[2022] KEBPRT 735 (KLR)

Ndege v Mutarura & another (Tribunal Case E126 of 2022) [2022] KEBPRT 735 (KLR) (Civ) (30 September 2022) (Ruling)

Neutral citation: [2022] KEBPRT 735 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E126 of 2022

Andrew Muma, Vice Chair

September 30, 2022

Between

Andrew Murimi Ndege

Tenant

and

Peter Mutarura

Landlord

and

Julius Gachimu Wanjigi

Respondent

Ruling

Parties and Representatives 1. The tenant Andrew Murimi Ndege instituted this suit as the tenant of a rented business space (herein after known as the tenant), The firm of M/s Kirimi K Advocates represents the tenant/applicant.

2. The 1st respondent Peter Mutarura is the landlord and owner of the suit premises rented out to the tenant (hereinafter known as the landlord). The firm of M/s Ndumu Kimani and Company Advocates represents the landlord/ respondent.

3. The 2nd respondent Julius Gachimu Wanjigi is a tenant of the 2nd respondent having taken over the premises initially occupied by the tenant applicant, The Firm of M/s Ann and Steve Mbugua Law represents the 2nd respondent.

The Dispute Background 4. The tenant filed a reference to the tribunal dated February 7, 2022 claiming that the landlord and the 2nd respondent had forcefully and unlawfully entered his premises, physically assaulted him and damaged sections of the tenant’s renovations in the premises. The tenant also filed an application under certificate of urgency seeking orders that pending hearing and determination of the Application the court be pleased to issue a temporary injunction to restrain the respondent by themselves or through agents, servants and/or employees from seizing disposing, selling, leasing, alienating and/or in any way interfering with the premises namely Plot No: 14235/4 comprising Monaco Restaurant situated in Kasarani and other tenant’s goods therein.

5. The tenant also sought that pending the hearing and determination of the application interpartes, the Tribunal issues an order of injunction directing the landlord and 2nd respondent to re-open the premises. Further that the landlord be restrained from offering the premises for lease and the OCPD of Kasarani Police Division and the OCS Kasarani Police Station be directed to enforce those orders.

6. In an order dated February 7, 2022, I gave orders certifying the application as urgent restraining the respondents or their proxies from seizing or disposing the tenant’s goods therein and also directing the landlord to re-open the premises and allow the tenant unlimited access to the premises and not to interfere with the tenant’s business operations. The OCPD Kasarani Division and the OCSKasarani Police Station were directed to enforce those orders.

7. Since then, a number of applications have been made by both the tenant and the 2nd respondent and a number of orders issued pursuant those applications.

Jurisdiction 8. The landlord challenges the jurisdiction of this Tribunal on the basis that there is no landlord-tenant relationship between him and the tenant applicant.

9. The jurisdiction of this Tribunal is spelt out in the provisions of theLandlords And Tenants (Shops, Hotels and Catering) Establishments Act, Cap 301 which regulates controlled tenancies.

The tenant’s Claim 10. The tenant claims that he entered into a lease agreement with the landlord that was to last for five years, scheduled to expire on November 1, 2026. He contends that he leased the premises at a monthly rent of KShs. 120,000 which he dutifully paid since he took possession of the premises.

11. He further contends that on or around February 4, 2022, the landlord and the 2nd respondent visited premises with a gang of street urchins who together with the landlord physically assaulted him, chased away his workers and broke into the premises tearing down sections of the premises he had renovated and locked the premises threatening with more physical injury if he stepped into the premise. He also states that the landlord and the 2nd respondent have interfered with his lease by locking up his goods in the premises and fencing off the premises to prevent him from accessing the premises.

12. In response to the 2nd respondent’s application, the tenant contends that he was not served with the alleged letter of termination of lease dated February 3, 2022 until February 9, 2022, two days after this Tribunal had issued orders on February 7, 2022. He claims that the letter is part of the respondent’s scheme to hoodwink the Tribunal into aiding ignoble acts of fraud and unjust enrichment.

13. He further contends that if anything, the letter of termination of lease dated February 3, 2022 is void as it violates the provisions of section 4 of the landlord and tenant (Shops, Hotels and Catering Establishments) Act and clause 3 of the lease agreement dated October 5, 2021 between the landlord and himself. He is also emphatic that the 2nd respondent has continued to occupy the suit premises in spite of an order against that being in place.

14. The tenant also made an application vide notice of motion dated May 17, 2022 seeking reinstatement of orders made on February 7, 2022.

The landlord’s Claim 15. According to the landlord’s submissions dated July 8, 2022 and other pleadings filed to this Tribunal including a replying affidavit sworn by the landlord on March 22, 2022, the landlord contends that this Tribunal does not have jurisdiction on the basis that the tenancy never crystallized as the tenant never paid rent. He contends that the tenant paid Kshs. 830,000. 00 after they had agreed that the tenant pays Kshs. 1,500,000. 00 for the equipment specified in the lease.

16. He contends that the tenant indicated to him that that he could not pay the rent, he therefore identified someone who was willing to take over the premises and said person was granted access to the premises for viewing by the tenant’s caretaker. He however contends that the tenant had a change of mind and denied the 2nd respondent access to view the premises.

17. He states that to enable the 2nd defendant take possession, he proceeded and terminated the “still born” lease agreement with the defendant. He further states that when he met the applicant with a view to delivering the termination notice, he was assaulted by the tenant, a matter he reported to Kasarani Police Station vide OB No. 107/03/02/22 and he thereafter sought treatment at Nairobi Hospital.

18. Further that on February 4, 2022, the wife of the tenant/applicant called him claiming a refund for the renovations allegedly effected by the tenant. He states that on 3rd February he refunded the applicant a sum of Kshs. 200,000. 00 via Mpesa. He further states that he was ready and willing to repay the balance of the monies paid for the equipment together with the reasonable amount for renovation the following week but the applicant was not willing to wait. The landlord further contends that the tenant has since vacated the premises and the premises have been taken over by the 2nd respondent. He therefore submits that the tribunal does not have jurisdiction.

The 2nd respondent’s Claim 19. The 2nd respondent contends in a notice of preliminary objection dated February 8, 2022 and a relying affidavit dated February 8, 2022 that the tribunal lacks jurisdiction to entertain the matter since there is no landlord/tenant relationship between the applicant/tenant and the 1st respondent/ landlord. He contends that he is the new tenant of the premises.

20. He contends that the lease agreement that was entered into on October 5, 2021 between the tenant and the 1st respondent/ the landlord was terminated vide a letter of termination of lease dated February 3, 2022 after the tenant breached the terms and frustrated the said lease agreement by failing and/or neglecting to pay the rent accruing as and when they fell due. He also contended that the tenant was not forcefully evicted but he moved out of the premises voluntarily.

21. Further, that following termination of subject lease agreement, the application dated February 7, 2022 was misconceived, mischievous, bad in law, frivolous, scandalous, vexatious and a waste of the court’s time. Further that it was founded on contradictory sections of the law which do not form sources of law of the Tribunal.

22. The 2nd respondent also made an application through notice of motion dated 8th February seeking orders of stay of execution of the Tribunal’s orders issued on February 7, 2022 on the basis that they were procured upon false submission and misrepresentation of facts. He also sought orders barring the tenant herein from harassing, intimidating, tampering, demolishing or disposing off and or interfering with his quiet possession of the restaurant in the suit premises.

23. The basis of his application as per his supporting affidavit sworn on February 8, 2022 was that he had already entered into a lease agreement with the landlord and paid a sum of KShs. 1,500,000 (Kenya Shillings one million, five hundred thousand) towards rent of the said premises. He also states that he is in full possession of the premises which he reconstructed and has invested heavily in the premises.

24. I issued orders on February 11, 2022 staying orders I had made on 7th February and making an order that status quo be maintained pending hearing of the application.

List of Issues for Determination 25. The issues raised for determination before this tribunal are as follows;(i)Whether this tribunal has jurisdiction to hear and determine this matter.9ii)Whether the termination of the tenant was valid.

Analysis and Findings (i) Whether this Tribunal has jurisdiction to hear and determine this matter. 26. It is the landlord’s contention that this Tribunal lacks jurisdiction to hear and determine this matter on the basis that there exists no landlord/tenant relationship between him and the respondent. The Jurisdiction of this Tribunal is spelt out in section 12 of the landlords and tenants (Shops, Hotels and Catering) Establishments Act, Cap 301 which regulates controlled tenancies.

27. The suit premises were a controlled tenancy. None of the parties have denied this fact. The Tenancy was established through a lease dated October 5, 2021 and the lease was to subsist for a period of 5 years at a monthly rent of Kshs. 120,000. 00.

28. The issue of contention is whether the tenancy crystallized since the landlord contends the contrary on the basis that tenant did not pay any rent to him. To establish this, it is important to analyze the dates of the various events and happenings in the instant suit. The lease agreement was entered into on October 5, 2021 and yet as at February 3, 2022 when the landlord issued a notice of termination, the landlord claims the tenancy never crystallized. Further from the landlord’s own admission, the tenant paid a sum of Kshs 830,000. 00 to him which he claims was payment for equipment as per the lease.

29. This tribunal is therefore of the view that, in light of the contradictions by the landlord, submissions by the tenant and the evidence on record, there indeed existed a landlord/tenant relationship between the tenant/applicant and the 1st respondent as the landlord. Further as per the terms of the lease agreement, the tenancy was a controlled Tenancy under the ambit of the landlords and tenants (Shops, Hotels and Catering) Establishments Act, Cap 301. This Tribunal therefore has the requisite jurisdiction to determine this dispute.

30. The jurisdiction of this honourable tribunal is however limited to issues of the tenancy relationship.

(ii) Whether the termination of the tenant was valid. 31. Having established that there existed a landlord/tenant relationship between the applicant and the 2nd respondent, this Tribunal shall move on to analyze the second issue of termination of the tenant.

32. Section 4 of the landlord and tenant (Shops, Hotels and Catering Establishments) Act provides for the legalities to be followed when terminating a controlled tenancy or when altering the terms of a controlled tenancy. The provisions on the issue of notice are clear that if a landlord intends to terminate a controlled tenancy, he should do so in accordance with the provisions of the Act.

33. Section 4(2) of the Act 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 a tenancy, shall give notice in that behalf to the tenant in the prescribed form.”

34. Section 4(4) is also to the effect that the notice can only take effect after two months of receipt by the receiving party and the notice must also specify the grounds upon which the requesting party seeks alteration of the terms. The receiving party on his part has to notify the requesting party after the date of receipt of the notice whether or not he agrees to comply with the notice.

35. In analysis of the facts of the case and the evidence on record, it is clear that the landlord issued the termination notice through a letter of termination on 3rd of February 2022. The termination was to take effect 7 days later. This is itself is a total derogation from the provisions of section 4 of the landlord and tenant (Shops, Hotels and Catering Establishments) Act, Cap 301. The situation even gets murkier with the involvement of the 2nd respondent who is brought in as a new tenant by the landlord. The landlord purportedly got into a landlord-tenant relationship with the 2nd respondent through a lease agreement dated 1stFebruary 2022.

36. This tribunal is appalled by the fact that the landlord executed another lease agreement even before terminating the other one with the applicant who was issued with the letter of termination on February 3, 2022. This Tribunal therefore makes a conclusion that the termination notice dated February 3, 2022 was invalid and termination of the tenant was illegal.

37. However, all this said the premises has now exchanged hands and all parties agree to that fact this seems to leave me clothed with powers to make a determination limited to damages I find that the tenant is entitled to damages incurred as a breach of the said termination of the agreement however with the limited information I have I can only order for damages stated in the pleadings any additional damages can be sought out in another forum.

ORDERS 38. Having made the analysis above. This tribunal makes the following orders:a.That the termination notice issued on 3rd February is illegal, null and void thus the eviction of the tenant from the premises was illegal as well.b.That the landlord compensates the tenant for any loss incurred by unlawful termination of the tenancy in respect of improvements carried out by the tenant and any other losses.c.That the termination notice being illegal, the landlord to refund the Kshs 830,000. 00 (less 6 months) rent at Kshs 600,000. 00) equivalent to Kshs 230,000. 00. d.That each party bears its own costs.

HON. A. MUMAVICE CHAIRBUSINESS PREMISES RENT TRIBUNALRULING DATED, SIGNED AND DELIVERED VIRTUALLY BY HON P. MAY (VICE CHAIR) THIS 30TH DAY OF SEPTEMBER, 2022 IN THE PRESENCE OF NDUNGU KIMANI FOR THE landlord AND WACEKE FOR THE tenant.HON. A. MUMAVICE CHAIRBUSINESS PREMISES RENT TRIBUNAL