Daima Group Limited v Kantaria Investments Ltd; Interfield Auctioneers (Agent) [2025] KEBPRT 279 (KLR)

Daima Group Limited v Kantaria Investments Ltd; Interfield Auctioneers (Agent) (Tribunal Case E1411 of 2024) [2025] KEBPRT 279 (KLR) (9 May 2025) (Ruling)

Neutral citation: [2025] KEBPRT 279 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E1411 of 2024

N Wahome, Chair & Joyce Murigi, Member

May 9, 2025

Between

Daima Group Limited

Applicant

and

Kantaria Investments Ltd

Respondent

and

Interfield Auctioneers

Agent

Ruling

1. This Ruling pertains to file Nos E1411/2024, E1412/2024 and E1413 of 2024. This is as a result of the orders that were made by this court on the 21/1/2025 with the concurrence of all the parties. The said orders and/or directions were to the effect that the orders in E411/2024 would also apply in file Nos. E1412/2024 and E1413/2024.

2. The Tenants applications all of which are dated the 23/12/2024 were founded on Section 12(1) and (4) (L) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap.301) which we hereinafter refer to as “the Act”. The main contention and or prayers are that:-i.Spentii.That the Honourable Tribunal be pleased to issue an order restraining the Landlord/Respondent and their agent Interfield Auctioneers from levying distress and and/or removing the proclaimed goods from the Tenant’s Business Premises.iii.That this Honourable Tribunal be pleased to issue an order prohibiting the landlord and/or their employees, agents, interfiled auctioneers from unlawfully intercepting, harassing, intimidating and/or evicting, closing, attaching or threatening, interfering, or in any manner whatsoever or howsoever with the Tenant/Applicant’s quiet occupation and lawful enjoyment of the suit premises office suite C4 on L.R Nairobi/block 4/277 and Nairobi Block 4/278. iv.That OCS Parklands Police Station to assist in compliance with these orders.v.That costs of this application be in the cause.

3. With the Applications, the Tenants also filed references dated 23/12/2024 all of which complained that:-“The Landlord, Kantaria Investments Limited, unlawfully proclaimed Brett Communications Limited/Dumia Media Services Ltd/Daima Group Limited through Interfiled auctioneers on disputed rent arrears without leave of this Honourable Tribunal, I seek this Honourable Tribunal’s intervention to issue the necessary orders and costs of this case”.

4. The gist of the Tenants/Applicants case is that:-i.The proclamation by the Landlord through M/S Interfield Auctioneers was on disputed rents.ii.The Landlord did not have the authority of the court to effect the levy of distress.iii.The levy of distress did not comply with Cap. 301, the distress for rent Act and the due process of the law.iv.The applications had satisfied all the pre-requisites on the grant of injunctions.

5. On their part, the Respondents filed the Replying Affidavit by Sundaresam Muthukumar sworn on the 23/1/2024. Their evidence is that:-a.The Tenant’s companies which are related continuously owed it Kshs.25,000,000/- since March 2024. b.At the time of the hearing in court, the Tenants jointly owed over Kshs.28,000,000/-.c.The initial lease between the parties was for 6 years but the same became periodic after the expiry of the 6 years.d.The Tenants have never denied being in rent arrears and had admitted as much through correspondences and made promises to settle the same but which were in vain.e.The levy of distress was an inherent right that vested in the landlord and the same had been exercised within the law.f.The Tenants applications were without merit and same should be dismissed.

6. We have perused the parties respective pleadings and the evidence attached, also the submissions thereof and the case law cited and are of the view that the issues for determination herein are the following:-i.Whether the court has jurisdiction to preside over this matter.ii.Whether the Tenants/Applications are merited.iii.Whether the landlord is entitled to levy distress in recovery of the rents in arrears.iv.Who should bear the costs of these proceedings:-

7. On Whether this court has jurisdiction to preside over this matter, we opine that the lease agreements between the parties and dated 21/6/2013 (annexture SM3) which were for six ( 6) years must have lapsed on or about 20/6/2019. Since then, the parties assumed a periodic tenancy and it appears that rent was paid by the Tenant and received by the landlord.

8. There is no indication or anything on record that this arrangement was ever reduced into writing. There however seems to have been movements towards getting into a further understanding which was to be reduced into writing but there is no evidence that the same ever crystalized. What we have on record between the parties is therefore in our view a periodic tenancy.

9. This kind of understanding is governed by Cap 301 and in particular Section 2(1) thereof which states that:-“Controlled Tenancy” means a tenancy of a shop, hotel or catering establishment:-a.Which has not been reduced into writing, orb.Which has been reduced into writing and which-c.Is for a period not exceeding five years, ord.Contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof, or specified under subsection (2) of this section.

10. It then follows that after the expiry of the 6 years lease which expired on the 20/6/2019, the parties assumed a periodic tenancy squarely under the governance of Cap. 301. This court has the wherewithal to supritend over the matters at hand.

11. We now turn on the question of whether the Tenants/Applications have merit. At the outset, we observe that the Tenant despite taint protestations, has not presented any materials to contradict it over Kshs.28,000,000/- at the time of evidence in court.

12. Having perused the court record, we also note hat since March, 2024, the Tenants have continuously been admitting to owing rent to the landlord running to even before the year, 2023. Commitments have also been made by the Tenants to liquidate the ever ballooning rent arrears but all in vain.

13. With this reality, it is our view that the Tenants do not deserve the equitable reliefs sought. To benefit from such remedy, the Tenants required to demonstrate that they had met all their cardinal obligations to the landlord with the principal one being to pay rent as and when the same falls due. This they have not done.

14. In the leading case in this area of jurisdiction namely the case of Samuel Kipkorir Ngeno & Another – vs- Local Authorities Pension Trust (Registered Trustees) and Another (2013) eKLR where Justice Hatari Waweru held that:-“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……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 principle obligation of paying rent as and when it becomes due”.

15. We need not say more on the merit or otherwise of the Tenants applications in view of the above dispositions but only to register our complete concurrence with the same. It is our view also that the Tenants applications herein and all dated 23/12/2024 have no merit especially when looked against non payment of any rent since these matters were lodged in court on the 23/12/2024 todate. We would therefore dismiss the same.

16. There is also the issue of whether the Landlord had the legal legitimacy to commence the levy of distress against the Tenants. This question is answered by Section 3(1) of the Distress for Rent Act Cap 293 which provides that:-“Subject to the provisions of this Act and any other written law, any person having any rent or rent service in arrear and due upon a gran, lase, demise or contract shall have the same remedy by distress for the recovery of that rent or rent service as is given by the common law of England in a similar case”.

17. The interpretation of this Section has been undertaken in several judicial decisions and the primary convergence of all of those decisions is that a landlord who is owed rent in arrears has an inherent right to effect distress without the court’s authority or licence.

18. In the case of John Nthumbi Kamwithi – vs- Asha Akumu Juma (2018) eKLR the court held that:-“I find that the appellant had no obligation to seek permission from the Tribunal to levy distress. The fact that the Tenancy is controlled does not mean that the landlord applies to the Tribunal to levy distress. Distress is a right the landlord is entitled to for recovery of rent”.

19. The court further proceeded to hold that:-“The magistrate erred in finding that the Appellant required orders from the Tribunal to levy distress because the Tenancy was controlled under Section 2(1) of the Act. As I have said earlier, the Act has no provision for applying for orders authorizing for permission of levying of distress of rent from the Tribunal”.

20. We therefore determine that the levy of distress as authorized by the landlord’s counsel and as undertaken by the 2nd Respondent was lawful and in line with the requirements of the law and cannot be faulted in any manner whatsoever.

21. Pursuant to the conventional wisdom of Section 12(1)(k) of the Act and Section 27 of the Civil Procedure Act is that costs follow the event. In this case, the landlord is the successful party and we award costs to it.

22. We do appreciate that having resolved the applications herein in the negative, there is nothing left of the attendant references also dated 23/12/2024. We would therefore resolve the same in the same terms with the said applications.

23. In the final analysis, the orders that commend to us are the following:-i.That the references and applications all dated 23/12/2024 are dismissed.ii.That the Tenant is at liberty to proceed with the execution of the levy of distress as already commenced by M/S Interfield Auctioneers.iii.That the landlord is awarded costs in the file Nos E1411/2024, E1412/2024 and E1413/2024 at Kshs.150,000/-.Those are the orders of the court.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY IN NAIROBI THIS 9TH DAY OF MAY, 2025. HON. NDEGWA WAHOME, MBS - PANEL CHAIRPERSONHON. JOYCE MURIGI - MEMBERRuling delivered in the presence of Mr. Wanyoike holding brief for Mrs. P.N. Ndungu for the Landlord/Respondent and M/S Ndoigo holding brief for Mr. Mumia for the Tenants/Applicants.