[2021] KEBPRT 210 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. E044 OF 2021 (NAIROBI)

DLUX LIMITED.......................................................................TENANT/APPLICANT

VERSUS

EDNA SHADRACK OUMA..................................LANDLORD/ 1ST RESPONDENT

NAIROBI CONNECTIONS

SERVICES AUCTIONEER...............................AUCTIONEER/2ND RESPONDENT

RULING

A. Parties and Representative

1. The tenant Dlux Limited rented space on LR No 330/378 Nairobi for the business (hereinafter known as the ‘tenant’)

2. The firm of Mengesa and Co Advocates represent the Tenant/Applicant in this matter.

3. The 1st respondent is the landlord and owner of LR No. 330/378 rented out to the tenants (hereinafter the Landlady).

4. The firm of Tobiko Njoroge & Co. Advocates represent the Landlord/Respondent in this matter. info@tobikonjorogeadvocates.co.ke

B. The Dispute Background

5. On 14th October 2020 the Landlord and the Tenant entered into a tenancy agreement which was to commence on 1st October 2020 for a term of five years six months.

6. On 19th April 2021 the 2nd Respondent proclaimed the tenants’ goods in his bar/restaurant and was set to distress the goods in nine days.

7. On 21st April 2021 the Tenant moved this Tribunal by way of a notice of motion dated 21st April 2021 under certificate of urgency under section 12(4) of the Landlords and Tenants (Shops, Hotels and Catering) Establishments Act Cap 301. The tenant was seeking amongst other orders that pending the hearing and determination of the application that the Tribunal order the Landlord/Respondents be jointly and severally restrained from carrying out distress for rent based on the proclamation done by the 2nd Respondent. Further that pending the hearing and determination of the application the Landlords/Respondents their servant’s employees and agents be restrained from disconnecting water and electricity evicting or harassing the Tenant or interfering with their tenancy in any other manner.

8. On 27th April 2021 the Tribunal ordered that the 1st and 2nd Respondents be jointly and severally restrained from carrying out distress for rent based on the proclamation done by the 2nd Respondent dated 19th April 2021 pending the hearing and determination of the application.

C. Jurisdiction

9. The jurisdiction of this Tribunal is in dispute.

D. The Tenant’s Claim

10. The Tenant filed a notice of motion application under certificate of urgency and supporting affidavit dated 21st April 2021 which pleadings form the basis of this claim.

11. The Tenant obtained restraining orders as against the Landlord on 27th April 2021 and to date the Landlord is still restrained from carrying out distress for rent based on the proclamation done by the 2nd Respondent dated 19th April 2021 pending the hearing and determination of the application.

E. The Landlord’s Claim

12. The Landlord has filed a preliminary objection and annexed a replying affidavit dated 11th May 2021 sworn by the landlord.

13. The 1st Respondent filed submissions on 19th May 2021 and the matter was fixed for ruling on 4th October 2021.

F. Matters Not in Dispute

14. It is not in dispute that there exists a tenancy agreement that was reduced into writing between the Landlord and the Tenant.

G. List of Issues for Determination

15. It is the contention of this Tribunal that the issues raised for determination are as follows;

a) Whether the Tribunal has jurisdiction under section 12 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya to investigate the complaint raised by the Tenant?

b) If the Tribunal determines that it has jurisdiction whether the landlord had the right to proclaim the Tenant’s goods with the intention to levy distress for rent?

H. Analysis and Findings

Whether the Tribunal has jurisdiction under section 12 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya to investigate the complaint raised by the Tenant?

16. Section 12 (4) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenyaprovides that;

“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 thereon as it deems fit”

17. The above provision allows the Business Premises and Rent Tribunal to in addition to the powers conferred upon it by the Act investigate on any other matters that may be raised in relation to a controlled tenancy.

18. The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya Act at section 2 defines a controlled tenancyas;

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;

19. In this case the Landlord claims that the Tribunal lacks jurisdiction based on the fact that the tenancy agreement between themselves and the Tenant was for a period of five years and six months and as such it is not a controlled tenancy.

20. The Landlord annexed in their replying affidavit a copy of the tenancy agreement marked ESO-1 which states that they entered into a tenancy agreement on 14th October 2020 for a period of five years six months

21. The main question before this Tribunal which will help determine whether the Tribunal has jurisdiction is whether the relationship between the Landlord and the tenant created a controlled tenancy.

22. Section 12(1)(a) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya provides that

A Tribunal shall, in relation to its area of jurisdiction have power to do allthings which it is required or empowered to do by or under the provisions of this Act, and in addition to and without prejudice to the generality of the foregoing shall have power—

(a) to determine whether or not any tenancy is a controlled tenancy

By virtue of this provision the Tribunal has the jurisdiction to investigate whether the relationship between the tenant and the Landlord satisfies all the requirements to be deemed as a controlled tenancy.

23. This tenancy agreement contains a termination clause which provides that

“Upon breach of the terms and conditions of the agreements restrictions covenants herein by the lessor and or lessee during the pendency of the lease either party reserves the right to terminate the lease by giving 6 calendar months’ notice to the other party”

24. The above clause in the tenancy agreement falls within the provisions of section 2 (b)(ii) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya as stated above. The termination clause in the tenancy agreement between the landlord and the tenant provides that parties are required to give notice to each other before terminating the contract which is what the provision states.

25. The termination clause in the tenancy agreement meets the requirements for the relationship to be deemed a controlled tenancy. The Landlord’s attempt to persuade this Tribunal that there was no controlled tenancy is not successful and as a result I find that this Tribunal is indeed clothed with jurisdiction to determine this matter.

Whether the Landlord had the right to levy distress for rent?

26. The Distress for Rent Act section 3(1) It provides that;

“Subject to the provisions of this Act and any other written law, any person having any rent or rent service in arrear 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”

27. The above provision allows for the recovery of any arrears owing to the Landlord through means other than the actual payment of rent owed to them. In this case, the 2nd Respondent proclaimed the goods of the tenant and was set to levy them for distress of rent within 9 days after the proclamation as a result of the tenant’s rent arrears.

28. The mandate of this tribunal is to evaluate whether this right for distress was exercised by the landlord as required by the law. Section 12(h) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya requires that before the right for distress is exercised by a Landlord leave should be sought from the tribunal to allow the same and failure to do so amounts to an illegality.

29. In this case the Landlord did not seek the leave of the Tribunal prior to proclaiming with the intention to levy the goods of the tenant. As a result, this right was not exercised lawfully and the tenant’s goods should not have been proclaimed.

30. Further the Tribunal had issued very clear orders on 27th April 2021 requiring that the 1st and 2nd Respondents be restrained from carrying out distress for rent as intended based on the proclamation obtained by the 2nd Respondent pending the determination of this matter. Proceeding to carry out distress for rent would amount to a disobedience and disregard of the Tribunal’s orders which amounts to an illegality.

I. Orders

a) The Landlord/1st Respondent’s preliminary objection dated 11th May 2021 is hereby dismissed.

b) Hearing on 22nd November 2021. Landlord to serve the same.

c) Tenant to pay rent monthly as agreed upon from the date of filing this suit till final determination in default Landlord is free to distress for rent.

d) Parties to file statement of accounts on any arrears pending before the filing of this suit before the next hearing date.

e) Costs in cause.

HON. A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

RULING DATED, SIGNED AND DELIVERED VIRTUALLY BY HON A. MUMA THIS 4TH DAY OF OCTOBER 2021 in the presence of Mukelia holding brief for Lesikilo for the Landlord and in the absence of the Tenant.

HON. A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL