Patel v Malca Amit Limited [2022] KEBPRT 141 (KLR)

Patel v Malca Amit Limited (Tribunal Case E070 of 2022) [2022] KEBPRT 141 (KLR) (Civ) (8 July 2022) (Ruling)

Neutral citation: [2022] KEBPRT 141 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case E070 of 2022

Gakuhi Chege, Vice Chair

July 8, 2022

Between

Rasikbhai Dahyabhai Patel

Plaintiff

and

Malca Amit Limited

Defendant

Ruling

1. The landlord filed a motion dated 19th January 2022 seeking in pertinent part leave to enter upon and repossess the suit premises being L.R NO. 209/7017 situate in Riverside Drive Nairobi. The landlord further seeks an award of Kshs.1696,900/- being rent arrears owed by the tenant on the date the notice of termination of tenancy took effect.

2. By another motion dated 15th March 2022, the landlord is seeking the same reliefs as in the application dated 19th January 2022 save that the rent arrears is expressed to be Kshs.3,708,000/- (inclusive of VAT). He further seeks for award of mesne profits from the date the termination notice took effect until the date of repossession of the suit premises by the landlord/applicant at the same rate as the one prevailing at the time of termination.

3. The Respondent filed a replying affidavit sworn by Paul Kobia on 1st April 2022 and a preliminary objection dated 4th April 2022. The preliminary objection was directed to be disposed of by way of written submissions and both parties complied.

4. The preliminary objection is based on the ground that this Tribunal has no jurisdiction to hear and determine the matter because the lease is for 5 years and one (1) day commencing on 1st January 2019. Secondly that the application is incompetent, misconceived, vexatious and a gross abuse of the court process. Kindly that the application is res judicata because a similar application is pending herein.

5. The next ground is that the landlord’s advocates are conflicted because they acted for both parties during execution of the lease agreement and cannot act for one of the parties under the Advocates Act.

6. The next ground is that the landlord has not filed a proper reference within the meaning of section 12(4) of Cap. 301, Laws of Kenya and as such the matter is incompetent.

7. The landlord failed to serve the tenant with a proper and adequate statutory notice of at lease sixty (60) days and give reasonable grounds for termination under Cap. 301, Laws of Kenya.

8. The tenant contends that the landlord cannot pursue rent in a manner he has purported to do as there is an elaborate procedure to pursue rent.

9. The tenant further contends that the landlord has breached the terms and conditions of the lease by purporting to levy VAT twice separately yet the monthly rent of Kshs.605,000/- per month was all inclusive subject to annual increment of 10% as per clause 3. 1.3 of the lease.

10. In the case of the Owners and Masters of the Motor Vessel ‘Joey’ and the Owners and Masters of the Motor Tugs ‘Barbara’ & ‘Steve B’ (2007) eKLR the court of appeal at page 7/15 that the question of jurisdiction is a threshold issue and must be determined by a Judge at the threshold stage using such evidence as may be placed in the case of the Owners of the Motor Vessel ‘Lilians’ – vs- Caltex Oil (Kenya) Ltd (1989) KLR 1 this:-“…………..I think it reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized…….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 move one more step. Scanty or limited facts constitute the evidence before the court. A party who fails to question the jurisdiction of a court may not be heard to raise the issue after the matter is heard and determined. I can see no ground why a question of jurisdiction could not be raised during the proceedings. As soon as that is done, the court should hear and dispose of that issue without further ado”.

11. I intend to examine the preliminary objection against the foregoing back ground and the edict in the Locus Classicus case of Mukisa Biscuits Manufacturing Co. Ltd – vs- West End Distributors Limited (1969) IEA 696 cited by counsel for the landlord in opposition to the objection.

12. On the first issue on whether the tenancy is controlled within the meaning and intendment of section 2(1) of Cap. 301, I note that although the lease is for 5 years and one (1) day it contains a termination clause at clause 14 which reads:-“This lease may be terminated at anytime by either party giving to the other three (3) calendar, months notice to said effect”.(see annexure ‘RDP2’ attached to the tenant’s supporting affidavit).

13. Section 2(1) (b)(ii) includes in the definition of a controlled tenancy any tenancy that contains provision for termination otherwise than for breach of covenant within five years from the commencement thereof……….”. The lease herein falls within the said definition and the preliminary objection therefore fails on that ground.

14. The second ground is that the application is incompetent, misconceived, vexatious and a gross abuse of the court process. This ground is too general to constitute a preliminary objection and therefore fails.

15. The third ground is that the application is res judicate because a similar application is pending in this matter. I agree with submission of the landlord’s counsel that the said ground does not pass the test laid down under section 7 of the Civil Procedure Act, Cap. 21 laws of Kenya as no matter has been heard and determined by the Tribunal or any other competent court over the subject matter of the dispute and between the same parties. This ground fails.

16. The next ground is that the landlord’s advocates are conflicted because they acted for both parties during execution of the lease agreement and cannot act for one of the parties under the Advocates Act. It is inconceivable how such an issue can affect the jurisdiction of the Tribunal or dispose of the issues herein in line with the definition of a preliminary objection espoused in Mukisa Biscuits Case. I find and hold that the issue does not pass the test laid down in the said case.

17. The next ground is that the landlord has not filed a proper reference within the meaning of section 12(4) of Cap. 301, Laws of Kenya making the matter incompetent. Section 12(4) of Cap. 301 gives this Tribunal powers to investigate any complaint relating to controlled tenancy made to it by the landlord or the tenant.

18. Regulation 5 of the Landlord and Tenant (Shops, Hotels and Catering establishments) (Tribunal) (forms and procedure) Regulations 1966 provides as follows:-“Reference to the Tribunal under section 6(1) or section 12(4) of the Act shall be in forms B and C in the schedule to these Regulations”.

19. I have perused the record and have not come across any reference filed under the foregoing provisions of the law. The landlord filed applications without filing any reference which amounts to filing an application under the Civil Procedure Rules without filing a plaint. The applications therefore lack a foundation as they are hanging on air making them incompetent and liable to be struck out.

20. I have noted the submission by counsel for the landlord that failure to file the forms prescribed amounts to deviation from forms which is curable by section 72 of the interpretation and General provisions Act, Cap. 2, Laws of Kenya. I however refuse to buy the argument as failure to file the reference/complaint goes into the root of the matter and is fatal to the landlord’s case.

21. In that regard, I wish to cite the decision in Lall – vs- Jeypee Investments Ltd (1972) EA 512 where it was held as follows:-“The Landlord and Tenant (Shops, Hotels and Catering Establishments) Act is an especially enacted piece of legislation which creates a privileged class of tenants for the purpose of affording them the protection specified by its provisions against ravages of predatory landlords. Such protection can only be fully enjoyed if the provisions of Act are observed to the latter otherwise the clearly indicated intention of the legislature would be defeated. In order to be effective in this fashion, the Act must be construed strictly no matter how harsh the result………. The Landlord and Tenant Act laid down a code which parliament intended to be followed and if a landlord does not give notice of termination as prescribed, the notice will be ineffectual. This may seem a technical and unmeritorious defence, but there is no doubt that the court has no power to dispense with these time limits if the defendant chooses to object at the proper time. This is an Act which requires, in so far as the giving of the notice is concerned absolute and complete not merely substantive compliance with its peremptory provisions”.

22. By parity of reasoning, the landlord had a mandatory obligation to comply with Regulation 5 of the Tribunal’s Regulations aforesaid and failure to do so rendered the proceedings fatally defective and a candidate for striking out.

23. The next ground is that the landlord failed to serve the tenant with a proper and adequate statutory notice of at least sixty (60) days and give reasonable grounds for termination under section Cap. 301, Laws of Kenya.

24. Section 4(2) of Cap. 301, provides as follows:-“A Landlord who wishes to terminate a controlled tenancy, or to alter, to the detriment of the tenant, any term or condition in or right or services enjoyed by the tenant under such a tenancy, shall give notice in that behalf to the tenant in the prescribed form”. (emphasis mine).

25. I have examined the notice subject matter of the instant proceedings which is dated 10th September 2021 and marked ‘RDP5’ attached to the affidavit of the landlord sworn on 15th March 2022 and I have no hesitation to hold that it does not pass the test of the notice prescribed under Regulation 4(1) of the Act which stipulates as follows:-“a notice under section 4(2) of the Act by a Landlord shall be in form A in the schedule to these regulations”.

26. This provision is mandatory and any notice that contravenes it is defective and/or invalid in law (see the case of Fredrick Mutua Mulinge t/a Kitui Uniform – vs- Kitui Teachers Housing Cooperative Society Ltd (2017) eKLR wherein several cases on the issue were cited with approval.

27. In the premises, this ground of preliminary objection succeeds. Since the said notice is the root of the instant proceedings, I find and hold that the proceedings are incompetent and a candidate for striking out.

28. In conclusion therefore, the following final orders commend to me:-(i)The preliminary objection by the tenant is upheld on grounds no. 6,7 and 8 thereof.(ii)The landlord’s notices of motion dated 19th January 2022 and 15th March 2022 are hereby struck out with costs.(iii)The landlord is at liberty to issue a proper notice upon the tenant (if he so desires) under Cap. 301 Laws of Kenya as the tenancy herein is controlled.(iv)The landlord shall pay costs of Kshs.25,000/- to the tenant which shall be deducted from the rent account if not paid within the next Thirty (30) days hereof.

RULING DATED, SIGNED AND DEVELIVERED VIRTUALLY THIS 8TH DAY OF JULY 2022. HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALIn the presence of:-Owino for the LandlordNo appearance for the Tenant