Koroga v Sufra Garden Restaurant Limited (Tribunal Case E437 of 2022) [2022] KEBPRT 802 (KLR) (Civ) (28 October 2022) (Ruling)
Neutral citation:
[2022] KEBPRT 802 (KLR)
Republic of Kenya
Tribunal Case E437 of 2022
Gakuhi Chege, Vice Chair
October 28, 2022
Between
Lets Koroga
Applicant
and
Sufra Garden Restaurant Limited
Respondent
Ruling
1.The tenant through a reference dated May 24, 2022 moved this Tribunal pursuant to section 12(4) of Cap 301 Laws of Kenya complaining that the landlord had unlawfully, illegally, and in breach of the lease threatened to stop it from building a temporary service kitchen in Banda 4 to serve bar bites and Koroga menu.
2.The tenant simultaneously filed a motion of even date seeking in material part that pending hearing and determination of the reference, the respondent, its servants and/or agents or auctioneers be restrained from evicting, repossessing, occupying or doing the following acts:-i.Stopping the applicant/tenant from refurbishing and making temporary improvements for a temporary kitchen removable at the termination of the lease.ii.Failing or neglecting to allow the applicant/tenant an abatement of rent if the business premises is destroyed by storm, tempest or fire or interfering with its quiet and peaceful tenancy on land reference number 1870/VI/Nairobi.
3.The tenant is further seeking that the landlord/respondent be ordered to provide true food sales revenues/records and pay the 25% rent profit as provided in the lease agreement.
4.The tenant also seeks that the landlord/respondent be ordered to keep the property in good, tenantable repair and condition under article 3(e) of the lease agreement including the toilets.
5.The tenant is seeking that the lease be extended up to December 2024 and that the respondent be ordered to pay for damages for loss of business to be proved during the hearing hereof and costs of the application.
6.The application is supported by the affidavit of Kamal Singh Bhullar and the grounds on the face thereof. The tenant occupies part of LR NO 1870/VI/Nairobi on a lease of one (1) year for the period 1st January 2022 to December 31, 2022 in terms of the said lease marked ‘K1’.
7.The tenant deposes that the landlord is in breach of the terms of lease agreement in the following manner:-i.Proceeds of the 25% net profit of the shared menu has not been accounted for and paid to it.ii.Building, services and maintenance. The tenant is not allowed to put a temporary kitchen in Banda 4 despite the same being in the rental space.
8.The tenant complains about bad drainage around the garden area near the bar and tent utility and near the store area which are affected by flooding. It further complains about lack of maintenance of garden services utility (ceiling, doors and locks), staff toilets broken down and rendered unusable to staff and the staff changing rooms and accommodation for night shift has not been provided.
9.The tenant deposes that on December 31, 2021, a tree fell on the store and the first banda which cannot be utilized to date due to bad workmanship and leakage which can be dangerous with electricals.
10.The tenant complains that it has not been allowed peaceable use and enjoyment of the property on account of disrespect and incompetent customer service, unreasonable demands, daily change of policy and pricing menu by the landlord without consultation.
11.In regard to services, the tenant complains that the internet is not provided by the landlord as well as back-up power. There was no provision of toilet paper, soap, hand towels to the garden public utility, lack of garbage bins and bags.
12.As far as the kitchen is concerned, the tenant complains of poor stock management, inconsistent quality of food and that the kitchen cannot support its menu as per the evaluation memo marked ‘K2’.
13.Despite several reminders, the landlord has taken no action on the aforesaid complaints and as a result, the tenant’s revenues have been dwindling making it difficult to meet its fixed costs including rent and service charge. The complaint letters are marked “K3”.
14.On June 3, 2022, the tenant filed yet another application seeking for orders that its application dated May 24, 2022 be given priority and for and prayer 2(i) and (ii) to be granted. The same came up ex-parte on the same day and interim orders were granted in terms of the latter prayer.
15.The applications are opposed through the replying affidavit of Abdulwahid Qassim Abdo sworn on July 20, 2022 wherein it is deposed that the landlord carries on the business of a restaurant offering various types of cuisine and hospitality services to its patrons which excluded sale of alcohol and similar intoxicating beverages.
16.The landlord sublet to the tenant a defined space to set up a bar for sale of alcohol and similar intoxicating beverages who was allowed to set up a temporary structure to serve as bar area and was also allowed to use the bandas on the premises for the bar business.
17.On taking possession however, the tenant started interfering with the landlord’s business by evaluating the business and operations which was unsolicited and started forcing changes to be made thereto.
18.The tenant is accused of being in breach of its obligations by using the orders of this Tribunal to run a fully – fledged restaurant on terms and conditions suitable to it without the consent of the landlord and in competition with the landlord’s business while defaulting in obligation to pay the prescribed rent and service charge.
19.The landlord contends that the tenant’s application contravenes section 12(4) of Cap 301 as no reference was filed to commence the proceedings.
20.The tenant is accused of various breaches, bad faith, malice and conducting its business in unprofessional manner with a view to damaging the landlord’s business by:-a.Failing to pay rent and service charge as agreed by the parties.b.Interfering with the respondent’s staff by using abusive language and shouting in a hostile and crude manner causing disharmony at the work place.c.Introducing an extended menu to his customers contrary to the understanding to only sell alcoholic beverages and the usual bitings and Koroga.d.Competing with the respondent’s business by operating a fully- fledged restaurant on the premises in addition to the bar.e.Setting up a fully fledged kitchen in the premises in breach of the agreement without written approval of the respondent.f.Operating the liquor business and bar services after hours permitted by the license ie 11.00 pm in breach of legal provisions thereby exposing the premises after closing time. On July 6, 2022, the applicant’s customers were requested to leave the premises at 11.30 pm while drinking alcohol.
21.In the months of June and July 2022, the applicant installed additional electronic equipment ie electric blender, microwave oven, deep freezer for storage of meat products, ice making machine and electric kettle without the landlord’s approval.
22.The said equipment use more than the estimated electricity cost agreed upon at the time of agreement and places the premises at a risk. The tenant also converted one of the gazebo areas reserved for guests into a fully fledged kitchen in breach of agreement and orders supply of food stuff, meat and vegetables directly instead of obtaining the same from the respondent.
23.The landlord prays for dismissal of the application with costs as the tenant was in arrears of rent and service charge amounting to Kshs 700,000/- as at July 20, 2022.
24.The respondent also filed grounds of opposition dated July 20, 2022 along the same line as discussed above in respect of the replying affidavit. I need not rehash the same.
25.On September 29, 2022, the tenant filed a third application seeking that it be allowed to be depositing disputed rent with the Tribunal. In its affidavit of Kamal Singh Bhullar sworn on September 29, 2022, it is deposed by that the landlord may take unilateral adverse action to evict repossess or lock the business premises for non – payment of rent arrears as follows:-i.Kshs 120,000/- for August 2022ii.Kshs 220,000/- for September 2022.
26.On October 13, 2022 when the matter came up in court for mention, the tenant confirmed that it had paid by way of banker’s cheque a sum of Kshs 250,000/- being the admitted rent arrears.
27.The matter was directed to be disposed of by way of written submissions. Both parties complied with the tenant filing submissions dated August 5, 2022 and the landlord’s submissions are dated August 26, 2022.
28.The following issues arise for determination in this matter:-a.Whether the tenant is entitled to the reliefs sought in the applications dated May 24, 2022, May 24, 2022, June 3, 2022 and September 29, 2022.b.Who is liable to pay costs?
29.The relationship between the parties herein is predicated upon the lease dated December 24, 2021 marked as annexure ‘K1’ attached to the tenant’s supporting affidavit sworn on May 24, 2022.
30.Under clause ( c) of the lease agreement, the space leased to the tenant is defined as follows:
31.Clause E of the lease provides as follows:-
32.Clause D of the lease provides as follows:-
33.The rent payable for the suit premises is Kshs 200,000/- per month under clause 2 of the lease on or before 5th day of every month and the period of lease is one (1) year from January 1, 2022 upto December 31, 2022 renewable upon agreement by the parties. A service charge of Kshs 50,000/- is also payable.
34.It is against the said background that this case was filed before this Tribunal. The tenant complained that the landlord had stopped it from refurbishing and making temporary improvements for a temporary kitchen removable at the termination of the lease and failing to allow the tenant an abatement of rent if the business premises is destroyed by storm, tempest or fire.
35.As observed above, the tenant was allowed to erect a semi-permanent bar counter with a canvas canopy net at the bar area as well as other temporary improvements. The landlord contends that the tenant instead started to run a fully -fledged restaurant in competition with the landlord’s business while defaulting to pay the prescribed rent and service charge.
36.I have looked at the lease agreement and note that the tenant was nowhere in the said agreement allowed to run a fully-fledged kitchen under its terms. However, he is accused of using the court orders given on June 3rd, 2022 to do exactly that to the chagrin of the landlord.
37.Without approval of the respondent, the tenant is said to have converted one of the Gazebo areas reserved for guests into a fully-fledged kitchen in breach of the agreement and has been ordering supplies of foodstuff, meat and vegetables directly instead of obtaining the same from the respondent as agreed by parties. As such, the tenant is accused of acting fraudulently and illegally and cannot be entitled to the orders sought herein.
38.It is thus submitted by the landlord’s counsel that equity will not aid a wrong and that he who comes to equity must come with clean hands and as such the tenant is disentitled to the orders sought herein.
39.The principles considered in an application of the nature before me were settled in the case of Giella v Cassman Brown & Co Ltd (1973) EA 358 to wit:-i.An applicant must show a prima facie case with a probability of success.ii.An injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury.iii.When the court is in doubt, it will decide the application on the balance of convenience.
40.A prima facie case was defined in Mrao Ltd v First American Bank of Kenya Ltd & 2 others (2003) eKLR as follows:-
41.In the instant case, the tenant is accused of failing to pay rent and service charge which stood at Kshs700,000/- as at July 20, 2022. The applicant is accused of various breaches of the lease agreement including starting a fully-fledged kitchen and running the bar beyond the licensed hours. It is trite law that he who comes to equity must come with clean hands and must do equity. This is what was held in the case of Kyangavo v Kenya Commercial Bank Ltd & another (2004) eKLR where it was also held that such an applicant must demonstrate that he has performed all his obligations under the contract.
42.I am not ready to assist an applicant who has failed to perform his obligations under the lease agreement. It is the applicant’s case that it wishes to pay rent into the Tribunal as it was disputed. I have no evidence that the landlord has ever refused to receive rent from the Tenant. The said order is thus underserving.
43.In regard to the prayer for an order directing the landlord to provide true food sales revenues/records and pay 25% net profit as provided in the lease agreement, I find that this Tribunal has no jurisdiction to deal with the issue as such a matter can only be litigated in a commercial disputes court.
44.On the issue of repair of toilets, I note that no evidence has been availed to this Tribunal to demonstrate that there is need for the same. It is not enough to simply allege a fact without proof.Section 107 (1) of the Evidence Act, Cap 80, Laws of Kenya stipulates as follows:
45.The issue raised by the tenant touch on the Public Health Act and it would have been desirable for it to exhibit a report from the county health department on non-compliance by the landlord with the Act. It is not sufficient to allege without proof matters of bad drainage, broken down staff toilets, flooding of certain parts of the premises, lack of garbage bins and bags. The department of health is in-charge of enforcement of such alleged dereliction of duty on the part of the landlord.
46.The tenant is seeking for extension of the lease up to December 2024 by this Tribunal. It is imperative to note that the parties herein entered into a written agreement on how they intended to relate including the period of such relationship. It is trite law that the duty of courts of law is to enforce contracts made by parties and not to make new contracts for them.
47.In the case of National Bank of Kenya Ltd v PipePlastic Samkolit (k) Ltd & another (2001) eKLR at page 4/5 the court of Appeal had the following to state:-
48.In the case of Jiwaji & others v Jiwaji & another (1968) EA 547 at page 554 letter B-C the court of Appeal for Eastern Africa had the following to state:-
49.Guided by the foregoing decisions of our superior courts, I am afraid that the extension sought by the tenant cannot be granted by this Tribunal.
50.The tenant has also sought for damages for loss of business to be proved at the hearing of the case. Loss of business is a claim for special damages which must be specifically pleadeded and strictly proved in line with the court of Appeal decision in the case of Hahn v Singh (1985) eKLR where it was held as follows:-
51.The tenant having failed to specifically plead the alleged loss of business is disentitled to any award of damages by this Tribunal. A party is supposed to plead its whole case at inception and cannot be allowed to litigate by instalments as the tenant is seeking to do. I shall therefore not allow the tenant to avail evidence of the alleged loss at the hearing of the case without any proper pleadings before me.
52.On the issue of costs, the same are in the Tribunal’s discretion under section 12(1)(k) of Cap 301, Laws of Kenya but always follow the event unless for good reasons otherwise ordered. I have no reason to deny the landlord costs.
53.The tenant’s reference raises the same issues as the applications discussed in this ruling and I am entitled under section 12(4) of Cap 301, Laws of Kenya to investigate any complaint relating to a controlled tenancy made to this Tribunal by the landlord or tenant and make such order thereon as I deem fit.
54.Flowing from the above analysis, the final orders which commend to me in this matter are:-i.The tenant’s applications dated May 24, 2022 and September 29, 2022 are hereby dismissed with costs.ii.The tenant’s reference dated May 24, 2022 is dismissed with costs.iii.The landlord is entitled to the agreed rent and service charge in terms of the lease agreement dated December 24, 2021.iv.The orders of June 3, 2022 are hereby set aside or discharged for avoidance of doubt.v.The landlord is awarded costs of Kshs 30,000/- against the Tenant.
It is so ordered.
RULING DATED, SIGNED & DELIVERED VIRTUALLY THIS 28TH DAY OF OCTOBER 2022.HON. GAKUHI CHEGEVICE CHAIRBUSINESS PREMISES RENT TRIBUNALIn the presence of:Wachakana for the Tenant/ApplicantMiss Akello holding brief for Miss Shah for the landlord/respondent