[2025] KEBPRT 224 (KLR)

Mwamburi t/a Kaddy Fashion & Suppliers v Mbololo Ushirika Company Limited (Tribunal Case E177 of 2022) [2025] KEBPRT 224 (KLR) (Civ) (4 April 2025) (Ruling)

Neutral citation: [2025] KEBPRT 224 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E177 of 2022

A Muma, Member

April 4, 2025

In the Business Premises Rent Tribunal Tribunal Case E177 of 2022 A Muma, Member

Between

Judith Wabosha Mwamburi T/A Kaddy Fashion & Suppliers

Tenant

and

Mbololo Ushirika Company Limited

Landlord

Ruling

A. Parties And Their Representatives 1. The Applicant, Judith Wabosha Mwamburi T/AKaddy Fashion & Suppliers, is a Tenant at the property Land Reference No. 1956/IV/31, house no. 162 (the “suit premises”).

2. The firm of Machora Motuka & Company Advocates represents the Tenant/Applicant in this matter.

3. The Respondent, Mbololo Ushirika Company Limited, is the Landlord of the suit premises.

4. The firm of N.A. Ali & Company Advocates represents the Landlord/Respondent in this matter.

B. Background Of The Dispute 5. The Tenant moved this Tribunal vide a Reference dated 13th May 2022 in opposition to the Landlord’s Notice of Termination dated 23rd March 2022.

6. The suit was subsequently subject to a series of applications owing to the Tenant’s Advocate lack of diligence in prosecuting the client’s case.

7. The parties appeared before this Tribunal for hearing on 27th January 2025. The Tribunal directed the parties to file their submissions within 22 days. The Tribunal slated the suit for hearing on 24th February 2025 to confirm compliance.

8. The Landlord filed their submissions dated 3rd February 2025 while the Tenant had not filed their submissions despite being reminded on the need for compliance.

C. Tenant’s Case 9. The Tenant states that they entered into a Tenancy Agreement for 3 years with the Landlord sometimes in 2005. The Tenant further avers that they continued to stay on the suit premises upon the lapse of the tenancy. Upto the time that the Landlord issued the Tenant with the notice, the parties had not signed a fresh Tenancy Agreement but they applied the terms under the expired tenancy.

10. The Tenant faulted the Landlord for failing to comply with the terms of the Tenancy Agreement while issuing the Notice of Termination. The Tenant’s position is that the notice failed to comply with the three months timeline as required both under the Agreement and the Law.

11. The Tenant urged this Tribunal to allow their Reference dated 13th May 2022 and find the Landlord’s notice to be void under the law.

D. Landlord’s Case 12. The Landlord states that they intended and want to demolish the suit premises to construct a modern shopping complex. They averred that they had undertaken various preliminary activities including:a.passing a resolution to demolish the suit premises;b.applying for approval and renewing the approved build plans for the intended development;c.procuring a contractor’s services and executing an agreement for the construction of the newly intended development;d.obtaining an EIA license from NEMA with respect to the intended development; ande.Obtaining a financial facility from Consolidated Bank of Kenya Limited to finance the construction.

13. The Landlord submits that they issued a Notice of Termination upon all the Tenants. The notice informed the Tenants of the intended demolishment and construction of a new development and gave them a period of 3 months to vacate the suit premises.

14. The Landlord holds that only the Tenant in the instant suit refused and/or neglected to vacate the suit premises. The Landlord submitted to the Tribunal that they have already commenced the construction process. They urged this Tribunal find their notice of termination to be valid.

E. Issues For Determination 15. Having carefully perused the pleadings presented before this Honorable Tribunal by the parties. It is therefore my respectful finding that the issues for determination are as follows:i.Whether the Landlord’s Termination notice dated 23rd March 2022 is valid.ii.Who should bear the costs of the instant matter?

F. Analysis and Determination I. Whether the Landlord’s Termination notice dated 23rd March 2022 is merited 16. It is undisputed that the relationship between the parties to this suit is a controlled tenancy and hence subject to the provisions of Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301, Laws of Kenya

17. Section 4 (2) of the Act expressly specifies the criteria that a Landlord’s termination notice must meet to be considered valid. It stipulates that:“(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.”

18. The required form is Form A as set out under Regulation 4(1) of legal notice 19 of 1966. The words as expressed in the regulations are as follows:“(1)A notice under section 4(2) of the Act by a landlord shall be in Form A in the Schedule to these Regulations.”

19. For such tenancy notice to be considered valid, it must set out the reasons for termination and should not take effect prior to 2 months from the date of service as stipulated under section 4 (4) of the Act.

20. The grounds on which the Landlord may terminate the tenancy are set out under section 7 of the Act. Particularly, section 7 (1) (f) allows the Landlord to issue such notice where they intend to demolish the premises or a substantial part thereof and carry out reconstruction. The words as expressed in the provisions of the Act are as follows:“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”

21. The threshold for terminating a tenancy on grounds of construction were pointed out in Auto Engineering Limited v M. Gonella Ltd [1978] eKLR. The Court held 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. If the landlord proves an intention to do one of those things, and to do it on the termination of the current tenancy, he must then prove that he could not reasonably do it without obtaining possession of the holding.”

22. The Landlord has attached a copy of termination notice that was duly received by the Tenant’s Advocates on record on 5th March 2022. As per the terms of the notice, the same was to have effect on 1st June 2022. The notice was issued in Form A as specified under the Regulations to the Act.

23. The ground for terminating the tenancy as cited in the notice was the Landlord’s intention to demolish and reconstruct a substantial part of the premises. (The Tribunal acknowledges that the Landlord copied the terms as expressly set out under section 7 (1).

24. However, the same did not cause any absurdity and if any, the Tenant had an opportunity to seek clarifications to issue a notice to the Landlord that they did not agree with the terms under the notice. In fact, the Landlord had required the Tenant to notify them in writing within one month upon receipt of the notice on whether the Tenant agreed to comply with the notice.

25. The Landlord has attached sufficient documents to establish that they indeed intended to demolish and reconstruct a substantial part of the suit premises. In fact, there are photographs on record proving that the reconstruction process has already commenced.

26. The Tribunal is therefore satisfied that the form and substance of the Landlord’s notice of termination dated 23rd March 2022 is valid in law.

II Who should bear the costs of the instant matter? 27. Section 12 1(k) accords this tribunal the powers to award costs with respect to applications and references made to it. It is trite law that costs follow event. In Republic vs Rosemary Wairimu Munene, Ex-Parte Applicant Vs Ihururu Dairy Farmers Co-operative Society Ltd Judicial Review application no 6 of 2014 the court held as follows: -“The issue of costs is the discretion of the court as provided under the above section. The basic rule on attribution of costs is that costs follow the event....... It is well recognized that the principle costs follow the event is not to be used to penalize the losing party; rather it is for compensating the successful party for the trouble taken in prosecuting or defending the case.’’

28. This Tribunal is cognizant of the fact that the Tenants’ conduct has been wanting and dishonorable to both the Landlord and the Tribunal.

29. With the foregoing, I would have awarded the costs of the instant matter to the Landlord but considering the Tenant has to look for new premises and relocate and set up which are costly in this hard economic terms I will find that each party to take care of their costs and if there is a deposit held by the landlord the same ought to be refunded as the premises need not be put back to the same state they were found as they are to be demolished.

G. Orders 30. In the upshot, the Tenant’s Reference dated 13th May 2022 is hereby dismissed. Consequently, the following orders shall abide:a.The Landlords Notice to terminate dated 23/3/2022 is hereby allowed.

HON A. MUMAMEMBERBUSINESS PREMISES RENT TRIBUNALRULING DATED, DELIVERED AND SIGNED AT NAIROBI ON THIS 4TH DAY OF APRIL 2025 IN THE PRESENCE OF MOHAMMED HB FOR HASSAN FOR THE LANDLORD AND IN THE ABSENCE OF THE TENANT.HON A. MUMAMEMBERBUSINESS PREMISES RENT TRIBUNAL