https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3618

**REPUBLIC OF KENYA** **IN THE ENVIRONMENTAL AND LAND COURT AT MALINDI** **ELC CASE NO. 4 OF 2020** **VIPINGO RIDGE LIMITED………………………………………………..…...PLAINTIFF** **VERSUS** **SAN VALENCIA LIMITED …………………………………………………… DEFENDANT** **JUDGMENT** *Plaint.* In the Plaint dated **29th September 2019**, the following orders were sought: 1. *The sub lease dated 1st September 2011 registered in Mombasa Land Registry as CR No. 53321/1 be forfeited by the defendant;* 2. *The Registrar of Titles be directed to cancel the entry CR No. 53321/1;* 3. *The Plaintiff be authorized to take vacant possession of the plot;* 4. *Costs and incidentals to this suit; and* 5. *Any other measure deemed fit by this Honourable Court.* The plaintiff’s claim is that it owns **Title Number CR 42241/1** (hereinafter the suit land) comprised of over **1000** acres, which is demarcated into various residential plots, golfing facilities and related amenities, recreational areas and landscaped gardens, and the defendant has purchased one of the plots, known as **Plot No A146** vide a sublease with certain conditions which include the payment of service charge by the defendant as per **Clauses Nos 2.1, 2.18, 2.19 and 2.24.** The plaintiff’s case is that the defendant is in breach of the said conditions as to service charge and that the outstanding amount as at **15th February 2019** was **Kshs 3, 6389, 874.00.** It is averred that under **Clause 2.19.4** the outstanding amount attracts interest till, paid in full; that the plaintiff served the defendant requisite notices, to wit, letter dated 25th July 2017 by post, and another dated 21st November 2017, also by post, but the defendant failed to pay the outstanding sums. Consequently, the plaintiff served the defendant with a 45-day forfeiture notice on 14th March 2019 under **Section 75** of the **Land Act**. However, the defendant still remained in breach upon the expiry of the notice. It is averred that the defendant failed to subscribe to golf club membership and has failed to pay membership subscription fees, has failed to construct a house on the said plot, and has failed to clear the penalty charges levied against it, and that these defaults by the defendant entitle the plaintiff to forfeiture. *Defence.* The defendant filed a defence dated **9/3/2020** in which it averred as follows: that it has absolute title to the plot and forfeiture is not one of the remedies envisaged in the sublease; that the clauses on membership and payments are standard form contracts which have been varied and vary from time to time and cannot be used to take away ownership; that no account has been taken and the figures supplied by the plaintiff are exaggerated in bad faith and the defendant will thus demand an account; that in any event the plaintiff has failed to abide by some covenants in the sublease, some which were to be fulfilled by the plaintiff before the development of the plot, thus delaying the development of the plot; that the plaintiff was in breach of terms in **Clause 1.19.1** and **2.19.3,** including by: failing to make roads to the suit plot; exaggerating the payable amounts; demanding forfeiture which is not one of the remedies available to it; failing to furnish the defendant with a proper account. The defendant denied that it was in breach of the lease agreement or that it was ever served with notices as alleged, and that if any notice was served, it was not for forfeiture, but also that no such remedy is available to the plaintiff under the sublease; that in any event by the 45-day notice and demand for interest and penalties the right of forfeiture if any was waived by the plaintiff and can not be availed by way of a suit. The jurisdiction of this court was denied on the basis of a mandatory arbitration clause in the sublease. *Reply To Defence.* The plaintiff filed a reply to defence dated 22/9/2020 denying the matters claimed in the defence. It claimed that no covenants in the sublease had ben varied and the defendant was bound; that service charge computations are provided for in the lease; that invoices for the same were issued to the defendant from time to time and that the plaintiff has complied with its obligations in the lease. That the plaintiff completed its 18-hole golf course and therefore the defendant was obligated to develop the plot. *Consents* Midway through the proceedings in the present suit the parties entered into a consent endorsed on **11/7/2023** by the court for a partial judgment on the principal amount and subscriptions claimed, being **Kshs 2,907, 534/=** and that they be allowed to negotiate on interest within 60 days. They entered into a further consent on **30/9/2024** as follows: 1. *That the defendant to pay Kshs 150, 000/= every month beginning October 2024 towards the interest accrued between 2017 and 2022 which is contested;* 2. *That parties to get a hearing date on the same issue;* 3. *That the Kshs 150,000/= hereinabove be paid by 5th of every month commencing 5th October 2024;* 4. *That a hearing date to be issued to determine the exact amount, this arrangement being based on the fact that at least something in the form of interest has to be paid;* 5. *That hearing on 22nd January 2025;* 6. *That hearing can be virtual.* The true import of those consents will be evident later in this judgment. The plaintiff called one witness while the defendant called two witnesses at the hearing of the suit. It is clear that the hearing was meant to ascertain how much interest had to be paid. **PW1 Edward Njagi,** the plaintiff’s accountant testified orally and adopted his witness statement dated as his evidence in chief. His evidence is that **Clause 1.19.4** of the lease agreement provides for interest and that the defendant never fulfilled his obligations towards interest. Interest is at **2%** per month **30** days after the invoice falls due, and accrues until the principal has been paid. To him the interest payable is **Kshs 3, 583,935**/=. Only Kshs 300,000/= of that amount was paid through a consent of the parties made in the present case. When PW1 was cross-examined by Mr Gikunda on subscription fees he stated that it was charged in dollars and that there is nothing in the lease agreement that warranted the charging of that service in dollars. As at time of filing suit the sum of Kshs 3,639,874 was due as principal. That amount reduced to Kshs 3,283,935 after the filing of the case. **DW1 Phineas Kimathi Muriithi,** a director of the defendant testified on 28/5/25 and adopted his statement dated 9/3/2020 as his evidence-in-chief. His evidence is that the original service charge amount owing was as per the plaint, and that later on he obtained a statement of account dated 10/11/2023 stating that the amount owing was Kshs 977,534/=. After that he paid other monies being Kshs 450,000/=. According to DW1 the service charge would be ascertained annually by reference to a certificate, but the defendant was never served with any half-yearly certificate as per clause 2.19.4, or with any proportional computation of service charge in order for him to pay. He pointed out that according to the plaintiff’s documents the service charge amount that is owing is Kshs 1,638,534/= and the accrued interest is Kshs 3,583,935/=, which is more than double the principal amount. According to DW1 forfeiture was not provided for. When he was cross-examined by Mr Ondego for the plaintiff, DW1 stated that he was not aware how the service charge was computed, and that the statement that was provided was a mere summary which does not disclose the computation. **DW2 Geoffrey Gitau,** a Certified Public Accountant, testified on 4/12/25. His firm, Geoffrey Gitau & Co CPA, had been engaged by the defendant to compute interest based on the statement of account given to the plaintiff as at 15/2/2023. According to him, the balance of the principal tallied with the plaintiff’s statement of account at Kshs 1,638,534. Subscriptions came to Kshs 1,269,000/=. The total of these became 2,907,534/= which, in his opinion, was fully paid. The accrued interest tallied with the plaintiffs’ save that DW2 applied the *in duplum* rule which meant that the sum exceeded the *in duplum* sum by Kshs 1,766, 895/=. When the amount was revised accordingly, DW1 arrived at Kshs 2,907,534/=, which was, according to him, fully paid. He produced his report as **DExh1**. *Submissions Of the Parties.* The plaintiff filed submissions dated 6/2/2026 and the defendant filed submissions dated 19/2/2026. I have considered the said submissions while in the process of preparing the present judgment. **Analysis and Determination**. The plaintiff’s counsel pointed out in his submissions that there is a consent judgment for Kshs 2,907,534/=. He relied on Clause 2.19 for the assertion that forfeiture existed as a recourse and that the proper notices preceding it had been issued. He submitted that the defendant’s reliance on the *in duplum* rule was misplaced, the relationship herein being one of a lessor and a lessee and not lender and borrower. Further submission was made to the effect that the violation of various clauses regarding service charge entitled the plaintiff to forfeiture. He stated that DW1 had admitted being furnished with a statement of accounts and that the defendant owed service charge. That being the case, forfeiture has to issue. He cited *National Bank of Kenya Ltd Vs Pipeplastic Samkolit (K) Ltd and Another 2001 eKLR* and *Kwanza Estates Ltd v JKUAT 2024 KESC 74* on the binding nature of contracts. He submitted that as the defendant had admitted execution of the lease, the court can not excuse its payment of interest simply because the defendant finds it excessive; that the forfeiture notice and the prayer for forfeiture being contractual remedies in the lease, the defendant’s payment of the arrears after the case had been filed can not extinguish the plaintiff’s right to forfeiture unless the parties expressly so agree. *County Government of Kakamega V Ali* *ELC E008 of 2022(2025) KEELC 5417 KLR* *inter alia* was cited for the remedy of forfeiture of sublease for breach as long as the landlord follows the proper procedure. Counsel attempted to discredit the expert report produced by DW2 stating that the same was produced with reference only to the defendant’s documents with no independent verification, and that it never took into account payments made pursuant to court orders; he submitted that such evidence is not binding on the court. Firstly, the preliminary issue that this court has to determine is *whether the remedy of forfeiture applies in this case*. The provisions of **Section 56** of the **Land Act** are as follows: *“56. Power to lease land* *Subject to the provisions of this Act, the owner of private land may—* *(a)lease that land or part of it to any person for a definite period or for the life of the lessor or of the lessee or for a period which though indefinite, may be terminated by the lessor or the lessee; and* *(b)subject the lease to any conditions that may be required by this Act or any other law or that the lessor may impose.”* The provisions of clause 2.19 stipulate what should take place in the event of breach by the tenant. 2.19.1 provides for a 30-day notice requiring the tenant ton rectify such breach. 2.19.2 provides for the cutting off of water supply, etc upon the expiry of the notice and default in compliance thereto. 2.19.3 provides for a further 30 days of waiting for the tenant to rectify the breach upon the disconnection of services under 2.19.2, and upon the expiry of those 30 days, the issuance of a 3-month notices to remedy the breach. 2.19.4 provides for the mode of computation of interest on the accrued arrears. 2.19.5 provides for reference of the matter to arbitration once the tenant disputes the amount or the breach within 14 days of payment of the sum demanded. 2.19.6 provides for re-entry upon the property by the landlord upon failure to settle the demanded payment or remedy of the breach or any part thereof upon the termination of the notice issued under 2.20.3. Upon that juncture the lease shall determine absolutely and the landlord shall be entitled to sell the same, recover the outstanding monies, cost and expenses and thereafter remit the balance to the tenant. However, the whole process of forfeiture is messed up by the ambiguity rendered by the absence of any clause 2.20.3 referred to in clause 1.19.6 in the lease agreement. It is clear that there being no such clause, no notice under it could have been validly issued to the defendant and as such, forfeiture could not be effected as the lease agreement was defective. Going by the *National Bank case* (supra), this court can not rewrite the same for the parties. Such a drastic remedy as forfeiture must have clear and unambiguous provisions governing it from the beginning of the dispute to its end and there must be left no room for guesswork as to what parties ought to do when one crucial clause regarding the final notice is missing. The effect of the absence of that clause means that the present dispute is reduced to a mere commercial accounting dispute regarding service charge and other sums demanded by the plaintiff and as such, this court lacks jurisdiction over such dispute and must down its tools as is required by the holding in *Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR*. Secondly, though forfeiture is not an equitable remedy and is strictly a common law remedy based on contractual terms in the present situation, in its plaint, the plaintiff has, despite outlining all kinds of breach, sought forfeiture and not payment of the arrears of service charge and subscriptions or interest in its prayers; consequently, its claim being based on non-payment of such arrears or interest, its subsequent acceptance of out of court negotiations and its entering into consents with the defendant for the payment of some of the sums alleged to have been accrued, rendered the claim for forfeiture untenable because there is obviously a tacit agreement that by such settlement of arrears the tenant is attempting to save his lease, for which he paid valuable consideration in the form of sublease premium under **Clause 1** of the lease agreement, from forfeiture. Secondly, the gist of the plaintiff’s case is that the defendant has failed to settle service charges and membership subscription fees and the outstanding amount as at 15/2/2019 was Kshs 3,639,874/=. These are not statutorily implied charges under **Section 66** of the Land Act, and the defendant has indeed pleaded that they are *“standard form covenants that have been varied and vary from time to time and can not be used to take away ownership.”* Thirdly, the tenant, (the defendant herein) has demonstrated, by defending the present claim *per se*, willingness to remedy the alleged breach. Indeed, the defendant believed even in his defence that there was no forfeiture provisions in the lease agreement and this court has addressed that issue herein above. Besides showing such willingness, the defendant has presented what is to this court convincing expert evidence that demonstrated that there are no more arrears and interest owing to the plaintiff while the plaintiff lacked any such expert evidence. From the very commencement of the suit the plaintiff’s conduct and pleading was as clear as day that it was an “*either .... or*” situation it had found itself in; that it knew that it could either pursue payment and abandon forfeiture, or abandon forfeiture and seek payment. Midway through the present proceedings, the plaintiff changed tact and elected to accept payments of the arrears, but still purported to continue with pursuit of the remedy of forfeiture. **Section 75** of the Land Act provides as follows: *“75. Notice before forfeiture* *Notwithstanding anything to the contrary contained in the lease, no lessor shall be entitled to exercise the right of forfeiture for the breach of any agreement or condition in the lease, whether expressed or implied, until the lessor has served on the lessee a notice of not less than thirty days—* *(a)specifying the particular breach complained of; and* *(b)if the breach is capable of remedy, requiring the lessee to remedy the breach within such reasonable period as is specified in the notice; and* *(c)in any case other than non-payment of rent, requiring the lessee to make compensation in money for the breach,* *and the lessee has failed to remedy the breach within thirty days thereafter, if it is capable of remedy, and to make reasonable compensation in money.”* On the other hand, **Section 76** of the Act provides as follows: *“76. Relief against forfeiture* *(1)A lessee upon whom a notice has been served under section 75, or against whom the lessor is proceeding, by action or re-entry, to enforce his right of forfeiture, may apply to the court for relief; and the court may grant or refuse relief, as the court, having regard to the proceedings and the conduct of the parties and the circumstances of the case, thinks fit, and, if it grants relief, may grant it on such terms as it thinks fit. (Emphasis mine)* *(2)The court, on application by any person claiming as sublessee or chargee any interest in the property or part of the property comprised in the lease forfeited or sought to be forfeited, may make an order vesting the property or such part in such sublessee or chargee for the whole period of the lease or any less period, upon such conditions as the court in the circumstances of the case thinks fit:* *Provided that nothing in this subsection shall apply in the case of a forfeiture arising from a breach to which the sublessee is a party, or from the breach of an express agreement or condition against subleasing, parting with the possession of or disposing of the property leased.* *(3)This section shall have effect notwithstanding any stipulation or agreement to the contrary and whether the lease is registered or not.”* It would be inconceivable for this court to countenance both remedies i.e. payment of the arrears and forfeiture at the same time where the lease agreement provides for only one remedy at a time, that is either payment of arrears and/or remedying of breach before forfeiture is arrived at, or, in default of one or both of those, forfeiture. It would thus be unconscionable to hold the defendant liable to forfeiture. The plaintiff can not have two diametrically opposed remedies simultaneously. It may amount to unjust enrichment on its part. In this court’s view, the plaintiff’s election to accept payments nullified its claim for forfeiture. As seen above, **Section 76** of the Land Act allows relief against forfeiture and grants the court wide discretion in granting such relief, predicated on the special circumstances of each case, to provide such relief. In the present case, the amounts due have already been established to have been paid in full by way of the defendants’ expert evidence, and there are no orders to be made regarding payments; in any event such were not sought. The end of the litigation will mean that the defendant is still the holder of the lease. In conclusion, in the circumstances of this case, this court finds it improper to entertain the plaintiff’s claim for forfeiture. Forfeiture being the only remedy sought in the plaint dated 23/9/2019, the present suit can not therefore stand, and it must be dismissed. On the basis of the two grounds addressed hereinabove, the plaintiff’s entire claim against the defendant as contained in the plaint dated **23/9/2029** fails and it is hereby dismissed with costs to the defendant. **Dated, signed** and **delivered** at **Malindi by Ms Teams** on this **11th** day of **June 2026.**  **MWANGI NJOROGE** **JUDGE, ELC, MALINDI.**