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ELCPartially AllowedELC Civil Appeal No 54 of 2019· [2021] KEELC 3538 (KLR)

Kanji K. Patel & 2 others v Steelmakers Limited [2021] KEELC 3538 (KLR)

Environment and Land Court
29 April 2021
3,952 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court ruled that a tenant who stays on after a lease expires without paying rent loses legal protection against eviction and rent recovery.

What this practically means

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Executive summary

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This was an appeal to the Environment and Land Court at Nairobi against a ruling of the Business Premises Rent Tribunal (Hon. Mbichi Mboroki, Chairperson) delivered on 5th July 2019 in BPRT Case No 873 of 2018. The Tribunal had held the tenancy between the parties to be a controlled tenancy under Cap 301, ordered the landlords to supply a statement of account, dismissed the landlords' application, and maintained interim injunctions against eviction and distress. The appellants (landlords and their auctioneer) contended the lease expired on 31st July 2014, the tenant refused to execute a renewal, rent was in arrears, and the tenant had issued a notice to vacate and vacated on 21st March 2019, leaving no landlord-tenant relationship. The respondent relied on sections 57 and 60 of the Land Act, arguing continued possession and acceptance of rent made it a protected periodic tenant. The court, L. Komingoi J, held there was no evidence the landlords accepted rent after expiry or consented to continued occupation; the tenant was not entitled to Cap 301 protection. The notice to vacate and subsequent vacation meant no landlord-tenant relationship existed at the date of the ruling, and the injunction had been obtained without disclosure of material facts. The landlords had a right to levy distress for the admitted arrears. The appeal was allowed, the Tribunal ruling set aside and substituted with an order dismissing the respondent's application dated 29th October 2018 with costs to the appellants; each party to bear its own costs of the appeal.

Key legal issues

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01

Whether the respondent was a protected/controlled tenant entitled to Cap 301 protection after expiry of the lease

Holding

The Tribunal erred; there was no evidence of rent acceptance or continued possession with the landlords' consent after 31st July 2014, so the respondent was not entitled to protection under Cap 301.

Reasoning

Sections 57 and 60 of the Land Act deem a lease periodic where a lessee remains in possession with the lessor's consent, and accepting rent for two months post-termination creates a month-to-month periodic lease. The court found rent was in arrears from 2017 and no material showed the appellants accepted rent after expiry or consented to continued occupation, so the foundation for controlled-tenancy status failed.

p. 5
02

Whether a landlord-tenant relationship still existed when the Tribunal ruled

Holding

No; the respondent had issued a notice to vacate and vacated on 21st March 2019, before the ruling of 5th July 2019.

Reasoning

The respondent's letter of 23rd October 2018 intimated vacation of the go-downs and office space, and the court found that henceforth no landlord and tenant relationship existed. The injunction obtained from the Tribunal was therefore granted without disclosure of material facts and ought not to have issued.

p. 6
03

Whether the landlords could levy distress for rent arrears

Holding

Yes; the Tribunal erred in enjoining them, as the respondent admitted rent arrears.

Reasoning

Since the protection under Cap 301 was unavailable and material facts were not disclosed when the injunction was obtained, the landlords' right to levy distress for admitted arrears revived and the Tribunal's injunction against distress was an error.

Legal principles established

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  • A lessee who remains in possession without the lessor's consent after expiry of a lease does not become a protected tenant under Cap 301; acceptance of rent after termination may, under section 60(2) of the Land Act, create a periodic lease, but the party asserting consent must prove it.

Court orders

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  1. 1.The appeal is allowed
  2. 2.The ruling of the honourable Chairman of the tribunal delivered on 5th July 2019 and the subsequent order is set aside
  3. 3.The same is substituted with an order dismissing the respondent's application dated 29th October 2018 with costs to the appellants
  4. 4.Each party to bear their/its own costs in this appeal

Authorities

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Legislation

  • Landlord and Tenant (Shops, Hotels and Catering Establishments) ActSection 2
  • Land ActSections 57 and 60(1) and (2)

Cases cited (9)

  • National Oil Corporation of Kenya vs Robert Obegi Ongera & Another
    [2014] eKLR
  • Spannerright Auto Limited vs Shell & BP (Malindi) Kenya Limited
    [2008] eKLR
  • KCB Ltd vs Popatlal Madhavji & Another
    [2019] eKLR
  • Giella vs Cassman Brown & Co. Ltd
  • Uhuru Highway Development Ltd vs Central Bank of Kenya & 2 Others
    [1995] eKLR
  • Republic vs The Chairman BPRT Exparte Velji Prenchard Shah
    [2012] eKLR
  • Michael Chole Lugalia vs Jonathan Ligure Ayodi
    [2016] eKLR
  • David Mungai & 2 Others vs Registered Trustees of Teleposta Pension Scheme
    [2012] eKLR
  • Said Ahmed vs Manasseh Denga & Another
    [2019] eKLR
On appeal from
Business Premises Rent Tribunal
Nairobi BPRT Case No 873 of 2018
Jurisdiction invoked
Appeal from the Business Premises Rent Tribunal to the Environment and Land Court under the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301

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, "Kanji K. Patel & 2 others v Steelmakers Limited [2021] KEELC 3538 (KLR)", Case Analysis (2021). ELC Civil Appeal No 54 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3538/eng@2021-04-29

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