[2021] KEBPRT 404 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 28 OF 2021 (MOMBASA)

RICHARD ONYANGO JUMA T/A

GOLDEN CHARIOTS JUNIOR SCHOOL..........................................TENANT

VERSUS

JOSEPH WAMBUA MWEMA........................................................LANDLORD

RULING

The Tenant’s/Applicants notice of motion application dated 21st January 2021 seeks the following orders;

1. Spent.

2. That the Landlord/Respondent and his agent namely Makini Auctioneers be restrained from carrying, taking away, selling, disposing or in any other way dealing with the Tenant’s/Applicant’s goods pending the hearing and determination of this application.

3. That the Landlord/Respondent and his agent Makini Auctioneers agencies be restrained from carrying, taking away, selling, disposing or in any other way dealing with the Tenant’s/Applicant’s goods pending the hearing and determination of this suit.

4. Costs.

The grounds upon which the application is brought and the contents of the affidavit in support thereof may be summarized as follows;

1. That the Applicant is the proprietor of a school called Golden Chariots Elite academy.

2. That the Respondent has attached the Applicant’s goods which the Applicant labels his tools of trade.

3. That the Respondent has not obtained orders from this Tribunal to attach the Applicant’s goods.

4. That the Respondent will suffer no prejudice if the application is allowed.

5. That the lease agreement commenced on 2011 and terminated in 2019. No new lease agreement has been entered into between the parties.

6. That since 2019 when the tenancy terminated, the Applicant became a monthly tenant.

7. That the Applicant was unable to clear rent arrears in the year 2020 due to the covid pandemic when schools were closed.

8. That the schools were closed from March 2020 to January 2021 and for which period the Respondent demanded rent amounting to Kshs 294,000/-.

9. That a meeting to resolve the rent issue never materialized.

10. That on 11th January 2021, the Applicant was served with a proclamation for distraint of movable property.

11. That the Applicant is willing to pay Kshs 100,000 to the Tenant or in the alternative, deposit the same in the Tribunal so that the pupils’ learning is not interfered with.

The Tenant’s application is opposed. The Landlord/Respondent has sworn an affidavit on 20th May 2021 which I summarize as follows;

1. That the Applicant is the Respondent’s Tenant on plot No. 101 Kisauni – Junda where the Tenant runs a school and pays rent of Kshs 22,000 per month.

2. That the Tenant has accumulated rent arrears amounting to Kshs 322,000/- as at May 2021.

3. That the Respondent did sent auctioneers to levy distress for rent to recover the sum of Kshs 322,000 being the rent arrears.

4. The Tenant was served with a notice to renew the lease but he ignored the same.

5. That the Tenant’s school has been running albeit with a limited number of pupils.

6. That the demand for Kshs 294,000/- represents the rent by January 2021.

7. That section 16 of the “Rent Restriction Act” does not apply to this matter.

8. That the meeting referred to by the Tenant did not take place because the Tenant did not turn up and switched off his phone.

9. That the Tenant is unwilling to pay the rent arrears unless ordered by the court.

The Landlord’s notice of motion dated 31st March 2021 seeks to stay the orders issued on 22nd January 2021. It also seeks to have the orders issued on the said day set aside and the Landlord to be allowed to proceed with the distress for rent to recover Kshs 322,000/-. The Landlord also seeks that the Tenant be ordered to issue postdated cheques as security pending the hearing and determination of this suit. Police assistance has also been sought.

The grounds upon which the Landlord’s application to bright and the contents of the affidavit in support thereof may be summarized as follows;

1. That the proceedings of 22nd January 2021 were ex-parte and the Applicant was therefore deemed an opportunity to be heard.

2. The Applicant’s preliminary objection raises triable issues.

3. The lease between the parties herein is beyond the limit of this Tribunal to determine.

4. The Applicant has a good defence to the application dated 22nd January 2021.

5. National justice demands that the Applicant be heard before a determination is made on the “same”.

I think the Landlord’s application dated 3rd March 2021 is brought under a misapprehension of the law. If seems to flow from an assumption that the orders issued by the Tribunal on 22nd January 2021 were final and the proceedings of the day locked the Landlord from the proceedings of the day locked the Landlord from the proceedings. That is not the case as the orders were granted ex-parte but pending the hearing the application, the order is self-explanatory.

The Landlord, in response to the Tenant’s application dated 21st January 2021 has filed a detailed replying affidavit. The parties have also filed their submissions on this matter.

It is my view therefore that a determination of the issues raised in the Tenant’s application will suffice to determine both applications.

The Tenant’s submissions dated 28th May 2021 may be summarized follows;

1. That the Tenant sums a school at the Landlord’s premises where he pays Kshs 20,000/- on rent per month.

2. That the school is private and derives all its income from fees collected from students.

3. The closure of schools meant that the Applicant lost a substantial part of his income and therefore did not pay rent for a period of seven months or thereabouts.

4. That the Landlord agreed to waive rent for a period of seven and half months of the schools shut down.

5. That the Landlord’s auctioneers have attached the following items;

a. 55 small chairs.

b. 80 desks (approximately)

c. 10 small tables (approximately).

d. 8 tables (approximately.

e. 1 reception desk.

f. 1 office desk and one computer set.

6. That the above goods are tools of trade and required for the day to day running of the school. The law is clear that tools of trade cannot be attached. The Tenant relies on section 16(1) (g) of Cap 293, the Distress for Rent Act in support of this preparation.

7. That the tenancy between the parties herein is a controlled tenancy.

8. That distress for rent was levied in January 2021 without leave of the court.

The Landlord’s submissions dated 20th May 2021 may be summarized as follows;

1. That following the expiry of the lease, the Tenant continued occupying the “space” and has accumulated rent arrears to the tune of Kshs 322,000/-.

2. That the Landlord merits the orders sought as his affidavit evidence is uncontroverted.

3. That the Landlord has proved his case on a balance of probabilities and the Tribunal has power to issue the orders sought.

4. The Tenant has breached the law by refusing to pay his rent arrears and vacate the Landlord’s premises.

The issues that arise for determination, in my view are the following;

1. Whether the tenancy between the parties herein is a controlled tenancy.

2. Whether the Landlord was entitled to levy distress for rent against the Tenant.

3. Whether the goods proclaimed by the Auctioneers are the Tenant’s tools of trade and if so, whether there is a legal bar to the proclamation and attachment of the same.

4. What are the appropriate orders to issue in the circumstances.

On Issue No. 1

The tenancy agreement between the parties herein was dated 8th March 2012. The same was for a period of eight years from 1st March 2012 to 31st December 2020. It is common ground that the parties have not entered into any other written agreement though the Tenant continues to occupy the premises. The Tenant can therefore only be occupying the premises on the basis of an unwritten lease agreement. The tenancy relationship between the parties is therefore a controlled tenancy and accords with the definition of a controlled tenancy under section 2 (a) of Cap 301 which where relevant provides;

“Controlled tenancy “means a tenancy of a shop, hotel or catering establishment;

(a) Which has not been reduced into writing or…

On Issue No. 2

The right to levy distress is reserved under section 3 of the Distress for Rent Act, Cap 293 of the Laws of Kenya,which provides;

“subject to the provisions of this Act and having any rent or rent service in arrears and due upon a grant, lease, demise or contract shall have the same remedy by distress for the recovery of that rent or rent service as is given by the Common Law of England in a similar case.”

The right of distress therefore arises if it is established that rent is in arrears. At paragraph 7 of the affidavit in support of the Tenant’s application, the Tenant states;

“That I had some arrears of rent which I was to have cleared during the year 2020 but the same was frustrated by the closing of the schools due to the covid 19 pandemic.”

At paragraph 9 of the said affidavit, the Tenant/Applicant states;

“That when schools resumed in January 2021, the Respondent came and demanded for rents for part of 2019and the whole of 2020 which totaled Kshs 294,000/- translating to about 13 months’ rent.”

It is therefore beyond doubt that the Tenant herein was in arrears of rent at the time the Landlord sought to levy distress. Indeed, the Tenant in his supporting affidavit does not seem to deny being in arrears. The sum of Kshs 100,000/- that he was offering to pay to the Landlord or deposit in the Tribunal very easily represents rent for a period of five months at the rate of Kshs 20,000/-per month. I therefore find that the Landlord’s right to levy distress for rent had crystalized and he was within his rights so to do.

On Issue No. 3

The goods proclaimed by the Auctioneers are the ones listed in the Applicants’ submissions. The goods have not been listed in the Applicant’s supporting affidavit. I need to point out here that submissions are not evidence and it is improper to introduce evidence into proceedings by way of submissions.

Under section 16(1)(g) the following articles are exempt from distress;

(g) ”Wearing apparel land bedding of the persons whose goods and chattels are being distrained upon and the tools and implements of his trade to the total value of one hundred shillings.”

The items listed in the submissions cannot be said to be apparel and beddings of the Applicant. I take judicial notice of the fact that their total value is not one hundred shillings and they are therefore not exempt from distress. There is therefore no legal bar to the proclamation and attachment of the same.

On Issue No 4

It is common ground that the Tenant/Applicant runs a school in the demised premises. The school is active with students though the number of the students has not been disclosed. It is also in the public domain that schools remained closed during the covid – 19 pandemic.

The Applicant’s school being a private school wholly depends on the fees paid by its students to finance its operations like paying salaries and rent. No doubt the closure of the school affected the cash flow of the Tenant/Applicant. But this state of affairs has to be balanced against the financial interests of the Landlord who also is not to blame for the pandemic. The interest of the learners is also a factor in determining and balancing the interests of the Landlord and the Tenant, not an easy task as Cap 301 provides no formula in these circumstances.

The Tenant has stated in his affidavit sworn on 28th May 2001, that the Landlord had agreed to waive rent for the seven months the school remained closed. I have not heard any evidence of this agreement as even the Tenant states that due to circumstances contributed to by himself and the Landlord, the agreement to waive the seven months rent was not reduced into writing. There does not therefore appear to be any waiver of the rent.

I note that the Tenant states that since the filing of the reference, he has paid Kshs 146,000/- as evidenced in the bundle of documents marked ROJ1 in the affidavit of 25th May 2021. While I am not able to conclusively state that this amount was actually paid to the Landlord, I note that the Landlord has not disputed the same.

From the affidavit of the Landlord, as at January 2021, the outstanding rent was Kshs 294,000/-. At the rate of Kshs 20,000 per month, the rent for the months February to date (July 2021) would be Kshs 20,000 x 6 – 120,000/-. Total arrears 294,000 + 120,000 = 414,000/- less paid 146,000 = 268,000/-.

Assuming the Tenant’s payments dully went to the Landlord, the total arrears would therefore amount to Kshs 268,000/-.

The Tenant has indicated his desire to have this matter amicably settled. On a tone not so hostile, the Landlord has also in his application dated 31st March 2021 made the following prayers;

5. In the circumstances of justice, this honourable Tribunal court do issue an order directing the Respondent/Tenant to issue postdated cheque to Landlord/Applicant as security pending the hearing and determination of the suit.

In seeking to make the appropriate orders in view of the foregoing, I am guided by section 12(1)(e) of Cap 301 which grants the Tribunal power;

“To make orders upon such terms and conditions as it thinks fit for the recovery of possession and for the payment of arrears of rent and mesne profits which orders may be applicable to any person whether or not he is a Tenant, being at any material time in occupation of the premises comprised in a controlled tenancy.”

In the circumstances of this case, I will therefore allow prayer 3 of the Tenant’s application dated 21st January 2021 on condition;

1. That the Tenant, over and above paying his usual monthly rent, does pay Kshs 40,000per month to cover the rent arrears till the arrears are paid in full.

2. That in default, the Landlord will be at liberty to levy for distress of rent outstanding.

3. The costs of this application shall be in the cause.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

RULING READ AND DELIVERED VIRTUALLY BY HON CYPRIAN MUGAMBI NGUTHARI THIS 2ND AUGUST 2021 IN THE ABSENCE OF THE PARTIES.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL