[2021] KEBPRT 101 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 17 OF 2021 (MOMBASA)

ADVENTURE ADRENALIN AFRICA LIMITED.........TENANT

VERSUS

HELLEN HARTLEY....................................................LANDLORD

JUDGEMENT

1. The dispute between the Tenant and the Landlord herein has a checkered history as shall become clearer in the courts of this judgement.

2. The relationship between the two parties in so far as this matter is concerned begun with a lease agreement dated 1st May 2015 in which the Landlord leased out the property known as “Diani House” which comprised of buildings, swimming pool, garden, forest and beach frontage to the Tenant at an agreed rent of Kshs 50,000/- per month inclusive of taxes for a period of two (2) years with an option at the end of the term for the Tenant to apply for a new 2 year agreement under terms to be agreed.

3. The premises was to be used as a “Guest house for paying guests only”. The property is constructed on land reference No. Kwale/Diani Beach Block/808 which was later sub-divided to create parcel No. 1752 which is now the subject matter of the tenancy herein.

The Tenant’s Case

4. The Tenant’s witness one Anjali Dayaramani filed her witness statement dated 8th April 2021 and a further statement dated 11th May 2021 which were adopted in evidence when the matter came up for hearing.

5. It is not in dispute that the Landlord is the registered owner of the suit premises. It is the Tenant’s case that it took the suit premises when the hotel and tourism business at the Kenyan Coast was at its lowest.

6. The Respondent renovated the premises and made improvements to the same and the Tenant paid for the renovations and improvements. As a result, rent was renegotiated and reduced to Kshs 50,000/- owing to low volume of business to enable the Tenant recoup costs thereof.

7. The Tenant had been conducting its business in the premises and faithfully meeting its obligations.

8. On 11th September 2016, the Landlord sent an email to the Tenant’s said witness to the effect that she had been offered a very good development option which she could not turn down as a result of which she gave the Tenant a three (3) months’ notice from that date to vacate the suit premises.

9. The Tenant filed Tribunal Case No. 107 of 2016 in the backdrop of the said notice to restrain the Landlord from evicting it or interfering with its quiet possession. The Tenant’s application was determined on 21st November 2016 and the offending notice was withdrawn. The Landlord was however restrained from evicting the Tenant or interfering with its quiet possession of the suit premises without complying with the law.

10. On 5th December 2016, the Landlord’s advocate Ms Ndegwa Katisya Sitonik & Associates Advocates sent a letter to the Tenant requiring it to vacate the suit premises on or before 1st May 2017 was set to expire.

11. The Tenant filed Tribunal Case No. 70 of 2017 seeking to restrain the Landlord from interfering or evicting it from the suit premises. A ruling was delivered on 10th November 2017 granting some of the prayers while others were directed to be heard by way of viva voce evidence.

12. The matter was subsequently heard as directed and judgment was delivered on 16th November 2018 by which the Tribunal reaffirmed the orders that the tenancy was controlled and was only terminable by the Tribunal or by mutual consent of the parties.

13. In the pendency of Tribunal Case No. 70 of 2017, the Landlord filed Mombasa Environment and Land Court Case No. 257 of 2017 seeking orders of vacant possession against the Tenant from the suit premises. An interlocutory application filed in the case was dismissed vide a ruling delivered on 11th October 2017. The case is still pending.

14. Following ruling and judgement in Tribunal Case No. 70 of 2017, the Respondent filed appeals vide Mombasa ELC Appeals No. 28 and 29 of 2018 which were subsequently consolidated and heard together. Judgement therein was delivered on 21st October 2020 dismissing the same.

15. In the month of January 2020, the Tenant learnt that the Landlord had subdivided the title of the suit premises into several parcels namely Title Nos Kwale/Diani Beach Block/1746, 1748, 1749, 1750, 1751 and 1752.

16. The Landlord leased out the portion comprising the suit premises to one Hannah Wambui Gatundu for a term of six (6) years from 26th November 2019 at a monthly rent of Kshs 500,000/-.

17. As a consequence, the Tenant filed another case being Tribunal Case No. 68 of 2020 against the new Tenants and Landlord and obtained interim orders restraining them from interfering with its business until the hearing and determination of the application and/or complaint.

18. The Landlord and Hannah Wambui Gatundu filed a replying affidavit stating that they were not intending to evict the Tenant from the suit premises.

19. After delivery of judgement in Mombasa ELC Appeals No. 28 and 29 of 2018, the Landlord issued the Tenant with a notice to terminate the tenancy dated 24th November 2020 claiming that she intended to occupy the suit premises as a family residence. The Tenant notified the Landlord that it did not intend to comply with the tenancy notice and filed this reference subsequently.

20. According to the Tenant, the actions by the Landlord are not only contrary to orders issued by the Tribunal but are illegal and unlawful. It adds that the notice given is in bad faith.

21. It is the Tenant’s case that the Landlord has not been living on the suit premises as the same was on long lease for 2 years between 2012 to 2014 to Base Titanium. The Tenant further contends that the Landlord has not shown any evidence that she has any intention to occupy the premises as a family residence.

22. The Tenant contends that the Landlord has been attempting to evict it in order to lease it out to another Tenant and as such, the notice should be dismissed with costs and/or declared to be of no effect.

23. The Tenant contends that the said termination notice is not genuine in view of the many previous cases and attempts to evict it from the suit premises enumerated above.

24. The Tenant further avers that the Landlord had another property in Naivasha which she sold some years back and therefore cannot claim to be financially handicapped.

25. According to the Tenant, the Landlord with a view of evicting the Tenant from the suit premises refused to accept rent from the year 2017 and cannot be heard to state that she cannot afford to lease a new family residence. Some of the money is said to have been deposited in the Tribunal and the rest has been kept by the Tenant in an escrow account which she was ready and willing to release to the Landlord.

26. The Tenant further contends that there is no evidence that the Landlord is homeless and has no financial means to find an alternative residence since she clearly admitted to have all along been gainfully employed in the Wildlife Conservancy Management and in operation of Mundui Guest House Business.

27. It is the Tenant’s evidence that the Landlord’s husband Richard Hartley’s family owns two beach front houses in the Casuarina area of Malindi.

28. The Tenant’s witness further contends that the Landlord has not written to her or the Tenant on the hardship she was facing to require the suit premises for her own occupation and the reasons in the termination notice are flimsy and totally unbelievable.

29. The Tenant doubts the coincidence that the woes facing the Landlord and her family arose around the same time the Environment and Land Court upheld the decision of the Tribunal and dismissed appeals filed by her confirming that the Tenant was protected.

30. As evidence of bad faith, the Tenant cites a post made on 18th March 2021 on its Instagram account “dianihouserocks#’ words to the effect:-

“helenhartley Kenya”

Wish that everyone know you are not paying me any rent for years now. I wish Diani knew the awfulness of what you are doing.”

31. According to the Tenant, this was done with the sole intention of injuring the character and reputation of its business.

32. The cases filed in the Tribunal and the Environment and Land Court, Mombasa according to the Tenant show the character of the Landlord as a person not ready to stop at anything to get it out of the suit premises.

33. Finally, the Tenant states that all the cases were merited and owing to the low business coupled with covid – 19 pandemic, it had not been able to recoup its costs of renovations and general improvement of the premises as agreed with the Landlord.

The Landlord’s Case

34. On the other hand, the Landlord recorded and filed a witness statement dated 22nd April 2021 which she adopted as her testimony in response to the reference dated 12th January 2021 filed on 14th January 2021 by the Tenant.

35. She admits having served the Tenant with a notice of termination of tenancy dated 24th November 2020 on the ground that she intended (and still intends) to occupy the premises as her family’s residence for a period of not less than one year with effect from 1st February 2021.

36. It is the Landlord’s case that the Tenant has without any credible evidence and in own interest sought to question the said ground as being not genuine.

37. The Landlord maintains in her evidence that she urgently needs to have vacant possession of the suit premises for her indefinite occupation and use as her own and her family’s residence for reasons that the property was at all material times always been her primary family residence comprising of a 9 bedroom residential dwelling house together with a swimming pool, usual residential out buildings and an expansive garden measuring 2. 6329 hectares (6. 5058 acres) or thereabouts. She states that it is not a hotel.

38. Before letting out the property, the same was her family residence and she used to live there with her husband Richard Hartley and some of their children and the same was let out to the Tenant since the Landlord and her husband were moving to live in Naivasha. At that time, their youngest daughter was attending a day school upcountry and they needed to be with her.

39. Secondly, Matalai Limited as a company owned by the Landlord and her son, Thomas Christopher Hartley and his wife, Nicola Grace Rushmere through the family trades had been engaged with effect from 1st March 2013 as Management Consultants of 1000-acre Wildlife Conservancy in Naivasha by a company known as Noratesa Limited together with a guest house facility known as Mundui Estate. As such they had to move on site to the conservancy.

40. Thirdly, with effect from 1st March 2017 up to 4th October 2020, the Landlord’s family had obtained a short term lease from Noratesa Limited for the Guest House known as Mundui Estate to operate the facility as a guest house during the term of the lease.

41. Owing to the foregoing, they did not require the suit premises to live in as a primary residence during the term of the said lease.

42. In view of their long absence from Diani, the Landlord and her husband needed to engage someone they could trust to take care of the suit premises during that period.

43. Unfortunately for the family, in April 2020, Noratesa Limited which was the Landlord of the Naivasha Conservancy informed them that it had entered into an agreement for sale in respect of the Wildlife Conservancy and the Guest House facility.

44. The purchasers of the property (new owners) required vacant possession as part of the sale completion process of the entire Wildlife Conservancy and Mundui Estate. As a result, the Landlord and her family were compelled to agree to termination of the lease over the property with effect from 4th October 2020 by executing a mutual agreement dated 7th April 2020 to that effect.

45. As a consequence, the Landlord and her family were left with no place to live due to the fact that the Tenant herein had already declined to deliver vacant possession of the suit property.

46. Owing to the aforesaid state of affairs, the Landlord and her family have been living as licensees of the new owners of the property in Naivasha which they were previously managing before the new owners take formal possession.

47. The completion of the sale agreement between Noratesa Limited and the new owners had been delayed and completion date extended to 31st December 2020and the family was only allowed to continue staying at the said premises up to 31st March 2021in the home that the proceedings before this Tribunal would have been completed and the Tenant directed to hand over vacant possession back to the Landlord.

48. In the light of the sale of Mundui Estate, the Landlord informed all travel agents and all customers via social media that Mundui Guest House business would be closing with effect from 31st March 2021 and no new bookings would be accepted after that date.

49. The Landlord fears that she and her family were liable to be directed to vacate the said property by the new owners or be forcefully evicted if they did not leave.

50. Following the happening of the Corona virus pandemic in2019, the Landlord contends that their business was adversely affected thereby impacting on their general finance prior to the sale of the Mundui Guest House property. This depleted the family’s savings making them unable to lease a new family residence in Naivasha or elsewhere.

51. It is therefore the Landlord’s case that she was truthful, genuine and honest when she issued the Tenant with notice of termination of the tenancy with effect from 1st February 2021 since they intended to move back to the suit premises as their primary residence and therefore requests the tribunal to uphold the notice.

52. It is urged that in the event of failure to uphold the notice, the Landlord and her family would continue to remain homeless at a time when they have no financial means to fund and alternative residence as well as support.

53. The Landlord further contends that the initial lease agreement expired on 1st May 2017 and since then, she has never accepted payment of monthly rent from the Tenant despite the latter failing to part with possession.

54. Prior to expiry of the tenancy agreement, the Landlord had received an offer from one Gary Lincoln Hope who was interested in investing the sum of Kshs 250,000,000/- in real estate in Diani and was looking for a joint venture with a person who owned a property similar to the suit premises.

55. As the proposal was quite advantageous to the Landlord, she considered accepting the offer and informed the Tenant herein via email on 11th September 2016 of her decision to invoke clause 4(c) of the tenancy agreement by giving a 3 months’ notice to vacate.

56. The Tenant declined to comply and file a reference vide BPRT case No. 107 of 2016 which was subsequently resolved by consent on 21st November 2016when the Landlady agreed to withdraw the notice.

57. Again, when the tenancy agreement was approaching expiry and believing that the Tenant would honour the contractual bargain and yield up possession, the Landlord issued notice that she would not be renewing the tenancy agreement by a letter dated 5th December 2016. This culminated into fresh legal proceedings vide BPRT case No. 70 of 2016. As a result, the potential investor backed off from the proposed investment. As a result, the Landlord and her family were deprived of a lucrative opportunity for financial advancement by the Tenant.

58. The reference vide BPRT No. 70 of 2016 was finally dismissed by the Tribunal for lack of merits on 16th November 2018.

59. However, the tribunal directed that the tenancy could only be terminated upon notice prescribed by the Act.

60. Pending determination of the appeals, the Landlord admits leasing the suit premises together with other land parcels to one Hannah Gatundu who was interested in operating a camping site at the expansive land surrounding the premises subject to the controlled tenancy of the Tenant.

61. The Tenant filed a 3rd reference vide BPRT No 68 of 2020 on the basis that the Landlord created the said lease with the sole aim of having her evicted from the premises. This allegation was denied on oath by both Respondents.

62. The Tenant has insisted on prosecuting the said reference in spite of the same having been overtaken by events. As a result the new Tenant surrendered the lease on 24th November 2020 which was registered on 25th November 2020. This led to the Landlord’s family losing an opportunity for advancement.

63. According to the Landlord, the previous proceedings have no bearing on this reference and the pending litigation in Mombasa ELC case No 257 of 2017 is seeking for recovery of mesne profits at market rental value of the suit premises with effect from 1st May 2017 when the tenancy agreement expired up to the date the Tenant yields vacant possession.

64. The Landlord produced 18 documentary exhibits in support of her case.

65. After close of both parties’ cases, the counsels filed their respective submissions which shall be considered alongside the issues for determination.

66. Arising from the pleadings and evidence, the following issues are due for determination;

a. Whether the notice of termination of tenancy dated 24th November 2020 ought to be upheld or dismissed.

b. Whether the previous court proceedings over the suit premises affects the instant proceedings.

c. What reliefs ought to be granted in this case.

67. Section 4(2) of Cap 301 provides as follows;

“A Landlord who wishes to terminate a controlled tenancy or to alter, to the detriment of the Tenant any term or condition in or right or service enjoyed by the Tenant under such a tenancy shall give notice in that behalf to the Tenant in the prescribed form.”

68. Section 7 (1) (g) of the said Act further provides one of the grounds of termination of tenancy to be that;

“Subject as hereinafter provided, that on termination of the tenancy, the Landlord himself intends to occupy for a period of not less than one year, the premises comprised in the tenancy for the purposes or partly for the purposes of a business to be carried on by him therein or at his residence.”

69. It is not in dispute that the Landlord herein served a notice dated 24th November 2020upon the Tenant on the ground;

“I intend, on the termination of the tenancy to occupy the premises comprised in the tenancy as mine and my family’s residence for a period of not less than one year.”

70. The notice was expressed to take effect on1st day of February 2021 and is duly signed by the Landlord. The period given is in accordance with section 4 (5) which stipulates that the notice shall not be effective for any of the purposes of the Act unless it specifies the grounds upon which the requesting party seeks the termination alteration or reassessment concerned and requires the receiving party to notify the requesting party in writing within one month after the date of receipt of the notice, whether or not he agrees to comply with the notice.

71. Section 4 (4) of the Actprovides that no tenancy notice shall take effect until such date not being less than two months after the receipt thereof by the receiving party as shall be specified therein.

72. In its submission, the Tenant contends that the said notice is defective and invalid on the basis that it offends section 9 of Cap 301 which provides that after a determination of a reference no further notice shall be given in respect of the premises concerned until after expiration of twelve months unless a shorter period is prescribed by the Tribunal at the time of determination.

73. The Tenant submits that a reference vide Tribunal case No 70 of 2017 was the subject matter of Mombasa ELC Appeal cases No 28 and 29 of 2018 (consolidated) whose judgement was delivered on 21st October 2020and the impugned termination notice herein was served on 26th November 2020 barely one month after the said determination.

74. The ruling and judgment from which the said appeals arose were delivered on 10th November 2017 and 16th November 2018 by the Tribunal. Through the said judgement, the Tribunal dismissed the Tenant’s reference dated 7th April 2017 but allowed prayers 1 and 2 of the notice of motion of even date “until when the tenancy shall be determined by the Tribunal or by mutual consent of the parties.”

75. The said order therefore meant that the Landlord was at liberty to move the Tribunal under the Act to determine the tenancy without being caught up by section 9 thereof.

76. I have looked at the judgement of the Environment and Land Court and noted that the Landlord’s appeal was basically on the holding that the relationship between the Landlord and the Tenant was a controlled tenancy. It also related to the indefinite order of injunction against the Landlord.

77. In the premises, I find and hold that section 9 of Cap 301, Laws of Kenya has not been offended by the termination notice more so given the fact that the reference appealed from was determined by the Tribunal more than 12 months before the notice was issued. I further hold that had the legislature intended that no termination notice could be issued in the pendency of an appeal, nothing would have been easier than to provide so under section 9 of the Act. The notice is therefore not defective or invalid.

78. The Tenant further submits that by the time the termination notice was served, Tribunal case No. 68 of 2020 had not been concluded and that ELC case No 68 of 2020 had not been concluded and that ELC case No. 257 of 2017 filed in Mombasa was still pending. As such, it is argued that since there was an active case filed by the Landlord in a higher court seeking the same orders, the termination notice was a gross abuse of the tribunal process.

79. On the other hand, the Landlord has submitted that Tribunal Case No 68 of 2020had already been overtaken by events as the lease issued to Hannah Gatundu was surrendered and both Respondents in the said case had made it clear that they did not intend to evict the Tenant through filed affidavits in the case.

80. In my view, the pendency of Tribunal Case No. 68 of 2020 in which the lease issued to Hannah Gatundu was under challenge did not prevent the Landlord from issuing notice to terminate tenancy against the Tenant herein since the subject issue in dispute was different.

81. It would be a travesty of justice, it were to be held that as long as there was a pending litigation on any issue involving a controlled tenancy, a party cannot serve notice under Cap 301, Laws of Kenya. I hold that the notice of termination is not an abuse of Tribunal process.

82. The Tenant further submits that the ground to terminate tenancy is not valid on the basis that a Landlord cannot seek to terminate tenancy if she intends to occupy the same as a family residence as sought in the notice given but could only do so if she intended to occupy the same for purposes of business to be carried therein by herself.

83. According to the Tenant, Cap 301 deals with business premises and there is no contemplation of the Tribunal dealing with residential premises. It is therefore submitted that since the Landlord intends to use the premises as her residence and not for business, the notice is not valid.

84. As such, the Tenant submits that the ground cited for termination of the tenancy is unknown law and contrary to the provisions of the Act and cannot be granted by the honourable Tribunal.

85. With tremendous respect to the Tenant’s counsel, the foregoing submission is totally wrong and misapprehension of section 7(1)(g) of Cap 301. The said provision is clear that a Landlord can terminate a tenancy where he intends to use the premises as a residence. This is the reason given by the Landlord and it is quite valid.

86. It is further contended that the grounds set out in the notice are not genuine or given in good faith. This is on account of the history of the relationship between the two parties herein.

87. The issues raised in the Tenant’s submissions were litigated and determined in previous proceedings and cannot be revisited in this matter since this Tribunal is not sitting in exercise of appellate jurisdiction. The decisions made thereon have already been captured in this judgement and I agree with counsel for the Landlord that nothing much turns on them.

88. In any event, the circumstances obtaining in respect of the Landlord and her family then as opposed to now have been clearly demonstrated to have adversely and substantially changed. The reasons given previously for wanting vacant possession by the Landlord are those obtaining then and there is nothing wrong for her to bring to fore any other reason for requiring possession different from the previous ones.

89. All the Landlord is required to do is to demonstrate a settled intention to occupy the premises held by the Tenant as was held in Eldomart Holdings Limited Vs the Ticket Company Limited [2016] eKLR.

90. On refusal to accept rent by the Landlord, it came out clearly during the hearing that she did so on the basis that the term of lease had expired and any acceptance of rent would create a periodic tenancy in law in clear contravention of the initial written intention of the parties as expressed in the tenancy agreement. The tenancy having terminated by effluxion of time in line with its own provisions, the Landlord was under no legal obligation to continue receiving rent.

91. The Tenant trashes the reasons given by the Landlord for requiring vacant possession of the suit premises citing reasons that she sold a property in Naivasha and cannot therefore claim to be financially handicapped. No evidence was however tendered of the said sale.

92. Secondly, it is submitted that the Landlord’s husband has an ancestry property in Malindi and that the Landlord has flatly refused to collect rent from May 2017 amounting to Kshs 2,500,000/- which was enough to accommodate her in any part of the country. She is said to have returned money deposited into her account as rent for the suit premises without a valid reason.

93. The Tenant submits that the Landlord is gainfully employed in the Wildlife Conservancy Management and in the management of Mundui Guest House which she runs to date. The present circumstances relating to the two properties have been clearly narrated by the Landlord and have been replicated in this judgement. I saw the Landlord testify and her demeanor revealed a witness who is truthful and honest is her evidence. I have no doubt that she told the truth in that regard.

94. The Tenant states that the Landlord did not write to her on the hardship she was facing to recover the suit premises. I do not think that it was necessary to do so given the history of their relationship.

95. On what was allegedly written on the Instagram page of the Tenant, I find that the same would constitute a different cause of action which is not before me.

96. In a nutshell, having considered the evidence and all the material placed before me and the demeanour of both p arties when they testified virtually in this matter, I agree with the Landlord that she is entitled to vacant possession of the suit premises.

97. I note that the initial agreement entered between the two parties was for a period of two years. The same was not renewed by mutual agreement as contemplated therein and the Tenant has remained in possession of the suit premises courtesy of the multiple litigations between her and the Landlord. the Landlord has never accepted rent after expiry of the said tenancy term and although the tenancy is controlled as previously declared by the Tribunal and the superior court the same cannot be extended by this court.

98. In that regard, I rely on the decision in the case of Dr Koisagat Tea Estate Ltd Vs Eritrea Orthodox Tewdo Church Ltd [2015] eKLRwhere the court cited the Court of Appeal decision in National Bank (K) Ltd Vs Pipe Plastic Sarkolit (K) Ltd and another CA 95/99 that;

“A court of law cannot rewrite a contract between the parties as the parties are bound by the terms of their contract unless coercion, fraud, or undue influence are pleaded.”

99. In the present case, the parties entered into a clear tenancy agreement of two years. The same has not been renewed and no vitiating factor has been cited to warrant a different interpretation of the contract. I am bound to enforce the said terms.

100. In the case of Kasturi Limited Vs Nyeri Wholesalers Limited [2014] eKLR the Court of Appeal held as follows;

“A Tenant cannot impose or force himself on a Landlord. In the instant case, when the lease between the parties expired, it was incumbent upon the Appellant to give vacant possession.”

101. Going by the foregoing decisions, there is no justification for denying the Landlord possession of the suit premises and this Tribunal is entitled to make orders of vacant possession pursuant to section 12 (1)(e) of Cap 301, Laws of Kenya.

102. In conclusion therefore, the following final orders commend to me;

a. The Tenant’s reference herein is hereby dismissed with costs.

b. The Landlord’s notice of termination of tenancy dated 24th November 2020is hereby upheld.

c. An order of immediate vacant possession in respect of the suit premises being title No. Kwale/Diani Block/1752 otherwise known as Diani House is hereby issued against the Tenant.

d. The Landlord shall be at liberty to evict and remove the Tenant from the suit premises using a licensed auctioneer in the event of her failure to vacate voluntarily.

e. The OCS Diani Police Station or any other Police Officer within whose area of jurisdiction the suit premises is situate shall provide security during enforcement of these orders.

f. Costs of the reference awarded to the Landlord.

It is so ordered.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Dated, signed and delivered this 5thday of November 2021 virtually in the presence of Ngethe holding brief for Wainaina for theTenant and Miss Gitari holding brief for Muthama for the Landlord.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL