Family Bank Limited v Makori & another (Civil Appeal 123 of 2022) [2023] KEHC 1483 (KLR) (2 March 2023) (Ruling)
Neutral citation:
[2023] KEHC 1483 (KLR)
Republic of Kenya
Civil Appeal 123 of 2022
MW Muigai, J
March 2, 2023
Between
Family Bank Limited
Appellant
and
Peter Okemwa Makori
1st Respondent
Africa Merchant Assurance Company Limited
2nd Respondent
Ruling
Notice Of Motion Application
1.Before this court is Notice of Motion Application brought under Section 1A, 1B and 3A of the Civil Procedure Act, Cap 21 Laws of Kenya, Order 42 Rule 6 of the Civil Procedure Rules seeking the following orders;
2.The Application is supported by the Affidavit of Samuel Kahuhu, the Legal Officer of the Appellant sworn on14th September 2022 in which he deposed that the 1st Respondent filed a garnishee application dated 25th March 2022 in Mavoko CMCC 1010 of 2018 seeking a garnishee order attaching the funds in the 2nd Respondent’s account held with the Applicant to satisfy the decretal amount of Kshs 667,614.
3.By the Ruling delivered on 25th July 2022 by the Hon. R Gitau (SRM), the garnishee order nisi was made absolute and the Appellant was directed to pay the decretal sum plus costs of the suit in satisfaction of the decree.
4.He deposed that as at 21st March 2022, the 2nd Respondent’s account held funds in the sum of Kshs 5,290,063.89 and the funds were not available for attachment as they had been frozen Courts by orders issued in;a.Malindi HCC Misc App 14 of 2018 CG Waithima Advocates v AMACO & others claiming Kshs 7,000,000b.Milimani CMCC 2105 of 2020 Stephen Gachuru v AMACO and Family Bank Limited claiming Kshs 2,829,326
5.He opined that the advocate for the 1st Respondent filed six other garnishee applications at the Chief Magistrates Court at Milimani against the funds in the 2nd Respondent’s account and by consent between the plaintiffs in the matters and the 2nd Respondent herein, garnishee orders absolute were issued.
6.He indicated that the Appellant filed stay of execution in the said matters which are still pending determination. A sum of Kshs 4,973,818.89 was paid out of the Defendant’s account in partial satisfaction of the decree in Malindi HCC Misc App 14 of 2018 CG Waithima Advocates v AMACO & others.
7.He contended that as at July 2022, the 2nd Respondent held funds in the sum of Kshs. 2,110,404.04 and are not available for attachment as they have been frozen by the various matters aforementioned and others which have been made absolute as such the Appellant is incapable of complying with the garnishee order absolute as it risks being cited for contempt of the orders which are still in force.
8.He deposed that he has filed an interpleader suit before the High Court in Nairobi HCCOMM E291 of 2022, Family Bank Limited v Simon Muinde Nzioka & Others asking the court to determine which decree holders should be paid with the limited funds in the 2nd Respondent’s account.
9.The Appellant has filed the instant Appeal as on 14.9.2022 it was served with warrants of attachment of moveable property by auctioneers acting on the instructions of the 1st Respondent demanding payment of the sum of Kshs 670,114,62 failure to which execution would issue.
10.The Appellant contends that the Appeal will be rendered nugatory if orders of stay of execution is not issued, that it will be exposed to loss if it pays the decretal sum as there is likelihood that the Respondent will not be able to refund the amount of the Appeal is successful. Further, that he will suffer substantial loss as it will be forced to pay the 1st Respondent from the bank’s reserve yet it is not the judgment debtor in the matter before the subordinate court. Lastly, that the 1st Respondent will suffer no prejudice and can recover the amount from the Appellant if the Appeal fails.
Response to the Application/Preliminary Objection
11.In response, the 1st Respondent filed Grounds of Opposition/Points of Law/ Preliminary Objection dated 26.09.2022 in which the following grounds were raised;a.The Appeal itself is incompetent having been filed without leave of court rendering itself and any subsequent applications misconceived, null and void ab initio.b.By virtue of Order 23 Rule 7 as read with Order 43 Rule 1 (1) (L) CPR 2010, an appeal only lies as of right from an order made in garnishee proceedings involving third party claims which was not the case before the Trial Court.c.All the matters raised were considered by the Trial Court effectively and cannot be relitigated in the motion.d.No Memorandum of Appeal has been served upon the 1st Respondent. The Ruling appealed against has not been exhibited either. Trial by ambush is illegal.e.There is no evidence of substantial loss but plenty of collusion
12.The Preliminary Objection was disposed of by way of written submissions.
Appellant Submissions
13.The Appellant filed submissions on 29.11.2022 in which it was submitted that after delivery of the Ruling, the advocate holding brief for the Appellant’s advocate requested for leave to appeal and 14 days stay of execution and he informed the advocate that both prayers had been granted.
14.Based on this information they filed a Memorandum of Appeal. It was contended that after the Preliminary Objection was filed, they realized that the Court had only considered the prayer for stay of execution and failure to seek leave to file an appeal was purely based on a mistake.
15.It was a procedural technicality which cannot render the appeal and application for stay incompetent. It was submitted that the Court had jurisdiction to entertain any matter before it under Article 165 of the Constitution.
16.It was submitted that the Preliminary objection should be on pure points of law as stated in the case of Mukhisa Biscuit Manufacturers Limited v West End Distributors Limited [1969] E.A.
17.Further, that ground 3 and 5 of the preliminary objection raised issues of fact that could only be determined at the hearing of the Appeal and not at the preliminary stage. Lastly, that the issue of substantial loss could only be determined after the hearing of the Application for stay that has been filed.
1St Respondent Submissions
18.The Respondent filed submissions on 22.11.2022 in which it was submitted that the appeal was dead on arrival having been filed without leave of court. It was submitted that the proceedings leading to the garnishee order nisi and absolute were taken out by the 1st Respondent under Order 23 rule 1 and under Order 43 rule 1(1), CPR 2010.
19.An appeal lies as of right from Order 23 rule 7, CPR 2010, Trial of claim of third person in attachment of debts meaning an appeal could only lie from any other order made under said order made under order 23 with leave of court sought and obtained under Order 43 Rule 1 (2). He contended that this is also provided for under section 75 (1) of the Civil Procedure Act.
20.It was submitted that there was no appeal by a third party but a garnishee. It was contended that the Appeal was dead at inception and the court had no jurisdiction and cannot take one more step. The remedy was to strike out the Appeal together with the application with costs. Reference was made to the case of David Kangethe & Another v Dennis Nyangicha Nayiro (2022) eKLR.
21.The 1st Respondent contended that the Appellant disobeyed order nisi and made payments from the attached accounts in collusion with other parties a fact the court took into account in dismissing the banks urgings before. he said that even on merit, the application did not deserve discretion. He further contended that should the court be persuaded otherwise, then the Applicant should deposit in court the sum of Kshs 667,614.62 and security for costs pending appeal. It was submitted that Kshs 100,000 would be reasonable.
Determination
22.I have considered the Preliminary Objection and the submissions of the parties on record.
23.Jurisdiction goes to the root of each matter before the Court. This was stated in the locus classicus in this subject, Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd. (1989):
24.The Court of Appeal in Equity Bank Limited v Bruce Mutie Mutuku t/a Diani Tour Travel (2016) eKLR in the following words:-
25.Section 75 (1) of the Civil Procedure Act is a proviso on situation where an appeal arises, it provides;
26.Order 43 Rule (3) CPR 2010 provides;
27.By the Appellants own admission, it failed to seek leave to file an appeal. It is not contended that the Appeal herein is pegged on the absolute nisi order and the Appellant is the garnishee and not a party to the suit.
28.Indeed, the Application by the 1st Respondent was made under Order 23 rule 1 of the Civil Procedure Rules, 2010 that provides that
29.The order sought to be appealed against does not fall under Order 43 Rule 1(1) of the Civil Procedure Rules, 2010 then leave ought to have been sought as provided in the same Order 43 (2) CPR 2010 as follows;
30.The Court of Appeal in the case of Kakuta Maimai Hamisi v Peris Pesi Tobiko & 2 others [2013] eKLR it was observed that;
31.The same court in Peter Nyaga Muvake v Joseph Mutunga [2015] eKLR stated that
32.Faced with a similar situation, this court in the case of Tatu City Limited v Calla Limited [2022] eKLR stated as follows;
33.This was also noted by Hon.O. Sewe L J, in Edith Wairimu Njoroge v Brooks Holdings Co. Ltd [2018] eKLR that where an appeal does not lie as of right from an order but only with leave, such leave “was a prerequisite to the assumption of jurisdiction by this court on appeal’’.
34.The position is fortified by Civil Appeal 269 of 2019 Nbi High Court David Kangethe & Simon Njangiru Kuria v Dennis Nyangicha Nyairo where Hon. C. Meoli LJ held that under Order 43 (1) CPR where the appeal lies as of right then in all other instances leave of the Court must be obtained.
Disposition
1.From the above legal provisions and case-law applied to the instant appeal, I have perused the record and there is no application for leave that was sought.
2.There is therefore no competent Appeal before this court and the jurisdiction of this court has not been properly invoked.
3.The Preliminary Objection is upheld and as such, the same application/appeal is dismissed with costs to the 1st Respondent.
DELIVERED SIGNED & DATED IN OPEN COURT IN MACHAKOS ON 2ND MARCH, 2023 (PHYSICAL/VIRTUAL CONFERENCE)M.W. MUIGAIJUDGE