Thara & another v Actae Development Limited & another (Environment & Land Case 196 of 2015) [2022] KEELC 3382 (KLR)
The bottom line
#Kenya's Environment and Land Court held property buyers to the lease and management agreements they signed, ordering them to pay over KShs 1.35 million in service charge arrears.
What this practically means
#Executive summary
#Key legal issues
#Whether the change of user from residential to hotel-type use breached the sub-lease
No breach: the Plaintiffs were fully informed of the hotel-type/Rental Scheme before executing the sub-lease and were bound by its terms through the sub-lease, the Management Agreement and the Deed of Adherence
The court examined the sub-lease (clause 6.2), the Sub-contractual and Facilities Management Agreement and the Deed of Adherence, and found the Plaintiffs had been provided the Tamarind Rental Scheme Report and disclosure letters before signing. A lessee is deemed a party to the management contract upon entering the lease. The Plaintiffs therefore could not claim to have been sidelined on the change of permitted user.
Whether the Plaintiffs are liable for the revised service charge of Kshs 1,357,542.00
Yes. The sub-lease obliged lessees to pay service charge computed on actual expenditure, and clause 2.6 of the 7th Schedule allowed the management company to withhold services for non-payment
The court found the Kshs 136,595 quarterly figure was only an initial provisional service charge; the lease required payment based on periodical expenditure as audited and revised. Having enjoyed the amenities since 2011, the Plaintiffs are obligated to pay service charge, including arrears accruing to conclusion of the suit, with interest.
The sanctity of voluntary contracts
Parties who voluntarily enter contracts are bound by their terms; a court cannot rewrite a contract absent coercion, fraud or undue influence
Applying Feba Radio, National Bank of Kenya v Pipeplastic Samkolit and Trollope Colls, the court held that the clear terms of the three agreements binding the Plaintiffs must be enforced, and equity will not relieve a party from a bad bargain.
Legal principles established
#- Where there is no ambiguity in an agreement it must be construed according to the clear words used by the parties
- A court of law cannot re-write a contract between the parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved
- Where express terms of a contract are clear and free from ambiguity, the court must apply them even if it thinks other terms could have been more suitable
- A lessee who enters a lease after full disclosure of a management/hotel-type scheme is bound by its terms even without executing the management contract directly
Court orders
#- 1.The Plaintiffs' suit and claim dismissed with costs to the Defendants
- 2.The Plaintiffs to pay Kshs 1,357,542.00 as at 1st October 2015 and such charges as may be properly levied between 1st October 2015 and the conclusion of the suit, together with interest thereon from the date the sums accrue until the date of payment
- 3.The Plaintiffs to pay costs of the counterclaim
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over the sub-lease dispute relating to plot Kwale/Galu/Kinondo/661
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Thara & another v Actae Development Limited & another (Environment & Land Case 196 of 2015) [2022] KEELC 3382 (KLR)", Case Analysis (2022). Plaint dated 26th August 2015 (with Defendants' counterclaim dated 5th October 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3382/eng@2022-07-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.