Villa Greens Limited v Creek View Limited [2022] KEBPRT 673 (KLR)

Villa Greens Limited v Creek View Limited (Tribunal Case 654 of 2019 & 234 of 2020 (Consolidated)) [2022] KEBPRT 673 (KLR) (Civ) (26 August 2022) (Judgment)

Neutral citation: [2022] KEBPRT 673 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Civil

Tribunal Case 654 of 2019 & 234 of 2020 (Consolidated)

Gakuhi Chege, Vice Chair

August 26, 2022

Between

Villa Greens Limited

Tenant

and

Creek View Limited

Landlord

Judgment

1. This mater was commenced by way of a reference dated July 11, 2019 under section 12(4) of the Landlord and Tenant (Shops, Hotels & Catering Establishments) Act, cap 301, laws of Kenya wherein the tenant complained that the landlord had disconnected electricity and threatened to kick it out yet rent had been paid in full.

2. The tenant simultaneously filed a motion of even date seeking immediate reconnection of electricity supply to its premises pending hearing and determination of the application. It also sought for an order that the landlord immediately reconciles its records and furnish a full statement of rent payment.

3. The tenant further sought for an order that the landlord installs a personal electricity meter for its premises and to permanently cease harassment and wrongful disconnection of the tenant’s electricity.

4. In the supporting affidavit of Mwenda Sawa Chokera sworn on July 11, 2019 as a director of the tenant company, he deposed that the tenant was a limited liability company incorporated under cap 486, laws of Kenya engaged in the business of real estate development and management in Nairobi City.

5. In February 2016, the said company moved into the respondent’s premises known as Ruaka Square 3rd floor, room 301 situate within Kiambu County (hereinafter called the suit premises) to conduct the business of real estate management as an agent in the name of Villa Greens Limited. According to annexure marked ‘MSC-1’ the company had three (3) directors namely Gloria Mukami Mwenda, Lydia Mutune & Mwenda Sawa Chokera as at August 7, 2014.

6. It is deposed that the landlord engaged Mwenda Sawa Chokera to let and manage the entire building being Ruaka Square whereby he was to be paid commission amounting to 70% of the monthly rent of every unit let. The commission was to be utilized towards the rent for the applicant and the said director would top up the difference if any on any particular month.

7. The said engagement was proceeding well since 2014 and the director expected his commission to be factored into his rent statement. The agency relationship is manifested in annexure ‘MSC-2’.

8. In line with the agreement, the director deposed that he had been making payments by way of cheques to the landlord amounting to about Kshs 100,000/- every two months while still anticipating that his commissions were being factored into the rent account. Copies of recent cheques dated April 1, 2019 for Kshs 100,000/-, May 25, 2019 for Kshs 100,000/- June 6, 2019 for Kshs 100,000/ and December 3, 2018 for Kshs 100,000/- are annexed as ‘MSC-3’.

9. It is further deposed that the respondent was making rent arrears demands without providing full rent statement account. The applicant had also requested the landlord to install an electricity meter for its premises to enable monitoring of its electricity consumption which was impossible with the general meter but the respondent had refused to do so.

10. On June 1, 2019, the landlord disconnected the tenant’s electricity supply despite the tenant having paid a total of Kshs 2,501,550/- as rent through cheques against expected rent due of Kshs 2,569,671/- since February 2016 leaving a deficit of Kshs 68,121/- only as per annexure ‘MSC5’.

11. According to the tenant, the said deficit is before factoring the applicant’s commission which stood at Kshs 1,520,207/- as outlined in the copy of record marked ‘MSC-5’. Despite demand vide annexure ‘MSC-6’ the respondent is accused of failing to reconnect electricity or issue a full statement of rent account.

12. On the same date of July 11, 2019, the prayer for reconnection of electricity was granted together with a restraining order against harassment and wrongful disconnection of the tenant’s electricity.

13. On July 25, 2019, the landlord was ordered to stop harassing and/or closing the tenant’s doors or making it difficult for the tenant to operate and/or access the business premises without following the provisions of cap 301, laws of Kenya. The landlord was ordered to reopen and/or remove the padlock placed on the door and in default, the tenant was authorized to remove /break it and regain entry with supervision of OCS Karuri Police Station or area OCPD.

14. By a notice of preliminary objection dated August 1, 2019, the respondent challenged the application dated July 11, 2019 for being incompetent and an abuse of court process in that the lease agreement relied on is for a period of six (6) years and the issue of payment of agency commission cannot be adjudicated by this honourable tribunal.

15. On August 5, 2019, the landlord was directed to file an affidavit in support of the preliminary objection and on September 18, 2019, a replying affidavit sworn by Vivek Shah, a director of the respondent was filed herein.

16. It is deposed in the said affidavit that the tenant acts as the landlord’s agent and was in charge of sourcing potential tenants on behalf of the landlord in exchange of commission for the agency which would sometimes be deducted from the rent due. However, the tenant under the terms in the letter of offer marked exhibit ‘VS1’ dated November 9, 2015 is obligated to pay rent in advance on or before the 5th of every month after the invoice date.

17. According to the respondent, the dispute arose when the tenant opposed tabulations of agency commissions calculated by the landlord and furnished to it on August 21, 2019 which was factored and deducted from the rent payable in terms of annexure ‘VS2’.

18. It is the respondent’s case that the tenant misled the tribunal when it obtained the interim orders alleging closure of the premises and disconnection of electricity. The respondent in reliance on the preliminary objection contends that this tribunal has no jurisdiction to determine the dispute herein being payment of agency commissions.

19. The respondent deposes that the tenant was directed to continue paying rent on August 1, 2019 in accordance with section 66(1) of the Land Act No 6 of 2012 in the pendency of the application and despite being issued with a demand letter dated August 8, 2019 on August 13, 2019 marked exhibit ‘VS4’ failed or neglected to do so and as at August 21, 2019 was in rent arrears of Kshs 459,711. 96.

20. On September 6, 2019, the respondent instructed Icon Auctioneers to levy distress for rent in terms of exhibit ‘VS3’. The respondent contends that the tenant has been unwilling to complete and settle the issue of rent arrears and its applications dated 11th and July 25, 2019 ought to be dismissed with costs and the interim orders discharged.

21. On September 14, 2019, the tenant filed yet another application seeking restraining orders against the respondent from inter-alia carting away the goods proclaimed on September 9, 2019 over disputed rent arrears. It also sought for an order that the landlord gives account of all rents paid in respect of the premises and amount owed by it to the tenant.

22. According to the proclamation of attachment annexed to the supporting affidavit, the amount claimed as rent arrears was Kshs 459,711/- as at September 9, 2019 when it was issued. As a result, the tribunal issued interim orders on September 30, 2019.

23. On December 3, 2019, the tenant filed another complaint herein dated December 2, 2019 under section 12(4) of cap 301, complaining that the landlord disconnected electricity from June 1, 2019 and threatened to kick it out yet rent had been paid in full. It also sought that rent be suspended from the month of June 2019 when power was disconnected from the main meter by the landlord until the same is restored back or the tenant authorized to install his own meter.

24. The application is opposed through a replying affidavit sworn on May 12, 2020 by Vivek Shah on behalf of the respondent reiterating the contents of his previous affidavit and in particular that this tribunal has no jurisdiction to hear and determine the dispute herein under section 2(1) (a) of cap 301 laws of Kenya since the lease was for a period of six (6) years.

25. It is deposed that by April 2020, the tenant was in rent arrears of Kshs 1,063,948. 15 as per annexure marked ‘VS6’. It is the respondent’s contention that the lease agreement had no provision for payment of rent through agency commissions.

26. It is the respondent’s contention that the interim orders obtained by the tenant were made through deliberate concealment and misrepresentation of material facts and was liable to pay compensation for the same under section 13 of cap 301.

27. On June 4, 2020, the landlord filed an application of even date seeking for directions on the hearing of the tenants application dated September 19, 2019 and the preliminary objection filed by it stating that the interim orders issued in the tenant’s favour was assisting it to escape its obligations to pay rent.

28. On June 5, 2020, the tribunal directed that the landlord’s preliminary objection be canvassed by way of written submissions with each party being granted 7 days and the matter was fixed for mention on June 25, 2020.

29. In compliance with the foregoing directions, the landlord’s counsel filed submissions on June 11, 2020. The tenant does not appear to have filed any submissions and I take judicial notice that by June 30, 2020, the tenure of office of the previous tribunal chairman had come to an end and there was a hiatus in assumption of office by the current members on account of litigation challenging their appointment before the Employment and Labour Relations Court at Nairobi.

30. On April 19, 2021, this matter came up for hearing before me when the tenant was directed to comply with previous orders on payment of rent and that current monthly rent be paid forthwith failing which the landlord was at liberty to use alternative means to recover the rent. The matter was set down for ruling on the preliminary objection on May 21, 2021.

31. The previous orders alluded to above had been made on March 25, 2021 when this tribunal directed the tenant to pay rent for the months of January, February and March totaling to Kshs 211,752/- before April 7, 2021.

32. On April 29, 2021, the landlord filed an application of even date seeking for police assistance to be given to Dancy Auctioneers in order to effect service of proclamation notice for distress for rent upon the tenant at the suit premises for recovery of Kshs 1,923,023. 00 plus costs. The application was considered and granted ex-parte on May 7, 2021 in view of the previous orders.

33. The tenant filed an application dated May 11, 2021 thereafter seeking for stay of the orders of March 25, 2021, April 7, 2021 and April 19, 2021 directing it to pay rent to the landlord. It also sought for setting aside of the said orders and for suspension of payment of rent to the landlord pending hearing and determination of the reference dated July 11, 2019 and December 2, 2019.

34. The application is hinged on the grounds that the tenant did not make use of the premises during the period in question due to continuous frustration by the landlord who had wrongfully disconnected electricity in the suit premises and failed to reconnect it despite numerous orders of this tribunal.

35. On November 20, 2020, the High Court had restrained the landlord from levying distress but it proclaimed the tenant’s goods on the same date as per annexures ‘MSC-01’. On 21st and November 22, 2021, the landlord allegedly instructed goons to break into the tenant’s premises at night and cart away the remaining goods in the suit premises as a result of which they were arrested on February 1, 2021 and charged in court with the offence of office breaking, stealing and handling stolen goods as per annexure marked ‘MSC-02’.

36. The application was directed to be placed before me on June 2, 2021 when I directed parties to file submissions and the matter fixed for mention on June 17, 2021 to confirm compliance.

37. On June 15, 2021, the tenant filed yet another application of even date seeking restraining orders against Dancy Auctioneers from carting away the tenant’s goods proclaimed on June 8, 2021 and to account for sale proceeds of all the previous distresses. It also sought for maintenance of status quo in the pendency of the complaint herein.

38. On June 17, 2021, both parties recorded a consent through their counsels that this matter be fixed for physical hearing of the main reference together with BPRT No 234/20 on July 14, 2020. The distress for rent initiated by the landlord was in the meantime stayed.

39. It was also agreed that both parties file and exchange case summaries, witness statements and documents intended to be relied upon within 21 days from June 17, 2021.

40. In compliance with the foregoing consent, the tenant filed undated witnesses statements of Mwenda Sawa Chokera, Stanley Gachuhi, Elizabeth M Sumuni and Laban Asiema together with documents and a list thereof.

41. The landlord on the other hand filed a witness statement dated July 10, 2021 by Vivek Shah together with documents ranging from folio 1-47 and a case brief of even date.

42. It is instructive to note that Nairobi BPRT No 234 of 2020 was filed by the landlord seeking to terminate the tenancy subject matter herein for non payment of rent inter alia with effect from January 2020. The case was directed to be heard together with this case on June 17, 2021.

43. It is also important to note that the landlord’s preliminary objection was withdrawn vide a notice dated June 16, 2021.

44. The hearing commenced on July 14, 2021 when the first witness of the tenant testified. The said witness is one Mwenda Sawa Chokera who restated what is contained in his witness statement and affidavits already analysed above. I shall therefore only rehash what has not been covered in the affidavits already considered in my foregoing analysis.

45. According to the witness, he was entitled to 70% commission for one (1) month rent per unit let. The total commission claimed is Kshs 2,136,918/42 with Kshs 395,942/- being credited to the rent account to leave a balance of Kshs 1,741,046/42 owing to him. He referred to pages 14 and 15 of his bundle of documents.

46. The tenant therefore maintains that he does not owe the landlord any rent. The tenant referred to the letter of offer executed in 2018 wherein he accepted to become a tenant of the respondent. It is on pages 8-14 of his bundle of documents.

47. The tenant’s witness stated that there was no dispute that he was entitled to a commission from the agency relationship. The tenant testified that he requested the landlord for reconciliation of accounts of rent and commission but its director intimated that the accountant was unwell. However on June 1, 2019, the landlord disconnected electricity supply to the suit premises.

48. According to the tenant, electricity was part of service charge and that the offer letter does not say who was to pay for electricity. The offer letter according to the witness talks only of service charge.

49. The witness testified that before June 1, 2019, he had paid Kshs 100,000/-. After disconnection of electricity, the tenant paid Kshs 100,000/- but the landlord failed to hear him despite accepting payment of the said amount. As a result, the tenant instructed its lawyers to do a demand letter which was done but never responded to. It is after that when the landlord closed the suit premises whereupon this matter was filed and interim orders issued on July 11, 2019.

50. According to the tenant, the orders for reconnection of electricity were never complied with by the landlord. As a result, it is the tenant’s case that it has not been able to operate its business since June 1, 2019. However, the office was opened with assistance of police officers from Karuri Police Station.

51. Power supply was reconnected pursuant to orders of July 25, 2019 but was disconnected the following day after police left. The tenant bought a generator but it was confiscated by the landlord’s caretaker after 3 days. The matter was reported to Karuri Police Station and the same was only recovered on intervention of Kiambu County Police Commander who commanded the OCS to go and recover it. The caretaker was one Stanley Gachuhi. The tenant took the generator home.

52. A neighbor offered to give the tenant power but the landlord prevented the move and todate the tenant has no power supply. The landlord sent an invoice showing that the tenant had power bill yet he never used to pay for electricity before closure of the premises.

53. The tenant was issued with an invoice for March 2020 when its witness states there was no power supply. The tenant relies on the witnesses statements filed in the matter to seek for damages and return of goods taken on November 20, 2020. He relies on the filed documents in respect of his claim for agency commission.

54. The tenant confirmed that he was served with a notice to terminate tenancy.

55. The tenant’s witness testified that the letter of offer did not contain any provision for offsetting rent against commission earned by him. He relied on a letter dated August 27, 2018 confirming the arrangement.

56. The tenant’s witness maintained in cross-examination that he was an agent and stated that the Estate Board’s Licence was not mandatory. He stated that he has never been issued with a licence by the board.

57. The tenant stated that he has never paid rent since July 7, 2019. He said that he was issued with orders by the High Court to stop sale of goods subject to payment of undisputed rent but according to him all rent was in dispute including future rent.

58. He however agreed that rent payment has never been suspended and that there was no written agreement on the commission payments with the landlord. He denied knowledge of the order of discharge dated November 25, 2020.

59. He also confirmed non- compliance with orders of March 25, 2021 by this tribunal to pay rent for January, February and March 2021. He stated that he was also not aware of discharge of orders of injunction on February 1, 2021. He said that he had not sued the landlord for breach of contract.

60. In re-examination, the tenant stated that the landlord has never charged VAT as a separate item nor issued a demand letter for the same. The landlord had previously deducted rent from the commission earned by the tenant. The tenant stated that he had not paid rent on account of power disconnection and on account of tools of trade having been carried away and the suit premises broken into which acts are the subject matter of this litigation.

61. Pw2 was Stanley Gachuhi who was the caretaker of the landlord at Ruaka Square Mall. He was employed in March 2018. On June 1, 2019, he was instructed by Vivek Shah to disconnect electricity to the tenant’s premises herein. He supervised the disconnection. The said disconnection was based on non-payment of rent. The witness accompanied the electrician who disconnected the supply.

62. Upon the tenant introducing a generator to serve his premises, the same was used for only three (3) days when the caretaker was instructed by the landlord to confiscate it. On October 30, 2019, the OCS, Karuri Police Station went to the premises and upon interrogating the caretaker took the generator away. The caretaker was thereafter dismissed from employment.

63. In cross-examination, the witness confirmed that as at June 19, 2019, the tenant had rent arrears. Each tenant had own meter for electricity. The generator was outside the premises and was connected to a cable. He was notified by the security personnel about the generator and upon confiscating it was held for 5 months. He was fired on October 30, 2019 but was not informed about the reason for the action.

64. Pw3 was Elizabeth Sumuni who is an employee of the tenant. She joined the tenant company at the end of 2018. On November 20, 2020, she had gone to the supermarket and on coming back to the suit premises found all office equipment scattered outside. She was informed by pw1 that an auctioneer came to the suit premises and removed the tenant’s property and took away the same.

65. On the landlord’s part, one Vivek Shah, a director thereof testified in this matter. He stated that the applicant has been its tenant since 2015. The parties entered into a tenancy agreement which was not returned. The rent payable was Kshs 45,000/- inclusive of VAT. Utilities eg electricity and service charge are charged separately.

66. There was no written agreement for payment of commission to the tenant. However, there was a management company which used to pay commissions to Villa Greens based on the tenants introduced to the landlord. The said company is known as Vam Realtors Ltd. There was no arrangement to offset rent liabilities against commission payable to the tenant.

67. Three (3) floors of the suit premises are not directly connected with electricity and the tenants on the said floors use submeters to bill their consumption. Any non-payment for consumed power is billed on the landlord.

68. The landlord disconnected electricity in the month of July or August 2019 and only reconnected upon being ordered to do so by the tribunal in November 2019. In 2019, the tenant was in rent arrears and as at September 2019, the amount due was Kshs 459,711. 96. The tenant had acknowledged indebtedness and undertaken to pay as can be seen on page 26 of the landlord’s bundle of documents.

69. As a result, the landlord instructed Icon Auctioneers to distress for rent in the month of September 2019. They proclaimed on September 9, 2019 but the tenant obtained a stay order.

70. On October 3, 2019, the landlord issued a notice of termination of tenancy on grounds of non-payment of rent and tampering with electricity and landlord’s submeter panel board thereby disconnecting other tenants. A reference was filed by the landlord vide BPRT No 230/2020 seeking for eviction.

71. According to the landlord, the tenant was not authorized to cease payment of rent upon obtaining the stay orders. In September 2020, the landlord instructed another auctioneer in the name of Little Vineyard to distrain for Kshs 1,214,659. 43. The tenant obtained injunctive orders in Nairobi MCELC No 1448 of 2020. On October 30, 2020, the case was struck out.

72. On November 19, 2020, the Auctioneers obtained orders for provision of security in CMCC No E2814/2020 and went ahead to proclaim the tenant’s goods in presence of Police Officers and in the process, the auctioneer was attacked leading to arrest of the tenant. The order restraining distress was served via whatsapp on the same day at 3. 12 pm and was issued in ELCC No E235/2020. On February 1, 2021, the order was discharged.

73. The goods were therefore sold on March 11, 2021 by public auction after advertisement. A sum of Kshs 68,300/- was recovered against rent arrears of Kshs 1. 2 million. The tenant was directed on March 25, 2021, April 7, 2021 and April 9, 2021 by this tribunal to pay rent but failed to comply. Since 2019, the tenant had not paid rent and it was in arrears of Kshs 2,165,215/85 and electricity bill of Kshs 102,146. 50 as at July 21, 2021.

74. The landlord’s witness stated that he was not aware that the tenant was not a licenced estate agent. The landlord seeks for termination of the tenancy whose term expired on November 30, 2021 based on the letter of offer, together with vacant possession, payment of all rent in arrears, utilities and costs of the case as well as auctioneers charges.

75. In cross-examination, the witness stated that he was a shareholder of Vam Realtors Ltd wherein he was also a director. He could not tell how many tenants were introduced by the agent/applicant herein to the company. The agreement was to pay commission of 70% of one month base rent. This was done for all the tenants introduced and only 2 stalls were not paid for in the sum of Kshs 21,000/- in terms of commission.

76. The witness confirmed that a letter of offer to let the suit premises to the tenant was executed by the landlord’s directors, the tenant and one Gloria Mukami and Lydia Mutune. The said agreement was binding on both parties.

77. In regard to electricity, the witness stated that each tenant has a submeter and power consumption is recorded every month in the presence of the tenant and each unit is charged in accordance with KPLC rates. As the tenant used to pay in lumpsum, a tabulation on how the amount is applied was supplied to it as can be discerned on page 46-49 of the landlord’s documents. VAT is similarly deducted against the lumpsum payments. Electricity was charged separately from rent, service charge and VAT which had a different invoice. This is evidenced by invoices to tenant on pages 15 and 16.

78. The tenant is accused of removing a submeter panel board leading to electricity disconnection. However the photographic evidence taken was not availed before the tribunal as the witness stated that the submeter panel board was later returned.

79. By the time of electricity disconnection, the tenant owed Kshs 102,000/- in electricity bills. The witness stated that the tenant’s generator was confiscated as it was a nuisance to other tenants and was causing pollution within the building.

80. The tenant is also accused of sourcing power from outside which posed a danger to other occupants. He confirmed that one cannot operate in the building without power supply and that the key to the control meter box was kept by the building management. The meter reading from March 16, 2020 to February 16, 2022 remained static meaning that the submeter had not been utilized.

81. However the tenant was still in occupation of the premises without power supply. The witness confirmed in re-examination that he disconnected power in October 2019.

82. Upon closure of both parties cases, counsels were directed to file written submissions by April 14, 2022. The landlord’s counsel filed submissions dated April 5, 2022. However counsel for the tenant requested for two (2) weeks to comply which was granted. The matter was fixed for mention on April 28, 2022 by when no submissions had been filed and the matter was fixed for judgment on 15th June 2022 with leave to the tenant’s counsel to file submissions within 14 days. However, by a letter dated June 14, 2022, counsel for the tenant sought for more time to file submissions and the matter was fixed for mention on July 5, 2022 to confirm the same. By July 5, 2022, no submissions had been filed and the matter was fixed for judgement on August 26, 2022.

83. The issues for determination in this matter based on the pleadings and evidence are:-a.Whether the tenant is entitled to the reliefs sought in the references dated July 11, 2019 and December 3, 2019 filed herein.b.Whether the landlord’s tenancy notice dated October 3, 2019 ought to be upheld or dismissed.c.Whether the tenant is entitled to offset alleged agency commission owing by the landlord against rent payable for the suit premises.d.Whether the landlord is entitled to rent from June 1, 2019 when it disconnected electricity to the suit premises.e.Who is liable to pay costs?

84. The tenant by its complaints dated July 11, 2019 and December 3, 2019 states that the landlord had disconnected electricity and threatened to kick it out yet it had paid rent in full. The tenant also sought that rent be suspended from the month of June 2019 when power was disconnected from the main meter by the landlord until the same is restored back or the tenant authorized to install its own meter.

85. In the tenant’s affidavit in support of the application dated July 11, 2019, it is deposed at paragraph 11 thereof as follows:-“11. That in addition to my rent statement, I have also been requesting the landlord/respondent to install an electricity meter for the applicant’s premises to enable me monitor the applicant’s consumption which is impossible with the general meter but the respondent has refused to do the same”.

86. According to the landlord’s witness statement at paragraphs 7 and 8, the tenant had always acknowledged its bill and on numerous occasions paid the electricity bills until May 2019 when it started defaulting thereby risking all the other tenants on the same floor being disconnected. In case of default, the landlord would be forced to pay for the defaulting tenant to avoid disconnection and thereafter seek disbursement.

87. By the time of disconnection of electricity, the tenant was in rent arrears of Kshs 459,711. 96. The tenant had acknowledged indebtedness and undertaken to pay vide an email dated March 15, 2018 on page 26 of the landlord’s bundle of documents.

88. According to the landlord, the building hosting the suit premises has separate electricity meters for each floor and each floor’s meter caters for seven tenants on the same floor with each tenant having a separate sub-meter installed by the landlord to track individual usage. The KPLC bill is shared according to each tenant’s usage and separate invoices are issued to each tenant by the landlord as can be seen on pages 15-20 of the landlord’s documents.

89. By the time of electricity disconnection, the tenant is alleged to have been owing Kshs 102,000/- in electricity bills. The tenant did not controvert the said allegation by producing evidence of payment of electricity charges or better still that it did not consume any electricity during the billed period. Instead, the tenant’s witness testified that electricity was part of service charge and that the offer does not say who was to pay for the same.

90. In my considered view, the tenant was not being forthright when its director asserted that electricity was part of service charge. It is not conceivable why the witness deposed in the initial affidavit that the tenant required a separate meter to monitor its electricity consumption. This is because, consumption impacted on the monthly bill payable by each tenant. I find and hold that the tenant is liable to meet its electricity bills separate from service charge and rent in respect of the suit premises.

91. As to whether the landlord was entitled to disconnect electricity for the tenant, I observe that no tenant is entitled to free services when the other tenants are obligated to meet such utility bills. The tenant was not entitled to continue enjoying power supply without meeting its obligation to pay rent. I am sure that had this Tribunal been aware of the true state of affairs, the interim orders would have been issued on condition that it pays outstanding bills or would have been denied. It is trite law that he who comes to equity must do equity and must fulfil all obligations required on his part before benefitting from equitable remedies.

92. I am therefore not convinced that the tenant is entitled to an order for suspension of rent payment from the month of June 2019 when power supply was disconnected from its premises neither is it entitled to restoration of power without paying any outstanding bills. At the time the tenant occupied the premises, it knew about the state of electricity supply in the building and once in the premises, it was not entitled to dictate that it be provided with its own meter by an order of this tribunal. The duty of this court is not to make new contracts for parties but to enforce the terms of their own contracts (see the case of Jiwaji & others v Jiwaji & another (1968) EA 548 at page 554 and National Bank (K) Ltd v Pipe Plastic Sarkolit (k) Ltd and another [2001] eKLR).

93. I am therefore not convinced that the tenant is entitled to the reliefs claimed in the two complaints/references set out above.

94. The next issue is whether the landlord’s tenancy notice dated October 3, 2019 ought to be upheld o dismissed. There is no dispute that the said notice was served upon the tenant and was expressed to take effect on January 1, 2020. The grounds for termination expressed therein are non-payment of rent and tempering with electricity and landlord’s submeter panel board thereby disconnecting other tenants.

95. The landlord’s witness stated that the photographic evidence taken at the time of alleged tampering were not produced before this Tribunal as the submeter panel board was returned. Secondly, it was his evidence that the meter board is ordinarily locked and keys kept by the management. No evidence was presented as to how the tenant gained access to the meter box in order to perpetrate the said act. I therefore reject the said ground.

96. In regard to the first ground of non-payment of rent, the tenant in his own affidavit filed in court in support of the initial application dated July 11, 2019 at paragraph 13 thereof deposed as follows:-“13. That from my records, I have been able to ascertain that I have paid the respondentlandlord a total of Kshs 2501,550/- as rent through cheques against the rent due since February 2016 of Kshs 2,569,671/- leaving a deficit of about Kshs 68,121/- only (a copy of the record is annexed hereto and marked “MSC 4”).

97. From the said affidavit, it is clear that the tenant admitted being indebted to the landlord in the sum of Kshs 68,121/- at inception of the case. He attached as annexure ‘MSC4’ a rent account statement issued by the landlord showing unpaid rent balance of Kshs 316,878/56 as at June 18, 2019. He has not denied the landlord’s contention that ever since obtaining orders in 2019, he has not paid any rent but continues to occupy the suit premises.

98. In my considered view therefore, the ground for non-payment of rent for more than two (2) months which is provided for under section 7(1) (b) of cap 301 has been proved by the landlord.

99. The next issue is whether the tenant is entitled to offset alleged agency commission owing by the landlord against rent for the suit premises. The landlord’s counsel submits that the tenant in entering into the tenancy agreement with the landlord mispresented itself as a real estate agency which is borne out by the letter of offer and documents filed before this court. It is on that basis that the tenant asserts that it is entitled to offset commissions earned against rent arrears.

100. According to the landlord, none of the directors of the tenant is a licensed real estate agent and their practice as such contravenes section 18 of the Estate Agents Act cap 533, laws of Kenya. In absence of such registration, it is submitted that the business being carried out by the tenant is illegal business by statute and that this court should not rubberstamp illegal activities in line with the decision in the case of Livingstone Gitonga Muchungi v ICEA Lion Life Assistance Company Limited [2021] eKLR which followed another decision in Mike Munga Mbuvi v Kenya Airways Limited [2017] eKLR where it was held as follows:-“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 the illegality is 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 the illegality, the court ought not to assist him”

101. The landlord’s counsel further cited the case of Hussein Ladha v Haresh Soni [2017] eKLR which is on all fours similar to this case as follows:-“He for that reason engaged in the practice of an estate agent. It is not in dispute that he was never a licensed agent and therefore in so doing, he affronted the provisions of the Act at section 18 of the Act. Being so prohibited by the statute, this court is itself, being a court and creature of the law, prohibited from enforcing a contract that is contrary to the provisions of a statute. A contract founded upon breach, violation or circumvention of a statutory provision cannot be enforced by the court. Indeed in this matter, the plaintiff seeks to be rewarded for having engaged in the practice of an estate agent when he was not registered under the law. To enforce such a contract would not only beat the very purposes of the law but the entire purpose of a judicial system which is to act as a bastion for the observance of the law. To enforce the agreement sued upon would be to throw out the entire architecture and purposes put in place by parliament in its constitutional legislative mandate regarding the prohibition placed against unregistered persons from engaging in the practice of Estate Agents. This is a clear case for the court to say the cause of action arose exturpi causa and this court has no otherwise but to declare that it has no ability or authority to assist the plaintiff benefit from his actions in violation of a positive provision of the Kenya law”.

102. In the instant case, the tenant’s witness in cross-examination maintained that he was an estate agent and that the Estate Agency Board’s licence was not mandatory. He confirmed that he has never been issued with a licence by the Board. In the premises, by his own admission, the tenant’s claim is statute barred by dint of section 18 of the Estate Agents Act aforesaid and the decisions of superior courts cited by the landlord’s counsel which are binding on this court. The claim therefore fails.

103. On whether the landlord is entitled to rent from June 1, 2019 when it disconnected electricity supply to the suit premises, it is important to note that I have already held that the tenant was not entitled to continue enjoying power supply without paying for it. As such, the disconnection having been occasioned by the tenant’s failure to pay for the utility bills, it cannot be rewarded for its own wrong doing by suspending or waiving rent payment for the period in question. Had the tenant paid for the service and the landlord failed to restore supply, I would have had no hesitation to order suspension or waiver of rent. However, in the circumstances obtaining herein, I am afraid that I am not ready to do so.

104. As regards who is liable to pay costs, the same are in the discretion of this tribunal under section 12 (1) (k) of cap 301, laws of Kenya. The tenant herein filed a multiplicity of applications to forestall payment of rent and in an attempt to obscure the real issues in controversy. None of the applications was prosecuted and all of them died upon obtaining ex-parte orders. This in my considered view amounts to abuse of court process and should call for award of exemplary costs in terms of the aforesaid section against the tenant. I shall award a sum of Kshs 100,000/- to the landlord in exercise of my discretion in that regard.

105. In conclusion therefore, the following final orders which commend to me in this matter are:-i.The tenant’s reference in Nairobi BPRT No 654 of 2019 is hereby dismissed with costs.ii.The landlord’s notice to terminate tenancy dated October 3, 2019 subject matter of Nairobi BPRT No 234 of 2020 is hereby upheld and the tenant’s tenancy in respect of Ruaka Square Building, room 301, 3rd floor, Kiambu County is hereby terminated.iii.The tenant shall forthwith vacate the suit promises and in default shall be forcibly evicted therefrom by a licenced auctioneer who shall be provided with security by the OCS within whose jurisdiction the premises are situate.iv.The tenant is liable to pay rent arrears owing to the landlord up to and including the date of such vacation or eviction.v.The landlord is at liberty to use all lawful means to recover rent arrears against the tenant.vi.The tenant is disentitled to offset the rent arrears owing to the landlord in respect of the suit premises against the alleged agency commission as the claim is illegal under section 18 of the Estate Agents Act cap 533, laws of Kenya.vii.The tenant shall pay exemplary costs of Kshs 100,000/- to the landlord in the consolidated case all inclusive.It is so ordered.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 26TH DAY OF AUGUST 2022. HON GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALIn the presence of:Kithinji Thuranira for the Tenant.Miss Nganga for the landlord.