Khushi Motors Limited v Kenya Railways Corporation [2024] KEBPRT 292 (KLR)

Khushi Motors Limited v Kenya Railways Corporation (Tribunal Case E110 of 2023) [2024] KEBPRT 292 (KLR) (5 March 2024) (Ruling)

Neutral citation: [2024] KEBPRT 292 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E110 of 2023

Gakuhi Chege, Chair & J Osodo, Member

March 5, 2024

Between

Khushi Motors Limited

Tenant

and

Kenya Railways Corporation

Landlord

Ruling

1. Khushi Motors Limited/the tenant herein moved this Tribunal through a Complaint dated 8th May 2023 under the provisions of Section 12(4) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301, against Kenya Railways Corporation in respect of premises known as House Asset Number BRMSA6 Kizingo Estate, within Mombasa County. The complaint is to the effect that the Landlord;i.had threatened to evict the Tenant without following the Lawii.intended to lock the Premises without lawful Court Orders;iii.intended to evict, harass and alter the terms of the tenancy without following the due process and hence the Tenant will lose protection;iv.has interfered with the Tenant’s' business;v.has denied the Tenant’s peaceful and quiet enjoyment of the tenancy premises.

2. The Tenant prays that:-a.The Landlord be stopped from evicting, harassing or intimidating the tenant and or closing or locking the Premises;b.The Landlord be prohibited from issuing threats to the tenant for eviction without due process of the law;c.The Tenant be allowed to enjoy the peaceful tenancy;d.The Landlord be stopped from interfering with the tenant’s tenancy in any way whatsoever;e.The Tenant be allowed to deposit rent in Court;f.The OCS Central Police Station to ensure full compliance with the Court Orders;g.Costs of the complaint to the Tenant.

3. The tenant simultaneously filed a motion of even date seeking for the following orders:-a.That this matter be certified as urgent and service in the first instance be dispensed with.b.That the Landlord by themselves and or their agents be stopped from interfering with the Tenant’s quiet possession of the Tenancy Premises at House Asset Number BRMSA6Kizingo Estate, within Mombasa County.c.That the Landlord by themselves and or their agents be stopped from closing the Tenant’s premises and or threatening to evict or from evicting the Tenant from the Tenancy Premises without a proper Notice and or Court Orders.d.That the Officer Commanding Central Police Station Mombasa be ordered to ensure that the Tenancy Premises are opened and the Tenant is not harassed, threatened with eviction by the Landlord or their agents with eviction and that in the event of non-compliance the Landlord and/or their agents be arrested and charged appropriately.e.That an Order do issue to confirm that the Applicant are protected Tenant.f.That costs of the application be granted to the Tenant/Applicant.

4. The application is supported by the affidavit of WaqasAhmad and on the following general grounds:-a.That the Applicant is a protected Tenant in the Landlord’s premises.b.That the Landlord has threatened to terminate the tenancy without proper Notice and contrary to the terms of the parties' tenancy agreement.c.The Landlord has vowed to evict the tenant without a court order or a proper notice and it is was harassing, threatening to forcefully evict the tenant.d.That it will be necessary and crucial that the OCS Central Police Station Mombasa be ordered to ensure full compliance with the orders of this court as the tenant will otherwise be evicted.

5. The application is supported by the affidavit of WaqasAhmad sworn on 8th May 2023 wherein it is deposed that the Applicant and the Respondent entered into a commercial tenancy agreement on 13th October 2021 for a period of six years subject to 3 (three) months termination notice by each party. Attached to the affidavit is a letter of offer for commercial lease of Kizingo House Asset number BRMSA6 Kizingo Estate-Mombasa County (the Premises) marked as Exhibit “WA-2”

6. The demised premises comprise of a 4 bedrooms house on own compound used as a commercial office with parking space which is currently occupied by the tenant for the intended purpose.

7. It is deposed that the tenancy is protected and attracts an annual rent of KES 1,440,000. 00 (Kenya Shillings One Million Four Hundred Forty Thousand).

8. On 11th April 2023, the Respondent served a notice to terminate tenancy I respect of the suit premises upon the tenant demanding that it hands over vacant possession on or before 11th May 2023.

9. The Respondent failed, neglected and/or refused to comply with the provisions of the tenancy agreement and the law as they cited the reason for termination of the tenancy agreement to be the need to utilize the demised property for its own use.

10. The landlord demanded to take vacant possession of the property upon expiry of 30 days whereas the tenancy agreement provides for a 3 months’ notice in the event of the premises being required for rail purposes.

11. The Applicant contends that it has been peaceably enjoying the tenancy and has fulfilled all terms and conditions and has a legitimate expectation to enjoy the premises for the demised term and in accordance with the parties' tenancy agreement. The tenant stood to suffer irreparable loss and damage in terms of goodwill, loss of protection and business if the Landlord is not stopped from interfering with its tenancy and hence the need for issuance of the Orders prayed for.

12. The application and complaint are opposed through the replying affidavit of Patrick Nzomo, the Acting Property Administration Manager of the Landlord sworn on 1st August 2023 wherein it is deposed that the parties herein entered into a tenancy agreement dated 13th October 2021 in respect of the suit premises which is attached as annexure “PN-1”.

13. It is admitted that the Landlord issued the termination of tenancy notice dated 11th April 2023 which has since become obsolete.

14. It is further deposed that on 21st July,2023, the Landlord/Applicant issued the Tenant/Applicant with a fresh three (3) months’ termination of tenancy notice dated 14th July,2023 in effect nullifying the initial termination notice dated 11th April, 2023. The tenancy notice is marked as "PN-3". It is therefore the landlord’s contention that by issuance of the termination of tenancy notice dated 14th July,2023, the present suit has been overtaken by events.

15. According to the Landlord, the said termination notice dated 14th July, 2023 was issued pursuant to Clause 8 of the tenancy agreement as read with Section 7(1)(c) of the Landlord and Tenant (shops, Hotels and Catering Establishments) Act, Cap 301, Laws of Kenya.

16. The tenant is accused of willfully and substantially breaching the tenancy agreement by carrying out major developments and/or renovation works on the suit premises without submitting the development/renovation plans to the Landlord/Respondent for approval in accordance with Clause 8 of the tenancy agreement. It is the Landlord’s contention that the termination of tenancy notice dated 14th July, 2023 issued to the tenant/applicant on 21st July, 2023 is regular and lawful and the same remains unchallenged. The landlord denies the allegation that it has attempted to forcibly and physically evict the tenant from the suit premises but admits issuing a termination of tenancy notice arguing that the tenancy did not confer any permanent occupation or use of the premises upon the tenant and no legitimate expectation accrues to it. The landlord seeks that the matter be marked as overtaken by events.

17. The landlord denies the allegation that it has attempted to forcibly and physically evict the tenant from the suit premises but admits issuing a termination of tenancy notice arguing that the tenancy did not confer any permanent occupation or use of the premises upon the tenant and no legitimate expectation accrues to it. The landlord seeks that the matter be marked as overtaken by events.

18. The application was directed to be canvassed by way of written submissions and both parties complied. The tenant’s submissions are dated 24th October 2023 while the landlord’s submissions are dated 30th January 2024.

19. We are required to determine the following issues in this case;a.Whether the notices served upon the tenant are valid and enforceable.b.Whether the tenant is entitled to the reliefs sought in the complaint and application dated 8th May 2023. c.Who is liable to pay costs?

20. Section 4(2) of Cap. 301, Laws of Kenya 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 right or service enjoyed by the tenant under, such a tenancy, shall give notice in that behalf to the tenant in the prescribed form.”

21. The prescribed notice under Regulation 4(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) (Tribunal) (Forms and Procedures) Regulations, 1966, states that a notice under Section 4(2) of the Actis supposed to be in Form A of the Schedule.

22. We have looked at the two notices dated 11th April 2023 and 14th July 2023 and it is our considered view that the same are not in the Prescribed Form and are to that extent defective and of no effect.

23. In the case of Fredrick Mutua Mulinge T/A Kitui Uniform v Kitui Teachers Housing Cooperative Society Limited [2017] eKLR the Superior Court reviewed several decisions on the requirement for strict compliance with the provisions of Cap. 301 at pages 4-5 as follows:-“It is not in dispute that the notice dated 28th June 2014 issued by the respondent herein gave the appellant 2 days’ notice of termination of his tenancy as it was to take effect on 1st July 2014. I am in agreement with the submission by the appellant that by failing to comply with section 4(4) of the Act, the notice of termination dated 28th June 2014 was defective, null and void for all intents and purposes. This position of the law is now settled as can be seen in the cases which are cited below. In the case of Ann Mwaura & 9 others v David Wagatua Gitau & 2 others (2010)eKLR (Maraga J. as he then was), the court stated as follows: -“As regards the period of notice, I concur with the Court of Appeal holding in the said case of Caledonia Supermarket Ltd v Kenya National Examinations Council [2002] 2 EA 357 that “... failure to comply with these mandatory requirements rendered the purported notice(s) null and void and incapable of enforcement.”In the case of Manaver N. Alibhai t/a Diani Boutique v 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.”In the case of Narshidas & Company Limited v Nyali Air Conditioning and Refrigeration Services Limited Civil Appeal No. 205 of 1995 the court stated as follows:-“The Landlord and Tenant (Shops, Hotels & Catering Establishment) ActCap 301 Laws of Kenya 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 and the notice must also specify the grounds 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...The notice to quit purportedly relied on by the defendant in this appeal is by no means a notice which in any way complies with Form A as prescribed in the Act. Such notice can only have been given pursuant to the provisions of section 7(1)(g) of the Act. The notice to quit given or issued by the defendant was clearly void and had no effect in law on the plaintiff’s tenancy and the plaintiff was under no duty, legal or otherwise to react to it.”In Lall v Jeypee Investments Ltd Nairobi HCCA No. 120 of 1971 (1972) EA 512 the court stated as follows:-“The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act is an especially enacted piece of legislation which creates a privileged class of tenants for the purpose of affording them the protection specified by its provisions against ravages of predatory landlords. Such protection can only be fully enjoyed if the provisions of Act are observed to the letter otherwise the clearly indicated intention of the legislature would be defeated. In order to be effective in this fashion the Act must be construed strictly no matter how harsh the result... The Landlord and Tenant Act laid down a code which Parliament intended to be followed and if a landlord does not give notice of termination as prescribed, the notice will be ineffectual. This may seem a technical and unmeritorious defence, but there is no doubt that the court has no power to dispense with these time limits if the defendant chooses to object at the proper time. This is an Act which requires, in so far as the giving of the notice is concerned, absolute and complete not merely substantive compliance with its peremptory provisions.”

24. It is therefore clear that the submission by the Landlord’s Counsel that the second notice rendered the Tenant’s suit to be overtaken by events is wrong since the said notice is equally defective. It therefore follows that the Tenant has established a prima faciecase with a probability of success in line with the decision in the case of Giella v Cassman Brown & Co. Ltd(1973) E.A 358.

25. The second consideration is whether the Applicant might otherwise suffer irreparable injury unless the injunction sought is granted. It is not in dispute that the Landlord intended to evict the tenant from the suit premises upon expiry of the impugned notices which we have declared defective, null and void. There can never be a greater injury than to be subjected to an illegal process of eviction. This Tribunal was created to protect tenants from such illegal evictions and it will be an abdication of duty for us to allow the tenant to be evicted. Consequently, the principles espoused in the case of Mrao Ltd v First American Bank of Kenya Limited(2003) eKLRhave been met by the tenant. We are also guided by the decision in the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others(2014) eKLR cited by Counsel for the Respondent in granting the application.

26. The Complaint herein raises the same issues as the application under consideration and this ruling shall therefore apply to it mutatis mutandis under Section 12(4) of Cap. 301, Laws of Kenya.

27. In regard to costs, the same are at this Tribunal’s discretion under Section 12(1)(k) of Cap. 301but always follow the event unless for good reasons otherwise ordered. We have no reason to deny costs to the tenant.

28. In conclusion, the following orders commend to us in this matter-a.The Tenant’s complaint and application dated 8th May 2023 are hereby allowed with costs in terms of Prayers 2, 3 and 4 of the application.b.The Landlord’s termination notices dated 11th April 2023 and 21st July 2023 are declared defective, null and void.c.The Landlord shall be at liberty to issue a proper notice under Cap. 301, Laws of Kenya.d.The Tenant’s costs are assessed at Kshs 30,000/= to be offset against the rent account if not paid within the next 30 days hereof.It is so ordered.

DATED, SIGNED & VIRTUALLY DELIVERED THIS 5TH DAY OF MARCH 2024HON. GAKUHI CHEGE - PANEL CHAIRPERSONHON JOYCE A OSODO - PANEL MEMBERRuling delivered in absence of the parties