Mohammed & 8 others v Gulf African Bank & another; Normak Company Limited (Interested Party) [2022] KEBPRT 188 (KLR)

Mohammed & 8 others v Gulf African Bank & another; Normak Company Limited (Interested Party) (Tribunal Case E411 of 2021) [2022] KEBPRT 188 (KLR) (13 May 2022) (Ruling)

Neutral citation: [2022] KEBPRT 188 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E411 of 2021

Gakuhi Chege, Vice Chair

May 13, 2022

Between

Abdullahi Sheikh Mohammed & 8 others

Landlord

and

Gulf African Bank

1st Respondent

Garam Investment Auctioneers

2nd Respondent

and

Normak Company Limited

Interested Party

Ruling

1. Through a reference dated 12th August 2021, the Applicants complain that the landlord had unlawfully advertised the suit premises for sale on 31st August 2021 contrary to provisions of Cap. 301, Laws of Kenya.

2. They simultaneously filed a motion dated 12th August 2021 seeking restraining orders against the Respondents from disposing and/or transferring by way of public auction on 31st August 2021 Flats no. A1, D1, F1, G1, G2, G3, G4, H1, H2, H3 and H4 erected on L.R No. 209/7260/72 (IR No.114223) pending interpartes hearing and determination of this suit.

3. The applicants also seek for prohibitory orders against the Respondents from interfering with their quiet occupation and lawful enjoyment of the suit premises pending hearing and determination of the application.

4. The application is supported by the affidavit of Abdullahi Sheikh Mohamed sworn on 12th August 2021 and the grounds on the face of the application. It is deposed that on 10th August, the applicants received a notice from the 2nd Respondent that the suit property would be auctioned on 31st August 2021.

5. The Tribunal granted interim orders of injunction on 13th August 2021 pending hearing of the application.

6. On 8th December 2021, a company known as Normak Company Limited filed an application seeking to be enjoined as an interested party and for discharge of the orders given herein on 13th August 2021. It further seeks for an order that this Tribunal has no jurisdiction to hear and determine the suit.

7. The application finally seeks that the Landlord/Respondent be restrained from demanding or receiving rent from the tenants pending hearing and determination of the application.

8. The application is supported by the affidavit of Ismail Noor Haji sworn on 8th November 2021 and the grounds on the face of the application. It is the proposed interested party’s case that it purchased the suit property in a public auction held on 31st August 2021. The same consists of residential houses and was not controlled within the meaning of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap. 301, Laws of Kenya.

9. It is further contended that the orders of 13th August 2021 were obtained through misrepresentation of material facts and deceit. The landlord had previously instituted proceedings vide HCCC No. 501 of 2016 (formerly ELC No. 1590 of 2016) between Abdullahi Mohammed Sheikh – vs- Gulf African Bank Ltd seeking an order of injunction to restrain the bank from seeking an order of injunction to restrain the bank from exercising statutory power of sale.

10. At the same time, it is contended that the landlord failed to disclose that he had also filed in the Court of Appeal civil application no. 121 of 2018 against the 1st Respondent herein.

11. According to the interested party, the auction held on 31st August 2021 was sanctioned by court and the landlord was aware of the same but misled the Tribunal that he learnt of it on 10th August 2021 after receiving notice from the 2nd Respondent that it could be sold on the said date.

12. The application dated 12th August 2021 is opposed vide the replying affidavit of Lawi Sato sworn on 2nd November 2021 on behalf of the 1st Respondent. The gist of the affidavit is that there was no existing Landlord/Tenant relationship between the parties herein to warrant this Tribunal exercising jurisdiction in this matter as the relationship was one of chargor and chargee as per annexture marked “LS1”.

13. As such the dispute involves exercise of statutory power of sale and not landlord and tenant as envisaged under Section 2(1) of Cap. 301 as such jurisdiction lies with the High Court.

14. The dispute was also a live matter before the High Court at Milimani Vide ELCcase no. 318 of 2018 and Milimani CMCC No. 533 of 2016 as per the pleadings attached to the replying affidavit.

15. A preliminary objection dated 2nd November 2021 was also filed by the 1st Respondent on the grounds that there exists no landlord and tenant relationship between the applicant and the Respondents to warrant the Tribunal to hear and determine the dispute.

16. Secondly, it is the Respondent’s contention that the dispute is subjudice as it is pending for hearing and determination vide Milimani ELC case no. 318 of 2018 and Milimani CMCC No. 533 of 2016 and ought to be struck out for being scandalous, frivolous, vexatious and an abuse of court process.

17. I am now called upon to determine the following issues:-a.Whether this Tribunal has jurisdiction to hear and determine the reference and application dated 12th August 2021. b.Whether the landlord/applicant is entitled to the reliefs sought in the application dated 12th August 2021. c.Who is liable to pay costs of the suit?

18. The jurisdiction of this Tribunal is granted by Section 2 (1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap. 301 Laws of Kenya in respect of controlled tenancies. The first part of call in exercising jurisdiction therefore is to establish existence of a landlord and tenant relationship in respect of a controlled tenancy as defined therein.

19. In this matter, the landlord has not attempted to even suggest existence of such relationship and the application dated 12th August 2021 is merely seeking to stop sale of the suit property by public auction. Such kind of a dispute is not what the Act envisages. In this regard, I wish to cite the decision in RepublicviceChairperson Business Premises Rent Tribunal at Nairobi & Another ex-parte Suraj Housing & Properties Ltd & 2 Others (2016) eKLR which followed the case of Pritam v Ratilal & Another (1972) EA 560 where it was held as follows:-“As stated in the landlord and Tenant(Shops, Hotels and Catering Establishments) Act it is 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 therewith and incidental thereto. The scheme of this special legislation is to provide extra and special protection for tenants. A special class of tenants is created. Therefore, the existence of the relationship of landlord and tenant is a pre-requisite to the application of the Act and where such relationship does not exist or it has come or been brought to an end, the provisions of the Act will not apply. The applicability of the Act is a condition precedent to the exercise of jurisdiction by a tribunal, otherwise the tribunal will have no jurisdiction. There must be a controlled tenancy as defined in section 2 to which the provisions of the Act can be made to apply outside it, the tribunal has no jurisdiction”

20. I am convinced beyond any peradventure that on the basis of materials placed before me, the relationship between the applicant and 1st Respondent is that of a mortgagor and mortgagee respectively and not tenant/landlord.

21. Under section 2 (1) of Cap. 301, the term ‘tenancy’ is defined to mean:-“…………..a tenancy created by a lease or underlease, by an agreement for a lease or underlease by a tenancy agreement or by operation of law and includes a sub-tenancy but does not include any relationship between a mortgagor and mortgagee as such”. (emphasis mine)

22. The relationship disclosed herein being one of mortgagor and mortgagee is clearly excluded from the operation of Cap. 301 and this Tribunal’s jurisdiction is ousted.

23. I also note that the issues raised herein are subject matter of Milimani ELC case no. 318 of 2018 and Milimani CMCC No. 533 of 2016 and the filing of the instant proceedings is an abuse of the court process and the proceedings offend the doctrine of Res-subjudice as defined in the case of Republic v Paul Kihara Kariuki, Attorney General & 2 others ex-parte Law Society of Kenya (2020) eKLR wherein the court cited the Supreme Court of Kenya decision in Kenya National commission on Human Rights v Attorney General, Independent Electoral & Boundaries Commission & 16 Others (interested parties)at paragraph 23 as follows:-“The term ‘subjudice’ is defined in Black’s Law Dictionary 9th Edition as “Before the court or Judge for determination”. The purpose of the sub-judice rule is to stop the filing of a multiplicity of suits between the same parties or those claiming under them over the same subject matter so as to avoid abuse of the court process and diminish the chances of courts with competent jurisdiction issuing conflicting decisions over the same subject matter. This means that when two or more cases are filed between the same parties on the same subject matter before courts with jurisdiction, the matter that is filed later ought to be stayed in order to await the determination to be made in the earlier suit. A party that seeks to invoke the doctrine of res-subjudice must therefore establish that there is more than one suit instituted before the other, that both suits are pending before courts of competent jurisdiction and lastly that the suits are between the same parties or their representatives”.

24. I have looked at the pleadings in Milimani ELC No. 318 of 2018 and Milimani CMCC No. 533 of 2016 and I am convinced that the 1st Respondent has been able to demonstrate that this case is on the same subject matter, parties and issues raised in the said previous suits and its filing is a clear abuse of court process.

25. In the premises, the applicant is not entitled to the reliefs sought in the reference and the application dated 12th August 2021. As such the orders granted in the matter were made through non-disclosure of material facts and are liable to be discharged and/or set aside forthwith.

26. On the issue of costs, the same are in the discretion of the trial court but shall always follow the event unless for good reasons otherwise ordered. I have no reasons to deny the Respondents the said costs.

27. In conclusion therefore, the final orders which commend to me are:-i.The preliminary objection by the Respondents on this Tribunal’s jurisdiction is hereby upheld.ii.The interim orders given herein on 13th August 2021 are hereby discharged forthwith and the proceedings struck out.iii.The Respondents costs are assessed at Kshs.50,000/- all inclusive.It is so ordered.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 13TH DAY OF MAY 2022. HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALRuling delivered in the absence of parties who had been duly notified.