Erotekt Kenya Limited v Mary Adhiambo Okech [2021] KEBPRT 321 (KLR)

REPUBLIC OF KENYA

IN THE BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 43 OF 2020 ( KISUMU)

EROTEKT KENYA LIMITED.......................................................................TENANT

VERSUS

MARY ADHIAMBO OKECH.................................................................LANDLORD

JUDGEMENT

1. The tenant approached the Tribunal by filing the present reference on 10th November, 2020 citing frustration and deliberate breach of clause 6 of the lease agreement by the Landlord. Contemporaneously with the reference, the tenant filed an application brought by way of certificate seeking temporary orders of injunction.

2. The Landlord upon being served entered appearance and subsequently filed a separate rather turgid notice of motion seeking a plethora of prayers including orders of eviction against the tenant.

3. The two applications were placed before the Hon Chairman on 1st December, 2020 whereby he issued directions on the same. The directions in a Solomonic manner struck a balance in protecting the interests of the two protagonists herein. The parties complied with the said directions and would appear before me on diverse dates for further directions.

4. The parties agreed to have the applications and reference dealt with simultaneously and be canvassed by way of written submissions when they appeared before me on 10th June, 2021. The parties complied by filing their submissions in support of their respective positions.

FACTUAL BACKGROUND:

5. It is not disputed that the parties herein entered into a lease agreement sometimes on 1st March, 2019. The lease was for a period of five years. The terms of the lease are largely not disputed by the parties.

6. It is important to note that the said lease created controlled tenancy as envisaged by Section 2 of Cap 301 which defines a controlled lease as:

“controlled tenancy” means a tenancy of a shop, hotel or catering establishment—

(a) which has not been reduced into writing; or

(b) which has been reduced into writing and which—

(i) is for a period not exceeding five years; or

(ii) contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof; or

(iii) relates to premises of a class specified under subsection (2) of this section

7. The Tribunal is therefore seized with the jurisdiction to hear an determine the present reference.

8. The tenant contends that it commenced renovations on the demised premises sometimes back in full accordance with the provisions of clause 6 of the lease agreement. The landlord was aggrieved by the said renovations as she believed they were carried out without her consent in blatant and flagrant breach of the provisions of the said clause 6.

9. It is against this background that the Landlord proceeded to issue a demand notice and a subsequent notice to vacate to the tenant sometimes in October 2020. The tenant protested the notices by filing the present reference.  As stated earlier, both parties filed interlocutory applications. This judgement shall however delve on the reference as the same shall conclusively dispense with the merits of the two applications.

ANALYSIS:

10. I have considered the pleadings and the submissions filed by the parties herein together with the various annexures which leads me to the conclusion that the dispute between the parties is anchored on the interpretation of clause 6 of the lease agreement. I shall reproduce the same:

“The lessee shall effect any necessary and reasonable improvements and renovations not structural in nature to make the premises more suitable for the intended bar and restaurant business. However expenses incurred on the current want of reparation shall be borne by the Lessee and recovered from the rent. The parties shall perform a joint inspection prior to the repairs being effected.”Emphasis mine

11. From the onset, I will state that this Tribunal shall refrain from rewriting contracts for the parties as the position in law with regard to the binding nature of a contract executed willingly by the parties has now followed a well beaten path. In National Bank of Kenya Ltd versus Pipe Plastic Samkolit (K) Ltd & another [2011] eKLR, the Court was categorical that:

“it is clear beyond para adventure, that save for those special cases where equity might be prepared to relieve a party from a bad bargain, it is ordinarily no part of equity’s function to allow a party to escape from a bad bargain.”

12. The Court explicitly pronounced itself in Pius Kimaiyo Langat versus Co-operative Bank of Kenya Ltd [2017] eKLR,after reviewing case law on the subject reiterated as follows:

“We are alive to the hallowed legal maxim that it is not the business of Courts to rewrite contracts between parties. They are bound by the terms of their contracts, unless coercion, Fraud or undue influence are pleaded and proved.”

13. I am guided by the above decisions from superior courts and will proceed as follows. It is not disputed that the tenant carried out renovations and or modifications on the demised premises. The tenant has made a spirited argument that the renovations were necessitated by the need to make the premises more commercially viable.

14. The parties agreed in their lease agreement that they shall perform a joint inspection prior to the renovations by the tenant. The tenant has stated that there was a joint inspection before the renovations were carried out. The landlord has denied the same.

15. Section 107 of the Evidence Act places the burden of proof on the party alleging the existence of a fact. The tenant was under a duty to prove that there was a joint inspection before the renovations commenced. The tenant has not convinced the Tribunal as no report has been filed neither did, they file a statement by the expert who carried out the inspection. They tenant has therefore failed to discharge their duty as imposed by statute.

16. Having made the above determination, I will turn to the issue of the validity of the notice to vacate issued by the Landlord on 15th October, 2020.  The process of terminating controlled tenancy by a Landlord is provided for under Section 4(2) of Cap 301 which state as follows:

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.

17. The grounds for termination of the tenancy by the Landlord are espoused under section 7 of the said Cap 301. The landlord is allowed to terminate the tenancy where the tenant has breached their obligations. In the present reference, the Landlord was justified to breach the tenancy.  However, the notice to vacate issued by the Landlord seeking that the tenant vacates immediately and threatening to impose an eviction after the lapse of 30 days was irregular and unlawful as it offends the provisions of section 4 of Cap 301.  The spirit of Cap 301 is to create a balance between protecting the interests of both the Landlord and the tenant. Termination of leases in the manner proposed by the Landlord shall lead to anarchy and great losses.

18. The landlord made a prayer for the payment of damages in the sum of Kshs. 950,000. The same has not been substantiated as no documentation has been tendered in support of the said claim. This claim therefore falls.

19. In the end, I make the following orders:

i.The notice to vacate dated 15th October, 2020 is hereby dismissed. The landlord shall be at liberty to issue a fresh notice of termination that conforms with the provisions of Cap 301.

ii.Each party shall bear their own cost.

It is so ordered.

Judgment, Dated, Singed and Delivered this 8th Day of  September 2021.

HON. P. MAY

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

In the presence of:

Ranah holding brief for Wachakana for the Tenant

Onguro for the Landlord