Eric Godwin Mwadime v Abbas Brothers [2021] KEBPRT 300 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 138 OF 2020 (MOMBASA)

ERIC GODWIN MWADIME....................TENANT

VERSUS

ABBAS BROTHERS............................LANDLORD

RULING

1.  The Tenant’s application dated 27th May 2020 seeks the following orders;

a.  Spent.

b.  That this honourable Tribunal be pleased to direct he Landlord to lower the current rent from Kshs 40,000/- to Kshs 32,000/-.

c.  That the lowered rent be backdated from 2015to date.

d.  Costs.

2.   The main ground upon which the application is brought is that in the year 2015, the size of the rented space was reduced to 40 feet by 20 feet from the original space of 40 feet by 25 feet and that the Tenant continues to pay rent of Kshs 40,000/- for a space smaller than the space the said rent is meant for.  The application is supported by the affidavit of Eric G. Mwadime, I have read and considered the same in this ruling.

3.   The application is opposed.  The Landlord has filed a replying affidavit the highlights of which are as follows;

a.  That the relationship between the parties herein is regulated by the contract of lease dated1st December 2015. The lease is for a period of five years, six months from 1st December 2015.

b.  That the rent for the premises has been evaluated on orders of the Tribunal at Kshs 74,700/- by the valuation report dated 5th December 2014.

c.  That on 2nd October 2010, the rent for the demised premises was assessed at Kshs 45,000/-.  (The court date as appears on the order is 2nd October 2015 and not 2nd October 2010 as indicated in the affidavit.

d.  That the lease agreement was made on1st December 2015while the court orders were made on 2nd October 2015.

e.  That the Tenant was therefore oware of the actual space as at 1st December 2015 before signing the lease agreement.

f.   That the court ought not to interfere with the relationship of the parties.

4.   The Tenant/Applicant has filed his submissions and I proceed to summarize the same as follows;

a.  That the principles guiding the assessment of rent are found in form G under the regulations.

b.  That the premises herein were leased absent any building or structure.

c.  That it is the Tenant who has carried out all the developments/improvements on the suit premises.

d.  That the Tenant’s claim arises from a reduction of the leased area from 269. 56 square meters to 223 square meters as a result of a road excission by the County Government of Mombasa.

e.  That the Tenant has filed a valuation report prepared by Wesco Property Consultants dated 24th May 2021.

f.  That the area captured in the lease reduced greatly as a result of the road carved out of the space aforementioned, the excised portion forms part of what was leased out to the Tenant.

5.   The Respondent’s submissions may also be summarized as follows;

a.  That the Tenant’s application seeks to rewrite the contract between the parties.

b.  That the issue between the parties herein was determined on merits inBPRT No 41/2014wherein the monthly rent was assessed atKshs 45,000/-from 1st March 2014.

c.  That the matter is thus res judicata and the Tribunal is barred from hearing and determining it.

d.  That on 1st December 2015, the Tenant entered into a lease agreement with the Landlord on a five years, six months term at the agreed monthly rent of Kshs 40,000/- amongst other terms.

e.  The Applicant now seeks to have the rent reviewed downwards as a result of a fire accident of 28th January 2015.

f.   The parties are bound by their agreements and the court cannot rewrite the terms of the contracts.

g.  That the lease agreement executed by the parties does not mention the actual size of the property.

h.  That the actual size of the demised premises according to the valuation report by Maina Chege & Co is 229 square meters at a cost of Kshs 156. 86 per square meter.

6.  That being the summary of the respective parties, cases, the following issues, in my view arise for determination;

a.  Whether the tenancy between the parties herein is a controlled tenancy.

b.  Whether the Tenant’s complaint is res judicata.

c.  Whether the Applicant is entitled to the orders sought in his application.

7.   On issue No (a)

a.   The Tenant/Applicant in his supporting affidavit states that he rented the suit premises from the Respondent in 2014.  The Applicant does not state whether the agreement was written or oral.  The Tenant only states that the Tenant verbally promised to lower the rent payable as a result of a fire accident of 28th January 2015.

b.   In his replying affidavit, the Respondent/Landlord has stated that the relationship between the parties herein is governed by the written lease agreement dated 1st December 2015.  The Respondent has annexed the said lease agreement as A – I in the said affidavit.  I have perused the said lease agreement and I do note that it is for a period of five years and six months from 1st December 2015.

c.   I further note that the lease does not contain provision for termination otherwise than for breach of covenant within five years from the commencement thereof.  The Tenant has not denied the lease agreement and on the basis of the material placed before the Tribunal, I do find that the lease has been properly executed by the parties.

d.   The jurisdiction of the Tribunal to deal with matters pertaining to controlled tenancies is donated by section 12 (4) of Cap 301 which is in the following terms;

12(4) in addition to any other powers specifically conferred in it by or under this Act, a Tribunal may investigate any complaint relating to a controlled tenancy made to it by the Landlord or the Tenant and may make such orders thereon as it deems fit.

e.   A controlled tenancy has been defined under section 2(1) (a) of Cap 301 to mean a tenancy of a shop, hotel or catering establishment;

i. Which has not been reduced into writing or

ii.  Which has been reduced into writing and which;

1.   Is for a period not exceeding five years or

2.   Contains provision for termination otherwise than for breach of covenant within five years from the commencement thereof or

3.   Relates to premises of class specified under sub-section (2) of this section.

f.  I have already observed above that the lease agreement between the parties herein is for a period of five years and six months commencing 1st December 2015; and that further the lease agreement does not contain any provision for termination otherwise than for breach of covenant within five years from the commencement thereof.

g. Having so observed, I do find that clearly, the tenancy between the Landlord and the Tenant herein is not a controlled tenancy and therefore the Tribunal lacks jurisdiction to hear and determine this dispute.

8.   On Issue No (b):

a.   The Landlord has stated in his affidavit that the Tribunal on 2nd October 2015, determined the rent payable for the demised premises in BPRT case No. 41 of 2014 as consolidated with BPRT case numbers 40, 44 and 45 of 2014.  The Landlord has annexed the order to that effect issued by the Tribunal on 5th October 2015.  The name of the Applicant/Tenant herein appears in the said order as one of the Applicants.

b.   The Tenant/Applicant has not challenged the said annexed order which clearly shows that the rent payable by the Tenant in BPRT No. 41 of 2014 with effect from 1st March 2014 would be Kshs 45,000/-.

9.   The order on assessment of rent was made on 5th October 2015 and the reference herein was filed on 27th May 2020.  Would the filing of the instant reference be res judicata in view of the determination of the Tribunal over the rent payable for the same premises in BPRT No 4 of 2014?  I think not.

10. Section 9(3) of Cap 301 provides as follows:

“Where a Tribunal has made a determination upon a reference, no further tenancy notice shall be given in respect of the premises concerned, which is based on any of the matters effected by the determination;

a.   In the case of an assessment of rent until after the expiration of two years or

b.   Or in any other case, until after the expiration of twelve months, after the date of the determination, unless the Tribunal, at the time of the determination, specifies some shorter period.”

11. It is evident therefore that two years after the date of determination would place the parties herein in the year 2017/2018.

12. Adjudging this matter res judicata would mean that once a determination on rent payable upon assessment has been made, the same can never be reviewed on interfered with.

13. This is not in agreement with express provisions of the Act, Cap 301 as above highlighted and I do hold that all a party needs to reopen rent assessment is to adhere to the timelines set out under section 9(3) of Cap 301 of the Laws of Kenya.

14. I therefore find that this matter is not res judicata.

15. On Issue No. 3

a.   In view of my finding that this Tribunal does not have jurisdiction to hear and determine this matter, no useful purpose will be served in determining the merits of the application.  Although I have found that this matter is not res judicata, I could only have proceeded to determine the same if the Tribunal had the requisite jurisdiction.

16. In conclusion, the Tenant’s reference dated 27th May 2020 and the notice of motion of the same date are hereby dismissed with costs to the Landlord.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered by Hon Cyprian Mugambi Nguthari this17thday of September, 2021 in the absence of the parties.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL