Nakumatt Holdings Limited has lost its appeal against Southcoast Holdings Limited where they demanded general damages of Sh 7 billion for unlawful eviction.
It had filed a suit complaining against Southcoast Holdings Limited as the landlord where they illegally and unlawfully evicted it from the leased premises on title number, Kwale Diani Beach Block 818.
Nakumatt sought judgment against Southcoast for the relief of Sh 7 billion for the loss incurred after the eviction.
In its calculation, they wanted a reward of Sh 120 million for the loss of fixtures, fittings, furniture and equipment.
For the loss of stock, Sh 69,355,848, loss of stock and stock release cost of Sh 12.5 million, loss of income for the unexpired term of the lease at the rate of Sh 8,804,349 per month.
They were further seeking an order compelling Southcoast Holdings Limited to hand over the fixtures, fittings and machinery, general damages and intermediate profits.
Simultaneously they made another application “seeking interim and mandatory injunctive orders to compel Southcoast to hand over the fixtures, fittings and machinery, furnitures and equipments in the leased premises pending the hearing and determination of the suit.”
During the hearing of the interlocutory, the counsel representing Southcoast Holdings Limited applied for the adjournment whereas the counsel representing Nakumatt Holdings Limited opposed the application for adjournment.
In doing so the court imposed a condition where Southcoast Holdings ordered to make a deposit of Sh 20 million to be held by the agreement of the two parties and the account to be opened in the joint names of advocates on record.
The respondent “did not comply with that order for payment of the deposit and there was distasteful and uncongenial exchange of correspondence between counsel for the two parties in regard.”
The respondent further presented an application seeking orders for the appellant to deposit security for costs for Sh 157, 847,196 on the ground that, among other things the appellant is insolvent, and that its liabilities against its assets of Sh 6 billion.
In an affidavit sworn in support of the application, Sultan Khimji a director of Southcoast Holdings Limited deposed that the appellant’s suit is incompetent and that given the insolvency of the appellant, and the fact that it was under administration, the respondent would have no chance of recovering costs from the appellant, should the suit fail, and that the respondent’s suit cost of the suit on instruction fees and getting up fees alone would be Sh 150,847,196,
“The appellant should be ordered to deposit security for those costs.”
In response to the application, Ankool Shah a director of the appellant in his affidavit, testified that the respondent’s application was made in bad faith, misconceived and an attempt by the respondent to circumvent its obligations under the lease and under the orders given on November 12, 2018.
After hearing the application by both parties, the judge delivered the ruling expressing that it was in the public domain that the appellant was undergoing financial challenges and had commented insolvency proceedings.
Even though the parties have a right to pursue their claims in court, the appellant’s financial status to meet the respondent’s costs is in doubt and the interest of justice the order of security was merited.
In dismissing the appeal, the bench of three judges led by Justice Gatembu Kairu was satisfied that the audit report that was provided that “the appellant will not be able to pay its costs” was not opposed by the appellant by filing any submissions on its ability to pay the respondent’s costs in the event of the suit failing.
In considering the rights of the parties to have an opportunity to pursue their claims in court before stating that “since the financial status of the plaintiff to meet the costs of the defendants is in doubt, it serves the interest of justice that the court ordered, “both parties to provide security for costs.”
Following the facts provided by the counsels for respondent Philip Muoka Advocates, they convinced the court to disregard the plaintiff’s appeal.
In those grounds provided before the court, the appeal was dismissed with costs to the respondent.