[2022] KEBPRT 122 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 1134 OF 2019 (NAIROBI)

JAMES NGANGA MWANGI…………………........……..………………..LANDLORD

VERSUS

IAN KANIU NDICHU…………………………………..…………………..1ST TENANT

FRANCIS GATHUMBI KARANJA……………..…………………2ND RESPONDENT

BETHUEL KABAIKU THUO……………………………………....3RD RESPONDENT

RULING

1. The Landlord’s application dated 8th December 2020 seeks the following orders;

a. Spent.

b. That there be an order against the 1st Tenant/Respondent herein estopping the operation of the premises for failure to pay rent contrary to orders of court issued on 4th March 2020 and the lease agreement pending the hearing and determination of this suit.

c. That there be an order directing the 1st Tenant/Respondent to vacate the premises for failure to pay rent contrary to the orders of court issued on 4th March 2020 and the lease agreement pending the hearing and determination of this suit.

d. That there be an order directing the 1st Tenant/Respondent to pay rent arrears accrued from May 2019 to December 2020 amounting to Kshs 820,000/-.

e. That there be an order for the Landlord/Applicant to levy distress upon the 1st Tenant/Respondent for the said arrears accrued from May 2019 to December 2020 amounting to an amount of Kshs 820,000/-.

f. Any further orders.

g. Costs.

2. The 3rd Respondent’s application dated 12th April 2021 seeks the following orders;

a. Spent.

b. That the Landlord, his agents, auctioneers, employees and/or employees be temporarily restrained from distressing for rent or in any way interfering with the 3rd Respondent’s use and occupation of the Tenant’s business premises situated on the plot No. 102 Githunguri Market pending the hearing and determination of this application.

c. That the sum of Kshs 600,000/- paid to the Landlord and his auctioneers under duress on 18th March 2021 be treated as advance rent for a period of 20 months from April 2021 to 30th November 2022.

d. Costs.

3. Both applications have been supported and respectively opposed by the parties’ affidavits. I have considered the same and will refer to them in this ruling.

4. The Landlord’s case may be summarized as follows;

a. That the 1st Respondent is the Landlord’s Tenant on the suit premises sinceNovember 2015at an agreed monthly rent ofKshs 140,000/-.

b. That in breach of the tenancy agreement between the parties, the 1st Tenant failed to pay rent and electricity bills sinceMay 2019and further sublet the suit premises to the 3rd Respondent without the knowledge of the Landlord.

c. That even after being ordered to pay rent, the 1st Tenant has failed to pay the same as a result of which he is in rent arrears amounting toKshs 820,000/-.

d. That the 1st Respondent has refused to vacate the premises.

5. The 3rd Respondent’s case may be summarized as follows;

a. That he has never been served with the applicationdated 8th December 2020and the orders emanating therefrom.

b. That on18th March 2021, the Landlord and his auctioneers invaded the 3rd Respondent’s business premises demanding rent arrears ofKshs 820,000/-.

c. That to forestall the carting away of his properties, the 3rd Respondent paid out a sum ofKshs 600,000/-to the Landlord’s counsel and the auctioneers.

d. That the 3rd Respondent does not owe the Landlord any rent as he has paid his rent to the 1st Respondent who leased out part of the demised premises to him.

e. That the Landlord and the auctioneers acted in breach of court orders when they demanded the payment ofKshs 820,000/-instead ofKshs 420,000/-as ordered by the court on8th January 2020.

6. The 1st Tenant who seems to be at the center of this controversy has stated as follows (in summary) as regards the applications by the Landlord and the 3rd Respondent;

a. That there was no signed sublease agreement between him and the 3rd Respondent as his yearly lease had expired in2019.

b. That he has not received any rent from the 3rd Respondent fromMay 2019to date and he is not a Director or beneficiary of Erekan Holding Company.

c. That he ceased operations at the business premises inMay 2019.

d. That he verbally sublet the premises to the 3rd Respondent sometimes in2018,the 3rd Respondent paid rent to him for six months only.

e. That the agreement attached to the 3rd Respondent’s affidavit is a forgery.

f. That when the 1st Tenant moved out, the 3rd Respondent informed him that he had an understanding with the Landlord that he would take up the entire premises.

g. That the 1st Tenant left the premises inAugust 2019and he had no rent arrears when he left. The disputed rent arrears are from 2020 onwards.

h. That he never signed the purported sublease agreement.

7. The issues that arise for determination in my humble view are the following;

a. Whether there exists a tenancy agreement between the Landlord and the 1st Tenant/Respondent.

b. Whether there exists a valid sub-lease agreement between the 1st Tenant/Respondent and the 3rd Respondent.

c. Whether the parties are entitled to the orders sought in their respective applications.

8. On issue (a)

a. It is evident from the affidavit of the Landlord sworn on7th November 2019that the Landlord and the 1st Respondent entered into a lease agreement for plot No 102 Githunguri. The terms of the lease agreement are in the lease annexed to the said affidavit. It is also clear from the testimony of the 1st Respondent upon cross-examination on the contents of his affidavit dated20th May 2021that the 1st Respondent left the suit premises on or aboutAugust 2019. It would therefore be safe to conclude that the 1st Tenant is no longer in occupation of the premises.

b. The tenancy between him and the Landlord has constructively come to an end and in these circumstances, I have my doubts whether the Tribunal still has jurisdiction to determine a dispute between the Landlord and the Tenant.

c. The lease agreement between the Landlord and the 1st Respondent at clause 12 states that the same is renewable after every one year. The 1st Respondent on his part states that he could not have signed a sublease agreement with the 3rd Respondent because his own lease had expired in2019and was never renewed.

d. The Tribunal is therefore faced with a scenario where the 1st Respondent’s tenancy agreement with the Landlord lapsed and was never renewed. The 1st Tenant left the suit premises sometimes inAugust 2019when he purported to verbally lease it out to the 3rd Respondent. I am of the view that in these circumstances, there no longer exists a Landlord/Tenant relationship between the Landlord and the 1st Respondent/Tenant.

e. In the case ofPritam Vs Ratrilaland anotherNairobi HCC NO 1499 of 1970 [1972] EA 560, Justice Madanstated as follows;

“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 or been brought 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 by a Tribunal. Otherwise, the Tribunal will have no jurisdiction. There must be a controlled tenancy as defined in section 2 which the provisions of the Act can be made to apply. Outside it, the Tribunal has no jurisdiction.”

f. It is my finding that whereas there initially existed a controlled tenancy between the Landlord and the Tenant/1st Respondent, the same was brought to an end by the vacation of the suit premises by the Tenant/1st Respondent on or aboutAugust 2019. The Tribunal, in the words of Justice Madan above, therefore has no jurisdiction to determine the dispute between the Landlord and the 1st Respondent/Tenant.

9. On issue (b)

a. The 1st Tenant/Respondent has admitted that he verbally leased out part of the suit premises to the 3rd Respondent. He has however denied extending the sub-lease and has termed the sublease agreement a forgery. He has further admitted to recovering rent from the 3rd Respondent for a period of six months and no more.

b. The Landlord on his part has not admitted receiving any rent from the 3rd Respondent. In deed the 3rd Respondent has stated that he paid all his rent to the 1st Respondent and not to the Landlord. the reason given by the 3rd Respondent for not paying the rent to the Landlord is that he leased the suit premises or part thereof from the 1st Tenant. From the outset, it is therefore clear that there does not exist a Landlord/Tenant relationship between the Landlord and the 3rd Respondent.

c. Clause 6 of the lease agreement between the Landlord and the 1st Tenant/Respondent expressly forbid the Tenant from subletting the suit premises without the consent of the Landlord. it states;

“The Tenant should not sub-rent the shop without the consent of the Landlord.”

d. The Landlord has stated that the purported subleasing of the suit premises to the 3rd Respondent was done without his consent. This assertion by the Landlord has not been challenged by the 1st and 3rd Respondents. As early as10th October 2016,the counsel for the Landlord had raised the issue of the sub-lease when counsel stated;

“Secondly for unknown reasons and without the consent of the Landlord, our client, you went ahead to sublet part of the premises and sell your business to 3rd parties sometimes in July 2019 contrary to clause 7 of the agreement.”

e. Counsel for the 1st Tenant denied the allegations set out above in their letter of16th October 2019but those denials now fly on the face of the real facts on the ground.

f. The purported sub-lease of the suit premises or a part thereof to the 3rd Respondent was in breach of the express terms of the lease agreement between the Landlord and the 1st Respondent. In the absence of the express consent of the Landlord had and obtained, the 1st Tenant had no capacity to enter into any sub-lease agreements with any third parties.

g. The sub-lease to the 3rd Respondent is therefore illegal as is his occupation of the suit premises, and I so find. That being so, the 3rd Respondent cannot claim to be a bonafide sub-tenant, protected by the provisions ofCap 301and cannot therefore avail herself of the jurisdiction of the Tribunal.

10. On Issue (c)

a. Having found that there exists no Landlord/Tenant relationship between the Landlord and the 1st Respondent, and having further found that the purported sub-lease between the 1st Tenant and the 3rd Respondent is illegal, I do find that the Tribunal does not have the requisite jurisdiction to make any findings on the parties’ applications. Both applications dated8th December 2020and12th April 2021are hereby dismissed with no order as to costs.

b. Parties are at liberty to pursue their respective claims in the appropriate fora.

c. The reference dated8th November 2019is also dismissed with no orders as to costs.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Rulingdated, signed and delivered virtually by Hon Cyprian Mugambi Nguthari this 5th day of January, 2022 in the presence of Ms Gitarifor theLandlord, Mr Magetofor the1st TenantandMr Ngurefor the3rd Respondent/Applicant.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL