[2024] KEBPRT 181 (KLR)

City Hub Electronics Limited v JAD Agencies (Tribunal Case E1013 of 2023) [2024] KEBPRT 181 (KLR) (15 January 2024) (Ruling)

Neutral citation: [2024] KEBPRT 181 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E1013 of 2023

N Wahome, Member

January 15, 2024

Between

City Hub Electronics Limited

Landlord

and

JAD Agencies

Tenant

Ruling

1. The Landlord/Applicant approached this court by way of a reference dated 12. 10. 2023. The same was said to be brought under Section 12(4) of the Landlord and Tenant (shops, Hotels and catering establishments) Act Cap 301 of the Laws of Kenya (hereinafter referred to as “The Act.”

2. The main grievance was that:-“Breach of Tenancy agreement and has failed to pay rent and leave vacant possession of the said premises for renovation.”

3. The Reference was accompanied by the notice of motion application dated 12. 10. 2023. It principally sought for the following reliefs;i.Levy of distress on rent arrears amounting to Kshs. 75,000/=.ii.Surrender vacant possession of the demised premises; andiii.That the orders sought be enforced by the OCS Central police station.

4. The landlord’s main issues or rather his case against the Tenant is that;-a.The Tenant had on several occasions breached the Tenancy agreement dated 1. 9.2022. b.He was not paying rent on time as agreed and was also not taking care of the demised premises.c.The landlord wants the Tenant to vacate the premises for him to renovate the same.d.Despite giving the Tenant a termination notice dated 4. 1.2023, the tenant had refused to surrender vacant possession.e.The Tenant had also created a backdoor to the premises without the consent of the landlord.

5. The landlord further filed the further affidavit dated 21. 11. 2023. In it, he denied all the Tenant’s averments and assertions in the replying affidavit sworn by John Wanguba on the 6. 11. 2023. He further offered that the Tenant had broken windows, created a backdoor and effected paintings on the walls of the demised premises without consent.

6. In his aforesaid replying affidavit sworn on the 6. 11. 2023, the Tenant testified that;-i.The landlord wanted to illegally terminate his tenancy and evict him.ii.He had closed his offices between September, 2023 and October 2023 and was not able to carry out his business.iii.The landlord should not be paid the rents for September and October 2023 when it had locked up the demised premises.iv.The premises had only been rented out for only a year and did not therefore require any renovations.v.Abdirahman Omar Maalim was a stranger to him and therefore the reference and application were both incompetent.

7. When this matter came up for hearing on the 31. 10. 2023, it was with the concurrence of both parties agreeing to have the application herein canvassed by way of written submissions. Both parties complied and the matter set down for Ruling.

8. It is however important to note that this Tribunal ordered for reopening of the demised premises and for the landlord not to interfere with the Tenancy thereof pending the hearing and determination of this matter. The tenant was also required to pay the rent for August, 2023 at Kshs. 25,000/= which was not in dispute within seven (7) days of the date of 31. 10. 2023.

9. I confirm having perused the landlord’s submissions dated 24. 11. 2023 and the Tenant’s submissions also of the same date. Having looked at all the materials placed before me. Am of the opinion that the issues for determination in this matter are the following: -a.Whether the landlord’s notice of termination is lawful.b.How much in rent arrears is owed to the landlord by the tenant and whether levy of distress should be allowed.c.Who should bear the costs of the suit.

Issue No. A: Whether the Landlord’s notice of termination is lawful 10. There is no dispute that this is a controlled tenancy here this Tribunal has the jurisdiction to preside and determine the matters/issues placed before it.

11. Section 4(2) of the Act is unequivocal on the requirements of a valid and legitimate notice of termination. The same provides that; -“A landlord who wishes to terminate a controlled tenancy or to alter, to the detriment of the tenant, any term or condition in, or of any right or service enjoyed by the tenant under such a tenancy, shall give notice in that behalf to the tenant in the prescribed form.”

12. In regard to this matter, the prescribed and form is Form A as provided by Regulation 4(1) of the Regulation to this Act. The said Regulation provides that:-“A notice under Section 4(2) of the Act by the landlord shall be in Form A in the schedule to this Regulations.”

13. These provisions are mandatory and call for complete and strict compliance and any notice that contravenes the same is defective and of no effect. I refuse the invitation that the letter by the landlord’s Advocate dated 4. 1.2023 is a notice of termination.

14. Indeed a notice of termination must also include the grounds for seeking such termination. Section 7 1(9) provides one of the grounds as;-“Where, under the tenancy under which the tenant holds for the time being, the tenant has any obligations in respect of the repair and maintenance of the premises comprised in such tenancy, that the tenancy ought to be terminated in view of the state of repair of the premises, being a state resulting from the Tenant’s failure to comply with the said obligations.”

15. Section 7(1)(b) provides for a further ground of termination which is that;-“That the tenant has defaulted in paying rent for a period of two months after such rent has become due or payable or has persistently delayed in paying rent which has become due or payable.”

16. The Landlord also relied on a strange ground that he wanted to carry out renovations on the premises. Section 7(1)(e) provides the following as a possible further ground for termination: -“That on termination of the tenancy, the landlord intends to demolish or reconstruct the premises comprised in the tenancy or a substantial part thereof, or to carry out substantial work of construction on such premises or part thereof, and that he could not reasonably do so without obtaining possession of such premises.”

17. I have already determined that the notice of termination was unlawful for failure to comply with mandatory provisions of the law. Secondly, the purported notice purported failure of payment of rent as a further ground. However, the notice is dated 4. 1.2023 and the rent arrears claimed were only for December as the January rent was payable by the 5th of the same month. Therefore, that ground was not available to the landlord as there was no rent in arrears of more than two (2) matters pursuant to Section 7(1)(b) of the Act.

18. The landlord further claimed that the Tenant had failed to carry out maintenance works and to preserve the premises in good and tenable condition. To say the least, this is not convincing and I agree with the Tenant that the landlord was holding onto any available straw to ensure his removal from the demised premises.

19. I simply cannot understand how a premises rented in September, 2022 required massive maintenance works or renovations barely three (3) months of being rented out. As earlier determined and pursuant to Section 7(1)(f) of the Act, renovations are not envisaged as a valid ground for requiring vacant possession. The only ground available to the landlord was in the even that it wanted to demolish or reconstruct the demised premises. This was not the case. For renovations, it is my opinion that if the same becomes necessary, then the landlord should carry out the same within the shortest time and thereafter restore the tenant to its original status.

20. Finally, on the termination notice, I observe that the same was dated 4. 1.2023. It was for three (3) months. The same was therefore to take effect on the 4. 4.2023. The landlord continued receiving rent, after 4. 4.2023 showing that the termination notice had been compromised. It is my finding that even if the termination notice was lawful, which it was not, the tenancy herein was reinstated by the conduct of the parties with the Tenant paying rent after the 4. 4.2023 and the landlord receiving the same.

21. In all, a notice of termination is a very critical legal instrument and for it to be considered effective, the law must strictly be observed. The courts have severally decided on this matter with the leading case being:Nairobi ELC Appeal No. 16 of 2015Fredrick Mutua Mulinge t/a Kitui Uniform Kitui Teachers Housing Cooperative Society Ltd.

22. The court in quoting with approval the holding in the case of; Manaver N. Alibhai t/a Diani Boutique v South Coast Fitness & Sports Centre Limited, Civil Appeal No. 203 of 1994, which stated that;“The act lays down clearly and in detail, the procedure for the termination of a controlled tenancy. Section 4(1) of the Act states in very clear language that a controlled tenancy shall not terminate or be terminated, and no term or condition in, or right or service enjoyed by the tenant of, any such tenancy shall be altered otherwise than in accordance with the specified provisions of the Act. These provisions include the giving of a notice in the prescribed form. The notice shall not take effect earlier than 2 months from the date of receipt thereof by the tenant. The notice must also specify the ground upon which termination is sought. The prescribed notice in Form A also requires the landlord to ask the tenant to notify him in writing whether or not the tenant agrees to comply with the notice.”

23. From the foregoing, it is plain and clear that the purported notice dated 4. 1.2023 was unlawful and therefore of no effect nor consequence.

Issue No. B: How much in rent arrears is owed to the landlord by the tenant and whether levy for distress should be allowed. 24. From the evidence on record, the landlord claims rent in arrears effective, 2023. By the time of filing submissions on the 24. 11. 2023, the rent in arrears was Kshs. 80,000/=, the tenant having paid Kshs. 20,000/=. As today’s date at the monthly rent of Kshs. 25,000/= the rent in arrears is Kshs. 130,000/=, if the tenant has not made any further payment.

25. The Tenant has not controverted this evidence in any way that the owes rent to the landlord effective August, 2023. His only contention was that the landlord had locked up the demised premises for the months of September and October 2023. He therefore felt that he should not pay the rent thereof at ……for 2 months at Kshs. 50,000/=.

26. I note that the landlord has vehemently denied having locked up the Tenant’s premises. The landlord’s counsel Mr. Onyiego also denied the same from the bar when this matter came up in court on the 31. 10. 2023. The issue can only be determined on the strength of the word of the landlord against that of the tenant.

27. From the perusal of the materials before me, I find that the only complaint lodged by the Tenant about the landlord having locked up his premises was through a whattsapp message dated 25. 6.2023. All the whattsapp correspondences between the parties between August and October 2023, there is no hint of the demised premises having been closed down.

28. Indeed, the Tenant had all through the two months been unequivocally pleading for more time to settle the rent in arrears. It is noteworthy that the Tenant has not presented any material to court about the alleged closure of his premises neither did he approach this court for intervention. It is the landlord who felt aggrieved and approached this court.

29. Therefore and from the totality of the materials on record, I find that the tenant owes the landlord rent for the months of between August 2023 and January 2024 amounting to Kshs. 150,000/= less the amount of Kshs. 20,000/= as admitted by the landlord leaving a balance of Kshs. 130,000/= which is payable to the landlord.

30. In the orders made on the 31. 10. 2023, I had directed the tenant to pay the rent for August 2023, which was not contested and Kshs. 25,000/= within seven (7) days of the said date, but the order was not complied with putting into serious doubt the candidness of the tenant in his dealing with the landlord.

31. Section 3(1) of the distress for rent Act provides that;-“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, leave, demise or contract shall have the same remedy by distress for recovery of that rent or rent service as is given by the common law of England in a similar case.”

32. In Misc. Civil No. 138 of 2020, Simon Ngomonge v George Kithi at the High Court of Kenya in Nairobi, the court observed that:-“The landlord’s right to levy distress occurs whenever any amount of rent due from a tenant is in arrears……”

33. The court further quoted with approval the case of; J.K. Chatrath &anotherv Shah Cedrar Mart [1967] EA 93 where the court of Appeal of East Africa held that;-“The Landlord was entitled to distrain for rent if any rent was in arrears……”

34. It is therefore my considered view that the Tenant is in rent arrears. Those arrears are Kshs. 130,000/= and that a right has consequently occurred to the landlord to levy distress and the leave of this court is granted to that effect.

35. The Tenant has raised an issue on the execution of the landlord’s documents by one Abdirahman Omar Maalim. He contended that he should have sought for a resolution by the landlord to …… that mandate. He relied on the case of Bacylab Ltd v Bacylab East Africa Ltd & Other Civil Case No. 588 of 2011 at Nairobi.

36. I note that apart of swearing that he was a director of the landlord, the said Abdirahman did not disclose whether the landlord was a company despite the use of the word “Ltd”. The tenant on its part did also not offer any materials in proof of the same.

37. That I also note that the Tenant’s representative Mr. John Wanguba and Mr. Abdirahman Omar Maalim were the key players in the business.

38. A landlord under the Act is defined as;-“In relation to a tenancy, means the person for the time being entitled, as between himself and the tenant, to the rents and profits of the premises payable under the terms of the tenancy.”

39. In view of the above, I would not fault the said Abdirahman Omar Maalim for filing the supporting documents to the landlord’s case. In any event, the justice of this mater calls for determination of this matter without undue regard to technicalities and discharge substantive justice to the parties.

Issue No. C: Who should bear the costs of this suit 40. Looking at the totality of this matter and materials placed before me, I will depart from the wisdom of Section 127 of the Civil Procedure Act and direct that each party bear own costs.

Conclusion 41. In the final analysis, the orders that commend themselves to me are the following:-(a)The landlord’s notice to terminate the Tenant’s tenancy on office No. 6 within Kimathi House being Land Reference No. 209/2326 dated 4. 1.2023 is declared illegal, null and void.(b)The landlord is granted leave to levy distress for the rent in arrears at Kshs. 130,000/= and for any other amounts that fall due and in arrears.(c)That each party shall bear own costs of this suit.(d)That the reference having been fully compromised by this ruling, the same is also settled in similar terms.Those are the orders of the court.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 15TH DAY OF JANUARY 2024. HON. NDEGWA WAHOME, MBSMEMBER15. 01. 2024Delivered in the presence of;Mr. Achillah for the Respondent/TenantMr. Onyiego for the Landlord