Charles M Taiti t/a Plumbline Hardware v Geramu Investment Limited [2021] KEBPRT 116 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL AT NAIROBI

TRIBUNAL CASE NO. 897 OF 2020 (CONSOLIDATED WITH BPRT CASE NO.898 OF 2020)

CHARLES M TAITI

T/A PLUMBLINE HARDWARE......................LANDLORD/APPLICANT

VERSUS

GERAMU INVESTMENT LIMITED...............TENANT/RESPONDENT

JUDGEMENT

A. Parties and Representatives

1. The applicant Rufus Mbaya T/A Wanjamba Insurance is the tenant and rented space on the suit premises in Plot No. LR. 1870/60 Muthithi Road, Westlands  (“hereinafter known as the “tenant”).

2. The firm of S.G Mbaabu & Co. Advocates represent the Applicant/Tenant in this matter. Sgadvocates8@gmail.com

3. The Respondent Geramu Investment Limited is the Landlord and owner of Plot No.LR. 1870/60 Muthithi Road, Westlands Nairobi for the business (hereinafter known as the ‘tenant’)

4. The firm of Kimani & Michuki Advocates represent the Respondent/Landlord in this matter. info@kmichuki.co.ke

B. The Dispute Background

5. On 31st October 2021, the Landlord issued the Tenant with a Notice of Termination of Tenancy in line with Section 4 (2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301 Laws of Kenya (hereinafter “the Act”), which notice was to take effect from 31st December 2021. The grounds of termination of the tenancy as stated in the notice was that the Landlord intended to do demolish the existing premises and develop them which would not be possible without obtaining vacant possession.

6. Subsequently, the Tenants in opposing the said notice of termination of the tenancy filed two references before this Honourable Court dated 13th November 2020.

C. The Tenant’s Claim

7. The Tenants filed references dated 13th November 2020 which pleadings form the basis of this claim.

8. The Tenant filed a further affidavit dated 27th August 2021.

D. The Landlord’s Claim

9. The Tenant has filed a replying affidavit dated 31st May 2021.

10. Parties have filed submissions and the matter was fixed for ruling on 29th November 2021.

E. List of Issues for Determination

11. It is the contention of this Tribunal that the issues raised for determination are as follows;

Whether the Landlord’s notice of termination of Tenancy dated 31st October 2021 is lawful and valid?

F. Analysis and Findings

Whether the Landlord’s notice of termination of tenancy dated 31st October 2021 is lawful and valid?

12. The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya Act at section 4(2) provides that:

A Landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition in, or right or service enjoyed by the tenant under, such a tenancy, shall give notice in that behalf to the tenant in the prescribed form.

13. Section 4(4) further provides that:

No tenancy notice shall take effect until such date, not being less than two months after the receipt thereof by the receiving party, as shall be specified therein

14. In the case of Manaver N. Alibhai T/A Diani Boutique vs. South Coast Fitness & Sports Centre Limited, Civil Appeal No. 203 of 1994 it was stated as follows;

“The Act lays down clearly and in detail, the procedure for the termination of a controlled tenancy. Section 4(1) of the Act states in very clear language that a controlled tenancy shall not terminate or be terminated, and no term or condition in, or right or service enjoyed by the tenant of, any such tenancy shall be altered, otherwise than in accordance with specified provisions of the Act.  These provisions include the giving of a notice in the prescribed form.  The notice shall not take effect earlier than 2 months from the date of receipt thereof by the tenant.  The notice must also specify the ground upon which termination is sought. The prescribed notice in Form A also requires the landlord to ask the tenant to notify him in writing whether or not the tenant agrees to comply with the notice.”

15. In this case the Landlord issued the Tenant with a notice to terminate tenancy on 31st October 2020 which was to take effect from 31st December 2020. Based on the above provision, the said notice was to take effect after two months which is as per the provisions of Cap 301. As such the said notice can be deemed to be valid.

16. Having established that the notice issued by the Landlord to the Tenant was valid, the main question for determination before this Tribunal is with regards to the substance of the said notice.

17. The Tenant in their submissions have averred that the main reason for their opposition of the notice is that it was not issued for genuine reasons, that the demolition by the Landlord was questionable.

18. Section 7(1) (f)of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya Actprovides that some of the grounds upon which the Landlord may seek to terminate tenancy include;

(f) that on the termination of the tenancy the landlord intends to demolish or reconstruct the premises comprised in the tenancy, or a substantial part thereof, or to carry out substantial work of construction on such premises or part thereof, and that he could not reasonably do so without obtaining possession of such premises

The court provided a threshold that Landlords have to meet before they can satisfactorily be granted possession and stated as follows:

“For this purpose the Court must be satisfied that the intention to reconstruct is genuine and not colourable: that it is a firm and settled intention, not likely to be changed: that the reconstruction is of a substantial part of the premises, indeed so substantial that it cannot be thought to be a device to get possession; that the work is so extensive that it is necessary to get possession of the holding in order to do it; and that it is intended to do the work at once and not after a time. Unless the Court were to insist strictly on these requirements, tenants might be deprived of the protection which Parliament intended them to have. It must be remembered that, if the landlord, having got possession, honestly changes his mind and does not do any work of reconstruction, the tenant has no remedy. Hence the necessity for a firm and settled intention

21. It was also stated in the case of Fisher v Taylors Furnishing Stores Ltd[1956] 2 All ER 78,that;

There must, therefore, be an intention and it must be an intention which in point of time is related to the termination of the current tenancy. It seems to me that the intention must be to do one of the following things: (i) to demolish the premises comprised in the holding; or (ii) to reconstruct the premises comprised in the holding; or (iii) to demolish a substantial part of the premises comprised in the holding; or (iv) to reconstruct a substantial part of the premises comprised in the holding; or (v) to carry out substantial work of construction on the holding; or (vi) to carry out substantial work of construction on a part of the holding.

If the landlord prove an intention to do one of those things, and to do it on the termination of the current tenancy, he must then prove that he could not reasonably do it without obtaining possession of the holding.

19. In the current case the notice issued by the Landlord stated that the grounds for termination were to demolish the existing premises and develop the property. From the case above, the grounds stated by the Landlord have been included the demolition suffices as “proof of intention as and that they cannot reasonably carry out the demolitions and developments without terminating the tenancy

20. In an attempt to proof their intention, the Landlord has annexed in their replying affidavit a proposed development plan over the property, an affidavit on proof of funds where the Landlord explains in detail how they intend to acquire funds to carry out the said developments. The Landlord has also provided valuation reports of properties that they intend to charge to acquire resources for the said developments.

21. The Tribunal is also persuaded by the averments of the Landlord guided by the documentation produced and Kobil Petroleum vs Almost Magic Merchants Ltd 2010 eKLR the issue of Tenants needs to be resolved first to enable banks to lend or joint ventures to be negotiated I also note that in their submissions the landlord states that one of the Tenants of the premises has already proceeded to look for alternative premises. I have also noted that the matter was adjourned severally at the Tenant’s request.

22. Based on the above evidence by the Landlord it is the contention of this Tribunal that the Landlord has sufficiently shown that there exists a firm and real intention to demolish the existing premises for purposes of carrying out developments on the same. On this basis therefore, I find that the Landlord has convinced this Honourable Court that the renovations to be conducted in the suit premises are substantial and extensive in nature and require vacant possession of the suit premises.

G. Orders

a) The Tenant’s references dated 13th November 2020 are hereby dismissed.

b) The Tenant shall grant the Landlord vacant possession of the premises within 30 days’ failure to which the Landlord is at liberty to reclaim the suit premises through break in with the assistance of Parklands Police.

c) Each party shall bear their own costs

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

JUDGEMENT DATED, SIGNED AND DELIVERED VIRTUALLY BY HON A. MUMA THIS 30TH DAY OF NOVEMBER, 2021 IN THE PRESENCE OF MUTURI FOR THE TENANT AND IN THE ABSENCE OF THE LANDLORD.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL