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ELCPartially AllowedEnvironment and Land Appeal E030 of 2023· [2023] KEELC 22028 (KLR)

Maxgame Limited v Sayani Investments Limited & 2 others

Environment and Land Court
23 November 2023
JMJo Mboya
6,552 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court ruled you cannot get a stay of execution against a dismissal order, and appeals from certain tribunal decisions need prior leave.

What this practically means

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Executive summary

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This ruling of the Environment and Land Court at Nairobi (Jo Mboya, J) determines two interlocutory applications arising from an appeal against a Business Premises Rent Tribunal Ruling of 17th October 2023 dismissing the Appellant's reference under Section 12(4) of the Landlord & Tenants (Shops, Hotels & Catering Establishments) Act. The Appellant sought stay of execution of the Tribunal's ruling, consequential prohibitory orders against eviction from Ground Floor of Philadelphia House (Hakati Lane Wing), and an order of status quo. The 1st Respondent sought to set aside the ex parte status quo orders granted on 23rd October 2023, contending the Appellant was never its tenant, having taken possession pursuant to a Tribunal order later vacated. The 3rd Respondent, the new tenant paying rent since April 2023, additionally challenged the court's jurisdiction, arguing the Tribunal lacked jurisdiction over a Section 12(4) reference. The court framed three issues: sufficient cause, whether stay could issue, and substantial loss. It held that no leave to appeal had been obtained although the reference arose under Section 12(4), meaning no appeal lay as of right under Section 15; that the Tribunal's dismissal was a negative order incapable of being stayed; and that substantial loss was not demonstrated since any loss was quantifiable and compensable in a pending High Court commercial suit. The Appellant's application was dismissed with costs to the 1st and 3rd Respondents; the 1st Respondent's application was allowed with costs to it alone; and the status quo orders were vacated and discharged.

Key legal issues

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01

Sufficient cause for stay of execution

Holding

The Applicant failed to establish sufficient cause; the appeal, filed without leave where leave was required under Order 43 Rule 1, undermined the claim of sufficient cause

Reasoning

Counsel conceded the reference was under Section 12(4) and that no leave to appeal was obtained. Section 15 confers a right of appeal only on parties to a reference under Section 6. The court took cognizance of the appeal's apparent incompetence, not to pronounce on it substantively, but to assess whether sufficient cause existed for stay. Finding none, it held the ingredient unmet.

p. 5
02

Stay of execution of a negative order

Holding

The Tribunal's dismissal of the reference was a negative order incapable of being stayed

Reasoning

Relying on Western College of Arts & Applied Technology v Oranga and the recent Kenya Railways decision, the court held that where a court dismisses a suit or reference, the resulting order is negative and there is nothing to execute; stay of execution is therefore unavailable. The court noted an appellant may instead seek a temporary injunction pending appeal under Order 42 Rule 6(6), but none was sought.

p. 11
03

Substantial loss

Holding

The Applicant failed to demonstrate substantial loss; any loss was ascertainable, quantifiable and compensable in money

Reasoning

The Applicant had not prima facie shown it was a tenant of the 1st Respondent, negating the plea of substantial loss. Further, a pending High Court commercial suit seeking compensation for loss of business meant any loss would be indemnifiable in monetary terms, which does not constitute substantial loss. The critical ingredient anchoring stay was therefore unproven.

p. 13

Legal principles established

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  • A dismissal order is a negative order incapable of being stayed; stay of execution lies only against positive orders requiring a party to do or refrain from doing something
  • Only a party to a reference under Section 6 of the Landlord & Tenants Act has a right of appeal under Section 15; a party whose reference arises under Section 12(4) requires leave to appeal
  • Substantial loss is the cornerstone of an application for stay of execution and must be demonstrated with plausible and cogent evidence

Court orders

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  1. 1.The Application dated the 17th October 2023 dismissed with costs to the 1st and 3rd Respondents
  2. 2.The Application dated the 27th October 2023 allowed with costs to the 1st Respondent only
  3. 3.The orders of Status Quo granted on the 23rd October 2023 and extended on the 8th November 2023 vacated and discharged

Authorities

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Legislation

  • Landlord & Tenants (Shops, Hotels & Catering Establishments) ActSection 12(4)
  • Landlord & Tenants (Shops, Hotels & Catering Establishments) ActSection 15
  • Landlord & Tenants (Shops, Hotels & Catering Establishments) ActSection 4(2)
  • Landlord & Tenants (Shops, Hotels & Catering Establishments) ActSection 6
  • Landlord & Tenants (Shops, Hotels & Catering Establishments) ActSection 2
  • Civil Procedure Rules 2010Order 43 Rule 1
  • Civil Procedure Rules 2010Order 42 Rule 6(6)
  • Civil Procedure RulesOrder XLI rule 4

Cases cited (10)

  • Kenya Women Micro Finance Ltd vs Martha Wangari Kamau
    (2020) eKLR

    Relied on by the Applicant on stay of execution and substantial loss

  • Century Oil Trading Company vs Kenya Shell Ltd
    Nairobi HCC No. 1571 of 2004 [UR]

    Relied on by the Applicant on stay of execution

  • Kenya Shell Ltd vs Benjamin Karuga Kibiru & Another
    (1986) eKLR

    Substantial loss is the cornerstone for granting a stay; without evidence of substantial loss an appeal is rarely rendered nugatory

  • Re-Hebtulla Properties Ltd
    (1979) eKLR

    Distinction between a 'reference' under Section 6 and a 'complaint'; only a party to a reference has a right of appeal under Section 15

  • Wachira Karani versus Bildad Wachira
    [2016] eKLR

    Meaning of 'sufficient cause'; liberal construction to advance substantial justice

  • Western College of Arts & Applied Technology versus Oranga
    (1976) eKLR; (1976-80) 1 KLR

    A dismissal is a negative order; there is nothing to execute and stay cannot issue

  • Registered Trustees Kenya Railways Staff Retirement Benefit Scheme Versus Milimo, Muthoni & Co. Advocates & 2 others
    2022 KECA

    Reiterating that negative orders cannot be stayed

  • Wilson v Church

    Distinguished within Western College: there a positive order required trustees to pay out of a fund

  • The Registered Trustees of the Archdiocese of Dar es Salaam vs The Chairman Bunju Village Government & Others

    'Sufficient cause' should receive a liberal construction to advance substantial justice

  • Daphene Parry vs Murray Alexander Carson

    Liberal interpretation of 'sufficient cause' must accord with judicial principles; sympathy cannot excuse delay

On appeal from
Business Premises Rent Tribunal
Reference dated 26th April 2023
Jurisdiction invoked
Section 15 of the Landlord & Tenants (Shops, Hotels & Catering Establishments) Act, Chapter 301 (appeal from the Business Premises Rent Tribunal)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Maxgame Limited v Sayani Investments Limited & 2 others", Case Analysis (2023). Environment and Land Appeal E030 of 2023. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/22028/eng@2023-11-23

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.