Belcom Agencies Limited v Transline Classic Limited [2021] KEBPRT 232 (KLR)

REPUBLIC OF KENYA

IN THE BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. E009 OF 2021

(KISII)

BELCOM AGENCIES LIMITED….……... ……………..………LANDLORD /APPLICANT

VERSUS

TRANSLINE CLASSIC LIMITED. ………..…………………...…TENANT/ RESPONDENT

RULING

1. Before me is an application dated 19th August, 2021 in which the Applicant is seeking for :-

(A) (spent)

(B) THAT  pending the hearing and determination of the application and reference herein this Honorable Tribunal be pleased to issue an order to levy distress against the respondent/tenant.

(C). (spent)

(D) That pending the hearing and determination of this application this Honorable Tribunal be pleased to issue an order of attachment of the tenant’s/Respondent’s moveable properties i.e motor vehicles to wit Matatus and Buses to recover rent arrears of Kenya Shillings Ten Million and Eighty Thousand (10,080,000)

(E) THAT a declaration be issued that the tenancy contract entered on 1st August, 2013 between the claimant and respondent is hereby terminated.

(F) That a declaration be issued that the tenancy contract entered on 1sts August 2013 between the claimant and Respondent is hereby terminated.

(D) That costs of this application be provided for.

2. Although the question of jurisdiction has not been raised in this matter before me, it is my cardinal duty to interrogate the issue and satisfy myself before making any further step in line with the decision in the celebrated case of Owners of the Motor Vessel‘Lillian S’ Vs Caltex Oil (Kenya) Limited [1989] eKLR where it was held at page 8- 9/27 as follows:-

“I think that it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything, without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.

Before I part with this aspect of the appeal, I refer to the following passage which will show that what I have already said is consistent with authority:

“By jurisdiction is meant the authority which a court as to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted, and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognizance, or as to the area over which the jurisdiction shall extend, or it may partake of both these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order to decide whether it has jurisdiction; but, except where the court or tribunal has been given power to determine conclusively whether the facts exist.

Where a court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgement is given”

3. As was stated by the Supreme Court inSamuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others [2012] eKLR:

“A Court’s jurisdiction flows from either the Constitution or legislation or both. Thus, a Court of law can only exercise jurisdiction as conferred by the constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law. ...”

4. The question which arises is whether this tribunal has jurisdiction to order for the levy of distress against a tenant who is in rent arrears and the answer to the question is to be found in Section 12(1) (e) (h) of the Landlord and Tenant (Shops, hotels and catering establishments) Act, Cap. 301 which provides as follows: -

“12. Powers of Tribunals

(1) A Tribunal shall, in relation to its area of jurisdiction have power to do all things which it is required or empowered to do by or under the provisions of this Act, and in addition to and without prejudice to the generality of the foregoing shall have power—

(a) to determine whether or not any tenancy is a controlled tenancy;

(b) to determine or vary the rent to be payable in respect of any controlled tenancy, having regard to all the circumstances thereof;

(c) to apportion the payment of rent payable under a controlled tenancy among tenants sharing the occupation of the premises comprised in the controlled tenancy;

(d) where the rent chargeable in respect of any controlled tenancy includes a payment by way of service charge, to fix the amount of such service charge;

(e) 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;

(f) for the purpose of enabling additional buildings to be erected, to make orders permitting landlords to excise vacant land out of premises of which, but for the provisions of this Act, the landlord could have recovered possession;

(g) where the landlord fails to carry out any repairs for which he is liable—

(i) to have the required repairs carried out at the cost of the landlord and, if the landlord fails to pay the cost of such repairs, to recover the cost thereof by requiring the tenant to pay rent to the Tribunal for such period as may be required to defray the cost of such repairs, and so that the receipt of the Tribunal shall be a good discharge for any rent so paid;

(ii) to authorize the tenant to carry out the required repairs, and to deduct the cost of such repairs from the rent payable to the landlord;

(h) to permit the levy of distress for rent;

(i) to vary or rescind any order made by the Tribunal under the provisions of this Act;

(j) to administer oaths and order discovery and production of documents in like manner as in civil proceedings before the High Court, to require any landlord or tenant to disclose any information or evidence which the Tribunal considers relevant regarding rents and terms or conditions of tenancies, and to issue summons for the attendance of witnesses to give evidence or produce documents, or both, before the Tribunal;

(k) to award costs in respect of references made to it, which costs may be exemplary costs where the Tribunal is satisfied that a reference to it is frivolous or vexatious;

(l) to award compensation for any loss incurred by a tenant on termination of a controlled tenancy in respect of goodwill, and improvements carried out by the tenant with the landlord’s consent;

(m) to require a tenant or landlord to attend before the Tribunal at a time and place specified by it, and if such tenant or landlord fails to attend, the Tribunal may investigate or determine the matter before it in the absence of such tenant or landlord;

(n) to enter and inspect premises comprised in a controlled tenancy in respect of which a reference has been made to the Tribunal.”

5. The Tenant opposed the application by filing the Replying Affidavit sworn by Charles Ogoti Arigisi claiming that it was not in any rent arrears and had in fact paid up to October 2022. The tenant maintained that they have never breached any of the terms of the Agreement.

6. The parties were directed to file submissions. I have considered the same and the pleadings filed by the parties and would proceed as follows:

7. It is not disputed that there exists controlled tenancy between the parties herein. The parties further do not dispute to the payment of Kshs. 4,000,000. The Landlord however states that the same was not to be construed to be part of rent. I have perused the lease and the said amount was acknowledged as rent. The argument by the Landlord that the same did not constitute rent does not hold sway. Parties are bound by the terms of their contracts. See National Bank of Kenya Ltd vs. Pipe Plastic Samkolit (K) Ltd (2002) 2 E.A. 503, (2011) eKLR where the Court of Appeal at page 507 stated as follows: -

A court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and prove

8. Turning to the evidence tendered by the tenant that they have always paid rent as it fell due, it is important to examine the documents filed in support of the said claim. The tenant has stated that they held talks with the Landlord and granted them an advance loan whereby they were issued with post dated cheques. The cheques were addressed to individuals who have been said are directors of the tenant. The same has not been denied by the landlord but rather tried to address the same in the submissions yet they had the opportunity to address it in the further affidavit. He however admits receiving KSH 8,050,000/= from the tenants a sum which the tenants aver was agreed to convert to rent considering non payment of the advance by the landlord.

9. These two parties to the lease agreement have so much going on and in my opinion so much is not being said

10. The process of levying distress for controlled tenancies requires one to obtain the consent of the Tribunal. The Landlord by approaching the Tribunal before levying distress has acted within the full purview of the law.

11. In determining whether Landlord’s right to levy distress had crystallized, I am guided by the decision in Owayo vs. George Hannington Zephaniah Aduda t/a Aduda Auctioneers and another (2007) 2 KLR 140, (2008) EA 287, where the Court of Appeal considered section 3(1) of the Distress for Rent Act and the English common law in dealing with the question of what constitutes illegality for distress for rent. It was stated that an illegal distress is one where there was no right to distrain or where a wrongful act was committed at the beginning of the levy thereby invalidating all subsequent proceedings. The instances of illegal distress were cited as: where distress is by a landlord who has parted with his reversion, distress by a person in whom the reversion has not vested, a distress when no rent is in arrears, a distress for a claim or debt which is not rent, distress after a valid tender of rent has been made, a second distress for the same rent, distress off the premises or on a highway, distress at night and a distress carried out contrary to the law relating to Distress.

12. The tenant has in their responses proffered explanations as to why and how they cannot be in arrears. The rent due according to them stands at 5,480,000/=. This is before factoring in advances of Ksh 8,050,000/= made to the landlord. After factoring in the advance, there is an overpayment. The prayer for leave to  levy distress therefore cannot stand.

13. The upshot of this is that the Landlord’s application is disallowed with costs to the tenant.

14. The costs of this application assessed at Kshs. 62,000/ shall be borne by the landlord.

It is so ordered.

RULING, DATED, SIGNED & DELIVERED THIS  21ST DAY OF SEPTEMBER 2021.

HON. P. MAY

VICE CHAIR

BUSINESS PREMISE RENT TRIBUNAL

In the presence of:

No appearance for Landlord/Applicant

Maroka for the Respondent/Tenant