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ELCPartially AllowedNot stated in the judgment as provided· [2021] KEELC 1950 (KLR)

Verus Praedium Realtors Ltd v Deluxe Homes Limited [2021] KEELC 1950 (KLR)

Environment and Land Court
22 September 2021
BEB M Eboso
1,656 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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Verus Praedium Realtors Limited sued to restrain termination of a 5-year-and-3-months lease over Land Reference Number 1/1397, Nairobi, and by notice of motion dated 26/2/2021 sought interlocutory injunctive relief. The plaintiff deposed that it paid Kshs 9,000,000 (deposit and six months' rent), took vacant possession, and developed the property at a cost of about Kshs 40,000,000; rent difficulties arising from Covid-19 restrictions prompted requests for relief that went unanswered, followed by a demand for Kshs 7,837,830 and a letter dated 5/2/2021 terminating the lease. The defendant, through James Mwarangu Gathara's affidavit, asserted a lease dated 17/10/2019 with quarterly rent of Kshs 3,000,000 plus VAT, breach by the plaintiff, and lawful termination. The second application, dated 11/5/2021, sought review of an order by Okongo J of 17/3/2021 directing deposit of Kshs 5,237,830 on conditions of payment. Applying Giella v Cassman Brown, the court found no dispute that arrears existed but noted that by 14/7/2021 counsel confirmed all arrears had been cleared. Doubting the rival positions and noting that whether Covid-19 excused default was a trial matter, the court decided the injunction application on the balance of convenience, favouring preservation of the lease given the developments and subletting. The review application was marked as spent, having been overtaken by events. A status quo order preserving the lease was issued, conditional on prompt payment of rent, with costs of both applications in the cause.

Key legal issues

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01

Entitlement to an interlocutory injunction restraining termination of a lease for rent default

Holding

A status quo order preserving the lease was granted on the balance of convenience, conditioned on prompt payment of rent under the lease

Reasoning

The plaintiff conceded rent arrears and blamed Covid-19 restrictions; whether the pandemic excused the default is a matter for trial. Since the arrears were fully paid by 14/7/2021, the court doubted the validity of the rival positions, applied the balance of convenience, and found preservation of the lease appropriate given the plaintiff's Kshs 40,000,000 developments and subletting.

p. 2
02

Review of the order of Okongo J dated 17/3/2021

Holding

The review application was marked as spent because the arrears had been cleared

Reasoning

Okongo J's order required payment of half the arrears by 12/5/2021 and full clearance by 31/5/2021. Counsel confirmed before the court on 14/7/2021 that all arrears as at 17/3/2021 had been cleared, so the review sought served no purpose and was overtaken by events.

p. 2

Legal principles established

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  • At the interlocutory stage the court does not make conclusive pronouncements on the substantive issues; it only assesses whether the Giella v Cassman Brown requirements are met
  • Where there is doubt on the first two Giella requirements, the application is determined on the balance of convenience; preservation of the lease favoured the plaintiff who had cleared arrears and developed the property

Court orders

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  1. 1.A status quo order issued preserving the lease between the parties in relation to Land Reference Number 1/1397, pending the hearing and determination of the suit
  2. 2.The status quo order to remain in force subject to the terms of the lease and on condition that the plaintiff pays rent as stipulated in the lease
  3. 3.The application dated 11/5/2021 marked as spent
  4. 4.Costs of the two applications to be in the cause

Authorities

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Cases cited (1)

  • Giella v Cassman Brown
    (1973) EA 358
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a lease dispute relating to Land Reference Number 1/1397, Nairobi

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Verus Praedium Realtors Ltd v Deluxe Homes Limited [2021] KEELC 1950 (KLR)", Case Analysis (2021). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1950/eng@2021-09-22

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