[2022] KEBPRT 914 (KLR)

Kaaria v Mwangi (Tribunal Case E027 of 2021) [2022] KEBPRT 914 (KLR) (29 April 2022) (Judgment)

Neutral citation: [2022] KEBPRT 914 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E027 of 2021

Gakuhi Chege, Vice Chair

April 29, 2022

Between

George Mwirigi Kaaria

Tenant

and

Susan Nyambura Mwangi

Landlord

Judgment

1. The relationship between the parties herein commenced with a tenancy agreement dated 18th November 2019 wherein the tenant agreed to take on lease the hotel premises erected on L.R. No. Kiine/Rukanga/194 within Kirinyaga County and the rent payable was agreed at Kshs.200,000/- per month for the 1st year and Kshs.250,000/- for the 2nd year per month in terms of Clause 3 of Defence exhibit 1.

2. The tenancy commenced on December 1, 2019for a period of seven (7) years subject to renewal upon giving three (3) months notice in writing to the Landlord.

3. The tenant was to use the premises i.e bar, restaurant, lodgings and garden already constructed by the landlord on the said land parcel.

4. The tenancy agreement provided that any notice shall be deemed to be served if ninety (90) days have lapsed from the date the same is posted by registered post to the address indicated in the agreement or payment of three (3) months rent in lieu of notice.

5. Clause 7 of the agreement provides that in case of breach of the agreement by the landlord she would compensate the tenant for any repairs done on the premises including the doors, windows, ceiling, walls, floor and any other development done on the premises.

6. Sometimes on August 26, 2021, the landlord served a tenancy notice upon the tenant seeking to terminate the tenancy with effect from November 1, 2021 on grounds of failure to pay rent since December 2019 to the date of issuance of notice and secondly on the ground that she intended to occupy the premises for her own use for a period of not less than one year.

7. The tenant filed a reference on September 6, 2021supported by an affidavit of even date deposing that the monthly rent was Kshs.16,666/- per month and that he had paid Kshs.200,000/- on 18th November 2019 for the full year.

8. The tenant deposed that upon entry into the premises, he was served with notices by NEMA and Ministry of Health notifying him that the premises were not worthy for business operations.

9. After notifying the landlord about the notices, her childrent begun threatening him with eviction and physical confrontation. He therefore filed Kerugoya CMCC No. 37 of 2020 and obtained orders of injunction produced as D.Exhibit 11.

10. On 3rd September, 2021 he was served with notice to terminate tenancy. He opposes the notice on grounds that he is up to date with rent payment but could not operate due to notices issued by NEMA and Ministry of Health.

11. The matter proceeded to hearing by way of viva voce evidence after both parties complied with order 11 of the Civil Procedure Rules, 2010. The landlord begun testifying and was cross-examined. She relied on her witness statement and documents annexed thereto. She also relied on the affidavit sworn on 23rd November 2021 and the witness statement.

12. The landlord denied that there were any notices to close the hotel business on account of environment pollution. She also denied any intention to evict the tenant using police with a view to selling the business to a third party. She denied knowledge of the notices produced as defence exhibits 4 and 6.

13. On his part, the tenant testified that he was introduced to the landlord by a friend and entered into the tenancy agreement dated 18th November 2019. He was to construct a swimming pool which was already excavated.

14. He was also to develop a garden within the hotel premises and the rent per year was agreed at Kshs.200,000/- for 1st year and Kshs.250,000/- for the 2nd year although the agreement states that rent per month was Kshs.200,000/-.

15. There was no handing over after the agreement and the landlord continued to use the hotel until January 2020 when her manager moved out.

16. The tenant undertook renovations of the hotel to avoid its closure and the cost was to be deducted from rent. The tenant referred to an assortment of receipts produced as defence exhibit 9 as per his list of documents dated 8th November 2021. A valuation report marked defence exhibit 1 was also produced with an assessment of improvements valued at Kshs.1,941,223 as at 9th July 2020.

17. A notice by the National Environmental Authority was produced as defence exhibit 6. The tenant was unable to do the sewerage system on account of lack of finances.

18. Sometimes in February 2020, five daughters of the landlady visited the hotel premises and after discussing with the tenant agreed to compensate him with Kshs.700,000/- so that he could move out. He agreed to the suggestion. No agreement was however written.

19. In March 2020, 5 daughters of the landlord and her one son accompanied her to the hotel and after discussing the issue of compensation for renovations agreed that a valuation be undertaken. The tenant brought a valuer who did the valuation which came to Kshs.1,941,223/-. They were to do their own valuation but did not comply.

20. Instead, a daughter of the landlord brought a tractor which ploughed the garden. The tenant was summoned by OCS Kiamachiri Police Station on account of failure to vacate the hotel premises and to pay goodwill of Kshs.1 million.

21. The matter was thus referred to Kerugoya Court by the tenant where he seeks compensation. An order of injunction was given in the matter on 2nd April 2020. The tenant seeks for compensation of Kshs.1,941,223/-. The notice to terminate tenancy was filed when the Kerugoya case was pending in court.

22. By the time of testifying in this Tribunal, the tenant was still using the hotel premises. He stated that he was ready to pay rent before moving out as long as he is compensated for improvements as per clause 7 of agreement.

23. I am now required to determine the following issues:-a.Whether the tenancy notice ought to be upheld or dismissed.b.Whether the tenant owes rent arrears and if so how much?.c.Whether the tenant is entitled to compensation for improvements.d.Who is liable to pay costs?.

24. There is no dispute that the relationship between the two parties is based on a written tenancy agreement.

25. Section 97 of the Evidence Act Cap. 80, Laws of Kenya provides as follows:-“When the terms of a contract or of a grant or of any other disposition of property have been reduced to the form of a document and in all cases in which any matter is required by law to be reduced to the firm of a document, no evidence shall be given in proof of the terms of such contract, grant or other disposition of property or of such matter, except the document itself or secondary evidence of its contents in cases in which secondary evidence is admissible under the provisions of this Act”.

26. Although the tenant testified that the annual rent for the hotel premises was Kshs.200,000/-, Clause 3 of the tenancy agreement clearly stipulates that for the 1st year the monthly rent was Kshs.250,000/-. There is no ambiguity in that regard and the tenant cannot through oral evidence change the same.

27. Secondly, the agreement at Clause 7 provides that the tenant would be entitled to compensation for any repairs done on the premises or any developments effected thereon. The tenant produced a valuation report for Kshs.1,941,223/- for the said improvements. No counter report was produced by the landlord neither was there denial that at one time the landlord’s family members were ready to pay Kshs.700,000/- but later sought for valuation to be carried out. I have no reason to doubt the value given in the valuation report produced by the tenant.

28. As regards the notice to terminate the tenancy, the same is in compliance with section 4(2) and 7 of cap. 301 and it has not been contested save on the issue of compensation by the tenant. It is therefore proved.

29. The tenancy agreement at Clause 2 indicates that a deposit of Kshs.200,000/- was made as the initial rent payment which the landlord acknowledged. No other evidence of rent payment has been tendered by the tenant and the termination of tenancy being based on non-payment of rent required proof that the tenant had fulfilled his obligation in that regard. I hold that he only paid Kshs.200,000/- reflected in the tenancy agreement and the amount due from December 1, 2019to April 30, 2022less the said amount is Kshs.6,450,000. made up as follows:-i.Rent from December 1, 2019 to November 30, 2020@Kshs.200,000/- per month = 2,400,000. 00ii.Less Kshs.200,000/- paid = 200,000. 00Balance thereafter = 2,200,000. 00iii.Add Rent from December 1, 2020 to November 30, 2021@ Kshs.250,000/- = 3,000,000. 00iv.Add Rent from December 1, 2021to April 30, 2022 @ Kshs.250,000/- per month = 1,250,000/-Total thereafter =6,450,000/-

30. The tenant is entitled to offset the value of improvements in the sum of Kshs.1,941,223/- from the rent owing to leave the balance at Kshs.4,508,777/- as the amount owing in rent arrears.

31. It is not in dispute that the tenancy herein is controlled by reason of the fact that it provided for shorter notice in Clause 6 of the tenancy agreement by either party during the currency thereof otherwise than for breach of covenant. As such the proper forum for adjudication of the dispute is before this Tribunal by dint of section 2(1) of Cap. 301, Laws of Kenya and the decision of the Court of Appeal in the case of Speaker of the National Assembly – vs- James Njenga Karume (1992) eKLR at page 3 /4 where it was held as follows:-“ In our view, there is considerable merit in the submission that where there is a clear procedure for the redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure should be strictly followed. We observe without expressing a concluded view that order 53 of the Civil Procedure Rules cannot oustlear constitutional and statutory provisions”.

42. In the premises, whereas I appreciate that there are other pending proceedings before Kerugoya Chief Magistrate’s court vide Civil Suit no. 37 of 2020 the proper forum for adjudication of the dispute between the two parties remains this Tribunal under Section 2(1) of the Landlord and Tenant (shops, hotels and catering establishments) Act Cap. 301, Laws of Kenya. The parties will therefore decide on the fate of the pending civil case.

43. Flowing from the above analysis, the final orders that commend to me are:-i.The tenancy notice dated August 28, 2021 is hereby upheld and the tenant’s tenancy over L.R No. Kiine/Rukanga/1914 within Kirinyaga County is hereby terminated with immediate effect.ii.The tenant is awarded Kshs.1,941,223/- towards improvements carried out on the demised premises which shall be defrayed against the rent arrears owing to the landlord.iii.The landlord is awarded Kshs.6,450,000/- in rent arrears up to and including 30th April 2022. iv.The balance payable by the tenant to the landlord after defraying the costs of improvements in (ii) above is Kshs.4,508,777/- as rent arrears up to and including 30th April 2022. v.Pursuant to section 12(1) (e) of Cap. 301, the Landlord is authorized to take over possession of the demised premises with immediate effect with the assistance of OCS Kiamachiri Police Station who shall make an inventory of all the movable properties found thereon and file the same with this Tribunal.vi.Each party shall bear own costs of this suit since both have succeeded in their respective claims against each other.

44It is so ordered.

RULING DATED, SIGNED & DELIVERED VIRTUALLY THIS 29TH DAY OF APRIL 2022. HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALRuling delivered in the presence of:Tenant present in person