Nilerch Investment Company v Ontulili Investment Limited & another [2024] KEBPRT 386 (KLR)

Nilerch Investment Company v Ontulili Investment Limited & another (Tribunal Case E1119 of 2023) [2024] KEBPRT 386 (KLR) (6 March 2024) (Ruling)

Neutral citation: [2024] KEBPRT 386 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E1119 of 2023

Gakuhi Chege, Chair & J Osodo, Member

March 6, 2024

Between

Nilerch Investment Company

Plaintiff

and

Ontulili Investment Limited

1st Defendant

Pyramid Auctioneers

2nd Defendant

Ruling

1. The Respondents herein filed a Preliminary objection dated 2nd January 2024 to the hearing of application dated 10th November 2023 on the following grounds:I.That this Honorable Tribunal has no jurisdiction to issue Orders and/or to hear the Application and the Reference as filed. The Tenant/Applicant is not a protected Tenant within the confines of the law, reference is made to Section 2 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap 301. II.That the Application and the Reference merely serves to waste the Court's time as the Court has no jurisdiction to entertain the Application and the Reference.III.That it is therefore just, expedient and in the interest of fairness and justice that the Application and the Reference dated 26th September 2023 be dismissed forthwith with costs to the 1st and the 2nd Respondents and the Honorable Tribunal should accordingly down its tools for want of jurisdiction.

2. According to the Respondents, Jurisdiction is everything and once it is challenged, a determination thereon should be made before the Tribunal can proceed further with the disposal of any matter before it. Where want of jurisdiction is demonstrated, the Tribunal has no option but to down its tools and proceed no further.

3. A controlled tenancy is defined in Section 2 (1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act as the tenancy of a shop, hotel or catering establishment which has been reduced into writing and which contains provisions for termination within 5 years from the commencement of the tenancy.

4. The law on Preliminary Objections is was defined in the locus classicus case of Mukisa Biscuits Manufacturing Company Ltd Vs West End Distributors Limited (1969) EA 696 as follows:“So far as I am aware, a Preliminary Objection consists of a pure point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit”.

5. According to the Respondents, the Lessees/Tenants herein approached the Tribunal through falsehood and material non-disclosure. The Lease Agreement entered into is a period of 5 years and 3 months which is attached to the Replying Affidavit as annexure 1.

6. They cite the case of Republic v Chairman Business Premises Rent Tribunal & 2 others, Ex Parte Abdul Kadir Hubess [2017]eKLR where it was held that...the jurisdiction of the BPRT under Section 2 of the Act only applied where the provisions for termination of a lease was otherwise than for breach of covenant. In this case, the Respondents submit that there was no termination Clause and the same exceeds 5 years and that the Tenant is in arrears and the ought to pay the same.

7. Therefore, it is submitted that this Tribunal has no jurisdiction to issue Orders and/or to hear the Application and the Reference. The Tenant/Applicant is not a protected Tenant within the confines of the law and in particular Section 2 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act Cap 301.

8. It is the Respondents’ contention that Jurisdiction is so central in judicial proceedings as a Court acting without jurisdiction acts in vain.Nyarangi, JA, in Owners of Motor Vessel 'Lillian S' Vs Caltex Oil (Kenya) Limited [1989] KLR1 expressed himself on the issue of jurisdiction as follows:-Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings...”The Court of Appeal in Jamal Salim v Yusuf Abdulahi Abdi & another[2018] eKLR held that Jurisdiction either exists or it does not.

9. It is further submitted by the respondents that jurisdiction of a Court flows from the Constitution or statute and that it cannot be conferred by art or craft of Counsel or litigant drawing and withdrawing pleadings to confer or oust the jurisdiction given to another institution or tribunal by statute. They conclude that a valid Preliminary Objection has been raised in this instance and the same ought to be allowed with Costs to the Respondents.

10. They finally submit that having proved that the Preliminary Objection is valid, the Application and any other pleading filed by the Applicant ought to be struck out with Costs to the Respondents.

11. The Tenant in answer to the question whether the Respondents have raised a proper Preliminary Objection submits that there does not exist a written lease agreement between it and the Respondent from 31st July 2023. According to the tenant, the lease upon which the landlords are seeking to oust this court’s jurisdiction is no longer in existence or in force and the tenant has no claim against the respondents with reference to the time during which the lease was in existence and in force. The said issue, upon which the applicants raise their preliminary objection is disputed and liable to be contested.

12. The tenant cites the locus classicus decision in Mukisa Biscuits Manufacturing Ltd-Vs-West End Distributors Ltd (1969) E.A 696 wherein a preliminary objection was defined by Sir Charles Newbold, P at page 701 thus;“A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of preliminary objections does nothing but unnecessarily increase costs and, on occasion, confuse the issues, and this improper practice should stop.”

13. The tenant further cites the decision in Oraro -vs- Mbaja [2005] 1 KLR 141 where Ojwang J (as he then was) observed as follows: -“I think the principle is abundantly clear. A "preliminary objection", correctly understood, is now well identified as, and declared to be a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the processes of evidence. Any assertion which claims to be a preliminary objection, and vet it bears factual aspects calling for proof. or seeks to adduce evidence for its authentication, is not, as a matter of legal principle, a true preliminary objection which the Court should allow to proceed...”

14. The tenant also cites John Musakali -vs- Speaker County of Bungoma & 4 others (2015) eKLR where it was held that a Preliminary Objection should arise from the pleadings and on the basis that facts are agreed by both sides. If, however; facts are disputed and remain to be ascertained, that would not be a suitable Preliminary Objection on a point of law.

15. In Omondi-vs-National Bank of Kenya Ltd & Others {2001} KLR 579; [2001] 1 EA 177- “...What is forbidden is for counsel to take, and the Court to purport to determine, a point of preliminary objection on contested facts or in the exercise of judicial discretion.”

16. According to the tenant, there was a clear need for proof of termination of the impugned lease agreement, its existence and whether it is relevant to the proceedings in relation to the issues for which the tenant sought remedy in its pleadings which points to the reality that the Preliminary objection herein is bad in law and does nothing but unnecessarily increase costs and confuse the issues.

17. The submissions made by both parties constitute good law on the issues raised in the present case and need no additions. What this tribunal is called upon to do is to apply the said law to the facts of this case.

18. The tenant moved this tribunal seeking for restraining orders against the respondents from terminating, evicting, removing or in any way interfering with its tenancy or its property within the suit property.

19. In response to the application, the landlord filed a replying affidavit sworn on 2nd January 2024 by Jane Kiiru who is a director thereof to which is annexed a tenancy agreement marked “JK 1” executed by the tenant’s directors on 8/12/2021 and by the landlord’s directors on 11/12/2021 which is for a period of 5 years 3 months from 1st January 2022.

20. The said lease agreement is executed before an advocate of the High Court and we have not seen any supplementary affidavit denying the contents of the said lease. It is not sufficient to dispute existence of such a lease through submissions or to claim that the lease is contested without assigning any reasons for the contestation. We find and hold that in absence of any documentary evidence to demonstrate that the existence of the said lease is in dispute, the same ousts this Tribunal’s jurisdiction.

2. In the case of Phoenix of E.A Assurance Company Limited Vs S.M Thiga t/a Newspaper Service (2019) eKLR, the court of appeal had the following to state at paragraph 2 on the issue of jurisdiction:-“2. In common English parlance, ‘Jurisdiction’ denotes the authority or power to hear and determine judicial disputes, or to even take cognizance of the same. This definition clearly shows that before a court can be seized of a matter, it must satisfy itself that it has authority to hear it and make a determination. If a court therefore proceeds to hear a dispute without jurisdiction, then the result will be a nullity ab initio and any determination made by such court will be amenable to being set aside ex debito justitiae. It is for this reason that this Court has to deal with this appeal first as the result directly impacts Civil Appeal No.6 of 2018 which is related to this one. We shall advert to this issue later. In the meantime, it is important to put this appeal in context.”

21. Further in the case of The Owners and Master of the Motor vessel “Joey” and The Owners and Masters of the Motor Tugs “Barbara” & “Steve B” (2007) eKLR, the court of appeal had the following to state on the same issue at page 7/15:-“That is the underlying principle contained in the two previous decisions of this Court in the cases of THe Owners Of The Motor Vessel “lilian S” V. Caltex Oil (kenya) Ltd [1989] Klr 1, And Roy Shipping Sa & All Other Persons Interested In The Ship “mama Otan” Vs. Dodoma Fishing Company Ltd,Civil Appeal No. 238 of 1997 (unreported). In the LILIAN S, the Court, consisting of the late Mr. Justice Nyarangi, the late Mr. Justice Masime, and Mr. Justice Kwach, relying on previous decisions of the Courts of the United Kingdom, decisions such as The River Rima [1987] 3 ALL E.R 1,The I Congreso del Partido [1983] 1 AC 244 and such like cases, held that the question of jurisdiction, raised in the circumstances such as those existing in the present appeal, is a thresh-hold issue and must be determined by a judge at the thresh-hold stage, using such evidence as may be placed before him by the parties. Nyarangi, J.A graphically put it thus:-“...... I think it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court siezed ....... of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law down (sic) tools in respect.”

22. Section 2(1) of Cap. 301, defines a controlled tenancy as follows:-““controlled tenancy” means a tenancy of a shop, hotel or cateringestablishment—(a)which has not been reduced into writing; or(b)which has been reduced into writing and which—(i)is for a period not exceeding five years; or(ii)contains provision for termination, otherwise than for breach of covenant, within five years from the commencement thereof; or(iii)relates to premises of a class specified under subsection(2)of this section:Provided that no tenancy to which the Government, the Community or a local authority is a party, whether as landlord or as tenant, shall be a controlled tenancy;

23. Based on the foregoing analysis, we find and hold that the tenancy herein does not fit into the foregoing definition and the tenant’s suit is a candidate for striking out.

24. Consequently, the preliminary objection taken by the landlord on the question of this Tribunal’s jurisdiction has merit and we have no option than to uphold it.

25. Consequently, the following orders commend to us in this matter:-a.The landlord’s preliminary objection dated 2nd January 2024 has merit and is hereby upheld.b.The tenant’s reference and application dated 10th November 2023 are hereby struck out with costs and the interim orders given on 5th December 2023 are hereby discharged.c.The landlord’s costs are assessed at Kshs 30,000/= against the tenant.It is so ordered.

DATED, SIGNED & VIRTUALLY DELIVERED THIS 6TH DAY OF MARCH 2024HON GAKUHI CHEGEPANEL CHAIRPERSONHON JOYCE A. OSODOPANEL MEMBERIn the absence of parties