Citadel Real Estates Limited v Mabeya & 4 others [2025] KEBPRT 244 (KLR)

Citadel Real Estates Limited v Mabeya & 4 others (Tribunal Case E793 of 2023) [2025] KEBPRT 244 (KLR) (Civ) (11 April 2025) (Ruling)

Neutral citation: [2025] KEBPRT 244 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E793 of 2023

P Kitur, Member

April 11, 2025

Between

Citadel Real Estates Limited

LandLady

and

Conseray Seme Mabeya

1st Tenant

Susan Gachuki

2nd Tenant

Jane Njeri Kinyenje

3rd Tenant

Martin Njoroge

4th Tenant

John Michael

5th Tenant

Ruling

A. Parties 1. The Landlord is a real estate company and the registered owner of the premises located at Tusker House – Cianda Market (hereinafter referred to as ‘the suit premises’).

2. The firm of Kangethe Waitere & Company Advocates represents the Landlord.

3. The 1st Tenant is a businessperson operating at the shop within the suit premises as tenant of the Landlord.

4. The firm of TLO Advocates LLP represents the 1st Tenant/Respondent.

5. The 2nd tenant is a businessperson occupying the suit premises as a tenant of the landlord however, it has not entered appearance in this suit.

6. The 3rd Tenant is a businessperson operating a business establishment within the suit premises as a tenant of the landlord.

7. The firm of Vusha Onsembe & Mambiri Company Advocates represents the 3rd Tenant/Respondent.

8. The 4th Tenant is a businessperson occupying the suit premises as a tenant of the landlord however, it has not entered appearance in this suit.

9. The 5th Tenant is a businessperson occupying the suit premises as a tenant of the landlord however, it has not entered appearance in this suit.

B. The Dispute Background 10. The Landlord initiated these proceedings by filing a Complaint dated 16th August 2023 with this tribunal, raising a complaint against the tenants for refusing to vacate the premises despite having been served with a legal notice to terminate their tenancy. The Landlord asserts that the notices were duly served and has provided an affidavit of service sworn on 14th April 2023 by Jack M. Mtiso a process server, to substantiate this claim.

11. Prior to filing the suit, the Landlord sought confirmation from the tribunal, through formal communication, on whether any references had been filed by the tenants in opposition to the termination notices. The tribunal responded, confirming that no such references had been made.

12. Subsequently, the Landlord filed a Notice of Motion Application dated 16th August 2023 under a certificate of urgency requesting the tribunal to issue orders directing the tenants to vacate the premises. The Landlord sought to terminate the tenancies on the basis that it intended to undertake renovations on the suit premises. The specific grounds supporting the Landlord's application were clearly outlined within the application itself.

13. The tribunal instructed the Landlord to serve the application on the tenants, which the Landlord claims was done, as evidenced by the affidavit of service filed. Following this, the court issued orders on 27th October 2023 for vacant possession as prayed by the Landlord, granting the Landlord leave to break in, with police assistance, to ensure compliance.

14. The 3rd Respondent, aggrieved by the Landlord’s actions, filed an Application dated 17th November 2023 seeking to stay the execution of the orders and to set aside the ex parte orders previously granted. The application also requested leave to cross-examine the process server regarding the service of the Landlord’s Application dated 16th August 2023 and hearing notices. Similarly, the 1st Tenant filed an Application dated 4th December 2023 seeking to stay execution, set aside the ex parte orders, and cross-examine the process server. Additionally, the 1st Tenant sought leave to file a replying affidavit to the Landlord’s Application.

15. In response, the court granted all parties time to file their responses to the applications and ordered an inspection of the premises to ascertain their vacancy. The 3rd Respondent subsequently filed an application seeking closure of the premises pending the inspection and assessment, but this application was later withdrawn.

16. The court directed the Landlord to file responses to the applications dated 4th December 2023 and 6th December 2023. It also required the respondents to submit written submissions and conduct an inspection of the tenants' goods to assess their condition and whether they were in storage.

17. The Landlord alleged that the 3rd Respondent was in arrears amounting to Kshs. 1,200,000/- and sought permission to attach goods to recover the unpaid rent. The 1st Tenant, on the other hand, claimed to have obtained orders in a prior suit and sought to halt the proceedings before the tribunal.

18. On 15th July 2024, the parties confirmed the filing of responses, further affidavits, and written submissions as well as supplementary submissions, as directed by the court. The Landlord informed the court that the 2nd, 4th, and 5th Tenants had vacated the premises, prompting the withdrawal of the references against them.

19. When the matter came up for ruling, the court directed the parties to physically appear and address the issue of conflicting orders issued by the High Court in Milimani suit E201 of 2023 and the instant suit before the tribunal. The court observed that further deliberations were essential, particularly considering the 3rd Respondent’s counsel’s acknowledgment that their client no longer held tenant status for the premises.

20. During the physical hearing on 12th August 2024, the Landlord and the 3rd Respondent agreed to exchange statements proving rent payments for the year 2023. Similarly, the Landlord and the 1st Respondent agreed to exchange statements demonstrating proof of rent and security deposit payments covering the period from January 2021 to October 2023. It was also agreed that the monthly rent from 15th January 2023 would be at Kshs. 180,000/=.

21. Upon exchanging statements, discrepancies emerged between the Landlord and the 3rd Respondent. The 3rd Respondent claimed to have obtained orders in suit Nairobi E252 of 2023 setting rent at Kshs. 31,000/=. Meanwhile, the 1st Tenant, upon receiving a statement, asserted that it showed no rent arrears as at the time of eviction and that the figure of Kshs. 1,350,000/- pertained solely to storage charges accrued post eviction.

22. The core dispute between the Landlord and the 1st Tenant revolved around storage charges and compensation for renovations. The Landlord contended that the storage charges had been duly communicated. The 1st Tenant contended that the storage charges were exorbitant, being equivalent to the rent, despite the tenant not occupying the premises. Similarly, the 3rd Respondent agreed that the outstanding issues with the landlord included whether the rent was correctly set at Kshs. 31,000/= and whether the goods stored incurred storage charges at the rate of Kshs. 5,000/= per day.

23. The court subsequently directed the parties to dispose of the issues by way of written submissions and the Landlord to file an affidavit providing evidence of the communication regarding the collection of goods and the applicable storage charges.

24. I have thoroughly reviewed the documents submitted by the parties and will refer to them where necessary in my analysis. From this review, I am of the considered view that the following issues emerge for determination.

C. List Of Issues for Determinationa.Whether the Landlord properly served the notice to terminate the tenancies.b.Whether the 1st and 3rd Tenants are liable for the storage charges and whether adequate communication was made regarding these charges.c.Whether the Tenants is entitled to compensation for renovations undertaken on the premises and for the Landlord’s failure to release their goods to them.

D. Analysis And Findings Whether the Landlord properly served the notice to terminate the tenancies 25. The Landlord has provided an affidavit of service sworn by Jack M. Mtiso, the process server, to substantiate that the notice to terminate the tenancies was duly served on the tenants. The tenants, however, dispute the validity of this service. They have not provided any counter-evidence that directly contradicts the affidavit of service.

26. Under Section 4(6) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, service of notices must comply with the prescribed procedure. The Act provides that:-“A tenancy notice may be given to the receiving party by delivering it to him personally, or to an adult member of his family, or to any other servant residing within or employed in the premises concerned, or to his employer, or by sending it by prepaid registered post to his last known address, and any such notice shall be deemed to have been given on the date on which it was so delivered, or on the date of the postal receipt given by a person receiving the letter from the postal authorities, as the case may be.”

27. This section permits service to be carried out on any servant or employee who resides in or is employed at the premises in question. The affidavit of service filed by the Landlord meets the requirements of the law. I find that the notices were validly served on the tenants. Accordingly, this issue is determined in favor of the Landlord.

Whether the 1st and 3rd Tenants are liable for storage charges and whether adequate communication was made regarding these charges. 28. The Landlord alleges that the 1st Tenant is liable for storage charges amounting to Kshs. 1,975,000/=, and contends that communication was made regarding the collection of goods and the applicable charges. It is further claimed that the 3rd Respondent similarly owes storage charges for goods held by the Landlord.

29. In response, the 1st Tenant has contested these charges, describing them as exorbitant and asserting that the Landlord improperly withheld the goods under the guise of distress for rent, despite no rent arrears being owed. The 3rd Tenant contended that the eviction was based on the landlord's intention to carry out renovations rather than rent arrears. Therefore, the landlord had no justification for retaining their goods and imposing storage charges.

30. The Tribunal notes that the Court directed the Landlord to file a Further Affidavit providing evidence of communication regarding the collection of goods and the applicable storage charges. However, the Landlord failed to present sufficient evidence to support this claim. The affidavit merely stated that communication was made to the 3rd Respondent through SMS, without submitting supporting evidence such as records or correspondence to substantiate this assertion.

31. It is a well-established principle under Section 107 of the Evidence Act, Cap. 80, that the burden of proof lies with the party making an assertion. In this case, the Landlord bore the responsibility to demonstrate that proper and timely communication was made to the Tenants regarding the storage charges and the collection of their goods. Unfortunately, the Landlord has failed to discharge this burden by providing adequate proof.

32. The Tribunal also takes note of the Tenants’ claim that there were no rent arrears at the time, and the withholding of goods was unwarranted. This contention remains unchallenged by the Landlord. It is a well-established principle of law that a party alleging a right to possession or claim over property must substantiate their actions and demonstrate lawful justification. In this instance, the Landlord has failed to justify the imposition of storage charges or the continued withholding of the Tenant’s goods.

33. Furthermore, the same reasoning applies to the 3rd Respondent case, who has similarly contested the storage charges. Without clear proof of communication and an agreement to such charges, the Landlord cannot impose liability for the same.

34. In addition, this Tribunal observes that storage charges cannot be deemed applicable in the absence of evidence that the goods were retained under terms agreed upon by both parties. The Landlord’s failure to provide such evidence renders the claim unsustainable.

Whether the Tenants are entitled to compensation for renovations and for the Landlord’s failure to release their goods upon termination. 35. The 1st Tenant in their submissions argue that they are entitled to compensation for renovations carried out on the premises, asserting that the Landlord would unjustly benefit from the enhancements made. The Tenant alleges to have expended a substantial sum of Kshs. 2,450,000/= on renovations that improved the premises and increased its value.

36. Conversely, the Landlord has denied that the renovations claimed by the Tenant were conducted. The Landlord contends that, even if such renovations were made, they were solely tailored to suit the Tenant's specific business needs and not intended for the Landlord's benefit. Further, the Landlord argues that there is no obligation to compensate the Tenant, as the lease agreement does not provide for such compensation. It was also stated that the Tenant is required to restore the premises to its original condition prior to vacating and is free to remove any fixtures related to the renovations.

37. Upon thorough review of the submissions by both parties and the evidence presented, the Tribunal makes the observations that: Firstly, the alleged renovations by the 1st Tenant amounting to Kshs. 2,450,000/= have not been supported by any agreement or written consent from the Landlord approving such works. In this case, there is no documented evidence showing that the Landlord consented to or authorized the Tenant to undertake the said renovations. Without such consent, the claim for compensation cannot be sustained.

38. Secondly, the principle of unjust enrichment, often argued in cases of this nature, does not arise here. For unjust enrichment to apply, there must be evidence that the Landlord accepted or benefited from the improvements knowingly and at the expense of the Tenant. The Landlord has unequivocally stated that they have no intention of utilizing the renovations, as they were allegedly suited to the Tenant’s business operations. Furthermore, the lease agreement explicitly required the Tenant to restore the premises to its original state, negating any presumption that the Landlord sought to benefit from the renovations.

39. It is trite law that he who alleges must prove. This is in accordance with the Evidence Act of Kenya in Section 107, which places a burden of proof on the person who desires any court to give judgment as to any legal right or liability, which is dependent on the existence of facts, which he asserts. The maxim has been grounded in law under Section 107 of the Law of Evidence. The same was enunciated by Justice Majanja in Evans Otieno Nyakwana v Cleophas Bwana Ongaro [2015] eKLR when he said that:“…As a general proposition the legal burden of proof lies upon the party who invokes the aid of the law and substantially asserts the affirmative of the issue. That is the purport of section 107 (1) of the Evidence Act (Chapter 80 of the Law of Kenya), which provides:“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…”

40. Finally, the Tribunal notes that while the Tenant is free to remove any fixtures or fittings introduced as part of the renovations, they are still under an obligation to restore the premises to its original condition. This further underscores the lack of basis for seeking compensation for the alleged renovations.

41. In conclusion, and in light of the applicable legal principles, the Tribunal finds that the 1st Tenant has failed to prove entitlement to compensation for the renovations claimed. Accordingly, the claim is dismissed.

42. I however find that the Landlord unjustly held the Tenant’s goods for purported defaults and / or arrears in rent payment, which issue did not form part of the grounds for their seeking to terminate the tenancies herein and therefore liable to compensate the Tenants.

43. The principle of compensation for unjustified withholding of goods is rooted in equity and justice, ensuring that tenants are protected from undue hardship caused by unlawful actions of landlords. Section 12 of the Act grants the Tribunal broad powers to make orders for the recovery of possession, payment of compensation, or any other relief deemed just in the circumstances. In this case, the Tribunal has exercised its mandate to award compensation to the Tenants for the hardship caused by the Landlord's actions.

44. The withholding of goods by the Landlord was unjustified, as the termination of the tenancy was based on the intended renovations of the premises, not rent arrears or defaults. Section 4(2) of the Act requires landlords to provide clear and valid reasons for terminating a controlled tenancy, and the grounds for termination must be consistent with the notice served. The Landlord's actions in retaining the goods and imposing storage charges were not aligned with the stated grounds for termination, thereby violating the tenants' rights under the Act.

45. Furthermore, Section 6 of the Act provides tenants with the right to refer disputes to the Tribunal for determination. In this case, the tenants contested the imposition of storage charges and the retention of their goods, asserting that these actions were not communicated adequately and lacked lawful justification. The Tribunal has found that the Landlord failed to provide sufficient evidence of communication regarding the collection of goods and the applicable storage charges.

46. The Tribunal also considered the equitable principle of unjust enrichment, which is applicable in cases where one party benefits unlawfully at the expense of another. By retaining the tenants' goods and attempting to impose exorbitant storage charges, the Landlord sought to gain financially without lawful basis. Section 9 of the Act empowers the Tribunal to make decisions that prevent exploitation and ensure fairness in landlord-tenant relationships. The award of compensation to the tenants serves as a remedy for the injustice suffered and a deterrent against similar actions in the future.

47. Additionally, the Tribunal has taken into account the tenants' claim that the retention of goods caused significant disruption to their businesses. Section 12(1)(e) of the Act allows the Tribunal to award compensation for loss or inconvenience suffered by tenants due to the actions of landlords.

E. Orders 48. In light of the foregoing analysis, I proceed to make the following orders;-a.The Landlord shall immediately release to the 1st and 3rd Tenants’ their goods under his custody within 7 days.b.The claim for storage charges against the 1st and 3rd Tenants is dismissed due to insufficient evidence of proper communication from the Landlord.c.The Landlord shall compensate the 1st Tenant a total sum of Kshs. 600,000/=, the equivalent of 4 months’ rent for unjustly holding his goods.d.The Landlord shall compensate the 3rd Tenant a total sum of Kshs. 124,000/=, the equivalent of 4 months’ rent for unjustly holding her goods.e.Costs are awarded to the 1st and 3rd Tenants assessed at Kshs. 60,000/= each.f.File is marked as closed.

HON P. KITURMEMBERBUSINESS PREMISES RENT TRIBUNALRuling dated, signed and delivered virtually by Hon P. Kitur this 11th day of April 2025 in the presence of Ms. Nyambura holding brief for Ms. Waitere for the Landlord and in the absence of the 1st and 3rd Tenants.