Touchstone Properties Ltd v Mwobia [2025] KEBPRT 343 (KLR)

Touchstone Properties Ltd v Mwobia (Tribunal Case E297 of 2025) [2025] KEBPRT 343 (KLR) (25 June 2025) (Ruling)

Neutral citation: [2025] KEBPRT 343 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E297 of 2025

A Muma, Member

June 25, 2025

Between

Touchstone Properties Ltd

Tenant

and

Catherine Ndigwa Mwobia

Landlord

Ruling

A. Parties and their Representatives 1. The Applicant, Touchstone Properties Limited (hereinafter the “Tenant”), is the tenant in the suit premises.

2. The firm of Morara Apiemi & Nyangito Advocates represents the Tenant in this matter.

3. The Respondent, Catherine Ndiwa Mwobia (hereinafter the “Landlord”), are the proprietors of the suit premises.

4. The firm of Kinyaki & Okeyo Company Advocates represents the Respondents in this matter.

B. Dispute Background 5. The Tenant moved this Honorable Tribunal vide a Reference and Application dated 21st March 2025. The Tenant sought, inter alia, the following Orders from this Honorable Tribunal:i.That the application be certified urgent and service thereof be dispensed with in the first instance.ii.Pending the hearing and determination of this application, the Landlord by her, her servants and/or agents be restrained from harassing the tenant and subtenants, evicting them from Land Reference No. 12715/324 (hereinafter referrediii.to as the suit premises) or in any other manner interfering with their quiet possession thereof.iv.Pending the hearing and determination of this reference, the Landlord by himself, his servants and/or agents be restrained from harassing the tenant and subtenants, evicting them from the suit premises or in any other manner interfering with their quiet possession thereof.v.The Officer Commanding Station (OCS), Syokimau Police Station to maintain peace and ensure compliance with the orders granted by this Honorable Tribunal.vi.The costs of this cause be borne by the Landlord.

6. In opposition to the Tenant’s Application, the Landlord filed a Replying Affidavit dated 8th April 2025.

C. Tenant ’s Claim 7. The Tenant vide his Application dated 21st March 2025 and Further Submissions dated 25th April 2025 avers that the Landlord entered into a lease agreement with Mr. Charles Ochieng on 1st July 2021 (hereafter referred as the initial tenant). (Annexed hereto and marked "EA-1" is a copy of the said lease).

8. It further avers that the said lease agreement inter alia allowed the said initial tenant to put up structures, to sublet the same and the liberty to assign the lease and the structures thereto and the said initial tenant put up shops and sub-let the shops to the sub-tenants.

9. He further stated that 7th April 2023, the tenant entered into a lease assignment with the initial tenant whereby the leased premise together with all the structures and the sub-tenants thereto were transferred and/or assigned the tenant herein on an agreed consideration.

10. The Tenant further claims that the Landlord was properly kept abreast of the intentions and process of transfer and/or assignment of the said leased premise and the structures thereon with the understanding that the tenant would enter into a formal lease directly with the landlord.

11. It further submits that since August 2024, the tenant has to date continued to pay the Landlord the agreed monthly rent and that despite having duly paid the agreed rent as and when it fell due as well as having complied with all the other terms of the agreement, the Landlord has started engaging the tenants subtenants directly demanding that they pay rent to her which has caused the tenant herein severe cash flow problems since several subtenants are not paying their rents to the tenant as per the sub-tenancy agreements.

12. It is the Tenant’s case that the Landlord has since served the tenant with a one-month termination notice to vacate the premises.

Landlords’ Case 13. The Landlords vide his Replying Affidavit dated 8th April 2025 and Further Submissions dated 9th May 2025 contends the tenant herein alleges to have acquired a sub-lease from a previous tenant of the Respondent in 2023.

14. He submits that the said sub-lease was procured fraudulently and without the consent or knowledge of the Landlord herein. That the previous tenant, who only had three years remaining on their lease, purported to sublet the premises to the Applicant for a period of ten (10) years—well beyond the subsisting lease period granted by the Respondent.

D. Issues for Determination 15. Having carefully perused all the pleadings and evidence presented before this Honourable Tribunal by the parties; it is my respectful finding that the issues for determination is:a.Whether the Applicant has a valid and lawful tenancy capable of protection under Cap 301?b.Whether the Tenant should be evicted from the premises?

E. Analysis and Findings a. Whether the Applicant has a valid and lawful tenancy capable of protection under Cap 301? 16. Section 2 of Landlord and Tenant (Shops, Hotels and Catering Establishments) Act defines a tenancy as;“A tenancy created by a lease or underlease, by an agreement for a lease or underlease by a tenancy agreement or by operation of law, and includes a sub-tenancy but does not include any relationship between a mortgagor and mortgagee as such;”

17. In Mistry Amar Singh V Kulubya 1963 E.A. 408, the Court cited the following passage from Scott V Brown Doering MC NAB & CO (3) 1892 2QB 724:“Ex turpi Causa non oritur action. … No Court ought to enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal if illegality is duly brought to the notice of the Court, and if the person invoking the aid of the Court is himself implicated in the illegality. It matters not whether the defendant has pleaded the illegality or whether he has not. If the evidence adduced by the plaintiff proves illegality, the Court ought not to assist him.”

18. From the above case, courts are cautioned against enforcing obligations arising from an illegal contract. However, in the present case, the Landlord’s conduct demonstrates acquiescence and acceptance of the tenant, notwithstanding any original irregularity in their occupation.

19. By accepting rent and not objecting to their continued occupation, the Landlord cannot now repudiate the existence of a tenancy relationship. The illegality doctrine does not bar the recognition of an implied tenancy that has arisen through continued possession and payment of rent with the landlord’s knowledge and acceptance.

20. The landlord has not disputed that he continued to receive rent from his submissions. The tenant on the other hand have provided proof of them having paid rent to the Landlord which they annexed to their submissions.

21. Accordingly, this Court finds that there exists an implied tenancy relationship between the Landlord and the Tenant, arising by operation of law through the conduct of the landlord.

b. Whether the Tenant should be evicted from the premises? 22. Section 4(2) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Chapter 301 of the Laws of Kenya (the "Act") 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”

1. Section 4(4) of the 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.

2. I have looked at the Landlord’s notice to terminate tenancy and I am satisfied that it does not comply with all the requirements of section 4(2) 4(4) and 4(5) of Cap 301 of the Laws of Kenya. The termination notice was to take effect in one month which is a period less than the two months provided for in section 4(4) of Cap 301.

3. Guided by the Cap 301, this Honorable Tribunal finds the termination notice dated 19th March 2025 is invalid.

c. Orders 26. In the upshot the Tenant’s Reference and Application dated 21st March 2025 is hereby allowed in the following terms;a.It is hereby declared that there exists an implied tenancy relationship between the Landlord and the Tenant herein.b.The tenancy termination notice dated 19th March 2025 is declared invalid for non-compliance with Section 4(4) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap 301), as it purported to take effect in less than two months from the date of issuance.c.Consequently, the Tenants shall remain in lawful occupation of the premises unless and until a valid notice complying with the provisions of Cap 301 is duly issued and takes effect. Landlord has liberty to issue a fresh notice if they so wishd.The said orders shall remain valid if the tenant complies with the directive of the court on 9/4/2025 of payment of rent from January to date being Kenya Shillings 600,000/- and subsequently pay rent every month as agreed. The Tenant has 30 days to comply.e.Failure to comply with d above the landlord will be at liberty to distress and take back vacant possession with the assistance of the OCS Syokimau Police Station.f.Each party shall bear its own costs.

HON A. MUMA - MEMBERBUSINESS PREMISES RENT TRIBUNALRULING DATED, DELIVERED AND SIGNED AT NAIROBI ON THIS 25TH JUNE 2025In the presence of Ondimu holding brief for Mugambi for the Tenant and Okeyo for the Landlord.