[2021] KEBPRT 53 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. E357 OF 2021 (NAIROBI)

HAWI & HERA BEAUTY SALON.....................................................................TENANT

VERSUS

AVENUE HOUSE LIMITED.........................................................................LANDLORD

RULING

1. The Applicant through a motion dated 26/7/2021 is seeking in material part for a permanent injunction to restrain the landlord from demanding the impugned rent increment challenged before this Tribunal, threatening to evict, locking the tenant’s premises, evicting, intimidating and/or in any other manner interfering with its quiet possession and lawful enjoyment of the premises known as shop no. 7, parking level, Avenue House, Kenyatta Avenue, Nairobi on L.R. NO. 209/642.

2. The application is supported by the affidavit of David Mcolaka sworn on even date and the grounds on the face thereof. The deponent is the Managing Director of the Applicant.

3. According to the affidavit, the parties herein entered into an oral contract for use and occupation of the suit premises and as such the tenancy is controlled. A monthly rent of Kshs.84,000/- was agreed upon payable on or before the 5th day of every month.

4. It is the tenant’s case that the landlord has increased rent illegally and arbitrarily from Kshs.84,000/- to Kshs.100,780/- without following due process under section 4(2) of Cap.301 as per annexture ‘DM2’.

5. According to the tenant it was being threatened with distress and eviction and therefore required the Tribunal to investigate and take appropriate action under section 12(4) of the Act.

6. The application is opposed through an affidavit sworn by one Samuel Kamau, the property manager of the landlord on grounds that the Tribunal had no jurisdiction to hear the matter and/or to issue the orders made on 3rd August 2021 as there is no controlled tenancy between the landlord and tenant.

7. The landlord contends that here was a written lease agreement dated 13th March 2018 between one David McOlaka T/a Hawi & Hera creations Salon over the suit premises. The agreement is marked ‘SK-1(a)” and the tenant’s certificate of registration of business name as ‘SK-1(b)’.

8. As such it is contended that the orders issued herein were obtained through lies and material non-disclosure that there existed a lease agreement for 6 years from 1st June 2016 to 31st May 2022. As such the tenancy does not fall within the definition of a controlled tenancy.

9. Consequently, the tribunal is divested of jurisdiction to deal with the case according to the landlord.

10. The agreement contains a rent escalation clause at the rate of 20% every two years for remainder of the term and as such the landlord was not guilty of illegal and arbitrary increment of rent.

11. The landlord denies having threatened illegal distress or eviction against the tenant and seeks for setting aside of the orders given ex-parte herein.

12. The tenant filed a supplementary affidavit sworn on 2nd September 2021 insisting on existence of an oral agreement between the two parties under the name Hawi & Hera Beauty shop ltd before taking possession of the suit premises.

13. The tenant denies existence of a lease agreement and that the tenant was not consulted or involved in contracting neither did it accept and execute the same. As such the tenant contends that the landlord was imposing an illegal contract as there was no common intention/meeting of the minds to enter into the terms of the lease agreement.

14. The landlord’s application is challenged on the grounds that it constitutes a preliminary objection which does not meet the test set by Mukisa Biscuits case.

15. A certificate of incorporation of the tenant is annexed as ‘DM-3’ and is dated 13th November 2019.

16. The application was ordered to proceed by way of written submissions and both parties complied. I shall consider the same in my analysis of issues and determination.

17. The issues for determination are:-

(a) Whether this Tribunal has jurisdiction to hear and determine the case.

(b) Whether the tenant is entitled to the orders sought.

(c) Who is liable to pay costs of the suit?

18. In the case of Republic – vs- The Chairperson, the business premises Rent Tribunal at Nairobi & another ex-parte Suraj Housing Properties and Co. Ltd (2016) eKLR, the court cited with approval the decision in Pritam – vs- Ratilal and Another (1972) EA 560 in which Madan J (as he then was) had the following to say:-

“As stated in the landlord and Tenant (shops, Hotels and Catering Establishments) Act itself, it is an Act of Parliament to make provision with respect to certain premises for the protection of tenants of such premises from eviction or from exploitation and for matters connected therewith and incidental thereto. The scheme of this special legislation is to provide extra and special protection for tenants. A special class of tenants is created. Therefore, the existence of the relationship of landlord and tenant is a pre-requisite to the application of the Act and where such relationship does not exist or it has come to an end, the provisions of the Act will not apply. The applicability of the Act is a condition precedent to the exercise of jurisdiction.

There must be a controlled tenancy as defined in section 2 to which the provisions of the Act can be made to apply outside it, the tribunal has no jurisdiction”.(emphasis added).

19. In the instant case, there is a lease dated 13th March 2018 between the landlord and David Thomas MCOlaka T/A Hawi & Hera Creation Salon in respect of the suit premises for a period of 6 years. The same is executed by both parties and attested by an advocate.

20. Although the tenant’s director/proprietor seems to suggest illegality of the said lease, no evidence or pleading has been presented to show the same. Neither is there any other vitiating factor under the law cited by him.

21. In line with the decision in the case of Owners of Motor Vessel Lilian’s – vs- Caltex Oil (Kenya) Ltd (1989) eKLR, I find and hold that this Tribunal has no jurisdiction to hear and determine the suit.

22. As such the orders given herein on 30th July 2021 were made without jurisdiction. The tenant obtained the same through concealment of material facts that there was a lease agreement in existence.

23. I have seen the argument by the landlord on the capacity of the tenant as well as the decision cited and I am of the considered opinion that the use of trade name by the tenant is excusable under Article 260 which defines the term “person” to include “a company, association or other body of persons whether incorporated or unincorporated”.

24. As regards whether the tenant is entitled to the orders sought in the application, the answer is in the negative. He has brought the reference/suit before the wrong forum and in any event has not satisfied any of the parameters set out in the case of Giella – vs- Cassman Brown & Co. Ltd (1973) EA 358. The application therefore fails on the twin grounds.

25. Finally, I agree with the landlord’s submission that the authority of Mukisa Biscuits Manufacturing Co. Ltd – vs- West end Distributors (1969) EA 696 does not apply to this case as there is no preliminary objection before me.

26. In the premises, the following orders commend to me:-

(a) The tenant’s application dated 26/7/2021 is hereby dismissed with costs for want of jurisdiction.

(b) The ex-parte orders given on 30th July 2021 are hereby discharged and/or vacated forthwith.

(c) The landlord is awarded costs of Kshs.30,000/- against the tenant.

(d) The tenant’s reference is ordered dismissed for avoidance of doubt.

DATED, SIGNED AND DELIVERED VIRTUALLY THIS 21ST DAY OF DECEMBER 2021.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

IN THE PRESENCE OF:

MISS KIHENJO FOR THE LANDLORD

WANJALA FOR THE TENANT