Living Waters Spa And Resort Co. Ltd t/a LH20 Bar And Restraurant v Dreamliners Energies Limited t/a Acasia West Point [2021] KEBPRT 240 (KLR) | Controlled Tenancy Definition | Esheria

Living Waters Spa And Resort Co. Ltd t/a LH20 Bar And Restraurant v Dreamliners Energies Limited t/a Acasia West Point [2021] KEBPRT 240 (KLR)

Full Case Text

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 328 OF 2021 (NAIROBI)

LIVING WATERS SPA AND RESORT CO. LTD T/A

LH20 BAR AND RESTRAURANT……………………TENANT/APPLICANT

VERSUS

DREAMLINERS ENERGIES LIMITED T/A

ACASIA WEST POINT………………………….LANDLORD/RESPONDENT

RULING

1. The Tenant’s application dated 6th April 2021 seeks the following orders;

a. Spent.

b. Spent

c. The Officer Commanding Police Station Kitengela Police Station ishereby ordered to enforce compliance of the orders herein.

d. Pending the hearing and determination of the complaint/reference herein a temporary order of injunction be issued restraining the Landlord/Respondent and/or its agents from closing or further closing or in any manner whatsoever interfering with the Tenant’s/Applicant’s Wines and Spirits retail shop outlet operating on LR Number Kajiado/Kaputiei North/83701.

e. Costs.

2. The application is brought on the grounds stated on the face of the said application and supported by the affidavit of Micah Kigen a Director and shareholder of the Applicant.

3. Pursuant to the Tenant’s application, the Tribunal issued injunctive orders against the Landlord on 16th April 2021.  It is these orders that the Landlord wishes to have set aside by his application of 26th April 2021.

4. The Landlord’s application dated 26th April 2021 seeks the following orders;

a. Spent

b. Spent

c. The honourable Tribunal be pleased to set aside and/or vary the orders of this honourable Tribunal issued on 14th April 2021 and the Tenant’s application and complaint be dismissed.

d. Costs.

5. The main ground upon which the application by the Landlord has been brought is ground 2 which is in the following terms;

2. By virtue of the lease agreement, the premises are not a controlled tenancy neither is the Tenant a protected Tenant within the meaning of the law and this Honourable Tribunal lacks the requisite jurisdiction to hear and determine any issue arising out of the lease agreement.

6. The Landlord having raised the issue of jurisdiction in its application, it is only proper that the same be dealt with at the earliest opportunity.  I will therefore deal with the Landlord’s application and determine whether or not the Tribunal has jurisdiction to hear and determine this dispute.

7. The Tenant at paragraph 2 of his affidavit in support of his application states that he leased the demised premises on the basis of the letter of offer he has annexed to his affidavit as LWSR 1.  The Tenant further states that it agreed on the contents of the draft lease agreement but never executed the same.

8. The Landlord on its part states that the Tenant executed the tenancy agreement on 18th April 2020. The lease agreement mirrored the terms of the letter of offer and there was no need for further negotiations.  The Tenant has alleged that the signature purporting to be the Tenant’s is forged and indeed he has reported the same to the police.

9. I have perused the letter of offer and do note the following details from the said letter;

a. That the term therein is for a period of five years, one month.

b. The rent payable is provided for under clause 3 of the letter of offer.

10. The letter of offer is dated 17th April 2020 and the Tenant issued a cheque for the payment of rent on 23rd April 2020.  It is clear that as at the time the Tenant took possession of the premises, it took it on the basis of the letter of offer.  The letter of offer is what contained the terms of engagement between the parties herein.  It formed their contract.  The Tenant has not denied this to be the position.

11. The Tenant’s position is rather that the lease agreement relied upon by the Landlord is forged.  Even if I am prepared to hold that the issue of the validity or authenticity of the lease is a matter that is pending police investigations, the relationship between the parties herein would still be governed by the letter of offer which as I have observed above, formed a contractual relationship between the parties herein.

12. It does not help matters that the letter of offer accepted by the Tenant and the disputed lease agreement bear the same terms as far as the term of the lease is concerned.  It is for five years and one month in both.

13. It is instructive to note that the Kshs 620,000/- paid by the Tenant vide the bank deposit slip dated 23rd April 2021 (LSR 2) is the exact amount required to be paid under the letter of offer.

14. Section 12(4) of Cap 301 provides as follows;

“In addition to any other powers specifically conferred on it by or under this Act, a Tribunal may investigate any complaint relating to a controlled tenancy made to it by the Landlord or the Tenant and may make such order thereon as it deems fit.”

15. A controlled tenancy has been defined under section 2 (1) (a) of Cap 301 as follows;

“Controlled tenancy “means a tenancy of a shop, hotel or catering establishment;

a) Which has not been reduced into writing or

b) Which has been reduced into writing and which

a. Is for a period not exceeding five years or

b. Contains provision for termination otherwise than for breach of covenant, within five years from the commencement thereof or

c. Relates to premises of a class specified under subsection (2) of this section.

16. The tenancy between the parties herein has been reduced into writing in the form of the letter of offer.  The letter of offer states the period of the lease to be five years and one month.  I have not seen any provision for termination in the letter of offer for termination of the lease otherwise than for breach of covenant within five years from the commencement of the said lease.

17. The tenancy between the parties herein does NOT therefore fall under the category of a controlled tenancy as defined under the Act.  The jurisdiction of the Tribunal is limited to controlled tenancies (section 12 (4) of the Act)and as defined under the said Act.

18. The Tenant having taken the position that the lease agreement is a forgery, I do not think it is open for the Tenant to rely on the said lease agreement to confer jurisdiction on this Tribunal.  The Tenant cannot blow hot and cold at the same time.

19. I in conclusion, do find that the Tribunal lacks jurisdiction to hear and determine this dispute and consequently make the following orders;

a. That the Tenant/Applicant’s application dated 6th April 2021and the reference dated 6th April 2021are hereby dismissed.

b. That the Tenant will bear the costs of the said application and reference.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon Cyprian Mugambi Nguthari this 22ndday of September, 2021 in the presence of Mr Okumufor theTenantand Mr Angwenyi for the Landlord.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

22. 09. 2021