Canarian Holdings Limited v Mohamed Said Abdulrehman (Sued as the Attorney of the Wakf of the Late Harith Al-Amin Bin Mazrui) [2022] KEELC 703 (KLR)
The bottom line
#A Mombasa court blocked a landlord's attempt to forfeit a Mombasa lease, ruling the forfeiture notice was invalid because it gave only 14 days instead of the required 30.
What this practically means
#Executive summary
#Key legal issues
#Whether non-payment of rent from 2012 constituted a breach warranting forfeiture
The breach was capable of remedy; the defendant's rejection of the plaintiff's cheque covering all arrears, penalties and interest defeated the forfeiture claim and raised an estoppel
Clause 6 of the head lease permitted forfeiture only for rent unpaid for ninety days or breach, subject to prior written notice. Non-payment of rent is remediable under Section 75 of the Land Act. The defendant acknowledged receipt of Kshs 371,863.90 computing all rent to lease expiry, then returned the cheque; the court applied estoppel, holding the defendant could not forfeit for non-payment after accepting and rejecting full settlement.
Whether the sublease to Kenya Oil Company Limited and charge to Diamond Trust Bank breached the lease
Neither transaction breached the head lease; the sublease was consented to by the trustee Munir Mohamed Mazrui and no consent was required for a charge
Clause 4 required written consent only for transfer, subletting, assignment or parting with possession. The 1997 transfer to the plaintiff and the 1999 sublease were both consented to by Munir Mohamed Mazrui, the trustee/attorney. A charge was not among transactions requiring consent, so charging the property to Diamond Trust Bank without consent was not a breach.
Whether the notice of forfeiture dated 1st November 2018 was valid
Invalid: it was not specific on remedy or waiver, the antecedent 24th July 2018 notice was only served on 23rd October 2018, and 14 days was not a reasonable remedy period, Section 75 requiring not less than 30 days
The court found the earlier notice could not be backdated to manufacture a three-month notice period. The notice failed to spell out how the breach was to be remedied or whether the lessor waived forfeiture. Fourteen days was unreasonable for reconciling rent against current value, so the notice failed and the counterclaim founded on it collapsed.
Legal principles established
#- A lessor's right to forfeit a lease may only be exercised after service of a valid notice under Section 75 of the Land Act specifying the breach and allowing a reasonable time to remedy it
- A court cannot rewrite a contract between parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved
- A lessor who by words or conduct induces a lessee to act on a belief (including accepting payment of all arrears) is estopped from asserting a different state of affairs
- A notice requiring remedy of a breach within 14 days is not a reasonable time where Section 75 of the Land Act stipulates a notice of not less than 30 days
Court orders
#- 1.A declaration that the Plaintiff is the registered proprietor as lessee of Subdivision Number 3071 (original number 2419/5) of Section VI Mombasa Mainland North for a term of 99 years from 1st July 1963 at a net monthly rent of Kshs 530 for the term of the lease
- 2.A declaration that the Plaintiff is entitled to quiet and peaceful possession of the suit property without interference from the lessor or its successors in office or assigns
- 3.A declaration that before exercising the right to forfeiture under clause 6 of the lease the Lessor shall first give the Lessee written notice to put the breach in order, failing which for three calendar months only then may the right of re-entry and forfeiture be exercised
- 4.A declaration that the Defendant's purported notice of forfeiture dated 1st November 2018 is in violation of clause 6 of the lease, is illegal and unlawful and is null and void ab initio
- 5.An order that the Plaintiff do pay to the Defendant the rent due under the lease to date
- 6.A permanent injunction restraining the Defendant, trustee, attorney or any person claiming through the Wakf from forfeiting, evicting or interfering with the Plaintiff's quiet enjoyment and possession of the suit property
- 7.An order permanently staying and/or setting aside the purported notice of forfeiture dated 1st November 2018 and served on 22nd November 2018 and prohibiting its implementation
- 8.Costs of the suit to the Plaintiff
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over land disputes (Environment and Land Court Act / Article 162(2)(b))
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Canarian Holdings Limited v Mohamed Said Abdulrehman (Sued as the Attorney of the Wakf of the Late Harith Al-Amin Bin Mazrui) [2022] KEELC 703 (KLR)", Case Analysis (2022). ELC Case No. 300 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/703/eng@2022-03-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.