Lasebream International Educational Limited t/a Boomerang International Educational Services v Buraq Investments Limited [2022] KEBPRT 66 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES AND RENT TRIBUNAL

TRIBUNAL CASE NO. E288 OF 2021 (NAIROBI)

LASEBREAM INTERNATIONAL EDUCATIONAL LIMITED T/A

BOOMERANG INTERNATIONAL EDUCATIONAL SERVICES...............APPLICANT/TENANT

VERSUS

BURAQ INVESTMENTS LIMITED.....................................................RESPONDENT/ LANDLORD

RULING

Parties and their Representatives

1. The Tenant entered into a 5 years lease agreement for office suite No. B17 on Mezzanine Floor- Krishna Centre located on Land Reference No. 1870/IX/181 Woodvale Grove Westlands Nairobi. (hereinafter referred to as the suit premises)

2.  Kimondo Gachoka & Company Advocates represent the Tenant in this reference. (info@kimondogachoka.co.ke)

3. The Landlord is the registered proprietor of the suit premises that is the subject matter of the present suit.

4. Costin & Webster Law represent the Landlord.  (webster@costinewebsterlaw.co.ke)

The Dispute Background

5. The Landlord and the Tenant entered into a lease agreement for office suite no. B17 on Mezzanine Floor- Krishna Centre L.R No. 1870/IX/181 Woodvale Grove Westlands Nairobi for a term of 5 years beginning 1st June 2019 and ending on 31st August 2024.

6. On 6th July 2021, the Tenant moved this honorable Tribunal by way of notice of motion dated 6th July 2021 Tenant obtained injunctive orders. Which exist today.

7. On 22nd July 2021 the Landlord entered appearance and by way of notice of motion dated 13th September 2021sought among other orders that:

a. Pending inter-parties hearing and determination of the application, the Honorable Court be pleased to issue an order for the Tenant to deposit security for costs of an amount equivalent to five months’ rent being Kshs. 450,000/- in an interest earning account held jointly by parties or subject to the Tribunal’s directions.

b. Upon inter-partieshearing and determination of the application, the Honorable Court be pleased to issue an order for the Tenant to deposit security for costs an amount equivalent to five months’ rent being Kshs. 450,000/- in an interest earning account held jointly by parties or subject to the Tribunal’s directions.

c. The cost of the application.

8. These applications are the subject matter of this Ruling and parties have filed responses and submissions to them.

The Tenant’s Case

9. The Tenant contends that the Landlord illegally locked the suit premises for the reasons stated below:

a. That the actions of the Landlord in locking the suit premises did not amount to levying distress and thus unlawful and against the provisions of CAP 301.

b. That the Tenant had cleared all its renal arrears owed to the Landlord and had in fact made an overpayment of Kshs. 48,065/-.

c. That the Landlord had arbitrarily raised the rent from Kshs. 72,000/- to Kshs 90,000/-.

d. That the locking of the suit premises by the Landlord restricted the Tenant from restoring the suit premises, from which the Tenant was scheduled to vacate on 6th July, 2021

10. In its submission dated 1st September 2021under paragraph 13, the Tenant avers that it had entered into an oral agreement with the Landlord that allowed the Tenant to continue paying a monthly rent of Kshs. 60,000/- from July 2020 to December 2020 and increase the same to Kshs. 72,000/- from January 2021 in place of Kshs. 90,000/- which was scheduled to commence on 1st June 2020.

11. The Tenant avers that in deed it fell into rent arears and requested the Landlord to utilize the security deposit of Kshs 120,000/- to settle the same and allow him to vacate.

12. That the Tenant stands to suffer if the Tribunal does no grant it the temporary injunction as prayed for.

The Landlord’s Case

13. The Landlord contend that there was no verbal agreement entered between himself and the Tenant vitiating the terms of the tenancy agreement dated 23rd May 2019.

14. The Landlord avers that it had given the Tenant a rent rebate for three months due to the particular nature its business and that after the said three months’ grace period the rent was to revert back to Kshs. 90,000/- per month.

15. The Landlord avers that it locked up the suit premises in order to protect its interests as the Tenant was yet to clear its rent arrears.

16. It is the Landlord’s deponent that the Tenant is in rent arears amounting to Kshs. 292,000/-.

17. The Tenant states that even after complying with the order given on 9th July 2021, letting the Tenant get into the suit premises, the Tenant has continued defaulting in the payment of the rent.

Analysis and Determination

18. I have carefully analyzed all the pleadings before this honorable Tribunal, all Submissions by parties herein and relevant evidence adduced before this Tribunal. There being no contestation as to the jurisdiction of this Court, I shall then proceed to merit the application before me.

19. I considerately find three main issues fall for determination:

a. Whether the Landlord arbitrarily increased the rent;

b. Whether the Landlord acted lawfully in locking the premises; and

c. Whether the Tenant is entitled to the orders sought

a. Whether the Landlord arbitrarily increased the rent

20. Both parties agree having entered into a tenancy agreement dated 23rd May 2019 for a five year period beginning 1st June 2019 and ending on 31st August 2024.

21. Clause 2 of the said agreement provides for the rent of payment as follows:

a. From 1st June 2019 to 31st May 2020 Kshs 60,000/-.

b. From 1st June 2019 to 31st May 2020 Kshs 60,000/-.

c. From 1st June 2022 to 31st August 2022 Kshs 99,000/-.

22. Both parties aver that as a result of the financial constraints faced by the Tenant’s business during the Covid -19 Pandemic, the Landlord allowed the Tenant rebate for the months of March 2020, April 2020 and May 2020.

23. The Tenant avers that through an oral agreement the Landlord reduced the rent payable from Kshs. 90,000/- to Kshs. 72,000/- which averment the Landlord denies.

24. I have seen the Tenancy agreement entered into by both parties on 23rd May 2019. The agreement clearly breaks down the rent payable by the Tenant as illustrated above. Further, the Tenant has not shown to this Court that the terms of the said agreement were altered in any way by the parties. However I am alive to the covid 19 situation prevailing during that period of time and this leads me to making the orders herein under.

b. Whether the Landlord acted lawfully locking the suit premises?

25. I find that the Landlord’s actions of locking in the Tenant’s goods and equipment in the suit premises amounted to a distress for rent aimed at recovering unpaid rent. This very clear in the Landlord’s evidence that after locking the premises, he advised the tenant to clear its outstanding rent after which the premises would be re-opened.

26. The Tenancy being a controlled tenancy, I find that the Landlord’s action was outright illegal as Section 7(b)requires the Landlord to move under Section 4if the Tenant has defaulted in paying rent for two months or has persistently delayed paying rent when it is due and payable, read together with Section 12(h)which empowers the Tribunal to permit the levy of distress for rent.

c. Whether the Tenant is entitled to the orders sought?

27. It is further noted that despite this Court issuing orders for reopening of the premises and the Tenant gaining possession of the said premises, it has still defaulted in its obligation to pay rent.

28. In the interest of justice this Tribunal must not close its eyes on the arrears due to the Landlord and that despite regaining possession of the suit premises the Tenant has not confirmed any payment of rent.

29. An injunctive order is an equitable relief and he who demands equity must come with clean hands. Further, it is incumbent upon this Court to do justice to parties.

ORDERS

For the reasons given I order as follows:

a) In light of the Covid pandemic and Landlords illegal action of locking up the premises I find as follows;

b) The Tenant’s application and reference dated 6th July 2021 are partially allowed.

c) The Landlord to prepare a statement of account for all arears owed up to February 2022 excluding the period which the suit premises was locked and issue the Tenant with the same within 7 days. The Landlord shall use a rental value of Kshs 60,000/- for the entire duration.

d) The landlord shall offset the deposit of Kshs 120,000/- from the above arrears.

e) The Tenant to clear arrears within 30 days.

f) The Tenant shall pick his items in the business and grant vacant possession to the Landlord immediately.

g) Each Party shall bear their own costs.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon A. Muma this 18thday ofFebruary, 2022 in the presence of Kibara for the Applicant/Tenantand in the absence of theLandlord.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL