[2021] KEBPRT 127 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. E073 OF 2021 (NAIROBI)

CAREN OKORE…........................................................TENANT/APPLICANT

VERSUS

BEMUDA HOLDINGS LIMITED........................LANDLORD/RESPONDENT

RULING

1. The Tenant’s complaint dated 23rd May 2021 is bought under section 12(4) of Cap 301 and is in the following terms;

“The complaint concerns the Landlord in that he unlawfully closed the Tenant’s business premises with all her goods of trade inside and denied her access contrary to the provisions of Cap 301 of the Laws of Kenya.”

2. The Tenant prayed in the said reference;

a. That the Tribunal intervenes and orders the Landlord to open the premises immediately for the Tenant to continue with her business.

b. That the Landlord be restrained from interfering with her business or from levying distress against her.

c. That the OCS Central Police Station to assist in the compliance with the orders.

d. That the Landlord bears the costs of the case.

3. On 23rd August 2021, the parties decided/agreed to have the reference disposed of by way of written submissions and the affidavits of the parties. I therefore proceed on the basis that the parties have adopted their respective affidavits as their evidence for the purposes of determining this dispute.

4. The affidavit of the Tenant, Caren Okore sworn on 3rd May 2021 may be summarized as follows;

a. That initially, the Tenant had a lease with the Landlord for five years and three months which expired in January 2021.

b. That the Tenant continued as a Tenant awaiting a new lease to be entered into or agreed upon.

c. That on 24th March 2021, the Landlord locked the premises due to rent arrears.

d. That the Tenant is not able to counter the disputed amounts as all her documents were locked inside the suit premises.

e.That the Tenant contests the rent arrears as she has paid a sum of Kshs 170,000/-.

f. That the Landlord’s statement is erroneous for purporting to state that the Tenant had paid Kshs 86,050/- instead of Kshs 100,000/-.

g. That a leakage in the roof of the suit premises caused by repair of the roof damaged the Tenant’s goods, with the damage assessed at Kshs 1,938,400/-.

h. That the closure of the business premises was unlawful and punitive.

i. That the Landlord has not addressed the issue of the damaged stocks belonging to the Tenant.

5. The replying affidavit sworn by Kamau Ngengi, a Director of the Landlord may be summarized as follows;

a. That during the pendency of the Tenant’s lease, the Tenant would only make irregular and partial payments of the rental amounts contrary to the terms of the lease agreement.

b. That the Tenant has failed to clear the outstanding balance on goodwill security deposit and rental arrears.

c. That on her application, the Tenant was allowed to pay half rent (Kshs 86,602. 23)for the months of April and May 2020.

d. That thereafter, the Tenant continued paying rent at the rate of Kshs 100,000/- instead of Kshs 176,243. 95/-.

e. That the Tenant’s lease expired on 31st January 2021 and the Tenant continues with her business on the suit premises awaiting a new lease.

f. That the alleged damages on the Tenant’s premises were caused by renovations conducted by one Mr Mohamed Kulmia, a Tenant whose premises are above the Tenant’s premises. The Landlord cannot be held liable for the said damages.

g. That the Tenant has led no evidence to prove the alleged damages suffered.

h. That the Tenant had been in rent arrears even before the alleged loss for a period of seven months. The Tenant is therefore in breach of the terms of the lease agreement.

i. The Tenant owes rent arrears in the sum of Kshs 1,496,087. 63.

j. That the Tenant’s application is an inequitable abuse of court process intended to delay the Landlord’s exercise of its rights under the tenancy and the Tenant is therefore not entitled to the orders of injunction sought.

6. The Tenant’s/Applicant’s submissions may be summarized as follows;

a. That the tenancy herein has not been reduced into writing.

b. That some of the money paid by the Tenant have not been accounted for by the Landlord.

c. That while the Landlord’s/Respondent’s premises were being renovated a leakage occurred causing damage to the Tenant’s goods valued at Kshs 1,938,400/-.

d. That the Landlord has not denied locking the Tenant’s premises.

e. That the locking of the Tenant’s premises was unlawful and against the provisions of Cap 301.

f. That the Landlord opened the suit premises on 6th May 2021.

g. That the Tenant is under no obligation to pay rent from 24th March 2021 to 6th May 2021 when the premises were closed.

7. The Landlord’s submissions may also be summarized as follows;

a. That as at 31st August 2021, the Tenant had arrears of rent in the sum of Kshs 1,848,575. 53 and costs of Kshs 144,200/- being the costs expended by the Landlord as a result of this case.

b. That the Tenant does not deny her indebtness to the Landlord. her complaint that there are discrepancies in the rent payments has been cured by the statement of account issued by the Landlord and marked KN – 1. The Landlord is therefore entitled to exercise its rights under the law to recover the rent arrears from the Tenant.

c. That the renovations on the suit premises which led to the alleged damages to the Tenants stock were not carried out at the behest of the Landlord. In any event, the Tenant had been in rent arrears for seven months before the alleged renovation.

d. That the computation of loss contained in the Tenant’s annexure “Co – 4” has no evidentiary or documentary basis pinning the said loss upon the Landlord.

e. That the Tenant has not proved that her loss was occasioned by the Landlord.

f. That the Landlord’s right to levy distress had already crystalized.

8. The issues which arise for determination as relates to the reference are the following;

a. Whether the closure of the Tenant’s business premises was unlawful and contrary to the provisions of Cap 301 of the Laws of Kenya.

b. Whether the Landlord has to be ordered to re-open the suit premises.

c. Whether the Landlord ought to be injuncted from interfering with the Tenant’s business.

d. Whether the Landlord ought to be injuncted from levying distress against the Tenant.

e. Whether the Landlord is liable to the Tenant for the alleged destruction of the Tenant’s assorted stockin the sum of Kshs 1,938,400/- while the Landlord’s premises was under renovation.

f. What are the appropriate orders to grant in the circumstances of this case.

9. On issue (a):

a. It is common ground that the lease between the parties herein expired in January 2021. The parties have not entered into any other written lease agreement. Clearly, the tenancy between the parties herein is a controlled tenancy as defined in section 2(1)(a) of Cap 301.

b. The Landlord in this matter has not denied that on 24th March 2021, it closed the Tenant’s business premises. The closure of the Tenant’s premises was an attempt at terminating the tenancy between the parties. Indeed at paragraph 20 of the replying affidavit, the Landlord states;

“That I am aware that the Tenant herein had been in arrears on the security deposit and the monthly rent for a whopping seven months before the alleged damage on the premises in February 2021 causing the Landlord untold financial loss and damage and the Landlord being apprehensive that the Tenant would leave the premises with arrears commenced termination of the tenancy sometime in March 2021.

c. The mode of the termination of the tenancy that the Landlord adopted in this case was the closure of the Tenant’s business premises. That was clearly illegal and contrary to the provisions of section 4(2) of Cap 301 which is in the following terms;

“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.”

d. In view of this finding, the Landlord will not be entitled to any rent from the Tenant from the date of the illegal closure of the Tenant’s business until the date that the same was opened, that is to say, from 24th March 2021to 6th May 2021.

10. On issue (b)

a. The Tenant has already indicated in her submissions that the suit premises were opened on 6th May 2021. Nothing therefore turns on this issue.

11. On issue (c) and (d)

a. The Tenant has sought an order that the Landlord be injuncted from interfering with her business. She has also sought orders that the Landlord be injuncted from levying distress. In order to deal with this issue, the question that begs an answer is whether or not the Tenant is in rent arrears.

b. The Tenant had stated in her supporting affidavit that she was unable to counter the disputed amounts of rent as all the documents supporting her rent payment were locked up in the business premises. I do note that the Tenant has conceded that the suit premises were opened on 6th May 2021. Since the said date, the Tenant has not filed any further affidavit annexing the documents in support of her rent payments. She has had free access to the premises since 6th May 2021.

c. The Landlord on its part has annexed the rent statement for the suit premises. The statement clearly shows that the total amount due from the Tenant to the Landlord is Kshs 1,408,575/-.

d. The Tenant has not in any manner challenged the statement of account supplied by the Landlord. I have no reason to disbelieve the same. Consequently, I do find that the Tenant is in rent arrears in the sum of Kshs 1,408,575. 53/-.

e. The Tenant having been found to be in rent arrears is not deserving of the orders of injunction which she has sought. In case of Julius Mogalla Gellode T/A Esmart Technical College Vs Ouru Power Ltd and Joseph Nyachoti T/A Minimax Automotives [2016] eKLR the court stated at paragraph 74 of the ruling;

“I find that once the Plaintiff has acknowledged that he is indeed in arrears of rent, it means that he is in breach of the most critical term of their tenancy and being a defaulting party, he cannot be seen to approach the court for an order of injunction which is an equitable relief/remedy only available to parties who come to court with clean hands.”

I am guided by the above finding of the honourable judge in declining to issue injunctive orders in favour of the Tenant/Applicant.

f. Can the Tenant obtain orders of injunction to restrain the Landlord from exercising its rights as Landlord to levy distress for rent arrears due? I think not.

In the case of Peter Nthenge Vs Daniel Itumo & Another Nairobi HCCC No 1242 of 1974it was held;

“The right of a Landlord to distrain for rent arises at common law and need not be expressly reserved. It enables the Landlord to secure the payment of rent by seizing goods and chattels found upon the premises in respect of which the rent or obligations are due. Formerly, the right to distress…”

g. In the case of John Nthumbi Kamwizhi Vs Asha Akumu Juma, Embu HCCA No. 7A of 2016, the court stated at paragraph 32 of the judgement;

“The right serves the purpose of a remedy for the Landlord to recover rent that may be in arrears. For this right to be enforced, there must be rent in arrears…”

h. And finally, section 3 of the Distress for Rent Act Cap 296 provides as follows;

“Subject to the provisions of this Act and any other written law any person having any rent or rent service in arrears and due upon a grant, lease demise or contract shall have the same remedy by distress for the recovery of that rent or rent service as is given by the Common Law of England in a similar case.

i. It is therefore clear that the only requirement for the exercise of the right to levy distress by the Landlord, is there being rent in arrears. In this case, the Tenant does not deny being in rent arrears. The Landlord cannot therefore be injuncted from taking legal steps in the recovery of the rent due. The Landlord is therefore at liberty to follow the laid down procedure in recovering the rent arrears.

12. On issue (e)

a. The Tenant has contended that while the Landlord’s premises were being renovated, a leakage occurred causing damage to the Tenant’s goods valued at Kshs 1,935,400/-. In support of this contention, the Tenant has annexed a schedule showing clothes and shoes which were damaged and their values. The Landlord has denied responsibility for the renovations that led to the leakage and the alleged losses. It has attributed the leakage to the activities of a third party Tenant, one Mohamed Kulmia.

b. The Tenant has not disputed this averment by the Landlord. I do find that the Tenant has not proved by her pleadings that the Landlord was responsible for the leakage that led to the damages upon her stock as alleged.

c. The Tenant’s claim is also in the nature of special damages. It must be specifically pleaded and proved. I do note that this claim for damaged stock did not form part of the Tenant’s complaint referred to the Tribunal and in my view it is therefore not one for consideration.

d. However, even if I am wrong on this view, I would still find that the Tenant has not laid any evidence to prove her special damages claim. It is not enough to just draw a list of goods and their values without more. One would have expected perhaps receipts used in purchasing the same and a sales catalogue showing the price lists, etc.

e. I therefore find that the Landlord is not proven to have been responsible for the renovations that led to the alleged losses and further that the Tenant has failed to prove her claim for the alleged losses due to the damaged stock.

13. On Issue (f)

a. In the circumstances and following from the above, I do make the following orders;

i. The Tenant’s prayer for orders of injunction against the Landlord is dismissed.

ii. That the Landlord is not entitled to any rent from the Tenant from 24th March 2021 to 6th May 2021.

iii. That the Landlord is at liberty to follow the laid down procedure to recover the rent arrears from the Tenant.

iv. That the Tenant’s claim for the sum of Kshs 1938,400/- being the value of damaged stock is dismissed.

v. That the Tenant’s reference is dismissed.

vi. That having found that the closure of the Tenant’s business by the Landlord was illegal, and the Tenant was in arrears of rent, each party will bear their own costs.

CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered in virtually by Hon Cyprian Mugambi Nguthari this 3rd day of December, 2021 in the absence of the parties.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL