[2021] KEBPRT 45 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 866 OF 2020 (NAIROBI)

NDUNGU KANGETHE KINYANJUI.....APPLICANT/LANDLORD

VERSUS

HARRISON OMONDI OYUGI.................. RESPONDENT/TENANT

RULING

1. The Landlord herein issued the tenant with a tenancy notice dated 5th August 2020 on grounds that he intended to occupy the premises for a period of not less than one (1) year for purposes of running his own business.

2. The tenant opposed the notice with a reference dated 28th October 2020 and the matter proceeded by way of viva voce evidence after both parties complied with order 11 of the Civil Procedure Rules, 2010.

3. The tenant testified and adopted his written witness statement dated 6th August 2021. It was his evidence that he entered into a tenancy agreement with the landlord in respect of shop no. 4 on Plot no, Nairobi Block 107/1/1299 along Manyanja Road at a monthly rent of Kshs.14,000/-.

4. It is the tenant’s case that he used close to a million Kenya shillings to upgrade the premises into a high end liquor joint.

5. Shortly after taking possession of the suit premises, the same was broken into on 3rd August 2016 as a result of which he installed CCTV Camera System.

6. On 5th August 2020, the tenant received a termination notice from the landlord despite paying rent promptly even after shut down of liquor outlets on account of Covid-19 leading to reduced sales and working hours.

7. The tenant contends that being an old tenant who had carried out extensive developments on the premises on loan which he was servicing monthly, he would have been given a valid ground or reason leading to premature termination of tenancy.

8. The tenant’s case is that he is not in a position to move out as he had heavy financial burdens. The business was his only source of income and moving out would require a lot of money and will occasion loss of income.

9. The tenant relies on documents marked ‘H00-1 to 4’ attached to the application dated 28/10/2020 as his exhibits.

10. He agreed in cross-examination that no documents were attached in respect of alleged investment on the premises. He also had no formal consent to undertake repairs from the Landlord.

11. He confirmed that he never used to communicate with the landlord when undertaking repairs in the premises. No documents to show he was servicing a loan were produced.

12. He stated that there was no bad blood between him and the landlord and he had no reason to think that the termination notice was issued by the latter in bad faith.

13. The landlord also testified and adopted his written witness statement dated 9th August 2021. He testified that he entered into a tenancy agreement with the tenant on 23rd July 2016 in respect of the suit premises at a monthly rent of Kshs.14,000/-.

14. He testified that he prior to Covid-19 outbreak, he was running a hardware business in a rented premises which he closed on account of inability to pay rent.

15. His son one Eric Ndungu Kangethe who was a pilot with Kenya Airways was terminated vide a letter dated 24th June 2020 thereby losing a source of livelihood.

16. As a result, the landlord and his son decided to restart the hardware business to provide for their families and meet financial obligations.

17. This led to issuance of a notice upon the tenant to vacate the suit premises to enable the landlord run his business therein.

18. It is the landlord’s case that he has a huge bank loan which could not be serviced by the rental income. He states that he does not intend to continue with the tenant’s business.

19. The tenant took possession of the premises in good condition and never at any time sought the landlord’s consent to undertake purported renovations. The landlord was willing to allow the tenant remove fixtures and fittings installed and return the shop in the condition he got it.

20. The landlord in cross-examination stated that all the 4 shops in his business premises were occupied at the time he gave notice to the tenant herein. He maintained that he intended to carry out hardware business in the suit premises and had paid for a business permit for the same.

21. The landlord called his son as a witness. He relied on his witness statement dated 9th August 2021. He states therein that he is a pilot by profession previously employed by Kenya Airways from June 2019 to 24th June 2020.

22. He was terminated on account of Covid-19 pandemic. This dealt a huge blow on his finances as the previous employment was his sole source of livelihood.

23. His father suggested that they could reopen the hardware business at his premises as a joint venture. It was thought that running the business in the said premises was cheaper as they would save on rent.

24. It is his evidence that upon termination of his employment, he has been relying on his parents for sustenance and needed the business to sustain himself and his child.

25. The landlord and his witness rely on the list of documents dated 9th August 2021.

26. Although it was agreed that both parties would file submissions none was filed and I shall therefore rely on the evidence on record in determining the case.

27. The issues for determination herein are:-

(a) Whether to uphold or dismiss the tenancy notice dated 5th August 2020.

(b) Who is liable to pay costs?.

28. The tenancy notice herein was issued pursuant to Section 4(2) of Cap. 301, Laws of Kenya. The same is in the prescribed form and its legality is not in question.

29. Under section 7(1)(g) of the said Act, one of the grounds upon which a landlord can seek to terminate a tenancy is that on termination of the tenancy, the landlord himself intends to occupy for a period of not less than one year, the premises comprised in the tenancy for the purposes or partly for the purposes of a business to be carried on by him therein or as his residence.

30. The landlord has cited the said ground in the termination notice. The tenant has not in any way questioned the said ground or adduced evidence to show otherwise.

31. The tenant’s only contention is that he made improvements to the suit premises valued at close to one million Kenya shillings for purposes of upgrading it into a high end liquor joint. He has installed CCTV Camera System for security purposes.

32. According to the landlord, the tenant will be free to move out with the improvements leaving the premises in the same condition it was at the time of taking possession.

33. The cost of the said improvements have not been demonstrated through empirical evidence neither has the source of funds been proved. Although the tenant states that he is unable to move on account of heavy financial burdens, no evidence to show the same has been tendered.

34. He says that the business was his only source of income and that the process of moving out would require a lot of money. This is not quantified.

35. The tenant agreed in cross-examination that he did not have the landlord’s consent to undertake any repairs to the suit premises and stated that he had no reason to think that the termination notice was issued in bad faith.

36. Section 107(1) of the Evidence Act, Cap. 80 Laws of Kenya 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”.

37. In this case, the tenant was required to prove that the termination notice was not justified. No evidence was tendered to demonstrate the same.

38. On the other hand, the landlord placed before court, evidence to show that he intended to operate a hardware with his son in the suit premises. His son had lost employment with Kenya Airways as a pilot and needed somewhere to fend for himself and son. The landlord had closed a previous hardware shop on account of covid-19 pandemic and needed to restart it in his owned premises to save on rent. This fact was not controverted by the tenant.

39. In the case of Eldomart Holdings Limited – vs- Ticket Company Limited (2019) eKLR, the Environment and Land Court at page 3/3 had the following to say in regard to the ground cited by the landlord:-

“The legislature left no doubt that the Act was enacted for the purposes of protecting tenants. This court must have the said objective in mind while interpreting the Act. The burden was upon the appellant to establish that it had an intention of occupying the suit premises for a period of not less than one year for the purposes of own business. In the case of Auto Engineering – vs- Gonella (1978) KLR 248, it was held that the onus is on the landlord to establish a firm and settled intention to occupy the premises held by a tenant’’.

40. The tenant has tendered Equity bank account statements for the business he wanted to move into the suit premises and the loan that was being serviced in respect thereof. The termination letter of his son’s employment was also produced besides a single business permit in respect of ‘Zondu Hardware’ for the year ending 31st December 2021. These cannot be made up documents.

41. In the premises, I am convinced beyond any peradventure that the landlord has justified the termination notice herein.

42. As regards, the improvements effected on the suit premises by the tenant, there is no evidence before me that the same cannot be removed or that they are of a permanent nature. No consent of the landlord has been tendered neither has compensation been an issue in this matter. The same cannot be a basis for denying the landlord possession.

43. In the premises, I make the following final orders:-

(i) The landlord’s notice of termination of tenancy dated 5th August 2020 is hereby upheld.

(ii) The tenant shall vacate the suit premises forthwith failing which he shall be evicted therefrom by a licensed auctioneer who shall be given security by the OCS of the Police Station within whose jurisdiction the suit premises known as shop no. 4 , Bee Centre, Manyanja Road is situated.

(iii) The costs of the reference are awarded to the landlord.

It is so ordered.

DATED, SIGNED AND DELIVERED VIRTUALLY THIS 29TH DAY OF DECEMBER 2021.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

In the presence of:

Omollo for Applicant/Tenant

No appearance for the landlord