Vincent Kimani Gitaka t/a 6.2 Lounge v Stankam Agencies, Aztec Auctioneers & Stephen Masha Ngoa [2022] KEBPRT 57 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO E244 OF 2021 (NAIROBI)

VINCENT KIMANI GITAKA T/A

6. 2 LOUNGE.......................................................................................TENANT/APPLICANT

VERSUS

STANKAM AGENCIES..........................................................................1ST RESPONDENT

AZTEC AUCTIONEERS.......................................................................2ND RESPONDENT

STEPHEN MASHA NGOA....................................................................3RD RESPONDENT

RULING

1.  By a motion dated 28th June 2021, the tenant is seeking for restraining orders against the Respondents from proclaiming, distressing, selling the attached goods, evicting and/or harassing him in any way until this case is heard and determined.

2.  The tenant simultaneously filed a reference of even date in which he complains that the landlord has adamantly refused to reconcile accounts to determine rent due and has refused to engage in any discussion despite attempts to reduce the rent arrears by the tenant and had instead sent auctioneers to proclaim his goods.

3.  The application is supported by the tenant’s affidavit of even date and the grounds on the face thereof.  The tenant deposes that there arose a dispute over rent from the time Covid-19 pandemic struck the country and bars ordered closed.  His lease also expired in the year 2020 without renewal making him a protected tenant under Cap. 301, Laws of Kenya.

4.  According to the tenant, the closure of bar businesses and the directive thereafter for their limited operating hours severely affected his business.  He admits indebtedness and deposes that he was doing all he could to offset the same in terms of annexture ‘VKG-1’.

5.  The application is opposed through a replying affidavit of 3rd Respondent sworn on 3rd August 2021.  The 3rd Respondent is the landlord of the applicant.  He leased a shop and a bar/restaurant to the tenant at a total monthly rent of Kshs.65,000/-.

6.  According to the landlord, the tenant started falling into arrears in the year 2019 and the default persisted into the year 2020.  Owing to Covid-19 pandemic effects, the landlord reduced rent for the bar from Kshs.50,000/- to Kshs.40,000/- and gave the tenant room to clear the arrears.  He however neglected or failed to pay rent and as at July 2021 was in arrears of Kshs.750,000/- as per annexture ‘SMN2’.

7.  In a meeting held on 17th May 2021, it was agreed that the tenant would pay additional Kshs.10,000/- every month to cater for arrears in terms of annexure ‘SMN3.  He however failed to make good the payments.  As a result a demand letter marked ‘SMN4’ was issued on 26th May 2021.

8.  The tenant made three (3) payments in respect of arrears and stopped as a result of which the landlord instructed auctioneers to levy distress on 18th June 2021 vide annexture ‘SMN5’.  A proclamation marked ‘SMN6’ was issued by the Auctioneer on 25th June 2021.

9.  The tenant having admitted being in arrears cannot fault the proclamation according to the landlord.  The tenant has not demonstrated good faith and continues to show lack of intention towards liquidating accrued rental arrears resulting into astronomical economic loss and mental anguish to the landlord.

10.  The suit property is charged to a commercial lender in terms of annexture ‘SMN7’ and the rent proceeds go towards repayment thereof and the tenant’s default exposes the property to the risk of being auctioned.

11.  The application was ordered to be canvassed through written submissions and both parties complied.

12.  The issues for determination are:-

(a) Whether the tenant is entitled to the reliefs sought.

(b) Who is liable to pay costs?

13.   The principles of injunctions were settled in the locus classicus case of Giella – vs- Cassman Brown & Co. Ltd (1973) EA 358 as follows:-

(i)    An applicant must show a prima facie case with a probability of success.

(ii)    An injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury.

(iii)   When the court is in doubt, it will decide the application on the balance of convenience.

14.  A prima facie case was defined in the case of Mrao – vs- First American Bank of Kenya Ltd & 2 Others (2003) eKLR at page 8/10 as follows:-

“So what is a ‘prima facie’.  I would say in civil cases, it is a case in which on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter”.

15.  It is not in dispute that by the time the landlord instructed Auctioneers to levy distress, the tenant was in rent arrears.  The tenant submits that the goods proclaimed are his tools of trade and his rights were infringed by that reason.  The tenant further submits that he will suffer irreparable damage if the proclaimed goods are sold or if he is evicted as he relies on the said goods to earn a living.

16.  The tenant relies  on the decision in Victoria Pumps Limited – vs- Kenya Ports Authority & 4 Others to support its contention that the proclaimed goods are tools of trade under section 16(1)(g) of Distress for Rent Act and Section 44 (1) of the Civil Procedure Act.

17.  The tenant submits that he was willing to pay the arrears in instalments of Kshs.20,000/- with effect from November 2021 until he clears the amount in full.  However, this is not contained anywhere in the filed affidavit neither is the issue of the proclaimed goods being tools of trade pleaded anywhere.  Submissions it must be stated are not pleadings.

18.  On the other hand, the landlord submits that the tenant is guilty of breach of contract and he could not be faulted for taking action to recover the rent arrears legally due to him under the Distress for Rent Act, Cap 293, Laws of Kenya.

19.  The landlord cites Halsbury’s Laws of England, 4th Edition volume 13 paragraph 368 on what constitutes illegal distress as follows:-

“ An illegal distress is one which is wrongful at the very outset, that is to say either where there was no right to distrain or where a wrongful act at the very outset, that is to say either where there was no right to distrain or where a wrongful act  was committed at the beginning of the levy invalidating all subsequent proceedings”.

20.     According to the landlord this court cannot stand in the way of enforcement of the tenancy contract term for payment of rent.  The tenant had further failed to demonstrate how he would suffer irreparable damage and any loss suffered was capable of compensation by an award of damages.

21.  I have observed above that the tenant has not pleaded anywhere that the goods proclaimed are tools of trade.  In the case of Raila Amollo Ondinga & Another – vs- IEBC & 2 others (2017) eKLR it was held  by the Supreme court in respect of essence of pleadings as follows:

“In absence of pleadings, evidence if any, produced by the parties, cannot be considered.  It is also a settled legal proposition that no party should be permitted to travel beyond its pleadings and parties are bound to take all necessary and material facts in support of the case set up by them, pleadings ensure that each side is fully alive to the question that are likely to be raised and they may have an opportunity to placing the relevant evidence before the court for consideration.  The issues arise only when a material proposition of fact or law is affirmed by one party and denied by the other party.  Therefore, it is neither desirable nor permissible for a court to frame an issue not arising on the pleadings………”

22.   I therefore refuse to be invited to determine whether the proclaimed goods are exempted from distress or not as the issue was not pleaded by the tenant.  It has been raised in submissions which as held above do not constitute pleadings.

23.  As to whether the tenant is entitled to the order of permanent injunction sought, I find that being in default of rent payment, he cannot benefit from the discretion of a court of equity.  I rely in this regard on the decision in the case of Kyangavo  -vs- Kenya Commercial Bank Ltd & Another (2004) e KLR at page 13/12where it was held as follows:

“Secondly, the injunction sought is an equitable remedy.  He who comes to equity must fulfill all or substantially, all his outstanding obligations before asserting on his rights.  The plaintiff has not done that.  Consequently, he has not done equity”.

24.   In yet another decision in the case of Samuel Kipkori Ngeno & Another – vs- Local Authorities Pension Trust (Registered Trustees) & Another (2013) e KLR paragraph  9 & 12,the court held as follows:-

“9. A tenant’s first and main obligation is to pay rent as and when it becomes due, for the landlord has the right to an income from his investment……….”

“The temporary injunction sought in the present application is an equitable remedy at the court’s discretion.  He who comes to equity is in huge arrears of rent is underserving of the court’s discretion.  The court cannot be the refuge of a tenant who fails to meet his principal obligation of paying rent as and when it becomes dues”.

25.  Flowing from the above analysis, it must by now be clear that the tenant’s application dated 28/6/2021 and the reference of even date which raises the same issues are candidates for  dismissal under section 12 (4) of Cap. Laws of Kenya.

26.  In conclusion, the final orders that commend to me are:-

(i)    The application dated 28/6/2021 and the reference of even date is dismissed with costs to the Respondents.

(ii)   The ex-parte orders given on 2nd July 2021 are hereby discharged and/or vacated.

(iii)  The landlord is entitled to use lawful means to recover rent owing by the tenant without further recourse to this Tribunal.

(iv)  The landlord is awarded Kshs.25,000/- in costs against the tenant.

It is so ordered.

RULING DATED, SIGNED AND DELIVERED VIRTUALLY THIS 18TH DAY OF FEBRAURY 2022.

HON. GAKUHI CHEGE

VICE CHAIR

BUSINESS PREMISES RENT TRIBUNAL

In the presence of:

Obiria for the Tenant/Applicant

No appearance for the Landlord