Arun C Sharma v Ashana Raikundalia t/a A Raikundalia & Co Advocates & 2 others [2014] KEHC 2430 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & ADMDIRALTY DIVISION

MISC. CIVIL APPLICATION NO. 802 OF 2010

ARUN C. SHARMA…….……………….……………PLAINTIFF/RESPONDENT    

VERSUS

ASHANA RAIKUNDALIA T/A                                                                                    

A. RAIKUNDALIA & CO. ADVOCATES.................1^ST DEFENDANT /APPLICANT

NISHIT RAIKUNDALIA…………………...……….…2^ND DEFENDANT/APPLICANT

RULING

[1]     I am considering a Notice of Motion dated 31^st July, 2014 by the Defendants/Applicants. The applicants are seeking for two significant orders; a) a stay of execution of the decree of this court given on 8^th December, 2011; and b) review and variation of orders given on 2^nd July, 2014. It also seeks for costs of the application. 

The Applicants’ Gravamen

[2]     The application is supported by the affidavit of the 1^st Defendant sworn on 31^st July, 2014. The major grounds are; 1) that the orders of stay in favour of the Applicants were granted on 3^rd July, 2013 on condition that the Applicants deposit the entire decretal sum of Kshs. 11,000,000/= within 30 days, which the Applicants have not been unable to raise; 2) The Defendants’ have filed Civil Appeal No. 128 of 2014 against the summary judgment entered on 8^th December, 2011 in favour of the Respondent by Kimondo J.  The Defendants claim the appeal has a high probability of success and if the Respondent is allowed to execute, the appeal would be rendered nugatory; 3) That the 1^st Defendant has not practiced law for some time and that if the Plaintiff is allowed to execute, the 1^st Defendant shall be rendered destitute, for, execution can only be by way of attachment of her personal effects.  The 1^st Defendant also deposed that she is not in any gainful employment at the moment as the instant dispute led to the closure of her law firm which was her only source of livelihood. And, despite making reasonable efforts to raise the entire decretal sum and deposit in court, she was unable to do so within the 30 day period.  The Applicants, in lieu of cash deposit proposes to give an alternative security in form of a title deed for the parcel of land known as NGUIRUBI/NDIUNI/333 ‘B’ which has been valued at Kshs.15,000,000 and is sufficient to cover the decretal sum of Kshs. 11,000,000/=. According to the Applicants, the requirement for deposit of security is not intended to punish the defendant but to secure the interest of the Plaintiff. As such, the Defendants should be allowed to deposit the aforesaid title deed in court as security. The 1^st Defendant also contended that if the application herein is not allowed, her right to a fair hearing shall be jeopardized.

[3]     Mr. Mwangi, counsel for the Applicants canvassed the application by way of oral submissions. The learned Counsel told the Court to balance the rights of the Judgment Debtor and those of the Decree holder. He emphasized the need to allow the alternative security but which was in the name of Anne Waithera Haruni. He pointed out that from the notification of sale of movable property dated 20^th June, 2014, the sale of the listed goods could not realize the decretal sum.  In the opinion of Mr. Mwangi, the pending appeal had a high probability of success and the Plaintiff had not shown that he had the means of reimbursing the decretal sums that were to be paid to him. Counsel also submitted on the cheques that were dishonored. The cheques were issued by the 2^nd and 3^rd Defendant, but according to Mr. Mwangi, the matter could be argued in another forum and not in the instant application. In sum, the Defendant’s urged the court to allow the application and grant the orders sought.

The Respondent opposed application

[4]     The Plaintiff/Respondent opposed the application for stay. He filed an affidavit sworn on 13^th August, 2014 which was in reply to the application under consideration and also in support of his application dated 13^th August, 2014. The plaintiff contended that the Defendants’ application lacked merit and was an abuse of the court process. It was further deposed that the defendants were mischievous and employing all manner of tricks to frustrate the execution of the decree in favour of the Plaintiff. According to the Plaintiff, the Defendants were behind the objection proceedings filed by another law firm in respect of two motor vehicles which they willingly and voluntarily offered to Moran auctioneers in lieu of the attached goods. Further, the defendants on execution paid Kshs. 100,000/= in cash and issued a cheques of Kshs. 549,938/= in settlement of the decretal sum albeit the cheque was dishonored. The plaintiff took issue with the proposed security in the parcel of land known as NGUIRUBI/NDIUNI/333 ‘B’; it is meant to shift the courts attention to enable the Defendants enjoy an unnecessary stay of execution. The Plaintiff additionally contended that the defendants could use the said title to borrow the decretal sums and deposit the same in court as ordered. In addition, the Defendants did not come to court with clean hands as they had previously misled the court to get another stay order. The Plaintiff further reiterated that the Defendant were revisiting issues on alleged deed of settlement which were disposed of by the trial court addressed an made findings about with regard to the deed of settlement. The plaintiff stated that the Defendants were all capable of paying the decretal amounts except that they were working in cahoots with each other to defeat justice by delaying the execution process.

[6]     Mr. Kirimi amplified the Respondent’s arguments. According to Mr. Kirimi, the conduct of the Defendants was contrary to law since the Defendants had failed to deposit the sum of Kshs. 11,000,000/= as part of the conditional stay issued by the court. It was further pointed out that the objection proceedings were filed on 15^th July, 2014 wherein an order of Stay was granted. According to Mr. Kirimi, the Plaintiff was not served with the said orders and it was thus clear that the Defendants intended to enjoy the stay that was issued to the objector.  Counsel submitted further that the 3^rd Defendant issued a cheques of Kshs. 549,938/= in answer to execution herein. The cheque was dishonoured and that is clearly indicative that the Defendants had come to court with unclean hands. Further it was submitted that the proprietor of the title number Nguirubi/Nduini/333 “B”, Anne Waithera Haruni, was not a party to the suit and the court could consequently not issue orders against her. In the foregoing, Mr. Kirimi also argued that the deposit of the aforesaid title was not suitable security as suggested by the Defendant. He stated that in the alternative the Defendants should charge the land and deposit the decretal sum as ordered by the court. Mr. Kirimi in closing urged the court to dismiss the application with costs as the Defendants were merely delaying the execution process.

THE DETERMINATION

Issue for determination

[7]     I have considered the affidavit evidence filed in court by the parties herein. I have also considered all the rival arguments presented in court. The order sought to be reviewed herein was made by this court on 2^nd July, 2014 and specifically granted the Defendants a stay of execution of warrants of attachment provided that the applicants deposited in court the entire decretal sum within 30 days from the date of the order. In real terms, the Defendant ought to have complied with the said order by 2nd August, 2014. In the event of default, the natural consequence is that the stay will lapse and execution will resume. The defendants filed this application on 1^st August, 2014 which was a day before the said conditional stay of execution lapsed.  I should, therefore, determine whether this court should review or vary the orders given on 3^rd July, 2014.

[8]     The Defendants have cited Section 80 of the Civil Procedure Act, and Order 45 of the Civil Procedure Rules 2010. Section 80 of the Civil Procedure Act states as follows;

“80. Any person who considers himself aggrieved—

(a) by a decree or order from which an appeal is allowed by this Act, but from which no appeal has been preferred; or

(b) by a decree or order from which no appeal is allowed by this Act,

may apply for a review of judgment to the court which passed the decree or made the order, and the court may make such order thereon as it thinks fit.”

Order 45 of the Civil Procedure Rules 2010 also states thus;-

“45. 1(1) Any person considering himself aggrieved-

(a)  by a decree or order from which an appeal is allowed, but from which no appeal has been preferred, or

(b) by a decree or order from which no appeal is hereby allowed

And who from the discovery of new and important matter or evidence which, after the exercise of  due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or the order made, or  on account of some mistake or error apparent on the face of the record, or for any other sufficient reasons, desires to obtain a review of the decree or order may apply for a review of judgment to the court which pass the decree or made the order without unreasonable delay”

[9]     The above provisions circumscribe the jurisdiction of the Court in an application for review. The conditions in Order 45 of the Civil Procedure Rules 2010 have to be satisfied although within a much wider approach expressed in constitutional desire in Article 159 of the Constitution and the overriding objective in sections 1A and 1B Civil Procedure Act to serve substantive justice. Now that the Applicants came under section 80 and Order 45 of the CPA and CPR, respectively, have they satisfied the standard as stated in  Kithoi v Kioko (1982) KLR 177, page 181, by the Court of Appeal that;

“……….the Civil Procedure Rules Order XLIV demands inter alia, that an application for review must be based in the discovery of new and important evidence which was not within the applicant’s knowledge or could not be produced by him at the time when the decree was passed or the order made or on account of some mistake on the face of the record or for any other sufficient reason. The application for review must strictly prove the grounds for review, except for review on the ground of mistake or error apparent on the record, falling which the application will not be granted.” (Emphasis added)

[10]   Without administering any sudden shock, I do not think so. There is no discovery of any new and important matter or evidence. And, there is no any mistake or error apparent on the face of the record. Perhaps, in the constitutional desire that courts should take a much broader approach in applying legal thresholds, the only point on which the instant application can be decided is whether there is any other sufficient reason presented before the court to warrant the court to vary the orders herein.  It was the argument of the defendants that their application for review was made before the time for depositing the decretal sum had lapsed. The argument by the Applicants that time, therefore, stopped to run especially when Mwongo J issued an interim relief on 1^st August, 2014 and that the defendants were not under any obligation to comply with the order which they now seek to be varied, were considered by this Court and found to be most unfortunate and untenable because Mwongo J did not stay the orders on 2^nd July, 2014. He only extended stay of execution up to 25^th August, 2014 when the file was to be placed before me.  And it should be understood that the filing of the application for review was not a stay of the orders issued on 2^nd July, 2014. Without doubt the defendants have and are still in breach of the orders of 2^nd July, 2014. They have not deposited the decretal sum as ordered by the Court. The breach notwithstanding, is there sufficient reason to vary the order of 2^nd July, 2014?

[11]    The Applicants are proposing to deposit land known as Nguirubi/Nduini/333 “B”, which belongs to and is in the name of Anne Waithera Haruni as security in lieu of deposit of the decretal sum. I presume since the Applicants are saying they have filed an appeal, the security they are proposing is pursuant to Order 42 rule 6 of the Civil Procedure Rules. The purpose of the security needed under Order 42 is to guarantee the due performance of such decree or order as may ultimately be binding on the Applicant. It is not to punish the judgment-debtor. The alternative security being offered presents several problems. The first one-the security is owned by another person. This is a civil suit where the Applicants are judgment-debtors. But, the Applicants seem to have borrowed from the criminal procedures where a person stands surety for the attendance of another in court. Civil process is quite different because, in a civil process, the judgment is like a debt hence the Applicants become and are judgment-debtors in relation to the Respondent. That is why any security given under Order 42 rule 6 of the Civil Procedure Rules acts as security for the due performance of such decree or order as may ultimately be binding on the Applicants. I presume, the security must be one which can serve that purpose. When one imagines, if it becomes necessary, the steps required to be taken for such security being offered to be realized by the decree-holder, it becomes absolutely clear that mere affidavit by the owner does not convert the said property into any legally binding security for the due performance of such decree or order as may ultimately be binding on the Applicant. I, therefore, hold that the security offered is not suitable for purposes of Order 42 rule 6 of the CPR. The Court should always remember that both the Applicants and the Respondent have rights. The Applicant has a right to his appeal and the prospects that it shall not be reduced to pious aspiration or a barren result if they pay out the decretal sum to a person who may not make a refund. The Respondent, on the other hand, has a right to the fruits of its judgment which should not be taken away; and where the right is postponed, it can only be upon adequate security for the due performance of such decree or order as may ultimately be binding on the Applicant. There is no legally binding assignment of the proprietary rights in the proposed security which the court may consider adequate to secure the due performance of such decree or order as may ultimately be binding on the Applicant. What is also startling is that the Applicants have even deposed that they may not be possessed of sufficient means to pay the decretal sum which they say is colossal. The defendants’ generally based their application on alleged difficulties especially of the 1^st defendant who stated has not practiced law in a long time, and that she will be rendered destitute if the execution of the warrants was allowed to take place. This not being a bankruptcy cause, the said argument can only work against the judgment-debtor as it depicts not quite bona fide intention in applying for stay. In any event, she did not provide the Court with any material to prove the difficulties she was allegedly facing in raising the decretal sum and I am not able to make any finding on those allegations. In the circumstances, the Applicants have not offered sufficient reason or alternative security to warrant the Court to vary its order of 2^nd July, 2014. Even going by my rendition in the first part of this ruling, the Applicants are guilty of breach of a court order and even issued a bad cheque to the Respondent when execution was levied. Thus, it will be perfect to label them as litigants who have come to court with unclean hands. And as it were, equity will not show any love to a person who has acted mala fides in seeking its hand. For those reasons, there is not any sufficient reason on which the Court may act in favour of the Applicants. Accordingly, I decline their request to vary the orders of 2^nd July, 2014. I dismiss their request for alternative security. The upshot is that the defendants’ application dated 31^st July, 2014 and filed in court on 1^st August, 2014 is dismissed.  In effect, the orders of 2^nd July, 2014 remain as ordained that the stay was conditional upon depositing the decretal sum in Court within 30 days thereof. But in the interest of justice, I am still inclined to extend the time for compliance with the orders of 2^nd July, 2014 by another 30 days from today. It is so ordered. I make no order as to costs although the conduct of the Applicants deserved to be penalized by an award of costs against them.

[12]    By this ruling the application by the Plaintiff dated 13^th August 2014 is also determined as it sought the orders of 2^nd July 2014 to be set aside.

Dated, signed and delivered in court this 16^th day of October, 2014

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F. GIKONYO

JUDGE