Fredrick Mutua Mulinge T/A Kitui Uniform v Kitui Teachers Housing Co-operatives Society Limited [2015] KEHC 209 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL APPEAL CASE NO.  197 OF 2015

FREDRICK MUTUA MULINGET/A KITUI UNIFORM…………...........…..APPELLANT

VERSUS

KITUI TEACHERS HOUSING CO-OPERATIVES SOCIETY LIMITED …RESPONDENT

RULING

This ruling  determines the appellant/applicants Notice of Motion dated 15th May 2015  under certificate of urgency seeking orders  of stay of execution  of the judgment delivered in  Tribunal Case  No. 45  of  2014 in Machakos – Fredrick Mutua Mulinge T/A Kitui Uniform V Kitui Teachers Housing  Co-Operative  Society Ltd pending hearing  and  determination of this appeal.

The application is brought  under the  provisions of Order 42  Rule 6, Order 51 Rule  1 of the Civil Procedure Rules and all other enabling provisions  of the law and is predicated  on the grounds that on 10th April 2015 the tribunal delivered a judgment  which the appellant/tenant is aggrieved by and hence this  appeal.  That the appeal has high chances of success and that the tenant risks being evicted from the premises and that unless stay is granted the appeal herein shall be rendered nugatory.  Finally that the application was made   without undue delay.

The application is supported by the annexed affidavit of  Fredrick Mutua  Mulinge sworn on 15th May 2015  annexing the decision  appealed from  and emphasizing  that  he had been a tenant  in the subject premises for ten years hence  if evicted  before this appeal is heard  and determined  then he stands to suffer  great losses  and damage  and the appeal herein shall be rendered nugatory  and that he is  willing to  abide  by any conditions  that  this court  may impose.

The application  is opposed  by the  respondent/landlord  who filed  grounds  of opposition   on 30th June  2015 and a replying affidavit  sworn by Joshua  Mumo Mwitwa  the chairman of the  management  Committee of the respondent  Kitui Teachers Housing   Co-operative  Society Ltd.

The respondents contend that the applicant  has not appealed against  the judgment of  the  Tribunal delivered on 27th January 2015 and that the current  appeal  is only against  the Ruling  of the Tribunal delivered on  10th April 2015  dismissing  the applicant’s  application that sought  for review  of the judgment.  That the termination  notices  were served  on all tenants  who have  vacated  save for the appellant  who is  frustrating the respondent’s  bid to develop its property as a  result, the respondent has lost  monthly  rent of  shs 100,000/- from September  2014  todate.  That there  are no special circumstances  warranting  the tenant (applicant  to be treated  special from other  tenants  who vacated and that no undertaking  for the losses  and  damages  has been given and  that should the court  grant  stay then the appellant  should  be ordered  to pay shs 100,000/- per  month  being lost income  from the  premises  as a result of his refusal  to vacate  the premises  to give way  for development.  That even if security is offered, the entire appeal lacks merit hence the application should be dismissed with costs.

The parties’ advocates canvassed the application by way of written submissions duly filed and exchanged.  The  appellant’s submissions are dated  11th  August  2015  whereas the respondent’s  submissions  are dated 22nd  October 2015.

The appellant  submitted that  being  aggrieved by the decision/ruling  of the Tribunal made on  10th April 2015 dismissing his  application for  review of the  judgment  delivered on 27th January 2015,  he has  exercised his constitutional right  to appeal against that ruling  within the  statutory period  of 30 days  and that if the stay  of execution is declined he stands to suffer  irreparable  loss and danger as he stands to be evicted from the subject  premises wherein he  has been a tenant for  the last  30 years.  Further, that he continues to pay his monthly rent therefore the landlord/respondent does not stand to suffer any loss.  The applicant contends  that his tenancy agreement  with the  respondent was between  the two of them and  did not  involve a group of tenants  and therefore  he does not understand   the  circumstances  under which the  other tenants  vacated  the premises  and neither  is he seeking any special treatment  but to be accorded an opportunity  to ventilate  his grievances  on appeal.  Further, that  he cannot undertake as to damages  which are too remotely  connected to  his grievance  and that  the issues  raised by the respondent  should  be canvassed  at the  hearing of this  appeal.  The appellant/applicant  relied   on the cases  of Ramadhan  Mohammed  Ali V Hashim Salim Ghaim HCCA 32/2013 Mombasa and Cloke Butchery V Nasser Puna Memon Jamat  HCCA  20/2013 Mombasa  wherein the court granted  stay of execution of the judgment of the Business Premises Rent Tribunal pending   hearing and  determination of the appeal on condition that the appellant does not  fall into  rent arrears.

The respondent’s submissions’ filed on 22nd October  2015  contend that  this application lacks merit, giving  a background of the dispute  before  the Business Premises Rent Tribunal which was  resolved by a determination of 23rd January 2015  after  which the  applicant herein applied for review  of that  judgment but by a ruling rendered  on 10th April 2015, the  Tribunal dismissed  the application for  review  hence this appeal and  application.

The respondent contends that  the application does not specify the date of the  judgment and that he annexed a ruling of 10th April  2015  which he  refers to as a judgment  which is misleading to the court  and that it is only the  respondent’s grounds of opposition and  replying affidavit  that clarified  on the Notice of termination  of tenancy. The respondent  maintains that all the  tenants  were issued with  similar notice and the ruling  of the  Tribunal referred to that  aspect  but that  only the applicant had declined to  vacate  the premises  hence the  contention that the notice  was  defective or that he was not served  with notice to terminate  tenancy has no basis.

On the undertaking  as to damages, the respondent contends that since they  only receive shs 3,718 monthly from the  applicant as opposed to shs 100,000/- monthly  when  all other tenants were in the premises, and now that  those tenants  have vacated the premises, the applicant should pay for  that loss, since the  respondent  continues to incur heavy losses from  September  2014.

The respondent also contended  that the applicant had not satisfied  the conditions under Order 42  Rule 6  of the Civil Procedure Rule  for stay of execution pending appeal to issue for reasons that  the application is  based on serious misrepresentations; the appellant has not appealed  against the  judgment of the tribunal which  stands unchallenged;, that he has  not demonstrated any substantial  loss that he is likely to suffer if  stay is declined;  It is the respondent who will be greatly prejudiced by the stay and that the appellant has not offered an undertaking as to damages.

I have carefully considered the applicant’s application, the opposition thereto and the parties advocates submissions together with the authorities submitted by Mrs Owino counsel for the applicant.

The law applicable in applications for stay  of execution  of  decree pending  appeal is Order  42 Rule 6 (1) and (2)  of the Civil  Procedure  Rules  which enact  that:

No appeal  or second appeal shall  operate  as a stay  of execution  or  proceedings  under a decree  or order  appealed  from except  in so far as  the court  appealed from may order, but the  court appealed  from may for  sufficient  cause  order  stay of  execution of such  decree  or order, and  whether  the  application for  such stay shall  have  been granted or refused by the court  appealed from, the court  to which  such appeal is preferred  shall be at liberty, on application being made, to  consider since application and  make  such order thereon as may to it  seen just, and any person aggrieved  by an order of  stay made  by  the court fro whose decision the  appeal is  preferred may apply to  the appellate  court to have such order  set aside.

No order of stay shall be made  under Subrule  (1) unless

The court  is satisfied  that substantial  loss may result to the applicant  unless the order is made and the  application has been made without unreasonable  delay and

Such security as the court orders for the due performance of such decree or order as may ultimately be binding on him has been given by the applicant.

The power of the court to grant or refuse an application for stay of execution is a discretionary power.  The discretion should be exercised in such a way as not to prevent an appeal. The general principle in granting or refusing a stay is, if there is no other overwhelming hindrance, a stay must be granted so that an appeal may not be rendered nugatory should that appeal court reverse the judge’s discretion. A Judge should not refuse a stay if there are good grounds for granting it merely because in his opinion a letter remedy may become available to the applicant at the end of the proceedings. The court in exercising its discretion whether to grant or refuse an application for stay will consider the special circumstances of the case and its unique requirements.

The cornerstone of the jurisdiction of the court under Order 42 Rule 6 of the Civil Procedure Rules is that substantial loss would result to the applicant unless a stay of execution is granted.  What would constitute substantial loss varies from case to case as was aptly discussed by Gikonyo J in James Wangalwa & Agnes Naliaka Cheseto where the learned Judge held:

“ No doubt, in law, the fact that  the process of execution has been put in motion, or is  likely to be put in  motion by itself, does not  amount to  substantial  loss even when  execution  has been levied and completed, that  is to say, the attached  properties have  been sold, as  is the case here, does not in itself  amount  to substantial  loss  under Order 42 Rule 6  of the Civil  Procedure Rules.  This is so because execution is a lawful process.  The  applicant  must establish other factors  which show  that the execution  will create a  state of  affairs that  will irreparably affect  or negate  the  very essential core of  the applicant as  the successful party in the appeal.  This is what substantial loss would entail, a question that was aptly discussed in the case of Silvertern V Chesoni the issue of substantial loss is the cornerstone of both jurisdiction.  It is what has to be prevented by preserving the status quo because such loss would render the appeal nugatory.”

The applicant herein is the tenant of the respondent/landlord.  The dispute between them revolves around the validity of notice to terminate tenancy which culminated in a reference being filed before the Business Premises Rent Tribunal.  The Tribunal heard the parties and rendered its decision on 23rd January 2015 dismissing the tenant’s reference.  The tenant/applicant did not exercise the right of appeal under Section 79G of the Civil Procedure Act.  Instead, he applied for Review under Section 12(1) 4(4) and 6(1) of the Landlord Tenant (Shops, Hotels and Catering Establishment Act) Cap 301 Laws of Kenya.  He also sought for  leave to file reference  out of time  on the Landlord’s Notice  dated  28th June 2014  since the reference  earlier  filed was dismissed  on  a technicality- having been brought  under the wrong provisions of the Act ( Cap 301) .

That application for review of the Tribunal’s judgment was dismissed on 10th April 2014 culminating in this appeal.

According  to the applicant, he has  been a tenant   in the suit premises for over 30 years and  that he is  aggrieved by the  refusal to review the judgment  and lodged  this appeal which will be rendered nugatory  unless stay is  granted.  Further  that he shall also  suffer irreparable  loss and  damage  and that  he is not aware of the circumstances   under which  the other  22 tenants  were issued  with notices  to vacate the suit premises  hence  he  cannot be faulted  for challenging  the Landlord’s tenancy  since he  has justifiable  reasons  for doing so.  He also submits that this application is brought timeously and that he is ready to abide by any conditions as to security as the court may order.

On the  other hand, the respondent  contends that  it stands to  suffer  irreparable  loss if  stay is  granted as it has already lost tenants  and rental income of shs 100,000/- per month from September 2014 by the applicant’s refusal to vacate  the premises to pave way for  the planned re-development   of the premises.  The respondent  contends that no appeal has  been lodged challenging  the  decision of the Tribunal made  on 23rd January 2015  and that this  appeal which is filed against  the ruling refusing  review  of the judgment  as delivered on 10th April 2015  is misleading  to the court.

On whether the  application has been  brought  without undue delay I note that  the ruling of the Tribunal was made on 10th April 2015 and the appeal  herein filed on 4th May  2015  within 30 days  followed by  this application for stay of execution of the judgment of 23rd January 2015 on  18th May 2015 by an application dated  15th May 2015.  In my view, the application was not brought after undue delay as it was ten days after filing the appeal.

The applicant has also offered security as may be ordered by this court.

On whether  the applicant shall suffer  substantial loss if the stay is not  granted is debatable, given that the  respondent  also alleges that it has suffered loss of rental income since  September  2014  when all other  tenants  vacated  the premises and  the appellant herein resisted.  Further, that it is unable to develop the premises.

The respondent also contends that there are  no special   circumstances  that would  warrant  the applicant  to remain in the premises  since  all tenants   were issued with  termination notices and they complied  and that the monthly rent  collected from him is too little  to  compensate  the Landlord  for the  loss of income for all this time.

What is not in dispute is  that the applicant has been a tenant  for the  respondent  for a considerably long period of time  and that when the Landlord  issued  him with termination Notice to  take effect on 1st September 2014, he  challenged that Notice  as being  defective .  The Tribunal overruled him and he sought   a review of that decision which review was also rejected then he filed this appeal.

A review is one of the alternatives to an appeal, for as long as a party satisfies the court or Tribunal on the conditions for review.  An appeal  also lies  from an Order of review  therefore  I find no fault in the  appellant opting  to apply  for review instead of  filing an appeal against  the judgment of 23rd January 2015.

The judgment being sought to be stayed is not a money decree.  The  respondent   was  the successful party  which means, it is free to evict  the appellant/applicant from the  premises unless restrained from doing so by the court and  since it intends to  develop the said premises, the next  cause of action would be to demolish  the said premises.  It therefore follows that even if the applicant is successful on appeal, his bid to challenge the termination of tenancy   will be futile and hence the appeal herein will be rendered an academic exercise.  The law was never intended that courts act in vain otherwise the rule of law would be subjected to disrepute.

Judicial discretion must be exercised in the interest of justice to both parties.  Such discretion is unlimited for as long as it is exercised rationally, reasonably and not capriciously or whimsically.  The balancing act in such cases as this is for the court to assess on what terms it should grant a stay. Weighing  the pros and cons  of granting the order, and in order to  accord the appellant  an opportunity to ventilate  his grievances  on  appeal and not to prematurely  oust him from  the judgment seat which in effect will be  curtailing his constitutional right  of  accessing justice, and having regard to the circumstances  of this case as a whole, the  court is inclined to grant stay taking into account  factors such  as the need for expeditious  disposal of the appeal, the prima facie merits  of the intended  appeal which it has  not been  demonstrated at this stage  that  it is  a sham or frivolous  and therefore not arguable, the scarcity and  optimum utilization of judicial  time  and whether  the application has been brought timeously ( See Global Tours  and Travels Ltd case.

Since  execution in this case would  give rise to eviction and demolition of the suit premises and possibly  the recovery of costs, I am  satisfied  that  eviction is an ultimate result which  if effected would subject  the appellant  to substantial loss and the appeal if successful shall  be rendered  nugatory.

Consequently, I would  grant the applicant  herein stay of execution of the  judgment of the Tribunal delivered  on 23rd January 2015 pending  hearing  and  determination  of this appeal conditional  upon

The appellant depositing in this court security of kshs 300,000/- within 30 days from the date hereof.

The appellant to continue to promptly and without default, paying the monthly rent as and when it falls due to the respondent.

The appellant to prepare file, and serve upon the respondent a record of appeal within the next 30days from the date.

In default of any of the conditions given herein, unless the timelines are extended by the court, the respondent shall proceed with execution of judgment on 23rd January 2015.

Costs of this application shall be in the appeal.

I further order that  the applicant  to follow up with the Rent  Tribunal to ensure  the record  thereof  as requisitioned  by the Deputy Registrar’s letter of  13th May 2015  is availed to this court within  60 days  from the date  hereof to facilitate  admission of  this appeal and the giving  of directions  for the appeal to be heard and determined expeditiously.

Mention on 2nd March, 2016 to confirm compliance.

Dated, signed and delivered in open court at Nairobi this 17th day of December 2015.

R.E. ABURILI

JUDGE