Dipan Mediratta & 17 others v Karen Hills Limited & 2 others [2022] KEELC 1009 (KLR)
The bottom line
#A Nairobi court ordered Karen Hills Estate's management company to hand over audited service charge accounts within 30 days, but residents must keep paying service charge meanwhile.
What this practically means
#Executive summary
#Key legal issues
#Preliminary objection on multiple representation of joint plaintiffs
Objection not merited; co-plaintiffs may have different advocates and file separate applications
The court held that while a single advocate promotes efficiency and prevents confusion, there is no law precluding different advocates acting for different plaintiffs. The right to counsel of one's choice is a treasured constitutional right, and the objection did not rest on a pure question of law.
Effect of failure to issue service charge certificates under clause 3.11 of the Lease
The Lease contemplates absence of a certificate with a 10% formula, but six years' failure to issue certificates is prima facie prejudicial and in breach
Clause 3.11 envisaged non-availability of the certificate and provided a 10% increase formula. However, the prolonged failure to issue certificates allows the Defendants to increase service charge without regard to actual costs and expenditure, which may be prejudicial to the Plaintiffs - a situation the Lease sought to cure.
Entitlement to interest on unpaid service charge
Plaintiffs made out no prima facie case; Defendants entitled to charge interest under clause 3.11.2(d)
Clause 3.11.2(d) expressly charges unpaid arrears with interest on a day-to-day basis from due date. Further, a dispute as to accounts cannot found an injunction, and any interest overpaid is easily ascertainable and refundable, so no irreparable damage arises.
Mandatory interlocutory injunction for board representation
Refused; the contractual question is not clear or straightforward and must await trial
The parties rely on different clauses of the Agreement for Lease on whether board representation accrues on purchase or only after sale of all units and registration of sub-leases. Mandatory interlocutory injunctions require special circumstances and a higher degree of assurance; this question is neither clear nor straightforward.
Interim deposit of service charge in joint account
Refused; status quo on payment to prevail pending audited accounts
The 3rd Defendant has the duty to manage the property; a joint account would effectively let Plaintiffs co-manage the Estate. With the Defendants' ongoing PKF audit, ordering appointment of other auditors would be superfluous; the court instead gave impetus by directing delivery of audited accounts within 30 days.
Legal principles established
#- A preliminary objection may only be raised on a pure question of law with no contest as to facts
- There is no strict legal prohibition against co-plaintiffs being represented by different advocates or filing separate applications in the same matter
- A dispute as to accounts cannot form the basis for the grant of an injunction
- A mandatory interlocutory injunction requires special and exceptional circumstances and a higher degree of assurance than a prohibitory injunction
Court orders
#- 1.An order directing the Defendants to furnish the Plaintiffs audited accounts in respect of service charge received from all the property owners within Karen Hills Estate and the expenses incurred from the years 2011 to date within the next 30 days
- 2.Parties are at liberty to apply upon receipt of the said audited accounts
- 3.Each party to bear his/its own costs
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over disputes relating to land/lease; interlocutory applications under Order 40 Rule 1 and section 3A of the Civil Procedure Rules (as invoked by the parties)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Dipan Mediratta & 17 others v Karen Hills Limited & 2 others [2022] KEELC 1009 (KLR)", Case Analysis (2022). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1009/eng@2022-03-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.