Nakumatt suffers blow in fight with former landlord
The troubled Nakumatt Supermarkets has suffered a blow after the Court of Appeal declined to suspend the Sh40 million security it was ordered to deposit in a case where it has sued its former Diani landlord, SouthCoast Holdings Ltd.
Three appellate judges ruled that the supermarket(under receivership) failed to demonstrate that the Environment and Land Court(ELC), which had issued the orders over two years ago “misdirected” itself in arriving at the decision
. “There is, therefore, no merit in the complaint that the judge gave conflicting or contradictory or incongruous orders. We have no basis for interfering with the decision. The appeal fails and is dismissed,” the judges Stephen Kairu, Jessie Lesiit and Pauline Nyamweya said in a ruling delivered last month.
The judges noted that Justice Anne Omollo, who issued the order, held correctly that the supermarket will not be able to pay its costs of the case based on an audit report that was provided.
The judges also said that it was correctly held that the appellant (Nakumatt) neither made any submissions on its financial ability to meet the respondent’s (SouthCoast holdings) costs in the event in which it is seeking more than Sh120 million compensation for damages will not succeed.
Judge complaints
The appellant had complained that Justice Omollo had erred in granting the order for security for costs while an earlier and similar one, requiring the respondent to deposit Sh20 million had not been complied with, varied, or set aside.
It also argued that the Judge had failed to consider this fact, which was a fundamental error that warranted the appeal's success. Through its advocate, the appellant contended that the judge had not considered its ability to pay the respondent's costs if the suit failed.
“The ELC, therefore, made an error in granting the order for security for costs, as it had not taken into account the appellant's ability to pay,” it said.
Nakumatt also argued that the order for security for costs was an attempt by the respondent to circumvent its obligations under the lease. In reply, the respondent argued that the ELC Judge had correctly applied the principles for making an order for security of costs and that the appellant's financial status and insolvency meant that it would not be able to pay the costs if the suit failed.
The respondent also pointed out that the appellant had not submitted any evidence of its ability to meet the respondent's costs and that the appellant was using its insolvency proceedings as an excuse to institute more suits instead of pursuing its claim in other existing proceedings.
However, the appellate judges upheld the ELC's decision, stating that the Judge had correctly applied the principles for making an order for the security of costs.
Nakumatt Holdings Limited (under Administration) filed a lawsuit against Southcoast Holdings Limited alleging that it was illegally and unlawfully evicted from the leased premises in Diani, Kwale county. BY DAILY NATION
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