Njoroge & 10 others v General of the Salvation Army (Registered Trustees) & 2 others (Tribunal Case E964 of 2024) [2025] KEBPRT 401 (KLR) (12 September 2025) (Judgment)
Neutral citation:
[2025] KEBPRT 401 (KLR)
Republic of Kenya
Tribunal Case E964 of 2024
Gakuhi Chege, Chair & J Osodo, Member
September 12, 2025
Between
Grace Njeri Njoroge
1st Applicant
Josephine W Wangui
2nd Applicant
Manassseh Lashighoni Mnaremanga
3rd Applicant
Millicent Wanjiru Githatu
4th Applicant
James Mwaura Ndung'U
5th Applicant
Ephantus Gikonyo Guthera
6th Applicant
Charity Waruguru
7th Applicant
Sarah W Kamau
8th Applicant
Sharath Berakha
9th Applicant
Rosemary Kathambi
10th Applicant
Edward Nduati Njoroge t/a Edtel Odeal Tecchnology
11th Applicant
and
General of the Salvation Army (Registered Trustees)
1st Respondent
Picturesque Properties Limited
2nd Respondent
Funan Consolidated Company Limited
3rd Respondent
Judgment
A. Introduction & Background
1.This Reference was filed under section 12(4) of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act, Cap 301 Laws of Kenya. The Applicants are tenants occupying business premises situate on LR No 209/1951 at the junction of Racecourse Road and River Road, Nairobi. They moved this Tribunal challenging the legality of demands for rent, goodwill and new lease terms made by the 2nd and 3rd Respondents.
2.The Applicants contend that following expiry of the head lease formerly held by Funan Construction Company Limited, they automatically became tenants of the 1st Respondent, the registered owner, by virtue of section 5 of Cap 301. They insist that the 2nd and 3rd Respondents are strangers with no mandate to demand rent or goodwill.
3.In a ruling delivered herein on 11th December 2024, this Tribunal directed inter-alia that the tenants’ Reference/Complaint dated 30th August 2024 shall proceed to hearing by way of viva voce evidence upon all the parties complying with Order 11 of the Civil Procedure Rules, 2010 by filing witnesses’ statements and documents in support of their respective cases in any event within the next Thirty (30) days thereof.
4.The tenants were directed to henceforth deposit all the unpaid rent with the Tribunal awaiting determination of the Reference/Complaint.
5.The costs of the application were to abide the outcome of the main Reference/Complaint
6.Apart from the 1st Respondent whose witness one Lt Colonel David Musyoki filed a statement, all the others chose to rely on the affidavits previously on record.
7.In support of their case, the Applicants rely on their affidavits, correspondence, and notices of rent deposit. They argue that the 1st Respondent, being the registered owner, is their direct landlord and ought to deal with them without interposition of the 2nd and 3rd Respondents.
8.The 1st Respondent opposed the Reference. Through the affidavit of Arthur Lord, it stated that it has never been the direct landlord of the Applicants. Instead, it leased the property to the 3rd Respondent, Funan Consolidated Company Limited, which in turn appointed the 2nd Respondent as its rent collection agent.
9.The 2nd and 3rd Respondents filed a replying affidavit sworn by Benjamin Ndiang’ui. They asserted that the 3rd Respondent is the lawful lessee of the 1st Respondent and relied on the lease agreement dated 1st October 2023. They further exhibited an appointment letter dated 11th September 2023 appointing the 2nd Respondent as its agent.
10.The Respondents accused the Applicants of withholding rent as a strategy to frustrate the 3rd Respondent’s management. They alleged that arrears had accrued and prayed for dismissal of the Reference with costs.
11.The matter proceeded by way of viva voce evidence when all the parties relied on their filed affidavits/statements, documentary evidence, and thereafter filed detailed written submissions which we have carefully considered.
B. Applicants’ Case and Submissions
12.The Applicants, through the affidavit of Edward Nduati Njoroge and their written submissions dated 15th September 2024 and 11th June 2025 respectively, argued that section 5 of Cap 301 protects subtenants upon expiry of a head lease. They submitted that they automatically became tenants of the 1st Respondent once the lease between the 1st Respondent and Funan Construction Company Limited lapsed on 30th September 2023.
13.The Applicants quoted section 5 verbatim as follows: -
14.They urged that by operation of law, the 1st Respondent, being the reversioner, became their direct landlord. They argued that the 3rd Respondent’s purported lease could not displace rights that had already accrued in their favour.
15.The Applicants further submitted that the Respondents had illegally demanded goodwill. They contended that goodwill is not a statutory obligation but a commercial arrangement that must be consensual. They relied on the decision in Republic v Chairman, BPRT ex parte Justus Nyang’aya [2013] eKLR where the High Court stated:
16.They also cited Mistry Amar Singh v Serwano Kulubya [1963] EA 408 where the Court of Appeal held:
17.The Applicants, however, argued that this authority supported their case in so far as the statute (Cap 301, s.5) places them under the reversioner once the head lease expired.
18.They urged the Tribunal to declare the 1st Respondent as their landlord, restrain the 2nd and 3rd Respondents from interfering with their tenancies, and direct that the rent deposited be released to the 1st Respondent.
C. 1st Respondent’s Case and Submissions
19.The 1st Respondent, in its submissions dated 20th September 2024, argued that the Applicants had misconstrued section 5 of Cap 301. It contended that while subtenancies survive the expiry of a head lease, the law does not bar the reversioner from granting a fresh lease to another party. Once such a lease is granted, the subtenants must recognize the new lessee as their landlord.
20.The 1st Respondent cited Samuel Musau & 33 others v Andrew Makau & 10 others [2021] eKLR where the Court of Appeal held:
21.The 1st Respondent further submitted that the Applicants were estopped from denying the 3rd Respondent’s authority, having attended meetings where the new arrangement was communicated. They relied on section 120 of the Evidence Act which provides as follows:
22.They also relied on Saheb v Hassanally [1980] eKLR where the court held:
23.The 1st Respondent also invoked the doctrine of res judicata under section 7 of the Civil Procedure Act, arguing that some of the issues had been litigated previously in suits involving the property. They urged the Tribunal to dismiss the Reference with costs.
D. 2nd & 3rd Respondents’ Case and Submissions
24.The 2nd and 3rd Respondents aligned themselves with the 1st Respondent. In their submissions dated 21st September 2024, they emphasized that the 3rd Respondent holds a valid lease from the 1st Respondent, and that the 2nd Respondent has been duly appointed as its agent.
25.They produced the lease agreement dated 1st October 2023 between the 1st and 3rd Respondents, minutes of a handover meeting of 7th August 2023, and the appointment letter of 11th September 2023. They argued that these documents conclusively establish the chain of authority.
26.They cited Assanand v Pettitt [1978] eKLR where the court observed:
27.They submitted that reconciliation of accounts is necessary before any enforcement against the Applicants, but maintained that arrears were owed and must be paid.
28.The Respondents prayed that the Reference be dismissed, that rent deposited with the Tribunal be released to them, and that the Applicants be condemned to pay costs.
E. Issues for Determination and Analysis
29.Having considered the pleadings, affidavits, evidence and submissions, the following issues arise for determination:i.Whether there exists a controlled tenancy between the Applicants and the 1st Respondent.ii.Whether the 2nd and 3rd Respondents are lawfully entitled to collect rent.iii.Whether the Applicants proved unlawful demands for goodwill.iv.What orders should be made with respect to rent deposited with the Tribunal?v.Who should bear the costs of the proceedings?
29.On the first issue, the Applicants’ reliance on section 5 of Cap 301 is noted. However, the Tribunal agrees with the Respondents that the provision does not prevent the reversioner from entering into a new lease. Once the 1st Respondent leased the premises to the 3rd Respondent, the Applicants were bound to recognize the 3rd Respondent as their landlord. This position is fortified by the decision in Mistry Amar Singh v Serwano Kulubya [1963] EA 408 where the court stated:
30.Accordingly, the Applicants’ direct claim against the 1st Respondent fails. Their landlord is the 3rd Respondent.
31.On the second issue, the Tribunal notes that the lease and appointment documents are authentic and undisputed. The Applicants cannot deny the 2nd and 3rd Respondents’ authority in light of section 120 of the Evidence Act. In Saheb v Hassanally (supra), the court held that refusal to pay rent to a duly appointed agent is a breach. We adopt this reasoning.
32.On goodwill, the Tribunal finds that no cogent evidence was adduced to prove unlawful demands thereof. In Republic v Chairman BPRT ex parte Nyang’aya (supra), the High Court emphasized strict proof. The Applicants’ allegations remain unsubstantiated.
33.On rent deposited, section 12(4) of Cap 301 empowers the Tribunal to direct its release. Given our findings, the sums held shall be released to the 2nd and 3rd Respondents forthwith.
34.On reconciliation, the Tribunal directs that accounts must be reconciled before enforcement in line with the principle in Assanand v Pettitt (supra).
35.In regard to costs, section 12(1)(k) of Cap 301, grants this Tribunal jurisdiction to make orders on costs. We note that there was some uncertainty in regard to the relationship of the 1st respondent vis-à-vis the 2nd and 3rd respondents which has now been clarified through the instant proceedings. In the circumstances, we shall direct each party to meet own costs of the suit.
F. Final Determination
30.In the result, the Tribunal makes the following orders: -a.The Applicants’ Reference and application dated 30th August 2024 is hereby dismissed.b.It is declared that the 3rd Respondent is the lawful lessee of the 1st Respondent and therefore recognized as the landlord of the Applicants in respect of the suit premises situate on LR No 209/1951 at the junction of Racecourse Road and River Road, Nairobi.c.The 2nd Respondent is equally recognized as the duly appointed agent of the 3rd Respondent for purposes of collection of rent in respect of the suit property.d.All rent deposited with this Tribunal shall forthwith be released to the 2nd and 3rd Respondents.e.The 2nd and 3rd Respondents shall reconcile the respective rent accounts with each tenant prior to any recovery measures.f.Pending the said reconciliation, there shall be a stay of any distress for rent against the tenants for a period of sixty (60) days from the date hereof.g.Each party shall bear its own costs of the suit.It is so ordered.
JUDGEMENT DATED, SIGNED AND DELIVERED VIRTUALLY THIS 12TH DAY OF SEPTEMBER 2025HON. GAKUHI CHEGE - (PANEL CHAIRPERSON)HON JOYCE OSODO - (MEMBER)BUSINESS PREMISES RENT TRIBUNALIn the presence of: -Thuita for the tenantsMiss Mwanzia for Wambuge for the 1st respondentMwangi for 2nd & 3rd tenants