Regional Container Freight Station Limited & 2 others v Zum Zum Investment Limited [2023] KEHC 20196 (KLR)

Regional Container Freight Station Limited & 2 others v Zum Zum Investment Limited (Civil Case 116 of 2016) [2023] KEHC 20196 (KLR) (3 July 2023) (Ruling)

Neutral citation: [2023] KEHC 20196 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Case 116 of 2016

DKN Magare, J

July 3, 2023

Between

Regional Container Freight Station Limited

1st Plaintiff

Akaba Invbestment Limited

2nd Plaintiff

Transouth Conveyors Company Limited

3rd Plaintiff

and

Zum Zum Investment Limited

Defendant

Ruling

1. The application dated 22/6/2023 was filed by the decree holder claiming the following prayers: -A. That this Honourable Court be pleased to grant leave to the Plaintiffs/Decree Holders to sell and/or continue with the intended sale of the parcels of Land known as Plot No 5905, Section I/MN; CR No 19849, located in Shanzu Area, Mombasa, and parcel LR No 1482/II/MN and the resultant subdivisions as detailed in the valuation reports dated August 6, 2021 prepared by M/s Musyoki & associates.B. That this Honuorable Court be pleased to grant an Order setting the terms of sale as follows: -a)M/s Moran Auctioneers, KTDA Plaza, 6th Floor, Moi avenue Nairobi, be appointed to dispose of the subject properties;b)A notification of sale be issued to M/s Moran Auctioneers to conduct the sale of the subject properties with due regard to applicable laws;c)That the subject properties be disposed of by way of public auction guided by the valuation reports dated November 25, 2022 prepared in respect of the subject properties by M/s Musyoki & Associates.d)In the event the public auction fails for the first time, M/S Moran Auctioneers be allowed to proceed and re- advertise the sale of the subject properties, and thereafter proceed to dispose off the same by way of public auction with due regard to all applicable laws;e)In the event of a second or any subsequent sale by public auction, the Plaintiffs/Decree holders be allowed to place their bid (if they so wish) whether singularly or jointly;f)In the event the Decree Holders bid is deemed to be a successful bid, the court to allow a set off the bid amounts as against the decretal sum, and any excess amounts realized be deposited in court for onward transmission to the defendant/Judgment debtor.g)Any other term and/or condition that this Honourable Court may deem fit and /or appropriate to impose.

2. The grounds are that there was a decree entered in 2019 for Ksh 903,008,308. 39 which as at October 2021 had accumulated interest and was standing at Ksh 1,457,064,334. 71. The amount must be accruing interest. According to Abdulkarim Saleh Muhsin the judgment debtor has not paid.

3. The Application was not opposed by the defendant. Parties also did not file submissions. I therefore proceeded on the basis of the evidence of the Applicant on record and appraising the law.

4. To be able to deal with this issue, I need to be satisfied that I have jurisdiction to make the orders sought. The orders sought are for attachment of movable property details of which are given.

5. Initially the Applicant had sought to have the deputy registrar sign for the transfer, which she declined and I gave directions on the way forward.

6. I had noted as I do now that sale of immovable property cannot be done without leave of the court.

7. Order 22 rule 68 (Sale of immovable property) provides as follows: -“Rule 68- Sale of immovable property in execution of decrees may be ordered by any court.

8. My understanding and considered view is that, that order has to be made by the court upon making ascertaining any claims on the register. This application was thus filed and I gave directions. When the matter came up, I noted that another Application had been made, by the intended interested parties.

9. I did not find it useful to have both applications heard at the same time. The position of interested parties is settled. Further there are procedures within theCivil Procedure Rules on claims related to objectors. I therefore separated the two applications without prejudging the position.

10. In respect to the matter before me, that is the application dated 22/6/2023, the same seeks to execute a decree already in situ. The decree is against the Defendant herein. Consequently, I must be so satisfied on the same before I proceed.

11. In Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR.“Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction. Before I part with this aspect of the appeal, I refer to the following passage which will show that what I have already said is consistent with authority:“By jurisdiction is meant the authority which a court as to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted, and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognisance, or as to the area over which the jurisdiction shall extend, or it may partake of both these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order to decide whether it has jurisdiction; but, except where the court or tribunal has been given power to determine conclusively whether the facts exist. Where a court takes it upon itself to exercise a jurisdiction which it does not possess, its decision amounts to nothing. Jurisdiction must be acquired before judgment is given”

12. As earlier stated Order 22, rule 48 provides for attachment of immovable property. The compliance required to perfect attachment is set out in order 22 rule 48 which provides as doth: -“48. Attachment of immovable property [Order 22, rule 48. ]

(1)Where the property to be attached is immovable, the attachment shall be made by an order prohibiting the judgment-debtor from transferring or charging the property in any way, and all persons from taking any benefit from such purported transfer or charge, and the attachment shall be complete and effective upon registration of a copy of the prohibitory order or inhibition against the title to the property.”(2)A copy of the order shall be affixed on a conspicuous part of the property.

13. The sale of attached immovable property is governed by Order 22 rules 68 and 69. Rule 69 provides as doth: -“69. Deposit by purchaser and re-sale on default [Order 22, rule 69. ] (1) On every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per centum on the amount of his purchase- money to the officer or other person conducting the sale, and, in default of such deposit, the property shall forthwith be re-sold.

(2)Where the decree-holder is the purchaser, and is entitled to set off the purchase money under rule 61, the court may dispense with the requirements of this rule.”

14. In Manso Enterprises Ltd v Kenya Commercial Bank Ltd & another[1989] eKLR, the High Court, justice E.M Githinji, as then he was, sitting in Mombasa had this to say: -“As regards ground No 4, it is true that the rules do not provide that the Decree Holder state the value of the property. However, rule 61(2) (d) provides that everything material for the purchaser to know in order to judge the nature of the property should be stated.Commentary 3 to Indian Order 21 rule 66(e) (similar to Kenya rule 61(2)(d) in Mulla’s Code of Civil Procedure 13th Edn. Vol. II page 1130, shows that value of property is a very material fact for the purchaser to know. The same commentary however indicates that there had been divergent decisions in the Indian courts as to who should provide valuation and as to whether value should be inserted in the proclamation of sale until some amendments were made to the rule. Those amendments relieved the court the burden of assessing the value of the property and left it to the Decree Holder and Judgment Debtor to state the value.”

15. The court was referring to the old rules. It means that the law has since evolved and all required safeguards are to be given. This ensures equity in disposal of property. However, the substantive law regarding safeguards in the auctions is still the land statutes and the auctioneers Act.

16. InNational Housing Corporation v Lawi Kiplagat[2017] eKLR“6. The procedure for execution is provided for in Order 22 Rule 13(4) of the Civil Procedure Rules. The said position was reiterated in the case ofMandavia v Rattan Singh Civil Appeal No 27 of 1967 [1968] EA 146 as follows:“The words “formal order for attachment and sale of property may be made by the Registrar” in Order 48, rule 3 must mean that the Registrar has to actually consider the application before him and then make the necessary orders to effect the attachment of the sale. Formal order here does not mean that the registrar has only to prepare and issue a formal order which has in fact already been made by the judge, as for instance where he draws and signs a decree after the judgment or as in this case an order after the judge has decided an application. In such cases, the registrar does not “make” the order, he only prepares the order already “made” by the judge. Rule 3 must empower the Registrar to consider the proceedings before him and then in his discretion himself make an order. In a sense this will usually only be a formal order as a judgment has already been obtained and, if not settled, execution against the judgment debtor’s property will follow as a matter of course without dispute, and the rule goes on to make it clear that if any dispute arises, then on the objection being taken in the manner provided, the matter will be taken over and dealt with by a judge. Order 48, rule 4 provides that for the purposes of rules 2 and 3 the registrar shall be deemed to be civil court, so that in effect a registrar sitting to deal with applications or proceedings under rule 3 would be the presiding officer of a civil court, and a civil court here must mean a tribunal where civil issues are settled and not just a body that is only going to put into formal phraseology an order already made on an issue tried and disposed of by a judge. Form 27 in Appendix D of the schedule to the rules sets out the form of the notification of sale under rule 61 and this does provide for the signature by “judge” but in this connection it is to be noted that judge is defined in section 2 of the Civil Procedure Act as meaning “the presiding officer of a civil court” and this would include the deputy registrar when he is acting under the provisions of Order 48 rule 3. ..It is clear that Order 48 rule 3 confers on the registrar not merely the power to make formal orders of attachment and sale, but also to conduct ‘proceedings thereunder’, at any rate until some formal objection is taken by motion on notice whereupon all further proceedings are to be before a judge. This must be the position here since the intention of this rule is to allow the registrar to conduct the necessary proceedings, and issue the appropriate directions and orders so as to carry out an execution by way of attachment and sale of property, provided that the proceedings are not contested. Therefore the expression “formal orders for attachment and sale of property” include not only the actual orders for the attachment and sale but any other consequential orders, which are necessary to effect this purpose, and this includes an order made under rule 61. ”

17. In Data Guard Distributors Limited v Virginia Njeri Kigo & 3 others [2019] eKLR, Justice GL Nzioka, stated as doth: -“11. I have considered these provisions of law and I find that indeed under Rule 68 referred to above, an immovable property may be sold by an order of the court in execution of a decree. However, this sale must be under the supervision of the court. The general conduct of a sale would require that, the property be first valued to ascertain whether it is viable to order for a sale taking into account the amount of the decree.

12. The Applicants have sought that the Honourable court do issue the prohibitory order issued over property known as Nairobi Block 76/516 Buruburu. They have then sought that the court sets a date for sale of that property alongside two others known as Nyandarua/Tulaga/1893, LR No 12715/8854 Syokimau. However, they depose that any property that a prohibitory order was issued against was Nairobi Block 76/516 Buruburu. In that case, the only property that can become a subject of attachment is the one against which the prohibitory order was issued.

13. In that regard, I allow the application herein in terms of prayer (1) and order that the property Nairobi Block 76/516 Buru Buru be subjected to evaluation by each party independently and/or jointly to enable the court give further orders as to, the manner of the sale and the dates thereof.”

18. In a nutshell there can be no sale without:-a.An order given by the court for attachment of property, pursuant to Order 22 Rule 48b.An order of the court supervising the salec.An order for sale of immovable propertyd.Safeguards to the judgment debtor and third parties.e.Existence of a valid decree.

19. I am satisfied there is a valid decree as set out in the Applicant’s application. A decree for Ksh 903,008,308. 39 together with costs of 12,248,092. 71 with interest accruing is due and owing.

20. The Defendant has not denied that they have not settled the decree. There is no application under order 22 rule 1 that the decree is settled. I therefore find that the decree is still due and owing.

21. There is no order of stay of execution or any order forbidding the transfer or sale of the suit property. In the circumstances the court will grant an order of attachment of movable property as set out in the orders below. I only need to satisfy the following; a valid order of the court be issued which includes an order supervising the said order. The sale that is to be ordered will need some safeguards to the judgment debtor and third parties.

22. The safeguards are properly so called, settlement of terms of the sale. Terms of sale cannot be settled before the properties are attached and in the hands of the judgment creditor.

23. Therefore, whichever safeguards we put in place, there will be no settlement of terms in this order. The terms are thus settled once an order for attachment has been issued and the parties commence on the valuation.

24. It is therefore my view that the following orders service: -a.The application dated June 22, 2023 is allowedb.The court grants leave to the plaintiff to attach the defendant’s, property in the schedule annexed hereto but being;No ORIGINAL PLOT No 1482/II/MN. SUB-PLOT NOS AS HEREUNDER REGISTERED OWNER AREA TITLE

1 MN/II/7429 Zumzum Investments Limited 0. 0371 Ha Freehold

2 MN/II/7430 Zumzum Investments Limited 0. 0371 Ha Freehold

3 MN/II/7431 Zumzum Investments Limited 0. 0371 Ha Freehold

4 MN/II/7432 Zumzum Investments Limited 0. 0371 Ha Freehold

5 MN/II/7433 Zumzum Investments Limited 0. 0371 Ha Freehold

6 MN/II/7434 Zumzum Investments Limited 0. 0371 Ha Freehold

7 MN/II/7435 Zumzum Investments Limited 0. 0371 Ha Freehold

8 MN/II/7436 Zumzum Investments Limited 0. 0371 Ha Freehold

9 MN/II/7533 Zumzum Investments Limited 0. 0371 Ha Freehold

10 MN/II/7534 Zumzum Investments Limited 0. 0371 Ha Freehold

11 MN/II/7535 Zumzum Investments Limited 0. 0371 Ha Freehold

12 MN/II/75369 Zumzum Investments Limited 0. 0371 Ha Freehold

13 MN/II/7538 Zumzum Investments Limited 0. 0371 Ha Freehold

14 MN/II/7539 Zumzum Investments Limited 0. 0371 Ha Freehold

15 MN/II/7542 Zumzum Investments Limited 0. 0349 Ha Freehold

16 MN/II/7543 Zumzum Investments Limited 0. 0385 Ha Freehold

17 MN/II/7546 Zumzum Investments Limited 0. 0349 Ha Freehold

18 MN/II/7547 Zumzum Investments Limited 0. 0349 Ha Freehold

19 MN/II/7549 Zumzum Investments Limited 0. 0348 Ha Freehold

20 MN/II/7550 Zumzum Investments Limited 0/03449 Ha Freehold

21 MN/II/7551 Zumzum Investments Limited 0. 0349 Ha Freehold

22 MN/II/7553 Zumzum Investments Limited 0. 0348 Ha Freehold

23 MN/II/7554 Zumzum Investments Limited 0. 0349 Ha Freehold

24 MN/II/7555 Zumzum Investments Limited 0. 0410 Ha Freehold

25 MN/II/7556 Zumzum Investments Limited 0. 0288 Ha Freehold

26 MN/II/7557 Zumzum Investments Limited 0. 0308 Ha Freehold

27 MN/II/7558 Zumzum Investments Limited 0. 0400 Ha Freehold

28 MN/II/7559 Zumzum Investments Limited 0. 0400 Ha Freehold

29 MN/II/7560 Zumzum Investments Limited 0. 0297 Ha Freehold

30 MN/II/7561 Zumzum Investments Limited 0. 0475 Ha Freehold

31 MN/II/74562 Zumzum Investments Limited 0. 0400 Ha Freehold

32 MN/II/7563 Zumzum Investments Limited 0. 0400 Ha Freehold

33 MN/II/7638 Zumzum Investments Limited 0. 0427 Ha Freehold

34 MN/II/7639 Zumzum Investments Limited 0. 0427 Ha Freehold

35 MN/II/7640 Zumzum Investments Limited 0. 0730 Ha Freehold

36 MN/II/7641 Zumzum Investments Limited 0. 0426 Ha Freehold

37 MN/II/7642 Zumzum Investments Limited 0. 0427 Ha Freehold

38 MN/II/7643 Zumzum Investments Limited 0. 042227 Ha Freehold

39 MN/II/7644 Zumzum Investments Limited 0. 0519 ha Freehold

40 MN/II/7645 Zumzum Investments Limited 0. 0519 ha Freehold

41 MN/II/7646 Zumzum Investments Limited 0. 451 Ha Freehold

42 MN/II/8410 Zumzum Investments Limited 0. 0427 Ha Freehold

43 MN/II/7675 Zumzum Investments Limited 0. 0325 Ha Freehold

44 MN/II/7676 Zumzum Investments Limited 0. 0398 Ha Freehold

45 MN/II/7677 Zumzum Investments Limited 0. 0400 Ha Freehold

46 MN/II/7678 Zumzum Investments Limited 0. 0269 Ha Freehold

47 MN/II/7647 Zumzum Investments Limited 0. /0368 Ha Freehold

48 MN/II/7648 Zumzum Investments Limited 0. 0353 Ha Freehold

49 MN/II/7649 Zumzum Investments Limited 0. 0353 Ha Freehold Freehold

50 MN/II/7650 Zumzum Investments Limited 0. 0353 Ha Freehold

51 MN/II/7651 Zumzum Investments Limited 0. 0368 Ha Freehold

52 MN/II/7652 Zumzum Investments Limited 0. 0368 ha Freehold

53 MN/II/7654 Zumzum Investments Limited 0. 0353 Ha Freehold

54 MN/II/7655 Zumzum Investments Limited 0. 0368 Ha Freehold

55 MN/II/7656 Zumzum Investments Limited 0. 036h Ha Freehold

56 MN/II/7657 Zumzum Investments Limited 0. 0353 Ha Freehold

57 MN/II/7658 Zumzum Investments Limited 0. 0353 ha Freehold

58 MN/II/7659 Zumzum Investments Limited 0. 0368 ha Freehold

59 MN/II/7660 Zumzum Investments Limited 0. 0368 Ha Freehold

60 MN/II/7661 Zumzum Investments Limited 0. 0395 Ha Freehold

61 MN/II/7662 Zumzum Investments Limited 0. 0400 Ha Freehold

62 MN/II/7664 Zumzum Investments Limited 0. 0352 Ha Freehold

63 MN/II/7665 Zumzum Investments Limited 0. 0400 Ha Freehold

64 MN/II/7666 Zumzum Investments Limited 0. 400 Ha Freehold

65 MN/II/7667 Zumzum Investments Limited 0. 0342 Ha Freehold

66 MN/II/7668 Zumzum Investments Limited 0. 0332 Ha Freehold

67 MN/II/7669 Zumzum Investments Limited 0. 0400 Ha Freehold

68 MN/II/7670 Zumzum Investments Limited 0. 0400 Ha Freehold

69 MN/II/7671 Zumzum Investments Limited 0. 0322 Ha Freehold

70 MN/II/7673 Zumzum Investments Limited 0. 0476 Ha Freehold

71 MN/II/7674 Zumzum Investments Limited 0. 0400 Ha Freehold

72 MN/II/7679 Zumzum Investments Limited 0. 0398 Ha Freehold

73 MN/II/7680 Zumzum Investments Limited 0. 661 Ha Freehold

74 MN/II/7681 Zumzum Investments Limited 0. 0400 Ha Freehold

75 MN/II/7682 Zumzum Investments Limited 0. 0400 Ha Freehold

76 MN/II/7683 Zumzum Investments Limited 0. 0400 Ha Freehold

77 MN/II/7684 Zumzum Investments Limited 0. 0400 Ha Freehold

78 MN/II/7685 Zumzum Investments Limited 0. 0400 Ha Freehold

79 MN/II/7686 Zumzum Investments Limited 0. 0400 Ha Freehold

80 MN/II/7687 Zumzum Investments Limited 0. 0400 Ha Freehold

81 MN/II/7688 Zumzum Investments Limited 0. 0400 Ha Freehold

82 MN/II/7689 Zumzum Investments Limited 0. 0400 Ha Freehold

83 MN/II/7690 Zumzum Investments Limited 0. 0400 Ha Freehold

84 MN/II/7691 Zumzum Investments Limited 0. 0400 Ha Freehold

85 MN/II/7692 Zumzum Investments Limited 0. 0400 Ha Freehold

86 MN/II/7693 Zumzum Investments Limited 0. 0400 Ha Freehold

87 MN/II/7694 Zumzum Investments Limited 0. 0400 Ha Freehold

88 MN/II/7751 Zumzum Investments Limited 0. 0358 Ha Freehold

89 MN/II/7752 Zumzum Investments Limited 0. 0402 Ha Freehold

90 MN/II/7753 Zumzum Investments Limited 0. 0379 Ha Freehold

91 MN/II/7754 Zumzum Investments Limited 0. 0363 Ha Freehold

92 MN/II/7756 Zumzum Investments Limited 0. 0379 Ha Freehold

93 MN/II/7757 Zumzum Investments Limited 0. 0379 Ha Freehold

94 MN/II/7758 Zumzum Investments Limited 0. 0363 Ha Freehold

95 MN/II/7759 Zumzum Investments Limited 0. 0363 Ha Freehold

96 MN/II/7760 Zumzum Investments Limited 0. 0379 Ha Freehold

97 MN/II/7761 Zumzum Investments Limited 0. 0379 Ha Freehold

98 MN/II/7762 Zumzum Investments Limited 0. 0363 Ha Freehold

99 MN/II/7763 Zumzum Investments Limited 0. 0363 Ha Freehold

100 MN/II/7764 Zumzum Investments Limited 0. 0363 Ha Freehold

101 MN/II/7765 Zumzum Investments Limited 0. 0379 Ha Freehold

102 MN/II/7766 Zumzum Investments Limited 0. 0363 Ha Freehold

103 MN/II/7777 Zumzum Investments Limited 0. 0523 Ha Freehold

104 MN/II/7779 Zumzum Investments Limited 0. 0405 Ha Freehold

105 MN/II/7780 Zumzum Investments Limited 0. 0405 Ha Freehold

106 MN/II/7784 Zumzum Investments Limited 0. 0405 Ha Freehold

107 MN/II/7785 Zumzum Investments Limited 0. 0405 Ha Freehold

108 MN/II/7855 Zumzum Investments Limited 0. 0363 Ha Freeholdc.The plaintiff to propose the terms of settlement within 14 days from today to the defendant for settlement. In default, the court shall settle the same. The matter shall be fixed for directions after the Ruling of 25/7/2023. d.When the terms are settled, the sale shall be as individual units and not as per plot.e.The valuation used must be valid as required under the Land Act.f.The sale must be subject to reserve price which shall not be less than 80%. Should the judgment creditors be allowed in terms of settlement, to take part in the auction, the purchase price to be paid by the judgment creditor shall not be less than 100 of the current market value as per valuation no less than 1 year old at the time of sale.g.Each party to bear its costs

DELIVERED, DATED AND SIGNED AT MOMBASA ON THIS 3RD DAY OF JULY, 2023. JUDGMENT DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.KIZITO MAGAREJUDGEIn the presence of: -Peter Munyoki for the applicantNo Appearance DefendantNo appearance for proposed Interested Party