[2022] KEBPRT 160 (KLR)

Gifted Hands School Limited v Mogul & another (Tribunal Case E242 of 2022) [2022] KEBPRT 160 (KLR) (16 June 2022) (Judgment)

Neutral citation: [2022] KEBPRT 160 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E242 of 2022

Gakuhi Chege, Vice Chair

June 16, 2022

Between

Gifted Hands School Limited

Applicant

and

Mohamed Raffique Mogul & Rehan Nabil Mogul

1st Respondent

Philips International Auctioneers

2nd Respondent

Judgment

1. The tenant herein moved this Tribunal by a reference dated 15th April 2021 complaining that it was facing threats of eviction and illegal distress perpetrated by the Respondents being the landlord and the auctioneer respectively.

2. On 9th March 2022, the landlord through its advocates instructed the 2nd Respondent to levy distress against the tenant in recovery of Kshs.2,400,000/- as at March 2022.

3. The 2nd Respondent proceeded to issue a proclamation on the same day upon the tenant. There was a previous distress on 3rd March 2020 which the tenant claims recovered outstanding rent arrears but the landlord is accused of failing to account.

4. The tenant being a controlled one contends that the distress is illegal for being done without leave. It is further contended that there is no registered lease between the tenant and 1st Respondent.

5. The tenant complains that the 1st Respondent has been harassing and forcing its agents to sign documents under duress without involvement of its advocates. The tenant issued a cheque of Kshs.250,000/- to the landlord on 11th March 2022 and contends that the landlord has not given a statement of accounts on the true balance of rent.

6. It is against the said background that the tenant filed a motion dated 15th March 2022 supported by affidavit of Tabitha Ogango Sungu of even date seeking for restraining orders against the Respondents from interfering with the proclaimed goods, selling or disposing of the same pending hearing of the suit. Interim orders were given on 16th March 2022 pending hearing inter-partes.

7. The application is opposed vide the 1st Respondent’s replying affidavit of 23rd March 2022 wherein it is admitted that the tenant is in occupation of premises known as L.R. No.209/2958, Nairobi at a monthly rent of Kshs.250,000/- and as at 9th March 2022 was in rent arrears of Kshs.2,400,000/-.

8. The 1st Respondent deposes that the cheque for Kshs.250,000/- sent to his advocates was unpaid with remarks ‘Refer to drawer” as evidenced by annexure ‘MRM2’.

9. It is deposed that the amount realized in the first distress was negligible and only covered the auctioneers’ fee as evidenced by annexure ‘MRM4’.

10. The tenant is accused of consistently being in rent arrears and giving false promises as evidenced by annexure ‘MRM5’ which is in her own handwriting in which a sum of Kshs.2,500,000/- is acknowledged as rent arrears.

11. As such the tenant is accused of bringing the instant proceedings with unclean hands as evidenced by annexures ‘MRM6’.

12. On 3rd March 2022, the tenant’s advocates intimated that it was willing to vacate the suit premises on or before 31st day of April 2022 or any other date thereafter as may be enlarged from time to time. The tenant was willing to pay Kshs.500,000/- by the end of week ending on 4th March 2022, Kshs.250,000/- by mid March 2022 and Kshs.250,000/- at the end of April 2022. The letter is marked annexure ‘MRM7”.

13. Although the said letter referred to a cheque of Kshs.500,000/- having been attached, no such cheque was enclosed.

14. The landlord filed a supplementary affidavit sworn on 25th April 2022 maintaining that the tenant was a perennial defaulter and was in arrears of Kshs.1,650,000/- by the time of distress for rent which it had agreed to settle as per annexure ‘MRM5’.

15. I am required to determine the following issues:-(a)Whether the tenant is entitled to the reliefs sought in the application dated 15th April 2021 and the reference of even date.(b)Whether the landlord required leave to levy distress against the tenant’s properties.(c)Who is liable to pay costs?

16. I have examined the evidence tendered through affidavits of both parties and noted that the tenant was in arrears of rent when the landlord sought to levy distress against its properties in recovery thereof. A tenant’s first and principal obligation under a tenancy is to pay rent so as to have peaceful and quiet enjoyment of a demised premises.

17. It is trite law that he who comes to equity must come with clean hands and must do equity. The tenant and its advocates have engaged the landlord in what amounts to the theatre of the absurd by making promises to pay the admitted rent arrears and issuing cheques which are either unpaid or not forwarded to the landlord’s advocates. This does not endear it in the eyes of a court of equity.

18. In the case of Samuel Kipkori Ngeno & Another – vs- Local Authorities Pension Trust (Registered Trustees) & Another (2018) eKLR at paragraphs 9 & 12, the superior court had the following to say:“9. A tenant’s first and main obligation is to pay rent as and when it becomes due, for the landlord has the right to an income from his investment……..”“12. The temporary injunction sought in the present application is an equitable remedy at the court’s discretion. He who comes to equity must come with clean hands. A tenant who is in huge arrears of rent is underserving of the court’s discretion. The court cannot be a refuge of a tenant who fails to meet his principal obligation of paying rent as and when it becomes due”.

19. In the case of Kyangavo -vs- Kenya Commercial Bank Ltd & Another (2004) eKLR, the superior court had the following to say at page 12/14:-“Secondly, the injunction sought is an equitable remedy. He who comes to equity must come with clean hands and must also do equity. The conduct of the plaintiff in this case betrays him……………He who comes to equity must fulfill all or substantially all his outstanding obligations before insisting on his rights. The plaintiff has not done that”.

20. In regard to whether the landlord needed to seek leave before distress for rent is carried out, my answer is that under section 3(1) of the Distress for Rent Act, Cap. 293, Laws of Kenya, no such leave is required. I place reliance in this regard on the case of John Nthumbi Kamwithi – vs- Asha Akumu Juma (2018) eKLR where it was held by the superior court at paragraph 35 as follows:-“I find that the appellant had no obligation to seek permission from the Tribunal to levy distress. The fact that the tenancy is controlled does not mean that the landlord applies to the Tribunal to levy distress. Distress is a right the landlord is entitled to for recovery of rent. If the tenant chooses he/she could file a reference to the Tribunal for orders in objection of the distress”.

21. In the instant case, I find that the landlord was entitled to levy distress for rent as there was rent in arrears which fact is admitted through documentary evidence presented before this Tribunal.

22. In regard to the issue of costs they always follow the event and are in the court’s discretion. I have no reasons to deny the Respondents costs in this case.

23. In conclusion therefore, the orders that commend to me in this matter are:-(i) The tenant’s reference and application dated 15th March 2022 is dismissed with costs under Section 12 (4) of Cap. 301 upon investigation by the Tribunal.(ii) The landlord’s right to levy distress without leave is hereby upheld under section 3(1) of the Distress for rent Act, Cap. 293 Laws of Kenya.(iii) The interim orders are discharged.(iv) The Respondents are awarded Kshs.50,000/- as costs for the reference.It is so ordered.

RULING DATED, SIGNED AND VIRTUALLY DELIVERED ON THE 16TH DAY OF JUNE 2022. HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALIn the presence of: 3