REPUBLIC OF KENYA
IN THE BUSINESS PREMISES RENT TRIBUNAL AT NAIROBI
TRIBUNAL CASE NO. 232 OF 2021
JACKSON KAMAU NDEGWA.............................................1ST APPLICANT
ANNE NJERI WANYEJI.......................................................2ND APPLICANT
VERSUS
EVERLYNE MUTHAMIA..................................................1ST RESPONDENT
MARKFORM MUOKI.......................................................2ND RESPONDENT
RULING
PARTIES AND THEIR REPRESENTATIVES
1. The 1st and 2nd Applicants herein are the Tenants occupying the premises in Imenti House (hereinafter referred to as the ‘Suit Premises’), Nairobi within the Republic of Kenya.
2. The Applicants are acting in person. Email:Jackndegwa2008@gmail.com
3. The 1st Respondent is the Landlord of the Suit Premises that are the subject matter of the present suit and therefore responsible for performing the duties and obligations of the Landlord
4. The 2nd Respondent is an employee of the 1st Respondent with duties of managing and taking care of the Suit Premises.
5. Both Respondents are represented by the Firm of Alosa & Associates Advocates. Email: info@alosaadvocates.com
DISPUTE BACKGROUND
6. Vide a Notice of Motion Application dated 9th March 2021 and reference by Tenant dated 9th March 2021 the Applicants herein approached this Tribunal seeking inter alia, orders compelling the Respondents to reopen the Tenant’s business premises, conservatory orders to the effect that the Respondents be prohibited from unlawfully intercepting, harassing, trespassing, intimidating and/or evicting, closing or interfering with the Tenant’s quiet enjoyment until the matter is heard and determined and damages for loss of income.
THE APPLICANTS CASE
7. The Tenants Notice of Motion Application dated 9th March 2021 above mentioned is supported by key grounds being that Tenants rights have been violated by the Landlords/ Respondents’ act of illegal closure of the Suit Premises on 9th March 2021; this Tribunal has the jurisdiction to issue and order the reopening of the Suit Premises since closure of the same was without any legal justification; and that the landlord did not give Notice.
8. The application is supported by the affidavit of Jackson Kamau Ndegwa, the 1st Applicant herein. The said Affidavit give the background, context and procedural history of acquisition of the Suit Premises by the Applicants from the 1st Respondent and proceed to provide the evidentiary support to the grounds above stated. He swore that the present suit is a matter whose gravity is undeniable as it touches on the Bill of rights relevant to the Applicants and characterized the same as deprivation and denial of conducting and/or carrying out business peaceful and quiet manner.
9. He further, avers that the 1st Landlord/Respondent by the illegal closure has subjected the Applicants’ business into agony and confusion thereby throwing the Applicants and their workers into an economic quandary. Further, that all their rights including the right to have their dignity respected have been eroded despite the same being guaranteed under the Constitution. He reiterates and maintains that this Tribunal is obligated to stop the illegal closure of the Suit Premises by the Respondents.
THE RESPONDENTS CASE
10. The 1st Respondent herein, Everlyne Muthamia filed a Replying Affidavit sworn on 9th April 2021, asserting that the 1st Applicant herein contacted her sometime in October 2020 pleading for a rental business space owing to the adverse effects of the Covid-19 Pandemic to ease her life struggles. She maintained that the 1st Tenant /Applicant was unable to meet the rental charges of the spaces available at the time and that she declined the 1st Applicant’s request. However, pursuant to the 1st Applicant’s incessant pleadings, she acceded to his request and lowered the rental amount payable by the 1st Tenant/Applicant by approximately 23%.
11. The 1st Respondent further averred that the Applicants failed in their tenancy obligations by habitually accumulating arrears to the tune of Kshs. 52,500.00 had failed the test of material disclosure to the Tribunal of the outstanding amounts. Further, she averred that due to the outstanding amounts, it was untenable to continue having the Applicants occupy the Suit Premises. She further sought that the Applicants do pay all outstanding rent.
SUBMISSIONS
12. The Application proceeded for hearing before this Tribunal virtually owing to the prevailing Covid-19 global pandemic on 12th May 2021 Parties were directed to file and serve written submissions in respect of the present Application for disposal of, which the Parties verily did. I shall proceed to consider the same.
APPLICANTS SUBMISSIONS
13. The Applicants filed their written submissions dated 13th May 2021. They submitted that the eviction attempt orchestrated by the Respondents was conducted with disregard to the due process and procedures established under the relevant laws. Further, they narrated that on diverse dates between 28th November 2020 and 6th March 2021 the Respondents engaged in historical and habitual disruption of the Applicants’ business by intermittently locking down the Suit Premises.
14. Further, the Applicants submitted by inviting this Tribunal to take notice of the fact that they commenced occupation of the Suit Premises towards the end of October 2020 and the same were locked down by the Respondents on 6th March 2021. That consequent to the Respondents’ actions it was increasingly difficult to successfully run the business and earn income. The Applicants also submitted that they had paid rent due and requested the Tribunal to order for production of MPESA Statements of (Maworks & Doreen), an MPESA Shop through which the Applicants remitted their rent, a situation in which they fault the Tribunal. The Applicants also submitted and characterized the Respondents’ actions as extreme and illegal and that the same denied them quiet operation in their enterprise, a grave violation of their rights.
15. The Applicants also filed supplementary written submissions in which they cited the Respondent’s failure to comply with the Tribunal’s Order in terms of the directions as to the timelines of service of pleadings. They also submitted that the outstanding arrears as enumerated by the Respondents were unsubstantiated. They also dismissed the claim by the Respondents that they had been served with a Termination Notice of the Tenancy Agreement allegedly dated 20th May 2021 and that even the same was issued, it was improper as the matter was still pending before this Tribunal. The Applicants further submitted that the demand by the Respondents for payment of rent for the months of March, April and May 2021 was untenable as the Suit Premises from where they get their income were illegally closed by the Respondents.
16. The Applicants urged this Tribunal to order for reopening of the Suit Premises for their continued operation.
THE RESPONDENTS SUBMISSION
17. Mr. Alosa, appearing on record for the Respondents also filed written submissions dated 21st May 2021 and indicated reliance on the Replying Affidavit of Everlyne Muthamia earlier sworn on 9th April 2021. The Learned Counsel presented to this Tribunal three issues for determination namely; whether there exists controlled tenancy between the Applicants and the 1st Respondent; whether the Applicants’ failure to pay rent is an affront to the duties of the tenant and; whether the 1st Respondent is entitled to terminate the Applicants’ Tenancy upon lapse of two months’ notice.
18. On whether there exists a controlled Tenancy between the Applicants and the 1st Respondent, Counsel submitted that to the affirmative within the meaning of section 2(1) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act. Counsel, further submitted that the Applicants were under a legal obligation and duty to pay rent to the 1st Respondent as and when the same was due and failure to do so is an affront to the duties of a tenant. It was further submitted that the payment and receipt of rent is at the heart of any tenancy agreement and that the same was the case in the instant matter. Counsel relied on several authorities; Rogan Kamper vs Lord Grosvenor (No. 2) [1977] KLR 129, East African Power and Lighting Co. Ltd vs Attorney General [1978] eKLR and Msabaha Victory Secondary School vs Gaetano Grasso [2014] eKLR to advance his position.
19. As regards the 1st Respondent’s entitlement to terminate the Applicants’ Tenancy upon lapse of a two months’ notice, the Learned Counsel submitted that the Applicants’ failure to pay rent met the threshold that entitles the 1st Respondent to terminate the Applicants’ Tenancy since the outstanding amounts were substantial and the equivalence was more than two months’ rent payable by the Applicants in the Suit Premises. Counsel maintained that it is trite law that where a tenant fails to pay rent for a period of two months after such has become due or payable or has persistently delayed in paying the rent which has become due or payable, the Landlord is entitled to terminate the tenancy. He cited Dorca Ondieki Gisege vs Nyankarangania Farmers Co-operative Society Ltd [2010] eKLR, Cyprianus Okoth Kere vs Nacico Sacco Society Limited [2019] eKLR and Cancer Investments Limited vs Sayani Investments Limited [2019] eKLR to buttress this line of argument.
20. The Learned Counsel urged this Tribunal to find that; there exists a controlled tenancy between the Applicants and the 1st Respondent; the Applicants’ failure to pay rent is an affront to the duties of the tenant; the 1st Respondent is entitled to terminate the Applicants’ Tenancy upon lapse of two months’ notice and finally urged the Tribunal to dismiss the Applicants’ Notice of Motion dated 9th March 2021 with costs.
ANALYSIS AND DETERMINATION
21. I have given full consideration to the Applicants’ Notice of Motion Application, the rival affidavits, submissions, and the authorities cited. Before I go into the merits of the Application I wish to state that since the jurisdiction of this Tribunal was not contested by the Parties herein, the same is considered in the affirmative.
22. In my respectful view, I find that the sole issue that falls for determination is whether the Applicants are entitled to the reliefs sought. I shall proceed to consider and determine the same in 3 limbs as follows:
a) Whether the Applicants have discharged the evidentiary Burden of Proof for the existence of a Contract between the Applicants and the 1st Respondent
23. The Applicants approached the 1st Respondent sometime in October 2020 with an aim to get a rental business space. In the ensuing discussion, the 1st Respondent acceded to the Applicants’ request of monthly rental amount of Kshs. 10,000 instead of the prevailing chargeable Kshs. 13,000/-. Additionally, the Applicants were to pay Kshs. 13,000/- as deposit, Kshs. 13,000/- as service charge and Kshs. 500/- as standing charge monthly for electricity supply in the Suit Premises. A fact which is not denied by the Applicants.
24. Subsequently as at December 2020, the Applicants had only paid Kshs. 20,000 being rent amount for the months of October and December 2020 respectively. Notably, the Applicants had not paid the deposit of Kshs. 13,000, service charge of Kshs. 13,000/- and also had an outstanding standing charge of Kshs. 1,500/- being electricity charge for the months of October, November and December 2020. A fact which is again not denied by the Applicants.
25. It is trite law that for a contract to be established between parties, the key elements of offer, acceptance and consideration must be sufficiently fulfilled. In the instant case, the consideration was one month rent, one-month deposit and a non-refundable service charge of 13,000/-. The rent and deposit appears to have been
renegotiated to 10,000/- per month from 13,000/- the same were payable by the Applicants before assuming possession of the suit premises unless otherwise agreed by the parties which does not seem to be the case here.
26. From the foregoing and from the evidence on record more particular both supporting and supplementary affidavits of Jackson Ndegwa he relies upon and has attached MPESA statement showing payments which I have carefully perused though I see no direct payments to the landlords. However, on reconciliation of the said mpesa statements with the landlords tabulated accounts and averments in the affidavit of Everlyne Muthama. At paragraphs 6,7,8 and 9 they confirm they received 10,000/- on 19th of October 2021 the same appears in the Tenants’ mpesa statement as Globalnet mobile on 19th October 2021 Kshs 10,000/-. In addition, further receipts of Kshs 10,000/-, 2,000/- 5,000/- and 5,000/- are confirmed by the Respondent and indeed appear in the Applicant mpesa statement on even dates.
27. I am therefore clear in my mind and I am persuaded by the evidence before me that the Tenant is in arrears of rent neither has he ever paid any deposit or service charge. This nonpayment of initial deposit and service charge begs the question whether there was ever a contract to which full consideration was paid. I am clear in my mind that consideration forms a very important pillar to any agreement, controlled tenancies included and if there is no such consideration my respectful view is that the substratum of the contract collapses and when this happens so does my ability to make a determination on this matter and am forced to down my tools.
28. In RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG (UK Production) [2010] UKSC14, [45], the Supreme Court of the United Kingdom addressing itself on consideration as an essential ingredient for a contract stated thus:
“The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations.
29. Further, in Fidelity Commercial Bank Limited v Kenya Grange Vehicle Industries Limited [2017] eKLR; the Court strongly affirmed consideration as a key element in the establishment of a contract and pronounced itself as follows:
“It is elementary learning that for there to be a contract, there has to be an acceptance of an offer on the same terms of the offer and such acceptance must be unconditional, unequivocal and absolute, accompanied by consideration.”
30. Additionally, Section 107 of the Evidence Act provides:
107. Burden of proof
(1) Whoever desires any court to give judgment as to any legal right or liability? Dependent on the existence of facts which he asserts must prove that those facts exist.
(2) When a person is bound to prove the existence of any fact it is said that the Burden of proof lies on that person.” (emphasis added)
31. Burden of Proof lies on the Applicants. They ought to produce receipts or MPESA Statements evidencing payment of the deposit amount of Kshs. 13,000 and Service Charge. The same has not been produced and he cannot as he stated expect the Tribunal to lift the burden for him. It is therefore my determination as stated earlier that there being no evidence of consideration I find it difficult to find for the existence of a legal Landlord -Tenancy Relationship which ought to be governed by this tribunal.
b) Whether the Respondent issued a Notice to the Applicants
32. Having established that there was no mature contract between the Applicants and the 1st Respondent, in my view, there was no need for issuance of notice by the 1st Respondent. Even so, leaning on the loose reading of Section 2(1) of Cap 301 that the Applicants’ relationship with the 1st Respondent resulted to a controlled tenancy, the same could only be terminated by issuing the notice prescribed under section 4(2) of the said Act.
33. The impugned notice has not been presented before this Tribunal and therefore it is gravely difficult to ascertain whether it is the notice anticipated under section 4(2) of Cap 301. That notice has to be in the prescribed form, and further fulfil the requirements of section 4(4) and section 4(5) of Cap 301 of the Laws of Kenya. I am therefore in no doubt that the impugned notice having not been presented before this Tribunal for verification, is a matter that this Tribunal cannot pronounced itself on as to its existence or validity.
DETERMINATION
The upshot is that the Tenants application dated 9th March 2021 lacks merit and is dismissed with costs. In view of my findings the Reference dated 9th March 2021 also lacks a legal leg to stand upon and the same is dismissed with costs. The Tenant will be free to pick his items from the suit premises and hand over the same to the Landlord immediately failure to which the landlord will be at liberty to evict the tenant from the suit premises.
ANDREW MUMA
VICE CHAIR
BUSINESS PREMISES RENT TRIBUNAL
Ruling dated, signed and delivered virtually by Hon Gakuhi Chege this 18th day of June 2021 in the absence of the parties.
HON. GAKUHI CHEGE
VICE CHAIR
BUSINESS PREMISES RENT TRIBUNAL