Taj Millenium Management Limited v Taj Mall Limited [2021] KEELC 1268 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Transfer of reversionary interest
The Plaintiff is entitled to the reversionary interest which the Defendant must transfer forthwith
Recital Clause E of the Lease and Clause F of the Sale Agreement required transfer of the reversionary interest to the management company upon payment of Kshs. 50,000 membership fees by each lessee. PW1 confirmed all thirty apartments were sold and fees paid, and the Defendant had no other interest in the property. The court associated itself with Shainaz Jamal and Taj Mall authorities and the Sectional Properties Act.
Whether the health club/gymnasium formed part of the estate
The health club and gymnasium formed part of the estate as described in the Sale and Lease Agreements; the Defendant's conversion of them into units was null and void and a breach of the Lease
Clause B of both the Lease and Sale Agreement described the estate as comprising thirty residential flats, Health Club, Swimming Pool, Parking Place and gardens. The Defendant produced no valid sectional plan or development permission for conversion; the approval it relied on referenced different parcel numbers. Waiver and estoppel were not proved. The conversion was an attempt to unjustly enrich the Defendant.
Defendant's counterclaim for interest and mesne profits
The counterclaim is dismissed in its entirety
Having no mandate to convert and sell the units, the Defendant could not claim the purchase price balance. On mesne profits, Section 2 of the Civil Procedure Act defines them as profits received by a person in wrongful possession; there was no proof of wrongful occupation by the Plaintiff's members, and no material showing how the sum claimed was computed.
Legal principles established
#- Where a Lease describes the estate as including a health club, swimming pool and parking, the developer cannot unilaterally convert those amenities into saleable units without requisite approvals and a sectional plan
- Upon sale of all units and payment of membership fees, the developer is obliged to transfer the reversionary interest in the mother title to the management company
- A claimant for mesne profits must place material before the court demonstrating how the amount claimed was computed
Court orders
#- 1.A declaration that the Defendant has breached the Lease Agreement dated 27th September, 2001
- 2.A Permanent Injunction restraining the Defendant from disposing of, charging, transferring or dealing with the suit property LR No.209/14036
- 3.A Permanent Injunction restraining the Defendant from any further works of bringing down the gymnasium
- 4.A Mandatory Injunction compelling the Defendant to transfer the reversionary interest to the Plaintiff within sixty (60) days
- 5.A Mandatory Injunction compelling the Defendant to hand over the certificate of incorporation, memorandum and articles of association, company seal, original certificate of title, original building plans and the thirty share certificates
- 6.A Mandatory Injunction compelling the Defendant to reinstate the gymnasium to its previous state within sixty (60) days
- 7.An order compelling the Defendant to account to the Plaintiff for funds received from charges levied for use of the gymnasium within sixty (60) days
- 8.Costs of the suit awarded to the Plaintiff
- Jurisdiction invoked
- Original civil suit; Environment and Land Court jurisdiction over the suit land LR No. 209/14036 (Article 162(2)(b) Constitution, implied from court description)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Taj Millenium Management Limited v Taj Mall Limited [2021] KEELC 1268 (KLR)", Case Analysis (2021). Not stated in judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1268/eng@2021-10-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.