[2020] KEBPRT 55 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 291 OF 2011 (MOMBASA)

MULTIPLE HAULIERS (EA) LTD......................................................TENANT/APPLICANT

VERSUS

HUME PIPES & CONCRETE PRODUCTS...............................LANDLORD/RESPONDENT

JUDGEMENT

The Tenant/Applicant through the law firm of Hamilton Harrison and Mathew on 9th December 2011 filed a complaint under section 12(4) of Cap in respect of the Landlord/Respondent. The complaint is dated 9th December 2011. The complaint concerned the Landlord in that;

“That the Landlord has indicated that it does not wish to renew the tenancy relationship in January 2012 and purposes to evict the Tenant from the premises. The Landlord has failed, refuted and/or declined to accept payments for the months of November 2011 andDecember 2011. ”

The Tenant/Applicant requested the tribunal to investigate the complaint and issue appropriate orders. The record of the tribunal shows that interim orders were issued on 9th December 2011 in favour of the Tenant/Applicant.

It is unfortunate that the complaint has been pending in the Tribunal from December 2011. The Tribunal was not able to resolve the complaint without taking evidence from the parties. The parties have adduced evidence before the Tribunal. The advocate of the parties have also filed written submissions in respect of the complaint.

The mandate of the Tribunal now is to evaluate the evidence on record, all the exhibits and the written submissions of the parties and make a determination of the reference.

Summary of the Tenant’s Case

For and on behalf of the Tenant John Diru testified as hereunder;

That he is an advocate of the High Court of Kenya. That he works as a legal counsel for the Tenant/Applicant. That he has been working with the Tenant’s company from 2010. That he is familiar with all the facts in respect of the dispute before the Tribunal. That the Tenant’s company deals with transportation and cargo within Kenya, Eastern and Central Africa. That is the core business of the Tenant business. The company does not engage in any other than Haulage.

The Tenant’s company has more than 3000 trucks that transport wet and dry cargo. The registered office of the company is Nairobi but has several yards in the Eastern and Central African region. The yard in dispute before the Tribunal is at Makongo at Mombasa. The company has been operating from the yard from 1999. The company is still in possession of the suit premises. There is no formal lease between the Landlord and the Tenant herein. There has been no written tenancy agreement between the parties. The witness stated that he was the deponent of the agreement sworn on 9th December 2011 in support of the notice of motion dated 9th December 2011.

The witness referred the Tribunal to exhibit JN1 which was the agreement which was in force. The Landlord is Huma Pipes and Concrete Products Ltd. The suit premises are near her exit and entry points for Mombasa County for the trucks. Around the year 2002, the Tenant constructed tanks for holding petrol and diesel. This was for the refueling of the trucks. The Landlord was aware that the Tenant was doing the works.

He stated that the relationship between the Tenant and the Landlord was cordial but the situation changed when the Tenant received the letter dated 28th September 2009 from the Landlord. The Landlord was alleging that the Tenant had breached the terms and conditions of the lease.

The Tenant replied to the Landlord’s letter by a letter dated 8th September 2009 which should have been dated 28th September 2019. The Tenant did not accept the allegations and also demanded for a copy of the lease which it was alleged it had breached. The company had not carried out the business of textile whole sale or retail in the suit premises yard or any other yard.

The Landlord’s advocate replied to the letter on 31st August 2009. The letter should have been dated 31st September 2009. A copy of the disputed lease was sent to the Tenant. The witness was referred to a copy of the lease which had the following features and/or particulars;

Landlord – Huma Pipes and Concrete Products Ltd

Tenant: Multiple Hauliers Kenya Ltd

The suit premises is described as yard/Godown Marked Red on the sketch plan. Clause 1C talks of the user of the premises. That the name of Tenant according to the records is Multiple Haulier (EA) Ltd. The witness was referred to the lease agreement annexed to the affidavit of Singh Chume at page 10 and made the following comments in respect of the same;

1. That the parties to the lease agreement are Huma Pipes and Concrete Ltd and Multiple Hauliers (K) Ltd. He stated that Multiple Haulier (Kenya) Ltd is not the company of the Tenant. There is a rubber stamp of Multiple Hauliers EA Ltd. The rubber stamp bears the correct name of the company. The Tenant maintained that the tenancy was protected. The advocate for the Landlord maintained that the lease agreement was valid.

The Landlord served the Tenant with the notice to terminate the tenancy dated 15th January 2010. The notice is issued under section 4(2) of Cap 301. The Tenants filed the reference in the Tribunal BPRT 180/2010. The Landlord withdrew the notice dated 15th January 2010. The Landlord’s reference in BPRT 85/2011 was dismissed with costs. There was no appeal after the dismissal of the Landlord’s complaint in BPRT 85/2011.

The Tenant then filed BPRT 291/2011 which is the subject matter of the reference. The Tenant does not admit the authenticity of the undated lease for 5 years and 3 months commencing from 12th October 2016.

The Tenant has been depositing rent in the Tribunal at the monthly rate of shs 150,000 plus shs 15000 collection charges. He prayed that the Tenant’s complaint be allowed.

The Tenant was cross-examined by Mr Njenga for the Landlord and he made the following further remarks in respect to questions put to him. That he started working for the Landlord in 2010. That he was admitted as an advocate on 4th March 2010. That he has not witnessed any of the leases before the Tribunal. That the Tenant’s company has 3 Directors namely;

1. Rajidar Sing Barian.

2. Tarlocham Singh Heer

3. Mahirir Singh Bariain.

Shreyesh Dave is the general manager and not a Director. That he found Shreyesh Dave in the company since the late 1990 or thereabouts. That he did not agree that the Director who is alleged to have signed the lease must appear before the Tribunal. He confirmed that all the Directors are in the country.

The Directors have not disputed the lease. The company’s document are hereby signed by 2 Directors. That there is a difference between Multiple Hauliers (K) Ltd and Multiple Hauliers EA Ltd. As far as he knows there is no company called Multiple Haulier (K) Ltd.

The witness admitted that the signature of the lessee in JNI and RCI in the replying affidavit Dalji Singh Chuma are similar. The witness stated that JNI is an admitted document. The only issue is the user of the premises.

That the user in JNI and RCI are the same. That exhibit JNI at paragraph 5 of the affidavit is Jon Divo was for a period of one year and 3 months. JNI was in respect of a portion of the suit premises. The dispute before the Tribunal is in respect of the whole premises which has a monthly rent of shs 150,000/-.

That he is aware that after expiry of the 1999 lease parties engaged in negotiations. JNI was in respect of the premises which the monthly rent is shs 40,000/-. The other premises was for shs 110,000/-. Total rent was shs 150,000/-. The witness was also reexamined and his remarks are part of the record.

Summary of the Landlord’s Case

For and on behalf of the Landlord Dalji Singh Chima testified as hereunder:

That he is the Managing Director of the Landlord’s company. The property is situated at Mikidani Mombasa. That he knows the Tenant in the reference. That the Tenants have been in the suit premises from 2002. The suit premises comprised of an open yard with a godown. It is about 2 acres. The godown is about 12,000 square feet. The other portion is an open yard. The Tenant initially leased the open yard. The Tenant later leased the godown. The combined lease started in 2006.

There was a formal lease in respect of the open yard. That he is aware that the Tenant has filed a list of documents which include a lease dated 31st May 2002 JN in the supporting affidavit. That the lease in respect of the godown was handled by one of the auditors whom they cannot trace.

The lease expired and they discussed about the renewal of the lease. The lease of the open yard and the godown was to be combined after expiry of the lease. The combined agreed rent is shs 1,500,000/-. There was an escalation clause but the Tenant did not increase the rent.

The lease was for 5 years and 3 months. The lease was to be drawn by the Tenant but they asked the Landlord to draw the lease. The previous leases were prepared by the lawyers. That he signed the first lease for the combined premises and a Mr Dave for the Tenant signed. This was in 2002. The 2nd lease is effective from 12th October 2006. The lease was prepared by the auditors. The witness signed the lease. It was also signed by Mr Dave. That he took the lease to the offices of the Tenants.

He was attended by a Mr Rajinder a Director of the company. The lease is signed by Mr Dave. Mr Rajinder stamped the lease. He left them with a copy of the lease. The lease was for a period of 5 years and 3 months. It was to expire in January 2012.

The Tenant did not ask for the copy exhibits of the lease. The Landlord wanted the Tenant to vacate the premises so that it can use the same. After the expiry of the lease, the Landlord did not accept the rent from the Tenant. The lease expired in January 2012. The rent is being deposited in the Tribunal. The Landlord is still intending to use the premises. That he knows Mr Dave who signed the lease. Multiple Hauliers EA Ltd and Multiple Haulier (Kenya) Ltd are the same. He never dealt with the witness of the Tenant who gave evidence before the Tribunal.

That to the best of his knowledge, Mr Rajinder and Mr Dave are still in the country. He wants the Tenant to vacate the premises.

The witness was cross-examined by Miss Mwangi for the Tenant and made the following remarks.

That the tenancy commenced in 1999. The lease which cannot be traced was given to the auditors. The lease expired in January 2012. The disputed lease is dated 12th October 2006 exhibit DCC/I.

The Landlord called a witness Martin Esakina Papa who testified as hereunder:

That he is a trained document examiner. He was trained by Scotland Yard 1997. That he is a retired Chief Inspector of Police currently in private practice in forensic audit. That he is also a Trainer in the reference between the Tribunal. In the reference before the Tribunal, he received instructions from the Advocates for the Landlord. That he was instructed to examine signature in 2 lease documents. The lease dated 31st May 2002 (admitted document) and the lease dated 12th October 2006 (disputed document).

That he examined the signatures in the 2 documents. He was to ascertain whether the 2 leases had been signed by the same hand.

The lease dated 31st May 2002 is marked A1 and the lease dated 12th October 2006 is marked B1 – B10. That he compared the signature in the leased document marked A1 against the lease document marked B1 – B10.

After an analysis of the signatures, he formed the opinion that the signatures were by the same hand.

That he condemned all the factors and prepared the report dated 10th January 2015. He produced a copy of the report file as exhibit. The leases were examined in the same manner. That it was not part of his mandate to identify the parties who had executed M1. The witness was cross-examined by Miss Mwangi for the Tenant and the answers to various questions are on record.

Evaluation of the Evidence of the Parties:

The core issue for determination in this reference has been whether the “tenancy” between the parties is a “controlled tenancy” within the meaning of section 2 of Cap 301 or not. The Tenant has contended that the tenancy was controlled while the Landlord contended that the parties had executed the lease agreement dated 12th October 2016 which created a tenancy outside the jurisdiction of the Tribunal. It is unfortunate that this issue which is an issue of pure law has caused the reference to pend in the Tribunal for a long time.

The advocates of the parties have filed written submissions which the Tribunal has read in details on the above issue. The Tribunal upon consideration of the evidence on record, all the pleadings and all authorities cited makes the following findings:

1. That there is overwhelming evidence on record including expert evidence that the Tenant/Applicant and the Landlord executed the lease agreement dated 12th October 2006 which was the last executed lease agreement between the parties.

In the light of the above findings, the Tribunal will now proceed and evaluate the contents of the lease dated 12th October 2016 to ascertain whether the lease created a controlled “tenancy”.

The lease dated 12th October 2006 has the following key features;

1. The Landlord is Huma Pipes Concrete Products Ltd and the Tenant is Multiple Hauliers (Kenya) Ltd.

2. The lease period is 5 years and 3 months from 12th October 2006.

3. That the monthly rent for the 1st year is shs 150,000/-.

4. The lease does not have a termination clause for reasons other than breach of the terms and conditions of the lease.

It is also admitted by the advocates of both parties that the lease was not stamped or registered in the Landlord’s office.

It is also admitted that the Tenant/Applicant before the Tribunal is Multiple Hauliers (EA) Ltd and not Multiple Hauliers (K) Ltd.

The Tribunal upon consideration of the above features of the lease agreement makes the following findings;

1. The lease dated 12th October 2006 reduced the tenancy between the Applicant and the Landlord for a period of 5 years and 3 months and did not create a controlled tenancy within the meaning of section 2 of Cap 301.

2. The provisions of Cap 301 do not require any Tenant agreement to be stamped and/or registered. The test is whether the parties have reduced the tenancy into writing for a period of more than 5 years and the lease has no termination clause for reasons other than breach of the terms within a period of 5 years from the commencement of the lease. The correct position in law is as set out in the case of Bachelors Bakery Ltd Vs Westlands Securities Ltd (Civil Appeal No 2 of 1978) which has been relied on by the advocates for the Landlord.

The Tribunal is also satisfied that the discrepancy in the description of the Tenant does not affect the substance of the dispute. The parties before the Tribunal are the Landlord and the Tenant in respect of the suit premises.

The discrepancies in the names do not affect the substance of the dispute. The Tribunal is mandated by Article 159 of the Constitution to ignore technicalities and administer justice with regard to the substance of the dispute.

All in all, the Tribunal is satisfied that the tenancy agreement dated 12th October 2006 which was duly executed by the parties did not create a controlled tenancy within the meaning of section 2 of Cap 301.

The Tribunal makes the following determination of the reference;

1. The Tenant’s reference herein dated 9th October 2011 and the notice of motion dated 9th December 2011 are hereby struck out as incompetent as the tenancy between the Applicant/Tenant and the Landlord/Respondent is not controlled tenancy within the meaning of section 2 of Cap 301 the parties having duly executed the lease agreement dated 12th October 2006.

2. The interim orders issued on 9th December 2011 are hereby discharged forthwith.

3. The money deposited at the Tribunal shall be released to the Landlord subject to compliance with the directives from the Accounts Department of the Tribunal.

4. The Tenant/Applicant shall pay the Landlord the costs of the reference.

5. Costs shall be agreed or taxed by the Tribunal.

Judgement delivered this 29th day of May 2020 in the presence of Miss Jeruto holding brief for Njenga for the Landlord/Respondent. Advocatefor the Tenantabsent.

MBICHI MBOROKI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL