Bora Capital Limited v Jane Njeri Munyi [2018] KEHC 6303 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL APPEAL  NO. 503  OF 2013

BORA CAPITAL LIMITED..............................APPELLANT

-V E R S U S –

JANE NJERI MUNYI..................................... RESPONDENT

(An appeal from the ruling and orders of Hon. C. Obulutsa (Mr.) Ag Chief Magistrate in Nairobi CMCC No. 338 of 2013 delivered on 17th day of September  2013. )

JUDGEMENT

1. Bora Capital limited, the appellant herein, and Jane Njeri Munyi,the respondent herein, entered into an agreement in 2010 in which the respondent would invest monies with the appellant to be repaid with interest upon maturity.  The respondent filed an action against the appellant for payment of kshs.575,597/= plus interest  when the  appellant failed to honour its obligations.  The appellant entered appearance but failed to file a defence within the required time.  Judgment was entered in default of appearance in favour of the respondent and against the appellant on 14. 3.2013.  The respondent commenced execution proceedings to recover the decretal sum leading to the proclamation of the appellant’s goods.  It would appear that the appellant’s advocate issued two cheques to the respondent’s advocate in settlement of the matter but unfortunately, those cheques were dishonoured upon presentation to the bank for encashment.  The appellant thereafter filed an application dated 29. 4.2013 seeking for stay of execution and for leave to liquidate the decretal sum by monthly instalments of kshs.100,000/=.  Being aggrieved, the appellant preferred this appeal putting forward the following grounds::

1. THAT the honourable magistrate ignored the provisions of Section 44(1) (ii)  of the Civil Procedure Act (Cap. 21) when he found that the appellant’s property proclaimed for attachment and sale were not tools of trade but office furniture, and he thus misdirected himself in law and fact.

2. THAT the honourable magistrate unlawfully ignored that the burden of proving ability to pay the decretal sum at once lay with the respondent, which burden the respondent failed to discharge, and thus he arrived at the wrong conclusion.

3. THAT the learned magistrate unlawfully ignored the provision of Order 21 rule 12 of the Civil Procedure Rules and disregarded the appellant’s reasonable proposal and as such the conclusion that the appellant did not deserve the orders to pay the decretal sum by monthly instalments was without basis and arbitrary.

4. THAT in arriving at his decision, the learned magistrate erred in law when he disregarded the authorities cited in the submissions on behalf of the appellant and failed to consider the guidelines provided therein with regard to circumstances where payment by instalments can be allowed.  The decision was thus whimsical and arbitrary.

5. THAT the honourable magistrate erred in law and in fact when he failed to show in his decision that he had actually considered the rights of both the judgment creditor and the judgment debtor and that he had weighed each against the other before reaching a conclusion that one overrides the other.

6. THAT the learned magistrate erred in law and in fact by when he found that the appellant had made previous proposal and dishonoured the same while disregarding, without proper basis, evidence tendered by the appellant and even the respondent herself that indeed there were genuine negotiations on how to settle the claim.

7. THAT the learned magistrate misdirected himself in law and fact and thus arrived at the wrong conclusion when he found that the appellant was guilty of issuing bad cheques when there was no evidence at all on record to support the allegations and the finding.

8. THAT the honourable magistrate misdirected himself in law and in fact when he found that the appellant was not a bonfides debtor when indeed there was no evidence on record to support such a finding.

9. THAT the honourable magistrate erred in law and fact by failing to find that the respondent had moved to attach the appellant’s tools of trade which if disposed of would only serve to cripple the appellant’s business and render it unable to pay its debts.

10. THAT the learned magistrate misdirected himself in law and fact when he found that the appellant had not pointed out errors in the decree and certificate of costs, when in fact the appellant had only challenged the process of extraction of the decree and certificate of costs.

11. THAT the honourable magistrate erred in law when he found that the provisions of Order 21 rule 8(2) of the Civil procedure Rules were no mandatory with regard to extraction of a decree as the text uses the word “may”.

12. THAT the learned magistrate erred in law when he appeared to have only considered the respondent’s evidence and submissions and failed totally to give regard to the appellant’s side of the story.

13. THAT the learned magistrate erred in law and fact when he failed to find that the appellant’s proposal to liquidate the decretal sum by monthly instalments of shs.100,000 was reasonable in the circumstances of the case.

14. THAT the learned magistrate was arbitrary and capricious in arriving at his decision and thus arrived at the wrong conclusion.

15. THAT the honourable magistrate arrived at the whole decision without due regard to the principles of law and equity and the facts presented before him and abdicated his duty as the custodian of law.

2. The appellant contemporaneously filed an application for stay ofexecution pending appeal.  An interim order for stay pending appeal was granted on condition that the appellant deposits a sum of ksh.700,000/= as security for the due performance of the decree but the appellant failed to deposit the security.

3. I have re-evaluated the case that was before the trial court andthe rival written submission.  What is not in dispute is that at the time of filing the rival submissions, the appellant had already paid the whole decretal sum to the respondent.

4. Though the appellant put forward a total of 15 grounds of appeal,two main grounds commend themselves for the determination of this court.  First, is that the trial court erred when it ignored the provisions of Section 44(1) (ii) of the Civil Procedure Act when it found that the appellant’s proclaimed property were not tools of trade.

5. Secondly, that the trial magistrate erred when he rejected the appellant’s reasonable  proposal to liquidate the decretal sum by monthly instalments of ksh.100,000/=.

6. On the first ground, the appellant is of the submission that the property attached were its tools of trade which tools are exempted from attachment under Section 44(1) of the Civil Procedure Act.  The appellant pointed out that the appellant is in business and is primarily engaged as real estate agents, developers and valuers.  It is stated that in the process of execution the appellant’s assets including chairs, tables, officercounter, metal cabinets, computers and a printer were proclaimed.  The respondent on the other hand is of the submission that  the trial magistrate arrived at the correct decision in finding  the attached property not tools of trade.  In his ruling, the learned magistrate ruled that the proclaimed goods were office furniture and not tools of trade hence the proclamation was valid.  With respect, I do not think the findings of the trial magistrate can be faulted, consequently this ground is found to be unmeritorious.

7. The second main ground is to the effect that the trial magistrate erred when he disallowed the appellant’s prayer to settle the debt by monthly instalments.  The appellant argued that the proposal was reasonable hence it should be allowed to pay as proposed.  The respondent is of the submission that the decision of the trial court should not be disturbed because it took into account the fact that the appellant was incapable of paying the instalments in view of the fact that it had previously issued cheques which were later dishonoured.  There is no doubt that the court has a wide discretion whether or not to allow the application to settle the debt by instalments so long as sufficient reason is provided.  The trial magistrate noted that the appellant had made numerous offers to settle the debt in vain.  The history of issuing bouncing cheques was taken into account.  In other words, the appellant did not provide sufficient reason to the trial magistrate to enable him exercise his discretion in its favour.  I find no merit in this ground.

8. There is one issue which the parties have argued in their submissions.  That is whether or not this appeal has been overtaken by events?  It is the submission of the respondent that the decretal sum of ksh.575,597/= plus interest, the subject matter of the appeal has been settled in full therefore this appeal serves no useful purpose since it has been overtaken by events.  The appellant is of the submission that the merits of the appeal still remains despite the fact that the decree has been fully settled.  The application which was dismissed and which gave rise to this appeal is the motion dated 29th April 2013 whereof the appellant sought for an order for stay and for leave to liquidate the decretal sum by monthly instalments.

9. It has now been pointed out that the decree has been settled in full.  If this appeal was to be allowed and the orders sought in the aforesaid motion are granted, then it means that the appellant will be allowed to liquidate the debt by instalments.  But the debt has been paid in full therefore there is nothing to liquidate by instalments.  With respect, I agree with the submissions of the respondent that in the circumstances of this case that the appeal has been overtaken by events.

10. In the end, I find no merit in this appeal.  It is dismissed. In the circumstances of this case a fair order on costs is to order that each party meets its own costs.

Dated, Signed and Delivered in open court this 31st  day of May, 2018.

J. K. SERGON

JUDGE

In the presence of:

....................................................  for the Appellant

................................................ for the Respondents