Charles Owino Ndonga v Kisumu Jua Kali Artisan Savings & Credit Co-op Society Ltd; Chase Bank Ltd (Kisumu) Branch, Jamii Bora Bank Ltd (Kisumu Branch) & Co-op Bank of Kenya (Kisumu Branch)(Garnishees) [2020] KECPT 68 (KLR)

REPUBLIC OF KENYA

IN THE CO-OPERATIVE TRIBUNAL

AT NAIROBI

TRIBUNAL CASE NO. 254 OF 2018

CHARLES OWINO NDONGA ..........................................................................................CLAIMANT

VERSUS

KISUMU JUA KALI ARTISAN SAVINGS & CREDIT CO-OP SOCIETY LTD.....RESPONDENT

AND

CHASE BANK LTD (KISUMU) BRANCH...............................................................1ST GARNISHEE

JAMII BORA BANK LTD (KISUMU BRANCH)....................................................2ND GARNISHEE

CO-OP. BANK OF KENYA (KISUMU BRANCH).................................................3RD GARNISHEE

RULING

What is before us for consideration are two Applications, namely:

a. The 3rd Garnishee’s Application dated 9/6/2020; and

b. The 2nd Garnishee’s Application dated 21/7/2020.

The two Applications substantially seek similar Orders namely:

a. That the Honourable Tribunal be pleased to make an order of stay of execution of the order absolute made on 9/4/2019 as against the two Garnishees; and

b. That the Honourable Tribunal be pleased to review, vary and/or set aside the Order absolute made on 9/4/2020.

The Applications are supported by the grounds on their respective faces and the following affidavits:

a. Supporting Affidavit sworn by Naomi Mwangi the legal officer of the 3rd Garnishee on 9/6/2020; and

b. The Supporting Affidavit sworn by Valence Mmuka, the legal officer of the 2nd Garnishee on 21/6/2020.

The Decree Holder has opposed the Application 9/6/2020 by filing a Replying Affidavit sworn by himself on 28/6/2020.

Garnishee’s Contention

Vide these Applications, the 2ndand 3rd Garnishees contend that they do not hold accounts or funds in favour of the Judgment Debtor (Kisumu Jua Kali Artisan Saving and Credit Co-operative Society Ltd).

That, the 3rd Garnishee’s Replying Affidavit dated 8/5/2020 sworn by Jack Odongo erroneously provided a bank account statement for Kisumu Centre Jua Kali Sacco Ltd which is neither the Respondent nor its affiliate.

That the order absolute made on 9/4/2020 remain a general order without the specific extent to which the 3rd Garnishee is liable to remit payments.

That neither does the erroneous account belong to the Respondent nor does it have sufficient funds to satisfy the Decree.

On its part, the 2nd Garnishee specifically responded to the Application as follows:

a. That the Claimant did not serve it with the Application dated 3/4/2019 contrary to the provision of Order 23 Rule (1) of the Civil Procedure Rules.  As such, it has been condemned unheard;

b. That it does not hold any account or funds in favour of the Judgment debtor; and

c. That the account the subject of the Application dated 3/4/2019 does not belong to the Judgment debtor.

Disposal of the Applications

Vide the directions given on 29/6/2020 and 22/7/2020, the two Applications were canvassed by way of written submissions.  The 3rd Garnishee filed its submissions on 9/7/2020 while the 2nd Garnishee did so on 19/6/2020.  The Decree Holder did not file his written submissions despite service of the notice.

Issues for determination

The 3rd Garnishee’s Application dated 9/6/2020 and the 2nd Garnishee s Application dated 21/7/2020 have presented the following issues for determination:

a. Whether the 2nd and 3rd Garnishee’s have laid sufficient basis to warrant a review and/or setting aside of the Decree Absolute issued on 9/4/2020; and

b. Who should meet the costs the Applications.

Review of the Garnishee Orders

This Tribunal has jurisdiction to review and/or vary its orders by dint of Section 80 of the Civil Procedure Rules (Cap 80) laws of Kenya and Order 45 of the Civil Procedure Rules, Order 45 Rule (1) provides thus:

“ Any person considering himself aggrieved as by a decree or order from which an Appeal is allowed but from which no Appeal has been preferred and who, from the discovery of new and important matter or evidence which, after the exercise of due diligence was not within his knowledge or could not be produced by him as the time when the decree was passed or the order made, or on account of some mistake or error apparent on the face of the record or for any sufficient reasons. May apply for review of Judgment.”

It thus follow that for an Application for review of a Judgment on Order succeed, the following condition must be fulfilled:

a. Discovery of new and important matter;

b. There is a mistake or error apparent on the face of the record; and

c. For sufficient reason.

Applying these principles to the facts of the present case, the question abound as to whether the two Applications meet and/or have satisfied the said principles.

In doing so, we will consider the circumstances under which the Orders sought to be reviewed were made and the requisite thresholds for granting them.

It is apparent that the current Applications have been precipitated by the Garnishee proceedings.  Vide the Application dated 11/12/2018, the Decree Holder moved this Tribunal seeking an order of Decree Nisi against the 1st, 2nd and 3rd Garnishees.  The said Decree was issued on 7/12/2018.

The above Application was amended on 4/4/19 and vide on order issued on 9/4/2020, the Decree Nisi issued on 7/12/2018 was made absolute.

The Garnishee contend inter alia, that whilst the said decree has been issued, the same is unenforceable for the following reasons:

a. That as against the 2nd Garnishee, the Application the basis of which the Decree was issued was not served upon it; and

b. That they are not indebted to the Judgment Debtor.

Whilst responding to the 3rd Garnishee’s Application dated 9/6/2020, the Decree Holder contended that the Judgment Debtor was originally known as Kisumu Centre Jua Kali Sacco Ltd but later changed its name to Kisumu Jua Kali Artisan Savings and Credit Co-operative Society Ltd. That the Garnishees are well aware about these changes.

The foregoing contention takes us to the Provision of Order 23 Rule (1) of the Civil Procedure Rules.  It deals with Garnishee proceedings. It provides thus:

“A court may, upon the ex-parte Application the Decree Holder and either before or after an oral examination of the judgment debtor, and upon Affidavit by the Decree Holder  or his Advocate stating that a Decree has been issued and that it is still unsatisfied and to what amount, and that another person is indebted to the judgment debtor and is within the jurisdiction, order that all debts (other than the salary, or allowance coming within provisions of Order 22 Rule 42 owing from such third person (hereinafter, called the garnishees) to the judgment debtor shall be attached to answer the decree together with the costs of Garnishee proceedings, and by the same or any subsequent order it may be ordered that the Garnishee shall appear before the court to show cause why he should not be ordered to pay the decree holder the debt due to him to the judgment debtor or so much thereof as may be sufficient to satisfy the decree together with costs aforesaid..”

From this provision, it follows therefore that for a Decree Holder to success in Garnishee proceedings, it must prove that the Garnishee is indebted to the Judgment Debtor.  This was the holding in the case of Ecobank Ltd-Vs- True North Construction Company Ltd & Another [2018]eKLR. In the pertinent part, the court held thus:

“The object of Garnishee proceedings is to enable a decree holder to reach a debt due to the judgment debtor from the Garnishee as may be sufficient to satisfy a Decree.  Crucial thereof is that the Garnishee is indebted to the judgment debtor.”

Applying the foregoing legal principles to the circumstances of the present case, it is apparent that the issue of indebtedness of the 2nd Garnishee and 3rd Garnishee to the Judgment Debtor is so critical in determining as to whether or not to issue Garnishee orders.  The 3rd Garnishee contend that whilst it made the impression that it held the Judgment Debtor’s account when it participated in the Garnishee proceedings, it has since emerged that the true position is that it does not have the said account.  That the entity it alluded to whilst responding to Garnishee proceedings is different and district from the judgment debtor.

We have considered arguments in favour and against the pending Applications.  What is emerging is that there exist two entities that almost bear similar identities i.e Kisumu Centre Jua Kali Sacco Ltd and Kisumu Jua Kali Artisan Savings and Credit Co-operative Society Limited.

The Garnishee contend that it holds accounts for Kisumu Centre Jua Kali Sacco Ltd while the Decree Holder contend that the two entities are one and the same thing.  With these contestation at the fore, it is thus manifest that this Tribunal need to ascertain the true identity of the judgment debtor before it can make any decision on attachment of its debtor. Caution has to be borne in mind so as not to expose parties other than the judgment debtor to loss.

In the circumstances, and in the spirit of fairness we find merit in the Garnishee’s Applications dated 9/6/2020 and 21/7/2020 and order as follows:

a. That the Decree Absolute made on 9/4/2020 is here by set aside;

b. That the Decree Holders Application dated 11/12/2018 (as amended on 4/4/19) is here reinstated;

c. The Judgment Debtor to meet the costs of the Application; and

d. Parties to take direction on disposal of the said Application .

Ruling, read and delivered online this 17th day of September, 2020.

Hon. B. Kimemia  Chairman                          …………………

Hon. F. Terer         Deputy Chairman            ………………….

P. Gichuki              Member                            ………………….

Mr. Olao  - 2nd and 3rd Garnishees

Mr. Yogo – Decree Holder

Leweri      - Court Assistant