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ELCPartially AllowedNot stated in judgment (Environment & Land Court, Nairobi)· [2024] KEELC 3752 (KLR)

SBS Dunhil Group (East Africa) Limited v Shah & 4 others (Environment and Land Case Civil Suit E112 of 2023) [2024] KEELC 3752 (KLR)

Environment and Land Court
24 April 2024
6,508 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~26 min to read original · ~4 min brief

The bottom line

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The Environment and Land Court refused to stop the eviction of tenants from Senteu Plaza because a board resolution promising a sale was never written into the lease.

What this practically means

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Executive summary

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This interlocutory ruling of the Environment and Land Court at Nairobi (Mbugua J) determined three applications arising from the plaintiffs' occupation of Senteu Plaza on parcel LR. 1/1373, whose lease/licence expired on 31.8.2023. The plaintiffs sought a temporary injunction against eviction, contending that a 12.6.2017 board resolution obliged the defendants to sell the building at the expiry of the six-year lease, and that they had invested heavily in the premises in reliance thereon. The court held there was no prima facie case: the board resolution was never incorporated into the executed lease or leave/licence agreements, which instead required delivery of vacant possession on expiry, and the plaintiffs admitted there was never any offer to sell. Irreparable loss was not demonstrated and the balance of convenience favoured the registered owners protected under Article 40. The injunction and the restraint against the Registrar of Lands therefore failed, and that application was dismissed with costs. In the plaintiffs' application of 18.1.2024, the court set aside the consent directions of 20.12.2023 (which had required payment of arrears and bills) because they were anchored on an ADR process that never materialised, but refused joinder of the intended 4th defendant (the advocate's firm) as agent of a disclosed principal; the Land Registrar was nonetheless joined as 4th defendant since specific relief was sought against it, with leave to amend the plaint within 30 days. The defendants' application to strike out the suit was declined, the court holding the cause of action 'thin on substance' but that striking out is a drastic remedy inappropriate where there are disputed allegations on payments.

Key legal issues

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01

Prima facie case for temporary injunction

Holding

No prima facie case was established; the alleged board resolution obliging the defendants to sell was never incorporated into the lease documents, which instead required vacant possession on expiry

Reasoning

The court examined the lease and leave/licence agreements and found no reference to the 12.6.2017 board resolution. The plaintiffs further admitted in their Further Affidavit that there was no offer to sell. Without a recognizable legal right, the Giella threshold was not met and the eviction injunction could not issue.

p. 9
02

Irreparable injury and balance of convenience

Holding

The plaintiffs failed to prove irreparable injury not compensable in damages; the balance of convenience favoured the registered owners protected under Article 40

Reasoning

Alleged loss of goodwill and business was not evidenced, and relocation costs were not quantified. It is a serious matter to restrain a registered proprietor over his property absent justifiable grounds, particularly where the lease had expired by its own terms.

p. 10
03

Setting aside the consent order of 20.12.2023

Holding

Although the plaintiffs did not meet the conditions for setting aside a consent order, the orders were set aside because they were anchored on a failed ADR process

Reasoning

The court found the application was motivated by inability to comply rather than any of the Total Kenya principles. However, since the consent arose within a spirit of exploring ADR which never materialised, the court declined to insist on compliance and set the orders aside.

p. 11
04

Amendment and joinder of parties

Holding

Leave to amend granted only to the extent of joining the Land Registrar, against whom specific relief was sought; the advocate's firm was not joined as it acted as agent of a disclosed principal

Reasoning

Order 8 rule 3(1) permits amendments to determine real questions in controversy. But the intended 4th defendant merely executed documents as agent; absent any denunciation by the defendants of their participation in the lease, the agent could not be joined. The Land Registrar was joined as specific relief was sought against it.

p. 12
05

Striking out the suit for want of cause of action

Holding

Although the cause of action was 'thin on substance', striking out was declined as a drastic summary remedy inappropriate where there are accusations and counter-accusations on payments

Reasoning

The court acknowledged that the plaintiffs admitted the lease expired and no offer to sell was made, giving no legal basis to hold onto the property. Nonetheless, striking out must be done in the clearest of cases, and disputed factual issues on payments and receipt warranted keeping the suit alive.

p. 12

Legal principles established

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  • Board minutes that were never incorporated into the executed lease or licence agreements do not create an enforceable obligation to sell, and cannot found a prima facie case for injunction
  • A tenant cannot challenge the lease on the basis of fraud while simultaneously relying on an alleged agreement for sale anchored on that lease
  • Striking out a suit is a summary remedy to be exercised in the clearest of cases with extreme caution
  • No legal basis allows a tenant to acquire proprietary interest in a landlord's property by virtue of improvements made

Court orders

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  1. 1.The Application dated 9.10.2023 is dismissed in its entirety with costs to the defendants
  2. 2.The orders of 20.12.2023 are set aside
  3. 3.The Land Registrar is joined in these proceedings as the 4th defendant; the plaint is to be amended accordingly, to be filed and served within 30 days along with summons to enter appearance upon the new party, failing which the order allowing amendment shall lapse
  4. 4.The plaintiffs are condemned to pay costs of the application dated 18.1.2024 to the defendants
  5. 5.The application dated 10.11.2023 is disallowed with no orders as to costs

Authorities

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Legislation

  • Constitution of KenyaArticle 40
  • Civil Procedure RulesOrder 51 Rule 4
  • Civil Procedure RulesOrder 2 Rule 15(1)(a)
  • Civil Procedure RulesOrder 8 Rule 3(1)

Cases cited (23)

  • Giella v Cassman Brown & Company Limited
    (1973) EA 358
  • Mrao v. First American Bank of Kenya Limited & 2 Others
    (2003) eKLR
  • Nguruman Limited v Jan Bonde Nielsen & 2 Others
    [2014] eKLR
  • Hydro Water Well (K) Limited v Sechere & 2 others
    [2021] KEHC 22 KLR
  • Pius Kipchirchir Kogo v Fran Kimeli Tenai
    [2018] eKLR
  • Tecno Holdings Limited & 4 others v National Social Security Fund Board of Trustees
    [2018] eKLR
  • Institute for Social Accountability & Another v Parliament of Kenya & 3 Others
    [2014] eKLR
  • Elijah Kipngeno Arap Bii v Kenya Commercial Bank Limited
    [2013] eKLR
  • Wema Foundation Trust Company Limited v County Government of Nairobi City & Another
    [20222] eKLR (as printed)
  • Kenya Commercial Bank Limited v Specialized Engineering Company Ltd
    [1982] KLR 485
  • Duale Maryan Gurre v Aminal Mohammed Mahamood & Another
    [2014] eKLR
  • Technomatic Limited t/a Promopack Company v Kenya Wine Agencies Limited and another
    [2014] eKLR
  • Antony Francis Wareham t/s AF Wareham & 2 Others v Kenya Post Office Savings Bank
    [2004] eKLR
  • Time Magazine International Ltd & another v Michael F Rotich & Another
    [2002] eKLR
  • Kenya Women Finance Trust v Bernard Oyugi Jaoko & 2 other
    [2018] eKLR
  • Cresent Construction Co Ltd v Delphis Bank Limited
    [2007] eKLR
  • Paolo Murri v Gian Battista Murri & Another
    [200] eKLR (as printed)
  • Kyanzavi Farmers Limited v Middle East Bank Kenya Limited
    [2012] (citation incomplete)
  • James Ndung'u Kero v Chief Land Registrar, Director of Survey & Attorney General
    (Environment & Land Case E046 OF 2021) [2022] KEELC 1446 (KLR)
  • University of Nairobi v George Mbele Sifuna
    [2021] eKLR
  • Total Kenya Limited v Kerugoya Service Station Ltd & Another
    [2019] eKLR
  • Eastern Bakery v. Castelino
    [1958] EA 461
  • Hasham Lalji Properties Limited v Philip Kimaiyo Komen & 2 others
    [2017] eKLR
Jurisdiction invoked
Original jurisdiction under Article 162(2)(b) of the Constitution and the Environment and Land Court Act over disputes relating to land; interlocutory applications under the Civil Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "SBS Dunhil Group (East Africa) Limited v Shah & 4 others (Environment and Land Case Civil Suit E112 of 2023) [2024] KEELC 3752 (KLR)", Case Analysis (2024). Not stated in judgment (Environment & Land Court, Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/3752/eng@2024-04-24

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