[2022] KEBPRT 762 (KLR)

Nazarene Group of Companies v Obel Company Limited; Farah (Interested Party) (Tribunal Case E553 of 2022) [2022] KEBPRT 762 (KLR) (Civ) (27 September 2022) (Ruling)

Neutral citation: [2022] KEBPRT 762 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E553 of 2022

Andrew Muma, Vice Chair

September 27, 2022

Between

Nazarene Group of Companies

Applicant

and

Obel Company Limited

Respondent

and

Farhan Adow Farah

Interested Party

Ruling

Parties and Their Representative 1. The tenant/applicant, Nazarene Group of Companies, rented an eatery space on the ground floor of Obel Company House on property known as South Sakwa/Barkowino/2698 located at Bondo-Usenge road for the business (herein after referred to as the ‘tenant’).

2. The tenant/applicant appears in person in this reference.

3. The landlord/ respondent, Obel Company Limited, is the owner of suit premises rented out to the tenant (herein after referred to as the ‘landlord’).

4. The firm of Dola, Magani & Co advocates represents the landlord/ 1st respondent indidisdola@gmail.com

5. The interested party is in alleged possession of South Sakwa/Barkowino/2698 located at Bondo-Usenge road.

The Dispute Background 6. In 2020, a tenancy was entered into between Nazarene Group of Companies as the tenant and Obel Company Limited who are the owners of the premises as the landlord wherein the Landlord had agreed to lease out the premises being South Sakwa/Barkowino/2698 located at Bondo-Usenge road (“herein after referred to as the suit premises”).

7. On June 24, 2022, the goods of the tenant were removed from the premises in the presence of an officer from Bondo police station on the grounds that there were rental arrears.

8. On June 27, 2022, the tenant moved this tribunal by way of notice of motion and a certificate of urgency seeking interim orders barring landlord from auctioning/selling the proclaimed goods. Further, the tenant sought orders restraining the respondents from interfering with the tenant’s quiet possession of the premises and be restrained from letting out the premises to third parties. Lastly, the tenant prayed that the officer commanding station-Bondo police station to oversee the implementation of those orders.

9. This tribunal granted orders of temporary injunction on June 28, 2022 restraining the landlord from auctioning or selling the proclaimed goods of the tenant. The court also ordered that the landlord be restrained from letting out to a third party the premises used by the tenant and the tenant serves forinter parteshearing on July 13, 2022; the same is in force to date.

10. This tribunal granted further orders on May 18, 2022 adding the interested part as a party to this reference, inspection of the premises be conducted at the cost of both parties on July 18, 2022 and that the officer commanding station-Bondo police station to facilitate opening of the two padlocks to allow inspection to be done by the Kisumu inspector. Further, the tribunal ordered that status quo be maintained that is the premises remain locked the same is in force to date.

Jurisdiction 11. The jurisdiction of this tribunal is not in dispute.

The Tenant’s Claim 12. The tenant filed a certificate of urgency, notice of motion and a supporting affidavit dated July 5, 2022. The tenant also filed a further affidavit dated July 20, 2022 and July 28, 2022.

The Landlord’s Claim 13. The Landlord on the other hand filed a notice of motion and replying affidavit dated July 5, 2022. These pleadings form the basis of this claim.

14. I have had occasion to peruse the above-mentioned documents of both the landlord, auctioneers and tenant and also the landlord’s and tenant’s written submissions and I will not rehearse the same again as they are brief and to the point.

Issue for Determination 15. Having considered the parties’ pleadings, affidavits and submissions and having considered the relevant legal framework and jurisprudence, I find that the following is main issues that are falling for determination before this tribunal:a.Whether the tenant is in rental arrears, and if so, to what extent?b.Whether the landlord is entitled to levy for distress and if so, whether due process was followed?c.Whether the landlord’s notice to terminate the tenancy as under section 4 (2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 to the tenant is correctly founded in the law?d.Whether the interested party or the applicant is in possession of the premises?

Analysis and Findings a. Whether the tenant is in rental arrears, and if so, to what extent? 16. The tenant disputes that she has rental arrears in the tenant’s further affidavit dated July 20, 2022. She further contends that the company in which she is a director/shareholder commenced their tenancy on September 2, 2020. This is disputed by the respondent’s replying affidavit dated July 5, 2022 where the landlord contends in paragraph 6 that the landlord found out that the tenant had taken over the premises without involvement of the landlord hence they wrote to her in March 2020 seeking audience and for her to sign a tenancy agreement. Accordingly, the first issue for determination is when the tenant began its occupation of the premises.

17. The evidence produced before the tribunal shows conflicting statements of accounts. Whilst both parties agree on the amount advanced so far, they still differ on the date of commencement of the tenancy. The landlord alleges it started in March 2020 while the tenant alleges that the tenancy commenced on September 2, 2020. Both allegations remain unproven as it stands.

18. That notwithstanding, the tribunal places reliance on Alice Wanjiru RuhiuvMessiac Assembly of Yahweh[2021] eKLR where the court dismissed an appeal on the grounds that there was no evidence produced by adopting section 107 of the Evidence Act which provides that “Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist. When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.”

19. Accordingly, the tribunal finds in favour of the landlord and thus concludes that the tenancy commenced in March 2020. This is evidenced by the letter dated March 15, 2020 addressed to the tenant asking them to come sign a tenancy agreement. Unfortunately, the tenant did not rebut this in their further affidavit dated July 20, 2022 and July 28, 2022.

20. The decision of the tribunal is guided as under section 9 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 that “upon a reference a tribunal may, after such inquiry as may be required by or under this Act, or as it deems necessary—a)approve the terms of the tenancy notice concerned, either in its entirety or subject to such amendment or alteration as the tribunal thinks just having regard to all the circumstances of the case; orb)order that the tenancy notice shall be of no effect;c)and in either case make such further or other order as it thinks appropriate.”

21. On the second part, the tribunal will proceed to examine and determine the extent of the rental arrears as per the evidence produced before the tribunal.

22. Having found that tenancy commenced in March 2020, then the rent payment schedule used tabled by the tenant and the landlord serves as evidence. The rent payment schedule of the tenant shows that rent was paid only from September 2020 to June 2022. This landlord’s statement shows that rent was paid only from March 2020 to October 2022. Hence, it reflects that rent was owing for 5 months. Replicating the same on the tenant’s statements, the period from March 2020- September 2020 will be the ones where no rent was paid. This is in conformity with the landlord’s notice of motion dated July 5, 2022 of the arrears being Kshs 50,000. 00 which is rent for 5 months. By dint of the above analysis, it is indisputable that the Tenant is in rental arrears amounting to Kshs 50,000. 00.

b. Whether the landlord is entitled to levy for distress and if so, whether due process was followed? 23. The tenant through a notice of motion and a supporting affidavit under certificate of urgency dated June 27, 2022 opposed the proclamation served by the landlord dated June 24, 2022 contends that the distress was a sham and it was in utter violation of the Landlords and Tenants (Shops, Hotels and Catering Establishments) Act cap 301.

24. Reliance is placed on section 12 (1) h of theLandlord and Tenant (Shops, Hotel and Catering Establishment)which provides that:“a tribunal shall in relations to its areas of jurisdiction have power to do all things which it is required or empowered to do by or under the provisions of this Act and shall have power to permit the levy of distress for rent.”

25. The tribunal in Moses Mungai Muigai & 20 others v Esther Njeri Kagunda & 4 others; Karen Wanjiku Thumbi & another (Interested Parties) [2021] eKLR relied on Nthumbi Kamwithi v Asha Akimu Juma in finding that it was illegal for a party to levy distress without the leave of the tribunal.

26. The landlord contends that the tenant is the one who removed the goods themselves via a replying affidavit dated July 5, 2022. The landlord went ahead to deposit an inventory of the goods removed signed by the landlord and the chief. However, the tenant did not sign the inventory list. In fact, the tenant has gone ahead and filed their own inventory list of the items that were confiscated. This casts the inventory in bad light since all parties present should have signed the inventory. Moreover, if the tenant willingly removing their goods, then the tenant would have voluntarily signed the inventory showing what they removed. As such, this casts doubt as to the veracity of the inventory list and the levy for distress itself.

27. Further, the landlord in paragraph 2 of the notice of motion dated July 5, 2022 and the tenant in their further affidavit dated July 20, 2022 also acknowledged that the goods taken off the premises belonged to one, Bethuel Owiti. Based on the above analysis, the tribunal finds that the goods confiscated did not belong to the tenant.

28. The landlord further alleges that the premises are under the occupation of the interested party and has tabled a tenancy agreement dated June 24, 2022 showing the same.

29. The inspection report tabled by Andrew Abuga dated July 21, 2022 did not state who was in occupation. It only mentioned that there is a shelf and a speaker that belongs to the tenant. On the other hand, there is a tenancy agreement with the interested party showing that he was granted possession by the landlord on June 24, 2022.

30. Therefore, I conclude that while the landlord was entitled at the time of filing this suit to engage the assistant chief to exercise their right to levy for distress of rent, the same must be done in accordance with the law. Accordingly, I conclude that the levy for distress and eviction of the tenant was unlawful. That being the case, I conclude that the illegal eviction of the tenant and the new lease shows that the landlord forfeited the arrears due and got a new tenant.

c. Whether the landlord’s notice to terminate the tenancy as under section 4 (2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 to the tenant is correctly founded in the law? 31. The pleadings emanate from the termination notice in the standard form A under section 4(2) dated March 16, 2022. I have perused the said notice and find that it states the grounds of termination of the tenancy as: renovation and installation of water and sewerage systems to meet the standards by the National Environment Management Authority (NEMA) tenant is in arrears and termination”.

32. Section 4 (5) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 provides that a tenancy notice shall not be effective for any of the purposes of this Act unless it specifies the grounds upon which the requesting party seeks the termination, alteration or reassessment concerned and requires the receiving party to notify the requesting party in writing, within one month after the date of receipt of the notice, whether or not he agrees to comply with the notice.

33. Further section 7 (f) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 provides the grounds on which a landlord may seek to terminate tenancy; “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.”

34. Tenant on the other hand had through a replying affidavit dated July 20, 2022 to oppose the notice to terminate the tenancy served by the landlord dated March 16, 2022 and contends that the notice to terminate was addressed to one Godfrey Otieno who is a stranger to the premises and these proceedings. This letter was produced before the tribunal and it does show Godfrey Otieno as the addressee. Additionally, the notice did not meet the requirements of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 as it gave one month’s notice instead of two months’ notice.

35. Section 4(2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 provides that “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 tenancy, shall give notice in that behalf to the tenant in the prescribed form.”

36. From the foregoing, it is my considered observation after looking at the notice of termination, I find that the landlord in the present case did not give proper notice hence the notice was null, void and unprocedural and culminated in the illegal eviction of the tenant.

37. The decision of the tribunal is guided as under section 9 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301 that “upon a reference a tribunal may, after such inquiry as may be required by or under this Act, or as it deems necessary—d.approve the terms of the tenancy notice concerned, either in its entirety or subject to such amendment or alteration as the tribunal thinks just having regard to all the circumstances of the case; ore.order that the tenancy notice shall be of no effect;f.and in either case make such further or other order as it thinks appropriate.”

Orders 38. For the reasons given above I order as follows;a)The upshot is that tenant/applicant’s notice of motion application dated July 5, 2022 and reference dated June 27, 2022 is partially allowed as follows;b)The lock be removed by OCS Bondo and the interested party to take possession.c)The landlord/1st respondent wrongfully locked the premises hence arrears of Kshs 50,000. 00 claimed by them is waived and the landlord/1st respondent to refund the deposit to the tenant and to pay the tenant Kshs 20,000. 00 as damages for the unlawful eviction of the tenant since no proper notice was given; all payable to the tenant within 30 days.d)Each party to bear their own costs of the reference.e)Costs of the reference to be borne by the landlord.

HON. A. MUMAVICE CHAIRBUSINESS PREMISES RENT TRIBUNALRuling dated, signed and delivered virtually by Hon A. Muma (Vice Chair) this 27th day of September 2022 in the presence of Dola for the Landlord and the interested party and in the absence of the Tenant.HON. A. MUMAVICE CHAIRBUSINESS PREMISES RENT TRIBUNAL