Alibhai & another (Trading as Sky Fri) v Technical University of Mombasa (Environment & Land Case 290 of 2017) [2022] KEELC 3896 (KLR)
The bottom line
#A Kenyan court dismissed both a fried chicken outlet's Kshs 15 million claim and the university's counterclaim, because neither side followed their lease's terms.
What this practically means
#Executive summary
#Key legal issues
#Existence of an oral agreement supplementing the written lease
No oral agreement was proved; the Defendant's conduct amounted only to good-faith accommodations, not a contract, and alleged oral terms could not vary the written lease
The court applied the requirement of offer, acceptance and consideration, finding that the Plaintiff failed to prove these elements. Requests for rent waiver were made in writing and were granted selectively in good faith (strikes, graduation, examinations), which could not amount to a concluded oral contract. Further, the parol evidence rule barred evidence of oral agreements varying a complete written lease.
Plaintiff's liability for rent default
The Plaintiff breached the lease by defaulting in payment of rent, which was payable quarterly in advance regardless of the students' schedule
The lease clearly required monthly rent of Kshs 100,000 payable quarterly in advance with a 5% annual increment. Section 66(1)(a) of the Land Act implied a mandatory condition to pay rent as specified. The court could not rewrite the contract to relieve the Plaintiff of a bad bargain merely because the business depended on students being on campus.
Termination of the lease and notices
Neither party validly terminated the lease: neither gave the six months' notice, nor did the lessor give the 30 days' breach notice required by Clause 6(i) and (ii)
Clause 6(i) allowed termination by six months' written notice or six months' rent in lieu; Clause 6(ii) required a 30 days' notice of breach before forfeiture for rent arrears, consistent with section 73 of the Land Act. Both parties failed to comply, so the lease subsisted until the court ordered repossession in April 2019.
Defendant's breach as lessor after the November 2016 fire
The Defendant breached the lease by failing to insure the premises against fire, to reinstate them, and to keep the premises in good repair, rendering them unfit for use
Clause 5(d) obliged the lessor to insure and reinstate the premises after fire damage; this was not done. Clause 5(b) and (c) imposed repair, lighting and lift maintenance obligations. Under section 65(1)(e) of the Land Act, rent should have been suspended where fire damage rendered the premises unfit. The Defendant's failure caused the Plaintiff to lose business.
Loan facility and repair claims
The Defendant was not liable for the Plaintiff's loan of Kshs 10,114,692.70 because no clause of the lease connected the credit facility to the lease
There was no clause in the lease obliging the Defendant to guarantee or repay the Plaintiff's credit facility; the Plaintiff took it out on its own volition. The claimed repair costs were likewise not established against the Defendant, given the court's findings that both parties breached the lease.
Legal principles established
#- A valid contract must be proved by offer, acceptance and consideration
- A contract may be inferred from the conduct of the parties even where no words were used
- Extrinsic evidence of an oral agreement cannot vary a complete written contract (parol evidence rule)
- Courts cannot rewrite contracts between parties; parties are bound by their terms absent coercion, fraud or undue influence
- Payment of rent reserved in the lease at the times and manner specified is a mandatory condition implied on the part of the lessee
- Where leased premises are destroyed or damaged by fire not attributable to the lessee, rent is suspended until the premises are rendered fit, and the lessee may terminate if not reinstated within six months
Court orders
#- 1.The Plaintiff's suit is dismissed
- 2.The Defendant's counterclaim is dismissed
- 3.Each party is to bear their own costs of the suit
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a lease dispute (Land Act 2012)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Alibhai & another (Trading as Sky Fri) v Technical University of Mombasa (Environment & Land Case 290 of 2017) [2022] KEELC 3896 (KLR)", Case Analysis (2022). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3896/eng@2022-06-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.