Horientetertainment Limited v Maina [2025] KEBPRT 265 (KLR)

Horientetertainment Limited v Maina (Tribunal Case E1278 of 2024) [2025] KEBPRT 265 (KLR) (29 April 2025) (Ruling)

Neutral citation: [2025] KEBPRT 265 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E1278 of 2024

A Muma, Member

April 29, 2025

Between

Horientetertainment Limited

Applicant

and

Harrison Maina

Respondent

Ruling

A. Parties And Their Representatives 1. The Applicant, Horientertainment (the “Tenant”) is the tenant of the premises which is the subject matter of the present suit.

2. The Respondent, Harrison Maina has let out business premises at the property known as Land Reference Number 13658/14, Along Kuria Close off Muthangari Road Lavington, Nairobi, the subject matter if this suit (hereinafter referred to as “the premises”).

3. The Firm of M/S Kanyoko Lewis & Co Advocates is on record for the Tenant/Applicant

4. The firm of M/S JP Advocates LLP is on record for the Landlord/Respondent.

B. Background Of The Case 5. The Tenant leased the suit premises from the Landlord to conduct hotel business from January 2018 where it was paying rent of Kshs. 65,000. 00 per month.

6. In 2024, the Landlord informed the Tenant of his intention to increase rent from Kshs. 65,000. 00 to Kshs. 400,000. 00.

7. The Tenant approached this Tribunal vide a Plaint and Notice of Motion under a Certificate of Urgency dated 20th December 2024 seeking inter alia that this Tribunal do issue orders restraining the landlord from evicting and/or leasing the property to third parties in any other manner whatsoever interfering with the tenant’s quiet possession on property Land Reference Number 13658/14, Along Kuria Close off Muthangari Road Lavington, Nairobi,

8. On 21st November 2024, this Tribunal issued exparte orders including orders restraining the Landlord from evicting the Tenant and/or leasing the property to third parties and ordered the Tenant to deposit the usual/normal rent of Kshs. 65,000. 00 for December 2024 January 2025 and March 2025.

9. Having been aggrieved by the exparte orders of the Court of 21st November 2024, the Landlord filed a Notice of Motion under Certificate of Urgency dated 9th January 2025 seeking inter alia eviction orders against the Tenant and a declaration that the Tenant is trespassing the Landlord’s property.

10. The Landlord then filed submissions dated 20th March 2025 opposing the Tenant’s Application dated 20th November, 2024.

C. Tenant’s Case 11. The Tenant has established a hotel business on the suit premises which he had leased from the Landlord from January 2018.

12. The Tenant aver that the Landlord issued a final vacation notice without any justifiable reason or right to do so.

13. The Tenant aver that the Landlord is seeking to increase rent on the suit premises from Kshs. 65,000. 00 to Kshs. 400,000. 00.

14. The Tenant seeks inter alia orders restraining the Landlord from eviction or interference with quiet possession of the premises.

D. Landlord’s Case 15. The Landlord submitted that the Tenant’s Application is misconceived, legally untenable, and an abuse of the Tribunal’s process as the Tenant has no enforceable right to remain in occupation of the premises following expiry of the lease.

16. The Landlord avers that this Tribunal lacks jurisdiction to entertain the present dispute as the tenancy in question is not a controlled tenancy within the meaning of Section 2 of the Landlord and Tenants (Shops, Hotels, and Catering Establishments) Act, Cap 301, Laws of Kenya.

17. The Landlord also submitted that the tenancy relationship between the parties was governed by a fixed lease agreement which expired hence the Applicant had no basis to continue occupying the premises and is now a trespasser to the premises.

18. The Landlord avers that the Tribunal in issuing ex parte orders on 21st November 2024 failed to afford the Landlord an opportunity to be heard, thereby violating his fundamental rights to fair hearing.

E. ISsues For Determination 19. Having carefully perused the Applications and Written Submission of the Landlord, it is therefore my respectful finding that the issues for determination before this honourable tribunal are:i.Whether this tribunal has the requisite jurisdiction to hear and determine this matterii.Whether the Tribunal should vacate ex parte ordersiii.What is the rent payable by the Tenant in respect to the suit premisesiv.Whether the Landlord is entitled to eviction orders

F. ANALYSIS AND DETERMINATION Whether this tribunal has the requisite jurisdiction to hear and determine this matter 20. Guided by the locus classicus case of Lillian S' v Caltex Oil (Kenya) Limited, Civil Appeal No 50 of 1989, [1989] eKLR this Tribunal acknowledges that jurisdiction is everything and once challenged, a determination thereon should be made before the Tribunal can proceed further with the disposal of any matter thereto.

21. The Landlord challenged the jurisdiction of this tribunal on the basis that there was no tenancy relationship between the applicant and respondents.

22. In the case of Nandlal Jiuraj Shah & 2 Others v Kingfisher Properties Limited 2015] eKLR it was held that in the absence of a landlord/tenant relationship, the tribunal has no jurisdiction to entertain any dispute arising between the parties.

23. This Tribunal is guided by section 2 of the Landlords and Tenants (Hotel, Shop and Catering Establishment) Act Cap 301, Laws of Kenya which establishes the criteria for determining the existence of a controlled tenancy. It provides that:“Controlled tenancy" means a tenancy of a shop, hotel or catering establishment—a.Tenancy relationship not reduced into writingb.which has been reduced into writing and which—i.is for a period not exceeding five years; orii.contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof; orii.relates to premises of a class specified under subsection (2) of this section:

24. The Landlord has alleged that there was a no tenancy agreement since the parties executed an Agreement with tenancy period exceeding five years.

25. Section 107 of the Evidence Act Cap 80; Laws of Kenya provide who he alleges must prove. The Landlord has not provided evidence of the Agreement stating the tenancy period was six years.

26. Neither of the partiers to the dispute has presented a tenancy agreement. However, this does not nullify the existence of tenancy relationship as Section 2 of Cap 301 above recognizes the existence of controlled tenancy where the tenancy relationship was not reduced into writing.

27. In Nyaboke & another v Ondieki [2024] eKLR the court in recognizing existence of tenancy relationship where there is no agreement stated as follows:“There is no problem where the tenancy is under a contract, whether oral or written. The landlord is known and the tenant is known. The rent is appreciated by the parties and so too the term.”

28. Receipts have been produced that show that rent has been paid for the premises. The Tribunal thus finds that there is a tenancy relationship between the Applicant and the Respondents.

29. The Tribunal thus has jurisdiction to hear and determine this matter as it follows under controlled tenancy.

a. Whether the Tribunal should grant the Orders sought in the Landlord’s Application dated 20th November 2024. 30. Section 12(i) of Cap 301 vests the Tribunal with the power to vary or rescind any order made by the Tribunal under the provisions of this Act.

31. The High Court in affirming the power of this Tribunal to vary or rescind its orders as provided under Section 12 (i) of the Act, and in remitting the matter back to the Tribunal for consideration on merit despite the execution of earlier orders stated as follows:“It is difficult to see under what circumstances a Tribunal would be asked to vary or rescind any order made under the Act if it cannot reconsider its own orders dismissing a reference and ordering a tenant’s eviction. The Act provides for it and it is in any event a fundamental principle of Justice.”

32. Based on the foregoing, it is therefore clear that this Honourable Court has the power to review or vary or rescind earlier orders issued by it. Subsequently, this raises the question on what grounds or under what circumstances is this Honourable Court required to consider an application to vary or rescind its earlier orders.

33. The grounds on which a court may exercise its power of review are clearly stated under Order 45 rule 1(1) of the Civil Procedure Rules. The Applicant must satisfy either of the conditions stipulated in Order 45 Rule 1 of the Civil Procedure Rules which area)Discovery of a new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or the order made;b)A mistake or error apparent on the face of the record; andc)Any other sufficient reason.

34. In the present Application, the Landlord has not demonstrated any ground on which he is seeking the orders to be vacated. His Application asking the court to vacate its orders of 21st November 2024 therefore lacks merit.

35. Regarding, eviction, the Tribunal relies in the case of Manaver N Alibhai t/a Diani Boutique – vs- South Coast Fitness & Sports Centre Limited Civil Appeal No. 203 of 1994 I where it was held as follows: -“The Act lays down clearly 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.

36. The Landlord has not placed before this court any evidence of Notice of Termination. The Tribunal this finds that the termination was unlawful and cannot therefore grant eviction orders.

c.VWhat is the rent payable by the Tenant in respect to the suit premises. 37. The Landlord seeks to evict the Tenant based on the fact that the Tenant has not adhered to his new rent increase from Kshs. 65,000. 00 to Kshs. 400,000. 00.

38. The Landlord also submitted that the Applicant failed to remit one month’s rent as directed by the Tribunal and therefore continues to be in unlawful occupation of the business premises. The Landlord therefore seeks eviction on this basis too.

39. Section 4(2) of Cap. 301 provides 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 service enjoyed by the tenant under such a tenancy shall give notice in that behalf to the tenant in the prescribed form”.Section 4(4) of the said Act provides 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.

40. Section 9(2) of Cap 301, it provides as follows:Without prejudice to the generality of this section, a Tribunal may, upon any reference;” determine or vary the rent to be payable in respect of the controlled tenancy, having regard to the terms thereof and to the rent at which the premises concerned might reasonably be expected to be let in the open market…”

41. Section 12(1)(b) of Cap 301, grants the Tribunal the power to determine or vary the rent to be payable in respect of any controlled tenancy having regard to all the circumstances thereof.

42. In Nyeri ELCA case No 31 of 2015, Margaret Wanjugu Nduma & 3 Others Vs James Gichuki Gathara (2020) eKLR, the court while dealing with the applicable principles governing assessment of rent stated at paragraph 37 stated thus:“On the first issue for determination as to whether the chairperson property applied the principles governing assessment of rent, the principles governing the assessment of rent are found in form G of the regulations as follows;i.Ascertaining the original, cost of construction of the building.ii.The age of the building.iii.The market value of the land on which the premises are built.iv.The improvement and cost of such improvements.v.Amenities or services provided for by the Landlord.vi.The rent at which the premises were let for the past three years.”

43. Further in Tala Investment Ltd Vs Green Spot Limited, Civil Appeal No. 269 of 1993, Justice Shah stated;“In dealing with principles upon which a Tribunal should act in assessing rent, its duty is to consider all the reports properly before it. The Tribunal must go into individual comparable to decide which is a better report rather than merely arrive at a mean figure that is the mean figure of the Landlord’s and Tenant’s valuer’s report. That is not proper criteria.”

44. This Tribunal takes notice that both the Landlord and the Tenant have not produced Valuation Report for purpose of rent assessment. The Tribunal cannot therefore decide on that matter.

G. Orders 45. In the upshot, the Tenant’s Reference and Application dated 20th November 2024 are hereby upheld in the following terms:i.The Landlord’s Application dated 9th January 2025 is hereby dismissed;ii.The Landlord is hereby restricted from evicting or in anyway interfering with the Tenant’s quiet possession of the suit premises;iii.Landlord to file his Valuation Report in 21 days and the Tenant to subsequently file a Valuation Report in 21 days;iv.This matter be listed for hearing is fixed on 30th June 2025;v.Tenants to pay rent to the landlord directly as follows, and for the avoidance of doubt any rent deposited with the Tribunal be released to the Landlord Harisson Maina:a.for the months of March 2025 and April 2025 by 30th April 2025; andb.for the months of May and June on or before the 5th of the next month.vi.That the OCS, Kileleshwa Police Station shall provide security and ensure compliance with the above orders.

HON A. MUMAMEMBERBUSINESS PREMISES TRIBUNALRuling dated, delivered and signed at Nairobi on this 29th day of April 2025 in the presence of Mutiang holding brief for Kariuki for the Landlord and NA for the Tenant.HON A. MUMAMEMBERBUSINESS PREMISES TRIBUNAL