[2022] KEBPRT 107 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 134 OF 2020 (NAKURU)

DANIEL NJOGU MWAGO........................................................................APPLICANT/TENANT

VERSUS

PETER K. TIYO................................................................................RESPONDENT/LANDLORD

RULING

1. On 22nd September 2020, the landlord herein served the tenant with a tenancy notice of even date seeking to terminate his tenancy over the business premises situate on L.R NO. Narok Block7/223 with effect from 15th January 2021 on the grounds:-

“(a) Failing to pay monthly rent of Kshs.25,000/- per month as per the tenancy agreement and persistly paying and/or depositing or even not paid Kshs.20,000/- from (2017 to February 2020) without landlord’s consent and which has accrued up to a tune of Kshs.431,170/- by the month of September.

(b) The said tenancy has expired.

(c ) Causing nuisance to other tenants.

(d) Frequently unloading loads of sands and parking your lories infront of the building in a way that blocks the entrance of other tenants businesses.

2. The tenant filed a reference dated 1st October 2020 in opposition to the said tenancy notice. On 9th February 2021, the parties herein filed a consent which provided inter-alia that they would exchange any pretrial documents within 21 days. The said consent was adopted on 10th August 2021 as an order of the Tribunal.

3. The tenant filed the following documents in compliance with the said consent order:-

(i) List of witnesses dated 25th May 2021.

(ii) List of documents dated 25th May 2021.

(iii) Further list of documents dated 10th August 2021.

4. Earlier on, the tenant had filed a witness statement dated 10th June 2021 and a list of documents bearing the same date.

5. On his part, the landlord filed the following documents:-

(i) List of witnesses dated 25th May, 2021.

(ii) Landlord’s witness statement dated 25th May 2021.

(iii) Further list of documents dated 31st August 2021.

(iv) Further list of witnesses dated 31st August 2021.

6. The matter proceeded by way of viva voce evidence with the parties adopting the witnesses statements and documents as their respective evidence and being cross-examined.

7. Pw1 was the tenant who denied being in arrears of Kshs.431,170/- stating that he had proof of rent payments. He testified that his tenancy started in the year 2016 on 1st May when the building was incomplete. It was agreed with the landlord to complete the three (3) rooms occupied with the amount used being defrayed against the rent account.

8. He produced as P. Exhibit 1 a bundle of invoices stating that invoice no. 509 dated 30/4/2019 for Kshs. 128,920/- had not been utilized as rent.

9. He also produced as P. Exhbiit 2 petty cash vouchers listed as number 2 in his list of documents dated 10th June 2021 and an acknowledgment by the landlord listed as no. 4 as P. Exhibit 3.

10. A statement of account dated 4/12/2020 which contains a summary of rent payments was produced as P. Exhibit 4. He produced copies of cheques dated 10/1/2021, 16. 2.2021, 10/3/2021, 10/4/2021, 10/5/2021, 10/6/2021 and 10/7/2021 and stated that he had paid rent up to September 2021.

11. The tenant stated that he had not received any demand letter for the alleged nuisance or non-payment of rent. He complained that although the landlord accepts rent, he does not issue receipts for such payments.

12. He was the first tenant in the building owned by the landlord. He denied that he has been blocking the premises of other tenants and produced photographs showing how he parks his vehicles as P. Exhibit 6.

13. He termed the termination notice as malicious and in bad faith. The notice was produced as P. Exhibit 8. The landlord is accused of breaking into a structure constructed by the tenant with his consent and leased it to another tenant after removing the properties therein.

14. The matter was reported to the police and the OB extract was produced as an exhibit. The landlord also removed a banner erected on top of the building by the tenant and allowed some other tenants occupying the rear part of the building to put their banners on top of his business.

15. In cross-examination, the tenant confirmed having entered into a written tenancy agreement on 5th March 2016 for a period of one year subject to renewal on yearly basis. The initial term expired on 31/3/2017. No other agreement was entered into thereafter.

16. The tenant stated that the landlord was taking building materials for completion of the building on credit. He was also being advanced money for paying workers during the construction. A sum of Kshs.190,500/- was paid before the tenant occupied the building in March 2016 through Mpesa.

17. The total amount paid to the landlord by the tenant was Kshs.1,421,670/- although there were no audited accounts available for the same.

18. The tenant stated that although the tenancy agreement was not renewed, he continued to occupy the premises and to pay rent to the landlord.

19. The landlord testified as DW1. He adopted his written witness statement and list of documents as D.Exhibit 1-4. He denied collecting materials and stock from the tenant’s shop.

20. According to the landlord, he only rent one shop to the tenant and not three vide the agreement entered into in 2016. The agreement expired in 2017 and was not renewed. The landlord however acknowledged rent payment though he said the same were irregular.

21. The landlord stated that the tenant had not complained of denial to advertise his business. He also denied allegation of malice against the tenant. He further denied breaking into the tenant’s business and stated that he had not been charged with any criminal offence.

22. In cross-examination, the landlord confirmed that the tenant did not vacate after expiry of the tenancy agreement and that he continued to receive rent. Rent is payable through his bank account though not indicated in the agreement.

23. He confirmed that he does not issue tenants with rent payment receipts and only rely on bank statements. He confirmed his signature on the acknowledgement dated 16th March 2020 which stated that rent had been paid upto December 2020.

24. On further cross-examination, he changed his answer and denied that the signature on the acknowledgment was his. He however confirmed that the tenant took possession when the building was incomplete but only the finishes remained to be done.

25. The landlord confirmed that he was buying building materials from the tenant’s business/shop. He confirmed that there was an agreement for the tenant to complete the hardware shop by plastering and putting doors. No invoices were sent to him as he used to pay cash for the materials.

26. He denied knowledge of the invoices produced by the tenant. He stated that he constructed the butchery premises although he had not filed evidence for the materials used. He stated that he was not aware of invoice no. 590. He stated that the tenant was in occupation of the extension now used as a butchery. The door thereof faces the hardware door.

27. On the 6th August 2021, the landlord leased the butchery extension to Lemkume Anthony when this matter was still pending before the tribunal.

28. The landlord testified that the tenant was obstructing other tenants by parking lorries infront of the building and entrance. He confirmed in cross-examination that he issues rent receipts to other tenants.

29. Dw2 was Lemkume Anthony who adopted his witness statement dated 31/8/2021 as well as the further list of documents filed by the landlord. He confirmed that the tenancy agreement entered into on 6/8/2021 in respect of butchery premises was done on a weekend and that the same was vacant.

30. Both counsels filed submissions after close of the case and I shall consider the same together with the issues for determination.

31. The issues for determination going by evidence tendered are:-

(i) Whether the tenancy notice dated 22/9/2020 ought to be upheld or dismissed.

(ii) Who is liable to pay costs?

32. Section 4(2) of Cap. 301, Laws of Kenya 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 right or service enjoyed by the tenant under such a tenancy shall give notice in that behalf to the tenant in the prescribed form”.

33. Section 4(4) of the said Act provides 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:

Provided that-

(i) Where notice is given of the termination of a controlled tenancy, the date of termination shall not be earlier than the earliest date on which but for the provisions of this Act, the tenancy would have or could have been terminated.

(ii) Where the terms and conditions of a controlled tenancy provide for a period of notice exceeding two months, that period shall be substituted for the said period of two months after the receipt of the tenancy notice.

(iii) The parties to the tenancy may agree in writing to any lesser period of notice”.

34. The Tenant submits that the tenancy notice issued upon him is defective. The same is issued in the middle of the month for a period of only one (1) month. It therefore offends section 4(4) of the said Act.

35. The landlord did not submit on this attack of the tenancy notice. In the case of Fredrick Mutua Mulinge t/a Kitui Uniform at page 4/6 the court cited the case of Ann Mwaura and 9 others – vs- David Wagatua Gitau & 2 others(2010) eKLR as follows:-

“ As regards the period of notice, I concur with the Court of Appeal holding in the said case of Caledonia Supermarket ltd -vs- Kenya National Examinations Council (2002) 2 EA 357 that…………failure to comply with these mandatory requirements rendered the purported notice (s) null and void and incapable of enforcement”.

36. The court further cited the decision in Manaver N. Alibhai t/a Civil Appeal no. 203 of 1994 as follows:-

“The Act lays down clearly and in detail, the procedure for the termination of a controlled tenancy. Section (1) of the Act states in very clear language that a controlled tenancy shall not terminate or be terminated and no term shall be altered otherwise than in accordance with 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”.

37. Finally the court cited the case of Lall -vs- Jeypee Investments Ltd (Nairobi HCCA No. 120 of 1971 (1972) EA 512 where it was held as follows:-

“ The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act is an especially enacted piece of legislation which creates a privileged class of tenants for the purpose of affording them the protection specified by its provisions against ravages of predatory landlords. Such protection can only be fully enjoyed if the provisions of the Act are observed to the letter otherwise the clearly indicated intention of the legislature would be defeated. In order to be effective in this fashion, the Act must be construed strictly no matter how harsh the result…..The Landlord and Tenant Act laid down a code which parliament intended to be followed and if a landlord does not give notice of termination as prescribed, the notice will be ineffectual. This may seem a technical and unmeritorious defence, but there is no doubt that the court has no power to dispense with these time limits if the defendant chooses to object at the proper time. This is an Act which requires in so far as the giving of the notice is concerned, absolute and complete not merely substantive compliance with its promptly provisions”(emphasis added).

38. In the instant case, I agree with the tenant that the notice being for only one month does not comply with section 4(4) of Cap. 301, Laws of Kenya.

39. In regard to the grounds for termination of tenancy, I note that whereas the landlord alleges that the tenant is in rent arrears, the tenant denies the same and has produced invoices and rent payment cheques for the year 2021. The main dispute revolves around building materials allegedly supplied to the landlord by the tenant during the process of completion of his building and an acknowledgement produced as P. Exhibit 4.

40. I have examined the signature on the acknowledgment vis a vis the landlord’s answers in cross-examination as well as the signature on the lease agreement and notice to terminate tenancy and I am satisfied that the same belongs to the landlord. There is no evidence or allegation of forgery made against the tenant whose demeanour in court satisfied me that he was telling the truth.

41. On the other hand the landlord was erratic on the question whether he signed the acknowledgement and did not strike me as truthful person in that regard.

42. In regard to the term of tenancy having expired, the landlord’s accept rent after the expiry date created a periodic tenancy which is controlled.

43. On the issue of the tenant causing nuisance, I have looked at the photographs exhibited herein and note that the parking area claimed by the landlord as part of his building is a road reserve which falls under the County Government. No evidence has been tendered that the County Government has found the current use of the road reserve and parking area to be wrongful. No evidence of obstruction by any of the landlord’s other tenant has been tendered.

44. In regard to the tenant using the top of the building to store heavy plastic tanks without the landlord’s consent, I have seen no evidence that the same has caused any structural defects to the building to warrant termination of the tenancy. The tenant stated that he has used the space for as long as he has occupied the building. One wonders why it has now become an issue. In any event this is not among grounds upon which a landlord can terminate tenancy under Section 7 of Cap. 301, Laws of Kenya.

45. The landlord in his submissions states that the tenant admitted using three (3) rooms one of which is a butchery with large glass windows, a rack and hooks used to hang meat. The second one is the shop with green metal grills at its entrance while the last one is where he runs the hardware.

46. The landlord called one Lenkume Anthony Wuantai who adopted his witness statement dated 31st August 2021 where he states that he became a tenant in respect of the butchery premises on 6th August 2021 after executing a tenancy agreement on that date.

47. According to the said witness, the shop was vacant at the time of entering into the tenancy agreement and it was designed as a butchery business. He started operating on 8th August 2021. On 9th August 2021, the witness found the shop closed and later learnt that the same was done by the tenant herein. The witness was summoned to the Police station and recorded a statement in relation to the said shop.

48. I have seen the O.B extract dated 7th August 2021 in respect to a report of breaking and stealing made by the tenant at Narok Police Station. This coincides with the period when DW2 states to have entered into a tenancy agreement with the landlord.

49. I have seen a court order given on 29th December 2020 in which this Tribunal ordered as follows:-

“ 1. The Respondent/Landlord is hereby restrained by herself (sic), her agents (sic) and or servants from trespassing, invading, transferring or in any manner whatsoever nature dealing with the applicants shop running as a hardware known as Sitemaster General and its corridors on plot no. L.R. No. 223 Block 7, Narok pending hearing and determination of this application interpartes”.

50. The said order was still subsisting at the time the landlord purported to give out the butchery premises to DW2. This obviously offended the doctrine of Lis pendens and the said tenancy agreement is null and void.

51. In this regard, I wish to rely on the court of appeal decision in the case of Naftali Ruthi Kinyua – vs- Patrick Thuita Gachure & Another (2015) eKLR at page 8-9/11 where it was stated as follows:-

“Black’s Law Dictionary 9th Edition defines Lis pendens as the Jurisdictional power or control acquired by a court over property while a legal action is pending”.

52. The court continued to cite Bellany – vs- Sabina (1857) 1 De J. 566 as follows:-

“It is a doctrine common to the courts both of law and equity, and rests as I apprehend, upon this jurisdiction, that it would plainly be impossible that any suit could be brought to a successful determination, if alienation pendent lite were permitted to prevail. The plaintiff would be liable in every case to be defeated by the defendants alienating before the judgment or decree and would be driven to commence his proceedings de novo subject again to defeat by the same course of proceedings”.

53. Citing Mawji – vs- US International University & Another (1976) KLR 185 per madan J.A (as he then was) the court continued:-

“The doctrine of lis pendens under section 52 of TPA is a substantive law of general application. Apart from being in the situate, it is a doctrine equally recognized by common law. It is based on expedience of the court. The doctrine of Lis pendens is necessary for final adjudication of the matters before the court and in the general interests of public policy and good effective administration of justice. It therefore overrides section 23 of the RTA and prohibits a party from giving others pending the litigation rights to the property in dispute so as to prejudice the other”(emphasis added).

54. Dw2 may argue that he was not party nor aware of the court order or litigation involving the suit premises but such argument finds a ready answer in the same case where it was stated as follows:-

“Every man is presumed to be attentive to what passes in the courts of Justice of the state or sovereignty where he resides. Therefore purchase made of a property actually in litigation pendente lite for a valuable consideration and without any express or implied notice in point of fact affects the purchaser in the same manner as if he had notice and will accordingly be bound by the judgment or decree in the suit” (emphasis mine).

55. In view of the foregoing, it matters not that DW2 was not aware of the instant proceedings and the agreement entered into with the landlord having been against the tribunal order is null and void and no property rights could ensue therefrom.

56. Flowing from the above analysis, the following orders commend to me under Sections 9(1) and 12(4) of Cap. 301, Laws of Kenya.

(i) The tenancy notice dated 22nd September 2021 is hereby dismissed for being invalid.

(ii) The tenancy agreement dated 6th August 2021 is hereby nullified for being offensive to the Tribunal Order of 29/12/2020 and the doctrine of Lis pendens.

(iii)The butchery premises being shop no. 18 within the suit premises belongs to the tenant herein and Antony Lenkume Wuantai has no Legal/or equitable interest therein.

(iv) Interim injunction orders earlier granted herein are confirmed.

(v) The landlord shall pay Kshs.50,000/- to the tenant as costs of this reference.

(vi) The OCS, Narok Police Station shall enforce compliance with the orders herein granted.

It is so ordered.

DATED, SIGNED AND DELIVERED THIS 13TH DAY OF JANUARY, 2022 VIRTUALLY.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

IN THE PRESENCE OF:

MR. MUTAI FOR THE LANDLORD PRESENT

LATER AT 3. 05 P.M

MISS NYABUTO HOLDING BRIEF FOR MRS. GATHECHA FOR THE TENANT AND FINAL ORDERS RE-READ TO HER.