Funscapes Limited v Azalea Holdings Limited & Upstate Kenya Auctioneers [2022] KEBPRT 103 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. E517   OF 2021  (NAIROBI)

FUNSCAPES LIMITED................................................APPLICANT/TENANT

VERSUS

AZALEA HOLDINGS LIMITED...............1ST RESPONDENT/LANDLORD

UPSTATE KENYA AUCTIONEERS.................................2ND RESPONDENT

RULING

1. Before me is a preliminary objection by the 1st Respondent which is dated 6th October 2021 seeking  that the application dated 20th September 2021 be struck out.  It further seeks that the orders issued by the Tribunal on 22nd September 2021 be vacated and costs be awarded to the Respondents.

2. The grounds of objection are that the Tribunal has no jurisdiction to hear and determine the matter under section 2 of Cap.301 there exists a signed lease agreement commencing on 17th September 2015 for a period of six (6) years which has since expired and the tenant signed a vacating form to handover occupation of the premises on 16th September 2021.

3. The preliminary objection was directed to be canvassed by way of written submissions and both parties complied.

4. In the case of the Owners and Master of the Motor Vessel ‘Joey’ – vs- Owners and Masters of the Motor Tugs ‘Barbara’ and SteveB’(2007) eKLR at page 7/15 the Court of Appeal held that the question of jurisdiction is a threshold issue and must be determined at the threshold stage using such evidence as may be placed before it by the parties.

5. The court cited the dicta of Nyarangi J.A in the locus classicus case of the Owners of the Motor Vessel ‘Lillians’ – vs- Caltex Oil (Kenya) Ltd (1989) KLR 1 thus:-

“I think it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and court seized…….of the matter is then obliged to decide the issue right away on the material before it.  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 down (sic) tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction……..”.

6. Through a replying affidavit sworn by Philip Cauviere, a director of the 1st Respondent/Landlord on 6th October 2021, a lease agreement whose term is 6 years with effect from 17th September 2015 is annexed as exhibit ‘PC-1’.  The same has no termination clause.

7. It is therefore submitted that the tenancy is not controlled within the meaning and interpretation of section 2 of Cap. 301, Laws of Kenya.

8. The lease term lapsed on 16th September 2021 and a notice of non- renewal had been given to the tenant on 8th September 2021 and the tenant was supposed to yield up the leased premises to the landlord at the expiration or determination of the lease term.

9. The instant proceedings were instituted on 21st September 2021 and thereafter the tenant had voluntarily handed over occupation of the premises on 16th September 2021 by signing the tenancy vacating form marked ‘PC-2’.

10. The tenant submits that the fact that there existed a tenancy agreement for 6 years is not in dispute.  The same expired on 16th September 2021 but the tenant continued in occupation as a tenant therein without a written lease and as such the tenancy is governed by Cap. 301, Laws of Kenya.

11. I am not in agreement with the foregoing submission in view of the decision in the case of Kasturi Limited – vs- Nyeri Wholesalers Limited (2014) eKLR wherein the Court of Appeal at paragraph 12 held as follows while considering a similar argument:-

“12. In the instant case, the appellant was put in possession of the rented premises by the respondent.  The tenancy is stated to be five years, notice was given to the appellant that the lease shall not be renewed, the appellant on his part acknowledges and admits existence of the tenancy agreement between the parties, the duration of the tenancy as five years is not disputed, the receipt of notice of non-renewal of the leases is also not disputed.  A tenant who has been put into possession cannot challenge the title of the landlord (see E.H Lewis & Son -vs- Morelli (1948) 2 All er 1021).  Upon the grant of a lease or tenancy, both the landlord and tenant are in general estopped from denying the validity of the transaction.  In the instant case, neither the landlord nor the tenant is permitted to assert that the tenancy which they created is invalid.  It is also trite law that a lease cannot be extended by implication where an express notice for non-renewal has been given”.

12. The Court of appeal at paragraph 13 continued to hold:-

“The appellant submitted that upon expiry of the lease on 14th April 2009, a tenancy at will arose.  In law, a tenancy at will arises whenever a tenant with the consent of the landlord occupies qua tenant on the terms that either party can determine the tenancy at will.  In the present case, there is no consent on the  part of the Respondent who is the landlord.  A tenant cannot become a tenant at will by refusing to vacate the demised premises when an express notice of non-renewal has been given” (emphasis added)

13. In the premises, the preliminary objection taken by the 1st Respondent is merited and is allowed in the following terms:-

(i) The application dated 20th September 2021 and the reference of even date are hereby struck out with costs to the Respondents.

(ii) The interim orders given on 21st September 2021 are hereby vacated and/or discharged.

(iii) The Respondents costs are assessed at Kshs.25,000/- all inclusive.

It is so ordered.

RULING DATED, SIGNED AND DELIVERED THIS 17TH DAY OF JANUARY 2022 VIRTUALLY.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

In the presence of:

Wainaina holding brief for Wairoto for 1st Respondent

Christine Githii for Tenant/Applicant