Eric Agbeko, Phillip Nyambok & Ravasam Development Company Limited v Farouk Ravate, Justin Samourgompoulle & Spire Bank (Formerly Known as Equatorial Commercial Bank Limited) [2020] KECA 768 (KLR)

IN THE COURT OF APPEAL

AT NAIROBI

(CORAM: OUKO (P), KOOME & MURGOR, JJA.)

CIVIL APPLICATION NO. 29 OF 2020

BETWEEN

ERIC AGBEKO............................................................................1ST APPLICANT

PHILLIP NYAMBOK.................................................................2ND APPLICANT

RAVASAM DEVELOPMENT COMPANY LIMITED............3RD APPLICANT

AND

FAROUK RAVATE....................................................................1ST RESPONDENT

JUSTIN SAMOURGOMPOULLE..........................................2ND RESPONDENT

SPIRE BANK (FORMERLY KNOWN

AS EQUATORIAL COMMERCIAL BANK LIMITED)......3RD RESPONDENT

(Being an application for the maintenance of status quo pending the delivery of ruling on 19thJune, 2020

in

Civil Application No. 29 of 2020. )

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RULING OF THE COURT

On 20th day of January 2020, the High Court, (F. Tuiyott), declared that the 1st and 2nd respondents were the true and rightful directors of Ravasam Development Company Limited (the 3rd applicant) and directed, inter alia, that the names of the 1st and the 2nd applicants be struck out from the records of the 3rd applicant and be replaced with those of 1st and 2nd respondents. The Judge issued an order of mandatory injunction whereby, the first two respondents were compelled to transfer all shares held by them in the 3rd applicant to the first tworespondents. They were further restrained from selling, disposing of, charging, dealing or interfering with the 3rd applicant’s property known as L. R Number 2/186 situated off Elgeyo Marakwet Road, Nairobi, (suit property) and not to interfere with the shares and shareholding in and of the 3rd applicant. These orders and a host of others aggrieved the applicants, who, by a motion filed on 7th February, 2020, moved the Court to stay the execution thereof, pending the filing and determination of the intended appeal.

We heard the application on 2nd March, 2020 and reserved the ruling for 19th June, 2020. The applicants have however returned to us with the instant application even before we have started drafting the ruling for 19th June, 2020, to ask for an order for the maintenance of “temporary status quo obtaining as at the date of the High Court judgment”pending the ruling of 19th June, 2020. They have also sought for the assistance of the police in the enforcement of the order to restore the status quo ante.

The applicants have complained that, on 19th June, 2020, the High Court, acting suo moto, vacated temporary orders of stay that it had granted to them. Immediately thereafter, the respondents and the former managing agents, Richland properties Ltd descended on the suit property with the assistance of the police and evicted them; that the respondents also hired goons in effecting the eviction and to intimidate the tenants and the applicants; and that the respondents’ main intention is to take charge of the property in order to receive the rental income from the property before the ruling set for 19th June, 2020 is rendered.

The applicants have drawn our attention to the existence of more confusion on the suit property. For instance, they stated that after they terminated the services of the managing agents, Richland properties Ltd and replaced them with another agent, the former have refused to hand over to the new agent and instead embarked on harassing tenants. The tenants are now confused as to which agent to make payments to. Then there is the question of a suit filed in the Magistrate’s court by the 3rd applicant against Richland properties Ltd, in which the latter has been restrained from interfering with the management of the suit property. As a result of all the foregoing, the applicants have now been barred from accessing the suit property.

The 3rd respondent in opposing the application, contended that it was the applicants who were engaged in the subversion of justice; that for instance, the first two applicants, during the pendency of the case, and in order to defeat the outcome of the judgment of the High Court, transferred their shares in the 3rd applicant to Nicholas Sankok Teeka; that using the said Nicholas Sankok Teeka, the applicants filed in the Magistrates’ court CMCC 1661 of 2020 purporting that the 3rd applicant was the party aggrieved and sought the exclusion from the suit property of the 1st and 2nd respondents’ appointed managing agents, Richland properties Ltd. An ex parte injunction was granted and the magistrate directed that the application be heard inter partes on 14th April, 2020. Counsel for the 3rd respondent urged us to find this application, an abuse of the court process and that the applicants have come to court with dirty hands.

The unique environment presented by the outbreak of the coronavirus (COVID-19) pandemic has compelled courts to innovate ways of ensuring that they continue to deliver core and vital judicial services during the period. For instance this application was presented online and our decision on it will be relayed to the parties the same way.

The application is for the maintenance of status quo. Status quo is not one of the reliefs specifically provided for in the rules of this Court. But it is accepted that by Rule1 of the Rules of this Court that, the Court has “inherent power to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court”.Such reliefs like the one sought before us, are simply ancillary orders for the preservation of the situation as it exists or existed.

The status quo the maintenance of which we have been asked to direct is that said to have been “obtaining as at the date of the High Court judgment”, that is, as at 20th January, 2020. Because status quo at any given time can be fluid and uncertain, it is of greatest importance to define the particular state of affairs that one seeks to have maintained.

To restore parties in this dispute to the status obtaining “as at the date of the High Court judgment”, we have to be told what that status was. As it is, we do not know what that status was. Coupled with that, there is already enough confusion in the whole dispute to which we do not wish to wade into or provide additional fuel to exacerbate.

The shareholding of the 3rd respondent has changed. They are now in the hands of Nicholas Sankok Teeka, who now holds all the shares in the 3rd applicant. He is not a party in this application. Whereas in the suit before the magistrate’s court, CMCC No. 1661 of 2020, he swore that he bought the company, 3rd applicant from its previous owners on 18th November, 2019, making him the sole shareholder. And the question that position begs is, after divesting all their shares in the 3rd applicant, what interests’ do the 1st and 2nd applicants have left in the 3rd applicant to defend in this application?

It is also uncontroverted that those first two applicants have been evicted from the suit property. An order reverting status quo ante will, in our considered view will help only in leaving the situation in more ferment.

With respect, we agree with the submissions by the 3rd respondent that there appears to be a deliberate abuse of the court process by the applicants. When they came before this Court with a 5(2)(b) application, we learnt from their counsel that they had also obtained from the High Court the very orders they were seeking before us. As we have shown, it is the vacation of those order by the learned Judge that has led to the filing of this application. The 3rd applicant has also obtained ex parte restraining orders against managing agent in the magistrates’ court.

For all these reasons, we conclude that the applicants have come to Court with dirty hands and are therefore undeserving of an (ancillary) equitable remedy.

Their application is bereft of any merit. Accordingly, we dismiss it with costs tothe 3rd respondent.

Dated and delivered at Nairobi this 24thday of April, 2020.

W. OUKO, (P)

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JUDGE OF APPEAL

M.K. KOOME

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JUDGE OF APPEAL

A.K. MURGOR

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JUDGE OF APPEAL

I certify that this is a

true copy of the original

Signed

DEPUTY REGISTRAR