Jimkara Autospares Ltd v Capacity Outsourcing (K) Ltd [2022] KEBPRT 888 (KLR)

Jimkara Autospares Ltd v Capacity Outsourcing (K) Ltd (Tribunal Case E893 of 2022) [2022] KEBPRT 888 (KLR) (Civ) (28 December 2022) (Ruling)

Neutral citation: [2022] KEBPRT 888 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E893 of 2022

Gakuhi Chege, Vice Chair

December 28, 2022

Between

Jimkara Autospares Ltd

Tenant

and

Capacity Outsourcing (K) Ltd

Landlord

Ruling

1. Before me is a notice of preliminary objection dated October 14, 2022 which is couched as follows:-“That the honourable tribunal does not have the jurisdiction to hear and determine the dispute for reasons that the tenant is not a controlled tenant pursuant to provisions of section 2(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act cap 301”.

2. Pursuant to the foregoing objections it is contended that the notice of motion and the reference should be struck out with costs to the landlord on the basis of lack of jurisdiction.

3. The instant proceedings were instituted by the tenant vide a reference dated September 26, 2022 pursuant to section 12(4) of cap 301, laws of Kenya in which the tenant complained that the landlord had made threats to illegally terminate its tenancy.

4. The tenant simultaneously filed a motion of even date seeking for restraining orders pending hearing and determination of the suit. It also seeks to be allowed to be depositing monthly rent with the tribunal.

5. In response to the application and reference, the landlord through one Joseph Kabugi filed a replying affidavit sworn on October 14, 2022 attaching as annexure ‘JK-1’, a lease dated December 2, 2022 executed on December 9, 2020 for a period of 5 years 3 months.

6. According to the landlord, this tribunal does not have jurisdiction to hear and determine this matter as the tenancy is not controlled within the meaning of section 2(1) of cap 301, laws of Kenya. As such the notice of motion and reference was filed before a forum without the requisite jurisdiction to entertain it.

7. The preliminary objection was directed to be canvassed by way of written submissions and both counsels complied with the directions.

8. The landlord’s counsel relied on the cases ofMukisa Biscuits Manufacturing Co Ltd v West End Distributors Ltd (1969) EA 696,Independent Electoral & Boundaries Commission v Jane Cheperenger & 2others (2013) e KLR,Neo Amadira Limited v Cape Holdings Limited &another(2020) eKLR andOwners of Motor Vessel ‘Lillian’ v Caltex Oil Kenya Limited (1989) e KLR to buttress the preliminary objection.

9. On the other hand, the tenant’s counsel relies on the contents of paragraph 20(1) (c ) of annexure ‘JK-1’ which states as follows:-“(b) The tenant must also execute and return the attached lease to the landlord within seven days after its delivery failing which negotiations may cease without any further reference at all to the tenant.(c) The lease will become binding upon the parties upon execution by the tenant and the landlord”.

10. According to the tenant’s counsel, no lease was ever prepared or executed but the tenant continued payment of rent and the landlord continued to accept the same. It is therefore submitted that in absence of a lease as contemplated in paragraph 20(b) & (c ), the tenancy is a protected tenancy and the chief Magistrate’s court could not have jurisdiction in absence of such lease.

11. The letter marked ‘JK-1’ is headed subject to lease and is expressed to be “intent to lease the premises on LR No 209/8077 capacity outsourcing (k) Limited”. The term of lease under clause 4 is 5 years 3 months commencing on November 2, 2020 under clause 5.

12. The court of appeal in the case of Bachelor’s Bakery Ltd v Westlands Securities Ltdupheld the decision of the superior court in which it was held as follows at page 369:-“………The agreement for lease provided for the execution by the parties of a formal lease, which was never done, the parties being content to abide by the agreement on them. It was capable of being specifically enforced and did not require to be registered as proviso (e ) to section 4 of the Registration of Documents Act (cap 285) exempts from registration documents merely creating a right to obtain another document”.

13. A similar situation obtained in the case ofEldo City Limited v Corn Products Kenya Ltd &another (2013) eKLR where at paragraph 14 the superior court cited the case ofStores v Manchester City Council(1974) 1 WLR 1403 where Lord Denning MR stated as follows:-“In contracts, you do not look into the actual intent in a man’s mind. You look at what he said and did. A contract is formed when there is, to all outward appearances, a contract. A man cannot get out of a contract by saying “I did not intend to contract” , if by his words, he has done so. His intention is to be found only in the outward expression which his letters convey. If they show a concluded contract, that is enough”.

14. In the instant case, the parties negotiated a lease of 5 years, 3 months and executed the letter marked ‘JK-1’ as the basis of their lease contract. The fact that there was no subsequent lease executed does not in my considered view alter the terms agreed upon so as to make the tenancy controlled. I must give effect to their intention to create an uncontrolled tenancy.

15. In the premises, the preliminary objection is well taken and ought to be upheld with costs to the landlord. The tenant is in the wrong forum and his reference is a candidate for striking out.

16. In conclusion, the final orders which commend to me in this matter are as follows:-a.The landlord’s notice of preliminary objection dated October 14, 2022 is hereby upheld.b.The tenant’s reference and application dated September 26, 2022 is hereby struck out with costs for want of jurisdiction.c.The landlord’s costs are assessed at Kshs 20,000/- all inclusive.It is so ordered.

RULING DATED, SIGNED & VIRTUALLY DELIVERED THIS 28TH DAY OF DECEMBER 2022. HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALRuling delivered in the presence of:-Ongeri for the LandlordNo appearance for the Tenant