Court orders billionaire Peter Munga to shut down Pioneer Girls School after losing land suit

Billionaire businessman Peter Munga has suffered a major blow after a court ordered his elite Pioneer International Schools  to vacate the 75 acres of land on which Pioneer Girls School stands along Thika Road by December 10.

This is after Environment and Land Court Judge Anne Abongo Omollo, sitting in Nairobi, established that Pioneer International Schools did not have an agreement to take over the property from Goshen Gardens Limited, which had leased it for eight years from Delmonte Kenya Limited from September 3, 2013, with a view to extending the lease period.

Justice Omollo, in her ruling dated July 10, issued permanent injunction restraining Goshen Gardens and Pioneer International Schools whether by themselves or their agents and/or employees or otherwise whomsoever from transferring possession of Delmonte Kenya’s property being a portion of the property known L. R. No. 12XX7/2 to any other third party with effect from December 10.

Further, she issued a mandatory injunction be issued to compel the two companies either by themselves, their agents and/or employees or otherwise whomsoever on  December 10 to vacate the suit property.

Justice Omollo also directed Goshen Gardens and Pioneer International Schools to take away, pull down or otherwise remove all fixtures, fittings, effects and/or any assets whatsoever belonging to them from the suit property and to make good to the reasonable satisfaction of Delmonte Kenya Ltd, all damage caused by such removal.

“In default of compliance with this order, the Plaintiff be at liberty to remove such fixtures, fittings and/or assets and to recover the costs of such removal from the defendants,” she ruled.

Justice Omollo directed that they deliver vacant possession of the suit property on December 10 to Delmonte Kenya Limited in good and substantial repair and condition.

“In default of compliance of this order, the Defendants be evicted from the suit property and the Officer Commanding Ngati Police Station is directed to supervise the eviction exercise.”

Delmonte had moved to court after Pioneer International Schools, which is owned by Munga, declined to vacate the land.

Goshen Gardens Limited had leased the land at a revisable monthly rent of Sh550,000 and on other terms and conditions that were set out in the lease agreement dated  September, 2013 but in February, 2015, the it defaulted in its rent payment obligations under the lease aforesaid following which it was served with a notice dated 21st April 2015 to remedy the default.

However, Goshen continued with the breach and subsequently Delmonte issued a 30 days’ notice dated 5th May, 2015 terminating the lease in accordance with clause 13 of the lease agreement. Further, through letter dated 11th June 2015, Delmonte requested the company to surrender possession of the suit property but the Goshen declined to do so.

According to Delmonte, Goshen Gardens went on to file a suit ELC 306 of 2015 against them on 29th April 2015 alleging that it had violated the terms of the lease agreement in the terms that pineapples manufacturer had fraudulently altered the terms of the lease agreement by changing the acreage of the lease from 100 acres to 75 acres of land, trespass on the suit property without its authorisation and exposing it to various security breaches after the said trespass and uprooting of the fence and on February 2, unknown people broke into the school premises and stole property worth Sh1,584,000.

It told the court that the case filed by Goshen Gardens was referred to arbitration on 15th July, 2015 and the it was to continue occupying the suit property pending the outcome of the arbitral proceedings. However, they did not go to arbitration because they resolved it amicably, with Goshen withdrawing the suit on 11th December 2015 and subsequently confirmed that it does not dispute the termination of the lease.

However, in August 2015, Goshen Gardens’ director David Kigwe requested them to meet with Munga, Pioneer International School’s chairman to discuss a possible resolution of the dispute.

According to Delmonte, the meeting occurred in late August 2015 when Kigwe indicated that Goshen was considering transferring its assets to Pioneer International Schools and asked it to confirm the possibility of the school taking over the lease.

It, however, averred that it made it clear that it would only consider entering into a lease with Pioneer International Schools after the dispute is resolved and after it hands over possession of the property to it.

Delmonte went on to state that about mid October 2015, it came to their attention that Goshen Gardens appeared to have handed over possession of the suit property to Pioneer International Schools whom through their Advocate’s letter dated 27th October 2015 denied the said possession.

In a meeting held on 19th November 2015, Pioneer International Schools asked Delmonte Kenya to give an undertaking that the property would be let to it after Goshen Gardens vacates the property which they refused.

The company also stated that about 30th November 2015, Pioneer International Schools trespassed the suit property at behest and assistance of Goshen Gardens, erected a sign boards for “Pioneer Girls School” at the entrance of the property and along Thika Nyeri Super Highway without its  consent to taking over possession, lease or any other arrangement.

As a result, it told the court that it has suffered loss and damage and is likely to suffer irreparable and substantial loss.

On its part, Goshen Gardens filed counter claim dated 29th February 2016 seeking a permanent injunction restraining Pioneer International Schools whether by itself or its agents and/or employees or otherwise whomsoever from trespassing, continuing to trespass transferring, leasing, subletting, interfering and/or otherwise dealing with Delmonte’s property, including operating a school and/or any other business on the suit property or in any other manner howsoever, interfering with Delmonte’s right over suit property.

It also sought an order of vacant possession as against Pioneer International School and that in default  it be forcefully evicted from the suit property.

Goshen Gardens denied Delmonte’s submission, stating that on 30th November 2015 when it became aware of the sign posts erected by Pioneer International Schools, it wrote a letter through its advocates to the Plaintiff stating that the sign posts were erected without their knowledge or consent and demanded the said posts be removed.

It further stated that that having withdrawn its case challenging the termination of lease, they did not have an intention to proceeding with contesting the same and that it has always been ready and willing to hand over possession of the suit property to Delmonte since December 11, 2015.

Through its lawyers, Goshen Gardens added that on January 14, 2016 they invited Delmonte to propose a mutual convenient date to enable it hand over the suit property to the plaintiff but during inspection and inventory taking on November 18, 2016 the handing over never took place because Pioneer International Schools was in occupation without an executed lease between them and Delmonte.

The company contended that despite various efforts to have vacant possession of the suit property given to it by Pioneer International Schools, including closing the suit property on January 13, 2016 with an attention for everybody to know that the suit property was still under the management of Delmonte, disconnecting power from the suit property and issuing notice to Pioneer International Schools on November 30, 2015 demanding that they remove sign posts from the suit property, Pioneer International Schools has refused to give vacant possession.

However, Pioneer International Schools also filed a statement of defence and a counter claim dated March 4, 2016 seeking the rectification of the agreement for sale and the correspondences concerning the contractual relationship between Goshen Gardens and itself in which it referred to the property known as LR. No.12XX7/4 to read and be acted on as L.R No.1217/2 situated in Gatanga Sub-County, Murang’a County.

It also sought a declaration that Delmonte holds, if the Lease agreement between it and Goshen Gardens is deemed as terminated or abandoned, the reversionary term, of the Lease Agreement dated September 3, 2013 on a constructive trust or as a trustee for its benefit.

Pioneer International Schools also sought, among others, a declaratory order that it is entitled, to enjoy a quiet possession of the land comprising the school premises, subject to compliance with the lease terms for the remainder of the eight years terms in the lease agreement dated September 3, 2013 by operation of law and/or the equitable doctrine of proprietary estoppel and/or that Delmonte  be ordered to execute a Lease Agreement within three months (and/or such other time as may be found fair and reasonable), for revisionary interest of the term in the lease agreement dated 3/9/2013, between the Plaintiff and the 1st Defendant and/or such monthly rent as may be found fair and just hereof.

It denied being in a lease with Delmonte but expressed interest in the purchase of the school premises and agreed to enter into a sale transaction  and that the school was in a deplorable state with its assets, business and infrastructure and equipments unrepaired and in low ebb.

Pioneer International Schools also averred that in the course of the month of July 2015, Delmonte offered the sale of school premises, assets and equipment and some designated facilities in Goshen Gardens’ leased premises whose landlord was the company.

And that in the course of undertaking its due diligence, it was introduced to Delmonte by Goshen Gardens where the company expressed itself orally and vide letter dated September 21, 2015 that in the event the matter in court is resolved and the subsisting lease is terminated, parties will have to agree on the terms of any prospective lease before they are reduced to a document to be executed by both parties and thereafter possession of the premises can be parted with.

Further, it stated that it understood that should it proceed to purchase off, Goshen Gardens’ business interest assets, equipment and infrastructure in the school premises, pay the outstanding rents, accruing rents as and when due, before completion, then the Plaintiff would honour the assurances and representations it had expressed, of welcoming the 2nd Defendant to the premises and entering a new lease.

Pioneer International Schools added that as a result of that understanding, they continued to pay the monthly rent as and when it became due and payable and that further they agreed to purchase the school from Goshen Gardens at an additional Sh38,000,000, undertook rehabilitation and remedial works to the school in tarmacking access roads, foot paths, buildings and serviced and mechanically repaired the school buses and grass cutting and some landscaping works.

It submitted that they understood that during the period that Goshen Gardens was effecting the termination, Delmonte was to simultaneously or soon thereafter, agree with it, as pledged in the written memoranda on the terms of the lease to be reduced to a document to be executed by both parties and thereafter possession of the premises, if any on a constructive trust and/or as a trustee of the schools.

Pioneer International Schools also told the court that it duly kept its side of the bargain by having the monthly rents of Sh50,000 paid to the credit of Goshen Gardens, committed and paid it Sh38,000,000, and renovated the premises.

In her ruling after going through the submissions and listening to witness evidence, Justice Omollo concluded while there is no dispute about how the lease was terminated as well as  transactions undertaken (sale of assets) between Goshen Gardens Limited and Pioneer International Schools, oher than the said lease executed on  September 3, 2013, and which expired on September 2, 2021, there was no lease executed thereafter between Delmonte and Pioneer International Schools.

“During the pendency of the impugned lease and this suit, the 2nd Defendant has been paying monthly rents. The Plaintiff avers that the rents were received on a without prejudice basis. The lease having come to an end due to effluxion of time, does the 2nd defendant currently on the suit premises have any legal basis to deny the plaintiff vacant possession demanded? The pleadings by the 2nd Defendant as contained in the counter-claim, were hinged on the remainder term of the impugned lease agreement.”

“Despite the impugned lease having expired, both Defendants have submitted that there was a landlord-tenancy relationship created under the doctrine of estoppel. It is trite law that courts do not re-write contracts between parties. This was the holding in the often-cited of National Bank Ltd Vs. Pipe Plastic Samkolit (K) Ltd (2002) E. A. 503 that a court of law cannot re-write a contract between parties,” Justice Omollo noted.

She also noted that Pioneer International Schools was not a party to the lease hence it had the burden to prove the basis from which it could derive rights.

“This is in view of the holding in the case of Savings & Loan (K) Ltd vs Kanyenje Karangaita Gakombe & Another (2015) eKLR which held that; “In its classical rendering, the doctrine of privity of contract postulates that a contract cannot confer rights or impose obligation on any other person other than the parties to the contract. Accordingly, a contract cannot be enforced either by or against a third party.”

Justice Omollo added that the doctrine of equitable estoppel (sub-tenancy) is a defence that is raised when there is evidence of conduct or representation that has been relied on by another party, with the result that the other party has suffered a detriment or injury.

After analysing the entire case, Justice Omollo dismissed both Goshen Gardens’ defences and counter claims and ruled in favour of Delmonte, which was also awarded costs. No costs were awarded for the counter claims.

In making her final orders, she, however, tool not that there is a school located on the suit property and thus the need to take regard to the best interest of the child.

“The best interest herein is to let the school calendar for this year run to an end before the students’ learning is disrupted. It is on this account that although I make an order for vacant possession, the 2nd Defendant shall surrender such vacant possession on the 10th of December 2025. Between now and the 10th December, 2025, the 2nd Defendant shall continue to pay the monthly rents due to the Plaintiff,” she ruled.