[2024] KEBPRT 316 (KLR)

Starlight Auto Parts & Accessories v Muswell Hill Limited & 2 others (Tribunal Case E987 of 2023) [2024] KEBPRT 316 (KLR) (26 February 2024) (Ruling)

Neutral citation: [2024] KEBPRT 316 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E987 of 2023

N Wahome, Member

February 26, 2024

Between

Starlight Auto Parts & Accessories

Tenant

and

Muswell Hill Limited

1st Respondent

Dilipkumar Lakhamshi Shah

2nd Respondent

Lorimar Management Limited

3rd Respondent

Ruling

1. The Tenant/Applicant filed the Reference dated 9. 10. 2023 said to be brought under Section 12(4) of the Landlord and Tenant (shops, hotels and Catering Establishments Act) Cap 301 of the Laws of Kenya hereinafter referred to as the Act. The Tenant’s grievance was that;-“Landlords have unlawfully issued a letter dated 2. 10. 2023 claiming that the Tenant has arrears and that the landlords want to proceed to levy distress for rent. The Applicant has been dutifully paying rent when it falls due and the actions of the Respondents are illegal and intended to unfairly interfere with the Applicant/Tenant business contrary to the provisions of Cap 301 of the Laws of Kenya.”

2. Accompanying the Reference was a notice of motion of even date, brought under certificate of urgency. The same principally sought that the landlords be restrained from levying distress on the Tenant and from in anyway interfering with its quiet enjoyment of the Tenancy. the orders if granted were to be effected by the OCS Industrial Area police station.

3. On being served with the Reference and the motion aforesaid, the 1st Respondent through its director M/S Jishit D.L. Shah filed the replying affidavit dated 17. 11. 2023. In answer to the Replying affidavit, the Tenant through its director namely; Patrick Gichini Sware a further affidavit on the 30. 12. 2023. The court on close of the pleadings and with the concurrence of the parties, it was agreed to canvass the motion by way of written submissions.

4. The Applicant filed its submissions dated 7. 12. 2023 whereas those of the landlords are dated 19. 1.2024. Having perused the pleadings and the submissions, the case for the Tenant is that;-i.By a letter dated 2. 10. 2023, the 1st Respondent instructed the 3rd Respondent to levy distress against the property of the Tenant for alleged rent arrears of Kshs. 222,500/=.ii.It did not owe any rent in arrears to the 1st Respondent and that the instructions were merely meant to harass it and eventually evict it from the demised premises.iii.It had paid rent at Kshs. 3,837,000/= against a requirement of Kshs. 3,400,000/= and had therefore paid rent in advance by over ten (10) months (cheque leafs and rent account statements were annexed to that effect).iv.The landlords rent account did not reflect the reality and only captured a few of the payment and omitting most of the payments.v.The landlords have never issued it with receipts for payment and had also declined to reduce their engagements into writing.vi.It has satisfied all the requirements on the grant of injunctions and referred to the following cases;a.Mrao Ltd vs First American Bank of Kenya [2003] KLR 125,b.Suleiman vs Amboseli Resort Ltd [2004] KLR 589; andc.Giella vs Cassman Brown [1973] EA 358

5. On the other hand, the case for the Respondents was that;-i.The Tenant was a serial rent defaulter and had severally instructed auctioneers to levy distress in recovery of such rents in arrears (annexures “JDLS-1(a) to (c).ii.It was owed by the Tenant rent in arrears at Kshs. 222,000/= when The Applicant moved this court.iii.It had been making promises to settle the rents in arrears but nothing materialized.iv.The Tenant did not deserve the reliefs that it was seeking from this court.v.The Respondents further relied on the following case laws;-a.Mrao Ltd vs First American Bank of Kenya & 2 Others [2003] KLR.b.American cynamid vs Ethicon Ltd [1975] AL 395,c.Nguruman Limited vs Jan Bonde Nielsen & 2 Others [2014] eKLR, andd.Dan Gitonga Wanjau vs Gathuthi Tea Factory Company Ltd & 2 Others [2016] eKLRvi.The Tenant’s Application should be dismissed with costs.

6. Having perused all the materials placed before the court, I am of the view that the issues for determination in this matter are the following;-A:Whether the Applicant’s Application is merited.B:Who should bear the costs of the suit

Issue A: Whether the Applicant’s Application is merited 7. I do recognize that its Application is for the equitable relief of injunction. To restrain the Respondents from distraining its goods and therefore pronouncing that there are no rent in arrears owed in respect of the demised premises.

8. On this issue, I put great reliance on the locus classicus case of; Giella vs Cassman Brown. The same remains the greatest point of reference on any decision for or against the grant of injunctions. The principles set down and which are conventionally settled and agreed on are that:-“For the court to grant an interlocutory injunction, first, an Applicant must first show a prima facie with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the Applicant might otherwise suffer irreparable injury which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide on Application on a balance of convenience.”

9. In this case, the Tenant is least required to prove on a balance of probabilities that indeed he has been meeting his cardinal obligations of paying rent and on time. He indeed produced a statement of rent account showing that he had infact paid rent in advance up to and including the month of October, 2024. Also annexed were cheque leafs as evidence of payment either to the 1st Respondent, the 2nd Respondent and one Dilip Shah whom I assume to be the 2nd Respondent.

10. However, from the statement of account, a casual look would show that some of the payments allegedly made were on returned cheques. A case in point is the purported paymets of Kshs. 65,000/= in March, 2022 and kshs. 85,000/= in May 2022. I also note that the payments allegedly made through mpesa were not provided.

11. It is inexplicable that the Applicant had also paid rent in advance but failed to respond to the numerous demands for rent by the Landlords as demonstrated in annexure “JDLS-1(a) to (c)”. These were demands that infact involved auctioneers. I therefore doubt that the Applicant has presented a prima facie case with probabilities of success in view of the case last cited and the principles also laid under Section 107 of the Evidence Act.

12. The Section provides that;-107(1)“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.”Justice Kimaru Luka expounded on this in the case of; William Kabogo Gitau vs George Thuo & 2 Others [2010] 1 KLR 526 where he assigned percentages to the burden of proof need to succeed. He held that;-“In ordinary civil cases, a case may be determined in favour of a party who persuades the court that the allegations he has pleaded in his case are more likely than not to be what took place. In percentage terms, a party who is able to establish his case to a percentage of 51% as opposed to 49% of the opposing party is said to have established his case on a balance of probabilities. He has established that it is probable than not that the allegations that he made occurred.”

13. In the present matter, I can still not understand how the Applicant who had paid rent in advance by ten (10) months continued to pay more rents up to and including the month of December, 2023. I am therefore not convinced that the Applicant has established a prima facie case with any chances of success.

14. Turning on the 2nd principle on whether the Applicant would suffer irreparable injury which would not adequately be compensated by an award of damages, I note that the Respondents are pursuing their rights as provided to them under Section 12(4) of the Act and Section 3(1) of the Distress for Rent Act. I doubt that a party pursuing its legal and legitimate rights can cause irreparable damage nor injury. In the circumstances of this case, the Tenant on paying the rent in arrears or by the landlords recovering the same through distress for rent and any other damages that may be incurred, can be compensated for by being offset from future rents. In all, I find that the Applicant has also failed to satisfy this requirement.

15. In my view, the Applicant may not benefit from the principle of balance of convenience. From the above analysis and findings, there is no doubt left in my mind to allow me venture into the realm of that principle. In the event it would be brought to play. In the event it would be brought to play, it would without doubt run to benefit the Respondents.

16. I therefore find that the Applicant’s Application lacks in any merit. I also doubt that with this Ruling anything is left for determination in the reference dated 9. 10. 2023. The same will therefore be determined in the same terms with this Application.

17. The tenancy herein is controlled and the parties herein have submitted to the same. The same is not in writing but it is clear that Kshs. 170,000/= was paid as deposit or security. It was said to be equivalent to rent for 4 months. As noted hereinabove, the same was not in writing. The landlord has not in anyway controverted that assertion by the Applicant.

18. Section 9(2)(b) of the Act provides that upon any reference- the Tribunal may;-“terminate or vary any of the terms or conditions of the controlled tenancy or any of the rights or services enjoyed by the tenant upon such conditions, if any as it deems appropriate.”Section 12(4) of the Act provides that;-“In addition to any other powers specifically confirmed on it by or under this Act, a Tribunal may investigate any complaint relating to a controlled tenancy made to it by the landlord or the tenant, and may make such order thereon as it deems fit.”

19. From the foregoing, I find that the landlords requirement for a deposit of Kshs. 170,000/= equivalent to four (4) months’ rent was oppressive and lacking in any logical foundation. I would therefore …….the terms and/or conditions of the tenancy and determine that security deposit equivalent to two (2) months’ rent or Kshs. 85,000/= is sufficient in the circumstances of this case.

Issue No. B: Who should bear the costs of this suit 20. The provisio to section 27 of the Civil Procedure Act provides that;-“Provided that the costs of any action, cause or other matter or issue shall follows the event unless the court or judge shall for good reason otherwise order.”I do not have any reason to depart from the wisdom of that section and would grant costs to the Respondents.

21. In the final analysis, I make the following orders;-a.That the Reference and the notice of motion Application dated 9. 10. 2023 are hereby dismissed.b.That the Applicant shall pay all the arrears in rent as tabulated by the 1st Respondent less the security deposit at Kshs. 85,000/= within thirty (30) days of the date hereof and in default the Respondents are at liberty to levy distress.c.The Respondents are awarded costs assessed at Kshs. 20,000/=.Those are the orders of the court.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 26TH DAY OF FEBRUARY, 2024. HON. NDEGWA WAHOME, MBSMEMBERBUSINESS PREMISES RENT TRIBUNALDelivered in the presence of;Mrs. Owuor holding brief for Mr. Isinta for the Respondents/LandlordsMr. Kabuthia for the Tenant/Applicant