Lazinos Hotel & Restraurant v Turitu Service Station Ltd & Housing Finance Company Of Kenya Ltd (Tribunal Case 977 of 2019) [2021] KEBPRT 306 (KLR) (18 August 2021) (Ruling)
Lazinos Hotel & Restraurant v Turitu Service Station Ltd & Housing Finance Company Of Kenya Ltd (Tribunal Case 977 of 2019) [2021] KEBPRT 306 (KLR) (18 August 2021) (Ruling)
REPUBLIC OF KENYA
BUSINESS PREMISES RENT TRIBUNAL
TRIBUNAL CASE NO 977 OF 2019 (NAIROBI)
LAZINOS HOTEL & RESTRAURANT……….…………...……TENANT/APPLICANT
VERSUS
TURITU SERVICE STATION LTD………………..…LANDLORD/1ST RESPONDENT
HOUSING FINANCE COMPANY OF KENYA LTD……………….2ND RESPONDENT
RULING
The Tenant/Applicant’s application dated 4th October 2019 has made prayers for eleven (11) orders had which I may summarize and paragraphs as follows;
1. Spent.
2. Spent
3. That pending the hearing and determination of this suit, the Tribunal be pleased to issue our order compelling the 2nd Defendant to desist from locking out and/or blocking the Tenant/Applicant from accessing the business premises.
4. Spent.
5. That pending the hearing and determination of this suit the Tribunal be pleased to issue an order against the 2nd Respondent to allow the Tenant/Applicant access to the business premises so as to allow it to continue conducting its business.
6. Spent.
7. That pending the hearing and determination of this suit the Tribunal be pleased to issue an order restraining the 2nd Defendant from invading the Tenant’s/Applicant’s business premises.
8. Spent.
9. That pending the hearing and determination of this suit, the Tribunal does issue an order for the return of the Tenant’s perishable goods and items unlawfully removed from the business premises.
10. That the OCS Langata Police Station does provide security and ensure compliance with the orders issued by the Tribunal.
11. Costs.
The grounds upon which the application is brought and the contents of the Applicant’s affidavit in support of the said application may be summarized as follows;
1. That at all material times, the Applicant is the Tenant of the 1st Respondent on LR No. 37/254/31 L.R 12628 Nairobi West shopping centre.
2. That vide a court order issued on 13th August 2018 in Milimani CMCC No 5973 of 2019, the Respondents herein were restrained from selling the subject matter (of that suit) pending the inter partes hearing of the application.
3. That by a letter dated 23rd September 2019, the 2nd Respondent informed the 1st Respondent that the 2nd Respondent had purchased the suit property at an auction on 30th August 2019. The Applicant contends that this sale was contrary to the court orders aforesaid.
4. That on 23rd September 2019, the 2nd Respondent unlawfully invaded the Applicant’s business premises and locked out the Applicant.
5. That the locking out of the Applicant from the premises was done without a court order.
6. That the Applicant is a Three Star Hotel with a regional and international customer base.
The application is opposed. The 2nd Respondent has filed an affidavit sworn on 29th November 2019 whose contents I proceed to summarize as follows;
1. That the deponent of the Applicant’s affidavit lacks authority to swear the said affidavit and therefore it is incompetent.
2. That the 1st Respondent sought for and obtained a loan facility from the 2nd Respondent in the sum of Kshs 250,000,000/-. The loan was secured by a charge over the suit premises.
3. That on or about 2015, the 1st Respondent neglected to service the loan facility and the 2nd Respondent moved to exercise its statutory right of sale.
4. In resisting the 2nd Respondent’s statutory right of sale, the 2nd Respondent filed Nairobi HCCC No 342 of 2018 which was compromised by the consent orders of 13th August 2019.
5. That on 30th August 2019, the 2nd Respondent purchased the suit premises at a public auction.
6. That as far as the 2nd Respondent is concerned, the suit regarding the suit premises was disposed of via the consent order.
7. That the Tenant/Applicant is still at the suit premises, the 2nd Respondent has not removed or forced out any Tenant from the suit premises.
In my ruling of 19th April, 2021 on the notice of preliminary objection raised by the 2nd Respondent, I found that the issues raised there would properly be dealt with in the context of the application itself and the affidavits. The parties herein were ordered to argue the application by way of written submissions. The Applicant and the 2nd Respondent have dully filed their submissions. I summarize the same as follows;
The Applicant’s Submissions:
1. That on the strength of the authority f R V. Business Premises Rent Tribunal and another ex-parte Albert Kigera Karume, this Tribunal is vested with the authority to issue injunctive orders.
2. That the Applicant has met the tests stipulated for the grant of injunctive relief.
3. That the sale of the property known as LR. No 209/178/29 (LR No 85343 in contravention of court orders is a clear manifestation of illegality and mischief on the part of the 2nd Respondent.
4. That the application is not frivolous and that the Applicant has an arguable case.
5. That the 2nd Respondent acted in contravention of court orders and on this basis, the Applicant has established that it has a prima facie case.
6. That if the injunction sought is not granted, the Applicant will suffer irreparable harm.
7. That the 2nd Respondent acted in contempt of the orders issued before Hon P.N. Gesora in Milimani CMCC No. 5973 of 2019, Wilfred Barasa Opondo Vs Turitu Service Station and another.
8. That the 2nd Respondent failed to issue valid statutory notices.
9. That the balance of convenience tilts in favour of the Applicant.
The 2nd Respondent’s submissions: (States)
1. That the Applicant has not adduced any evidence to prove that there exists a tenancy relationship between it and the 2nd Respondent.
2. That the Applicant has not shown that it pays any rent to the 2nd Respondent.
3. That the Applicant has not annexed any registered lease between itself and the 2nd Respondent.
4. That therefore, the Tribunal lacks jurisdiction to hear this matter.
5. That the Tribunal lacks jurisdiction to issue orders for recovery of possession by a Tenant.
6. That the Tribunal lacks jurisdiction to issue injunctive orders.
Following from the above summary of the parties’ respective cases, the following issues arise for determination;
1. Whether the Tribunal has jurisdiction to determine the dispute herein?
2. Whether the Tribunal has jurisdiction to issue injunctive relief.
3. Whether the Applicant is entitled to the orders sought in its application dated 4th October 2019.
On Issue No. 1
The case for the Applicant is that it was a Tenant of the 1st Respondent in the suit premises. It is also its case that the suit premises was sold in contravention of court orders issued in Milimani CMCC No 5973 of 2019 on 13th August 2019. The public auction of the suit premises took place on 30th August 2019 where the 2nd Respondent emerged the highest bidder. The Applicant herein was not a party to the case Milimani CMCC No 5973 of 2019 and the order annexed by the Applicant to its affidavit does not disclose the interest of the Plaintiff in the subject matter. The Applicant has also not indicated what became of the suit before the Chief Magistrate’s Court at Milimani.
The 2nd Respondent’s affidavit at paragraph 8 thereof has indicated that there existed High Court Civil Case No 342 of 2018 between the 1st Respondent and the 2nd Respondent over the sale of the suit premises herein. That suit was compromised by a consent recorded in court on 13th August 2019, the same day orders referred to earlier were issued by the Chief Magistrate Milimani.
The 2nd Respondent purchased the suit property pursuant to consent orders recorded between it and the former owner of the suit property. That consent order which finalized the dispute between the 1st and 2nd Respondents has not been appealed against and/or raised.
I take it that the suit premises became the property of the 2nd Respondent from 30th August 2019 when it was declared the highest bidder in the auction.
The 1st Respondent ceased being the owner of the suit premises on 30th August 2019 when the ownership therein passed to the 2nd Respondent, in that event, the 1st Respondent ceased to be the Landlord of the Applicant as he was no longer entitled to any rent or other profits from the suit premises.
The question that arises for determination in the circumstances is whether the 2nd Respondent upon purchase of the suit premises became the Landlord of the Tenant/Applicant whose initial Landlord the 1st Respondent had exited the scene.
It is clear from the affidavits of both the Applicant and the 2nd Respondent that the Applicant is in possession of the Hotel in the suit premises (L.R. No 37/254/31 L.R 12628 Nairobi West Shopping Centre) at paragraph 14 of the 2nd Respondents replying affidavit, it is stated;
At paragraph 16:
“That the contents of paragraph 8 and 9 are denied. The 2nd Respondent states that it did not evict, remove lock out or carry away any perishable goods or items from the Tenant’s/Applicant’s business premises.
At paragraph 17
“That contrary to the Tenant’s/Applicant’s allegations at paragraph 10 and 11 of the affidavit, the 2nd Respondent states that it is unlikely the Tenant/Applicant will suffer any loss of business or income as it is still in operation at the suit premises.”
It is also safe to conclude that at the time the 2nd Respondent purchased the suit premises at the auction, the Applicant was still in the premises and continued to remain therein even after 30th August 2019, this is so because the replying affidavit of the Respondent confirming the presence of the Applicant on the suit premises was sworn on 2nd November 2019.
Did there then arise the relationship of a landlord and Tenant between the Applicant and the 2nd Respondent after the 2nd Respondent purchased the suit property?
Under Cap 301 section 2(1) a Landlord and a Tenant have been defined as follows:
“Landlord” in relation to a tenancy means a person for the time being entitled as between himself and the Tenant to the rents and profits of the premises payable under the terms of the tenancy.
“Tenant” in relation to a tenancy means the person for the time being entitled to the tenancy whether or not he is in occupation of the building and includes a sub-Tenant.
In the instant case, the 2nd Respondent having purchased the suit premises on 30th August 2019, it became the person for the time being entitled as between itself and the Tenant to the rents and profits of the premises it purchased. The 2nd Respondent therefore became the Landlord envisaged in the definition above.
Likewise, the Applicant having been in occupation of the premises at the time the 2nd Respondent purchased the same and the 1st Respondent exited, became the person for the time being entitled to the tenancy. The Applicant therefore became the Tenant within the definition of section 2(1) of Cap 301. The Landlord/2nd Respondent would in the circumstances be free to recover any rent outstanding from the Tenant and exercise any other rights available to it under the law against the Tenant. The Tenant too would have similar rights against the Landlord.
The relationship between the Applicant and the 2nd Respondent is not governed by a written agreement in the circumstances. I therefore do hold that the tenancy between them is a controlled tenancy within the provisions of section 2(1) (a) of Cap 301 of the Laws of Kenya. I therefore do hold that the Tribunal has jurisdiction to hear and determine this dispute.
On Issue No 2
The 2nd Respondent has submitted that the Tribunal has no powers to issue injunctive reliefs. This issue has now been settled in the case of R Vs Business Premises Rent Tribunal and 2 others ex-parte Albert Kigera Karume, Nairobi High Court JR Misc Application No. 435 of 2012 in the said case, the Learned Judge stated in paragraph 40,
“It is therefore clear that the jurisdiction of the subordinate courts can be limited by an act of Parliament. To that extent it is incorrect as it is contended by the interested party that the Tribunal necessarily has the same powers as the Magistrate’s Court. However, where the powers of the Tribunal have not been limited by a statute, it is my view that there is nothing to prevent the Tribunal from exercising the powers conferred on the subordinate courts such as the Magistrates’ Courts. Section 63(c) of the Civil Procedure Act provides;
In order to prevent the ends of justice from being defeated, the court may, if it is so prescribed, (c) grant a temporary injunction and in case of disobedience commit the person guilty thereof to prison and order that his property be attached and sold.
At paragraph 43
“It is therefore my view and I so hold that until Parliament enacts legislation limiting or restricting the powers of the Tribunal, the Tribunal has the powers to grant orders prescribed under section 63(c) of the Civil Procedure Act including orders of temporary injunction.
On this issue, I therefore associate myself with the views of the Learned Judge and return a finding that yes, the Tribunal has jurisdiction to issue orders of an injunctive nature.
On Issue No. 3:
The Applicant’s contention is that the 2nd Respondent unlawfully and illegally invaded its business premises and locked out the Tenant/Applicant. The actions of the 2nd Respondent seem to have been informed by the fact that it was the new owner of the premises.
Whereas the 2nd Respondent denies invading the Applicant’s premises, it has continued to maintain that it is the Landlord and has lawful access to the suit premises. The Landlord has not sought to terminate the tenancy herein under the provisions of the Act, Cap 301 of the Laws of Kenya and or enforce its rights under the Distress for Rent Act. Its actions of attempting to remove the Applicant from the premises do not therefore have the backing of the law.
In the circumstances, I will grant prayers 7 and 11 of the application dated 4th October 2019.
HON. CYPRIAN MUGAMBI NGUTHARI
CHAIRMAN
BUSINESS PREMISES RENT TRIBUNAL
Court:
Ruling delivered in virtually by Hon Cyprian Mugambi Nguthari this 18th day of August 2021 in the presence of Ms Mutei for the 2nd Respondent and in the absence of all the other parties.
HON. CYPRIAN MUGAMBI NGUTHARI
CHAIRMAN
BUSINESS PREMISES RENT TRIBUNAL