[2020] KEHC 10374 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND TAX DIVISION

MISC. CIV. APPLN. NO. E1191 OF 2020

BETWEEN

UCHUMI SUPERMARKETS PLC..................................APPLICANT

AND

TOWNSVILLE HOLDINGS LIMITED......................RESPONDENT

R U L I N G

1. By a Motion on Notice dated 29/10/2020 made, inter alia, underOrder 51 of the Civil Procedure Rules, Section 1A, 1B and 3A and 95 of the Civil Procedure Act, Cap 21 and Article 159(2) of the Constitution of Kenya, 2010 the applicant sought the following orders: -

“a) THAT the Application herein be certified urgent, service thereof be dispensed with and the same be heard ex-parte in the first instance.

b) THAT the Landlord by itself and/or its agents be and is hereby restrained from harassing, Levying distress for rent, attaching selling, auctioning, disposing, the Applicant’s property, pending the hearing and determination of this Application.

c) THAT Stay of execution be and is hereby granted against the intended auction of the Applicant’s assets as proclaimed by CHADOR auctioneers.

d) THAT the Landlord by itself and/or its agents be restrained from evicting and/or interfering with the operations of the Applicant pending the hearing and determination of this Application.

e) THAT costs of this application be in the cause”.

2. The application was supported by the affidavits of Judith Nduku Matata, the Legal Officer of the applicant, sworn on 29/10/2020 and 25/11/2020, respectively. It was deposed that the parties are in a landlord/tenant relationship. That relationship has been smooth for over 20 years save that for the last one year, the applicant has had challenges paying the agreed rent in full. This has been made worse by the Covid-19 pandemic which has ravaged businesses world over.

3. That for the foregoing reasons, the respondent has been threatening the applicant with distress for rent as well as eviction. That In the Matter of Uchumi Supermarkets PLC Insolvency Petition No. 25 of 2018, Kasango J had issued an order protecting the applicant from harassment and from any form of execution proceedings. That the respondent had instructed CHADOR Auctioneers to levy distress against the applicant. The applicant therefore sought protection in terms of the foregoing prayers.

4. The application was opposed by the respondent through a replying affidavit sworn on 17/11/2020 by Janerose Musee Nekesa, the respondent’s Property Manager. The respondent contended that the Lease between the parties in the property known as LR No. 209/8300 located on Jogoo, expired by operation of contract on 31/10/2020. That in the premises, there is currently no subsisting Lease in respect of which the applicant can continue to occupy its property and seek the court’s protection. The respondent complained that this fact was not disclosed at the time the ex-parte orders were being made.

5. The respondent denied attempting to proclaim or attach the applicant’s assets during the subsistence of the Lease and that it was its desire that the applicant vacates the premises as there is no subsisting Lease. That the proclamation was done after it became clear that the applicant was not willing to vacate upon expiry of the tenancy term.

6. Although the Court directed that the application be canvassed by way of written submissions, by the time of writing the ruling, only the respondent had filed the same. It was submitted that the application was incompetent as the prayers sought were already spent; that the prayer for stay of execution was not predicated on any suit. That sections 1A,1B and 3A and 95 ofthe Civil Procedure Act do not presuppose the filing of an interlocutory application without a substantive suit.

7. It was further submitted that the applicant had failed to disclose that the lease with the respondent had expired. That the ruling in the insolvency case did not renew the lease neither did it bar the applicant from renegotiating a new lease with the respondent. That the respondent was willing to have the applicant vacate the premises amicably and take out all its goods.

8. I have considered the depositions and the submissions What is before Court is a miscellaneous application for the orders sought above. I set out the orders sought by the applicant in extenso to show the manner in which the application is a non-starter. Prayer a) was granted and is therefore spent. Prayer Nos. b) and c) were sought to run until the application was heard inter-partes.The Motion was heard inter-parteson 16/11/2020. In this regard, those prayers are also spent.

9. The only substantive prayer that remains for consideration is prayer c) which read; “THAT Stay of execution be and is hereby granted against the intended auction of the Applicant’s assets as proclaimed by CHADOR auctioneers”.

10. That prayer is not predicated on any suit. It hangs in the air. The law is quite clear. Section 19 of the Civil Procedure ActandOrder 3 Rule 1 of the Civil Procedure Rulesprovide to the effect that suits are to be instituted as provided for under the Rules. The prayer no. d) is either in the form of an injunction or restraining order. It has to run pending the determination of the dispute. However, the way it has been prayed, it is prayed with finality.

11. In view of the foregoing, I find the application to be fatally defective and it is for dismissal.

12. However, there is one issue which the Court has to consider. There is no dispute that there is in existence an order by Kasango J made in the insolvency matter, In the Matter of Uchumi Supermarkets PLC Insolvency Petition No. 25 of 2018. In that matter, Kasango J ordered on 1/7/2020, inter alia,that the claims before 2/3/2020 be settled in terms of the Company Voluntary Arrangement (CVA). That the CVA be reviewed after every 6 months.

13. Further, the Court directed that; “The Company’s Landlords may exercise a right of forfeiture by peaceable re-entry in relation to premises let to the company only with the consent of the Supervisor or with the consent of this Honorable court”.

14. The evidence on record shows that the Lease between the applicant and the respondent was entered into on 1/8/2020 for 5 years and three months. The same was to terminate by effluxion of time on 31/10/2020. It is after that date that the respondent had the right to demand possession of the demised premises.

15. However, on 29/10/2020, the respondents Advocates notified the applicant that the Lease between the parties would terminate on 31/10/2020 and that the applicant should vacate the premises by then. That on 30/10/2020, CHADOR Auctioneers moved and proclaimed properties belonging to the applicant vide Proclamation Nos. 051 and 052.

16. That action went contrary to the order of Kasango J of 1/7/2020. The order of the Learned Judge was categorical. After the CVA was approved on 1/7/2020, no Landlord was to exercise any act of forfeiture, re-entry or even distress for rent without reference to or consent of the Supervisor of the Company or approval of the Court.

17. The Notices from the respondent’s Advocates regarding the lapse of the Lease were addressed to the respondent personally. None was ever sent to the Supervisor of the Company for his/her consent nor was the approval of the Court sought in terms of the order of Kasango J of 1/7/2020.

18. In view of the foregoing, this Court cannot fold its hands on the altar of technicality and allow the respondent blatantly disobey a lawful Court Order. Court orders, however detestable, must be obeyed for the sake of the rule of law. The respondent should have complied with the said order, as it has sought vide its Motion lodged in or about 17th or 19th November, 2020.

19. In this regard, while I dismiss the application by the applicant for sheer incompetence, under Article 159 of the Constitution and S3A of the Civil Procedure Act, I hereby\ set aside the proclamation dated 30/10/2020 and restrain the respondent from harassing the applicant in any way whatsoever until further orders of this Court.

It is so ordered.

DATEDand DELIVEREDat Nairobi this 14th day of December, 2020.

A. MABEYA, FCIArb

JUDGE