[2024] KEBPRT 81 (KLR)

Ibrahim & another v Savasci (Tribunal Case E766 of 2023) [2024] KEBPRT 81 (KLR) (2 February 2024) (Ruling)

Neutral citation: [2024] KEBPRT 81 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E766 of 2023

Gakuhi Chege, Chair & J Osodo, Member

February 2, 2024

Between

Abdulkadir Aden Ibrahim

1st Tenant

Khalif Ahmed Gabow

2nd Tenant

and

Snat Savasci

Landlord

Ruling

1. The instant proceedings were instituted by the tenants by way of a reference dated 10th August 2023 under Section 6(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301, Laws of Kenya challenging the notice to terminate tenancy dated 8th August 2023 issued by the Landlord on the grounds that he intends to use the business premises for his own purpose for more than one year with effect from 1st November 2023.

2. On 25th August 2023, the Landlord moved the Tribunal under Section 10 (4) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap 301 & Section 3A of the Civil Procedure Act seeking for orders; -i.Thatthe application be certified urgent and the same be heard ex-parte in first instance.ii.Thatthe Tenants be ordered to give vacant possession of the business premises located at L.R No209/7361 Panganiimmediately in default,O.C.SPangani Police Station to enforce eviction.iii.Thatthe Respondents/Tenants to cease collecting parking fee from the premises and operating the car wash.iv.That the tenants be ordered to pay the landlord the outstanding arrears in full and in the alternative, the two months’ deposit be used to pay the two months’ rent they have defaulted.v.Thatthe O.C.SPangani Police Station to ensure compliance.vi.Thatcosts of the application be provided for.

3. The application is supported by the affidavit of Sonat Savasciand on the following grounds; -a.Thatthe Respondents/tenants herein who are still occupying the Applicant's business premises were served with the termination notice dated 8th August 2023 to vacate by 1st November 2023. b.Thatdespite being served with the said legal notice, the said Respondents have refused to vacate the business premises and have continued to operate and generate income.c.Thatthe Respondents have adamantly refused to pay the monthly rent in time leading to the accumulation of rent arrears.d.Thatthe continued occupation of the Applicants’ business premises by the Respondents has made the Applicant to suffer loss and damage.e.Thatthe Applicant is a “protected landlord” and thus must be protected by the honorable court from illegal activities of the Respondents.

3. The application is supported by the affidavit of Sonat Savasciwho deposes that he was leased the said premises by the Board of Pumwani Boys High School where he was to start a recreational business popularly known as “Lunar Park”.

4. In the year 2020 when Covid-19 hit the country, he closed down the business in order to minimize the spread of the virus and turned the premises into a car wash and car park in order to generate revenue and be in a position to pay the monthly rent owed to the school.

5. Sometimes last year he was approached by the 1st Respondent who requested to be given the car wash so that he could run a business agreed upon who later introduced his friend one Khalif Ahmed Gabow.

6. The 1st Respondent asked the Applicant if he could give him a prayer room and he gave him one of the stores where he could keep his washing machine and use the room for prayers.

7. Around July last year, the 1st Respondent delayed in payment of rent and the Applicant asked him to stay on until 31st August 2023 when his two months' deposit would have been exhausted.

8. The Applicant deposes that since Covid-19 restrictions were no more, he intends to use the property for the intended purpose being recreation center.

9. On 8th August 2023, the Applicant gave a legal termination notice to the Respondents in terms of Section 4(2) of Cap 301 annexed thereto and marked “S.S.1”.

10. The application is opposed through the replying affidavit of the 2nd Respondent sworn on 26th September 2023 wherein he deposes that he and the 1st Respondent are tenants of the Applicant in respect of the suit premises.

11. The landlord issued the tenants with a notice to terminate the lease and to vacate the suit premises being L.R No. 209/7361 Pangani, pursuant to which they filed the instant reference against the notice.

12. The said reference is yet to be heard and determined.

13. Sometimes in the month of December 2022, through the assistance of a property agent one Salat, the 2nd Respondent met the landlord whereupon negotiating, he agreed that he was to lease the suit premises to them for the business of a car wash and parking for a period of 5 years and a payment of Kshs 520,000 deposit was made.

14. Out of the said payment, a sum of Kshs 100,000 was given to Salat as his commission leaving a balance of Kshs 420,000 which was taken by the landlord.

15. The landlord promised to prepare a written lease agreement which was to be executed in the presence of their lawyers and the business was to start in January 2023.

16. The 2nd Respondent immediately embarked in massive construction, renovation, repairs and refurbishment to make the premises fit for his business of car wash and parking and by 8th January 2023, the business was officially open.

17. Immediately after he commenced the business, the 2nd Respondent started following up on the written lease but the landlord kept on giving him excuses including non-availability of his lawyer who he introduced as Dominic to whom the 2nd Respondent paid Kshs 4,000 as his share of legal fees for preparation of the lease.

18. Later on, the tenant realized that the landlord had gone ahead to sublet part of the premises to one Mandela, a mechanic, some lady running a restaurant and another person who is operating an office for his construction leaving part of the space for himself without the tenant’s consent and knowledge as per the sketch plan marked “KAG-1”.

19. Having discovered that the landlord had sublet a fairly big portion of the demised premises, the 2nd tenant could not continue paying the previously agreed rent.

20. Upon being frustrated by the landlord’s failure to prepare the lease agreement as promised and further subletting a substantial portion of the premises and upon receiving reliable information that the property belonged to a public school, the 2nd Respondent wrote a WhatsApp message on 28th July 2023 to the landlord and informed him that he was not going to receive any further payments until the agreement is drafted and the same duly signed before both lawyers. The dispute between the two ended up at Pangani Police Station where the 2nd Respondent recorded a statement highlighting his tribulations as per annexure marked “KAG-2” being a copy of the OB and statement.

21. The 2nd Respondent contends that the landlord has not disclosed nor exhibited evidence of the lease agreement he purports to have with Pumwani Boys High School and the landlord’s interest in L.R No. 209/7361 Pangani has not been demonstrated.

22. According to the 2nd Respondent Pumwani Boys High School is a public school which cannot be a party to a controlled tenancy in terms of Section 2 (c) (iii) ofCap 301, Laws of Kenya.

23. It is therefore argued that the landlord has not met the threshold nor demonstrated that he requires the premises for his own recreation business having been unable to pay rent and subsequently abandoned the same previously. Accordingly, he has not met the threshold for granting of interim relief in line with the case ofGiella vs Cassman Brown.

24. Even before the first application could be heard, the landlord filed a second application dated 19th October 2023 seeking for orders:-(a)Thatthe application be certified urgent and heard ex parte in the first instance.(b)Thatthe Tenants/Respondents be restrained by themselves, their servants and/or agents from remaining upon the premises located at L.R 209/7361 Pangani, from interfering with the Landlord’s right to egress and regress into and from the said premises or otherwise interfering with the Landlord's peaceful and quiet enjoyment of the premises pending the hearing of this case and/or further orders of the Tribunal.(c)Thatpending the hearing and determination of the application, the Tenants/Respondents be restrained by themselves, servants and/or agents from accessing, remaining upon and/or interfering with the Landlord’s access to the premises located at L.R No 209/7361 Pangani.(d)Thatthe OCS Pangani Police Station to ensure compliance.(e)Thatcosts of the application be provided for.

25. The application is supported by the affidavit of the landlord sworn on 19th October 2023 and the grounds set out on the face thereof to wit;a.The landlord sublet the suit premises to the tenants who have since openly indicated that they will not remit to the landlord the rent as agreed and have been in default thereof for several months.b.The tenants have been violent to the Landlord and a case has been reported at Pangani Police Station.c.The tenants were a nuisance to the landlord/applicant and other occupants.d.The acts of the tenants will occasion irreparable damage and it was just and fair that the orders prayed for be granted.

26. The application is supported by the affidavit of the landlord sworn on 19th October 2023 wherein he deposes that he is the head tenant in the premises located on L.R No 209/7361 as per the notification from the head landlord dated 14th June 2012 marked “SS 1”.

27. He further deposes that he has been running a business known as Truckkom Enterprises on the suit premises since the year 2012.

28. In December 2022, he was approached by the Tenants/Respondents to sublet some of the premises to them and reached an agreement in respect thereof at a monthly rent of ksh 140,000 being Kshs 40,000/= for the Car wash and half of the open parking lot at Kshs. 100,000.

29. The subletting was partly informed by the challenges occasioned by the Covid-19 Pandemic. However, the Tenants/Respondents soon fell into arrears leading to difficulties with the head landlord and he therefore decided to have the premises back so that he could proceed with his business as before. He therefore issued a statutory notice which led to the filing of this reference.

30. The Tenants/Respondents are accused of being violent and a menace to other users of the premises.

31. The landlord deposes that on 17th October 2023 at 7. 15 pm or thereabouts, he was assaulted by the 2nd Respondent who had locked in other tenants and would not allow them to leave the premises. The matter was reported at Pangani Police Station under OB No. 110/17/10/23 whereupon he was issued with a P3 form which is marked as annexure “SS2”.

32. The landlord filed a further affidavit sworn on 26th October 2023 in which he deposes that the tenants had variously boasted that they were working in cahoots with the head Landlord to induce breach by him of the covenants in order to have his enterprise leave the premises in order for the tenant to pay to the Landlord vast amounts in rent as opposed to his current rent payments.

33. The landlord deposes that nothing demonstrates the foregoing more than the fact that a supposed notice to him was in the hands of the tenant and had not been furnished to him by the head Landlord.

34. The 2nd Respondent filed yet another replying affidavit sworn on 14th November 2023 wherein he deposes that the license agreement only allows an entity known as Truckkom Enterprises Ltd to put up some Luna Park equipment on the suit premises.

35. The 2nd Respondent deposes that the purported agreement is between Pumwani Secondary School and Truckkom who are strangers to the dispute herein.

36. He further deposes that annexure “SS 1” being a license agreement, the rights between the School and Truckkom are personal and are thus incapable of transfer. In any event, the agreement is devoid of consideration rendering it void ab initio and neither the landlord nor the School can enforce the agreement.

37. It is the tenants’ case that there is no privity of contract between them and Truckkom, they are therefore strangers to each other and cannot have a cause of action against them and that the landlord has not shown the nexus between the School, Truckkom, himself and the tenant.

38. According to the tenants, the admission that the suit premises was granted to Truckkom is therefore a clear manifestation that the Landlord does not have any legal interest in the suit premises and cannot therefore purport to demand rent and vacant possession.

39. It is the view of the tenants that the Landlord has failed to demonstrate the legal relationship between himself and the School.

40. According to the tenants, the landlord has not shown whether he has a right to sublet the suit premises to entitle him to the orders being sought in the application.

41. The tenants contend that it appears that they were duped into entering into a relationship with a person who had no recognizable interest in the suit property, their investment is therefore exposed to severe loss and damage and granting the prayers in the application shall be tantamount to aggravating an already delicate situation.

42. According to the tenants. this Tribunal is not the proper forum to ventilate the allegations of actual violence since the issue is already being investigated by the police who are mandated to deal with any complaint of a criminal nature.

43. Thatthe actions complained of by the landlord according to the tenants are a clear testament that they have not been granted quiet use and/or enjoyment of the suit premises and the landlord is not therefore deserving of the orders sought herein since he has clearly not come to court with clean hands.

44. Thatthe leased portion is still in contention since the landlord has further sublet part of the agreed portion to a third party which has substantially reduced the initial size of the suit premises.

45. Having discovered that the landlord had sublet a fairly big portion of the suit premises coupled with evidence of his doubtful interest in the suit premises, the 2nd Respondent deposes that he could not continue digging a deeper hole by paying rent to the landlord.

46. The following issues arise for determination in this case: -a.Whether the landlord is entitled to the reliefs sought in the applications dated 25th August 2023 and 19th October 2023. b.Who is liable to pay costs?

47. The genesis of this dispute is a notice to terminate tenancy dated 8th August 2023 served upon the tenants by the landlord in respect of the suit premises.

48. The tenants being opposed to the said notice filed the instant reference under Section 6(1) of Cap. 301, Laws of Kenya which provides as follows: -“(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.”

49. Based on the foregoing provision, it is clear that until the reference filed by the tenants is heard and determined, the notice cannot have the effect of terminating the tenancy herein.

50. We have also noted that the two applications dated 25th August 2023 and 19th October 2023 were filed in the pendency of the tenants’ reference herein and in any event before the effective date of the notice to terminate tenancy which was expressed to be 1st November 2023. The applications were therefore premature, incompetent and bad in law. As such, they fail to meet the test laid down in the case of Giella Vs Cassman Brown & Co. Ltd [1973] E.A 358.

51. It is also clear that the relationship between the parties herein is very contentious and incapable of determination through an interlocutory application. It is only right to hear and determine it through a full hearing where parties will testify and be cross examined on their evidence in the normal manner in line with the decision in Essanji & Another Vs Solanki [1968] E.A224 which was cited in the case of Trust Bank Limited Vs Amalo Company Limited[2002] eKLR at page 2/3 where it was held as follows:-“The principle which guides the court in the administration of justice when adjudicating on any dispute is that where possible disputes should be heard on their own merit. This was succinctly put a while ago by Georges, C.J. (Tanzania) in the case of Essanji and Another Vs. Solanki[1968] EA at page 224-"The administration of justice should normally require that the substance of all disputes should be investigated and decided on their merit and that errors should not necessarily deter a litigant from the pursuits of his right."

52. Section 9(1) of Cap. 301, Laws of Kenya deals with the manner of handling of references by this Tribunal as follows:-“(1)Upon a reference, a Tribunal may, after such inquiry as may be required by or under this Act, or as it deems necessary—(a)approve the terms of the tenancy notice concerned, either in its entirety or subject to such amendment or alteration as the Tribunal thinks just having regard to all the circumstances of the case; or(b)order that the tenancy notice shall be of no effect;(c)and in either case make such further or other order as it thinks appropriate.”

53. It therefore follows that until an inquiry is conducted in respect to the landlord’s notice to terminate the tenants’ tenancy, this Tribunal cannot make an order for eviction against the tenants herein.

54. In regard to costs, Section 12(1)(k) of Cap. 301, Laws of Kenya grants this Tribunal discretion to make orders for costs. The landlord’s applications have failed and as costs follow the event unless for good reasons otherwise ordered, we shall award costs to the tenants.

55. Consequently, the following orders commend to us: -a.The landlord’s applications dated 25th August 2023 and 19th October 2023 are hereby dismissed for being premature, incompetent and bad in law.b.The matter shall proceed to hearing of the reference against the tenancy notice in the normal manner under Section 9(1) of Cap. 301, Laws of Kenya.c.The status quo obtaining at the suit premises shall be maintained and the tenants shall not be evicted therefrom in the pendency of the reference.d.The OCS, Pangani Police Station shall ensure compliance with the status quo order.e.Costs of the applications are awarded to the tenants against the landlord.It is so ordered.

DATED, SIGNED & DELIVERED VIRTUALLY THIS 2ND DAY OF FEBRUARY 2024. HON. GAKUHI CHEGEPANEL CHAIRPERSONHON. JOYCE OSODOPANEL MEMBERIn the presence of: -Onzomu holding brief for Nyakundi for the LandlordAnyoka for tenants