Al-Riaz International Limited v Ganjoni Properties Limited [2017] KEHC 658 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

CIVIL SUIT NO. 158 OF 2014

AL-RIAZ INTERNATIONAL LIMITED....................PLAINTIFF

VERSUS

GANJONI PROPERTIES LIMITED........................DEFENDANT

R U L I N G

1. By its Notice of Motion dated 17.10.2017, the defendant/applicant seeks from Court an Orders that:-

i) THAT this Honourable Court be pleased to certify this application as urgent and service thereof be dispensed with in the first instance.

ii) THAT this Honourable Court be pleased to issue a stay of execution of the orders of 13^th October 2017 granted by the court pending the inter partes hearing of the instant application.

iii) THAT this Honourable Court be pleased to issue a stay of execution of the orders of 13^th October 2017 pending the inter partes hearing of the appeal filed herein.

iv) THAT this costs of this application be provided for.

2. When this matter came up for arguments, only prayer 3 remained outstanding as the other two had been overtaken by event now that the matter was due from hearing interpartes.

3. That application is grounded on the brief facts that;- the Plaintiff/Respondent had already extracted the order for execution, the Defendant/Applicant was faced into prospects of suffering irreparably because the appeal would be rendered nugatory; there was arrears of mesne profits in the sum of Kshs.12,240,000.00; if the two motor vehicles are released and sold, the Defendant/Applicant would have nothing to fall back to as the plaintiff is owned by foreign directors who have hatched a plan to flee the country after closing down and lastly that the plaintiff/Respondent does not need the physical motor vehicles to undertake their Registration.

4. That application was supported by the affidavit of one MICHAEL KIOKO MAUNDU advocate whose gist was to reiterate the grounds on the face of the Notice of Motion after reinstating the history of the matter.  It is equally contended that the intended appeal has high chances of success.

5. The application was opposed by the plaintiff/Respondent on grounds among others that the landlord who is keeping the motor vehicles when served with the order, frustrated the release by abusing and chasing away the plaintiffs representative and the auctioneer an act the plaintiff/considers and views as contempt of court; that the plaintiff has paid rent of upto September 2017 and is keen on payment of rent as directed by the court and that the defendants application is not made in good faith.

6. When the matter came for hearing Mr. Maundu appeared for the defendant/Applicant while Mr. Asena was to the Respondent/Plaintiff.  He argued the application and urged the court to grant stay because he had filed a Notice of Appeal and such an appeal would be rendered nugatory and substantial loss suffered by his client.  He set out the history of the matter at great length and said that the Respondent having failed to pay rent as ordered by the court the consent orders of 14/12/2016 became due for enforcement and pursuant to it the landlord had levied distress for mesne profits calculated at 360,000/= per month from 1.1.2015.

7. On substantial loss the advocate said that if the motor vehicle are  released the plaintiff may dispose of the same and leave the Applicant/Defendant with nothing to fall back to as the directors of the company are foreigners who, the advocate has information, intend to close shop and leave jurisdiction.

8. He then submitted that the plaintiff does not need the physical possession of the motor vehicles to effect registration as that is done online.  On security, the advocate submitted that in the circumstances of the case the applicant need not provide security but it is the Respondent to provide security for the payment of rent or mesne profits outstanding.

9. For the Respondent Mr. Asena reiterated that the Applicants have acted in contempt of court order and should not be rewarded for it.  On the need to release the motor vehicles Mr. Asena submitted that before vehicles can be registered there need to be conducted physical examination and therefore need to have them released forthwith.  He denied that his clients were planning to dispose of the motor vehicle or relocate and finally that the plaintiff was upto date with payment of rent.

Analysis and determination

10. When all is aid and done, the application before this court is purely one under order 42 Rule 6 Civil Procedure Rules.  The consideration the court gives to such an application are those set out under the Rules.  They are that there ought to be no delay in presenting the application - it ought to be presented with expedition’s dispatch; the applicant must demonstrate prospects of substantial loss being visited upon him and he must as of necessity provide security for the due performance of the decree that many ultimately result upon the determination of the appeal.

11. Put in the context of the matter before me, the plaintiff applicant did approach the court by the application dated 12/10/2017 to have the two motor vehicles seized in distress for rent released on the basis that being unregistered, the same ought to be registered before and of year or else they shall become overage for purposes of being allowed for registration in Kenya with the undesirable consequence that they shall become contraband and not registrable.

12. When parties first appeared before court for hearing of the application, Mr. Maundu was unable to confirm if the vehicles were with the auctioneer even after extra time was given to him to confirm.  To avoid the two chattels being rendered worthless to all parties after becoming overage for purpose of the law, the court directed that the same be released to the plaintiff on a running attachment.  The court said on 13/10/2017 making the order for release:-

“……..to obviate the two motor vehicle from exceeding the age of motor vehicles to be registered in Kenya, and for the interests of both parties, it is directed that the motor vehicles be released forthwith to the plaintiff on running attachment to enable it effect their registration.

It is further ordered that the mere pendency of these proceedings do not shield the plaintiff from its obligations to pay rent neither is it an injunction against the defendant to accept rent”

13. To this court, the parties are losing sight of the dispute and veering off the path to have the dispute determined on the merits if the number of applications is anything to go by.

14. This court has in the past directed that the only dispute between the parties, as is revealed in the pleadings is the rent payable and was directed that each side participates at ascertainment of the quantum of such rent using a professional valuer.  It would appear that the landlord is not keen to go that route at all costs.  To that extent I think the defendant is not being cognizant of its obligations to court under section 1A (3).  One gets the impression that there could be a dispute that the parties have not laid before the court for their own undisclosed reasons.  However that must be left to them to decide but this court must seek to meet its mandate to determine the dispute presented before it and shall guard against being swayed away from that mandate.

15.  Now, on the instant application, I am in no doubt that the applicant cannot be faulted for not acting expeditiously in bringing the application.  What the court must considered in addition is whether there is disclosed substantial loss and if security has been offered as the law dictates.

Substantial loss

16. It is now settled law that the expansion substantial as opposed to irreparable loss, is a relative term for the court to relate to the circumstances of each case.  What may be substantial loss may not be uniform in all case as each case possesses own peculiar circumstances.  However the test to be used is whether in the context of a particular case a difficulty a party will be exposed, to if stay is refused, would be such that a just and fair court would say he has been prejudiced.  Some of the factors that evidence such loss is the inability to recover the property loss by execution like where the decree-holder is a person of the straw or where executions would totally and finally dissipate the substratum of a litigation such that even where the appeal succeeds the parties cannot be reinstated to the status prior to execution like say a child whose custody is disputed being taken out of jurisdiction.

17. Noting that no party should be exposed to a litigation whose outcome would be brought to naught or merely academic results, the law designed the remedy of stay to preserve the subject of litigation.  It is therefore said that the existence or prospects of a loss that would impossible to reverse or only capable of reversal with lots costs of difficulty is the core or cornerstone for grant of an order of stay of execution pending appeal.  See Adah Nyabook vs Uganda Holding Properties Ltd [2012] eKLR  and Daniel Chebutul Rotich vs Emirates Airlines, HCC No. 368 of 2001.

18. In this matter the essence of the order is that the two motor vehicles be released, on a running attachment, to enable them be registered hence be lawfully present in Kenya.  I understand running attachment to connote that the person to whom the property is released holds it on condition that it is subject to the attachment without the liberty for dispose of it so as to remove it from attachment.  If that be correct, then it would be necessary for the Defendant/applicant to demonstrate to court how such release order would occasion to him an injustice or hardship.  The converse and the reason that informed the issue of that order is that should the motor vehicles remain unregistered after the end of this year they shall be overage for purposes of registration in Kenya and to that extent they would be of no worth to anybody including the two disputants.

19.  The question one may ask is what benefit would the court have afforded to the parties by refusing to secure the subject of dispute, atleast in the application?  I hold the view that the court shall have worked hardship on both sides and no justice shall have been served.  To the contrary the court shall have exposed both sides to total loss of value of the motor vehicles.

20. To this extent, I find that the Applicant has failed to demonstrate substantial loss and therefore a critical consideration has not been met to warrant the issue of Orders of stay pending appeal.

Security for costs

21. The law is expressed in mandatory terms that the court ought not to grant stay unless security for the due performance of the decree or order that may result after the appeal is disposed.  I understand this to be an obligation on an applicant to secure the due performance of the decree even where the appeal fails.

22. Put in the context of this matter what should be secured is the monetary value of the two vehicles seized pursuant to distress for remit as may be sufficient to settle the arrears of rent.  For the Applicant/Landlord after the appeal, if the appeal succeeds it should be able, to have the vehicles sold to recover the alleged outstanding rent if however the appeal fails the tenant should have the vehicles with some money worth.

23. In my view, if plaintiff allegations which have not been disputed, be true that the vehicles will not be registrable after the end of the year then to grant stay would not be to secure the substratum of the Applicants rights but to facilitate its decipation.  That would be the undesired effect of grant of an order for stay.  Infact it will not only be disadvantageous to the Applicant but also to the Respondent who shall have lost the monetary value of the motor-vehicles in all events, whether the appeal succeeds or fails.

24. While it is true that there being no monetary decree it may not be a straight forward case to decide what security to be offered, it is also true that the security intended under Order 42 Rule 6(2)b must not necessarily be in monetary terms.  I regard it to be the assurance that whatever the outcome of the appeal, the subject of litigation in the appeal be preserved to be available to the person entitled.

25. In totality, I do find that the Applicant has failed to satisfy the court that it is entitled to courts discretion in granting stay pending appeal.  For that failure, I decline to accede to the request and order that the application be dismissed with costs.

26. For avoidance of doubt let the two motor vehicles seized and said to be kept at the premises of the Defendant be released to the plaintiff forthwith and within 24 hours from the date of this ruling and in default the OCS, MAKUPA POLICE STATION to ensure that this order is complied with by the defendants.

27. For the purposes of compliance, let this order be extracted and served upon the said OCS for his necessary action.

Dated at Mombasa this 10th day of November 2017.

P.J.O. OTIENO

JUDGE

Read and Delivered in Open Court this 13^th day of November 2017.

E. OGOLA

JUDGE