[2021] KEBPRT 318 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO. E135 OF 2021 (NAIROBI)

FINISHLINE AUTOMOTIVE LIMITED aka

MAYHEM MOTORS LIMITED.................................................TENANT/APPLICANT

VERSUS

AKABA INVESTMENTS.................................................LANDLORD/RESPONDENT

RULING

A. Parties and Their Representatives

1. The tenant Finishline Automotive Limited aka Mayhem Motors Limited rented space on LR No. 209/7793 Nanyuki Road , Nairobi for the business (hereinafter referred to as the tenant).

2. Learned counsel Odera Obar & Co Advocates represent the tenant/applicant in this Reference

Info@oderaobar.org

3. The Respondent is the landlord and owner of suit premises on LR No. 209/7793 rented out to the tenants. (hereinafter referred to as the Landlord)

4. Learned counsel Tebino & Associates is on record for the Landlord/Respondent

martintebino@icloud.com

B. The Dispute Background

5. On or about the 20th day of August 2020 a tenancy agreement was entered into between the Landlord and the Tenant for the suit premises LR No. 209/7793 which was supposed to run for a period of two years.

6. Following unforeseen circumstances the tenant issued the Landlord with a notice of termination dated 1st of December 2020 before the lapse of the two year period.

7. The tenants have since not been allowed to vacate the premises after the same were locked.

8. After receipt of the notice of termination, the Landlord claims to have advised the tenant to comply with the requirements of their tenancy agreement and either pay the stipulated amount in lieu of notice or continue occupation of the premises for a period of three months while paying the requisite rent as agreed which the Landlord claims that the tenant failed to do.

9. On the 19th of May 2021 the tenant moved this tribunal by way of reference dated 19th of May 2021 and Notice of Motion under certificated filed on the 19th of May 2021 under section 12(4) of the Landlords and Tenants (Shops, Hotels and Catering) Establishments Act Cap 301 seeking amongst other orders that pending the hearing and determination of the application that the tribunal order the Landlord to re-open the premises for use and occupation by the tenant. Further the tenant sought orders that the Landlord allow for unimpeded Ingres and egress in and out of the premises with the tenant’s tools of trade. They have since abandoned the prayer to reopen and reenter the premises.

10. The tribunal granted orders that status quobe maintained

C.Jurisdiction

11. The jurisdiction of this tribunal is not in dispute.

D. The Tenant’s Claim

12. The tenant filed a reference dated 19th of May 2021 together with a Notice of Motion application under certificate of urgency and supporting affidavit dated 19th of May 2021 which pleadings form the basis of this claim.

E. The Landlord’s Claim

13. The landlord has filed a replying affidavit dated the 7th of June 2021 and sworn by a director of the Landlord company. The landlord has further filed a preliminary objection dated the 17th day of June 2021 on the basis that the amorphous entity couched as the tenant herein is unknown and not recognized by law.

14. Parties filed written submissions on the 3rd of August 2021 and the matter was fixed for ruling on the 3rd of September 2021.

F. Matters Not In Dispute

15. There is no dispute that there existed a landlord and tenant relationship by virtue of the existence of the tenancy agreement.

16. There is no dispute that the tenant was in rent arrears as at the date the tenant issued a Notice to Terminate.

G. List of Issues For Determination

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

a) Whether the preliminary objection raised by the Landlord on the Locus Standi stands?

b) Whether the Tenants Notice of Termination was valid?

c) Whether the landlord had the authority to retain the tenant’s goods of trade?

d) Whether there was rent arrears owed to the Landlord and if so how much?

H. Analysis and Findings

Whether the preliminary objection raised by the Landlord on the Locus Standi stands?

18. In the case of Mukisa Biscuit Manufacturing Co. Ltd –vs- West End Distributors Ltd (1969) EA 696,a preliminary objection has been defined as

“a point of law which has been pleaded or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit.

The court further stated that;

“It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact had to be ascertained or if what is sought is the exercise of judicial discretion.”

19. The Landlord put to question the Locus Standi of the Tenant through raising a preliminary objection on the basis that the tenant “FINISHLINE AUTOMOTIVE LIMITED aka MAYHEM MOTORS LIMITED” is an amorphous entity unknown in law. They presented before the tribunal forms CR12 for the company MAYHEM MOTORS LIMITED and FINISHLINE AUTOMOTIVE LIMITED as proof of their existence as separate entities.

20. Interestingly the CR12 forms have been annexed as part of the List of Authorities of the Landlord Authority Nos.1 and 2 when Ideally they ought to be produced as evidence annexed to their affidavits it is for this reason that I felt from the onset it is best to deal with the PO at this later stage. I have in addition been persuaded that it is a matter of good order to settle fundamental issues first even if they are apparent factual conflicts that could lead to calling of evidence David Nyekorach Matsanga and anor vs Philip Waki and 3 Others (2017) eKLR relying on Kaplana Rawal vs Jsc and 6 Others.

21. To this end before I deal with the dispute at hand I have taken the liberty to look at the pleadings the Tenant filed they are headed Finishline Automotive Limited also known as Mayhem Motors Limited I have also taken the liberty to look at the CR12s provided and the Tenancy Agreement dated 20th August 2020 and I find one silver line linking the three One Edward Mukunga Gichuki. He is not only a majority shareholder in both companies but is also a signatory to the Tenancy Agreement. That said and being alive to the principles of lifting the veil and also alive to Article 159 of the Constitution of Kenya 2010. I am persuaded and I find that the tenant indeed has locus to institute this reference.

Whether the tenants Notice of Termination dated 1/12/2020 was valid?

22. It is not in dispute that the tenant issued a Termination of Tenancy notice of 1 month on 1st of December 2020 due to reasons of inability to continue in business arising from the demise of one family member which notice was later to serve till February 2021 by agreement of parties as the agreement provided for a 3 months Notice. At the end of the 3 months his goods and other items were detained but it is not in dispute that he left the premises come end February.

I have looked at the reading of section 4 (3) read together with section 6 of Cap 301 it reads:

4 (3) A tenant who wishes to obtain a reassessment of the rent of a controlled tenancy or the alteration of any term or condition in, or of any right or service enjoyed by him under, such a tenancy, shall give notice in that behalf to the landlord in the prescribed form.

6 (1) A receiving party who wishes to oppose a tenancy notice, and who has notified the requesting party under section 4(5) of this Act that he does not agree to comply with the tenancy notice, may, before the date upon which such notice is to take effect, refer the matter to a Tribunal, whereupon such notice shall be of no effect until, and subject to, the determination of the reference by the Tribunal:

Provided that a Tribunal may, for sufficient reason and on such conditions as it may think fit, permit such a reference notwithstanding that the receiving party has not complied with any of the requirements of this section.

(2) A Tribunal to which a reference is made shall, within seven days after the receipt thereof, give notice of such reference to the requesting party concerned.

23. I have looked at the circumstances under which a tenant can issue a notice and indeed find as reproduced above that the act envisages notices being issued by a tenant where they seek reassessment of rent or to alter terms and conditions and or rights or services enjoyed by them under the tenancy. To this end I find this reading to include giving up continued right of enjoyment of quite possession of the premises back to the Landlord. As such the landlord ought to be guided by 6(1) upon receipt of the said Notice which requires him to file a reference opposing the same on the grounds as in this case rent arrears seeking the tribunals leave to levy distress.

Whether the landlord had the authority to retain the tools of trade of the tenant?

24. This finding leads me to the act of levying distress generally as provided for in Cap 301 the same is found in Section 12(1)(h).

25. 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”

26. 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 Landlord retained the goods and tools of trade of the Tenant as a result of the Tenant’s default on paying rent for the premises. Which goods the tenant actually claims are not his and has produced a logbook to evidence the same. One log book is indeed in the name of one George Gichuki Mukunga which from my finding above would actually be attachable the other is of Blue Sky Ind Limited which belongs to a third party and attaching the same would present some difficulties.

27. That said 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 is clear beyond paradventure before the right for distress is exercised by a landlord leave should be sought from the tribunal to allow the same failure to do so amounts to an illegality. To obtain possession by carrying out illegal distress is per se wrong ……a court of law cannot allow such state of affairs where the law of the jungle takes over…Gussii Mwalimu Inv Ltd vs Mwalimu Hotel Ltd (1996) eKLR

28. In this case the Landlord did not seek the leave of the tribunal prior to retaining the goods and tools of trade of the tenant. As a result this right was not exercised lawfully and the tenant’s goods should not have been retained.

Whether there was rent arrears owed to the landlord and if so how much?

29. It is the view of this tribunal that the tenancy agreement between the tenant and the landlord terminated at the expiry of the three months ie February 2021. As a result, the rent arrears owed to the landlord are only for the months up to February 2021 and not May 2021 as alleged by the Landlord.

30. However, the figures are difficult to a certain at this juncture and can only be subject to a full reference when parties produce evidence of statement of accounts and or assessment of damages to enable proper reconciliation and findings.

ORDERS

For the reasons given above, I ORDER as follows that:

a) The Tenant has locus to prosecute this reference.

b) The Tenants Notice of Motion application 19th May 2021 is allowed in terms of prayers 4.

c) OCS industrial area police station to ensure peace prevails in the compliance of this order.

d) The reference be set down for hearing within 90 days failure to which it stands compromised.

e) I make no orders as to costs.

HON. A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered this 6th day of September 2021 in the presence of Nyabutiholding brief for Begi (Landlord) and Anita Ndukuhire for the Tenant.

HON. A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL