Mada Holdings Limited v Sheikh Zoeb Kacee & George Munyambu t/a Makini Auctioneers Agencies [2021] KEBPRT 413 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 81  OF 2021  (MOMBASA)

MADA HOLDINGS LIMITED........................................................APPLICANT

VERSUS

SHEIKH ZOEB KACEE.................................................LANDLORD/RESPONDENT

GEORGE MUNYAMBU

T/A MAKINI AUCTIONEERS AGENCIES.............AUCTIONEER/RESPONDENT

RULING

1. By a motion dated 1st April 2021, the Tenant/Applicant in material part prays for restraining orders against the Landlord/Respondent to prohibit him and the 2nd Respondent/auctioneer from altering the terms and conditions of the controlled tenancy and/or varying rent from Kshs. 46,500/- to Kshs.87,000/- and Kshs.1,009,920/- and/or distressing for rent or evicting the Tenant/Applicant from the suit premises or doing anything detrimental pending the hearing and determination of the application and suit.

2. It is the Applicant’s case that it has been paying rent of Kshs.40,000/- per month plus VAT.

3. The  Landlord/Respondent instructed the 2nd Respondent to distress for rent  the sum of Kshs.441,460/- and on 31st March 2021 a proclamation was issued to that effect.

4. According to the Applicant, the Landlord had unilaterally varied rent from Kshs.46,500/- to Kshs.87,000/- and to Kshs.100,920/- and that the alleged rent arrears is  fictitious and illegal.

5. The Applicant contends that it is fair, just and equitable in the circumstances that the reliefs sought be granted to stop the unlawful actions of the Landlord and the Auctioneer.

6. The application is supported by the Applicant’s affidavit sworn on 1st  April 2021 and annexures thereto.

7. The Applicant acknowledges having received the Landlord’s advocates letter of 27th February 2021 in which a sum of Kshs.441,960/- was demanded against it.

8. The applicant replied to the demand on 4th March 2021 disputing the amount demanded.

9. A sum of Kshs.517,460/- was indicated in the proclamation issued by the 2nd Respondent to the Applicant.  It is the Applicant’s contention that the 2nd Respondent was illegally and unlawfully instructed by the landlord to distress for rent.

10. In response to the application, the 1st Respondent/Landlord filed a replying affidavit sworn on 14th April 2021 seeking dismissal of the application.

11. According to the 1st Respondent, he undertook a valuation notice upon the Applicant/Tenant from Kshs.40,000/- to Kshs.87,000/- plus VAT to make altogether Kshs.100,920/-.

12. The notice to alter terms of tenancy is annexed as ZK2 and is dated 29/10/2020.  The affidavit of service thereof is annexed as ZK3.

13. On 6th November 2020, the Applicant/Tenant wrote a letter acknowledging the notice to terminate tenancy indicating that it was not agreeable to the increment on account of effects of covid-19 pandemic.  It suggested holding a meeting with the Landlord/Respondent after the pandemic.

14. On 27th February 2021, the Landlord’s advocates demanded payment of Kshs.441,960/- made up as follows:-

i. Kshs.139,200/- being rent for October to December 2020 inclusive of VAT at Kshs.46,400/- per month.

ii. Kshs.302,760/- being rent for January to March 2021 at Kshs.100,920/- per month inclusive of VAT.

15. On 4TH March 2021, the Applicant wrote an acknowledgement letter disputing indebtedness in the sum of Kshs.441,960/-.  It also indicated that it never agreed to increase rent.

16. It is after that dispute that the Landlord instructed the 2nd Respondent to distress for rent in the sum of Kshs.441,960/- precipitating the instant proceedings.

17. It is the Respondents’ case that the Tenant/Applicant did not file a Reference against the notice of increment of rent and that the notice had taken effect on 1st January 2021 as expressed therein.

18. The Applicant/Tenant did not file a further affidavit to controvert the contents of the replying affidavit.

19. I have considered the filed pleadings and the only issue that fail for determination is whether the Tenant’s application for injunction against the Respondents should be granted or not.  The second issue is  who is liable to pay costs of the application?.

20. The principles considered in an application for temporary injunction are well settled since the celebrated  case of GIELLA- VS- CASSMAN BROWN & CO. LTD (1973) EA 358 and need not be re-emphasized.

21. Simply stated, an Applicant must demonstrated a prima facie case with a probability of success.  Secondly an applicant ought to demonstrate that he/she will suffer irreparable loss and damage which cannot be compensated in monetary terms if the injunction is not granted and finally if the two conditions are in doubt, the balance of convenience must tilt in favour of granting the injunction.

22. There is no doubt that the Applicant was served with notice of increment of rent on 29th October 2020 and even acknowledged the same.

23. Under section 6(1) of Capp. 301, laws of Kenya, a receiving party who wishes to oppose a tenancy notice and who has notified the requesting party under section 4 (5) of the Act that he does not agree to comply with the tenancy notice may before the date upon which such notice is to take effect refer the matter to a Tribunal whereupon such notice shall be of no effect until and subject to the determination of the reference by the Tribunal.

24. Under section 10 of the said Act, where a Landlord has served a notice in accordance with the requirements of section 4 of the Act and the Tenant fails within the appropriate time to notify the Landlord of his unwillingness to comply with such notice or to refer the matter to a Tribunal then subject to section 6 of the Act such notice shall have effect from the date therein specified to terminate the tenancy or terminate or alter the terms and conditions thereof or the rights or services enjoyed thereunder.

25. In the instant case, there is no dispute that the Tenant did not file a reference as required by section 6(1) aforesaid.  The notice therefore took effect on 1st January 2021 and the new rent of Kshs.87,000/- plus VAT therefore applies.

26. The Applicant’s motion is premised upon the Tenant’s dispute/claim that the rent increment is in dispute.

27. In absence of any reference to challenge the rent increment, I find and hold that the application is founded on quick sand.

28. The claim by the Tenant that the rent demand by the Landlord is illegal has no basis in absence of a reference against the Landlord’s notice aforesaid.

29. 29. I therefore hold that the Tenant/Applicant has not demonstrated that he has a prima facie case as defined in the case of MRAO LTD  VS  FIRST AMERICAN BANK OF KENYA LTD & 2 OTHERS (2003) eKLR.

30. The Tenant/Applicant has also failed to demonstrate that it will suffer irreparable loss and damage which cannot be compensated by way of monetary terms.  If the Tenant pays the new rent, I find that he can claim it back should he succeed after hearing of the reference to show that the Landlord was not entitled thereto.

31. In the premises, I proceed to dismiss the application dated 1st April 2021 with costs to the Respondents.

32. For avoidance of doubt, the interim orders given on 9th april 2021 are hereby discharged and/or vacated forthwith.

It is so ordered.

DATED, SIGNED & DELIVERED ON 19TH DAY OF JULY 2021.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

In the presence of:

Miss Meme holding brief for Mrs Kipsang for Tenant/Applicant

No appearance for the Landlord