Plural Enterprises Limited v Victor Wambugu [2022] KEBPRT 58 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. E005  OF 2021 (NYAHURURU)

PLURAL ENTERPRISES LIMITED.................................................. LANDLORD/APPLICANT

VERSUS

VICTOR WAMBUGU.............................................................................TENANT/RESPONDENT

RULING

1. This is a ruling in respect of an application dated 30th November 2021 in which the landlord seeks for an order for immediate delivery of vacant possession against the tenant in respect of business premises situate on L.R NO. Nyahururu Municipality Block 6/535 and in default, the landlord be at liberty to evict him through a licensed auctioneer.

2. The landlord further seeks that the OCS, Nyahururu Police Station do provide security and ensure compliance with the tribunal orders.  The landlord also seeks for costs of the application and eviction to be met by the tenant.

3. The application is supported by the affidavit of Gerald Kingori Marugu sworn on 30th November 2021 and the grounds on the face of the application.

4. The tenant herein is a month to month tenant in the landlord’s business premises erected on L.R No. Nyahururu Municipality Block 6/535.  On 27th May 2021, the landlord issued a notice of termination of tenancy upon the tenant whose service was effected on 27th May 2021,in terms of annexture PE-1 (a) & (b).

5. The said notice was expressed to take effect on 1st August 2021 if the tenant did not file any objection thereto.  As the tenant failed to file any reference, the notice took effect but he did not vacate from the demised premises.

6. As a result, the landlord instituted the instant proceedings seeking for an order of vacant possession as the continued occupation of the premises by the tenant constitutes trespass to property and is an affront to its  constitutional right to property.

7. The application is opposed through the tenant’s replying affidavit sworn on 9th December 2021.  Although the  tenant deposed that the law firm of Hon. Gakuhi Chege, vice Chair drew and executed the tenancy agreement between him and the applicant marked ‘VW1’, no application for recusal was filed neither does the tenant allege that the court has any pecuniary interest in the outcome of the instant proceedings.  In any event the said agreement is not signed by Hon. Gakuhi Chege, Vice Chair as an attesting witness or otherwise neither is there a dispute over the same.

8. According to the respondent, he entered into the suit premises in the year 1994 after taking over from the previous owner one Mirriam Wanjira Githaiga to whom he paid Kshs.230,000/- termed as goodwill.  A sum of Kshs.50,000/- was refund of goodwill paid to the applicant by the previous tenant.

9. The tenancy agreement dated 4th May 2021 stipulates a period of two (2) years (renewable) commencing from 1/3/2021 to 28/2/2023 which term was yet to expire.

10. The tenant deposes that he was informed by one Jane Wanjiru about the tenancy notice on 2nd June 2021 and he advised her to seek advice from an advocate.  He states that he was never served with the notice personally.

11. On 3rd June 2021, a notice was written to the applicant by the Respondent’s advocate protesting the notice requiring him to vacate the premises by 1st August 2021 and was as such defective since it fell short of the 60 days statutory period.

12. No response was received from the landlord and after 1st August 2021, the landlord continued to receive rent from the tenant and the latter assumed that the applicant had withdrawn the notice and there was no need of filing a reference.

13. The applicant is said to have sent a text message in August 2021 advising the Respondent to be paying rent through Mpesa till number and he proceeded on the belief that the applicant through its subsequent acts of instructing him to continue paying and receiving rent had withdrawn the notice dated 27th May 2021 on the basis of the protest dated 3rd June 2021.  The tenant has annexed rent payment receipts marked ‘VW3’.

14. It is the tenant’s case that he has extensively developed and renovated the rental premises and converted it from a hotel to a salon and barber shop with the applicant’s full knowledge and no compensation has been offered to him including the goodwill paid to the previous tenant.

15. The tenant states that the notice is defective and ought to be dismissed having been drawn only 23 days after execution of the tenancy agreement without any violation on his part.

16. The salon business was the tenant’s family source of livelihood and he stood to suffer greatly if the applicant is allowed to evict him from the rental premises without committing any wrong to warrant the same.

17. The landlord filed a supplementary affidavit sworn by Gerald Kingori Marugu on 14th December 2021 denying knowledge or having consented to payment of alleged goodwill of Kshs.230,000/- by the tenant.

18. The deponent confirms having been present when the tenancy notice was served and being the one who identified the tenant to the process server.

19. Despite writing a letter of objection, the tenant did  not file a reference against the notice and the landlord was entitled to continue receiving mesne profits from the tenant even after the notice took effect.

20. It is deposed that at no time did the landlord withdraw notice of termination of tenancy nor discuss the issue with the tenant.

21. According to the landlord, the developments effected on the suit premises are of a temporary nature and it had no objection to their removal provided the premises are left in the same state as they were during the time of taking possession.

22. It is the landlord’s contention that the notice of termination is not in any way defective and the fact that it was drawn after the tenancy agreement does not make it invalid.

23. When the matter came up on 15th February 2022, only the landlord’s counsel appeared.  She prayed that the application be allowed based on the pleadings on record.

24. I am required to determine the following issues:-

(a) Whether the landlord is entitled to the reliefs sought in the application dated 30th November 2021 and the reference of even date.

(b) Who is liable to pay costs?

25. 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 service enjoyed by the tenant under such a tenancy shall give notice in that behalf to the tenant in the prescribed form”.

26. Section 4(4) of the said Act provides that no tenancy notice shall take effect until such date not being less than two months after the receipt thereof by the receiving party as shall be specified therein.

27. There is no dispute in this matter that the landlord served the tenant with the tenancy notice dated 27th May 2021.  What is in dispute is the date of service.  According to the affidavit of service marked PE-1(b) annexed to the supporting affidavit, service was effected by one Peter Githinji Ngure on 28th May 2021.

28. Although the tenant denied such personal service and claimed to reside at Nakuru, he did not apply for the process server to be summoned for purposes of cross-examination as required by law.

29. In this regard, I am fortified by the decision in the case of Secretary & Another – vs- Lucia Ndinda Musyoka t/a Jocia Stores (2019) eKLR where  the superior court citing the treatise “The code of Civil Procedure Vol.II page 1670 by Chitaley and Annaji Rao at paragraph 22 on presumption of service had the following to state:-

“There is a presumption of service as stated in the process servers report, and the burden lies on the party questioning it, to show that the return is incorrect.  But an affidavit of the process server is admissible in evidence and in absence of a contest it would normally be considered sufficient evidence of the regularity of the proceedings.  But if the fact of service is denied, it is desirable that the process server is put in the witness box and opportunity of cross-examination is given to those who deny service”. (emphasis added).

30. I therefore find and hold that there is no material placed before me to demonstrate that the tenancy notice was not served on the date and manner stated in the process server’s affidavit of service.

31. The respondent contends that the notice is defective without elaborating.  I have examined the said notice and noted that it is in the standard form and accords  with section 4(4) by giving the requisite 2 months.  No defect has been cited by the tenant.  I also note that the grounds of termination accord with section 7(1)(g) of Cap. 301, Laws of Kenya.

32. Under section 6(1) of Cap. 301, 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 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.

33. In this matter, the tenant did not file any reference against the termination notice in the believe according to him that the same had been withdrawn by the landlord.  There is no evidence of such withdrawal or intimation by the landlord of having abandoned the termination notice.

34. Section 10 of the Act provides as follows:-

“Where a landlord has served a notice in accordance with the requirements of section 4 of this Act, on a tenant, 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 this 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”.

35. Having failed to file a reference before 1st August 2021 as confirmed by the Tribunal vide the landlord’s annexture ‘PE -2(b) that no reference was filed by the tenant the notice took effect as expressed therein.

36. The tenant contends that, the landlord continued accepting rent after 1st August 2021 when the notice took effect.  The landlord counters the argument by stating that, the payments made by the tenant are in form of  mesne profits which it was entitled to.  I agree that a landlord who has terminated tenancy of a tenant is entitled to receive mesne profit and such payment do not serve to renew the tenancy.

37. In the case of Fredrick Korir – vs- Soin United Women Group (sued through Eunice Towett, Jane Mwolomet, Lucio Chebocho (2018) eKLR at paragraph 25, the court cited the definition of mesne profits’ in section 2 of the Civil Procedure Act, Cap. 21, Laws of Kenya as follows:-

“Mesne profits” in relation to property, means those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom together with interest on such profits but does not include profits due to improvements made by the person in wrongful possession”.

38. At paragraph 27, the court cited the court of appeal decision in Attorney General – vs- Halal Meat Products Limited (2016) eKLR as follows:-

“It follows therefore that where a person is wrongfully deprived of his property, he/she is entitled to damages known as profits for loss suffered as a result of the wrongful period of occupation of his/her property by another, see Mc Gregor on damages, 18th Edn para 34-42”.

39. Citing the case of Rajan Shah t/a Rajan S Shah & Partners – vs- Bipin P. Shah (2016) e KLR at paragraph 28 the court went on to hold as follows:-

“…………

Mesne profits are awarded in place of rents, where the tenant remains in possession after the tenancy agreement has run out or been duly determined.  A landlord claiming for mesne profits is claiming for the profits intermediate from the date the tenant ought to have given up possession and the date he actually gives up possession.

After the service of a written notice or at the end of the term granted and the tenant holds over without the permission of the landlord, the tenant is liable to pay mesne profits for the use and occupation of the premises till he delivers up possession …………….”

40. In the premises, I am of the considered view that the landlord has proved its case on a balance of probabilities and is entitled to the orders sought in the application and reference together with costs.

41. Consequently, I make the following final orders herein:-

(i) That an order be and is hereby issued against the Tenant/Respondent for immediate delivery of vacant possession in respect of the business premises situate on L.R NO. Nyahururu Municipality Block 6/535 and in default, the landlord shall be at liberty to evict him through a licensed Auctioneer.

(ii) That the OCS, Nyahururu Police Station shall provide security and ensure compliance with the above orders.

(iii) That the landlord is awarded costs of Kshs.30,000/- against the tenant.

It is so ordered.

DATED, SIGNED & DELIVERED  VIRTUALLY THIS 24THDAY OF FEBRUAY 2022.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

RULING delivered in the absence of the parties.