Mugira & another v Roso Garage Limited & another (Tribunal Case E435 of 2025) [2025] KEBPRT 396 (KLR) (5 September 2025) (Ruling)

Neutral citation: [2025] KEBPRT 396 (KLR)

Republic of Kenya

In the Business Premises Rent Tribunal

Tribunal Case E435 of 2025

CN Mugambi, Chair

September 5, 2025

Between

David Muhoro Mugira

Applicant

and

Pixxel Yard Limited

Tenant

and

Roso Garage Limited

Contemnor

and

Daniel Gathaiya Njagi

Respondent

Ruling

Introduction

1.This Ruling is in regard to three Applications filed in this matter by the parties. The Tenants Application dated 25.4.2025 seeks orders that pending the hearing and determination of the Reference, the Tribunal be pleased to stay the eviction notice dated 9.04.2025, that the Landlord be injuncted from in any manner interfering with the Applicants quiet possession of the premises known as L.R. No. 209/7736 pending the hearing of the Reference. The Tenants have also sought police assistance in the enforcement of the orders sought.

2.The Application by the 2^nd Respondent dated 14.5.2025 seeks the following orders;a.That the orders issued by the Tribunal on 29.4.2025 be vacated or stayed.b.That the Tenants be declared trespassers upon the suit property.c.That the Tenants be ordered to pay the outstanding rent of Kshs. 750,000/=, service charge of Kshs. 50,000/=, penalty interest of Kshs. 15,000/= and Kshs. 19,500/=.d.That in default of payment, the 1^st Respondent be allowed to hold all the property of the Tenants in the suit premises until payment in full.

3.The Application by the 2^nd Tenant/Applicant dated 15.7.2025 seeks the following orders;-(a)A declaration that Roso Garage Limited is in breach of the Tribunal’s directions issued on 25.6.2025.(b)That the 1^st Respondent, Roso Garage Limited be restrained from in any manner interfering with the Applicants designated parking area and the Tenants/Applicants quiet possession and beneficial use of the same.(c)That the Applicants/Tenants be at liberty to apply to the High Court for appropriate contempt proceedings under the applicable laws.(d)That the OCS Kilimani Police Station be directed to ensure compliance with the orders sought.

The Applicants depositions in support of the Application dated 25.4.2025

4.The Affidavit in support of the above Application sworn by David Muhoro Mugira on 25.4.2025 may be summarized as follows;-a.That he is a director of the 2^nd Applicant dully authorized to swear the affidavit by the 2^nd Applicant.b.That by a lease dated 1.5.2023, he entered into a fixed term Agreement with the 1^st Respondent at an agreed monthly rent of Kshs. 300,000/=.c.That even after the Tenants executed their part of the lease and forwarded the same to the Landlord, a counter part of the fully executed lease was never returned to the Tenants.d.That thereafter, the 1^st Applicant took possession of the demised premises and established a restaurant there known as Pixel Yard operated by the 2^nd Applicant.e.That the lease was for a period of two (2) years and when the Applicants commenced negotiations for renewal, the 1^st Respondent demanded a 100% rent increment; which the Tenants declined as a consequence of which the 1^st Respondent issued the earlier notice dated 9.4.2025.f.That the Tenants have spent over Kshs. 10,000,000/= on infrastructure, employment and goodwill and have always met their obligations under the lease and the 1^st Respondent’s decision to terminate the lease is therefore irrational and unfair.g.That the club and restaurant operated by Pixel Yard Limited employs several persons who will be rendered jobless and the company stands to suffer irreparable commercial damage and reputational harm.

The 1^st Respondent’s response to the Tenant’s Affidavit

5.The Replying affidavit sworn by Mr. Stephen Kinyanjui on 14.5.2025 may be summarized as follows;-a.That the 1^st Respondent signed a lease agreement with the 1^st Applicant only and further the Agreement annexed by the 1^st Applicant as exhibit DMM2 is an Agreement for another space leased from the 1^st Respondent and is in no way involved in this matter.b.That it is the 1^st Tenant who took possession of the suit premises and he never informed the 1^st Respondent that the 2^nd Tenant supposedly ran the restaurant.c.That the 2^nd Tenant is stranger to the lease Agreement and therefore illegally on the suit premises.d.That the 1^st Respondent was never informed that the 2^nd Tenant would be paying rent on behalf of the 1^st Tenant.e.That the 1^st Respondent has never demanded the alleged rent increment to Kshs. 600,000/=.f.That the notice dated 9.4.2025 was issued to the Tenant because the tenancy was coming to an end on 30.4.2025 and the 1^st Respondent had no intention of renewing the said lease, and the Tenants had therefore to be notified that they would vacate at the end of the said lease, the letter does not amount to an eviction notice.g.That there can be no implied tenancy in the circumstances because there was a signed Agreement between the parties and as admitted by the 1^st Tenant at paragraph 3 of his affidavit.h.That the 1^st Applicant/Tenant whose Agreement has come to an end is now a trespasser and illegally occupying the suit premises.i.That the Tenant does not pay rent in time or in full all the time and the rent for the month of May 2025 remains unpaid.j.That the Tenant was required to notify the 1^st Respondent of his intention to renew the lease as per clause 10 of the lease document.k.That the Tenant owes rent in the sum of Kshs. 750,000/=, Kshs. 17,000/= penalty on account of late payment service charge of Kshs. 50,000/= and Kshs. 19,500/= being the losses incurred as a result of electricity disconnection due to the 1^st Tenant’s non-payment of his portion of the electricity bill.l.That even though the Tenant kept on defaulting in rent payment, the 1^st Respondent never disrupted his business.

The 1^st Respondent’s depositions in support of the Application dated 14.5.2025

6.The affidavit sworn by Mr. Stephen Kinyanjui may be summarized as follows;-a.That the 1^st Respondent is a Tenant on the property known as L.R. No. 209/7736 Dagoretti on which the 1^st Respondent runs a garage and car wash, all known as Roso Garage.b.That by an Agreement dated 1.5.2023, the 1^st Respondent leased to the 1^st Tenant a portion of the property at a monthly rent of Kshs. 300,000/= payable before the 10^th day of every month, and with a penalty of 2% for late payment.c.That the 2^nd Respondent has no lease Agreement with the 1^st Respondent and its occupation of the premises is illegal.d.That the Tenant has been erratic in his payment of rent and now owes rent of Kshs. 750,000/=, service charge of Kshs. 50,000/=, penalty of Kshs. 15,000/= and a further Kshs. 19,500/= being the losses incurred due to the Tenants non-payment of his portion of the electricity bill which led to disconnection of power.e.That a notice dated 19.4.2025 was issued to the Tenant notifying him that his tenancy was coming to an end but the Tenant chose to file the instant sit before the notice could expire.f.That the Tenant misled the court while obtaining the orders of 29.4.2025 as the 1^st Respondent had never threatened to increase the rent.

The 1^st Respondent’s reply to the Application dated 14.5.2025

7.The affidavit sworn by Mr. David Muhoro Mugira in reply to the motion dated 14.5.2025 may be summarized as follows;-a.That the Application is replete with material non-disclosure and intended to mislead the court into issuing adverse orders against the Tenants.b.That the 1^st Respondent entered into the lease Agreement dated 1.5.2023 with the intention of operating a barber shop which he still operates to date.c.That Pixel Limited was incorporated after the lease Agreement was signed and operates a separate business on a different portion of the suit premises which was not part of the original lease. Pixel Limited is therefore not a stranger in the suit premises as alleged by the 1^st Respondent.d.That in any case, the 2^nd Respondent has over the years received rent from the Applicants without protest or reservation which effectively created a controlled tenancy by implication or conduct.e.That no verbal or written demand has been made for the alleged arrears of Kshs. 750,000/= and the claim is an after-thought and mere retaliatory in nature as the Applicants have made payments up to and including the month of May 2025.f.That the Tenants have not received any valid notice of termination of tenancy under the provisions of Section 4 of Cap 301 from the 1^st Respondent and further the notice dated 19.4.2025 is illegal and invalid.g.That the 1^st Respondent’s claim for Kshs. 19,500/= on power related issues is speculative and not supported by any evidence.h.That the Application is a premature attempt at evicting the Tenants.

The 1^st Respondent’s Supplementary Affidavit

8.The Supplementary affidavit sworn by M/S Stephen Kinyanjui on 11.7.2025 may be summarized as follows;-a.That the 1^st Tenant has used the orders issued by the Tribunal on 29.4.2025 to escape from his responsibilities.b.That the Tenant had a separate lease Agreement where he was running a barber shop under the name Shava Wellness Salon and which lease the Tenant terminated vide a notice dated 12.11.2024.c.That the lease was only between the 1^st Tenant and the 1^st Respondent and the 1^st Respondent was never aware that the 2^nd Tenant was operating in the premises, the 2^nd Tenant’s incorporation took place two months after the lease was executed between the 1^st Tenant and the 1^st Respondent.d.That the Tenants have not been paying rent as required and indeed have not produced any evidence that they have paid rent and service charge.e.That the Kshs. 150,000/= shown as paid at paragraph 12 of the Tenants affidavit only covers rent arrears. The rent for July 2025 in the sum of Kshs. 300,000/= is yet to be received, and as at to date, the Tenant is in rent arrears amounting to Kshs. 1,565,000/=.f.That the letter of 19.4.2025 cannot be termed as an eviction notice.

The 2^nd Tenant’s depositions in support of the Motion dated 15.7.2025

9.The affidavit of M/S David Muhoro Mugira sworn on 15.7.225 may be summarized as follows;-a.That the court on 25.6.2025 gave express and clear orders in favour of the Tenants and more particularly directed the 1^st Respondent to desist from any conduct that would amount to harassment or obstruction of the Applicants business activities.b.That in disregard of the court orders, the 1^st Respondent has escalated its acts of interference by increasing the number of vehicles parked at the Tenants designated area completely obstructing the Tenants clients and suppliers, this has occasioned severe reputational and financial injury to the Applicant’s business.c.That the actions of the 1^st Respondent are a brazen assault on the authority of the Tribunal and amounts to economic sabotage against the Tenants and the 1^st Respondent ought not to be allowed to benefit from its own wrong doing.d.That the Tribunal has inherent jurisdiction to punish for contempt.

The 1^st Respondent’s Replying affidavit

10.The Replying affidavit sworn by Mr. Stephen Kinyanjui on 21.8.2025 may be summarized as follows;-a.That the motor vehicles are parked on the property because the 1^st Respondent has an Agreement with a third party owner of the said motor vehicles to have them parked there.b.That there is no exclusively designated parking area for the 1^st Tenant, no such provision exists in the Agreement of 1.5.2023.c.That the vehicles parked have not occupied the whole premises as alleged by the Tenants as the parking space is shared by all parties legitimately on the premises.d.That there is no evidence presented to show that the Tenants have suffered any losses or that their customers are unable to park within the property.e.That the Tenants are aware that there are other spaces within the property which the Respondents can lease out for their benefit.f.That the filing of this Application is meant to frustrate the 1^st Respondent and to negatively paint it as the aggressor.g.That there is no evidence to show that any conduct of the 1^st Respondent is contemptuous.h.That the 1^st Respondent has complied with all court orders and parties are living in a peaceful manner.

Analysis and determination

11.The issues that arise for determination in the above Applications are in my view the following;-a.Whether the 1^st Tenant has an independent lease Agreement with the 1^st Respondent and whether the 2^nd Tenant enjoys an independent implied tenancy?b.Whether the Applicants have a valid subsisting lease or whether their occupation of the premises amount to trespass and illegal occupation.c.Whether the 1^st Respondent is entitled to vacant possession of the premises and whether the notice dated 9.4.2025 amounts to an illegal eviction noticed.Whether in view of the findings in a, b and c, the 2^nd Tenant is entitled to the orders sought in its Application dated 15.7.2025e.What orders ought to be issued in this matter?

Issue A: Whether the 1^st Tenant has an independent lease Agreement with the 1^st Respondent and whether the 2^nd Tenant enjoys an independent implied tenancy?

12.In the Application dated 25.4.2025, the 1^st Tenant admits to entering into a lease Agreement dated 1.5.2023 which was due to lapse on 1^st May 2025. From the CR 12 annexed to the Tenant’s Affidavit, the 2^nd Tenant was registered/incorporated on 26.6.2023. The 2^nd Tenant could therefore not have been a party to the lease Agreement dated 1.5.2023. The 1^st Tenant has clearly deponed that he took possession of the demised premises and therein established a restaurant operating as Pixxel Yard Limited which is operated by the 2^nd Tenant. It is not disputed that the 2^nd Tenant has no formal Agreement with the 1^st Respondent and it is not clear how it came to be in the premises.The 1^st Tenant has contended that the lease Agreement dated 1.5.2023 was in regard to the premises wherein he runs a barber shop and not the one which is occupied by the 2^nd Tenant. The suit property identified in the Tenant’s Application is L.R. No. 209/7736 and it is the same one which appears in the lease Agreement in draft annexed to the Tenant’s affidavit. The lease Agreement dated 1.5.2023 annexed to the 1^st Respondent’s response and marked SK2 also shows that the demised premises is on L.R. No. 209/7736. So it is clear that the suit premises at least as far as the registration thereof goes, is one and the same premises.

13.Is there evidence that the 2^nd Tenant independently took up the tenancy of the demised premises independent of the 1^st Tenant?It is instructive to note that from the CR 12 annexed to the Tenants Affidavit, the 1^st Tenant, David Muhoro Mugira is one of the shareholders/directors of the 2^nd Tenant. The documents from ECLAT Design Studio and which the 1^st Tenant has exhibited to show the improvements he has done on the suit premises in the said Application have all been addressed to Pixxel Yard, Kevin & Muhoro. The 2^nd Tenant does not seem, at least from the records, to have participated in the renovations and/or improvement of the said premises.

14.Turning to the documents annexed to the Replying affidavit of the 1^st Respondent, it is clear that from exhibit SK3, the 1^st Respondent received rent from the 2^nd Tenant and never protested or sought to know why a stranger was paying rent into its accounts. I therefore do not think it is true as alleged by the 1^st Respondent that the 2^nd Tenant is a stranger in the premises. This situation would have had different consequences if the 1^st Respondent declined to accept the rent from the 2^nd Tenant or at least sought an explanation from the 1^st Tenant why rent was consistently being paid by a stranger into its accounts.

15.What seems to have happened in this case is that the 1^st Tenant entered into a lease Agreement with the 1^st Respondent and thereafter incorporated a company which together with his co-shareholders and directors, they surreptitiously gave to manage what was previously Pixxel Yard, now Pixxel Yard Limited.

16.It is admitted that the 1^st Respondent and the 2^nd Tenant have no formal lease and it is also clear that the 2^nd Tenant has been paying rent to the 1^st Respondent. It is further obvious that the 2^nd Tenant is independent in existence from the 1^st Tenant by virtue of its incorporation. The relationship between the 2^nd Tenant and the 1^st Respondent therefore and without the awareness of the 1^st Respondent, legally became one of a controlled nature, it became a controlled tenancy under the provisions of Section 2(1) of Cap 301.

17.That being the case, the lease Agreement dated 1.5.2023 could only be binding as between the 1^st Tenant and the 1^st Respondent being the only parties to the said Agreement and could not bind third parties. To that extent, I am in agreement with the 1^st Respondent that the said Agreement expired by effluxion of time and there was no requirement for a notice vide Section 4(2) of Cap 301 to terminate the same. The notice sent to Mr. David Muhoro Mugira was therefore a proper notification under the terms of the Agreement between the parties.

18.But as between the 1^st Respondent and the 2^nd Tenant, the notice dated 9.4.2025 is invalid as only a notice under Section 4(2) of Cap 301 would be applicable to terminate a controlled tenancy and I have already found the tenancy between the two parties to be a controlled tenancy.

19.In my view, the only tenancy which was legally terminated is the one entered into between the 1^st Tenant and the 2^nd Respondent leasing the space currently occupied by the 2^nd Tenant under a controlled tenancy and therefore subject to the strict provisions of Cap 301.

Issue A: Whether the Applicants have a valid subsisting lease or whether their occupation of the premises amount to trespass and illegal occupation.

20.I have already found that the 2^nd Tenant has been paying rent to the 1^st Respondent. Although the 1^st Respondent claims that the 2^nd Tenant is a stranger, this is not borne out by the evidence on the record. The 1^st Respondent has not denied that indeed the 2^nd Tenant is in occupation of the premises and the court having already found that there exists a controlled tenancy between the 2^nd Tenant and the 1^st Respondent, the Tenants cannot be described as trespassers on the suit premises.

Issue B: Whether the 1^st Respondent is entitled to vacant possession of the premises and whether the notice dated 9.4.2025 amounts to an illegal eviction notice

21.I have already made a finding that the notice in the letter dated 9.4.2025 was proper and perfectly legal only as far as it touched on the tenancy between the 1^st Tenant and the 1^st Respondent but invalid as far as it could be construed as terminating the tenancy of the 2^nd Tenant. If the 1^st Respondent is desirous of terminating the tenancy between itself and the 2^nd Tenant, then the law requires that a mandatory notice be issued to that effect under the provisions of Section 4(2) of Cap 301. Absent the said notice, the 1^st Respondent would not be entitled to vacant possession.

Issue C & D: Whether in view of the findings in a, b and c, the 2^nd Tenant is entitled to the orders sought in its Application dated 15.7.2025 and What orders ought to be issued in this matter?

22.The Landlord/1^st Respondent has deponed in its affidavits that the Tenant is in rent arrears amounting to Kshs. 750,000/= which has escalated to arrears in excess of a million shillings and probably continuous to accrue. The 2^nd Tenant does not agree with the Landlord’s allegations. None of the parties have filed a coherent statement of accounts to assist the court in determining the rent status of the parties. The Landlord has not produced before the Tribunal by way of an affidavit evidence, a copy of the rent book required under Section 3(3) of Cap 301 which would have gone a long way in resolving the issue of rent as between the 2^nd Tenant and the 1^st Respondent or even as between the Tenants and the Respondents. In these circumstances, I am unable to make any conclusive findings on this aspect and opine that the same be subjected to a hearing where parites will present their statement of accounts and be cross examined on the same.

23.The Tenants’ Complaint in the Application dated 15.7.2025 is that the 1^st Respondent has blatantly disobeyed court orders in having vehicles parked at the designated parking area reserved for the 2^nd Tenant. The 1^st Respondent has deponed in response that there is no reserved/exclusive parking area for any of the parties legitimately in occupation of the suit premises. Having already observed that the relationship between the 2^nd Tenant and the 1^st Respondent was never reduced into writing, it is not easy to conclude that there is an express term of the lease which delineates any specific area as a parking exclusively reserved for the 2^nd Tenant.

24.What I glean from the affidavits is that L.R. No. 209/7736 is a premises with many businesses, for example the 1^st Respondent runs a garage and car wash on the same premises, other legitimate Tenants have taken up space for rent to park their vehicles and even the 1^st Tenant has deponed that he runs a barber shop in the premises. I have therefore no material placed before me to show that the 2^nd Tenant has any exclusive parking rights in the premises. however, if the Tenant is minded of taking up the issue before the High court to prosecute a motion for contempt against the 1^st Respondent then that is the Tenants choice to make and no leave is necessary from the Tribunal.

Disposition

25.In view of the foregoing findings, I will make the following orders in disposing of the Applications;(a)That the notice by letter dated 9.4.2025 is declared as illegal and invalid in as far as it purports or may purport or may be construed to be a notice to vacate issued against the 2^nd Tenant.(b)That pending the hearing and determination of the Reference, the Respondents are injuncted from in any manner whatsoever interfering with the 2^nd Tenant’s quiet possession, peaceful occupation and use of all that business known as Pixxel Yard Limited situated on L.R. No. 209/7736 Dagoretti North.(c)That the dispute as it relates to rent be subjected to a full hearing.(d)That the 1^st Respondent’s Application dated 14.5.2025 is hereby dismissed.(e)That the Tenants Application dated 15.7.2025 is dismissed.(f)That each party will bear their own costs.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 5^TH DAY OF SEPTEMBER 2025HON. CYPRIAN MUGAMBICHAIRPERSONBUSINESS PREMISES RENT TRIBUNALDelivered in the presence of Mr. Omondi holding brief for Mr. Ikua for the Tenants and in the absence of the Counsel for the RespondentsCourt: Mention on 17.9.2025 for directions on the Reference.