Sinohydro Corporation Ltd v 55 Chalbi Drive Springs Ltd & 2 others [2022] KEBPRT 228 (KLR)

Sinohydro Corporation Ltd v 55 Chalbi Drive Springs Ltd & 2 others (Tribunal Case E103 of 2022) [2022] KEBPRT 228 (KLR) (10 June 2022) (Ruling)

Neutral citation: [2022] KEBPRT 228 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E103 of 2022

Gakuhi Chege, Vice Chair

June 10, 2022

Between

Sinohydro Corporation Ltd

Applicant

and

55 Chalbi Drive Springs Ltd

1st Respondent

Luo Bibo

2nd Respondent

Frontier Intergrated Solutions

3rd Respondent

Ruling

1. The tenant filed a complaint dated January 28, 2022against the respondents together with a motion of even date seeking for an injunction to restrain the 1st and 2nd respondents from demanding rent from it pending determination of the application.

2. The tenant further seeks for set off of its claim of Kshs.1,814,267/-11 against the rent payable to the 1st respondent through the 2nd respondent.

3. Finally, the tenant is seeking compensation in the sum of Kshs.1,814,267/11 against the respondents.

4. The application and complaint is supported by the affidavit of XU Han who is descried as a senior executive, International Company of National Representative, Kenya Branch Company and the grounds on the face of the application.

5. On August 4, 2021, the tenant entered into a tenancy agreement with the 1st respondent over house no. A3 & A4, Chalbi Spring Villas, Chalbi Drive, Lavington, Nairobi which agreement is marked annexture ‘XH1’.

6. The monthly rent agreed upon is remitted to the 1st respondent through the 2nd respondent in terms of annexure ‘XH2’. The 1st respondent contracted the 3rd respondent to provide security for the suit premises on 24 hour basis with the security fee being incorporated in the monthly rent payable by the tenant.

7. It is the tenant’s case that the surveillance cameras and electric fence malfunctioned on account of construction works taking place in a neighbouring plot and the 1st and 2nd Respondents failed to repair it.

8. On October 18, 2021, a robbery occurred in the tenant’s premises leading to loss of laptops which was reported at Muthangari Police Station vide OB No. 09/19/10/2021 as evidenced by annexure ‘XH3’.

9. The tenant contends that there was no security guard in the premises on the date of robbery as a result of which it has suffered loss through theft of its laptops.

10. The tenant deposes that the Respondents promised to compensate it but failed to do so as a result of which it replaced the laptops and reinforced security by engaging G4s security to install burglar proofing in the premises, alarm systems and response services at a cost of Kshs.1,814,267/11 as evidenced by annexure ‘XH4’ but the Respondents failed to compensate it despite demand to do so.

11. The tenant blames the loss suffered on negligence and breach of contract on the part of the Respondents. It is on that basis that the tenant instituted the instant proceedings.

12. The application is opposed through the 2nd respondent’s replying affidavit sworn on February 10, 2022 wherein he admits to be one of the directors of 1st Respondent.

13. The 2nd respondent denies privity of lease between him and the tenant and seeks for dismissal of the claim against him. He however admits that the tenant was authorized to deposit rent into his account by the 1st Respondent.

14. According to the 1st respondent, the tenancy agreement dated August 4, 2021 was between the 1st respondent and the tenant and that the latter used the premises for both business and residential purposes.

15. It is the 2nd respondent’s contention that it was the responsibility of the 3rd respondent to provide security in the premises and that there were no warranties given to the tenant as per Article 16 of the tenancy agreement.

16. Under clause 6 of the tenancy agreement, it was the sole responsibility of the tenant to ensure security of property within the premises and that there was no break in or forceful entry which took place and the alleged theft is suspected to have been an inside job.

17. The said theft was reported at Muthangari Police Station and necessary assistance was accorded by the landlord.

18. It is the 1st respondent’s case that it discharged its duties by ensuring that there was a security company in the name of 3rd respondent deployed to secure the premises and was thus not negligent in discharge of its mandate under the tenancy agreement.

19. According to the 2nd respondent, there were 13 guards from the 3rd respondent deployed to secure the property on October 18, 2021 as evidenced by annexure ‘LB-b’ and that during handing over the alleged robbery was recorded by the 3rd Respondent as per annexure ‘LB-7.

20. The 2nd respondent deposes that there has never been any admission of liability or undertaking to compensate the tenant for alleged loss and that any security reinforcement done to the premises by it were for its own benefit and was not recoverable against the landlord. No consent was sought under clause 4 of the agreement to make the alterations.

21. The reference according to the landlord is intended to infringe on its right to realize its return on investment. The claims by the tenant is unverified, unsubstantiated and cannot be claimed against the landlord according to the 2nd respondent.

22. The 1st respondent filed notice to co-respondent stating that should the tenant’s claim against it succeed, the landlord shall claim contribution or indemnity against the 3rd respondent. The notice is dated 10/2/2022.

23. On February 14, 2022, the 3rd Respondent moved the Tribunal vide a motion of even date seeking his name to be struck out from the suit on grounds that the tenant’s suit does not disclose a cause of action against it.

24. The application is supported by Geoffrey Muia, the operations manager of the 3rd Respondent sworn on February 14, 2022. The 3rd respondent also filed a preliminary objection on grounds that there was no landlord/tenant relationship between it and the tenant and that this Tribunal has no jurisdiction to hear and determine any purported dispute between them under section 12 of cap. 301, Laws of Kenya.

25. As such, the tenant’s application and 1st respondent’s notice to co-respondent are therefore bad in law and an abuse of court process and ought to be dismissed with costs according to the 3rd respondent.

26. The tenant filed a further affidavit sworn on March 15, 2022wherein, it is reiterated that rent was payable into the 2nd respondent’s account as per the schedule to the tenancy agreement. As such the 2nd respondent has been the 1st respondent’s agent and both are jointly and severally liable according to the tenant in regard to the compensation claim.

27. The tenant contends that it was obligated to pay for security under clause 6 of the tenancy agreement and the 1st respondent was to provide for the service.

28. It is the tenant’s case that the Respondents failed to discharge their duties in taking care of the premises and as such are liable to compensate it for the loss occasioned through theft.

29. On February 15, 2022, this court directed that both applications be disposed of by way of written submissions and both parties complied. I shall advert to the submissions while addressing the issues for determination herein.

30. From the above analysis of pleadings, the following issues arise for determination.a.Whether the tenant is entitled to the reliefs sought in the application dated January 28, 2022and the complaint of even date.b.Whether the 3rd respondent is entitled to the orders sought in the application dated February 14, 2022 and the notice of preliminary objection of February 17, 2022. c.Whether the 1st respondent is entitled to the claim of contribution and/or indemnity set out in the notice against co-respondent in term of notice dated 10th February 2022. d.Who is liable to pay costs of this suit?

31. There is no dispute that the tenant entered into a tenancy agreement with the 1st Respondent in respect of the suit premises on August 4, 2021 at a monthly rent of Kshs.180,000/- payable on or before the 5th day of each month.

32. Under clause 6 headed ‘outgoings’ the tenant was responsible for “payment of the utility bills. These shall include but shall not be limited to water, electricity, refuse collection and security. Any delay in the payment of the above shall constitute a breach of this tenancy. In any such event, the landlord shall pay the same and it shall be considered to be rent arrears and shall be recoverable as such”.

33. Pursuant to the said agreement, the 1st Respondent engaged the services of the 3rd Respondent to provide security for the suit premises inter-alia. It is therefore clear from both the tenancy agreement and the act of engaging the 3rd Respondent’s services that the 1st Respondent was liable to pay for the said services together with rent.

34. It is also not in dispute that on the night of October 18, 2021, a burglary took place in the suit premises which was reported vide OB No. 09/19/10/2021 at Muthangari Police Station for investigation.

35. The tenant claims a sum of Kshs.1,814,267. 11 against the Respondents in respect of lost laptops, personal items, employees items and documents stolen after the said theft on grounds of negligence and breach of contract.

36. According to the tenant, when the respondents failed to pay compensation for the stolen items and to restore security in the premises, it went ahead to engage G4s security to install burglar proofing measures in the premises and install alarm systems, response services and CCTV Systems at a cost of Kshs.1,811,267/11 in terms of annexure ‘MH4’.

37. I have examined the said annexure ‘MH4’ which is dated October 23, 2021for Kshs.1320,000 being an invoice on page 28 of the supporting affidavit whose source is not known and the quotation by G4S Kenya Ltd dated October 29, 2021for a total sum of Kshs.254,082,82 on page 29 & 30 of the application. There is no evidence of any payments made in regard to the said purchases or installations.

38. I have also not seen any demand for compensation prior to the alleged expenditure by the tenant. No consent has been exhibited by the tenant to show that the landlord allowed it to install intruder detection systems, alarm response and CCTV systems.

39. I have looked at the tenant’s counsel’s submissions but have not come across any justification why the tenant should be compensated on the basis of invoice and quotations exhibited by it without any evidence of expenditure in the sum of Kshs.1,811,267/11. The tenant’s claim is one for special damages which must not only be specifically pleaded but also strictly proved.

40. In that regard, I wish to rely on the court of appeal decision in the case of Hahn v Singh(1985) eKLR at page 4/7 where it was held as follows:- “……………..special damages must not only be claimed specially but proved strictly for they are not the direct natural or probable consequence of the act complained of and may not be inferred from the act. The degree of certainty and particularity of proof required depends on the circumstances and the nature of the acts themselves”.

41. The initial complaint by the tenant was that it lost “laptops, personal items, employees items and documents”. It is not therefore clear how the tenant brought in its claim for installation of intruder detection systems, alarm response and CCTV systems which did not arise from the alleged robbery incident. Such claim cannot be founded on alleged negligence and breach of contract by the landlord.

42. In absence of expenditure receipts or evidence of payment of the money sought to be recovered by the tenant, I find and hold that the claim has not been proved on a balance of probabilities.

43. The next issue is whether the 3rd respondent is entitled to the orders sought in the application dated February 14, 2022 and the notice of preliminary objection dated February 17, 2022. The 3rd respondent submits that it does not fall within the description of either a landlord or tenant under cap. 301 Laws of Kenya being a security company and as such this Tribunal has no jurisdiction to adjudicate over the claim filed against it by the tenant.

44. I have seen the decision in the case of Lucy Njeri Njoroge v Kaiyahe Njoroge (2015) eKLR cited by counsel for 3rd Respondent where it was held as follows:-“The landlord and Tenant Act is unequivocal on the mandate of the Business Premises Tribunal which is limited to controlled tenancies within the meaning of the landlord and Tenant Act and does not extend towards other contractual arrangements between parties”.

45. I agree with the said holding and the 3rd Respondent’s contention that there is no privity of contract between it and the tenant. The tenant has indeed no cause of action against it in line with the decision of the court of appeal in Agricultural Finance Corporation v Lengetia Limited &another(1985) eKLR at page 3/8 where the court cited with approval the treatise Halbury’s Laws of England, 3rd Edition, volume 8 at paragraph 110 as follows:-“As a general rule a contract affects only the parties to it and cannot be enforced by or against a person who is not a party even if the contract is made for his benefit and purports to give him the right to sue or to make him liable upon it. The fact that a person who is stranger to the consideration of contract stands in such near relationship to the party from whom the consideration proceeds that he may be considered a party to the consideration does not entitle him to sue upon the contract”.

46. In the premises, I find and hold that the 3rd respondent was wrongly sued in this matter and this means that the notice against co-respondent filed against it by the 1st respondent is equally improper and the claim against it by both the tenant and 1st respondent are hereby struck out.

47. In view of the foregoing, it is my considered holding that the tenant’s claim against the 1st and 2nd respondent has not been established on a balance of probabilities and is a candidate for dismissal.

48. As regards costs, the same are in the trial court’s discretion but always follow the event unless otherwise ordered by the court for good reasons recorded. I have no reasons to deny costs to the Respondents.

49. In conclusion therefore, the final orders that commend to me are:-i.The tenant’s application dated January 28, 2022 and the complaint of even date is dismissed with costs.ii.The 3rd respondent was wrongly joined in this matter and its application dated February 14, 2022 is hereby allowed with costs.iii.The 1st respondent’s claim against the 3rd Respondent vide the notice of claim dated February 10, 2022 is hereby struck out with costs in the cause.iv.The tenant shall pay a sum of Kshs.30,000/- to the 1st and 2nd respondents jointly and Kshs.30,000/- to the 3rd respondent as costs of the suit.It is so ordered.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 10TH DAY OF JUNE 2022. HON. GAKUHI CHEGEVICE CHAIRBusiness Premises Rent TribunalIn the presence of:Miss Nyaga for the 1st and 2nd RespondentsWambua holding brief for Munyororo for the Applicant/TenantKotonya for the 3rd Respondent