Pampa Grill Limited & another v North Lake Limited & another [2021] KEELC 2938 (KLR)
The bottom line
#A Kenyan hotel wrongfully evicted after its lease expired won Kshs 18 million in deposits, lost goods and punitive damages, but not lost profits.
What this practically means
#Executive summary
#Key legal issues
#Whether an implied lease or periodic tenancy arose after expiry of the lease on 30th November 2017
No implied lease or periodic tenancy arose; there was no written agreement for renewal as required by section 38 of the Land Act, and rent was not accepted for two months as required by section 60(2)
The lease had no renewal clause and the lessor gave notice of non-renewal. Section 38 of the Land Act requires contracts for disposition of an interest in land to be in writing and signed. Acceptance of December 2017 rent was not proved and, in any event, only continued acceptance for two months creates a periodic tenancy under section 60(2). No agreement to renew was evidenced.
Whether the eviction breached the tribunal orders of 15th January 2018
No contempt was established because two conflicting orders of equal force were issued on the same day over the same subject matter
The lower court and the tribunal issued conflicting orders on 15th January 2018 over the same property. Until a higher court resolved which order was enforceable, enforcing either could not constitute contempt of the other; both had equal force, and a tribunal order filed in the lower court is enforceable as that court's order under section 14 of the Landlord and Tenant Act.
Whether the lower court eviction orders were illegal, fraudulent, null and void
The eviction orders were illegal, null and void; no provision authorised eviction pending hearing of an application or suit, and the suit was withdrawn before inter-partes hearing
The lower court granted eviction orders ex-parte on temporary basis without service of hearing notices, executed them, and then the 1st defendant withdrew the suit a day after eviction. The court found no rule authorising eviction pending determination, that possession at interlocutory stage requires a temporary mandatory injunction or Order 36 rule 1(b) procedure, and that the proceedings were muddled with irregularities violating natural justice.
Whether the plaintiffs were served with the lower court pleadings and orders
The 1st plaintiff was not served; the uncontroverted averments and unchallenged evidence of PW1 stood unopposed
The defendants filed no defence and did not appear at trial, so the plaintiffs' averments of non-service were uncontroverted and PW1's evidence unchallenged. The court found the 1st defendant's conduct after obtaining the orders demonstrated it did not want the 1st plaintiff to be heard.
Whether the eviction was illegal and malicious
The eviction was unlawful because it rested on a void order, and its manner demonstrated malice
Since the eviction was executed under a void order, it was conducted without a lawful court order; a landlord must obtain an order of a competent court or tribunal to obtain possession. The forceful manner of eviction, executed during business hours with police and auctioneers without allowing removal of goods, left no doubt the eviction was malicious.
Which heads of damages were proved
Refund of both security deposits and compensation for converted, stolen and destroyed goods were proved; renovation costs, December rent, loss of profits failed; general and punitive damages of Kshs. 5,000,000 awarded
The first security deposit was contractually refundable at lease expiry; the further deposit was paid in expectation of a lease never granted, so it cannot be retained. Renovation expenses were borne under a rent moratorium and waiver with no reimbursement clause. Loss of profits failed as the plaintiffs had no right of occupation in 2018. General and punitive damages were justified by the illegal and malicious eviction, tempered by expiry of the lease.
Legal principles established
#- Acceptance of rent after expiry of a lease does not per se create a lease or entitle the tenant to an extension; a periodic tenancy arises only where the lessor accepts rent for two months after termination under section 60(2) of the Land Act, 2012
- There is no legal basis for an order of eviction pending the hearing of an application or suit; possession at interlocutory stage may only be granted through a temporary mandatory injunction in exceptional circumstances or summary possession under Order 36 rule 1(b) of the Civil Procedure Rules
- A judgment or order procured by extrinsic fraud is void and liable to collateral attack at any time
- A void order is a nullity requiring no setting aside, and every proceeding founded on it is equally void
- Unless a tenant consents to give up possession, a landlord must obtain an order of a competent court or statutory tribunal to obtain possession
Court orders
#- 1.Judgment entered for the plaintiffs against the 1st defendant for Kshs. 900,000/= being the first security deposit
- 2.Kshs. 1,292,073/= being further security deposit
- 3.Kshs. 11,942,455/= being the value of or compensation for the plaintiffs' goods or assets that were converted, stolen, destroyed and/or damaged during the illegal eviction
- 4.Kshs. 5,000,000/= being general and punitive damages for illegal eviction
- 5.Interest on items 1 and 2 at court rates from the date of filing suit and on items 3 and 4 at court rate from the date of judgment until payment in full
- 6.Costs of the suit
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a dispute concerning a lease of land known as L.R No. 330/352, Nairobi
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Pampa Grill Limited & another v North Lake Limited & another [2021] KEELC 2938 (KLR)", Case Analysis (2021). Not stated in the excerpt (plaint dated 19th February 2018, amended 13th November 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/2938/eng@2021-06-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.