[2024] KEBPRT 1738 (KLR)

Kungu & 6 others v Dajohn Enterprises Limited (Tribunal Case E800, E801, E802, E803, E804, E805 & E810 of 2023 (Consolidated)) [2024] KEBPRT 1738 (KLR) (13 December 2024) (Judgment)

Neutral citation: [2024] KEBPRT 1738 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E800, E801, E802, E803, E804, E805 & E810 of 2023 (Consolidated)

Gakuhi Chege, Chair & J Osodo, Member

December 13, 2024

Between

Moses Gakunga Kungu & 6 others & 6 others

Tenant

and

Dajohn Enterprises Limited

Landlord

Judgment

A. DISPUTE BACKGROUND 1. The tenants/applicants moved this Tribunal vide their References dated 17th August 2023 pursuant to Section 6(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap 301, Laws of Kenya objecting to the Landlord’s notices dated 22nd June 2023 seeking to terminate their tenancies over L.R NO. 209/1837, BIDII HOUSE, DURUMA ROAD, NAIROBI CITY with effect from 1st September 2023.

2. The tenancy notices are based on the ground that the landlord requires possession of the suit premises for purposes of renovation and repair thereof in compliance with demands of the Public Health Department of Nairobi Metropolitan Services attached thereto.

3. On 25th October 2023, all the seven (7) cases were consolidated for hearing and determination. Parties were directed to comply with Order 11 of the Civil Procedure Rules. The landlord complied on 3rd November 2023 by filing a witness statement by Jackline Nyambura Mbugua and a list of documents of even date. The landlord also filed a further witness statement dated 16th February 2024 by the same witness together with a supplementary list of documents of even date.

4. On the other hand, the tenants complied by filing witnesses’ statements by Moses Gakunga Kung’u, Martha Muthoni Gituthu,Esther Wairimu Kihara, Stanley Njogu Wainaina, Eliud Mutura M’angicia, Charles Mbugua Thuo & Daniel Kinuthia Njoroge . The matter was therefore fixed for hearing on 25th April 2024. They also filed their list of documents dated 12th January 2024 and a further list dated 2nd April 2024.

5. The matter was thereafter set down for hearing with the landlord beginning and calling one expert witness. Thereafter, the tenants’ case proceeded with Moses Gakunga Kung’u testifying on their behalf. The tenants withdrew their Structural Engineer’s report attached to their further list of documents dated 2nd April 2024 after it emerged that the witness called to produce it was not qualified to do so.

6. Jackline Nyambura Mbugua testified that she is the Chief Operations Officer of the Landlord Company and that she was fully conversant with the matters in dispute. She stated that the suit premises herein are in a very dilapidated state due to the landlord’s inability to properly maintain them whilst the tenants were in occupation.

7. On 16th April, 2023, the landlord was served with a 14 days’ notice to refurbish the premises by the Public Health Department of Nairobi City County. On 27th April, 2023, the landlord was given another notice from the Public Health Department to carry out extensive repairs over the suit premises within 30 days.

8. After consulting an expert contractor, the landlord established that it was not possible for them to carry out the repairs and comply with the Public Health requirements while the tenants were in the premises.

9. The Public Health Department demanded extensive rehabilitation which had been held back by the pendency of this case. The landlord therefore requests this Tribunal to order the tenants to vacate so that the premises can be renovated as they are losing value and the City County could easily condemn the premises as unfit for human habitation.

10. The Landlord’s witness one Engineer Benjamin Muraya testified and produced his report in the name of EGOVA CONSULTANTS whose findings were that the building is “very dated, requires significant refurbishment and extensive repairs to match up to similar buildings in the area”. As the building is, it is extremely under-utilized as most of the building cannot be sublet in its current state.

11. According to the witness, the building requires a minimum of 4 toilets per floor whereas only one is currently provided for per each floor. The building’s facade requires repainting or refurbishment to match other buildings in the area. All floors through the entire building have deep cracks. Some areas require to be re-concreted a fresh. Tiling needs to be done through the entire building.

12. . It was his evidence that all the plumbing i.e. for water supply, toilets and waste water drainage must be re-done as all the current provisions are leaking. This plumbing would also support the required toilets on each floor. The sewer reticulation also needs to be re-done to accommodate the extra sanitary provisions.

13. The report further states that the building requires electrical rewiring. All sockets and lighting provisions need to be replaced. The roof is leaking in several areas. Given the extent of the leakage, it would be advisable to replace the entire roof cover to permanently arrest the issue.

14. The witness concludes his report by stating that the work involved is extremely involving and will require a qualified contractor with several labourers with full possession of the construction site in order to carry out the work successfully and in a timely manner. Retaining the tenants during the envisaged renovation process would cripple their businesses as they would not have access to their shops. There would also be a significant safety hazard to have them in a construction site as well as a health hazard.

15. He therefore recommends that the building should be completely vacant during the construction period for the work to be done well, safely and in a timely manner.

16. On the other hand, the 1st tenant who testified on behalf of the rest stated that he is the proprietor of Monans General Supplies and that he has been a tenant of Dajohn Enterprises Ltd for the last 15 years having had 3 other landlords since 1998.

17. For the last 25 years, he has been receiving notices from the Public Health Department of Nairobi County regularly instructing him to refurbish the premises and he has been complying without moving out of the premises. On 23rd June 2023, he was served with a notice to vacate the premises to allow the landlord to do repairs and wondered why because the other landlords have never told him to move out while undertaking the repairs.

18. Upon receipt of the notice, he requested the landlord through the agent to reconsider the decision and allow him to do the repairs as he has been doing previously. When the landlord refused his request, he opted to seek legal redress through his advocate.

19. According to the 1st tenant, the premises is habitable since he has been maintaining it over the period of his occupation. He stated that he has been paying rent timeously and that he has not damaged the premises nor engaged in illegal activities to necessitate being directed by the landlord to vacate.

20. He therefore seeks that this court stops the landlord from forcing him out as he would incur huge loses both in terms of investment and goodwill. According to the tenant, the repair complained of can be done while he is still in the premises and does not warrant his eviction as it touches only the common area.

21. Both parties filed their written submissions after close of the case. The tenants’ submissions are dated 8th October 2024 while the landlord’s submissions are dated 17th October 2024. We have read and taken the said submissions into consideration in arriving at our determination of the issues set out below.

B. Issues, Analysis And Determination 22. The following issues arise for determination; -a.Whether the tenancy notices issued by the landlord to the tenants ought to be approved or dismissed.b.Whether the tenants’ references ought to be allowed or dismissed.c.Who shall bear the costs of the references?

23. We shall consider the first two issues together while the third issue shall be dealt with separately.

24. The tenants/applicants moved this Tribunal vide their references dated 17th August 2023 pursuant to Section 6(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap 301, Laws of Kenya objecting to the Landlord’s notices dated 22nd June 2023 seeking to terminate their tenancies over L.R NO. 209/1837, BIDII HOUSE, DURUMA ROAD, NAIROBI CITY with effect from 1st September 2023.

25. The tenancy notices are based on the ground that the landlord requires possession of the premises for purposes of renovation and repair thereof in compliance with demands of the Public Health Department of Nairobi Metropolitan Services attached thereto.

26. It is not contested that the suit premises herein are controlled within the meaning and interpretation of Section 2(1) of Cap 301, Laws of Kenya.

27. Sections 4(1) & (2) of the said statute which provides as follows;“(1)Notwithstanding the provisions of any other written law or anything contained in the terms and conditions of a controlled tenancy, no such tenancy shall terminate or be terminated, and no term or condition in, or right or service enjoyed by the tenant of, any such tenancy shall be altered, otherwise than in accordance with the following provisions of this Act.(2)A landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition in, or right or service enjoyed by the tenant under, such a tenancy, shall give notice in that behalf to the tenant in the prescribed form.”

28. We have looked at the tenancy notices served upon the tenants herein and have confirmed that the same are in tandem with the foregoing legal provisions. The same are therefore valid.

29. Section 6(1) of the said statute provides as follows;“6. Reference to Tribunal 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:Provided that a Tribunal may, for sufficient reason and on such conditions as it may think fit, permit such a reference notwithstanding that the receiving party has not complied with any of the requirements of this section.”

30. In compliance with the foregoing legal provision, the tenants filed the instant references objecting to the tenancy notices. This Tribunal is therefore required to inquire into the said notices and decide whether or not, the reasons set out therein have been proved by the landlord in line with Section 9(1) of the said statute.

31. The ground for termination of the tenants’ tenancies set out in the landlord’s notices is provided for under Section 7(1)(f) of the said statute which provides as follows;(f)that on the termination of the tenancy the landlord intends to demolish or reconstruct the premises comprised in the tenancy, or a substantial part thereof, or to carry out substantial work of construction on such premises or part thereof, and that he could not reasonably do so without obtaining possession of such premises.”

32. The landlord’s witness one Engineer Benjamin Muraya testified and produced his report in the name of EGOVA CONSULTANTS whose findings were that the building is very dated, requires significant refurbishment and extensive repairs to match up to similar buildings in the area. The building is extremely under-utilized as most of the building cannot be sublet in its current state.

33. According to the witness, the building requires a minimum of 4 toilets per floor whereas only one is currently provided per floor. The building’s facade requires repainting or refurbishment to match other buildings in the area. All floors through the entire building have deep cracks. Some areas require to be re-concreted a fresh. Tiling needs to be done through the entire building.

34. It was his evidence that all the plumbing i.e. for water supply, toilets and waste water drainage must be re-done as all the current provisions are leaking. This plumbing would also support the required toilets on each floor. The sewer reticulation also needs to be re-done to accommodate the extra sanitary provisions.

35. The report further states that the building requires electrical rewiring. All sockets and lighting provisions need to be replaced. The roof is leaking in several areas. Given the extent of the leakage, it would be advisable to replace the entire roof cover to permanently arrest the issue.

36. The witness concludes his report by stating that the work involved is extremely involving, will require a qualified contractor with several labourers who shall require to have full possession of the construction site in order to carry out the work successfully and in a timely manner. Retaining the tenants during this renovation process would cripple their businesses as they would not have access to their shops. There would also be a significant safety hazard to have them in a construction site as well as a health hazard.

37. He therefore recommends that the building should be completely vacant during the construction period for the work to be done well, safely and in a timely manner.

38. On the other hand, the 1st tenant who testified on behalf of the rest stated that he is the proprietor of Monans General Supplies and that he has been a tenant of Dajohn Enterprises Ltd for the last 15 years having had three other landlords since 1998.

39. For the last 25 years, he has been receiving notices from the Public Health Department of Nairobi County regularly instructing him to refurbish the premises and have been complying without moving out of the premises. On 23rd June 2023, he was served with a notice to vacate the premises to allow the landlord to do repairs and wondered why because the other landlords have never told him to move out while undertaking the repairs.

40. Upon receipt of the notice, he requested the landlord through the agent to reconsider the decision and allow him to do the repairs as he has been doing previously. When the landlord refused his request, he opted to seek legal redress through his advocate.

41. According to the 1st tenant, the premises is habitable since he has been maintaining it over the period of his occupation. He stated that he has been paying rent timeously and that he has not damaged the premises nor engaged in illegal activities to necessitate being directed by the landlord to vacate.

42. He therefore seeks that this court stops the landlord from forcing him out as he would incur huge loses both in terms of investment and goodwill. According to the tenant, the repair complained of can be done while he is still in the premises and does not warrant his eviction as it touches on the common area only.

43. In the case of Auto Engineering Ltd Vs Gonella & Co. Ltd (1978) eKLR the Superior court held as follows;“The first authority to which Mr Esmail referred us in connection with this part of his appeal was Fisher v Taylors Furnishing Stores Ltd [1956] 2 All ER 78, and he referred us to a passage from the judgment of Morris LJ at page 81, in reference to section 30(1)(f) of the Landlord and Tenant Act 1954, which is as follows:‘There must, therefore, be an intention and it must be an intention which in point of time is related to the termination of the current tenancy. It seems to me that the intention must be to do one of the following things: (i) to demolish the premises comprised in the holding; or (ii) to reconstruct the premises comprised in the holding; or (iii) to demolish a substantial part of the premises comprised in the holding; or (iv) to reconstruct a substantial part of the premises comprised in the holding; or (v) to carry out substantial work of construction on the holding; or (vi) to carry out substantial work of construction on a part of the holding.” (emphasis added)

44. It is not in dispute that the landlord was served with statutory notices by the Public Health Department of the Nairobi City County to undertake substantial repairs and renovation over the suit premises. The landlord engaged a building consultant who prepared a report whose contents have been reproduced above. The Consultant concluded that the renovations could not be undertaken whilst the tenants remained in occupation of the suit premises. The said report has not been controverted through another expert’s report and we have no reason to reject the recommendations contained therein. The tenants who are not experts do not qualify to guide this Tribunal on whether or not the intended renovations can be undertaken whilst they continue in occupation of the suit premises. We choose to go by the expert’s report.

45. In the premises, we find and hold that the landlord’s notices to terminate the tenants’ tenancies are valid and ought to be approved. The tenants will therefore give vacant possession of their occupied premises within the next Forty-Five (45) days from the date hereof failing which they will be evicted therefrom by a Licensed Auctioneer who shall be given security by the OCS CENTRAL POLICE STATION.

Issue (b) Who shall bear the costs of the reference? 46. As regards costs, the same are in the Tribunal’s discretion under Section 12(1)(k) of Cap. 301, but always follow the event unless for good reasons otherwise ordered. We shall award costs of the reference to the landlord.

C. ORDERS 47. In view of the above analysis, the final orders which commend to us are;a.The tenants’ references dated 17th August 2023 are hereby dismissed.b.The landlord’s notices to terminate the tenants’ tenancies over L.R NO. 209/1837, Bidii House, Duruma Road, Nairobi City, are hereby approved.c.The tenants will give vacant possession of their occupied premises within the next Forty-Five (45) days from the date hereof failing which they will be evicted therefrom by a Licensed Auctioneer who shall be given security by the OCS Central Police Station.d.The tenants will jointly pay costs of Kshs 50,000/= to the landlord.It is so ordered.

JUDGEMENT DATED, SIGNED AND DELIVERED VIRTUALLY THIS 13TH DAY OF DECEMBER 2024HON. GAKUHI CHEGE(PANEL CHAIRPERSON)BUSINESS PREMISES RENT TRIBUNALHON. JOYCE AKINYI OSODO(MEMBER)In the presence of:Kinyua for TenantsNjuguna for landlord