[2022] KEHC 1709 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAKURU

CIVIL SUIT NO. 2 OF 2019

MOSES BARTO CHEROP T/A CRATER CENTER......................................................PLAINTIFF

VERSUS

POSTAL CORPORATION OF KENYA........................................................................DEFENDANT

RULING

1. This is a ruling on preliminary objection dated 5th July 2021 challenging the jurisdiction of this court and sought this suit to be struck out with costs to the Defendant.

2. The plaintiff filed this suit on 17. 01. 2019 through plaint dated 16th January 2019 and filed on 17th January 2019 seeking judgment for the payment of:-

a. Kshs 4,171,383 being alleged losses,

b. Kshs 88,306,373. 50 for loss of business income for 9 years,

c. General damages for breach of contract and

d. Costs of the suit.

3. The Plaintiff’s claim arise from an agreement to lease property known as Nakuru/ Municipality Block 5/9 for a period of 10 years. The plaintiff contend that the Defendant misrepresented itself when leasing the property.

4. The Defendant filed a defence on 12th March 2019. On 15th March 2021, the Defendant filed a preliminary objection disputing the jurisdiction of this court to hear and determine the suit, and a notice of motion seeking to amend the statement of defense.

5. Grounds in support of preliminary objection are as set out hereunder:-

a. THAT the High Court lacks jurisdiction to hear and determine this dispute as such Jurisdiction falls within the Environment and Land Court established under Section 162 (2)(b)of the Constitution of Kenya, 2010.

b. THAT the dispute before this Court relates to a Lease of undeveloped land known as Title No. Nakuru/Municipality Block 5/9, which Lease is an instrument that confers an enforceable interest inland.

c. THAT the creation of a Lease is governed by the Land Act, and any dispute arising from the same ought to be a matter for resolution by the Environment and Land Court, as envisaged by the Land Act.

d. THAT a lease confers a right to occupy the property for a particular use and the Plaintiff contends at paragraphs 10 & 12 of its Plaint that the plans it submitted for the proposed use of the Leased land were rejected .by the County Government of Nakuru.

e. THAT Section 13 (2)(d) of the Environment and Land Court No. 19 of 2011 grants the Environment and Land Court jurisdiction to deal with disputes relating to enforceable interests in land.

f. THAT the Defendant has not denied the existence of a Lease between itself and the Plaintiff, thus the proper Court to determine a dispute arising therefrom is the Environment and Land Court.

g.THAT under Section 13(7), the Environment and Land Court, which is the proper forum to hear this dispute has powers to grant the orders sought by the Plaintiff including making an award of damages and compensation.

6. In a rejoinder, the Plaintiff opposed the Preliminary objection on the ground that the dispute herein is not in relation to the lease perse and rights but the losses Plaintiff has incurred.

7. By the court’s direction on 5th July 2021, the Preliminary objection was canvassed by way of written submissions. Each party filed submissions in support of their respective arguments.

DEFENDANT’S SUBMISSIONS

8. In submissions filed on 22nd October 2021,the defendant submitted that the importance of a preliminary objection is for the court to down its tools should it find that it has no jurisdiction and cited the case of OWNERS OF MOTOR VEHICLE LILIAN VS CALTEX OIL (K) LTD (1989) IKLR.

9. The defendant submitted that the suit emanates from a lease of undeveloped land known as Title No. Nakuru/ Municipality Block 5/9 where the defendant leased 5,000square feet to the Plaintiff and the suit therefore fall within the class of use and occupation of land under 162(2) of the constitution and within the jurisdiction of the ELC under section 13 of the ELC Act.

10. The defendant submitted that the ELC court has the power to make a wide array of orders and grant any relief as it deems fit and just, including an award of damages, compensation, restitution, and costs, and therefore the prayers sought by the Plaintiff are capable of being awarded by the ELC Court and cited the case of MIDLAND PROPERTIES INVESTMENT LTD VS MASINDE MULIRO UNIVERSITY OF SCIENCE AND TECHNOLOGY (2020) eKLR, PBM NOMINEE LIMITED VS UCHUMI SUPERMARKET LIMITED (2020) eKLR.

11. The defendant submitted that the creation of a lease is governed by the Land Act and any dispute arising from the same ought to be resolved by the Environment and Land Court; that the Preliminary objection meets the threshold in MUKISA BISCUITS MANUFACTURING COMPANY LIMITED VS WEST END DISTRIBUTORS (1969) EA 696 and urged this court to strike out the suit with costs to the defendant or in the alternative transfer the suit to the ELC court for determination.

PLAINTIFF’S SUBMISSIONS

12. The Plaintiff through the firm of Mirugi Kariuki filed submissions on 9th August 2021 and raised 3 issues for determination.

13. The first issue is on the substantive cause of action in the Plaintiff’s suit and whether the cause of action in respect of breach of contract by misrepresentation lies in the high. The plaintiff submitted that the dispute is not in the lease perse but the loss incurred by the Plaintiff due to the misrepresentation of the Defendant. That Plaintiff is seeking to recover money losses and not enforce the lease or the rights attached thereto, thus the test to be used is the predominant purpose test.

14. The plaintiff submitted that due to misrepresentation of the defendant,the defendant failed to inform the Plaintiff the property was not available for development and thus the plaintiff suffered damages.

15. The second issue is that averments of ground 4 of the preliminary objection can only be ascertained by adducing evidence in court and cannot therefore stand as a point of law;that the case has to go for full trial to ascertain the interest of the parties in respect to the agreement and ground 4 is therefore misplaced and aimed at prolonging the suit and increasing costs unnecessarily.

16. The plaintiff submitted that the suit involves a breach of a contractual agreement which is determined by this court;that the Preliminary objection is incompetent and improper and out to be struck out.

17. On the issue of costs counsel submitted that costs follow the event as per Section 27 of the Civil Procedure Act Cap 21 law of Kenya and urged this court to dismiss the preliminary objection and award costs to the Plaintiff.

ANALYSIS AND DETERMINATION

18. I have perused and considered the pleadings,averments and submissions by the parties herein. The issue for determination is whether the court is seized with the jurisdiction to determine the matter.

19. What should constitute a Preliminary Objection is set out in the case ofMUKISA BISCUIT MANUFACTURING CO. LTD –VS- WEST END DISTRIBUTORS LTD(1969) EA 696,where the court stated as follows:-

“A Preliminary Objection consists of a point of law which has been pleaded or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the Court or a plea of limitation or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration… a Preliminary Objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact had to be ascertained or if what is sought is the exercise of judicial discretion.”

20. There is no dispute that the preliminary objection herein raises a pure point of law.

21. The courts stem out its jurisdiction from the constitution or legislation as was held in the Supreme Court of Kenya Application No. 2 of 2011 SAMUEL KAMAU MACHARIA V. KCB AND OTHERS [2012] eKLRwhere the court stated asfollows:

“A Court’s jurisdiction flows from either the Constitution or Legislation or both. Thus a Court can only exercise jurisdiction as conferred by the Constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law………the Court must operate within the constitutional limits. It cannot expand jurisdiction through judicial craft or innovation.”

22. Article 165(5) of the constitution of Kenya 2010 provides that the High Court shall nothave jurisdiction in respect of matters falling within the jurisdiction of the courts contemplated in Article 162(2).

23. Article 162(2) of the Constitution provides that parliament shall establish Courts with the status of the High Court to hear and determine disputes relating to the environment and use and occupation of, and title to land.

24. The Environment and Land Act Section 13 provides that:-

(1) The Court shall have original and appellate jurisdiction to hear and determine all disputes in accordance withArticle 162(2) (b)of the Constitution and with the provisions of this Act or any other law applicable in Kenya relating to environment and land.

(2) In exercise of its jurisdiction underArticle 162(2) (b)of the Constitution, the Court shall have power to hear and determine disputes;

a. relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources;

b. relating to compulsory acquisition of land;

c. relating to land administration and management;

d. relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interests in land; and,

e. any other dispute relating to environment and land.

25. The court will have to determine the pre-dominant issue before concluding that a particular dispute falls within the jurisdiction of either court. The Plaintiff argument is that the dispute herein involves recovery of money losses that arise from the breach of the agreement made by the Defendant is therefore a commercial dispute to recover money lost from the breach of the contract while the defendant contends that the dispute touches on the lease of the property and the Environment and land court is seized with jurisdiction to hear and determine the matter

26. I have perused the plaint herein and note that the claim arises from agreement between between the plaintiff and the defendant where the defendant leased its propert LR NO. NAKURU/MUNICIPALITY BLOCK 5/9. The plaintiffs contention is that after execution of the lease,he was not able to utilize the premises as the land was not available for lease.He cites misrepresentation on part of the defendant and claims money paid and loss of business as a resulted of inavalability of the premises. Plaintiff’s prayers are as captured hereinunder:-

a. Kshs 88,306,373. 50 for loss of business income for 9years,

b. General damages for breach of contract and

c. Costs of the suit.

27. From the pleadings, there is no dispute as to proprietorship rights of parties in respect to the land herein.The issue that the court will be considering is whether the defendant misrepresented to the plaintiff that the premises was available for lease by the plaintiff to set up and run restaurant business; and whther the plaintiff suffered any loss as a result of misrepresentation if any.

28. From the foregoing, it is evident that the claim arises from breach of contract. This court is therefore seized with jurisdiction to hear and determine this matter. I therefore find the preliminary objection lacks merit and proceed to dismiss with costs to the plaintiff.

29. FINAL ORDERS

1. Preliminary objection dated 9th July, 2020 is hereby dimsmissed.

2. Costs to the the plaintiff.

RULING DATED AND DELIVERED VIRTUALLY AT KIAMBU THIS 10TH DAY OF FEBRUARY, 2022.

RACHEL NGETICH

JUDGE

CORAM:

COURT ASSISTANT : KINYUA

FOR PLAINTIFF : - MIRUGI KARIUKI

FOR DEFENDANT : - MR. WACHIRA

RULING DELIVERED VIRTUALLY.

RACHEL NGETICH

JUDGE