John Chege t/a Wachege Cake Shop & Hotel v Gitau [2025] KEBPRT 165 (KLR)

John Chege t/a Wachege Cake Shop & Hotel v Gitau (Tribunal Case E103 of 2024) [2025] KEBPRT 165 (KLR) (7 February 2025) (Ruling)

Neutral citation: [2025] KEBPRT 165 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E103 of 2024

A Muma, Member

February 7, 2025

Between

John Chege t/a Wachege Cake Shop & Hotel

Applicant

and

John W. Gitau

Respondent

Ruling

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

2. The firm of MarkPeter M.Khisa & Advocates is on record for the tenants.

3. The Respondent, John Gitau (the “Landlord”), is the proprietor of the premises known as Eldoret Munyaka Plot No. 59, the subject matter of this suit (hereinafter the “suit premises").

4. The Firm of Njiru Kibaru & Co Advocates is on record for the Respondent/Landlord.

B. Background Of The Case 5. The genesis of this suit is Notice of Termination dated 31st July 2024, effective on 1st October 2024, given by the Landlord to the Tenant.

6. Consequently, the Tenant moved this tribunal by way of Reference and Notice of Motion under Certificate of Urgency dated 26th September 2024 seeking Orders; restraining the Landlord from interfering with his quiet and peaceful occupation of the suit premises and to restore the tenant’s terms of tenancy pending hearing and determination of this matter.

7. In opposition to the Tenant’s Application and Reference, the Landlord filed a Replying Affidavit dated 2nd November 2024.

8. Subsequently, the Tenant filed a Supplementary Affidavit dated 12th November 2024 and written submissions dated 29th November 2024.

9. The Landlord also filed submissions dated 13th December 2024 in opposition of the Tenant’s Reference and Application.

10. It is the Tenant’s Reference and Application dated 26th September 2024 that is the subject of this ruling.

C. Tenant’s Case 11. The Tenant avers that the sole reason for termination of the tenancy agreement is that the landlord wants to renovate the premises. The tenant submits that for a landlord to terminate the tenancy on ground of renovation, the landlord must prove that the renovation is genuine and involves major reconstruction works which cannot be achieved without obtaining vacant possession of the building.

12. It is the Tenant’s further submission that the photographs tendered by the Landlord showing the premises in a dilapidated state are inadmissible as evidence since they have not followed the requirements of Section 106B of the Evidence Act.

13. The Tenant, therefore, prays that the court dismisses the Landlord’s Notice of Termination and allow the Tenant’s Reference and Notice of Motion.

D. Landlord’s Case 14. The Landlord avers that the Notice of Termination of the tenancy dated 31st July 2024 is valid as it was in the prescribed form and took effect on 1st October 2024, being a period exceeding two months as required by the Act.

15. The landlord submits that the termination satisfied the requirement of Section 7 of Cap 301. He further submits that he has to undertake substantial work which cannot be done without a grant of possession.

16. The Landlord avers that the Tenant erected illegal mabati constructions in the Tenant’s area of operation which left the premises in bad shape and that the exhibits of mabati constructions are admissible within provisions of Section 78A of the Evidence Act.

17. The Landlord submitted that he does not owe the tenant any amount spent on renovation since the Tenant did the same for his own benefit, without his consent.

E. Issues for Determination 18. Having carefully perused the Application, Reference and Responses presented by parties, it is therefore my respectful finding that the issues that fall for determination before this honorable tribunal are:i.Whether the Notice of Termination dated 31st July 2024 is validii.Whether the Landlord is liable to reimburse the Tenant the amount incurred on the repairs done on the premises.

F. Analysis and Determination i. Whether the Notice of Termination dated 31st July 2024 is valid 19. It is trite law that termination of a controlled tenancy is subject to the provisions of the Landlords and Tenants (Shops, Hotels and Catering Establishments) Act, Cap 301 of the Laws of Kenya.

20. Section 4(2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301 of the laws of Kenya) provides 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 the under, such a tenancy, shall give notice in that behalf to the tenant in the Prescribed Form.”

21. Section 4(5) of the Act provides that: -“A tenancy notice shall not be effective for any of the purposes of this Act unless it specifies the grounds upon which the requesting party seeks the termination, alteration or reassessment concerned and requires the receiving party to notify the requesting party in writing within one (1) month after the date of receipt of the notice, whether or not he agrees to comply with the notice.”

22. In the case of Manaver N. Alibhai t/a Diani Boutique vs. South Coast Fitness & Sports Centre Limited, Civil Appeal No. 203 of 1994, the court stated 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.”

23. From the foregoing, the validity of Notice of Termination is predicated on form and substance. The prescribed form for Notice of Termination is Form A. The substance for Notice of Termination is the two months’ notice period, the notification to the tenant to ask whether to notify the Landlord whether or not he agrees to comply with the notice and the reasons for termination.

24. It is evident that the Notice of Termination of the tenancy dated 31st July 2021 was in Form A as prescribed by the Act. Further, the Notice of Termination of the tenancy was to take effect on 1st October 2024, being a period exceeding two months as required by the Act. The Notice also notified the Tenant of his right to reply to the Landlord on whether or not he agrees to comply with the notice within one month.

25. Having established that the notice of termination of the tenancy was in the prescribed form and was given for the prescribed period, I shall proceed to analyze the substance of the notice with regard to the grounds of termination of the tenancy as follows.

26. The ground upon which the Landlord seeks to terminate the tenancy on the grounds of wanting to renovate the said premises. Accordingly, Section 7 of the Act clearly stipulates the grounds upon which a Landlord may seek to terminate tenancy. One of the grounds as enshrined in Section 7 (f) of the Act is: -“that on the termination of the tenancy the Landlord intends to demolish or reconstruct the premises comprised in the tenancy, or a substantial part thereof, or to carry out substantial work of construction on such premises or part thereof, and that he could not reasonably do so without obtaining possession of such premises."

27. In expounding on the threshold that should be met by a Landlord placing reliance on Section 7(1)(f) of the Act as a ground for termination of tenancy, the High Court in the case of Auto Engineering Ltd Versus M. Gonella & Co. Ltd (1978) eKLR stated as follows: -“…First, it is correct that the wording of section 7(1)(f) is “demolish or reconstruct”, and not merely to effect repairs. The distinction can of course be important; for while mere repairs may not necessarily mean that the landlord needs possession of the premises, an intended demolition or reconstruction of a substantial part of the premises would in all probability be frustrated if the landlord could not obtain possession, and that is why this provision exists.”

28. This Tribunal is also guided by the decision of the court in Fisher v Taylors Furnishing Stores Ltd [1956] 2 All ER 78, where the court held:“There must, therefore, be an intention and it must be an intention which in point of time is related to the termination of the current tenancy. It seems to me that the intention must be to do one of the following things: (i) to demolish the premises comprised in the holding; or (ii) to reconstruct the premises comprised in the holding; or (iii) to demolish a substantial part of the premises comprised in the holding; or (iv) to reconstruct a substantial part of the premises comprised in the holding; or (v) to carry out substantial work of construction on the holding; or (vi) to carry out substantial work of construction on a part of the holding. If the landlord proves an intention to do one of those things, and to do it on the termination of the current tenancy, he must then prove that he could not reasonably do it without obtaining possession of the holding.”

29. To demonstrate genuine intent, the Landlord is required to give evidence of his plan to renovate the premises, for example, statement of available funds for renovation, approved developmental as well as building plans for the renovation. The Landlord has not demonstrated the same.

30. The evidence tendered by the landlord that the tenant has constructed illegal mabati buildings in his area of operation leaving the buildings in bad shape does not support his ground of termination. According to Cap 301 and the case laws above, the reconstruction must be in the business premises which the landlord leased to the tenant.

31. The landlord can demolish the mabati constructions without having to take back vacant possession of the suit premises. The demolition of the mabati constructions cannot be frustrated by reason that the landlord has not been granted vacant possession of the premises.

32. From the above analysis, it is not clear the intentions upon which the Landlord requires vacant possession for purposes of renovation. There is no evidence adduced on record that there exists a firm and real intention by the Landlord to put the premises to use.

33. Therefore, I find that the Landlord has failed to convince this Honourable Tribunal that there is a need to evict the Tenant and require vacant possession of the suit property. As such the termination notice dated 31st July 2024 fails to give reasons for termination.

ii. Whether the Landlord is liable to reimburse the Tenant the amount incurred on the repairs done on the premises. 34. The parties have not furnished this tribunal with any evidence to demonstrate the agreement for the Tenant to renovate the suit premises, the cost of which would be set off from the rent payable.

35. Additionally, the Tenant has not provided concrete proof of the costs incurred in undertaking the renovation. Without any material evidence as to the agreement to renovate and the costs incurred, this Court is not in a position to decide on the issue of reimbursement of renovation costs. The tribunal will, therefore, not decide on this matter.

G. Orders 36. In the upshot, the Tenant’s Reference and Application dated 26th September 2024 are hereby allowed in the following terms:i.The Landlord is hereby restrained from interfering with the Tenant’s peaceful occupation of the suit premises;ii.If necessary, the OCS Eldoret Police Station to ensure compliance with (i) above;iii.The Landlord shall be at liberty to issue a fresh notice at a time when they are ready to provide proof of the intention to renovate the premises; andiv.Each party to bear their own costs.

HON A. MUMAMEMBERBUSINESS PREMISES TRIBUNALRULING DATED, DELIVERED AND SIGNED AT NAIROBI ON THIS 7TH DAY OF FEBRUARY 2025 IN THE ABSENCE OF THE PARTIESHON A. MUMAMEMBERBUSINESS PREMISESN TRIBUNAL