Express General Insurance Brokers Ltd v Telkom Kenya Limited & Paul N. Waithaka t/a Arvin Park Auctioneers [2021] KEBPRT 181 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 25  OF 2021  (NAKURU)

MS EXPRESS GENERAL INSURANCE

BROKERS LTD....................................................................................TENANT/APPLICANT

VERSUS

TELKOM KENYA LIMITED............................................1ST LANDLORD/RESPONDENT

PAUL N. WAITHAKA T/A

ARVIN PARK AUCTIONEERS.................................2ND RESPONDENT/AUCTIONEERS

RULING

1. Through a motion dated 24th February 2021, the Applicant/Tenant has approached this Tribunal seeking for restraining orders against the Respondents from interfering with its quiet possession of the premises known as L.R No. Kericho Municipality Block 2/69.

2. Prayers (b) and (d) were granted at the ex-parte stage and do not therefore fall for determination.

3. The application is supported by the annexed affidavit of the applicant’s director one Martin Maurice Odhiambo sworn o 24th February 2021 and the grounds on the face of the application.

4. The dispute herein revolves around closure of office premises rented by the applicant from the 1st Respondent.  It is the applicant’s case that its lease was to commence upon completion of the construction and signing the lease agreement and that rent was to be deducted from the cost of construction before future rent could become due and payable.

5. On 21/1/2015, an email authorizing the applicant to access the premises for construction was received.  However, there was need to procure authority of the county Government Engineer but the front office extension approval was missing from their records.

6. Conditional approval was granted on 9/2/20217 subject to availing copies of approvals by Telkom (k) Ltd for construction of the front office extension.  This was not availed despite several follow up on email.

7. As a result, completion of the construction intended by the Applicant stalled.

8. The application is opposed through a replying affidavit sworn on 27th May 2021 by one Thinwa Kagai who is the 1st Respondent’s facility manager.

9. It is the Respondent’s case that the initial offer has made in the year 2014 to the Applicant for a period of 6 years on 10th January 2015, the applicant paid Kshs.191,000/- as security deposit for the office space and executed the letter of offer marked “TK1”.

10. The applicant was responsible for internal repairs of the premises and was granted permission to construct the front office extension on the space it occupied.

11. The applicant was to continue paying rent even as he undertook the renovations.  Although the applicant sought to defray the costs of the renovations against rent, the proposal was not accepted.

12. The applicant continued occupying the premises without paying rent ever since.  The lease term expired in February 2020 automatically terminating the engagement.

13. As at 5th February 2019, the applicant was in rent arrears of Kshs.4,875,425. 73 as per annexture TK3.  It is the Respondents’ case that it would be a travesty of justice for the applicant to be allowed to continue occupying the premises without paying rent.

14. The Respondents oppose the application on grounds that the orders sought are mandatory in nature and that the applicant has not met the principles espoused in the case of Giella vs- Cassman Brown case.

15. The applicant is accused of seeking equitable remedies whereas its hands are tainted with gross contractual breaches of failing to pay rent as per the letter of offer.

16. The applicant is further accused of material non disclosure of the fact that it owed rent arrears of Kshs.4,876,426. 73 as at 15th February 2019.

17. The applicant filed a further affidavit sworn on 8th June 2021 stating that the letter of offer was accepted subject to conditions contained in its letter of 10/1/2015 marked “MM01”.

18. According to the applicant, the cost of construction was to be deducted from rent after getting authority from the County Government of Kericho.

19. A letter of authority from the 1st Respondent granting the applicant access to the premises marked “MMO2” is annexed. It seeks to establish If the applicant had been authorized by the County Government to undertake the work.

20. An email marked ‘MMO3’ by one Francis  W. Gathura dated 13th January 2015 indicates that the payment for the first two quarter would be used for the construction work and that the lease was to commence on 1st March 2015.

21. A draft lease was forwarded to the applicant via email on 2/3/2015 and the commencement date of the lease agreement was to be agreed upon later.

22. A letter dated 14/3/2015 on what the applicant wanted to be included in the lease is  attached as “MMO5”.

23. Authority to construct was only given by the County Government on 9/2/2017 as per annexture ‘MM06’ subject to the 1st Respondent availing the building plan to the County Government as per annexture “MM07”.

24. The Applicant contends that it only occupies a small section of the building which it had completed but not the whole building as claimed by the 1st Respondent.

25. As the lease was to commence upon completion of the construction and signing thereof, the Applicant contends that the closure of the office space was done without following due process of the Law.

26. The application was directed to be disposed of by way of written submissions but only the Respondents complied.

27. Going by the pleadings, the issues for determination are:

(a) Whether the Applicant is entitled to the reliefs sought in the application.

(b) Who is liable to pay costs of the application?.

28. In considering the application, I shall be guided by the locus Classicus case of Giella – vs- Cassman Brown & Co. ltd (1973) EA 358 which settled the principles upon which an application for interlocutory injunction is granted as follows:-

(i) An applicant must show a prima facie case with a probability of success.

(ii) An injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury.

(iii) When the court is in doubt, it will decide the application on the balance of convenience.

29. As to what constitutes a prima facie case, I only need to refer to the Court of Appeal decision in Mrao Ltd –vs- First American Bank of Kenya Ltd & 2 others (2003).

“A prima facie case in a civil application includes but is not confined to genuine and arguable case.  It is a case which on the material presented to the court a tribunal properly directing itself will conclude that these exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter”.

30. The applicant herein was offered a lease of office space on 20th December 2014 for a period of six years for a total lettable area of 1274sqft with effect from 1st February 2014 (sic).  The annual rent was Kshs.611,520,00.

31. He paid a security deposit of Kshs.191, 100/- and executed the offer letter.  The tenant was under clause 14 of the offer letter supposed to take the premises as it was and was responsible for repairs to the internal parts of the premises including windows, electricity, plumbing, tiling and woodworks.

32. There is no evidence that the tenant made any subsequent  rent payments to the landlord for the entire period of six years and the lease expired sometimes in February 2020  4,876,425. 73 by the time of expiry of the lease.

33. According to the tenant, she landlord allowed it to undertake some construction works on the premises and the amount expected was to be defrayed against the rent account.

34. It would appear from the documents that the approval for such construction was not forthcoming from the County Government of Kericho which required the building plans for the front office under renovation and the tenant only obtained approval on 9th February 2017 as per annexture “MMO6” attached the further affidavit.

35. According to the tenant’s annexture MMO3” the rent payment for the first two quarters was to be used for the construction work to be undertaken and the lease was to commence on 1st March 2015.

36. Although the tenant contends that the delay in obtaining approval for the construction was occasioned by lack of building plans, I have not seen any demand or correspondence from the County Government of Kericho to that effect.  The formal approval given on 9th February 2017 does not contain any condition save for payment of Kshs.10,000/-.

37. The applicant admits that it has been in occupation of part of the premises which it was able to complete on an undisclosed date.

38. The applicant has not demonstrated payment of rent for any portion of the premises occupied by it out of the lettable area surrendered to it by the landlord way back in January 2015.  No good explanation has been given for this state of affairs and it appears that the tenant has not come to this Tribunal with clean hands.

39. Although the initial lease of six years expired, the tenant continued in occupation of the suit premises thereby creating a periodic tenancy under the jurisdiction of this Tribunal.

40. It is inconceivable that a tenant can continue occupying a landlord’s premises rent free for over 8 years and when the landlord attempts to recover arrears rush to court and obtain protection without disclosing the default.  This is an outright abuse of court process.

41. In the case of Samuel Kipkori Ngeno & another – vs- Local Authorities pension Trust (Registered Trustees) & another (2013) eKLR at paragraphs 9 and 12 it was held as follows:-

“9. 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.  Why would a tenant allow himself to fall into such huge arrears of rent”.

“12. 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 principal obligation of paying rent as and when it becomes due”

42. There is no evidence that the initial closure of the suit premises was executed by the landlord or its agents.  However, the landlord is clearly owed rent by the tenant who has been in occupation and use of its premises.

43. I have seen several demand letters for the rent arrears and there is no evidence of payment by the tenant.  As such the tenant is not entitled to an interlocutory injunction against the landlord.

44. In the premises, the application dated 25th February 2021 is hereby dismissed with costs to the Respondents.

45. The ex-parte orders given on 1st March 2021 are hereby discharged and/or vacated.

It is so ordered.

DATED, SIGNED & DELIVERED THIS 12TH DAY OF OCTOBER 2021 VIRTUALLY.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Delivered in the absence of both parties.