[2021] KEBPRT 212 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO. 23 OF 2021 (MOMBASA)

REUBEN M. KIOKO T/A

KIOKO ENTERPRISES............................................TENANT

VERSUS

PIETRO CANNOBIO

T/A KILIFI COMPLEX CENTRE...................LANDLORD

RULING

Parties and Their Representative

1. The tenant entered into a 6 years lease agreement for shop No. Township /Kilifi Block 3/1177 which lease expired on 1st December 2018 (herein after referred as the suit premises’)

2. Mutisya & Associates Advocates represent the Tenant in this reference.

3. The Landlord is the registered proprietor of the suit premise that is the subject matter of the present suit.

4. Mwamuye Mzungu Solomon Advocates (LLP) represent the Landlords.

The Dispute Background.

5. The Landlord and the Tenant entered into a lease agreement for a shop LR. 3/1177 Township/Kilifi for a term of 6 years which term ended on 1st December 2018.

6. On 18th January 2021, the Tenant moved this honorable tribunal by way of Notice of Motion dated 18th January 2021 seeking inter alia orders that:

a. The Landlord be restrained from disconnecting the electricity and water supply to the Tenant and/or closing the toilets and/or closing the toilets and/or evicting the tenant from the shop on plot no. Kilifi/township block 3/1177, Kilifi Complex Centre accordingly pending hearing and determination of the Application inter-partes.

b. That the application be certified as urgent.

c. The alleged notice by the Landlord be declared null and void and of no legal consequence.

The Tenant obtained orders dated 20th January 2021which orders granted prayers 1 & 2 certifying the application as urgent and restraining the Landlord from disconnecting the electricity and water supply to the Tenant from shop on Plot No. Kilifi/Township block 3/1177, Kilifi Complex Centre pending hearing and determination of this application.

7. On 16th February 2021 the Landlord moved this Court by way of notice of motion dated 16th February 2021 seeking among others orders that:

a. The Honorable Court be pleased to certify this Application as urgent and be heard ex parte in the first instance.

b. The Court be pleased to set aside orders issued on 29th January 2021.

c. The Court be pleased to issue order for the Tenant to hand over the physical possession of the suit premise.

d. The Honorable Court be pleased to issue orders against the tenant to pay rent arrears of Kshs. 76,000. 00/- to the Landlord being rent arrears for two months.

The Landlord obtained orders dated 23rd February 2021 which orders granted prayer 1 certifying the matter as urgent.

8. The Tenant further moved this Court by way of notice of motion on 1st March 2021 seeking inter alia Orders that:

a. The Application be certified as urgent and service be dispensed with at first instance;

b. The Landlord Pietro Cannobio T/A Kilifi Complex Centre and/or his agents M/S Makuri Auctioneers be restrained from distressing for rent or evicting the Tenant from the suit premise pending hearing and determination;

c. The Landlord be cited for contempt of the Tribunal and commitment to civil jail for 6 months for disobedience of Orders of the Tribunal issued on 20th January 2021; and

d. The costs be borne by the Landlord

The Court in Order dated 4th March 2021 granted the Tenant prayers a & b, which prayers certified the Application as urgent and restrained the Landlord and/or his agents from evicting the tenant from the suit premise. The Court further directed that the Tenant to deposit and continue paying the rent to the tribunal pending hearing and determination of this Application for inter partes.

These applications are the subject matter of this ruling and parties have filed responses and submissions to them.

The Tenant’s Case

9. The Tenant contend that the Landlord issued an illegal Notice to vacate the premises or face eviction which notice was illegal for the reasons he stated as below:

a. That the notice did not give 2 months’ prior notice which period is a statutory required by dint of CAP 301 section 4 (4).

b. That the said notice does not give any grounds. That the Landlord in his subsequent reply gives false grounds for he blatantly rejected to accept the rent.

10. The Tenant also avers that the Landlord has verbally and expressly threatened to disconnect the electricity and water supply to the Tenant and/close the toilets and/or evict the tenant from the suit premise.

11. On his further application dated 1st March 2021, the Tenant contend that the Landlord has since instructed M/S Makuri, being the Auctioneers to levy distress which he finds it illegal owing to non-default of rent payment.

12. That the Landlord in a concerted effort to evict the Tenant stormed the suit premises on 21st February with welders and cut the locks, harassed and disturbed the Tenant and his employees which action prompted the Tenant to seek intervention from the police officers who arrested the Landlord and charged him in Kilifi Criminal Case No. E163 of 2021 R v. Canobbio Piero.

13. The Tenant in his replying affidavit denies in total to have vacated the suit premises as deponed by the Landlord. He admits to be operating a sub-branch elsewhere but indicates that its sheerly irrelevant in the instant suit.

14. The Tenant content to have surrendered the store on March 2021 whose rent was Kshs. 10,000. 00 thus monthly rent is now Kshs. 38,140. 00/-.

15. He (the Tenant) contend that the Landlord refused rent and accordingly the Tribunal ordered that he deposit the same to the Tribunal and that he has done so to date.

The Landlord’s Case

16. The Landlord contend that, the Tenant has since issuance of the order by the Court on 20th January, 2021, vacated the suit premise but failed to render and hand over physical possession to him.

17. It is the Landlord’s deponent that the Tenant reopened the same business in a building adjacent to the Landlord’s building and is now running its business there.

18. The Landlord deponed that the Tenant has put notice on the suit premise notifying to its customers that they vacated the suit premise but insists on remaining and or occupying the front desk section of the suit premise.

19. The Landlord issued a notice to the Tenant Which Notice required the Tenant to vacate the suit premise on or before 5th February 2021.

Jurisdiction

20. The jurisdiction of this Tribunal is not in dispute.

The Tenant’s Submission.

21. The Tenant filed written Submissions dated 9th August 2021 in support of his case. He submitted that there was a controlled tenancy for the reasons that the then tenancy agreement expired reverting back to monthly tenancy duly admitted by the Landlord in paragraph 3 of their affidavit filed on 11th February 2021.

22. The Tenant citing section 4 CAP 301 submits that the notice by the Landlord requiring the Tenant to vacate on or before 5th February 2021 is defective, null and void and of no legal consequence.

23. He further submits that the Landlord refused to accept the rent again in bad faith prompting the tenant to apply to pay in the Tribunal which he has been religiously doing so to date.

24. It is Tenant’s submission that the Landlord’s affidavits do not give any plausible or defence at all the notice.

Landlord’s Submissions.

25. The Landlord filed written submissions dated 28th July 2021in support of his case. He submitted on two issues; whether there was any form of lease agreement between the Tenant and the Landlord; and, whether the notice to vacate issued on 2nd January, 2021 was valid.

26. It is his humble submission that the Tenant declined to commit to a new agreement following the expiry of the tenancy on 1st December,2018.

27. He submits relying upon the provisions of section 60of the Lands Act, 2012 that by conduct and acceptance of rent by the Landlord since December 2018 after the expiry of their tenancy, which period is beyond two months, and, as stipulated by law in the foregoing provision, this conduct culminates into a periodic lease between the parties

28. It is his submission that the Landlord’s conduct of rejecting the rent paid via cheque by the tenant terminates the periodic lease that had been created between the parties.

29. On the second issue of notice to vacate, the Landlord submits that the periodic tenancy was created and as such the Landlord’s one-month notice was within the provision of law thus legal and valid.

30. Further, the Landlord submits that the Tenant’s reference dated 18thJanuary,2021 is baseless, malicious and that it is unfounded and as such should be dismissed and struck out.

Analysis of Law and Determination.

31. I have carefully analyzed all the pleadings before this honorable Tribunal, all Submissions by parties herein and relevant evidence adduced before this Tribunal. There being no contestation as to the jurisdiction of this Court, I shall then proceed to the merit of the applications before me.

32. I considerately find that two main issues fall for determination: Whether there is a periodic lease or controlled lease agreement between the parties; and, whether the one-month Notice to vacate by the Landlord to the Tenant is valid.

33. Cap 308 defines controlled tenancy means a tenancy of a shop, hotel or catering establishment: -

a) Which has not been reduced into writing; or

b) Which has been reduced into writing and which –

i. Is for a period not exceeding five years; or

ii. Contains provision for termination, otherwise than for breach of covenant, within five years from commencement thereof; or

iii. Relates to premises of a class specified under subsection (2) of this section:

Provided that no tenancy to which the government, the community or a local authority is a party, whether as Landlord or as tenant, shall be a controlled tenancy;

34. Both parties admit that the tenancy between them had expired on 1st December 2018 and that since then, there has been no other consensus ad idem in respect of the suit property that was reduced into writing by the parties.

35. Both parties in their pleadings and submission further admit that, the Tenant extended his stay after the expiry of the agreement between him and the Landlord.

36. In determining whether the extended stay by the Tenant culminated into a periodic tenancy, I shall place reliance upon section 60 of the Land Act, 2012 which stipulates:

Lessee remaining in possession after termination of lease without the consent of lessor.

60. (1) If a lessee remains in possession of land without the consent of the lessor after the lease has been terminated or the term of the lease has expired, all the obligations of the lessee under the lease continue in force until such time as the lessee ceases to be in possession of the land.

(2) A lessor who accepts rent in respect of any period after the lease has been terminated or the term of the lease has expired, shall not, by reason of that fact, be deemed to have consented to the lessee remaining in possession of the land, or as having given up on any of the rights or remedies of the lessor against the lessee for breach of a covenant or condition of the lease, and if the lessor continues to accept rent from a tenant who remains in possession for two months, after the termination of the lease, a periodic lease from month to month shall be deemed to have come into force.

37. From the foregoing, the Landlord has to prove that there was no consent from his end on the extended stay by the Tenant for him to successfully claim periodic tenancy.

38. Consent can either be express or implied. The Court, Judge Christine in the case of Mupekori Pere v Samuel Gicheru & another [2017] eKLR while affirming that contracts can either be implied or express stated as follows:

“it is trite law that contracts can either be express or implied. Express when there is a written agreement while implied when the owner of a premise continues to receive consideration for the demised premises even if there is no written agreement.”

39. It is also trite law that where tenancy agreement expires, then Tenant chooses to extend the stay fully complying with the rent requirements, and that the Landlords continues to receive consideration from the said Tenant, then it culminates into extended tenancy which in turn becomes an implied tenancy.

40. In the instant case, the tenancy expired on 1st December 2018. There is no dispute as to the expiry date on the said tenancy. In the same event, parties agree that there was no written agreement after the expiry of the said tenancy but, the tenant continued paying rent, which rent was accepted by the Landlord.

41. It is my respectful finding that the extended stay culminated into an implied tenancy, thus, a controlled tenancy by dint of section 2 of CAP 301.

42. Having determined the first issue, I now turn to the second issue on whether the one-month notice issued by the Landlord to the tenant is valid, which issue is greatly dependent on the first one.

43. Section 4 of CAP 301 provides:

4. Termination of, and alteration of terms and conditions in, controlled tenancy (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. (4) No tenancy notice shall take effect until such date, not being less than two months after the receipt thereof by the receiving party, as shall be specified therein: Provided that— (ii) where the terms and conditions of a controlled tenancy provide for a period of notice exceeding two months, that period shall be substituted for the said period of two months after the receipt of the tenancy notice; (5) 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.

44. The Landlord issued a one month notice to the Tenant. Having established that the tenant herein is a protected tenant, and from the aforesaid provisions by CAP 301, the Tenant was duly entitled to at least a two months-notice.

45. The upshot of this finding is that, I allow orders sought by the Tenant in his notice of motion dated 18th January 2021 as follows:

a)The Landlord is hereby restrained from disconnecting the electricity and water supply to the tenant and/or closing the toilets and/or closing the toilets and/or evicting the Tenant from the shop on plot no. Kilifi/Township block 3/1177, Kilifi Complex Centre.

b) The notice by the Landlord to the Tenant is hereby declared null and void, and has no legal consequence.

c) Tenant to pay all rent arrears within the next 7 days and rent as and when they fall due on or before the 5th of every month in default landlord is at liberty to distress.

d) The Landlord shall be entitled to the rent paid by the tenants in the Tribunal if any.

e) On the issue of costs, it is trite law that costs follow the event. I hereby order that costs be borne by the Landlord.

f) Tenants Reference is compromised on similar terms.

HON. A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon A. Muma this 7th day of October 2021 in the presence of Miss Mwanyika for Kayehi (Landlord) and in the absence of the Tenant.

HON. A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL