Gate House Limited v Watene [2024] KEBPRT 1512 (KLR)

Gate House Limited v Watene (Tribunal Case E182 of 2023) [2024] KEBPRT 1512 (KLR) (29 February 2024) (Ruling)

Neutral citation: [2024] KEBPRT 1512 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E182 of 2023

N Wahome, Member

February 29, 2024

Between

Gate House Limited

Applicant

and

Dr Simon Watene

Respondent

Ruling

1. M/S Gate house Limited filed the Reference dated 12th October 2023. It is said to be founded on Section 12(4) of the Landlord and Tenant (Shops, Hotels and Catering establishments Act) Cap. 301 hereinafter referred to as the Act. The Landlord’s complaint is that:-“Respondent/Tenant herein has sublet to 3rd parties, ignored, failed/defaulted in paying rent and rent arrears amounting to Kshs.735,139/- despite being reminded of it numerously by the Applicant/Landlord. I therefore pray that the Respondent be compelled to clear the rent and give vacant possession of the same as per the notice issued in 2015 and the Reference dismissed”.

2. The Reference is supported by the notice of motion application of the even date which sought for the following reliefs,i.Spentii.That pending the hearing and determination of the application inter-partes, the Honourable Tribunal be pleased to compel the Respondent by the order of the tribunal to pay and clear rent arrears amounting to Kshs.755,139. iii.That failure to pay the rent, the landlord be allowed to engage a licensed auctioneer and levy distress for rent to the tenant’s goods and recover the rent arrears and obtain vacant possession of the same with the assistance of the OCS Central Police Station.iv.That further and in the alternative, the landlord’s notice served upon the Respondent to terminate tenancy in 2015 which he filed a reference (BPRT 111 of 2015) that was dismissed in September 2022 by Hon. Andrew Muma for want of prosecution do take effect forthwith and the Respondent vacate the premises.v.That the OCS Central Police Station do ensure compliance of these orders.vi.That costs of this application be provided for.

3. From the Application and the supporting affidavit thereof, the Applicant asserted that:-i.The Respondent was its tenant occupying the 2nd and 3rd floors on Title No. Nakuru Municipality Block 9/8 otherwise popularly known as gate house.ii.The rent payable is Kshs.22,000/- per month and which is paid quarterly at Kshs.78,258. iii.The Landlord issued the Tenant with the notice dated 2015 and whereof the Tenant filed Nakuru BPRT case No. 111 of 2015 which was dismissed for want of prosecution on the 8/9/2022, annexure “PG03”.iv.The rent owing by the Tenant as at September 2023 was Kshs.755,139 and sought for leave to be allowed to levy distress to recover the same.v.There was rent assessment done on the space occupied by the Tenant with his consent and the rent payable thereof was found to be Kshs.103,000/- per month. I therefore sought to have the Tenant compelled to pay the same annexture “PG04”.

4. The Tenant filed the Replying Affidavit sworn by himself on the 9th November 2023, it was his case that:-i.It was not true that he owed any rents in arrears at Kshs.755,139/- or any other amount as he had paid all the rents due from him upto the month of November 2023 when he filed the Replying Affidavit- Annexrue ‘SMW1”.ii.His monthly rent is Kshs.22,488 per month and not Kshs.78,258 as alleged by the Landlord.iii.He had not committed any breach to the oral tenancy agreement and the Applicant was aware that he operated with his professional colleagues at the demised premises.iv.Despite the dismissal of his reference in Nakuru BPRT No. 111 of 2015 on the 18th September 2022, he remained a tenant at the demised premises and meeting all his cardinal obligations by timely payment of rent.v.At paragraph 12 of the supporting affidavit, the Applicant had admitted that the rent payable per month is Kshs.22,488 and it is not explained as how it reached the figure of Kshs.78,258 in quarterly payments.vi.This was a controlled tenancy and any term could not be altered without the requisite notice thereof,vii.He was a stranger to the purported rent assessment at Kshs.103,000/- as per the Applicants annexture “PG04”.viii.He therefore sought for the dismissal of the Applicant’s application with costs.

5. The Applicant pursuant to the leave of the court filed a supplementary affidavit through its agent one Peter Gikonyo. The same is dated 23/11/2023. In it, the Applicant testifies that,i.By dismissal of the Tenants reference in Nakuru BPRT Case No. 111 of 2015 on the 9/8/2022 the respondent has remained a stranger to the demised premises.ii.It was not aware that the Respondent was on quarterly basis depositing the purported rents into its account until he filed the Replying Affidavit herein.iii.The Respondent has been frustrating the Applicant by filing a chain of suits which included Nakuru CMCC Nos.297 of 2009, 985 of 2011 and 245 of 2014 Annexures 5 (a) (b) and (c ).iv.That the amount of Kshs.78,258 is the rent payable plus 16% VAT.v.The Applicant had taken out the demised premises as the landlord and accrued more benefit from it than the Applicant.

6. Both parties filed their respective submissions with those for the Applicant being dated 23/11/2023 and those for the Respondent being dated 23/2/2024.

The Applicant’s Submissions 7. The Applicant submitted that:-i.By the dismissal of Nakuru BPRT Case No. 111 of 2015 the Landlord/Tenant Relationship between the parties was severed.ii.The Respondent had breached the terms of the tenancy by sub-letting the demised premises without its consent.iii.The Respondent consented to the assessment of rent and this Tribunal had therefore the authority to effect the rent increment sought under Section 12(1) of the Act. The case of Shirbook (k) Ltd – vs- Nakuru Industries Ltd & Another (2013) eKLR was cited to support that position. Also cited was the case of Republic – vs- BPRT and Another ex-parte Albert Kigera Karuma (2015) eKLR.iv.Having sublet the demised premises without the consent of the Applicant it warranted an order for the Respondent to deliver vacant possession. The case of Calabash Ltd – vs- Eng. Joseph Odero (2018) e KLR was cited.v.Finally that the Respondent could not force himself on the Applicant when the relationship was no longer tenable. The case of Kastoni Ltd – vs- Nyeri Wholesalers Ltd (2014) e KLR was invoked in support of this position.vi.The Applicant signed off by lamenting that VAT was a statutory obligation for every citizen and which the Respondent had abdicated.

The Respondent’s Submissions 8. By his submissions dated 23rd February 2024, the Respondent waved away the Applicants claims. He asserted that despite the dismissal of BPRT case No. 111 of 2015, he had continued to pay rent dutifully and was upto date on payment of the same.

9. The Applicant recognized him as a tenant which was clear from the following:a.In its letters dated 27th July 2023 and 26th July 2023 which were long after dismissal of BPRT 115/2015, the Applicant recognized him as its tenant.b.By proposing increment of rent on him by the valuation report dated 15th August 2023. c.Receiving rents into its accounts from him from 9/8/2022 when case BPRT Case No. 111 of 2015 was dismissed until todate without any protest.d.Complaining of non payment of VAT on the rents paid to it among others.e.The issue of existence of a Landlord/Tenant relationship was a non issue and that the only issue was the legality of the purported rent increment from Kshs.22,488 to Kshs.103,000/-.f.The increment was unlawful as it was not in compliance with Section 4 and 7 of the Act.g.There was need for the Applicant to respect the law in all his actions to avoid unnecessary misunderstanding.

10. Having analysed and perused all the materials on record, it is my view that the issues for determination in this matter are the following:-A.What is the effect of the dismissal of Nakuru BPRT case No. 111 of 2015 on the Landlord/Tenant relationship herein.B.Whether the proposed increment of rent from Kshs.22,488 to Kshs.103,000/- is lawful.C.Who should bear the costs of this suit.

On Issue No. A what is the effect of the dismissal of Nakuru BPRT case No. 111 of 2015 on the Landlord/Tenant relationship herein. 11. The law in my view envisages that if a Notice of termination of tenancy is issued pursuant to Section 4(1) of the Regulations thereof, the Tenant requires to register its objection within a month and thereafter to file a reference before such a notice of termination could take effect at the expiry of 60 days.

12. If the tenant does not file or register an objection nor file a reference then Section 10 of the Act takes effect. It provides that:-“Where a landlord has served a notice in accordance with the requirements of Section 4 of this act on a tenant, and the tenant fails within the appropriate time to notify the landlord of his unwillingness to comply with such notice, or to refer the matter to a Tribunal then subject to section 6 of this Act, such notice shall have effect from the date therein specified to terminate the tenancy, or terminate or alter the terms and conditions, thereof, or the rights, or services enjoyed thereunder”.

13. In the present case, the Tenant filed a reference but the same was dismissed for want of prosecution. In my view the provisions of section 10 would not have come into play and the landlord required to lodge a fresh termination notice, the Tenant having filed a reference in opposition to the previous notice.

14. As that may, even assuming that the termination notice of 2015 had taken effect on dismissal of Nakuru BPRT case No. 111 of 2015 which I doubt, the landlord/Tenant relationship herein was re-established by the conduct of the parties. I will highlight just a few of the instances:-a.The Tenant has paid and the landlord has received rent for the demised premises todate.b.In filing the present reference and Application, the Applicant recognized the respondent as its tenant.c.In the reference the Applicant complains of the Tenant failing to pay rent and rent arrears.d.The Applicant is proposing to increase the rent payable on the demised premises from Kshs.22488 to Kshs.103,000/-.e.In its letter dated 27/7/2024 and 26/7/2023 marked as PGB(a) and PG 6(b) respectively and annexed to the applicants supporting affidavit, it recognizes the Respondent as its tenant.f.In all, if there was no landlord/Tenant relationship between the Applicant and the respondent, then this court would not have the jurisdiction under Section 2(1) of the Act to preside over this matter.

15. In the case of Pritam – vs- Ratilal & Another (1972) EA the court held that“Therefore the existence of the relationship of Landlord and Tenant is a pre-requisite to the application of the provisions of the Act where such a relationship does not exist or it has come to or been brought to an end, the provisions of the Act will not apply. The Applicability of the Act is a condition precedent to the exercise of jurisdiction by the Tribunal. Otherwise the Tribunal will have no jurisdiction. There must be a controlled tenancy as defined in Section 2 to which the provisions of the Act can be made to apply. Outside it the Tribunal has no jurisdiction”.

16. The upshot of all that is that there is in existence a thriving Landlord/Tenant relationship herein and that the dismissal of Nakuru BPRT case No. 111 of 2015 has no effect or at all on the relationship.

Issue No. B-whether the proposed increment of rent from kshs.22488 to kshs.103,000/- is lawful. 17. Section 4(2) of the Act provide that:-“A Landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition or of any right or service enjoyed by him under such a tenancy, shall give notice in that behalf to the Tenant in the prescribed form”.Section 4(4) goes on to provide that:-“No tenancy notice shall take effect until such date, not being less than two months after the receipt thereof by the receiving party, as shall be specified therein”.

18. It is clear and plain from the materials before court, that in purporting to increase the rent payable by the Respondent to the Applicant was by the letters dated 26/7/2023 and 27/7/2023 and the valuation report dated 15/8/2023 which are not notices of any measure as envisaged and the law. Only to add that these provisions are mandatory and any notice that contravenes them is defective and invalid in law.

19. In the case of Fredrick Mutua Mulinge t/a Kitui Uniform – vs- Kitui Teachers Housing Co-operative Society Limited (2017) eKLR where the decision in Manaver N. Alibhai t/a Diani Boutique – vs- South Coast Fitness and Sports Centre Limited Civil Appeal No. 203 of 1994 was quoted with approval, it was held that:-“The Act lays down clearly and in detail the procedure for the termination of a controlled tenancy, Section 4 (1) of the Act states in very clear language that a controlled tenancy shall not terminate or be terminated and no term or condition in or right or service enjoyed by the Tenant of any such tenancy shall be altered otherwise than in accordance with specified provisions of the Act. These provisions include the giving of a notice in the prescribed form. The notice shall not take effect earlier than 2 months from the date of receipt thereof by the Tenant. The notice must also specify the ground upon which termination is sought. The prescribed notice in form A also requires the landlord to ask the Tenant to notify him in writing whether or not the Tenant agrees to comply with the notice”.

20. I therefore determine that the purported rent increment was not supported by the law and the notice thereof was unlawful and of no effect nor consequence. I hasten to add that the reference herein is founded on the same grounds as the application, and by this decision in this application, the reference is rendered of no further purposes. The same will therefore be deemed as settled in the same terms as the application thereof.

Issue No. C Who should bear the costs of this suit 21. I note that in dismissing the Nakuru BPRT case No. 111 of 2015, my brother Hon. Andrew Muma did not condemn the Respondent who had failed to prosecute the same to pay costs. it follows then that I will depart from the wisdom of Section 27 of the Civil Procedure Act and direct that each party bears own costs of these proceedings.

22. In conclusion, I make the following orders:-a.That the reference and application both dated 12/10/2023 are dismissed as they lack in any merit.b.That pursuant to Section 9(3)(b) the landlord will be at liberty to issue a proper notice in compliance with Cap. 301 at its convenience.c.That each party shall bear own costs of these proceedings.Those are the orders of the court.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY AT KAKAMEGA THIS 29TH DAY OF FEBRUARY 2024. HON. NDEGWA WAHOME MBS - MEMBERBUSINESS PREMISES RENT TRIBUNALRULING DELIVERED IN THE ABSENCE OF THE PARTIES.HON. NDEGWA WAHOME MBS - MEMBERBUSINESS PREMISES RENT TRIBUNAL