Isaac Kuria t/a Mishku Communications v Nitin Shah t/a Jaykay Enterprises Ltd & JK Wanderi Auctioneers [2021] KEBPRT 96 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 48 OF 2021

(RULING)

ISAAC KURIA T/A

MISHKU COMMUNICATIONS..............................................APPLICANT/TENANT

VERSUS

NITIN SHAH T/A

JAYKAY ENTERPRISES LTD...............................1ST RESPONDENT/LANDLORD

J.K. WANDERI AUCTIONEERS...................2ND RESPONDENT/AUCTIONEERS

RULING

1. The tenant by a motion dated 31/3/2021 is seeking for restraining orders against the landlord and 2nd Respondent from harassing, intimidating and/or evicting, closing or threatening, attaching and/or in any manner interfering with his peaceful occupation of the suit premises pending hearing and determination of the case.

2. The tenant further seeks that the 2nd Respondent be restrained from attaching his property and selling by public auction.

3. Finally the tenant is seeking that the OCS, Central Police Station do ensure compliance with the orders and that peace prevails.

4. The application is supported by the affidavit of the applicant sworn on 31st March 2021 and the grounds on the face of the application.

5. The tenant is in occupation of the 1st Respondent’s premises paying a monthly rent of Kshs.328,550/-. On 29th March 2021, the 2nd Respondent under instructions of the 1st Respondent issued a proclamation marked ‘LK1’ for recovery of Kshs.9,864,652/-.

6. According to the tenant, the landlord had illegally increased rent by 12% annually from Kshs.180,000/- to Kshs.328,550/- per month.

7. Being a protected tenant, the applicant came to this Tribunal to seek protection against illegal increment of rent and/or eviction by the landlord.

8. When the matter came up for hearing ex-parte, this Tribunal directed the tenant to file evidence of payment of rent failing which the order restraining removal of the proclaimed goods would automatically lapse.

9. The application is opposed through the replying affidavit of SANJIV KUMAR H.G. SHAH, a director of the 1st Respondent wherein it is deposed that the actual tenant is Mishku communication Co. Ltd and as such the applicant had no locus standi to file the complaint. As such the complaint should be struck out.

10. A copy of certificate of incorporation in respect of the tenant is annexed to the replying affidavit and marked ‘SHGS-1’.

11. According to the Respondent, the relationship between it and the tenant started with a letter of offer dated 14th June 2016 annexed thereto as ‘SHGS-2’ executed on 17th June 2016 whose terms had not been altered. The rent increment complained about by the tenant was one of the terms of the tenancy.

12. The landlord contends that the application was an abuse of court process with the sole intention of denying it rental income as the tenant had sublet the premises to 19 other tenants from whom he collects rent. He last paid rent on 15th May 2018 after two cheques totaling Kshs.600,000/- had been dishonoured after the said date.

13. By a letter dated 27th November 2020 marked ‘SHGS3’, the tenant admitted indebtedness. He was however in arrears of Kshs..10,774. 856. 90 for the period 1st January 2018 to 31st March 2021 which continued to accumulate as per annexture “SHGS-4”.

14. On 3rd May 2021, the tenant filed a further affidavit sworn on 29th April 2021. The total payments on the schedule marked ‘1K-1’ by the tenant is Kshs.2,810,000/-. The said payments are indicated to have been made between 25th June 2018 and 20th April 2021.

15. The tenant complains that the landlord has not acknowledged the said payments and has not been issuing receipts to him.

16. He further complains that the amount demanded by the landlord through the 2nd Respondent is without justification and is not recoverable by way of distress without leave of the Tribunal.

17. The tenant contends that negotiations were going on or how to review the rent downwards on account of Covid-19 pandemic and resultant economic effects and that it had been agreed to liquidate the amount due by instalments of Kshs.200,000/- which he had been faithfully paying since November 2020 with the last payment having been made on 20th April 2021.

18. On 28th April 2021, the Landlord served the notice to terminate tenancy upon the tenant on grounds of rent arrears. The notice is marked ‘1K-4’ which according to the tenant is defective in form.

19. The tenant contends that the landlord’s actions have far reaching effects upon him and 7 remaining sub-tenants whose livelihoods is drawn from the suit premises.

20. The application was directed to be disposed of by way of written submissions. Both parties filed submissions but the tenant’s submissions were not paid for.

21. The issues for determination in this matter are:-

(a) Whether the tenant is entitled to the reliefs sought.

(b) Whether the complaint is competent

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

22. The principles upon which an application for injunction is considered were settled in the Locus Classicus case ofGiella- vs- Cassman Brown & Co. Ltd (1973)EA 358 to wit:-

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

(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.

23. The applicant submits that his relationship with the 1st Respondent started vide a letter of offer dated 14th June 2016 subject to contract. No contract or lease agreement was drawn up, negotiated and completed and as such the relationship is controlled.

24. Several shop premises totaling 19 were put up by the tenant but only 7 are occupied owing to Covid-19 pandemic visiting untold hardship upon him. Owing to the said hardship, the tenant contends that he approached the landlord to review rent downwards until the situation normalizes and has been paying Kshs.200,000/- since November 2019. I note that the agreement referred to in this regard is not exhibited nor admitted by the landlord.

25. The tenant contends that the landlord increased rent illegally by 12% annually, secondly that he had no rent arrears and that the landlord did not seek leave of the Tribunal before levying distress for rent.

26. The landlord has submitted that the rent increment of 12% was in terms of the agreement negotiated with the tenant as per the letter of offer duly signed by both parties.

27. The landlord further submits that the tenant was in arrears of Kshs.10,774,856. 90 by the time of swearing the replying affidavit and as such, the application and the complaint was mischievous and in bad faith.

28. The landlord maintains that the applicant has no locus standi as the tenant named in the letter of offer is Mishku Communication Co. Ltd. As such the applications should be struck out.

29. The signature of Isaac Kuria on documents filed is also questioned. No evidence however has been tendered by the landlord to prove that the said signature does not belong to the same person and I refuse to make a finding to that effect.

30. I have looked at the heading of the pleadings filed and although the applicant uses both his name and that of Mishku Communication Company Limited as if they were one and the same person, I shall in line with Article 159 of the Constitution of Kenya, 2010 assume that the application is by the company. This shall enable me do substantive justice to both parties.

31. In regard to 12% increase of rent, I note that cause 8 of the letter of offer dated 14th June 2016 provides as follows:-

“Rent Review: upward rent review of twelve percent (12%) at the conclusion of each one (1) year”.

The offer letter is signed by both parties and I agree with the landlord that it constitutes the contract entered into by both parties and the escalation is therefore legal and incapable of founding an injunction order.

32. The landlord submits that the tenant owed Kshs.10,774,856/90 as at the date of swearing the replying affidavit. Between June 2018 and April 2021, the tenant had only paid Kshs.2,810,000/-. This amount falls short of the expected rental income accruing from the suit premises. No agreement has been exhibited to support the tenant’s submission that a sum of Kshs.200,000/- per month had been agreed upon. It therefore means that the tenant was indebted to the landlord as at the time of distress.

33. Under section 3(1) of the distress for Rent Act Cap. 293 Laws of Kenya, “any person having any rent or rent service in arrears and due upon a grant, lease, demise or contract shall have the same remedy by distress for the recovery of that rent or rent service as is given by the common Law of England in a similar case”.

34. I find and hold that having found that the tenant was in rent arrears, the landlord was entitled to levy distress under section 3(1) of the said Act without seeking leave from this Tribunal as the same is not mandatory (see the case of John Nthumbi Kamwithi – vs- Asha Akumu Juma (2018) eKLR at paragraph 35).

35. I agree with the landlord’s submission that the notice to terminate tenancy is not subject matter of the instant proceedings as no reference to oppose the same is before me. I shall not deal with it.

36. From the foregoing analysis, it must by now be clear that the applicant has failed to satisfy the principles for granting a temporary injunction espoused in the case of Giella – vs- Cassman Brown & Co. Ltd(supra).

37. In the premises, I find and hold that the application is a candidate for dismissal. I proceed to make the following final orders:-

(a) The application dated 31/3/2021 is hereby dismissed with costs.

(b) The interim orders herein granted are hereby discharged and vacated.

(c) The landlord shall be at liberty to proceed to recover outstanding rent against the tenant by use of lawful means.

(d) The reference being based on the same complaint is hereby marked as compromised and dismissed by dint of this ruling.

(e) The cost of the application and reference awarded to the Respondents.

DATED, SIGNED AND DELIVERED THIS 2ND DAY OF DECEMBER 2021.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

In the presence of:

Mburu for the Landlord

Wairimu for the Tenant