Mercy Njeri Wainana T/A Kairuthi Green Groceries v Travis (E. A) Limited & Garam Investment Auctioneers [2021] KEBPRT 450 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 152 OF 2021 (NAIROBI)

MERCY NJERI WAINANA

T/A KAIRUTHI GREEN GROCERIES………....………………..TENANT/APPLICANT

AND

TRAVIS (E. A) LIMITED ……………………..............LANDLORD/ 1ST RESPONDENT

GARAM INVESTMENT AUCTIONEERS...……..AUCTIONEER / 2nd RESPONDENT

RULING

PARTIES AND THEIR REPRESENTATIVE

1. The Tenant/ Applicant, Mercy Njeri Wainana, rented space on LR. NO 209/3546 ground floor TRAVIN HOUSE for the business (herein after referred to as the ‘Tenant’)

2. Learned Counsel Kinoti Kimathi & Co. Advocates represents the Tenant in this reference. kinotikimathiadvocates@gmail.com

3. The 1st Respondent Travis (E.A) Limited is the landlord and owner of suit premises on LR. No 209/3546 ground floor TRAVIN HOUSE rented out to the tenant (herein after referred to as the ‘Landlord’).

4. The 2nd Respondent Garam Investment Auctioneers are auctioneers

5. Learned Counsel KarimbuX-Effendy & Co. Advocates represents the 1st Respondents. skeffendy@ke-lawfirm.com

THE DISPUTE BACKGROUND

6. On or about 1st January 2018 a lease agreement was reduced into writing between the Landlord and Tenant but not signed by the tenant wherein the landlord had agreed to lease out the premised being ground floor Travin house LR. NO 209/3546 from the 1st of January 2018 for a term of five (5) three months (3 months).

7. On 15thof February 2021 the tenant moved this tribunal by way of a reference dated 15th February, 2021and a Notice of Motion under certificate filed on 16th February, 2021 under Section 12 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap 301, seeking amongst other orders quite enjoyment of the suit premises arising from illegal threats of eviction without due notice by the landlord pending hearing and determination of the application and reference. Further the tenant sought that the Tribunal gives an injunction restraining the 2nd Respondent from auctioning the applicant’s goods pending hearing and determination of the Tenant’s application and reference.

8. The said notice was to run from 17th August 2020 for 30days.

9. This Tribunal granted orders to restrain the landlord from closing or evicting the tenant on 22nd February, 2021 and or auctioning the applicant’s goods the same is in force to date.

JURISDICTION

10. The Jurisdiction of this tribunal is in dispute.

THE TENANTS CLAIM

11. The tenant filed a reference dated 15th February, 2021 together with a Notice of Motion application under certificate of urgency and supporting affidavit dated 15th February, 2021 these pleadings form the basis of this claim. The tenant obtained restraining orders as against the landlord on 22nd February, 2021 and to date the landlord is still restrained from interfering with quite possession of the suit premises by the tenant either by closing or evicting the tenant. The basis of their claim is that they are in default being in the business of a hotel which was closed on and off because of COVID 19 and they need time to offset the arrears.

THE LANDLORDS CLAIM

12. The landlord on the other hand have filed grounds of opposition and annexed a replying affidavit on8th March, 2021and a further replying affidavit on 8th April, 2021 and sworn by the general manager of the 2nd respondent.

13. Parties filed written submission and on 24th May 2021 the matter was fixed for ruling on 18th June 2021. The submission having not been uploaded on time this ruling.

14. I have had occasion to peruse the pleadings above-mentioned of both the landlord and tenant and also the landlord’s and Tenants written submissions and I will not rehearse the same again as they are brief and to the point.

15.  I will refer to them in my analysis below where relevant and I thank parties for the same.

MATTERS NOT IN DISPUTE

16. There is no dispute that the rent owing is Kshs 1,533,812/- at the time of eviction and auction of the Tenant’s goods.

LIST OF ISSUE FOR DETERMINATION

17. The 1st respondents raised certain issues for determination in their submissions and the applicants in their affidavits, therefore, the tribunal shall proceed to distill the issues discussed by parties and their counsels who submitted in writing as below:

a) Whether the Tribunal has jurisdiction under section 12 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya to investigate the complaint raised by the tenant?

b) If the tribunal finds it has jurisdiction whether the action of the landlord was legal?

c) How does the tribunal deal with rent arrears over Covid19 Pandemic?

ANALYSIS AND FINDINGS

Whether the Tribunal has jurisdiction under section 12 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Chapter 301 Laws of Kenya to investigate the complaint raised by the tenant warranting striking out of the reference?

18. The Tribunal’s jurisdiction is circumscribed under Section 2(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishment) Act a controlled tenancy is defined as a tenancy of a shop, hotel or catering establishment which has been reduced into writing and which is for a period not exceeding five years. In the present case, the applicant contends that there exist no valid lease Agreement presented before the Tribunal by the 1st respondent of a purported Agreement dated 1st January, 2018 as it was not signed.

19. The 1st respondent on the other hand contends that the tribunal lacks jurisdiction as in the said Agreement it has been stipulated that:

The term is “five (5) years three (3) months with effect from the first day of January two thousand and eighteen”

20. From the foregoing it is evident that the tenancy was not intended to be a controlled tenancy. Indeed, I am also aware that the Tenant/Applicant contends that the tenancy should be deemed as a controlled Tenancy for the reason that: there was no existing Lease at the time of the filing of the application dated 15th February, 2021and relies upon Section 3(3) of the Contract Act which states that any contract for disposition of an interest in land must be in writing, signed and attested. None of these was done.

21. The question of jurisdiction is a threshold issue and must be determined at the threshold stage.

22. The Supreme Court in its Advisory Opinion, In the Matter of Advisory Opinion of the Supreme Court, Constitutional Application No. 2 of 2011, restated the principle in the “Motor Vessel “LILLIAN S case”, in the following terms –

“The “Lillian S” case [1989] KLR, establishes that jurisdiction flows from law and the recipient court is to apply the same with any limitation embodied therein. Such a court may not arrogate to itself jurisdiction through craft of interpretation or by way of endeavor to discern or interpret the intention of Parliament where the wording of legislation is clear and there is no ambiguity”.

23. The preamble to the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, reads as follows: -

“An Act of Parliament to make provision with respect to certain premises for the protection of tenants of such premises from eviction or from exploitation and for matters connected there with and incidental thereto.”

24. The tribunal’s construction of the title of this Act together with the content of the preamble (supra) is that, this Act deals specifically with the landlord and tenant relationships in relation to structures standing on the land. The mandate to resolve disputes arising from dealings in relation to such structures is exclusively vested in the Business Premises and Rent Tribunal in terms of section 12 of the Act.

25. In assessing the Jurisdiction of the Business Premises and Rent Tribunal, it must be noted that in the case of Owners of Motor Vessel Lillian S -vs- Caltex Kenya 1989 eKLR;

“Jurisdiction is everything. Without it, the Court has no power to make one more step. A Court lays down its tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction”

26. The Landlords attempt to persuade this tribunal to rely on Jubilee insurance vs JN Karega case 2014 eKLR that the conduct of the parties were such that there was no controlled tenancy is not at all persuasive in light of the reading of the Contract Act I thereofore find that this tribunal is clothed with jurisdiction to deal with this dispute and indeed there is a landlord tenant relationship.

Was the Action to Distress for rent by the Landlord Legal?

27. Having found that the Tribunal has jurisdiction the landlords action to instruct auctioneers as thought the lease was NOT controlled was outright illegal as Section 7(b) requires the landlord to move under section 4 (issue notice to terminate tenancy) if the tenant has defaulted in paying rent for 2 months or has persistently delayed paying when its due and payable.  Read together with 12(h) which empowers the Tribunal to permit the levy of distress for rent.

Dealing with rent Arrears?

28. Be as it may the Tenant does not deny owing rent and the figure stood at 1,533,812 as at June 2020. She states that the covid 19 pandemic restrictions were her major undoing however it is evident from the record that the default started in May 1990 long before the pandemic and has not only failed to pay the rent of 112,500/- per month but also any amount to defray the arrears. A partly amount of 104,909. 90 was realized from the distress and sale of the tenants attached goods.

29. In the interest of justice this Tribunal must not close its eyes on the arrears due to the landlord merely due to the actions taken in the mistaken belief that the tenancy was not controlled. It is for this reason that more than once the tribunal has ordered payment of rent during the pendency of the said suit and only once has the tenancy confirmed they paid 75,000/- which receipt has never been acknowledged or proof of payment disclosed.

30. That said it is incumbent upon this court to do justice to parties and not lay too much emphasis on technicalities it is on this ground that the tribunal addresses itself to the issue of the arrears in the manner herein under enumerated.

ORDERS

For the reasons given above I ORDER as follows:

a) The Tenant’s Application dated 15th February, 2021 is hereby dismissed.

b) The landlord shall on or before the 30th of June 2021 issue a valid notice of termination in the prescribed format to terminate the said tenancy on specific terms and within such period as specified by law.

c) The tenant shall be at liberty to file a reference to the said tenancy notice on condition that she has paid 50% of the rent owing being 1,533,812 as at June 30th 2021 plus Kshs 112,500. 00 per month from June 2021 to the date of payment.

d) In default of c above the landlord shall be at liberty at the end of the termination notice to not only distress for rent but also to evict the tenant with immediate effect by breaking in and forcing open the premises, if the tenant will not be willing to hand over vacant possession of the same back to the landlord.

e) OCS Central Police to ensure peace prevails.

f) The reference by the Tenant dated 1st February, 2021 is effectively compromised.

g) Each party to bear their own costs.

HON A. MUMA

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

Rulingdated, signed and delivered virtually by Hon P. May on 25th June 2021 in the presence of Effendy for the Landlordand Kinotifor the Tenant.

HON P. MAY

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL