Mutua & 51 others v Eveready Batteries Kenya Ltd [2004] KEHC 1157 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAKURU

CIVIL CASE NO. 255 OF 2002

FESTUS MUTUA & 51 OTHERS…………………………..PLAINTIFF

VERSUS

EVEREADY BATTERIES KENYA LTD……………...…DEFENDANT

RULING

On 5th November, 2002 the plaintiffs, 52 in number, filed a joint suit against the Defendant claiming general damages for breach of contract of employment plus costs of the suit. The defendant entered appearance and filed a statement of Defence on 25th November, 2002. In their plaint, the plaintiff’s averred that between 1988 to 2002 they were lawfully employed by the defendant in various capacities and their contracts of employment were subject to terms and conditions under the Employment Act Chapter 226 of the Laws of Kenya. The plaintiffs also alleged that their former employer had been deducting from their respective salaries National Social Security Fund and National Hospital Insurance Fund contributions but had failed to remit the same to the appropriate authorities since January, 1988.

They further averred that on or about January, 2002 the defendant unlawfully terminated their employment and denied them one month’s salary in lieu of Notice, unpaid leave, House allowance, arrears of salary and Gratuity.

in its defence, denied that the plaintiffs were its employees between 1988 and 2002 as alleged and put the plaintiffs to strict proof of their allegations.

Alternatively and without prejudice to the aforesaid denial, the defendant averred that if the plaintiff’s were its employees at any given time then they were only engaged as casual labourers with no employment contracts. The defendant specifically traversed all the plaintiffs’ allegations and denied them in an elaborate manner. The plaintiffs thereafter filed a reply to defence and joined issue with the defendant in its defence.

On 9th October, 2003 the plaintiffs applied to amend their plaint to include some particulars that had been omitted and on 24th February, 2004 a consent letter was filed which stated as follows:-

   “BY CONSENT

1. Leave is hereby granted to the Plaintiffs/Applicants to amend their plaint within (14) days from the date of filing this consent.

2. The defendant be at liberty to amend their defence within (10) days after service of amended plaint aforesaid.

3. Costs of appli cation dated 9 th October, 2003 to be borne by the Plaintiffs/Applicants”.

The amended plaint was filed on 1st March, 2004 and was served upon the defendant’s Advocates on 5th March, 2004. The amended plaint was almost the same as the original one except in paragraph 5 where the benefits or claims were added as follows:- two months salary in lieu of notice, leave allowance, end of service gratuity, overtime, training deductions, Providence fund and N.S.S.F.

There was also added a schedule which particularised each plaintiff’s monetary claim for salary in lieu of notice, leave due, leave allowance, end of service gratuity, house allowance, overtime, salary arrears, training deductions, N.S.S.F and provident fund. The total claim came to Kshs.56,928,743.80 and that amount was added as one of the prayers in the plaint.

On 16th March, 2004 the Plaintiff’s advocates filed an affidavit of service and also wrote a letter to the Deputy Registrar informing him that the plaintiffs wished to withdraw their claim for General damages for breach of contract of employment as prayed in item (i) of the plaint. The said letter showed that it was copied to the defendant’s advocates although they denied having received the same.

On the same day that is 16th March, 2004 the plaintiffs’ advocates requested for interlocutory judgement against the defendant for failure to file an amended defence. The interlocutory judgement requested for was for Kshs.56,928,743.30 with interests and costs and the Deputy Registrar entered judgement as requested the same day. The following day a bill of costs was filed and a Notice of Taxation issued the same day, indicating that the bill of costs was to be taxed on 22nd April, 2004. On the same day also the Deputy Registrar issued an order to the effect that the claim for general damages had been withdrawn and interlocutory judgment entered for Kshs.56,928,743.30 with interest and costs.

On 23rd March, 2004 the Defendants’ advocates applied by way of a Chamber Summons dated 24th March, 2004 for a stay of execution of the Ex parte judgment as well as for an order to set aside the ex parte judgement. They also prayed that the Defendant’s amended defence dated 16th March be deemed to be properly filed or otherwise the defendant be granted unconditional leave to file an amended defence. The application was supported by affidavits sworn by the Defendant’s Plant Manager, Mr. Geoffrey Isaac Waza and Mr. Kisila Daniel Gor Advocate on 24th March, 2004. I believe that the date shown on the chamber summons and the said affidavits is not correct because the application was filed and paid for on 23rd March, 2004. Mr. Musangi, the learned counsel for the defendant stated that his office prepared an amended defence and sent their Court Clerk to go and file the same on 16th March, 2004 but due to an afternoon meeting which had been called by the Chief Magistrate, the appropriate staff at the Civil registry were not available and so the document was paid for on 17th March, 2004 but the Court file could not be traced in the registry so that the amended defence could be filed. The same was traced on 18th March, 2004 at about 3.00p.m. but by that time the interlocutory judgement aforesaid had already been entered.

He submitted that the Deputy Registrar acted irregularly in entering a final judgment on the strength of a letter written to him by the plaintiffs’ advocate withdrawing the claim for general damages. He also submitted that the Deputy Registrar had absolutely no power to enter an ex parte judgment on an amended plaint when there was a defence on record denying the entire claim and referred the Court to the provisions of Order VI A Rule 1 (6) of the Civil Procedure rules which states as hereunder:-

“where a party has pleaded to a pleading which is subsequ ently amended and served on him under sub rule (1), then, if that party does not amend his pleading under the foregoing provisions of this rule, he shall be taken to rely on it in answer to the amended pleading, and order VI, rule 10 (2) shall have effect at the expiry of the period within which the pleading could have been amended ”.

The defence counsel also cited Halsbury’s Laws of England 3rd Edition volume 30 page 33 paragraph 70 in an effort to buttress his above submission.

He stated that the deputy registrar ought to have acted with utmost caution as the amount of money involved in the claim was quite substantial. He urged the Court to allow the defendant’s application as there had been no inordinate delay in filing the amended defence and presenting this application.

Mr. Aminga and Mr. Ndolo Advocates appeared for the respondents (plaintiffs) and opposed the defendant’s application. They relied on grounds of opposition dated 24th March, 2004 and an affidavit sworn by Mr. Ndolo on 25th March, 2004. Mr. Aminga submitted that there was no judgment on record dated 17th March, 2004, saying that the judgement was entered on 16th March, 2004 and therefore the defendant could not be granted that which he never asked for.

Regarding the defendant’s prayer to have its amended defence to be deemed as having been filed timeously, he submitted that since the consent filed by the parties on 24th February, 2004 gave the defendant a period of ten (10) days to file its amended defence (if any) from the date of service of the amended plaint which was served on 5th March, 2004, the time allowed expired on 15th March, 2004 and an extension of the period could only be by a further consent, saying that the Court had no jurisdiction to enlarge time. He referred to Mulla on Civil Procedure Code at Page 472 and the case of MUNYIRI VS NDUNGUYA (1985) KLR 370.

And regarding the plaintiff’s letter dated 15th March, 2004 withdrawing the claim for general damages, Mr. Aminga submitted that the deputy registrar had authority to enter judgement. He further submitted that the original plaint and the amendment thereof brought in a new claim altogether of a liquidated sum and that the new cause of action required a new defence because the old defence did not cover the new issues raised in the amended plaint. He said that the original defence was a general denial and there was no specific defence to the amended plaint which particularised the specific claims of each plaintiff.

He denied that the registry was not fully operational on 16th March, 2004 as claimed by the defendant’s advocate, saying that the respondent was able to file a letter that day as well a request for judgement.

On his part Mr. Ndolo fortified some of the submissions made by his leading counsel that the court had no jurisdiction to extend time for filing the amended defence when the agreed time for doing so had been agreed upon by consent and he cited the case of NGURE VS GACHOKI GATHAGA (1979) K.L.R. 152.

He further submitted that if the Court would not allow the amended defence, only the old defence would remain in force and it would not be sufficient to answer the plaintiffs’ claim for liquidated damages. He relied on the Court of Appeal Case of COACH SAFARIS LTD. VS GUSII DELUXE LTD C.A. 177 OF 1996.

He further submitted that the application should not have been brought under Order IX A of the Civil Procedure Rules as the Order was not applicable in an application as that brought by the defendant.

Having carefully considered the application filed and the grounds of opposition thereto together with the replying affidavit and having heard  counsel involved in the matter including all the authorities cited, the issues that arise for my determination can be summarised as hereunder:

(a) whether the plaintiffs could obtain a valid judgement by reason of the defendant’s failure to file an amended plaint inspite of the defendant’s original defence being on record.

(b) whether the Court has power to set aside the ex parte judgement obtained by the plaintiffs in default of the defendant’s failure to file an amended defence to the plaintiffs’ amended plaint.

(c) whether the Court has power to order the Amended defence dated 16th March, 2004 and filed on 17th March, 2004 to be deemed as properly filed when the time for filing the Amended defence had been agreed upon by consent of the parties and had lapsed on 15th March, 2004.

(d) whether the defendant rightly filed its application to set aside an ex parte judgement in default of filing an amended defence under Order IX A rules 10 and 11 of the Civil Procedure Rules.

At the beginning of this ruling, I set out the salient features of the original plaint, defence as well as the amended plaint. The main difference between the original plaint and the amended one is that the latter contained a schedulethat particularised the plaintiffs’ claims and came up with a total quantified claim of Kshs.56,928,743.30. The original defence denied all the plaintiffs’ claims in an elaborate matter and that defence cannot be described as a sham one or frivolous in any way.

Order VI A Rule 1 (6) is quite explicit that where a party has pleaded to a pleading which is subsequently amended and served, if that party does not amend his pleading he shall be taken to rely on the original pleading in answer to the amended one. This therefore means that after 15th March, 2004 and before the amended defence was filed, the defendant’s original defence filed on 25th November, 2002 was in force.

It was procedurally wrong for the plaintiffs’ Advocates to request for judgement in default of filing of an amended defence by the defendant. It was equally wrong and illegal on the part of the deputy registrar to purport to enter judgement against the defendant on account of its failure to file an amended defence when there was a valid defence on record. The record shows that the deputy registrar signed a default judgment because the defendant failed to enter appearance while that was no the case. A judicial officer ought to be very cautious before he enters any kind of judgement for whatever reason and should not allow himself to be put under pressure by any person to deal with a matter in an unwarranted haste as that may easily cause him to over look important legal provisions.

Mr. Aminga’s argument that the amendment of the plaint brought in a new claim all together of a liquidated nature which required a new defence is not tenable in light of the express provisions of Order VI A Rule 1 (6).

After the withdrawal of the plaintiffs’ claim for general damages, it was made to appear as though the plaintiffs’ suit was for a liquidated claim only and so judgment in default of filing an amended defence could simply be granted upon request but that was far from the correct legal position. Even if one was to disregard the provisions of Order VI A Rule 1 (6), the plaintiffs’ claim cannot strictly be termed as being a “liquidated demand” as envisaged under order IX A. The Civil Procedure Act does not define what a liquidated demand is but according to Supreme Court Practice 1985 Volume 1,

“A liquidated demand is in the nature of a debt…..if the ascertainment of a sum of money even though it be specified or named as a definate figure, requires investigation beyond mere calculation, then the sum is not a debt or liquidated deman d but constitutes damages”.

A claim for unliquidated damages is not made into a liquidated demand simply by the plaintiff naming a definate figure as per Halsbury’s Laws of England 4th Edition Volume 26 page 243

. I believe that the plaintiffs’ Advocate knew as such and that is why they applied for an interlocutory judgement perhaps intending to proceed to formal proof but they changed tactic and treated it as a final judgement because they proceeded to file a bill of costs based on instruction fees of Kshs.57,000,000/= and took a date for the taxation of the same.

Even if there was no defence at all, the plaintiffs’ claims would have required proof by their very nature.

The plaintiffs’ Advocates’ submission that the deputy registrar was right in entering judgement for the plaintiffs because the original defence could not suffice as a defence to the amended plaint cannot stand because if that was so, the plaintiffs ought to have filed a specific application to strike out the defence.

I therefore find that the purported entry of judgement against the defendant was in violation of Order VI A Rule 1 (6) of the Civil Procedure Rules and having arrived at that conclusion, I have no difficult in setting aside the ex parte judgement. It matters not whether the same was entered on 16th or 17th March, 2004 as long as the same was void ab initio.

Regarding the third issue for determination, it was submitted by the plaintiffs’ counsel that the Court has no power to order the amended defence to be deemed as properly filed when it was filed out of time, the time for filing the same having been agreed upon by consent. They submitted that time could be enlarged only by consent. No provision of the Civil Procedure Act or rules was cited but several authorities were referred to. In the Court of appeal Case of MUNYIRI VS NDUNGUYA which was cited to me, in a trial before the High Court between the appellant and the respondent, it was recorded in the presence of their Advocates that by consent, the case be marked as settled and the terms upon which this settlement would proceed were stated. The appellant appealed, arguing, among other things that no consent had been reached and that the Judge should have entered judgement for the plaintiff in the case or dismissed the suit. The Court held that the parties had entered into what amounted to a consent order from which no appeal is allowed and that the remedy that was open to the parties was to set aside the consent order either by review or by bringing of a fresh suit as a Court can only interfere with a consent judgement in such circumstances as would afford a good ground for varying or rescinding a contract between parties.

It is apparent that the above authority is not relevant in the present matter. In the matter of NGURE VS GACHOKI GATHAGA it was held that since a party cannot be considered to be aggrieved by an order made with his consent and in his presence, the Court has no jurisdiction under the Civil Procedure Rules to review a consent order even though there is no right of appeal against such an order. It was further held that the inherent jurisdiction of the court cannot be exercised to reverse an order which the parties had previously treated as meeting the ends of justice.

In the matter under consideration, the order which was entered into by consent was not final in nature in that it was not to bring about a consent judgment, it related to amendment of pleadings. The Court can rightly invoke its inherent power to enlarge time for filing the amended defence so that the ends of justice can be met and more so where the plaintiffs have abused the process of the court to obtain an illegal ex parte judgment in the pretext of the defendant having failed to file an amended defence within the agreed period of time.

Order VI A rule 6 is also relevant here. It states as follows:

“Where the court has made an order giving any party leave to amend, unless that party amends within the period specified or, if no period is specified, within fourteen days, the order shall c ease to have effect, without prejudice to the power of the court to extend the period ”. (emphasis supplied).

It is not lost to me that the order regarding the time for amendment of the pleadings was agreed upon by consent but equally it must be remembered that the order which was formulated by the parties and recorded in the court file was endorsed by the deputy registrar and it became a court order like any other. An Order is defined as “the formal expression of any decision of a Court which is not a decree, and includes a rule nisi”.

Having set aside the irregular ex parte judgement as aforesaid, it would be unjust and unreasonable to hold that the defendant cannot amend its defence. The defendant was late by one day and has given a reasonable explanation for the delay and besides no prejudice will be occasioned to plaintiff by the grant of the defendant’s prayer. I therefore order that the defendant’s amended defence dated 16th March, 2004 be deemed as properly filed.

The plaintiffs requested for judgement against the defendant for failure to file an amended defence and even though the provision of the law under which they did so is not stated, I have no doubt in my mind that they did so by virtue of order IX A Rule 3. Any doubts as to the above would becleared by an order which the plaintiffs obtained on 17th March, 2004 which reads as follows:

“Upon reading application presented by Musembi Ndolo Counsel for the plaintiffs under provisions of Order 24 Rule 1 and Order 9A rules 3 and 9 of the Civil Procedure Rules it is hereby ordered: -

1. That claim for general damages for breach of contract of employment as prayed in item (i) of the plaint is hereby withdrawn.

2. That interlocutory judgment for Kshs.56,928,743.30 with interests and costs is hereby ente red against the defendant EVEREADY BATTERIES (K) LTD”.

Mr. Ndolo submitted that order IX A was not the appropriate one to be used by a defendant in applying to set aside a judgement entered against it for failure to file an amended defence. He did not state what the right order was.

However as already stated earlier in this ruling, Order VI A Rule 1 (6) does not envisage a situation where a judgement would be entered in default of filing an amended defence as long as the original defence is on record. But where such an irregular ex parte judgement has been entered, the defendant can come to court under Order IX A Rule 10 and under any other relevant provision of the law and ask the Court to set aside the judgement. I therefore find that the defendant’s application is proper.

The end result is that the defendant’s application dated 24th March, 2004 is allowed with costs to be paid by the plaintiffs.

DATED, SIGNED and DELIVERED at Nakuru this 21st day of April, 2004.

DANIEL K. MUSINGA

AG. JUDGE

21.4.2004

Ruling delivered in the presence of Mr. Ndolo for the Respondents, Mr.

Musangi for the applicant.

DANIEL K. MUSINGA

AG. JUDGE

21ST APRIL, 2004