Taj Millenium Management Limited v Taj Mall Limited [2021] KEELC 1268 (KLR)
The bottom line
#What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Defendant is entitled to transfer of the reversionary interest to the Plaintiff
- 2.Whether the health club including gymnasium formed part of the estate and if the Defendant had a legal right to convert them into apartments
- 3.Whether the Plaintiff is entitled to orders sought in the Plaint
- 4.Whether the Defendant is entitled to orders sought in the counterclaim
- 5.Who should bear the costs of the suit
Key legal issues
#Transfer of reversionary interest
The Plaintiff is entitled to the reversionary interest which the Defendant must transfer forthwith
Recital Clause E of the Lease and Clause F of the Sale Agreement required transfer of the reversionary interest to the management company upon payment of Kshs. 50,000 membership fees by each lessee. PW1 confirmed all thirty apartments were sold and fees paid, and the Defendant had no other interest in the property. The court associated itself with Shainaz Jamal and Taj Mall authorities and the Sectional Properties Act.
Whether the health club/gymnasium formed part of the estate
The health club and gymnasium formed part of the estate as described in the Sale and Lease Agreements; the Defendant's conversion of them into units was null and void and a breach of the Lease
Clause B of both the Lease and Sale Agreement described the estate as comprising thirty residential flats, Health Club, Swimming Pool, Parking Place and gardens. The Defendant produced no valid sectional plan or development permission for conversion; the approval it relied on referenced different parcel numbers. Waiver and estoppel were not proved. The conversion was an attempt to unjustly enrich the Defendant.
Defendant's counterclaim for interest and mesne profits
The counterclaim is dismissed in its entirety
Having no mandate to convert and sell the units, the Defendant could not claim the purchase price balance. On mesne profits, Section 2 of the Civil Procedure Act defines them as profits received by a person in wrongful possession; there was no proof of wrongful occupation by the Plaintiff's members, and no material showing how the sum claimed was computed.
Legal principles established
#- Where a Lease describes the estate as including a health club, swimming pool and parking, the developer cannot unilaterally convert those amenities into saleable units without requisite approvals and a sectional plan
- Upon sale of all units and payment of membership fees, the developer is obliged to transfer the reversionary interest in the mother title to the management company
- A claimant for mesne profits must place material before the court demonstrating how the amount claimed was computed
Court orders
#- 1.A declaration that the Defendant has breached the Lease Agreement dated 27th September, 2001
- 2.A Permanent Injunction restraining the Defendant from disposing of, charging, transferring or dealing with the suit property LR No.209/14036
- 3.A Permanent Injunction restraining the Defendant from any further works of bringing down the gymnasium
- 4.A Mandatory Injunction compelling the Defendant to transfer the reversionary interest to the Plaintiff within sixty (60) days
- 5.A Mandatory Injunction compelling the Defendant to hand over the certificate of incorporation, memorandum and articles of association, company seal, original certificate of title, original building plans and the thirty share certificates
- 6.A Mandatory Injunction compelling the Defendant to reinstate the gymnasium to its previous state within sixty (60) days
- 7.An order compelling the Defendant to account to the Plaintiff for funds received from charges levied for use of the gymnasium within sixty (60) days
- 8.Costs of the suit awarded to the Plaintiff
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original civil suit; Environment and Land Court jurisdiction over the suit land LR No. 209/14036 (Article 162(2)(b) Constitution, implied from court description)
Relief refused
#Counterclaim: interest on Kshs. 20,000,000/- balance of purchase price
The Defendant had no legal mandate to convert the gymnasium and health club into units and sell them
Counterclaim: mesne profits of Kshs. 13,492,500/-
No evidence that the Plaintiff's members were in wrongful possession; burden not discharged
Costs
Costs of the suit is awarded to the Plaintiff
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
A declaration be and is hereby issued that the Defendant has breached the Lease Agreement dated 27 th September, 2001.
A Permanent Injunction be and is hereby issued restraining the Defendant either by itself, its agents, servants and/or its officials from disposing off, charging, transferring or in any other manner dealing with the suit property LR No.209/14036.
A Mandatory Injunction be and is issued compelling the Defendant by itself, its servants and/or its officials to transfer the reversionary interest to the Plaintiff within sixty (60) days from the date hereof.
A Mandatory Injunction be and is hereby issued compelling the Defendant either by itself, its agents, servants and/or officials to reinstate the gymnasium to its previous state within sixty (60) days from the date hereof.
I find that the Defendant has not come to court with clean hands and perhaps that is why the plan it presented showing that it obtained approval to convert gymnasium and health club into two units did not match with the reference number for the suit property
To my mind, it seems the Defendant sought to rewrite the terms of the contract by denying the members of the Plaintiff what they rightfully purchased and I opine that this won’t do as equity demands that he comes to must come with clean hands.
Issues in the judgment
#Plaintiff's counsel reliance role: the judgment does not distinguish between 'plaintiff' and 'applicant'; citedBy recorded as 'applicant' for plaintiff's authorities as closest fit
Typographical error in the judgment regarding clean hands
Statutory provisions cited inconsistently: 'Section 57 of the Physical Land Use Planning Act' in submissions versus 'Section 57q(1) of the Physical Planning and Land Use Act' in the analysis
Case name of the Plaintiff/Defendant and case number not printed in the excerpt provided
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Taj Millenium Management Limited v Taj Mall Limited [2021] KEELC 1268 (KLR)", Case Analysis (2021). Not stated in judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1268/eng@2021-10-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.