Asiyo v National Cereals & Produce Board [2022] KEBPRT 4 (KLR)

Asiyo v National Cereals & Produce Board (Tribunal Case E590 of 2021) [2022] KEBPRT 4 (KLR) (15 April 2022) (Judgment)

Neutral citation: [2022] KEBPRT 4 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E590 of 2021

Gakuhi Chege, Vice Chair

April 15, 2022

Between

Isaac Sero Asiyo

Applicant

and

National Cereals & Produce Board

Respondent

Judgment

1. The tenant moved this Tribunal by a reference filed on 11th June 2020 which is both undated and unsigned. He complained that he had not been paid by the Landlord/Respondent for transport services he offered to it. It is pleaded that the tenant has been offering transport services to the landlord which should be used to settle rent arrears.

2. The tenant filed an application for injunction dated 11th June 2020 pursuant to which interim orders were granted at the ex-parte stage pending hearing and determination of the application. The application is supported by the tenant’s affidavit sworn on even date and the grounds on the face thereof.

3. The tenant deposes that he offers transport services to the landlord and at the same time has a lease agreement with the latter in respect of premises known as office no. 54 and 55 measuring about 420sq ft at Gilfillian head office Nairobi City as per annexure ‘JSA-1’ dated 10th July 2017.

4. It is deposed that the landlord has failed to pay for transport services to the tenant so as to offset rent arrears in time. On 1st April 2020, a demand notice for Kshs.683,250/- was issued to the tenant marked ‘JSA-2’ to which he responded vide ‘JSA-3’.

5. On 18th May 2020, the landlord wrote back to the tenant vide annexure ‘JSA’-4 and in paragraph 2 acknowledged that the tenant was engaged as a transporter and was owed Kshs.194,726/-.

6. According to the tenant, the landlord advised him to wait for release of funds from the National Government yet he had no contractual agreement with the latter as proposed in the response letter. The tenant was threatened with distress for rent arrears yet according to him, it is the landlord who had failed to pay for services rendered to it.

7. The tenant deposes that the intended actions of the landlord will occasion great loss to him when he has not been paid by the latter for services rendered.

8. Through a replying affidavit sworn by Fredrick Akello, a legal officer with the landlord, he confirms the landlord/tenant relationship for a term of 5 years from 10th July 2017 to June 2022. According to the lease agreement marked ‘FA1’ the initial monthly rent of Kshs.18900/- plus VAT of 16% to make altogether Kshs.21,924/- was payable in advance on or before 5th day of each month. Any rent default would attract a penalty of 5% per month in addition to the outstanding rent. Rent was agreed to escalate at a rate of 5% annually with a minimum of Kshs.500/-.

9. As at April 2020 the tenant is said to have been indebted to the tune of Kshs.763,763. 92 as per annexure ‘FA3’. On 22nd May 2020 the landlord issued the tenant with a notice of termination of tenancy marked ‘FA4’.

10. The deponent states that the Respondent is a total stranger to the alleged transport facility and that the Tribunal is not the right forum for such claims. In any event the allegations have not been substantiated with any written contract between the parties herein.

11. According to the respondent, paragraph 14 of the tenancy agreement allows the landlord to terminate the tenancy, re-enter the demised premises and repossess the office whenever rent or any amount is in arrears for 14 days.

12. The Respondent contends that the application is an abuse of court process and the orders issued on 12th June 2020 ought to be vacated and the tenant ordered to pay the amount due and vacate the premises.

13. In a further affidavit sworn on 30th April 2021, the tenant contends that there was an agreement to suspend implementation of the 5% penalty per month on any rent in default since he was a transporter with the Respondent and enjoyed a very close relationship with it.

14. According to the tenant, the tenancy agreement was executed in utmost good faith and trust notwithstanding mistakes therein without amendments in the interest of time.

15. The tenant acknowledges that the Tribunal ordered him to pay rent for the months of January to April 2021 but instead it wrote to the Respondent to transfer Kshs.194,726/- from his account with NCPB to his rent account which would cater for the 1st quarter rent for the year 2021.

16. Through a second motion dated 24th September 2021, the tenant is seeking to be granted an order for unlimited access to his office and car park and to remain in office no. 54 and 55 uninterrupted until the current suit is heard and determined. The application is supported by the tenant’s affidavit of even date and the grounds on the face thereof.

17. The said application is opposed through a replying affidavit of Charles Too who is an accountant with the Respondent which reiterates the contents of the replying affidavit sworn on 14th August 2020. It is deposed that as at 25th August 2021, the tenant owed the landlord Kshs.958,520/69 as per the statement of account marked CT2.

18. The application is challenged on the basis that it is fatally defective and that the Tribunal has no jurisdiction to determine matters concerning transport logistics. The landlord contends that the tenant is only entitled to enjoy benefits of the premises if he pays the due amounts but he has not come to court with clean hands. As such he is disentitled to the equitable reliefs sought.

19. The applications were ordered to be subsumed in the main reference and both parties directed to comply with order 11 of the Civil Procedure Rules. The landlord complied but the tenant did not.

20. On 18th January 2022 the landlord filed an application seeking that the tenant be ordered to provide security for due rent and in the alternative, the rent be assessed by the Tribunal with the tenant being ordered to pay and in the alternative the landlord be authorized to levy distress for rent.

21. The application is supported by the affidavit of Charles Too sworn on 11th January 2022 which reiterates the contents of his previous affidavit sworn on 15th October 2021 save that the rent arrears had increased to Kshs.966,413/23.

22. Although the hearing date of 15th March 2022 was fixed by consent of both parties, only the landlord and its lawyer and witness appeared. The matter therefore proceeded ex-parte after the tenant’s advocate failed to pick calls even after having earlier confirmed to the landlord’s advocate of being aware and ready to proceed.

23. The landlord’s witness one Charles Kipyegon Too adopted the witness statement filed in court. He stated that the arrears stood at Kshs.1,046,359/50 as at the end of February 2022. The witness sought for a breaking order, distress and eviction against the tenant.

24. The issues for determination herein are:-a.Whether the tenant is entitled to the reliefs sought herein.b.Whether the landlord is entitled to the reliefs sought in the application dated 18/1/2022. c.Who is liable to pay costs of the reference?

25. The tenant is seeking for an equitable remedy of injunction against the landlord. The landlord contends that the tenant has failed to discharge his principal obligation of paying rent. On the other hand, the tenant claims that his failure to pay rent was occasioned by the landlord’s failure to pay for transport services provided to it by him valued at Kshs.194,726/-.

26. I have looked at the tenancy agreement entered into between the two parties in the year 2017 and the same has no provision that the tenant would pay rent out of proceeds of transport services rendered to the landlord neither does it have a provision for set off of rent against any other debt owing between the parties.

27. Clause 9 of the said agreement states as follows:-9. The tenant paying rent herby reserved and observing the terms of this agreement, landlord shall not interfere with the quiet and peaceful possession of the demised premises”.

28. Clause 14 of the agreement further provides as follows:-“14. Provided however that if the said rent or any part thereof shall be in arreas for the space of fourteen (14) days next after any of the days whereupon the same ought to be paid (whether formally demanded or not) or if their (sic) shall be any breach, non-performance or no observance by the lessee any of the lessee’s conditions then and in any case it shall be lawful for the landlord (although the landlord) may not have taken advantage of some previous or default of a like nature to re-enter the demised premises and repossess the leased office anything herein contained to the contrary in any way notwithstanding and without prejudice to any right of action or remedy of the landlord in respect of any antecedent breach of any of the tenant’s covenants”.

29. By the time, the landlord’s witness testified, the rent due by the tenant was Kshs.1,046,359/50 excluding the month of March 2022. The tenant came to this Tribunal after the landlord demanded payment of Kshs.683,250. 29 in outstanding rent as at 7th April 2020. The tenant did not dispute owing rent arrears to the landlord but claimed to have been owed money for transport services provided to it. In my considered view, this Tribunal has no jurisdiction to deal with the tenant’s claim for unpaid transport services by way of counter-claim or otherwise. The same is not part of the tenancy agreement or within the contemplation of the two parties at the time they entered into the agreement subject matter hereof.

30. The duty of a court of law is to interpret and enforce contracts made by parties and not to make new contracts for them. This was settled in the case of Jiwaji and Others v Jiwaji and Another (1968) EA 547 wherein Sir Charles Newbold, P at page 554 letter B-D had the following to state:-“………………But where there is no ambiguity in an agreement, it must be construed according to the clear words actually used by the parties, and it would be quite wrong to adopt a different construction or to imply a term to the contrary effect. As lord Halsbury, L.C said in Smith v Cooke (1891) A.C at P. 299):.“I must say I for one have always protested against endeavouring to construe an instrument contrary to what the words of the instrument itself convey, by some sort of preconceived idea of what the parties would or might have intended when they began to frame their instrument”.“……….i think I am not entitled to put into the instrument something which I do not find there, in order to satisfy an intention which is only reasonable if I presume what their intentions were. I must find out their intentions by the instrument which they have executed and if I cannot find a suggested intention by the terms of the instrument which they have executed, I must assume that their intentions were only such as their deed discloses”.

31. I am guided by the foregoing decision convinced beyond any peradventure that the tenant having failed to pay rent, the landlord was entitled to re-enter the demised premises and repossess the leased office as provided under clause 14 of the tenancy agreement.

32. It is trite law that he who comes to equity must come with clean hands. A tenant who has failed to meet his cardinal obligation to pay rent in my considered view is not entitled to the equitable remedy of an injunction. I am guided in this regard by the decision in the case of Samuel Kipkori Ngeno & Another v Local Authorities Pension Trust (Registered Trustees) & Another (2013) eKLR at paragraphs 9 & 12 where it was held by the superior court as follows:-9. A tenant’s first and main obligation is to pay rent as and when it becomes due, for the landlord has the right to an income from his investment……………..”.12. The temporary injunction sought in the present application is an equitable remedy at the court’s discretion. He who comes to equity must come with clean hands. A tenant who is in huge arrears of rent is underserving of the court’s discretion. The court cannot be the refuge of a tenant who fails to meet his principal obligation of paying rent as and when it becomes due”.

33. In the premises, the tenant is disentitled to the reliefs claimed in the reference and subsequent applications filed herein.

34. On the other hand, the landlord has clearly demonstrated that the tenant is indebted to it in respect of rent arrears in excess of Kshs. 1 million. It was therefore entitled to exercise the options set out in the tenancy agreement under clause 14 thereof. The tenant rushed to court on account of a mere demand letter to pay what was lawfully due to the landlord. It is my considered holding that the tenant had no cause of action against the landlord.

35. In the premises, the following final orders commend to me in this matter:-i. The tenant’s reference which is undated and unsigned is hereby dismissed with costs.ii. The tenant’s applications dated 11th June 2020 and 24th September 2021 are hereby dismissed with costs.iii. The interim orders given on 11th June 2020 are hereby discharged and/or vacated forthwith.iv. The landlord’s application dated 18th January 2022 is allowed and the landlord is authorized to levy distress against the tenant’s properties in the demised premises using a licensed auctioneer.v. The landlord shall not be required to pay further court fees for the distress in view of the history of this case.vi. The landlord’s costs are assessed at Kshs.50,000/- all inclusive.

It is so ordered.RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS15TH DAY OFAPRIL 2022. **HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNAL