Retirement Benefits Authority & Mumias Sugar Company Staff Provident Fund v Retirement Benefits Authority &Roberts; Insurance Brokers Limited [2017] KEHC 2467 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYAAT NAIROBI

MISC. APPLICATION NO. 302 OF 2017

MUMIAS SUGAR COMPANY LIMITED.............................1ST APPLICANT

MUMIAS SUGAR COMPANY

STAFF PROVIDENT FUND...................................................2ND APPLICANT

VERSUS

THE RETIREMENT BENEFITS AUTHORITY................1ST RESPONDENT

ROBERTS INSURANCE BROKERS LIMITED..............2ND RESPONDENT

RULING

This ruling seeks to determine the Notice of Motion dated 20th July, 2017 brought under the provisions of Article 159 (2) (b) of the Constitution and sections 1A and 3A of the Civil Procedure Act, inherent Power of the Court and any other enabling provisions of the law. The Application seeks orders that:-

(a)…spent

(b)THAT pending the hearing and determination of this Application and Appeal, this Honourable Court be pleased to stay the execution / implementation of the decision of the 1st Respondent to place the 2nd Applicant under interim administration.

(c)THAT pending the hearing and determination of this Application and Appeal, this Honourable Court be pleased to issue a temporary injunction against 2nd Respondent from in way interfering with the assets of the 2nd Applicant as interim administrators.

(d)THAT the Applicants be at liberty to apply for further orders and/or Directions as the Honourable Court may deem fit and just to grant.

The Application is premised on the grounds on the body of the application and the Supporting Affidavit of BONIFACE NAMAYI MULOMA,the Chairman of the Board of Trustees of the 2nd Applicant. The grounds in support of the application are that the proceedings and outcome at the Retirement Benefits Appeals Tribunal in the Appeal dated 10th July, 2017 by the Applicants would be overtaken by events if the implementation/execution of the decision of the 1st Respondent is not stayed and that the appeal would be rendered nugatory. That the applicants stand to suffer irreparable loss given the nature, scope and implementation of the decision of the 1st Respondent.

In the Supporting Affidavit dated 20th July, 2017, the Appellants aver that they have filed an appeal and a similar application to this, at the tribunal, against the decision of the 1st Respondent dated 28th June, 2017. The Appellants were desirous of prosecuting the application, however, they could not do so as they were informed by the Clerk of the Tribunal, that the tribunal was not properly constituted and it lacked a chairman for the time being. A copy of the letter was annexed to the affidavit. The applicants further aver that they are apprehensive that the order to freeze further transactions by the trustees and hand over all bank accounts and assets of the 2nd Applicant will have the irreversible implication of totally grounding all its business operations.

The Respondents did not file a response to the application.

The Application was canvassed by way of oral submissions which I have considered. Further, despite having being served with the hearing notice, there was no appearance by the Respondents.

The principles for consideration in an application for stay of execution are provided for under Order 42 Rule 6 of the Civil Procedure Rules.

The said guidelines were outlined by the Court of Appeal in the case of Housing Finance Company of Kenya v Sharok Kher Mohamed Ali Hirji & another [2015] eKLRwhere the Court held that, “We cannot over emphasize that at this stage we are not required to go to the merits of the case as tempting as it may be or consider whether the issues will be successful in favour of the appellant, lest we embarrass the trial judge. We therefore find that the applicant has discharged this requirement on the balance of probabilities. We are further guided by this court’s decision in CARTER & SONS LTD. V. DEPOSIT PROTECTION FUND BOARD & TWO OTHERS – Civil Appeal No. 291 of 1997, at Page 4 as follows:

“. . . the mere fact that there are strong grounds of appeal would not, in itself, justify an order for stay. . .the applicant must establish a sufficient cause; secondly the court must be satisfied that substantial loss would ensue from a refusal to grant a stay; and thirdly the applicant must furnish security, and the application must, of course, be made without unreasonable delay.”

The question of unreasonable delay was dealt with in the case of JaberMohsen Ali & another v Priscillah Boit & another E&L NO. 200 OF 2012[2014] eKLRwhere it was stated: “The question that arises is whether this application has been filed after unreasonable delay. What is unreasonable delay is dependent on the surrounding circumstances of each case. Even one day after judgment could be unreasonable delay depending on the judgment of the court and any order given thereafter. In the case of Christopher Kendagor v Christopher Kipkorir, Eldoret E&LC 919 of 2012 the applicant had been given 14 days to vacate the suit land. He filed an application one day after the 14 days. The application was denied, the court holding that, the application ought to have come before expiry of the period given to vacate the land.”

The decision sought to be stayed was communicated to the Appellants via a letter dated 28th June, 2017 after which the appellants filed an application for stay in the Tribunal dated 10th July, 2017. It is upon following up to have the application fixed for hearing at the tribunal that the Applicants were informed via a letter from the tribunal dated 12th July, 2017 that the tribunal was not properly constituted as the term of a majority of the members of the tribunal had ended on 14th February, 2017.  The Applicants therefore proceeded to file the instant application on 21st July, 2017. Looking at the timelines, the applicants were desirous to have the decision of the Tribunal stayed and the application was not filed with unreasonable delay.

The Applicants have stated that they will suffer irreparable loss given the nature of the decision of the 1st Respondent.  The decision of the 1st Respondent was to the effect that the 2nd Respondent be appointed as an interim administrator of the 2nd Applicant for a period of 3 months from 28th June, 2017.  The Decision of the 1st Respondent was that the 2nd Respondent is to assume the management, control and conduct of the affairs and business of the Trustees and exercise ALL the powers of the Board of Trustees effective immediately to the exclusion of the trustees. The decision is said to have been influenced by the Applicants failure to remit contributions together with accruing interest amounting to over and above 80 Million as well as failure to adhere to a remedial plan submitted to the Authority. I have perused the Remedial Plan and it is apparent that the 1st applicant has made commitment to remit monthly installments in order to clear the unremitted arrears.

In the premises, its only fair and just that the application herein be granted. The same is allowed. No order is made on costs.

It is so ordered.

Dated, Signed and Delivered at Nairobi this 3rdDay of November, 2017.

…………………………….

L. NJUGUNA

JUDGE

In the Presence of

…………………………. for the 1st Application

…………………………. for the 2nd Application

…………………………. for the 1st Respondent

…………………………. for the 2nd Respondent