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ELCDismissedMombasa ELC Case No. 180 of 2018 (Formerly Malindi ELC No. 79 of 2018)· [2019] KEELC 1336 (KLR)

Abdihamid Sheikh Abdulla t/a Jambo Matt Supermarket & 2 others v Tecno Holdings Limited & 2 others [2019] KEELC 1336 (KLR)

Environment and Land Court
15 October 2019
MSMUNYAO S.
1,273 words in judgment
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The bottom line

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What this practically means

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Executive summary

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The applicants, who were subtenants of Techno Holdings Limited on premises owned by the National Social Security Fund Board of Trustees, sued in April 2018 claiming that auctioneers instructed by the respondent had unlawfully proclaimed their goods during a distress against the head tenant. They sought a declaration that the attachment was unlawful and damages of Kshs. 100,000,000 being renovation costs, together with an interim injunction against attachment. On 31 July 2018 A. Omollo J directed that pending the injunction ruling, the applicants deposit rent into a joint interest-earning account in the names of counsel. On 22 February 2019 the injunction application was dismissed and the entire suit was also dismissed, principally because a related suit, Mombasa ELC No. 377 of 2017, concerned the same subject matter. The applicants then moved by the application dated 25 March 2019 seeking release to themselves of the monies deposited in the joint account, arguing that the surrender of the head lease and their eviction meant no tenancy nexus justified the respondent retaining the funds, and that the account also held deposits from other tenants not before the court. The respondent countered that the deposits were the condition for the applicants' continued occupation and that having utilized the premises they had no claim on the money. Holding that the deposit functioned as security or damages for the applicants' enjoyment of the premises under the interim orders, and that releasing it to them would constitute unjust enrichment and an injustice to the respondent, Munyao S. J dismissed the application with costs and ordered that all monies in the joint account be released to the National Social Security Fund Board of Trustees, after which the account is to be closed.

Key legal issues

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01

Character of the rent deposited in the joint interest-earning account pending the injunction application

Holding

The deposit was in the nature of security or damages for the period the applicants enjoyed interim orders of injunction and continued occupation, and thus belongs to the respondent as head lessor

Reasoning

The court ordered the deposit as a condition for the applicants' continued stay while the injunction application was pending. The applicants remained in occupation until the ruling was delivered and the respondent was barred from letting the premises to another tenant during that period. Having enjoyed the premises, the applicants must pay for that occupation; releasing the deposits to them would mean they occupied the premises for free and would unjustly enrich them at the respondent's expense.

p. 2
02

Claim over deposits made by other subtenants into the joint account

Holding

The applicants cannot claim monies deposited by other subtenants; any other person asserting a claim over such funds must file their own suit or application

Reasoning

Counsel for the applicants argued that the account held deposits from many tenants besides the applicants, so releasing it to the respondent would transfer funds belonging to persons not before the court. The court held that whether deposited by the applicants or other subtenants, the money was deposited by persons who enjoyed the premises and must pay for their stay. The applicants can only speak for themselves, and any other claimant is free to file a suit or application to be considered on merits.

p. 2

Legal principles established

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  • Rent deposited in a joint account as a condition for continued occupation pending determination of an injunction application operates as security for the benefit enjoyed under the interim orders and is payable to the owner of the premises

Court orders

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  1. 1.The application dated 25 March 2019 is dismissed with costs
  2. 2.All monies deposited in the joint account be released to the respondent, The National Social Security Fund Board of Trustees
  3. 3.Upon release of the said funds the joint account be closed
  4. 4.The applicants to shoulder the costs of the application
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court under Article 162(2)(b) of the Constitution and the Environment and Land Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (4)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Abdihamid Sheikh Abdulla t/a Jambo Matt Supermarket & 2 others v Tecno Holdings Limited & 2 others [2019] KEELC 1336 (KLR)", Case Analysis (2019). Mombasa ELC Case No. 180 of 2018 (Formerly Malindi ELC No. 79 of 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/1336/eng@2019-10-15

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.