Business Imaging Systems v Co-operative Bank of Kenya Ltd [2006] KEHC 3483 (KLR)

BUSINESS IMAGING SYSTEMS…………………….………....…………PLAINTIFF

VERSUS

CO-OPERATIVE BANK OF KENYA LTD. ……………………….…DEFENDANT

RULING

This is an application to strike out the Defence, so that judgement is entered against

the Defendant for Kshs.3,644,049. 70/=.

The plaintiff's claim, as set out in the Plaint is to the effect that it did supply

technical services to the defendant in 1999 and 2000. It also supplied to the defendant, a

Kodak imagelink digital service station. The total value of the services and equipment

supplied to the defendant was Kshs.4,346,002. 95.

It is common ground between the parties that the value of the equipment was

Kshs.701,908. 25/=.

Furthermore, the defendant conceded receipt of technical services from the

Plaintiff. It is for that reason that the plaintiff believes that it is entitled to the striking out

of the defence, or alternatively, summary judgement, for the reason that the defendant had

failed to pay for the services which the plaintiff had rendered in 1999 and 2000.

Both parties are in agreement that the plaintiff was to have charged a flat rate. That

notwithstanding, the plaintiff accuses the defendant of failing to settle the invoices for the

said services.

A perusal of the documents filed in court reveals that the defendant paid

Kshs.701,908. 25/=. The defendant makes no claim, whatsoever, of making any further or

other payments. Therefore, if the total value of the services rendered as well as the

equipment supplied was Kshs.4,346,002. 95/=, as pleaded by the plaintiff, the defendant

would be indebted to the plaintiff, to the tune of Kshs.3,644,094. 70/=.

But, the defendant accuses the plaintiff of departing from the agreement governing

the contracts between the two parties, and invoicing the defendant for other services,

despite the agreement to charge a flat rate.

From the documents on record in the court file, it is clear that the plaintiff has

adduced evidence of the invoice dated 31st December 1999, which was for four pieces of

equipment, namely, Kodak imagelink microfilmer; Kodak imagelink digital workstation;

Kodak imagelink business solution (IBS) PC plus software; and Kodak imagelink printer.

Also attached are a number of job cards for services rendered by the plaintiff to the

defendant. The question that arises is whether or not the plaintiff did raise invoices for the

services rendered. And, if the plaintiff did raise invoices, were they calculated on the basis

of flat rates, as per the agreement, or were they calculated at other rates as claimed by the

defendant. I am afraid that from the documents now available to the court, I do not have

answers to those questions.

But, all said and done, whether or not the plaintiff charged for the services, at a flat

rate, the defendant has definitely not made any positive averment that it did pay for the

services rendered. Therefore, as the defendant did confirm receipt of services, it must be

deemed to be indebted to the plaintiff in that respect.

In arriving at this conclusion, I have given due consideration to both the plaint and

defence, as well as the affidavits on record. In the defence, the defendant denied being

indebted to the plaintiff as alleged or at all. By implication, that suggests that if any money

was owed to the plaintiff, at any time, the same must have been paid. However, and very

significantly, the defendant went on to expressly state that it had paid Kshs.701,908. 25/=

on account of the microfilm processor. No averments for any other payments, are made.

Then in the Replying Affidavit of Regina Anyika, the defendant's legal officer, it is

stated that the amount due to the plaintiff under the service agreement was paid by the

defendant. Implicit in that statement is the acknowledgement by the defendant that some

money was payable to the plaintiff under the service agreement. However, the defendant

does not tell us how much was due, and thus how much it paid, so that it could be said to

no longer be indebted to the plaintiff.

In COMMERCIAL ADVERTISING AND GENERAL AGENCIES LTD. –

VS- QUREISHI [1985] KLR 458, Sachdeva J., expressed himself thus, at page 464;

"Upon perusal and careful consideration of all the material on the record

before me, I am of the view that the defendants have shown some prima facie

defence to the plaintiff's case, but it may well turn out to be a sham and

invalid, but I cannot conclusively decide that as matters stand, and therefore, I

consider that in all the circumstances of the case, I should grant the

defendants only conditional leave to defend."

In that case, the defendant had not denied the delivery of goods and the giving of a

promissory note. The judge then allowed them to defend the suit, on condition that the

principal sum claimed was deposited in court.

In this case, the defendant acknowledged receipt of services. He must also be

deemed to have received invoices, as he had accused the plaintiff of calculating the charges

at rates which were not in keeping with the agreed flat rates. But, he says that he does not

owe any money to the plaintiff, as he had made payment. To my mind, that is not a mere

denial as envisaged in BARCLAYS BANK OF KENYA LIMITED –VS- WANANCHI

SANITARY & HARDWARE LIMITED & 2 OTHERS [1990] KLR 177. I say so

because although the Defence itself was devoid of facts which the defendants relied on in

saying that it was not indebted to the plaintiff, the Replying Affidavit did provide some

explanation by the defendant.

The reason why I have not limited my attention to the defence only is that the

Replying Affidavit is also on record, before the court. In the case of UNITED

INSURANCE CO. LIMITED –VS- WARUINGE & 2 OTHERS [2003] KLR 629, the

Hon. Njagi J. held that Order 35 requires a defendant to show either by affidavit or oral

evidence or otherwise that he should have leave to defend the suit.

In ZOLA & ANOTHER –VS- RALLI BROTHERS LTD. & ANOTHER

[1969] EA 691 at 694, Sir Newbold P. said;

"Order 35 is intended to enable a plaintiff with a liquidated claim to which

there is clearly no good defence, to obtain a quick and summary judgement

without being unnecessarily kept from what is due to him by delaying tactics

of the defendant."

Now, in this case, the plaintiff is seeking judgement for the debt of

Kshs.3,644,094. 70/=, plus damages for loss of business. The plaintiff also claims interest

and costs of the suit.

In GURBAKSH SINGH & SONS LIMITED –VS- NJIRI EMPORIUM LTD.

[1985] KLR 695, the Court of Appeal held that a summary procedure should only be

applied where the amount claimed has been specified, is due or payable or has already

been ascertained as a mere matter of arithmetic. It was made clear that a liquidated claim

was one that needs no further inquiry as to how much ought to be claimed.

Applying the holding of the Court of Appeal to this case, there can be no doubt that

the claim was for more than a liquidated amount, as there is an express claim for damages.

Therefore, to the extent that this application is founded on Order 35 of the Civil Procedure

Rules, it is not sustainable.

On the other hand, insofar as the application is for striking out the defence, I wish

to borrow the following words of Platt J.A. in MAGUNGA GENERAL STORES –VSPEPCO

DISTRIBUTORS LTD (1988-92) 2 KAR 89 At 91;

"First of all a mere denial is not a sufficient defence in this type of case. There

must be a reason why the defendant does not owe the money. Either there was

no contract or it was not carried out and failed. It could also be that payment

had been made and could be proved. It is not sufficient therefore simply to

deny liability without some reason given." – emphasis added.

As already demonstrated herein, the defendant did not provide any material from

which it could be proved that it had paid such money as the plaintiff was claiming. In the

circumstances, although I do remind myself that the court should act very cautiously in

dealing with the summary procedure, so that the same are only resorted to in plain, clear

and obvious cases, I find that the defendant has not satisfied me that it should have

unconditional leave to defend the suit. Having admitted that the plaintiff was entitled to

some payment for services rendered, but failing to prove that it did effect payment therefore,

it is my considered view that the only way to ensure that justice is done, is by granting

conditional leave to defend.

I therefore refuse to strike out the defence, or to grant summary judgement in

favour of the plaintiff, as prayed. However, I direct the defendant to deposit, in an interestearning

account, to be held jointly in the names of the advocates for the plaintiff and those

of the defendant, the sum of Kshs.2,000,000/=. The deposit is to be made within the next

thirty (30) days from today.

If the money is so deposited, the suit will proceed to trial, and the costs of this

application shall be in cause. However, if the defendant fails to comply with this order, to

deposit Kshs.2 million within thirty days, the defence will stand struck out, and judgement

will be entered in favour of the plaintiff, as prayed in prayer 2 of the Plaint. If judgement

is entered in accordance with prayer 2, the costs of this application will be awarded to the

plaintiff.

Dated and Delivered at Nairobi this 26th day of January 2006

FRED A. OCHIENG

JUDGE