Boleyn Magic Wall Panel Ltd v Nesco Services Limited (Civil Suit 16 of 2017) [2022] KEHC 10020 (KLR) (20 July 2022) (Ruling)
Neutral citation:
[2022] KEHC 10020 (KLR)
Republic of Kenya
Civil Suit 16 of 2017
GV Odunga, J
July 20, 2022
Between
Boleyn Magic Wall Panel Ltd
Plaintiff
and
Nesco Services Limited
Defendant
Ruling
1.On March 24, 2022, this Court delivered a ruling in this matter in which it inter alia directed that there be a stay of execution of the judgement and decree delivered herein pending the hearing and determination of Nairobi Court of Appeal Civil Appeal No. E322 of 2020 on condition that the judgement debtor, the applicant herein, furnishes a Bank Guarantee from a reputable financial institution for the payment of Kshs 25,000,000.00 during the pendency of the said appeal within 30 days of the date of the said ruling. Subject to compliance with the said order, the decree order nisi was to be made absolute.
2.It is clear that the Judgement Debtor /Applicant was unable to comply with the said order because by a Motion on Notice dated 5th of May 2022 expressed to be brought under Order 45, 42 Rule 6 (1), (2), (7) of the Civil Procedure Rules and Sections 1A, 3A and 63 of the Civil Procedure Act, Cap 21 Laws of Kenya, the applicant is seeking the following orders;a.Spentb.Spentc.Spentd.That the Honourable Court be pleased to extend the time within which to present the bank guarantee ordered in the order of March 24, 2022 by a further 30 dayse.That in the alternative to 4 above, the court be pleased to admit land parcels number Idaho/Iguhu/1822 measuring 1.1 Ha and Idaho/Iguhu/ 2305 measuring 1.22 Ha both in the name of BMW Precast Housing Development Limited and valued at Kshs 34,500,000 as security for stay of execution pending appeal in lieu of the bank guarantee.f.That costs of this application be provided for.
3.The Application was supported by the affidavit of Lie Weijun, the director of the Plaintiff/ Applicant, dated 5th of May 2022, in which he stated that subsequent to the aforesaid ruling, he immediately applied for a bank guarantee from credit bank which he was convinced he would be granted but on further follow up on April 20, 2022 and on April 24, 2022, the bank responded that it would only issue a bank guarantee on the basis of a marketable collateral. According to him, the response came quite late in the day forcing him to go back to the drawing board.
4.The deponent deposed that the applicant had now secured unencumbered assets from its sister company in the form of land parcels number Idaho/Iguhu/1822 measuring 1.1 Ha and Idaho/Iguhu/2305 measuring 1.22 Ha both in the name of BMW Precast Housing Development Limited which he has now presented as security for the bank guarantee that he has applied for. He deposed that the parcels combined are valued at Kshs 34,500,000 however the process of charging the parcels before the bank can issue a bank guarantee may take a while since a valuation and due diligence have to be undertaken by the bank independent of the Applicant.
5.It was averred that the delay was caused by the Respondent who failed to serve the bank with a garnishee order nisi that would have enabled the bank participate in these proceedings and that the Bank was were shocked to find that a garnishee order absolute had been issued against them without any notification.
6.According to the deponent, the applicant will suffer irreparable loss and damage if the orders sought are not granted. He deposed that as at March 30, 2022, he had already made an application for Bank guarantee and the bank embarked on finding out information but the Bank did not respond in time. In his deposition, the time taken in verifying the garnishee order nisi ate into the time available for processing the bank guarantee as the bank had to protect its interest by filing an application challenging the garnishee order.
7.In opposition to the application, the Respondent filed the following grounds of opposition dated 16th of May 2022;a.The application is fundamentally defective, bad in law and a nullity.b.The application is misconceived, untenable and a complete abuse of the court process.c.The application is plainly res judicata in view of the ruling of the court of March 24, 2022.d.That the Honourable Court lacks jurisdiction to entertain the Application dated May 5, 2022 as it is functus officio on the issue of stay of execution and the only routes available to the Plaintiff/ Applicant are through review and appeal and neither is before the court.e.That the Application seeks for flies in the face of the holding in CIC General Insurance Limited vs Phylllis Mbula [2019] eKLR that a court cannot extend the validity of a lapsed order.f.Accordingly, the Defendant/ Respondent seeks that the Application dated May 5, 2022 be dismissed with costs.
8.The Applicant filed a Supplementary affidavit dated 26th of May 2022 in which he deposed that he has done everything within his powers to obtain a bank guarantee but the same has not been possible due to the Applicant’s low credit rating. He regretted that he would not be in a position to furnish the Court with a bank guarantee as directed and instead offered land parcels Nos. Idaho/Iguhu/1822 measuring 1.1 Ha and Idaho/Iguhu/ 2305 measuring 1.22 Ha both in the name of BMW Precast Housing Development Limited, his other company valued at Kshs 34,500,000 as alternative security. According to him, the said parcels are unencumbered.
9.He disclosed that he had procured a deed of guarantee from the registered proprietor confirming acceptance that this parcel can be used as security. He annexed a copy of the full valuation report and invited the Court to also place a restriction on the said parcel as it deems it necessary.
10.On behalf of the Applicant, it was submitted that this Court is not functus officio with respect to reviewing its order by extending time to comply since this is not a fresh application for stay orders and that the application does not seek to disturb the substantive findings of the court hence this Court has jurisdiction to determine the matter based on the case of Silvanus Kizito vs. Edith Nkirote Mwiti [2021] eKLR.
11.This Court was invited to take judicial notice of the fact that the Court of Appeal is strained in terms of human resources and there is a backlog of cases and therefore it takes several years for applications of stay of execution to be listed for hearing at the Court of Appeal in Nairobi where the same has not been certified. He submitted that in compliance with the overriding objective of the court, the application should not be thrown out but the most reasonable utilization of judicial time and resources would be to extend the duration within which to comply with production of the security.
12.On admission of an alternative security, it was submitted that the applicant has demonstrated how it extensively engaged its banker with both physical meetings, email correspondences and letters but has not been favoured with a bank guarantee. It was submitted that orders and of particular of the one seeking to be reviewed are not cast on stone and the court has powers to vary the same. It was submitted that the Applicant has expressed and demonstrated desire to comply with the orders of the court by initially presenting a crane as security then proactively pursuing a bank guarantee which was rejected and now obtaining from its sister company two parcels of land as security.
13.It was submitted that land is one of the soundest assets one can own. That the Respondent may benefit from the sound security fronted by the Applicant in place of the bank guarantee which he had difficulties securing. The court was invited to exercise its residual powers in favour of the Applicant and ensure the ends of justice are met.
14.On the part of the Respondent, it was submitted that the Application was res judicata in view of the orders of the Court of March 24, 2022granting conditional stay. In support of this contention, the Respondent cited Section 7 of the Civil Procedure Act and the case of Uhuru Highway Development Limited vs. Central Bank of Kenya 72 Others [1996] eKLR as well as Njue Ngai vs. Ephantus Njiru Ngai and Another [2016] eKLR and it was submitted that the order of stay of execution of the judgement and decree of the Court of November 18, 2020 as sought through prayer 3 is a similar prayer sought in the Application dated September 15, 2021 which application was allowed through the ruling of March 24, 2022.
15.It was further submitted that the Court was functus Officio and cannot be asked to appeal on its own decision. Therefore, any party aggrieved or not satisfied with that decision has only two avenues either through review or appeal to a superior court. Based on Section 80 of the Civil Procedure Act and Order 45 of the Civil Procedure Rules 2010 and Bellevue Development Company Limited vs. Vinayak Builders Limited & Another [2014] eKLR and Julia Wangeci Githua vs. Commissioner General of Prisons & 2 Others [2021] eKLR.
16.It was submitted that the applicant had not demonstrated any of the grounds of review as per the case of Otieno Ragot & Company Advocates vs. National Bank of Kenya Limited [2020] eKLR and it was noted that there is no order in the notice of motion application seeking review or setting aside of the orders of March 24, 2022. The court, it was contended, therefore no jurisdiction to entertain this as it is more of an Appeal and has not a review application Section 80 of the Civil Procedure Act and or order 45 of the Civil Procedure Rules, 2010.
17.In the Respondent’s view, this Court cannot extend lapsed order. The Application, according to the Respondent, was filed on May 5, 2022seeking to extend validity of orders of court lapsed on April 23, 2022.The court is invited to be persuaded by the case of CIC General Insurance Limited versus Phyllis Mbula [2019] eKLR and dismiss the Application.
Determination
READ, SIGNED AND DELIVERED IN OPEN COURT AT MACHAKOS THIS 20TH DAY OF JULY, 2022.G V ODUNGAJUDGEDelivered in the presence of:Mr Eredi for the ApplicantMr Manyara for the RespondentCA Susan
18.I have considered the Application, the Grounds of Opposition and the submissions made by the parties.
19.It is clear that the main order being sought herein is for extension of the time within which to present the bank guarantee ordered in the order of March 24, 2022 by a further 30 days. The other order is sought in the alternative. Accordingly, the order seeking the application of land parcels number Idaho/Iguhu/1822 and Idaho/Iguhu/ 2305 as security for stay of execution pending appeal in lieu of the bank guarantee can only be considered if the main prayer fails.
20.Section 95 of the Civil Procedure Act provides as hereunder:
21.Order 50 rule 6 of the Civil Procedure Rules provides that:
22.It is clear from both the Act and the Rules that in exercising its powers to extend time the Court exercises a discretionary power. In this case, since the time for complying with the conditions was fixed by this court’s order, this court has the discretion to grant the orders sought herein. It therefore follows that as long as the justice of the case requires the Court may on its own motion or upon an application by a party enlarge time fixed for doing any act or taking any proceedings under the Civil Procedure Rules, or by summary notice or by order of the court and it matters not whether the time appointed or allowed has expired. It is therefore not correct as contended by the Respondents that this Court can only extend the time where the application is made before the expiry of the time allowed by the Rules or the Order of the Court. That discretion in such matters covers periods before or even after the set time has expired was appreciated by O’kubasu, Mbito & Mwera, JJ in M’maitsi vs. Lusweti & Another [2008] 1 KLR 501.
23.The Respondent has however contended that this Court is functus officio. The doctrine of functus officio is one of the expressions in law on the principle of finality and Black's Law Dictionary, 9th Edition defines functus officio as: -
24.The Court of Appeal in Telkom Kenya Limited vs. John Ochanda (Suing on his Own Behalf and on Behalf of 996 Former Employees of Telkom Kenya Limited) [2014] eKLR therefore held that: -
25.I associate myself with the position adopted by the Supreme Court decision in Raila Odinga & 2 others vs. Independent Electoral & Boundaries Commission & 3 Others [2013] eKLR where the Supreme Court cited with approval an excerpt from an article by Daniel Malan Pretorius entitled, “The Origins of the Functus Officio Doctrine, with Special Reference to its Application in Administrative Law” (2005) 122 SALJ 832 to the effect that:
26.That position however clearly applies to a situation where the Court has pronounced itself on merits. It cannot once more revisit the same decision with a view to arriving at a different decision. However, where there is a clear provision permitting the Court to take a particular action, the court is not barred from dealing with the matter in order to effectuate the said provision. Otherwise the provision of the law dealing in question would be rendered superfluous. I therefore agree with the decision in Mombasa Bricks & Tiles Ltd & 5 Others vs. Arvind Shah & 7 Others [2018] eKLR, where the court observed on the doctrine of functus officio that :-
27.Similarly, in Aneriko M Simiyu vs. Redempta Simati Civil Appeal No. 227 of 2004, it was held that it cannot be correct that a court of law would be said to be functus officio when moved to correct a mistake or mistakes on the face of the record because the ultimate result would be injustice.
28.In the premises I find that this Court is not functus officio.
29.However, the decision whether or not to do so is in the court’s discretion. This being an exercise of judicial discretion, like any other judicial discretion must on fixed principles and not on private opinions, sentiments and sympathy or benevolence but deservedly and not arbitrarily, whimsically or capriciously. The Court’s discretion being judicial must therefore be exercised on the basis of evidence and sound legal principles, with the burden of disclosing the material falling squarely on the supplicant for such orders. However, it is clear from both the Act and the Rules that in exercising its powers to extend time the Court exercises a discretionary power. This being an exercise of judicial discretion, like any other judicial discretion must be exercised judicially. Accordingly, it has to be exercised on fixed principles and not on private opinions, sentiment and sympathy or benevolence but deservedly and not arbitrarily, whimsically or capriciously. The Court’s discretion being judicial must therefore be exercised on the basis of evidence and sound legal principles, with the burden of disclosing the material falling squarely on the supplicant for such orders. In Rev. Peter Indalo & Another vs. Fanana Investments Civil Applications No. NAI. 119 of 1994, it was held by the Court of Appeal that the applicant must place before the Court sufficient materials to enable the Court exercise its discretion in his favour. It was similarly held by in Kimani vs. Kirimi & Another [2008] 1 KLR 515, by O’kubasu, Mbito & Mwera, JJ that:
30.In Mwakalu vs. Timamy & Another Nairobi HCEP No. 18 of 1993 [2008] 1 KLR 464, the same bench held that:
31.One of those judicial principles expressly provided for in the above provision is that the applicant must satisfy the Court that he has a good cause for doing so, since as was held in Feroz Begum Qureshi and Another vs. Maganbhai Patel and Others [1964] EA 633, there is no difference between the words “sufficient cause” and “good cause”. It was therefore held in Daphne Parry vs. Murray Alexander Carson [1963] EA 546 that though the provision for extension of time requiring “sufficient reason” should receive a liberal construction, so as to advance substantial justice, when no negligence, nor inaction, nor want of bona fides, is imputed to the appellant, its interpretation must be in accordance with judicial principles.
32.In this case, the applicant contends that subsequent to the delivery of the ruling in question attempts were made to comply within the prescribed period. However, that compliance depended on factors which were not within its control. Accordingly, it was forced to alter its plans and look for alterative options which could not be undertaken within the remaining period. In my view, a party who seeks discretionary relief must always show that he is honest in his dealings and where indulgence is sought with respect to compliance with timelines it is always helpful if the applicant shows that he has complied with the order albeit belatedly or that he is ready to do so. However, as held by Torgbor, Amin & Couldrey, JJ in Omamo vs. Oyoo & Another [2008] 1 KLR 483, every application to enlarge time is to be considered in the circumstances peculiar to it and that no two applications are identical.
33.In such matters, Lakha, JA held in Touring Cars (K) Ltd & Anor vs. Ashok Kumar N. Mankanji Civil Application No. 78 of 1998 that the rule (permitting extension of time) confers the widest measure of discretion in an application for extension of time and draws no distinction whatsoever between the various classes of cases but clearly requires the Court to look at the circumstances and recognises the overriding principle that justice must be done and that prejudice or lack of it is a highly relevant matter in considering the justice; it may be an all-important one. The Learned Judge appreciated that to construe the rule with exceptional rigidity of its requirements would contrast most forcibly with the flexibility which is now a general characteristic of the rules and which ensures that justice is done.
34.It is therefore my view that in the wider interest of justice and in the unique circumstances of this case, time should be enlarged to the Applicant to comply with the order in question.
35.Accordingly, I hereby extend the time prescribed by this Court in the ruling dated March 24, 2022 with a further period of 30 days from today’s date.
36.It is nolonger necessary to deal with the alternative prayer.
37.The costs of this application to be borne by the Applicant.
38.It is so ordered.