Sagalla Lodge Limited v Samwuel Mazera Mwamunga & another (Suing as the Executors of Eliud Timothy Mwamunga – Deceased) [2022] KEELC 287 (KLR)
The bottom line
#A Kenyan court protected a hotel operator's lease during the Covid-19 downturn, confirming that withdrawn cases can't be reused to block new suits and tenants must still pay rent.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Plaintiff, via its Notice of Motion application dated 7th December 2021, meets the standards and requirements for being granted temporary injunction orders under Order 40 Rules (1)(2) and (3) of the Civil Procedure Rules 2010
- 2.Whether the Notice of Motion application and suit filed by the Plaintiff offends the doctrines of res judicata and sub judice under Sections 6 and 7 of the Civil Procedure Act and hence should be struck out as an abuse of process for non-disclosure of material facts
- 3.What are the equitable remedies that the parties are entitled to in law in the given circumstances
- 4.Who will bear the costs of the two Notice of Motion applications dated 7th December 2021 and 21st December 2021
Key legal issues
#Temporary injunction - prima facie case, irreparable harm, balance of convenience
The Plaintiff established a prima facie case with a high chance of success, irreparable harm not compensable in damages, and the balance of convenience tilted in its favour
The lease of 21st July 2015 still had eight years to run and the Plaintiff was in lawful possession. The force majeure clause was arguable. Goods were levied under distress without any full account of what was recovered, and reputational harm in the hospitality industry is not quantifiable in money. The balance of convenience favoured the Plaintiff.
Res judicata and sub judice
The doctrine did not apply because the former suit (Voi ELC No. 15 of 2020) was only decided at interlocutory stage and was withdrawn before full trial
Section 7 requires that the matter was heard and finally decided in a former suit between the same parties. The injunction ruling of 29th September 2021 was interlocutory, preserving property pending trial; the suit was withdrawn on 25th November 2021. Non-disclosure allegations were baseless since withdrawal occurred in the presence of the Defendants' advocate.
Striking out for abuse of process
The suit was not struck out; it raised triable issues
Order 2 Rule 15 powers are discretionary and exercised only in plain and obvious cases. The court must not embark on a trial at the striking-out stage and should aim at sustaining rather than terminating suits. The Plaint disclosed a reasonable cause of action against the Defendants.
Force majeure clause interpretation
The interpretation of Clause 17(a) of the lease is arguable, but upon resumption of operations the Plaintiff must adhere to the lease terms including payment of rent
Force majeure frees parties from liability when extraordinary events beyond their control occur; the Covid-19 pandemic and government closure directives hit the hospitality industry hard. However, parties remain bound by the contract, which the court cannot rewrite, so rent obligations revive on resumption.
Legal principles established
#- The ingredients of res judicata must be satisfied in conjunctive, not disjunctive, terms and interlocutory orders do not amount to a former suit heard and finally decided
- Striking out powers are discretionary and exercised only where the pleading is plainly and obviously unarguable
- A court cannot rewrite a contract between parties unless coercion, fraud or undue influence are pleaded and proved
Court orders
#- 1.The Notice of Motion dated 7th December 2021 by the Plaintiff is allowed with costs, conditional on the Plaintiff strictly conforming to the terms of the Lease Agreement of 21st July 2015
- 2.The Notice of Motion dated 21st December 2021 by the Defendants is dismissed for lack of merit with costs to the Plaintiff
- 3.The Notice of Motion dated 18th October 2021 by the Appellant/Applicant is allowed: stay of execution of the ruling of Hon. F. N. Nyakundi issued on 29th September 2021 in Voi ELC No. 015 of 2020 pending hearing on 9th June 2022; Appellant granted 21 days to compile and prepare the record of appeal for directions under Section 79B and G of the Civil Procedure Act and Order 42 Rules 11 and 13
- 4.The Plaintiff and Defendants to prepare and furnish the court with full and detailed accounts of actual rental remittances within 14 days with a view to directing payment of a reasonable sum towards rent arrears
- 5.The matter to be fixed for hearing and final determination within 90 days; mention on 13th May 2022 for production of books of accounts, reasonable advance payment towards rental arrears, and a pre-trial case-management conference under Order 11
- 6.Costs of the two Notice of Motion applications dated 7th December 2021 and 21st December 2021 to be borne by the Defendants in the cause
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Chief Magistrate's Court, Voi
- ELC No. 15 of 2020
- Jurisdiction invoked
- Article 162(2) of the Constitution / Environment and Land Court Act (Environment and Land Court, Mombasa)
- Consolidated with
- ELC Appeal No. 69 of 2021, Voi ELC No. 15 of 2020, Voi ELC No. 48 of 2021
Relief refused
#Striking out of the Plaintiff's suit as an abuse of process / for res judicata and sub judice
The former suit was never heard and finally determined - only interlocutory orders were granted - and the suit was withdrawn; the pleadings disclose a triable cause of action
Setting aside of the interim injunction orders issued in favour of the Plaintiff
The application of 21st December 2021 was dismissed for lack of merit
Costs
Costs of the two Notice of Motion applications dated 7th December 2021 and 21st December 2021 to be borne by the Defendants in the cause; costs of the Appellant's application provided for as allowed
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
THAT the Notice of Motion application dated 7th December, 2021 by the Plaintiff herein be and is hereby allowed as the same has merit and all other orders sought granted thereof with costs
THAT the Notice of Motion application dated 21st December, 2021 by the Defendants be and is hereby dismissed for lack of merit with costs to the Plaintiff.
THAT the Plaintiff and the Defendants to prepare and furnish this court with a full and detailed accounts on the actual rental remittance from the business premises within the next fourteen (14) days from the date of this ruling
The condition for the grant of an interlocutory injunction are now, I think well settled in East Africa.
the doctrine of Sub Judice and Res Judicata collapses
Issues in the judgment
#Inconsistent dates for the Plaintiff's application and issues framed - the court variously refers to 7th December 2021 and '7th December, 2011' in framing the issues
The court states the injunction application 'has no merit and therefore fails' in its analysis yet allows it in the disposition
Inconsistent appeal number - the memorandum of appeal is referred to as ELC Appeal No. 69 of 2022 at the start and ELC Appeal No. 69 of 2021 elsewhere
Amount of rent arrears inconsistently stated - Kshs 5,465,040 in the affidavit versus 'Kshs. 5, 000.00' in the brief facts
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Sagalla Lodge Limited v Samwuel Mazera Mwamunga & another (Suing as the Executors of Eliud Timothy Mwamunga – Deceased) [2022] KEELC 287 (KLR)", Case Analysis (2022). ELC No. 242 of 2021 (with ELC Appeal No. 69 of 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/287/eng@2022-04-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.