Milly Glass Works Limited v Kenya Railways Corporation & another [2021] KEELC 4479 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT OF KENYA

AT MOMBASA

ELC NO. 135 OF 2012

MILLY GLASS WORKS LIMITED..................................................PLAINTIFF

VERSUS

KENYA RAILWAYS CORPORATION & ANOTHER...............DEFENDANTS

RULING

(Application seeking orders for extension of time to file appeal to the Court of Appeal out of time and for stay of proceedings pending appeal; genuine reasons given for not filing the Notice of Appeal within time and time so extended; stay declined as court not persuaded that the applicant stands to suffer any substantial loss)

1. This ruling is in respect of the application dated 14 September 2020 filed by the plaintiff. The application seeks the following substantive orders which are respectively  prayers (3) and (4) in the application being :-

(a) There be a stay of any further proceedings in this matter pending the hearing and determination of the intended appeal in the Court of Appeal or for such other period as the court may deem just.

(b) The time for filing and serving the Notice of Appeal against the ruling delivered on 24th July 2020 be appropriately extended and the Notice of Appeal dated 6th August 2020 be deemed to have been properly filed.

The application is opposed.

2. To put matters into context, the applicant commenced this suit through a plaint which was filed on 12 July 2012. The subject matter of this suit is a lease granted by Kenya Railways Corporation  (the 1st defendant) to the applicant, over the land parcel Mombasa/Block XLVIII/134 (the suit property). The lease had initially been granted to Kenya Glass Works Limited for a term of 81 years from 1 January 1977 at an annual rent of KShs. 22,000/= which  lease was subsequently transferred to the applicant on 26 April 1993. The issue in dispute relates to the right to increase rent. There is a clause in the lease which gives the lessor the right to increase rent at the expiry of each period of 30 years, to an amount equivalent to 1/20 of the unimproved value of the suit property. In 1994, the lessor (1st respondent), increased rent from the sum of KShs. 22,000/= to KShs. 194,000/= , which though the applicant contends to have been illegal, is what the applicant was paying prior to the filing of this suit. In September 2013, the 1st respondent increased the rent from the sum of KShs. 146,000/= to KShs. 10,200,000/= per annum with effect from 1 January 2012. The applicant argues that the right to increase rent fell on 1 January 2007, being 30 years after the 1977, and that since the 1st respondent did not increase rent at that time, it effectively waived its right to do so, and has to wait for another period of 30 years to lapse before increasing rent. The applicant thus contends that rent can only be increased in the year 2037 and has sought orders to that effect. The 1st respondent filed a defence refuting the claims of the plaintiff and asserting that it properly increased the rent.

3. Hearing of the matter commenced on 20 April 2015 before my predecessor, Omollo J and the applicant (as plaintiff) closed its case. The matter was then adjourned for defence hearing.  For one reason or another, the defence hearing did not proceed as initially scheduled, but eventually, on 10 March 2020, the 1st respondent availed its witness ( now before me as Omollo J had been transferred) and closed its case. I then gave directions for the filing of written submissions and the matter was to be mentioned on 7 May 2020 to confirm the filing of submissions. However, before that date, the plaintiff filed an application dated 28 April  2020, seeking leave to amend the plaint. It was the contention of the applicant that it has been paying the contested increased rent, and what the applicant wanted to amend is to include a prayer for refund. I heard the application and dismissed it through my ruling of 24 July 2020. My view of the matter being that the application was coming too late in the day, after the parties had closed their respective cases. I was further of the opinion that if the applicant succeeds, it can always seek to recover any excess rent paid through a subsequent suit, in the event that the 1st respondent failed to refund it. It is this ruling that has provoked this application.

4. It will be recalled that the applicant essentially seeks an extension of time to file a Notice of Appeal out of time, and further seeks a stay of proceedings. There are various grounds listed in support of the application and the application is supported by two affidavits, one of Gikandi Ngibuini, learned counsel on record for the applicant, and the second of Mohamed Rashid, the applicant’s Managing Director.

5. In his affidavit, Mr. Gikandi has more or less tried to explain the delay in not filing the Notice of Appeal within time. He has confirmed receipt of the ruling on 24 July 2020, but around that time, his family members contracted Covid-19 disease and one unfortunately succumbed to the illness on 3 August 2020 and was buried on 6 August 2020. Mr. Gikandi has deposed that he had prepared the Notice of Appeal, but he forgot to give instructions on its filing, as he left the office in a hurry on 6 August 2020. The Notice of Appeal was ultimately filed on 12 August 2020 which was out of time. He has deposed that the failure to file the Notice of Appeal within time was for the above reasons.

6. In his affidavit, Mr. Rashid, has averred inter alia that if stay of proceedings is not granted, the applicant will be denied an opportunity to fully present its case, and if the intended appeal succeeds, precious and limited judicial resources will have been misused in determining this suit.

7. I have taken note of both the written and oral submissions of Mr. Gikandi, learned counsel for the applicant and Mr. Karina learned counsel for the respondent. In his submissions, Mr. Karina inter alia submitted that documents filed out of time are null and void, and therefore time cannot be extended to validate a document filed out of time. He referred me to various Court of Appeal decisions. He further submitted that there would be no jurisdiction to grant a stay of proceedings if the Notice of Appeal is incompetent. I have considered the matter alongside these arguments and I take the following view of the matter.

8. As I had mentioned earlier, this application has been precipitated by my ruling of 24 July 2020 wherein I declined to grant the applicant leave to file an amended plaint. It is apparent that the applicant wishes to appeal that ruling and further seeks to stay these proceedings awaiting the outcome of that appeal. Under the provisions of Order 43 Rule 1 (1) (f), appeal on a ruling relating to amendment of pleadings is of right and leave is not required. It follows that upon delivery of the ruling on 24 July 2020, the applicant needed to file its Notice of Appeal within 14 days, which is the time stipulated under Rule 75 (2) of the Court of Appeal Rules, 2010 made under the Appellate Jurisdiction Act, Cap 9, Laws of Kenya. Since the ruling was delivered on 24 July 2020, the Notice of Appeal needed to be filed by 7 August 2020. The Notice of Appeal was filed on 12 August 2020 and thus out of time. This Court has power to extend time for the filing of a notice of appeal pursuant to Section 7 of the Appellate Jurisdiction Act which provides as follows :-

Power of High Court to extend time

The High Court may extend the time for giving notice of intention to appeal from a judgment of the High Court or for making an application for leave to appeal or for a certificate that the case is fit for appeal, notwithstanding that the time for giving such notice or making such appeal may have already expired:

Provided that in the case of a sentence of death no extension of time shall be granted after the issue of the warrant for the execution of that sentence.

9.  Mr. Karina did not contest the power of the court to extend time, and did contend that the reasons given for the delay were unreasonable. His issue, if I got his argument right, was that the Notice of Appeal ought not to have been filed at all, but instead, leave first ought to have been sought before the same was lodged out of time. To me, it makes no difference, for the end result is the same, whether one has filed the document or not. The document filed out of time would remain null and void, unless the court in its discretion extends time for it. If no document is filed and time is extended for the subject document to be filed, then one can be filed within the extension period. That is why, to me, it doesn’t matter, whether the document is filed or not. What is important is whether or not the court will allow time to be extended. Where a document is already filed, but  is out of time, I think it would be up to the discretion of the court to either extend time to allow the document already filed, or to direct that a new document be filed.

10. In the instance of this case, I am of opinion that good reason has been given as to why the Notice of Appeal was not filed within time. Counsel has explained the predicament that he faced and I am personally sympathetic to what counsel went through at the time that the Notice of Appeal was to be lodged. I am thus persuaded to extend time for the lodging of the Notice of Appeal. I opt not to validate the Notice of Appeal that was filed late and strike it out. Instead I do direct that a proper Notice of Appeal be filed and served within Seven (7) Days of this ruling.

11. The second limb of this application relates to the question of stay of proceedings. The issue of stay is covered in Order 42 Rule 6 (2) which provides as follows :-

(2) No order for stay of execution shall be made under subrule (1) unless—

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

(b) 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.

12. Although strictly speaking, Rule 6(2) above relates to stay of execution after judgment, I think the principles therein are also applicable when a court is dealing with the question of whether or not to grant a stay of proceedings. If no substantial loss is going to be occasioned to the applicant, then there would really be no point to grant a stay of proceedings. In the instance of this case, what the applicant wanted in its application to amend the plaint was to be allowed to make a claim for the new rent that it is paying, in the event that it succeeds in the suit. Assuming the Court of Appeal allows the appeal, and allows the applicant to amend its plaint, will the applicant have suffered any substantial loss ? I am not so persuaded. If this case proceeds, there can be two outcomes; the applicant can either succeed in its suit or fail in it. If the applicant succeeds, automatically, she will have a right to the difference between the old and the new rent. If the applicant fails then nothing arises and the applicant will need to continue paying the new rent. The right to claim any excess rent will remain, whether or not the applicant successfully appeals against the ruling that denied her leave to amend the pleadings. I therefore do not see any substantial loss that the applicant stands to suffer if a stay of proceeding is not granted. Given that position, I am thus not persuaded to grant a stay of proceedings.

13. The effect of the above is that time is extended for the applicant to lodge its Notice of Appeal as directed above, but there will be no stay of proceedings.

14. I will make no order as to the costs of this application since, as I have stated earlier, I am sympathetic to the misfortune that befell counsel, and which led to the Notice of Appeal not being lodged within time.

15. Orders accordingly.

DATED AND DELIVERED THIS 28TH DAY OF JANUARY 2021

JUSTICE MUNYAO SILA

JUDGE, ENVIRONMENT AND LAND COURT OF KENYA

AT MOMBASA