REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

TRIBUNAL CASE NO 168 OF 2021 (NAIROBI)

EAST AFRICAN CHAMBERS OF COMMERCE,

INDUSTRY AND AGRICULTURE...............TENANT/APPLICANT

VERSUS

TAMC LOGISTICS LIMITED....LANDLORD/1^ST RESPONDENT

UMMA UNIVERSITY TRUST...LANDLORD/2^ND RESPONDENT

RULING

1. The Tenant’s/Applicant’s notice of motion dated 19^th February 2021 seeks the following orders;

a. Spent

b. Spent

c. That pending the hearing and determination of the reference, the Landlord/Respondents whether by themselves, agents, servants or otherwise howsoever be restrained from interfering or taking possession and/or interfering with the Applicant’s quiet possession and occupation of the office space measuring 600 square feet on the third floor of mirage Plaza erected on L.R. No 209/105061/1.

d. Costs.

2. The application is grounded on the reasons on the face of the said application and supported by the affidavit of Charles N. Kahuthu and which I proceed to summarize as follows;

a. That the Tenant/Applicant is a controlled Tenant of the 1^st Respondent in the office space measuring 600 square feet owned by the 2^nd Respondent on L.R. No 209/105061/1 (Mirage Plaza), the suit premises.

b. That on 11^th March 2021, the Applicant found a proclamation notice issued to the 1^st Respondent purporting to proclaim on the Applicant’s property.

c. That the purported proclamation is backdated to 10^th February 2021 and alleges that the 1^st Respondent is in rent arrears despite the Applicant paying all rent due to the 1^st Respondent.

d. That the notice issued by the 2^nd Respondent to the 1^st Respondent is illegal, irregular and contrary to the provisions of Cap 293 as read together with the provisions of Cap 301.

e. That the Applicant is entitled to exclusive occupation and quiet enjoyment of the business premises as against the Landlord.

3. In opposing the application, the 2^nd Respondent has filed a replying affidavit sworn by one Rosemary K. Muendo on 7^th June 2021 and which I summarize as follows;

a. That she is the managing agent of the 2^nd Respondent.

b. That on 22^nd September 2015, the 2^nd Respondent leased out the suit premises to the 1^st Respondent.

c. That on 7^th July 2017, the 2^nd Respondent rented out an additional 120 square feet to the 1^st Respondent.

d. That the leases were delivered to the 1^st Respondent who has never returned them.

e. That the 1^st and 2^nd Respondents are in a Tenant/Landlord relationship, the Applicant is a stranger to the 2^nd Respondent.

f. That the lease agreement between the 1^st and 2^nd Respondent is for a period of six (6) years amongst other conditions.

g. That the 1^st Respondent is in rent arrears of Kshs 1,142,069/- as at June 2021.

h. That on 10^th February 2021, the 2^nd Respondent through its agent instructed auctioneers to levy distress for rent.

i. That the Applicant being a stranger, it cannot intervene in the 2^nd Respondent’s right to levy distress for rent against the 1^st Respondent.

j. That the Applicant is in illegal occupation of the 2^nd Respondent’s premises.

k. That on 14^th January 2021, the Applicant wrote to the 2^nd Respondent acknowledging a default in rent payment of Kshs 766,229/- the Applicant is therefore not being candid with the Tribunal.

4. The 2^nd Respondent has also filed a notice of preliminary objection dated 4^th March 2021 where it contended that;

a. The Applicant lacks legal capacity to institute a suit against the 2^nd Respondent herein therefore the suit is defective and bad in law.

b The Applicant is estopped by law from making the said application since the 2^nd Respondent has no capacity to sue or of being sued.

c. The Applicant lacks locus to institute this suit as against the 2^nd Respondent as it is a stranger to the 2^nd Respondent.

d. The notice of motion application dated 19^th February 2021 and the entire suit are hopelessly misconceived, frivolous, totally devoid of merit, mala fide and an abuse of the Tribunal’s process as it contravenes order 1 rule 3 of the Civil Procedure Rules 2010.

e. The said application is bad in law, misconceived, fatally incompetent and unsustainable.

5. Both the Applicant and the 2^nd Respondent have filed their respective submissions.  I have considered the same in this ruling.  The 1^st Respondent on its part has not filled any pleadings and this ruling is therefore without the benefit of any contribution from the 1^st Respondent.

6. The preliminary objections raised by the 2^nd Respondent do not in my view raise pure points of law. In order to determine the objections raised, certain facts would have to be established for example, the legal capacity of the Applicant to institute suit, the legal capacity of the 2^nd Respondent to sue and be sued, whether or not the Applicant is a stranger to the 2^nd Respondent amongst others.  The preliminary objections do not meet the standard in Kenya Breweries Limited and another Vs Keroche Breweries Ltd [2020] eKLR where the court cited the case of J.N & Others Vs Board of Management St G. School, Nairobi & another [2017] eKLR where it was held;

“A preliminary objection is in the nature of what used to be a demurrer.  It raises a pure point, which is argued on the assumption that all facts pleaded by the opposite side are correct.  It cannot be raised if any fact is to be ascertained or if what is sought is the exercise of judicial discretion.  The principle is abundantly clear.  A preliminary objection correctly understood is now well defined as and declared to be, a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the process of evidence.  Any assertion which claims to be a preliminary objection, yet it bears factual aspects calling for proof or seeks to adduce evidence for its authentication, is not as a matter of legal principle, a true preliminary objection which the court should allow to proceed.  Where a court needs to investigate facts, a matter cannot be raised as a preliminary point…anything that purports to be a preliminary objection must not deal with disputed facts, and it must no itself derive its foundation from factual information which stands to be tested by normal rules of evidence.”

7. The issues that arise for determination in this application are in my humble view, the following;

a. Whether the Applicant has the legal capacity to initiate these proceedings.

b. Whether the 2^nd Respondent has capacity to be sued in these proceedings.

c. Whether there is in existence a sublease/sub tenancy between the Applicant and the 1^st Respondent.

d. Whether the Applicant is entitled to the prayers sought in its application dated 19^th February 2021.

8. On issue (a);

a. At paragraph 8 of the affidavit in support of the Applicant’s application, the Tenant/Applicant describes itself as follows;

“That the Applicant is an organization established in 2003 and owned by the Kenya National Chamber of Commerce and Industry, the Uganda National Chamber of Commerce and Industry and the Tanzania Chamber of Commerce and Industry…”

b. It is true as pointed out by the 2^nd Respondent that the Applicant has not stated whether it is a company and therefore duly incorporated under the Companies’ Act 2015 or its predecessor, whether it is a non-governmental organization or society, or whether it is a body created by statute.  It is therefore doubtful whether the Applicant is a legal person.  In its circumstances, one would have expected the Applicant to bring this suit in the names of the National Chambers of Commerce and Industry which “own” it.  In the absence of evidence to the contrary, I do find that the Applicant has no legal capacity to bring those proceedings.

9. On issue (b)

a. The 2^nd Respondent in its pleadings has variously described itself as UMMA University Trust and UMMA University Trust, registered trustees.  In the letter of offer dated 22^nd September 2015, the Landlord is described as UMMA UNIVERSITY TRUST and in the letter of offer for office extension, the same is copied to UMMA UNIVERSITY TRUST Registered Trustees.  In my view, these two names refer to one and the same entity.  I do therefore find that the 2^nd Respondent had/has capacity to sue and be sued.

10. On issue (c)

a. The Applicant states in its affidavit sworn by Charles Kahuthu that it is a controlled Tenant of the 1^st Respondent, and that it has been paying rent to the 1^st Respondent.  I have gone through the pleadings herein and I have not found any evidence of the payment of rent by the Applicant to the 1^st Respondent.  Evidence of rent payment is a critical component in establishing the existence of the Applicant’s tenancy with the 1^st Respondent.

b. The relationship between the 1^st Respondent and the 2^nd Respondent is established based on the letters dated 22^nd September 2015 and 7^th July 2017.  Paragraph 11 of the letter of offer dated 22^nd September 2015 is in the following terms;

“The Tenant will not be permitted to transfer, sublet or part with possession of the premises.  Upon the breach of covenant, the Landlords may re-enter the premises whereupon the lease shall be terminated absolutely.”

c. The letter of offer for office extension dated 7^th July 2017 was issued on the same terms as the existing lease (these must be the terms in the letter of offer dated 22^nd September 2015).  The 1^st Respondent accepted this offer by executing the acceptance letter.

d. I have not found any evidence on the record suggesting that the 1^st Respondent sought and obtained the permission of the 2^nd Respondent to sublet the premises to the Applicant herein.  In any event, the letter of offer dated 22^nd September 2015 expressly forbid the subletting of the premises in absolute terms.  The occupation of the suit premises by the applicant could therefore only be illegal as the 1^st Respondent had no authority to part with possession of the suit property or to sublet it to third parties.

e. I therefore hold that there was no valid sub-tenancy between the 1^st Respondent and the Applicant and the Applicant cannot therefore be said to be the 1^st Respondent’s controlled Tenant as suggested by the Applicant.

f. I have noted from the pleadings and documents in this matter that the affidavit in support of the application is sworn by one Charles N. Kahuthu.  The acceptance form of the letter of offer dated 7^th July 2017 is also executed by Charles Kahuthu.  The first letter of offer is dated 22^nd September 2015 and the Applicant states that it has been the 1^st Respondent’s Tenant since 2015.  The area allegedly occupied by the Applicant is 600 square feet.  The area in the premises offered to the 1^st Respondent by the 2^nd Respondent on 22^nd September 2015 is also 600 square feet.

g. I have also noted that all rent demands by Value Zone Ltd, the agents of the 2^nd Respondent are addressed to the 1^st Respondent and forwarded by email to Charles Kahuthu.  The said demand letters are also responded to by the said Charles Kahuthu.  Though the email address used by Charles Kahuthu is one belonging to the Applicant, no demand for rent seems to have been sent to the Applicant.

h. Could the 1^st Respondent and the Applicant be one and the same entity operating under cover of different names?  If Charles Kahuthu executed the letters of offer on behalf of the 1^st Respondent and signed the supporting affidavit on behalf of the Applicant, why did he not find it proper to file any pleadings on behalf of the 1^st Respondent who has remained mute in these proceedings?

i. To further illustrate the intertwining nature of the relationship between the Applicant and the 1^st Respondent, I have noticed that a demand letter dated 8^th January 2021 was addressed to the 1^st Respondent.  It demanded the sum of Kshs 766,229/- as arrears of rent.  On 14^th January 2021, the Applicant responded to the said demand letter and forwarded to the agents of the 2^nd Respondent a postdated cheque in the sum of Kshs 400,000/-.  The letter by the Applicant was signed by Charles Kahuthu, Director, TAMC Logistics Ltd!!

j. The cheque was returned unpaid due to insufficient funds and the same was communicated to the 1^st Respondent by the letter by Value Zone Ltd dated 9^th February 2021.

k. I am therefore of the view that the prevalence of Charles Kahuthu in the operations of the Applicant and the 1^st Respondent lead to the irresistible conclusion that these two entities are operated by the said Charles Kahuthu, but I digress.

11. On issue (d)

a. I have already found that the Applicant has not demonstrated that it has the legal capacity to bring these proceedings.  Even if I was wrong on this finding, I have further found that the occupation of the suit premises (if any) by the Applicant is illegal for being in breach of express terms of the letter of offer prohibiting the 1^st Respondent form subletting the suit premises.  The distress for rent undertaken by the 2^nd Respondent is against the 1^st Respondent with whom the 2^nd Respondent has a   Tenant/Landlord relationship.  The said 1^st Respondent has not denied being in rent arrears and neither has it resisted the 2^nd Respondent’s exercise of its right to distress for the rent in arrears.

b. In these circumstances, I do not think the Applicant has demonstrated that he has a prima facie case against the 2^nd Respondent.  There has not been demonstrated any legal relationship between the Applicant and the 2^nd Respondent.

12. In these circumstances, I do find that the application dated 9^th February 2021 has no merits and I proceed to dismiss the same with costs to the 2^nd Respondents.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

RULING DATED, SIGNED AND DELIVERED VIRTUALLY BY HON CYPRIAN MUGAMBI NGUTHARI (CHAIRMAN) THIS 7^TH DAY OF MARCH 2022 IN THE PRESENCE OF MS ATHMAN FOR THE 2^ND RESPONDENT/LANDLORD AND IN THE ABSENCE OF THE OTHER PARTIES.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL