Adan Yare Hassan & 7 others v Habiba Ali and Batula Ali t/a Emirates Shopping Mall (K) Ltd [2021] KEBPRT 323 (KLR)

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 22 OF 2020 (NAIROBI)

ADAN YARE HASSAN.........................................................................1^ST TENANT

MOHAMUD MOHAMED...................................................................2^ND TENANT

FARHAN ABDI HUSSEIN...................................................................3^RD TENANT

AHMED MOHAMMED HUSSEIN....................................................4^TH TENANT

AHMNED ABDULLAHI......................................................................5^TH TENANT

ABDISALAH HASSAN........................................................................6^TH TENANT

NOOR HUSSEUIN................................................................................7^TH TENANT

MOHAMMED ABDI.............................................................................8^TH TENANT

VERSUS

HABIBA ALI AND BATULA ALI T/A                                                                        

EMIRATES SHOPPING MALL (K) LTD............................................LANDLORD

RULING

1. This ruling concerns the Tenant’s application dated 8^th January 2020, the Landlord’s application dated 19^th April 2021 and the Tenant’s application dated 30^th April 2021, and the Landlord’s application dated 28^th July 2020.

2. The Tenant’s application dated 8^th January 2020 seeks the following orders;

a. Spent.

b. Spent

c. That this honourable Tribunal do issue a restraining order against the Landlord from illegally evicting, forcefully interfering, trespassing, locking up the Tenant’s shops on L.R No 36/11/9 Eastleigh Nairobi and or interfering in any way whatsoever with the Tenant’s quiet and peaceful business within the demised suit premises pending the hearing and determination of the complaint herein.

d. That the OCS Pangani Police Station, Shauri Moyo, Kamukunji Police Station to ensure compliance with the orders issued by the Tribunal.

e. Costs.

3. The Landlord’s application dated 28^th July 2020 seeks orders to the effect;

a. That all Tenants of L.R 36/11/9 Eastleigh Emirates Shopping Mall Nairobi including the owners and National Bank do deposit rent in the Landlord’s joint account No. 01036063943600 National Bank in the name of Emirates Shopping Mall Ltd pending the hearing and determination of the complaint.

b. That pending the hearing and determination of the complaint, the 1^st Applicant be directed to pay into the Landlord’s joint business account the sum of Kshs 10,500,000/- being monies received from the Tenant’s as rent, goodwill and due rent from the 1^st Applicant’s rental premises on the basement floor.

c. That pending the hearing and determination of this complaint, the 1^st Applicant be directed to pay full rent for his occupied rental space on basement floor and clear his rent arrears at Kshs 470,000 per month failing which he surrenders the premises.

d. That the 1^st Applicant be directed to account for all the rent and goodwill received from the Tenant of the shopping mall pending the hearing and determination of this complaint.

4. The Landlord’s application dated 19^th April 2021 seeks the following orders;

a. Spent.

b. Spent

c. That an order directed to the Tenants for immediate payment of their respective rents to the Landlord’s company bank account and not the 1^st Tenant pending hearing and determination of this suit.

d. Costs.

5. The Tenant’s application dated 30^th April 2021 seeks an order to the effect that the orders issued by this honourable Tribunal on 21^st April 2021 be stayed, set aside and/or varied pending the hearing and determination of the complaint herein.

6. The parties have filed submissions in support of their respective application and I summarize the contents of the said submissions as hereunder.

7. The Tenant’s submissions are briefly as follows;

a. That the Tenants are protected Tenants within the meaning of the term in the Landlords and Tenants Act Cap 301 of the Laws of Kenya.

b. That the Tenants are in possession of the suit premises but the Landlords unlawfully threatened the Tenants to vacate from the suit premises.

c. That the account suggested by the Landlord is dormant and has been dormant for the last nine (9) years.

d. That the 1^st Tenant/Applicant and one Fatuma Abdikadir Ali together own 62.5% shares in the suit premises while Muna Ali Wetal, Habiba Ali Welal and Batula Ali Welal had a combined share of 37.5% and not 50% as alleged by the Landlords.

e. That the 1^st Tenant and Fatuma A. Ali partly occupy and manage the basement ground and 1^st floor of the suit premises while the Landlords manage the remaining 2^nd, 3^rd and 4^th floor apartments.

f. That the Landlords have not paid rent for two shops in the premises.

g. That the Tenants have been paying rent to the 1^st Tenant who has in turn disbursed the equivalent of 37.5% of the rental income to the Landlords being their share in the premises.

h. That the Landlords/Respondents have not forwarded the 1^st Tenant’s share of the rental income from the apartments now amounting to Kshs 13,440,000/-.

i. That the intended 3^rd party, the National Bank of Kenya has a lease with a lease period of six years and is therefore outside the provisions of Cap 301 of the Laws of Kenya.

j. That the insistence to have the rent deposited in the Landlord’s account at the National Bank would operate to the detriment of the 1^st Tenant/Applicant.

k. That the Landlords have not forwarded to the 1^st Tenant his share of the rental income from the flats in the suit premises for a period of seventeen months.

l. That unless the orders issued on 21^st April 2021 are set aside, the 1^st Tenant will therefore suffer irreparable harm.

m. That the Landlord’s application dated 28^th July 2020 and 19^th April 2020 seeks similar orders and they ought to be dismissed.

8. The Landlord’s submissions are briefly as follows;

a. That the grounds in the notice of motion dated 8^th January 2020 and the Applicant’s supporting affidavit are an abuse of the court’s intelligence.

b. That the 1^st alleged Tenant is indeed a Landlord and part owner of the suit property.

c. That the 2^nd to 9^th Tenants have been dragged into this suit by intimidation.

d. That the Tenants have not produced any legal and/or justifiable document showing the Landlord’s intention to evict them from the shops and/or termination notice of the various tenancies they hold.

e. That the 1^st Tenant/Applicant has not come to equity with clean hands as his only intention is to steal the Landlord’s profits.

f. That the actions of the 1^st Tenant to take rent from the other Tenants is criminal and fraudulent, it is offensive to section 282 of the Penal Code.

g. The 1^st Tenant is simply stealing from his own company and his application is a malicious attempt to steal from the other Landlords.

h. That the Applicant has met the conditions for the grant of the orders of injunction he is seeking.

i. That the Landlords have every right to seek for rent, evict and/or trespass into the shops of any nonpaying Tenant in the property.

j. That the 1^st Tenant’s application have no triable issues.

k. That if the Tenant’s application does not eventually succeed, the Respondents shall suffer a huge loss and might not be able to recover the illegally stolen rent by the 1^st Tenant.

l. That the 2^nd to 9^th Tenants have no claim or issue with the Landlords.

m. That the balance of convenience falls in favour of the Respondents.

n. That the payment of rent where a company is involved is only supposed to be done to the company’s bank accounts, no single director should take company’s money into his personal accounts.

o. That any money collected by the 1^st Tenant as rent in the suit premises should be refunded or deposited in the joint account in the name of Emirates Shopping Mall (K) Ltd as the real Landlords and owners of the suit property.

p. The 1^st Tenant should pay for the space he occupies as a Tenant in the suit premises.

q. That the Tenant’s application ought to be dismissed with costs.

9. The 3^rd Party/Respondent’s Submissions;

a. That the proposed third party is a Tenant in the suit premises as per the lease agreement dated 1^st April 2015 for a period of six years.

b. That the said 3^rd party has diligently paid rent into the account of the 1^st Respondent and not in cash as alleged by the Applicant in the application dated 28^th July 2020.

c. That the application does not disclose any cause of action against it; the application does not seek any indemnity or contribution against the 3^rd party and the Applicant is entitled to none.

d. That the proposed third party has signed a lease agreement with the Landlord’s for a term of six years and it does not contain a termination clause.  It is therefore not a controlled tenancy and the proposed third party is not subject to the Tribunal’s jurisdiction.

e. That the Applicant has not met the relevant test in joinder of third parties to proceedings.

10. The issues that arise for determination in all the applications, in my humble view are the following;

a. Whether the Tenants are entitled to the prayers they have sought in their application dated 8^th January 2020.

b. Whether the Landlords/Applicants are entitled to the orders sought in their applications of 28^th July 2020 and 19^th April 2021.

c. Whether the proposed third party is subject to the jurisdiction of the Tribunal.

11. From a perusal of the applications before me, the following facts emerge;

a. That the 1^st Tenant and the Respondents are co-owners of all that premises known as Emirates Shopping Mall in the corporate form of Emirate Shopping Mall (K) Ltd.

b. That the parties own shares in the company in the ratio of 62.5% and 37.5% respectively.

c. That there are allegations and counter allegations on the accountability of rent received by the 1^st Tenant on the one hand and the rent received by the Respondents on the other hand.

d. That the 1^st Tenant has made allegations that though he has been sharing out the rent he receives from the basement, ground and first floors of the suit premises, the Respondents have not accounted to him for the rents received on account of the premises on 2^nd, 3^rd and 4^th floor.  The 1^st Tenant claims Kshs 13,440,000/- from the Respondents being his share of the rent for the premises on the 2^nd, 3^rd and 4^th floors of the suit premises.

e. The Respondents on the other hand have demanded that the 1^st Tenant/Applicant do pay to the company’s joint account the sum of Kshs 10,500,000 being monies received from the Tenants as rent and a goodwill.

f. The 1^st Tenant has indicated, and which is not challenged by the Respondents that the account that the Respondents seek to have the money deposited has been dormant for nine years.

g. The Respondents have demanded that the 1^st Tenant pays rent for the area he occupies in the suit premises in the sum of Kshs 470,000/- per month.

h. That the proposed third party, the National bank of Kenya has a lease over the suit premises for a period of a term of six (6) years.  The bank has diligently paid rent into the account of the 1^st Tenant and not by way of cash as alleged by the Respondents.  The bank’s agreement is dated 1^st April, 2015.

i. That indeed there is no evidence that the Respondents have threatened to evict the Tenants.

12. What emerges clearly from the above facts is that the real dispute is one between the 1^st Tenant and the Respondents.  That dispute basically concerns the rents payable upon the demised premises.  The 1^st Tenant seems to have been receiving rent for a substantial period of time from the premises on the basement, ground floor and 1^st floor.  He alleges to have been paying the portion of the rent that belongs to the Respondents into the Respondents’ joint account.  The Respondents on their part are said by the 1^st Tenant not to have accounted for the rent they receive for the remaining part of the premises. 

13. The bank’s lease over the suit premises was executed on 1^st April 2015. This therefore means the 1^st Tenant has been receiving rent from the bank since 2015.  There is a further allegation that the account the Respondents seek to have the rent deposited has been dormant for a period of nine years.

14. It is therefore clear from the averments by the parties that the mode of collecting rent over the suit premises by both the 1^st Tenant and the Respondents has been going on for over five years.

15. I am not able at this interlocutory stage to determine with finality the rights of the respective parties and it would be unsafe to interrupt a system that has been in place between the parties without the benefit of a full hearing of the reference.

16. The accusations and counter accusations flying between the parties ought to be subjected to a full hearing.  The issue of the sharing of the proceeds of rent and the operations of any joint accounts in a manner that safeguards the interests of all the parties can also only be determined upon a full hearing.

17. In answer to the issues raised under paragraph 10 of this ruling, the order that commands itself to this Tribunal is an order directing that the status quo obtaining as at the date of this ruling be maintained pending the hearing of the reference.

18. The parties are also advised to fix the reference for hearing on a priority basis.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon Cyprian Mugambi Nguthari this 26^th day of August 2021 in the presence of Mary Wanjiku for Lakicha for the Tenants, Miss Abok for the intended third party and in the absence of the Respondents.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Court:

The reference will now be heard on 14^th October 2021.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL