David Mereka t/a Mereka & Co Advocates v Ukulima Co-operative Savings & Credit Society Ltd & [2021] KEBPRT 302 (KLR) | Stay Of Execution | Esheria

David Mereka t/a Mereka & Co Advocates v Ukulima Co-operative Savings & Credit Society Ltd & [2021] KEBPRT 302 (KLR)

Full Case Text

REPUBLIC OF KENYA

BUSINESS PREMISES RENT TRIBUNAL

VIEW PARK TOWERS 7TH & 8TH FLOOR

TRIBUNAL CASE NO. 92 OF 2021 (NAIROBI)

DAVID MEREKA T/AMEREKA & CO ADVOCATES.................................................TENANT

VERSUS

UKULIMA CO-OPERATIVE SAVINGS &CREDIT SOCIETY LTD.........1ST RESPONDENT

SANNEX ENTERPRISES AUCTIONEERS...................................................2ND RESPONDENT

RULING

1. The Tenant/Applicant’s notice of motion application dated 7th July 2021 seeks the following orders;

1) Spent

2) That this court be pleased to stay the orders issued by this court through a ruling delivered on 18th June 2021 pending the hearing and determination of the intended reference.

3) Costs.

2. The application is based on the grounds;

1) That the Tribunal allowed the Respondent’s advocate’s bill of costs dated 14th April 2021 for an amount of Kshs 91,943. 00/-.

2) That the Respondent’s were allowed costs on an unprocedural and unlawful proclamation.

3) That the Applicant stands to suffer substantial loss and damage if the orders of 18th June 2021 are enforced.

4) That the Applicant has an arguable reference with overwhelming chances of success which will be rendered nugatory in the event the irregular orders are implemented.

3. The application is also supported by an affidavit by David Mukii Mereka whose contents I summarize as follows;

1) That on 18th June 2021, the Respondents bill of costs was allowed as drawn.

2) That an award of costs was issued in the absence of proper notice to the Applicant as is required under section 4(2) as read together with section 12(1)(h) of Cap 301 Laws of Kenya.

3) That the instruction fees allowed on item 1 at Kshs 50,303/- is manifestly excessive as to present an error of principle on the part of the taxing officer.

4) That the taxing officer erred in law in failing to give reasons of how he arrived at the figure of Kshs 91,943/-.

5) That the taxing officer erred in principle by failing to interrogate each item in the bill of costs and on justification for the taxation of the items, most of which had not been drawn to scale.

6) That the taxing officer failed to take into consideration that the procedure as followed by the Plaintiff in instituting the suit was fatally defective.

4. The application is opposed.  The Respondent has filed grounds of opposition in the following terms

1) It is misconceived and an abuse of the Tribunal process.

2) It has no factual or legal basis.

3) No reference has been preferred.  The notice of objection dated 25th June 2021 is neither an appeal nor a reference.

4) The Tribunal is functus officio.  The Applicant’s remedy (if any) lies on an appeal under section 15 of Cap 301.

5) Section 12 (4) of Cap 301 deals with complaints not stay of orders.

6) The Applicant is buying time as he did not appeal or seek variation/review of the order of 8th April 2021 awarding costs.

7) Stay of orders cannot be granted in a vacuum.

8) The Applicant will not suffer any substantial loss and damages.  He can always recover the same from his Landlord.

9) That it is in the interests of justice that litigation must come to an end.

5. The Applicant has filed a supplementary affidavit sworn on 3rd August 2021 and which I summarize as follows;

1) That he is aware that the taxing officer gave execution orders and the same may be executed any time.

2) That the Applicant has filed an objection in accordance with the procedure provided for under paragraph 11 of the Advocates Remuneration Order, he has applied for the ruling but he is yet to be supplied with the same to enable him file a reference.

3) That the Tribunal is not functus officio by dint of section 12 (1) of Cap 301 f the Laws of Kenya.

4) That the Applicant has filed a memorandum of appeal together with an application seeking stay dated 22nd April 2021.

6. The Tenant’s/Applicant’s submissions in support of the application may be summarized as follows;

1) That the Tribunal by its ruling of 18th June 2021 awarded the Respondents costs and allowed the Respondent’s bill of costs in the sum of Kshs 91,943 on 14th April 2021.

2) That the Respondents did not issue a proper notice to the Tenant as required under section 4(2) as read together with section 12(1) of Cap 301 and was therefore not deserving of the orders granted on 18th June 2021.

3) The items proclaimed by the Respondents were items exempted from distress under section 16(1) (g) of Cap 293 Laws of Kenya.

4) That the Applicant stands to suffer substantial loss while the Respondent will suffer no prejudice if the orders sought are granted.

5) That the application meets the test set by the grant of interlocutory orders.

6) That the reference has overwhelming chances of success.

7) That the Tenant has shown his intention to file a reference by filing a notice of objection and is awaiting a copy of the ruling and reasons as provided under paragraph 11 of the Advocates Remuneration Order.

8) That the Tribunal has the discretion to grant stay of execution.

7. The Respondent’s submissions may be summarized as follows;

1) That there is no evidence of a pending reference before the Tribunal or any court to warrant orders of stay pending its hearing and determination.

2) That section 12(4) of Cap 301 empowers the Tribunal to investigate complaints and make orders.  There is no complain pending before the Tribunal.

3) That the Applicant’s remedy lies on an appeal or an application for review.

4) That the Applicant was given a hearing before the costs were assessed.

5) That the Applicant will suffer no loss at all if execution is levied.

6) That no objection or the request for the ruling has been attached.

7) That the Tribunal orders can only be challenged by way of an appeal and not a reference under paragraph 11 of the Advocates’ Remuneration Order.

8) That the Applicant is seeking similar orders in different forums, the High Court and the Tribunal.

9) Whether the proclaimed items are exempted form distress or not, it is not an issue before the Tribunal.

10) That costs follow the event.

8. The only issue that arises from the above submissions for determination is whether the Applicant is entitled to the orders of stay of execution as prayed for under prayer 2 of his notice of motion dated 7th July 2021.

9. The application is expressed to be brought under section 12(4) of the Landlord’s and Tenant (Shops, Hotels and Catering Establishments) Act Cap 301 of the Laws of Kenya.  The said section provides as follows:

“in addition to any other powers specifically conferred on it by or under this Act, a Tribunal may investigate any complaint relating to a controlled tenancy made to it by the Landlord or the Tenant and may make such order thereon as it deems fit.”

10. Does the Tenant’s application herein amount to a complaint under section 12(4) of Cap 301?  I do not think so.  The Tenant’s complaint is the one dated 29th January 2021.  The same was marked as settled on 8th April 2021.

11. In his response to the Respondent’s challenge that the Applicant has not filed any reference, the Tenant states that he has indeed preferred a reference against the taxing master’s ruling and has filed a notice of objection dated 25th June 2021 in line with the procedure provided for under paragraph 11 of the Advocates Remuneration orders.

Paragraph 11 of the Advocate’s Remuneration Orderprovides;

1) “Should any party object to the decision of the taxing officer, he may within fourteen days after the decision give notice to the taxing officer of the items of taxation to which he objects.

2) The taxing officer shall forthwith record and forward to the objector the reasons for his decision on those items and the objector may within fourteen days from the receipt of the reasons apply to a Judge by chamber summons which shall be served on all the parties concerned setting out the grounds of his objection.

3) Any person aggrieved by the decision of the judge upon any objection referred to such judge under sub-section (2) may, with the leave of the judge but not otherwise appeal to the Court of Appeal.

12. I have carefully gone through the affidavits of the Tenant.  I have not for myself seen the notice of objection given to the taxing officer of the items of taxation to which the Tenant objects.  I have also not seen annexed to the affidavits of the Tenant a request for the copy of the ruling and the reasons.  The Applicant has clearly not commenced the procedure under paragraph 11 of the Remuneration Order which would culminate to a reference.

13. The Tenant, in his submissions has stated that the Respondents were awarded costs on an unprecedural and unlawful proclamation as no proper notice was issued to the Tenant under section 4(2) read together with section 12(1) (h) of Cap 301 of the Laws of Kenya.  The Tenant has further stated that the items proclaimed were exempted from distress under section 16(1) (g) of Cap 301 and therefore the Respondents were not entitled to costs and as such the Tenants have preferred a reference.

14. I do not think these are matters for my consideration at this stage.  These complaints ought to form the basis of the Tenant’s appeal as my determination of the issues would amount to a re-opening of the proceedings and probably a new decision. I am also of the view that the objection referred to under paragraph 11(1) of the Advocates remuneration order deals with “the items of taxation to which the party objects” and not to the decision to award costs.  An objection to the decision to award costs can only be challenged by way of an appeal against the said decision as the Tenant herein has clearly sought to do in his intended appeal.

15. The Tenant has stated that the application is brought in good faith and is properly before this court by dint of section 12(1)(i) of Cap 301 which provides that this court has jurisdiction to vary or rescind any order made by the Tribunal.

16. While dealing with section 12(1)(i) of Cap 301 Justice A.B. Shah in Nairobi HCCA’s No 79 and 80 of 1987, National Dry Cleaners & Another Vs Ndune stated;

“The material words are to vary or rescind.  I must give the ordinary meaning of the words vary or rescind.  Variation or rescission cannot include the words stay pending appeal.  An appeal generally seeks to set aside the orders of the Tribunal or court below.  I appreciate that in some appeals a variation or rescission is sought but such variation or rescission is necessarily with a view to having the orders of the court below set aside.

In my opinion, the words “vary or rescind” are used in section 12 of the Act in a restricted sense, in that the Tribunal can possibly vary or rescind its order or determination in the sense that the High Court can review its orders or judgements under Order XLIV of the Civil Procedure Rules and I find nothing else in the Act which empowers a Tribunal to grant stay pending appeal from the Tribunal to the High Court.”

17. I am in view of the above persuaded that section 12 of Cap 301 of the Laws of Kenya does not grant the jurisdiction to the Tribunal to issue orders of stay of its own orders.

18. Even if I were wrong on the issue of jurisdiction, would the Tenant suffer substantial loss if the orders sought are not granted?  In Kenya Shell Ltd Vs Kibiria [1986] KLR 410 Platt Ag JA(as he then was) at page 416 expressed himself as follows;

“It is usually a good rule to see if Order XLI Rule 4 of the Civil Procedure Rules can be substantiated.  If there is no evidence of substantial loss to the Applicant, it would be a rare case where an appeal would be rendered nugatory by some other event.  Substantial loss in its various forms is the cornerstone of both jurisdictions for granting a stay.  That is what has to be prevented.  Therefore, without this evidence, it is difficult to see why the Respondents should be kept out of their money.”

19.  Gachuhi Ag JA (as he then was) in the same case at page 417 stated as follows:

“It is not sufficient by merely stating that the sum of Kshs 20,380. 00 is a lot of money and the Applicant would suffer loss if the money is paid.  What sort of loss would this be?  In an application of this nature, the Applicant should show the damages it would suffer if the order for stay is not granted.  By granting a stay would mean that the status quo should remain as it were before judgement.  What assurance can there be of appeal succeeding?  On the other hand, granting the stay would be denying a successful litigant of the fruits of his judgment.

20. In the same case, Platt Ag JA gave his observations as to the meaning of “substantial loss” when he detailed;

“The application for the stay made before the High Court failed because the first of the conditions set out in Order XLI Rule 4 of the Civil Procedure Rules was not met.  There was no evidence of substantial loss to the Applicant either in the matter or paying the damages awarded which would cause difficulty to the Applicant itself, or because it would loose its money, if payment was made since the Respondents be unable to repay the decretal sum plus costs in the two courts.”

21. The Tenant/Applicant states that he stands to suffer substantial loss amounting to Kshs 93,943/-should the Respondent proceed to execute “Orders they did not deserve.”  It is proper at this point to state that an intended reference is not of itself a stay of execution, whether or not the Respondent deserved the orders they seek to stay to execute is a matter to be determined on appeal and not in this application for stay.

22. In the case of Machira T/A Machira & Co Advocates Vs East African Standard (No 2) [2002] KLR 63, it was held;

“To be obsessed with the protection of an Appellant or intending Appellant in total disregard or fitting mention of the so far successful opposite party is to flirt with one party as crocodile tears are shed for the other contrary to sound principle for the exercise of a judicial discretion.”

The ordinary principle is that a successful party is entitled to the fruits of his judgment or of any decision of the court giving him success at any stage.  That is trite knowledge and is one of the fundamental procedural values which is acknowledged and normally must be put into effect by the way application for stay of further proceedings or execution pending appeal are handled.  In the application of that ordinary principle the court must have its sight firmly fixed on upholding the overriding objective of the rules of procedure for handling civil cases in courts, which is to do justice in accordance with the law and to prevent abuse of the process of the court.”

23. Following from the above, the Respondent in this case has an order in its favour and until and unless that order has been set aside by a superior court, it remains in force and capable of being executed.

24. The Tenant has not demonstrated what substantial loss he is going to suffer if he pays the ordered costs or if the Respondent executes for the same.

25. It is common ground that the Applicant is the Respondent’s Tenant.  In the event that the Applicant is successful in his intended reference, he can always recover the costs ordered to be paid from the rent due to the Respondent.  It has not in any event been suggested that the Respondent would be unable to refund the costs were the Tenant to succeed in his intended reference.

26. In conclusion and based on the foregoing reasons, it is my holding that the Tenant’s application dated7th July 2021lacks merit and the same is dismissed with costs to the Respondent.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL

Ruling dated, signed and delivered virtually by Hon Cyprian Mugambi Nguthari this9thday of September 2021 in the presence of Mrs Mbambufor the Landlord/Respondent and Miss Njorogeholding brief forMr Merekafor the Tenant.

HON. CYPRIAN MUGAMBI NGUTHARI

CHAIRMAN

BUSINESS PREMISES RENT TRIBUNAL