National Social Security Fund Board of Trustees v Protection Custody Limited (Civil Appeal E311 of 2021) [2024] KEHC 2549 (KLR) (Civ) (12 March 2024) (Judgment)
Neutral citation:
[2024] KEHC 2549 (KLR)
Republic of Kenya
Civil Appeal E311 of 2021
JN Njagi, J
March 12, 2024
Between
National Social Security Fund Board of Trustees
Appellant
and
Protection Custody Limited
Respondent
(Being an appeal from the Order of Hon. LL. Gicheha CM delivered on 14{{^th}} June 2019 in Milimani CMCC No. 7409 of 2018)
Judgment
1.The Respondent herein sued the Appellant seeking a sum of Ksh. 10,114,998/= being the outstanding payment for services rendered to the Appellant by the Respondent on a contract of provision of security services between the years 2010 to 2018. The Respondent claimed a further sum of Ksh. 360,000/= being the amount incurred as debt collection fees thereby making a total claim of Ksh10,475,256/=. The Respondent further claimed interest on the amount owing at compound interest rate of 14% per annum from 15th March 2018 till payment in full and costs.
2.The Appellant filed a statement of defence dated 17th September 2018 in which it denied owing any money to the Respondent. The Respondent then filed an application dated 13th November 2018 seeking to have the Appellant’s defence struck out and summary judgment entered against the Appellant on the ground that the defence did not disclose any reasonable cause of action and only contained mere denials, was frivolous, vexatious, scandalous and an abuse of the court process solely aimed at delaying the plaintiff`s right to a quick judgment.
3.The application was opposed by the Appellant through the replying affidavit of the Appellant`s legal officer, Hellen Koech who deposed that the application offended the provisions of Order 2 Rule 15(2) of the Civil Procedure Rules in so far as the application required evidence to substantiate the same. That the evidence that was attached by the Respondent required the matter to go for full hearing. That the services were not fully provided for by the Respondent as per the contract thereby causing breach of the contract leading to the Appellant to terminate the contract.
4.Upon hearing submissions from the Advocates for the parties, the trial magistrate held that the statement of defence did not raise any triable issue and was a mere denial. The court held that the Respondent had proved a sum of Ksh. 7,831,189/=. It consequently allowed the application, struck out the Appellant’s statement of defence and entered summary judgment for the Respondent in the sum of Ksh.7,831,189/= (part of the money having been paid after filling of the suit).
5.It is that ruling which prompted the Appellant to file the instant appeal. The grounds of appeal are that:
6.The appeal proceeded by written submissions from the parties.
Appellant’s Submissions.
7.The Appellant pointed out that the law on striking out of pleadings is provided for under Order 2 rule 15 of the Civil Procedure Rules. That the word used in that rule is “may” which shows that the court is clothed with discretionary jurisdiction to allow striking out and also order a party to amend instead of striking out.
8.Counsel submitted that this court can interfere with the discretionary powers of the trial court. In this regard he referred the court to the case of Mbogo & another v Shah (1936) EA 93. The Appellant submitted that the learned trial Magistrate did not exercise her discretion properly and judiciously when striking out the defence.
9.It was contended that the dismissal of a suit or striking out a pleading is a draconian act which can only be a last resort even in the clearest cases. To buttress this position, this court was referred to the cases of D.T Dobie & Company v Muchina & another 91982) KLR and Ram’ji Megji Gudka Ltd v Alfred Morfat Michira & 2 others (2005) eKLR.
10.The Appellant submitted that its defence raised triable issues. The case of Olympic Escort International Co. Ltd & 2 others v Parminder Singh & another (2009) eKLR was referred where it was opined that a triable issue is not necessarily one that would ultimately succeed but only needs to be bona fide.
11.It was submitted that the Appellant has denied owing the Respondent money and put the Respondent to strict proof. It was argued that this in itself shows that there is a dispute for trial.
12.It was submitted that in an application seeking to strike out pleadings, the court is barred from considering evidence by Order 2 Rule 15(2) of the Civil Procedure Rules. That the magistrate having considered evidence erred in exercised her discretion wrongly.
13.It was submitted that the trial court usurped its powers by striking out the defense without affording the Appellant right to be heard. That the magistrate considered the merits of the parties` respective cases and in essence usurped the powers reserved for the trial magistrate which is not allowed in determining an application seeking to strike pleadings. In support of this counsel referred to the case of Wenlock v Moloney (1965) 2 All ER 871 as quoted in Gladys Jepkosgei Boss v Star Publication Limited (2021) eKLR where it was held that:
14.The Appellant contended that the trial court made its decision on reliance of the Respondent`s documents as it was yet to file its witness statements. That the court did not have the benefit of full facts when it held that the Respondent had proved Ksh.7,831,189/=. That there were no supporting documents such as invoices for the court to arrive at such a conclusion.
15.It was submitted that the trial magistrate entered judgment for the sum of Ksh.7,831,189/= that is not pleaded in the plaint. That it is trite law that parties are bound by their pleadings. That in doing so the Magistrate travelled outside the parties` pleadings as was stated in the Malawian case of Malawi Railways Ltd v Nyasulu Co. Ltd (1998) MWS,3.
16.It was also argued that the supporting affidavit sworn in support of the application to strike out was not dated and hence fatally defective. The court was referred to various authorities on the effect of undated affidavits.
Respondent’s Submissions
17.The Respondent submitted that the issue for determination in the appeal is whether the trial court was right to strike out the Appellant`s statement of defence. They submitted that mere denials are not sufficient defence. In this respect they placed reliance in the case of Magunga General Stores v Pepco Distributors Ltd (1987) eKLR where the defence to a liquidated claim was by way of mere denial and the Court of Appeal held that:
18.It was also submitted a Respondent in an application for striking out a defence must establish that the defence raises a triable issue. The Respondent cited the case of Trikam Maganlal Gohil & another v John Waweru Wamai (1983) eKLR where it was held that:
19.The Respondent also referred to the case of Mercy Nduta Mwangi t/a Mwangi Kanga’ra & Company Advocates v Invesco Assurance Company Ltd (2022) eKLR where the Appellant filed an application for entry of summary judgment against the Respondents. The Respondent opposed the application alleging that there was a fee agreement with the Appellant and some payments were made to buttress this point yet did not provide any evidence in support of the averments. The subordinate court dismissed the application but on appeal the court allowed the appeal and stated that:
20.It was submitted that the Respondent`s application was based on Order 2 Rule 15 sub rule (1) (a) to (d). That it is only where the application is grounded on sub Rule 1(a) where no evidence is admissible.
21.The Respondent submitted that Order 7 Rule 5 of the Civil Procedure Rules provides that a statement of defence must be filed together with the list of witnesses, witness statement and copies of documents to be relied during trial. That the Appellant did not file any accompanying documents with the defence. That it did not file any documents with its replying affidavit to the Respondent`s application. That it can only be concluded that it failed to do so because it did not have a defence to the Respondent`s claim.
22.It was argued that although the Appellant purports to argue breach of contract, there were no such particulars in the statement of defence. Further that no documents are provided to show it paid for the services rendered. It was submitted that the trial court exercised its discretion rightly in finding that the defence contains mere denials.
23.The Appellant submitted that the trial court did not err in entering judgment in the sum of Ksh.7,831,189.25 as subsequent to filing of the suit the Appellant has been paying the amount owing thereby reducing the balance from the sum claimed in the plaint to Ksh.7,831,189.25. It was submitted that the court had inherent power to enter judgment in the sum now owing. The Respondent urged the court to dismiss the appeal.
Analysis and Determination
24.It is the duty of this court, as the first appellate court, to examine matters of both law and facts and subject the whole of the evidence to a fresh and exhaustive scrutiny, drawing its own conclusions from that analysis and bearing in mind that the court did not have an opportunity to hear the witnesses first hand - see the Court of Appeal case of Gitobu Imanyara & 2 Others v Attorney General [2016] eKLR. The same court in Abok James Odera T/A A.J Odera & Associates v John Patrick Machira T/A Machira & Co. Advocates [2013] eKLR, stated as follows on the issue:
25.I have considered the pleadings and the submissions filed by the respective counsels for the parties. The issue for determination is whether the trial magistrate erred in striking out the Appellant`s defence.
26.The motion is expressed to be brought under Order 2 Rule 15 of the Civil Procedure Code which deals with striking out of pleadings and provides as follows;
27.Order 2 Rule 15 (2) states as follows:(2)) No evidence shall be admissible on an application under subrule (1) (a) but the application shall state concisely the grounds on which it is made.
28.The Respondent`s application was made under the whole of Rule15 (1) (a), (b), (c) and (d) whereby no evidence could be called under rule (1) (a) but evidence could be adduced under Rules (b) – (d). In Jevaj Shariff & Co. v Chotail Pharmacy Stores [1960] EA 374, the East Africa Court of Appeal stated that:
29.The supporting affidavit of the director of the Respondent in paragraph 7 stated as follows:
30.The Respondent herein called affidavit evidence to show that the defence did not raise any triable issue. This is contrary to the mandatory provisions of Order 2 Rule 15 (1) (a) which prohibits the calling of evidence to show that an application does not raise reasonable cause of action. The Court of Appeal considered such an issue in the case of Olympic Escort International Co. Ltd. & 2 Others v Parminder Singh Sandhu & Another [2009] eKLR, where it held that: -
31.The Respondent herein combined prayers where evidence was required to be called with one that does not require evidence to be called. The court seems to have relied on rule 15 (1) (a) to strike out the defence. The trial magistrate in the matter considered the affidavit evidence to hold that the defence did not raise triable issues. The court erred in that respect. The appeal should be allowed for that reason.
32.It is trite law that a defence can only be struck out in the clearest of the cases where the defence looks hopeless and no life can be breathed into it. Further that courts of law should endeavor to sustain suits than striking them out. In the case of Jubilee Insurance Company Limited v Grace Anyona Mbinda [2016] eKLR, the Court quoted with authority the celebrated case of Saudi Arabian Airlines Corporation v Premium Petroleum Company Ltd [2014] eKLR it was held that:
33.The Court of Appeal in the case of Blue Shield Insurance Company Ltd v Joseph Mboya Oguttu [2009] eKLR established that striking out of pleadings is a drastic remedy that should only be resorted to where a pleading is a complete sham. Similarly, in the case of Crescent Construction Co. Ltd v Delphis Bank Ltd (2007) eKLR the same court stated thus: -
34.In D.T. Dobie & Company (Kenya) Ltd. v Muchina (1982) KLR 1 it was stated as follows:
35.The Appellant in their statement of defence dated 17th September 2018 in paragraphs 5, 6, 7 and 8 denied being indebted to the Plaintiff/Appellant. The trial court relied on affidavit evidence to hold that the defence did not raise reasonable cause of action when it should only have considered the defence to do so. The trial court did not apply the correct law for striking out defence on the ground that it did no raise reasonable cause of action. The Appellant was yet to file their witness statements in the case before the defence was struck out. In my view, the defence was wrongly struck out.
36.The upshot is that the Appeal herein is allowed and the Appellant’s suit is hereby reinstated for hearing and determination on merit. As the appeal has succeeded, I order the Appellant to have the costs of the appeal.
DELIVERED, DATED AND SIGNED AT NAIROBI THIS 12TH DAY OF MARCH 2024.J. N. NJAGIJUDGEIn the presence of:Mr Mugo holding brief Mr Mbaabu for AppellantMr Githiri for RespondentCourt Assistant – Amina30 days R/A.