[2021] KEBPRT 326 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 1142 OF 2019 (NAIROBI)

BCONCEPT LIMITED T/A B-CLUB........................................TENANT

VERSUS

GOLDROCK DEVELOPMENT LIMITED.........................LANDLORD

DALALI TRADERS AUCTIONEERS......................1ST RESPONDENT

VALLEY AUCTIONEERS.........................................2ND RESPONDENT

RULING

1. The Tenant’s/Applicant’s notice of motion dated 15th November 2019 seeks the following orders;

a. Spent.

b. Spent.

c. That an injunction do issue restraining the Landlord whether by itself, its servant, agent and/or employees from levying distress, distraining, attaching and/or in any other way interfering with the Tenant quite (sic) possession and occupation of all that premises known as B-Club, Galana Plaza Nairobi pending the hearing and determination of this reference.

d. Costs.

2. The application is supported by the affidavit of one George Otieno Mbory sworn on 15th November 2019.

3. The application is opposed. The Landlord/Respondent has filed a replying affidavit sworn by one Nicholas Makula Mutinda on 10th February 2020 and a further affidavit sworn on 15th March 2021. The Tenant/Applicant has not filed any further affidavits in response to the affidavits sworn and filed by the Landlord.

4. The Landlord, on 18th March 2021 filed a notice of preliminary objection in the terms;

a. That the subject matter of the Tenant’s application being the lease agreement does not fall under the provisions of Cap 301 and therefore the Tribunal cannot determine the matter.

b. That the Tribunal lacks the jurisdiction to determine the matter and grant the reliefs sought and subsequently given in the orders dated 18th November 2019.

c. That the forum with the jurisdiction to hear the matter is the Environment and Land Court and NOT the Business Premises Rent Tribunal.

d. The Tenant’s application is misconceived and an abuse of the court process.

The Landlord’s notice of preliminary objection being one that substantially challenges the jurisdiction of the Tribunal to hear and determine this matter, it is only proper that the same is dealt with at the earliest opportunity and I propose to do so now.

5. The Tenant’s affidavit in support of its application is quiet on the nature of the lease entered into between the parties. The Tenant has only stated at paragraph 3 of the said affidavit that it has been a Tenant of the Landlord on the demised premises since the year 2015. It has not stated the term of the said lease and whether or not it was in writing.

6. The Landlord’s replying affidavit at paragraph 3 thereof states that the Tenant has been renting the demised premises since February 2016. The landlord has annexed to the said affidavit exhibit NMMI, a copy of the heads of terms of the lease. Under the said terms, the term of the proposed lease is expressed to be a period of six (6) years. The terms were accepted by the Tenant who appended its representatives signature on the document on 19th February 2016. At paragraph 2 of the heads of terms of the lease it is stated;

“Please note that these terms will form the contract up and until the lease for the premises is executed and stamped.”

It is clear at this point, that, the Tenant having accepted the terms contained in exhibit NMMI, it had already entered into a binding contract with the Landlord until the execution and stamping of the lease.

7. The Landlord’s further replying affidavit sworn on 15th March 2021 has introduced the lease document between the parties herein. The same is annexed as the Landlord’s exhibit NMM-1. I have perused the lease document and do note that;

a. It has a commencement date of 1st March 2016.

b. It is for a term of six (6) years from and including the commencement date.

c. It does not contain provision for termination, otherwise than for breach of covenant within five years from the commencement thereof.

8. On 8th February 2021, 11th March 2021, 26th April, 2021, 10th May 2021, 13th May 2021, 17th May 2021when this matter came up for hearing the Tenant/Applicant did not appear in court to argue its application. However, on 2nd June 2021, Miss Achieng was present for the Landlord and Mr Ndolo was present for the Tenant. On the said date, the Tenant on counsel’s request was granted fourteen days to file its submissions and the matter fixed for mention on 16th June 2021. The Tenant did not appear in court on 16th June 2021 and neither did it file its submissions, none have been filed to date. This ruling has therefore been written without the benefit of the submissions of the Tenant.

9. The Tenant’s complaint dated 15th November 2019 is brought under section 12(4) of Cap 301 which is in the following forms;

“In addition to any other powers specifically conferred on it by or under this Act, a Tribunal may investigate any complaint relating to a controlled tenancy made to it by the Landlord or the Tenant and may make such order as it deems fit.

Section 2(1) of Cap 301 is in the following terms;

Controlled tenancy means a tenancy of a shop, hotel or catering establishment;

a. Which has not been reduced into writing or;

b. Which has been reduced into writing and which;

i. Is for a period not exceeding five years or

ii. Contains provision for termination otherwise than for breach of covenant within five years from the commencement thereof OR

iii. Relates to premises of a class specified under subsection (2) of this section.

Section 2(2) of Cap 301 provides:

“The Minister may by notice in the gazette specify by reference to rent paid or rateable value entered in a valuation roll under the valuation for rating Act (Cap 266) classes of shops, hotels or catering establishments, tenancies of which shall be controlled tenancies regardless of the form or period of such tenancies.”

10. The lease agreement exhibited by the Landlord herein has not been challenged by the Tenant. The Tenant in its application and supporting affidavit has not disclosed the existence of the lease agreement. I do find that the heads of terms of the lease were accepted by the Tenant and that indeed the lease document itself has been properly executed by both the Landlord and the Tenant.

The lease is in writing, it is for a period of six years and does not contain provisions for termination otherwise than for breach of covenant within five years from the commencement thereof. The tenancy between the parties herein is therefore clearly Not a controlled tenancy as defined under Cap 301 of the Laws of Kenya.

I am in agreement and do find guidance in the holding of the court in the case of Jubilee Insurance Company of Kenya Limited Vs Joseph Ndugu Karega T/A Leather Touch Foot Care Specialists [2014] eKLR where the court held;

“I have perused the lease agreement annexed by the Plaintiff which the Defendant acknowledges entering into. Indeed, the duration of the lease is expressly provided as 6 years commencing 1st October 2007. The lease also provides that the term shall determine by effluxion of time. The term of the lease agreement itself removes this Tenant – Landlord relationship from the ambit of controlled tenancyunder Cap 301 Laws of Kenya. A distinct characteristic is the duration of the tenancy which at section 2 thereof defines controlled tenancy as having a period not exceeding five years… It is my finding that this is not a controlled tenancy and therefore this court has jurisdiction to adjudicate over this matter.”

11. Having found that the tenancy between the parties herein is not a controlled tenancy and guided by the above authority and the definition of a controlled tenancy under Cap 301 of the Laws of Kenya, I do consequently hold that this tribunal has no jurisdiction to hear and determine this matter.

12. The Landlord’s preliminary objection dated 18th March 2021 is allowed. The Tenant’s reference dated 15th November 2019 and the Tenant’s notice of motion dated 15th November 2019 are hereby dismissed with costs to the Landlord/Respondent.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon Cyprian Mugambi Nguthari this 6THday of September, 2021 in the presence of M/S Biwott for the Landlord.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL