Sohan Singh & Sons Ltd v Parkview Properties Ltd [2004] KEHC 1261 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL APPEAL NO 481 OF 2002

SOHAN SINGH & SONS LIMITED …………………….. APPELLANT

VERSUS

PARKVIEW PROPERTIES LIMITED ……….....……. RESPONDENT

JUDGMENT

In June 1995, the Respondent landlord gave its tenant, the Appellant a notice under Section 4 (2) of Cap 301 on the ground that it intended to occupy and carry on its own business on the premises comprised in the tenancy (“the suit premises”). The Appellant objected, and filed a Reference to the Business Premises Rent Tribunal (“the Tribunal”) which, after hearing the dispute came to the conclusion that the landlord (respondent) had established its intention to occupy the premises for its own business, and dismissed the tenant’s reference.

It is against this decision that the tenant – Appellant has appealed to this Court. Its appeal is based on the following 4 grounds:

1. The learned Chairman erred in granting an order of termination on the grounds given by the Landlord whereas there was insufficient evidenc ed to support the grounds.

2. The learned Chairman erred in failing to consider the nature, validity and veracity of the evidence adduced for the Respondent in granting the orders of termination.

3. The learned Chairman erred in failing to consider the circumsta nces and effect of the Appellant’s relinquishing a third of its space to the Landlord.

4. The learned Chairman erred in granting an inordinately short period for the effective date of termination considering the Appellant’s long period in the suit premises.

Mr R M Mutiso, Counsel representing the Appellant, argued Grounds 1, 2 and 3 together. The main thrust of his argument was that the landlord Respondent did not demonstrate that it had “a firm and settled intention” to occupy the premises for its own use in June, 1995 when the notice was given, not in the year 2002 when the hearing took place. According to Mr Mutiso, in 1995, when the notice was given, the landlord had made no preparation for the transfer to the suit premises its property management business – indeed one of the properties to be “managed” by the landlord was acquired in 1996, one year later; that the landlord had produced only a rough sketch plan (as opposed to a professionally prepared plan) to show how the premises would be utilized; that there was no evidence that employees had been hired; nor was there evidence of funds being available. He cited the case of Auto Engineering Limited vs Gonella(1978) KLR 248 which had considered what “firm and settled intention” meant. He also argued that because the landlord had failed to utilize about 1/ 3 of the space that the tenant had voluntarily surrendered, the landlord had no firm and settled intention to occupy the premises for its own use. Finally, on Ground 4, Mr Mutiso argued that the tenant had been given a relatively short time to vacate the suit premises.

Mr Rach, for the Respondent landlord, in dealing with the last ground of appeal pointed out that the Tribunal was required to give the tenant no more than two clear months to vacate the premises, but had actually given it more than three months. In any event, the tenant is still in possession pending this Appeal, hence that is not an issue any more. I agree that Ground 4 of the appeal must fail.

With regard to the other grounds of appeal, Mr Rach submitted that the finding of facts made by the Tribunal is conclusive, and that the Appellant had not shown how the Tribunal went wrong in evaluating the evidence before it (See Makubo vs Nyamuso (1983) KLR 403 ).

The basic facts as found by the Tribunal are not in dispute. The issue is whether those facts lead inexorably to the conclusion that the landlord had a firm and settled intention of occupying the suit premises for its own business. The second related issue is whether that intention must be present at the time the notice is given, or upon termination of the tenancy. Here, in this case, notice was given in June, 1995 and the termination was slated for September 1995, but was actually terminated in August, 2002 by an Order of the Tribunal, which is the subject of this Appeal.

Let me first address myself to the finding of facts, before I come to the law applicable.

Having heard witnesses, and having observed their demeanour, and having considered the written submissions filed by Counsel, the Chairman of the Tribunal delivered himself as follows on facts:

“I have considered the evidence on the landlord’s intention. As submitted by the landlord’s counsel, it was not controverted at all. I am satisfied by the landlord’s evidence that there is need for it to transfer its office to the spacious tenant premises. I am also satisfied that it has made sufficient preparations and shall fully occupy the premises for its business for more than 12 months it indeed intends.”

In arriving at the above finding, the Chairman took into account evidence before the court which showed that the landlord had managed its three properties from an office on the upper floor of the suit premises; that it needed to expand its business; that it needed larger premises; that the ground floor of the suit premises was its best choice; that it had produced a layout plan to show how the premises would be utilized; and that it had the necessary funds to carry out its intent.

The Chairman also considered, but rejected, evidence by the tenant that the suit premises were not “practical” for the landlord’s business, and the fact that because it had not utilized the 1/3 portion surrendered to it voluntarily, that it had no intention to carry on its business in the suit premises. To this latter point, the landlord had responded by saying that the 1/3 portion was indeed not sufficient for its intended purpose, and that is why it had remained vacant.

Having examined the record of proceedings, and the Tribunal’s Judgment, I am satisfied that there is no reason to interfere with the Tribunal’s finding of fact. As the Court of Appeal in Makube vs Nyamuro(supra) said:

“A court on appeal will not normally interfere with the finding of fact by a trial court unless it is based on no e vidence, or on a misapprehension of the evidence, or the judge is shown demonstrably to have acted on wrong principles in reaching his conclusion.”

Based on the facts found by the Tribunal, I am satisfied that those facts led inexorably to the result that the landlord had a firm and settled intention to occupy the suit premises for its own use. The case of Auto Engineering Ltd vs Gonella (supra) , was cited to me by the Appellant’s Counsel to show that the burden was on the landlord to demonstrate such intention “through more than a sketch (or layout) plan” and by producing evidence that substantial preparation had been done to realize its intent, including the submission of professionally drawn plans.

The facts in the Auto-Engineering case are substantially different. There the notice to vacate was given under Section 7 (1) (f) and (g) on the grounds that:

(a) The landlord intends to carry out substantial repairs to the premises on getting vacant possession.

(b) On completion of the repairs the landlord intends t o occupy the premises to carry out its business therein for a period of not less than one year.

In the case before this Court, notice was based only on one ground – that the landlord intended to occupy the business for its own business. In any event, the Court held in the Auto Engineering case that the two grounds were not mutually exclusive, and that it was not necessary for the landlord to show that his “only” intention was to construct or re-construct, and further that the need for a planning permission is not an insurmountable obstacle to establishing the landlord’s intention.

Where, as in the case before me, the landlord proposes to occupy the premises for his own business, I do not believe that he needs to obtain planning permission or produce professionally prepared sketch plans to demonstrate “a firm and settled intention” to do so. The evidence led by the landlord here was sufficient to show his intent, and I concur with the Tribunal on that point.

Finally, I also agree with the Tribunal that the landlord’s “intention” is to be expressed to be carried out “on the termination of the tenancy” under Section 7 (1) (g), and not at the date the notice was given (See Standard Bank vs Kenya Craft HCA 75 of 71– quoted by the Tribunal).

Accordingly, and for reasons outlined, I dismiss this appeal with costs to the Respondent.

Dated and delivered at Nairobi this 18th day of November, 2004.

ALNASHIR VISRAM

JUDGE