Thinkard Ltd v Kenda Millers Ltd [2022] KEHC 12939 (KLR)

Thinkard Ltd v Kenda Millers Ltd (Commercial Appeal E674 of 2021) [2022] KEHC 12939 (KLR) (Commercial and Tax) (16 September 2022) (Ruling)

Neutral citation: [2022] KEHC 12939 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Appeal E674 of 2021

A Mabeya, J

September 16, 2022

Between

Thinkard Ltd

Appellant

and

Kenda Millers Ltd

Respondent

(Emanating from the Chief Magistrate’s Court at Nairobi CMCC No. E952 of 2020)

Ruling

1. Before Court is an application dated 8/09/2021. It was brought under sections 1A, 1B, 3A of the Civil Procedure Act, and order 42 rule 6 and order 51 rule 1 and 3 of the Civil Procedure Rules.

2. The application sought the stay of proceedings in the Chief Magistrate’s Court at Nairobi CMCC No E952 of 2020 Kenda Millers Ltd vs Thinkard Ltd pending the hearing of this appeal. The grounds for the application were set out on its face and on the supporting affidavit sworn by Eric Maikuma Holi.

3. The applicant contended that it had preferred an appeal against the ruling delivered on August 24, 2021. That ruling had dismissed its preliminary objection challenging the existence of two contradictory orders emanating from two different court cases being Chief Magistrate Court at Nairobi CMCC No E952 of 2020 Kenda Millers Ltd vs Thinkard Ltd filed by the respondent, and Nairobi CMCC No 7495 of 2020 Thinkard Ltd vs Kenda Millers Ltd filed by the applicant.

4. That both suits were between the same parties, over the same subject matter and there were two conflicting orders whereby one allowed the applicant to have unrestricted access to the suit premises whilst the other restricted it from such access. That the respondent had since filed contempt proceedings against the applicant for accessing the premises in defiance of court orders. The two court orders were produced as EMH2B and B.

5. The respondent opposed the application vide the replying affidavit of Dammarys Mapusi Amenya sworn on September 22, 2022. It was contended that the parties had entered into a hire purchase agreement on September 18, 2020 for the purchase of the business premises owned by the respondent wherein the applicant conducted its milling business. That the applicant defaulted in payment of the installments causing the respondent to file Chief Magistrate Court at Nairobi CMCC No E952 of 2020 Kenda Millers Ltd vs Thinkard Ltd.

6. That the suit filed by the applicant was not over the same subject matter as it concerned a dispute over ownership of three cheques valued at Kshs 1,072,000/= which both parties claimed. That the matters were therefore not sub-judice and the instant appeal lacked merit. That there was no justification for staying the proceedings as such stay would lead to depreciation of the respondent’s machinery and loss of value.

7. The applicant’s submissions were dated October 21, 2021 whilst those of the respondent were dated 8/11/2021. The court has considered those submissions as well as the opposing affidavits.

8. A decision on whether or not to grant stay of proceedings is discretionary. This jurisdiction is derived from order 42 rule 6 (1) of the Civil Procedure Rules.

9. In Re Global Tours & Travel Ltd HCWC No 43 of 2000 Ringera, J (as he then was) held that: -“As I understand the law, whether or not to grant a stay of proceedings or further proceedings on a decree or order appealed from is a matter of judicial discretion to be exercised in the interest of justice ... the sole question is whether it is in the interest of justice to order a stay of proceedings and if it is, on what terms it should be granted. In deciding whether to order a stay, the court should essentially weigh the pros and cons of granting or not granting the order. And in considering those matters, it should bear in mind such factors as the need for expeditious disposal of case, the prima facie merits of the intended appeal, in the sense of not whether it will probably succeed or not but whether it is an arguable one, the scarcity and optimum utilization of judicial time and whether the application has been brought expeditiously…”

10. For the court to grant a stay of proceedings, an applicant ought to show that he has an arguable appeal with high chances of success such that, if the stay of proceedings is not granted the appeal will be rendered nugatory.

11. The court has seen the memorandum of appeal in this matter. The applicant is challenging the trial court’s decision to dismiss its preliminary objection on the sole ground that it was filed before a defence was filed. Further, that the trial court failed to address the points of law raised therein. The preliminary objection had challenged the continuance of two matters involving both the applicant and respondent and had contended that they were over the same subject matter thus sub judice.

12. In addition, it was contended that the two cases contained contradictory orders regarding the same subject matter. The court has seen those orders which are on record.

13. In as much as the respondent contended that the two cases were not over the same subject matter, the orders streaming from the cases showed otherwise. The order from CMCC No E7495 of 2020 dated December 15, 2020 restrained the respondent herein from interfering with the suit premises being Go Down No 12 off North Airport Road Embakasi. On the other hand, the order from CMCC No E952 of 2021 dated July 12, 2021 restrained the applicant herein from interfering with the very same suit property. Indeed, the two orders are contradictory as each party is restrained from accessing the suit property.

14. From the above, it seems that the applicant has established an arguable point in the intended appeal. Further, the applicant averred that the respondent had instituted contempt proceedings against it for disobeying the court orders restraining the applicant from interfering with the suit property. The respondent did not respond to that allegation.

15. This creates an awkward position. The continuance of both suits would create a rather strange position whereby different courts with equal jurisdiction and hierarchy issue contradictory orders. It is in the best interest of justice that the stay sought be granted.

16. Accordingly, the application dated 8/09/2021 is found to be meritorious and is allowed with costs to the applicant.

It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 16TH DAY OF SEPTEMBER, 2022. A. MABEYA, FCIArbJUDGE