East Africa Institute of Certified Studies Limited v Kigio Group company Limited & another [2023] KEELC 22280 (KLR)

East Africa Institute of Certified Studies Limited v Kigio Group company Limited & another (Environment & Land Case 247 of 2023) [2023] KEELC 22280 (KLR) (7 December 2023) (Ruling)

Neutral citation: [2023] KEELC 22280 (KLR)

Republic of Kenya

In the Environment and Land Court at Nairobi

Environment & Land Case 247 of 2023

JE Omange, J

December 7, 2023

Between

East Africa Institute Of Certified Studies Limited

Plaintiff

and

Kigio Group company Limited

1st Defendant

Etwons Property Consultants Limited

2nd Defendant

Ruling

1. In the Notice of Motion application dated the 30th June 2023 the Applicant sought the following orders:a.Spentb.Spentc.That pending hearing and determination of this suit, the defendants, whether by themselves, their servants and or agents be stopped and restrained from levying distress or attempting to levy distress on the plaintiff’s goods and property in the land parcel no 4953/45 and 46 Thika Business Centre , Thika Town.d.Costs of the application.

2. The Application was supported by an Affidavit sworn by Daniel Macharia the director of the Plaintiff company who deponed that the 1st Defendant offered to lease property LR No 4953/45/46 through a letter of offer dated 7th February 2019 for a period of 6 years. That they took possession of the property without signing the offer letter after it was agreed that a lease would be executed which would supercede the offer letter. The Applicant deponed that the relationship was a controlled tenancy under Landlord and Tenant (shops, hotels and catering establishments) Act cap 301 of the laws of Kenya and as such was not bound to pay service charge, VAT and other charges that were not rent. It is for this reason that this application is brought to restrain the Defendants from levying distress on their goods for collection of the above-mentioned fees.

3. The 1st Respondent opposed the application by filing a notice of preliminary objection dated 14th July 2023 on grounds that the court lacked jurisdiction to entertain the application and the right court to determine the matter would be the magistrates court at Thika. They also filed a Replying affidavit in which they averred that the Plaintiff/ Applicant has executed a lease agreement dated 1st September 2019 which is a binding contract which provided for payment of service charge, VAT and other charges by the Plaintiff/Applicant. Further, it was contended that the Applicant had acknowledged the arrears owed through various correspondences and could therefore not state that it was not in any arrears.

4. The Respondents argued that given that there existed a valid lease agreement, the matter should determined by the magistrate court. They cited the case of Law society of Kenya Nairobi Branch v Malindi law society and 6 others [2017] eKLR, and the case of Diana Kethi Kilonzo v IEBC and 2 Others.

5. The Respondents further contended that the valid lease agreement executed by both parties, had overtaken the letter of offer and as such the relationship was not a controlled tenancy.

6. The Applicants insisted that the Environment and Land Court has been given powers under Article 162(2) and (3) of the Constitution to hear disputes relating to Environment and the use and occupation of and title to land and further article 165(3)(c) gave unlimited jurisdiction to the court as a court of equal status to the High Court in criminal and civil proceedings. They also relied on the provisions of section 13(1) of the Environment and Land Court Act.

7. The preliminary objection touches on the issue of jurisdiction. As such I will handle it first. Jurisdiction is defined in Halsbury’s Laws of England (4th Ed.) Vol. 9 at page 350 as “…the authority which a Court has to decide matters that are litigated before it or to take cognizance of matters presented in a formal way for decision.”

8. The centrality of jurisdiction is captured by Nyarangi J in the locus classicus of Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] KLR 1, wherein he states:“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 downs its tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.

9. In this particular case the Applicant approached the Environment and Land Court on the grounds that the Tribunal mandated to hear such disputes in section 12 of the Landlord and Tenant (shops, Hotels and Catering Establishments) Act cap 301 was not constituted. It is not in contention that as at the time of filing this suit the Business Premises Tribunal was not constituted. In the absence of a functional Tribunal this court which has both original and appellate jurisdiction would be the appropriate forum to determine an application which would ordinarily be determined at the Tribunal. It is argued that the tenancy is not a controlled tenancy hence it is Thika Magistrates Court which has jurisdiction. I am of the view that the fact that the magistrates court can have jurisdiction over a matter does not strip this court of the original jurisdiction it has.

10. The court will now address the question of whether the Applicant has satisfied the threshold for grant of an injunction. The criteria for issuance of temporary injunctive orders are spelt out in the case of Giella v Cassman Brown [1973] EA 358. First, the Applicant is required to demonstrate a prima facie case with a probability of success. Secondly, the Applicant is required to demonstrate that unless an injunctive order is issued, he /she would stand to suffer irreparable injury that cannot be adequately compensated by an award of damages and lastly, should the court have doubts on both or either of the above two limbs, the application is to be determined on a balance of convenience.

11. The question of whether the tenancy is a controlled tenancy is at the heart of the Plaintiffs case. Section 2 of the Act defines a controlled tenancy as follows:“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—i.is for a period not exceeding five years; orii.contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof; oriii.relates to premises of a class specified under subsection (2) of this section.

12. The court in the case of Al-Riaz International Limited v Ganjoni Properties Limited [2015] eKLR in expounding on the requirements of Section 2 of the Act stated as follows:“In my view, the provisions of section 2 of Cap. 301 are clear. Thus, if a tenancy satisfies any of the conditions provided at section 2, the tenancy automatically becomes a controlled one and subject to the provisions of Cap. 301 and it does not matter whether the parties had agreed that the provisions of Cap. 301 shall not apply to their relationship. Whether the tenancy relationship between the parties herein was a controlled one, which is subject to the provisions of Cap. 301, is a matter of law and cannot be ousted by agreement between parties because that would amount to contracting outside the law.

13. The letter of offer was not executed and as such is not a binding document on both parties. The lease which both parties executed supercedes the unsigned letter of offer. The lease reduced the agreement between the parties in writing and was for a period longer than 5 years. The agreement had a provision for termination for breach of covenant. It clearly falls outside the parameters envisaged by section 2 above for a controlled tenancy.

14. The tenancy not being a controlled tenancy the Applicant did not have protection of not paying other charges such as service charge. It is also on record that the Applicant through its letters to the 1st defendant admitted it was in arrears of rent.

15. I therefore find that the Plaintiff has not established a prima facie case that would warrant grant of an injunction. As such I find the application has no merit and is dismissed. The costs are to abide the outcome of the suit.

DATED, SIGNED AND DELIVERED VIA MICROSOFT TEAMS THIS 7TH DAY OF DECEMBER 2023. JUDY OMANGEJUDGEIn the presence of:Dr. Chokaa for the Plaintiff/ApplicantMr. Kagura for the Defendant/RespondentSteve - Court Assistant