Ashanti Holdings Ltd t/a Dass Restraurant v PKF Kenya [2022] KEBPRT 71 (KLR) | Controlled Tenancy | Esheria

Ashanti Holdings Ltd t/a Dass Restraurant v PKF Kenya [2022] KEBPRT 71 (KLR)

Full Case Text

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 612 OF 2019 (NAIROBI)

ASHANTI HOLDINGS LTD T/A DASS RESTRAURANT....TENANT/APPLICANT

VERSUS

PKF KENYA.......................................................................LANDLORD/RESPONDENT

RULING

1. The Tenant’s application dated 28th June 2019 seeks orders prohibiting and restraining the Landlord from unlawfully terminating the tenancy, evicting the Tenant or in any other manner whatsoever interfering with the Tenant’s quiet use, possession and enjoyment of all the demised premises situated on L.R. No 7158/13 situated on Grevelea Grove, Nairobi, pending the hearing and determination of the reference.

2. The Respondent’s application dated 9th July 2020 seeks orders to the effect that the orders issued by the Tribunal on 2nd July 2019 be set aside, that the Tenant yields vacant possession of the demised premises in default of which the Landlord/Applicant be granted leave to evict the Tenant.

3. The Tenant/Applicant’s case from its affidavits may be summarized as follows;

a. That the Tenant took up the premises free of rent, water, light and other charges but in consideration, the Tenant was to purchase the existing cafeteria equipment from the Respondent at a consideration of Kshs 1,500,000/- and offer events and meals to the members of staff of the Respondent at subsidized rates.

b. That the Tenant has been in occupation of the premises for three and half years now.

c. That the Tenant has incurred huge expenses in refurbishing the premises.

d. That on 17th June 2019, the Respondent sent an email to the Tenant purporting to terminate the tenancy for no reasons.

e. That the intention of the Respondent is to give out the premises to another Tenant.

f. That the tenancy between the parties herein is a controlled tenancy, a proper notice to terminate the tenancy ought to have been issued under the provisions of Cap 301 of the Laws of Kenya.

g. That the Tenant has taken out the necessary licences to conduct its cafeteria business.

h. That the Tenant has fulfilled its end of the bargain by providing meals to the members of staff of the Respondent at subsidized rates and maintaining the agreed prices since 2015 to date.

i. That the Tenant is not an independent contractor as posited by the Respondent, it is a Tenant.

4. The Respondent’s case in its replying affidavit and in the affidavit in support of its application dated 9th July 2020 may be summarized as follows;

a. That the Respondent is itself a Tenant of East Africa Property Holdings (Kenya) Limited having entered into a lease agreement on 1st August 2016.

b. That East Africa Property Holdings (Kenya) Limited is the proprietor of the suit premises.

c. That the permitted use of the premises is for commercial offices only.

d. That the lease prohibits the Respondent herein from assigning, sub-letting, charging or parting with possession of the premises without the written consent of the Landlord.

e. That the Respondent has never sublet the premises and has in any event never sought the consent of its Landlord to sublet the premises.

f. That the Respondent has designated the 1st floor of the annexed demised premises as its cafeteria named PKF Cafeteria.

g. That the Tenant/Applicant came into the demised premises as an independent contractor to provide food services at subsidized rates to the Respondent and its employees.

h. That the Tenant was not required to pay rent or service charge and/or any other expense.

i. That before the Applicant started operating the suit premises, it bought the kitchen equipment directly from the outgoing food service provider.

j. That the Applicant has not established to whom money for the purchase of the kitchen equipment was paid to and from which account it came from.

k. That the fire sensors, drainage and plumbing works have been installed and maintained by the Respondent at all times.

l. That there is no Landlord/Tenant relationship between the parties herein.

m. That the Applicant shoulders no costs other than those related to its catering services.

n. That the Applicant obtained access to the suit premises for purposes of ease of cooking only and not as a Tenant, the Respondent had put fittings and furniture already in place.

o. That the Tenant/Applicant is offering substandard food to the Respondent’s employees.

p. That the Respondent has engaged another food provider who has to operate from outside the suit premises as the Applicant herein is still in occupation thereof.  The engagement of another catering entity is costing the Respondents’ employees meals at Kshs 350/- instead of Kshs 250/- they would be paying if they were to use the Respondent’s cafeteria.

q. That the Respondent no longer wishes for the Applicant/Tenant to continue with providing its food services and the Tenant/Applicant ought to vacate.

5. Both parties have filed their written submissions.  I will consider the same in this ruling. From the pleadings filed and the submissions of the parties filed, the key issue that arises for determination is whether there exists a Landlord/Tenant relationship between the parties herein, and if it exists, whether the same is a controlled tenancy and therefore whether ultimately, this Tribunal has the jurisdiction to hear and determine this dispute.  Another issue for determination will be whether the parties are entitled to the prayers they have sought in their respective applications.

6. The following facts are held as common ground between the parties;

a. The Applicant/Tenant is currently in occupation and use of the suit premises.

b. The relationship between the Respondent and the Applicant is not governed by any written instrument.

c. The Tenant/Applicant does not pay any rent, electricity and water bills to the Respondent, indeed, the Tenant does not bear any charges over the suit property.

7. It is a disputed fact as from whom the Tenant purchased the kitchen equipment.  It is also not an agreed fact that the purchase of the kitchen equipment was to be the consideration for the Tenant’s continued stay at the suit premises and for how long.  At most, the terms governing the relationship between these two parties are vague and uncertain, the standard conditions in leases, written or otherwise are not clear in the obtaining circumstances.

8. Section 2 of Cap 301 defines a Landlord as follows;

“Landlord” in relation to a tenancy means the person for the time being entitled as between himself and the Tenant to the rents and profits of the premises payable under the terms of the tenancy.”

9. The same section defines rent as follows;

“Rent” includes any sum paid as valuable consideration for the occupation of any premises and any sum paid as rent or hire for the use of furniture or as a service charge where premises are let furnished or where premises and furniture therein is hired by the Landlord to the Tenant or where premises furnished or unfurnished are let with services.”

10. The Applicant in this case does not pay any rent for the suit premises.  It also does not pay for water or electricity.  It is clear that the Applicant was allowed to occupy the premises in consideration of supplying food to the members of staff of the Respondent at subsidized prices.  I do not understand this to mean that the Applicant was to say in the suit premises for an indefinite period of time.  The Applicant also states that it kept its end of the bargain by purchasing the kitchen equipment.

11. The kitchen equipment was purchased by the Applicant for its own use.  It has not been suggested anywhere that the Respondent was to retain the kitchen equipment after the Tenant was done with it.  I also note that it has been suggested by the Respondent that the kitchen equipment was purchased by the Applicant from a previous entity who operated the canteen.

12. The Respondent’s occupation of the suit premises is hinged on a lease agreement signed between itself and East Africa Property Holdings (Kenya) Ltd.  Clause 3. 10. 1 of the said lease agreement is in the following terms;

3. 10. 1 Not to assign, sublet, charge or part with possession of the premises or any part thereof without the written consent of the Landlord had and obtained and if any charges holding a charge over the property and the building or the premises and it is hereby expressly agreed and declared that upon any breach by the Tenant of this covenant it shall be lawful for the Landlord to reenter upon the premises without notice and thereupon the term shall determine absolutely.

13. The Respondent has categorically stated that it has not leased out the suit premises to the Applicant.  The Respondents’ position is that it has no authority to sublet the premises without the consent of the (its) Landlord and as a matter of fact no consent has been had obtained.  The Applicant has not challenged this position taken by the Respondent and I do find that indeed, the Respondent never obtained any consent from its Landlord to sublet the premises.  Any purported sublease would have been void for the lack of the said consent.

14. A Landlord/Tenant relationship is basically a contract between the parties.  It has to satisfy the basic conditions of offer, acceptance and consideration.  In the instant suit, the consideration for the tenancy on the part of the Tenant/Applicant would be the payment of rent.  The Applicant in this case does not pay any rent to the Respondent and the Respondent in any case, would not be entitled to any rent over the premises as it cannot sublease the same in the absence of its Landlord’s consent.

15. In these circumstances, I am not satisfied that there exists a Tenant/Landlord relationship between the parties herein, very much less so a controlled tenancy.  The relationship between the parties is anything but a controlled tenancy.

16. In the absence of a Landlord/Tenant relationship between the parties herein, the Tribunal has no jurisdiction to hear and determine the dispute herein and I so find.

17. In these circumstances, the Tenant’s reference to the Tribunal dated 28th June 2019 is dismissed for want of jurisdiction. For the avoidance of doubt, any orders granted in this matter are hereby discharged.

18. The Applicant shall bear the costs of these proceedings.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

RULING DATED, SIGNED AND DELIVERED VIRTUALLY BY HON P. MAY (VICE CHAIR) THIS 24TH DAY OF FEBRUARY, IN THE PRESENCE OF MS AKUNGA FOR THE LANDLORD AND IN THE ABSENCE OF THE TENANT.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL