Cyrus M. Kamau v Universal F and B Contractors [2017] KEHC 10063 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL & ADMIRALTY DIVISION

CIVIL SUIT NO 1730 OF 2000

CYRUS M. KAMAU..........................................................PLAINTIFF/DECREE HOLDER

VERSUS

UNIVERSAL F AND BCONTRACTORS LTD......DEFENDANT/JUDGMENT DEBTOR

RULING

1. The motion of 6th June 2017 seeks the following orders;-

(i) That the Honourable Court be pleased to give a restraining order preventing the intended execution against the Defendant/Applicant.

(ii) That the Honourable Court be pleased to declare that the Judgment debt is fully settled by the Defendant/Applicant.

(iii) That this Court be pleased to order that the overpaid amount of Kshs. 51,261. 10 be refunded to the Defendant/Applicant.

2. This is a short backdrop to this matter. An order of Court was entered in the following terms:-

“It is hereby ordered:

1. That the Defendant do pay to the Plaintiff the sum of Kshs.1,549,125 together with interest, thereon at 12% p.a from 21. 5.2001 until payment in full.

i. Principal amount – Khs.956,250. 00

ii. Interest at 12% pa from 21. 5.2001 to 30. 6.2006 – Kshs.592,875. 00

iii. Total – Kshs.1,549,125. 00

2. That the Defendant do pay to the Plaintiff the costs of this suit to be taxed and certified by the Taxing Master of this Court”.

3. There was default and in an Application filed on 20th September 2016, the Advocate for the Decree holder bespoke a Notice To Show Cause why Attachment should not issue against the Judgment Debtor to recover the following decretal sum:-

Principal sum and interest…………………..2,627,500

Less paid………………………………………1,000,000

……………………….

1,677,500

Add costs awarded                                     49,225

4. The Notice To Show Cause proceedings were compromised vide a consent entered on 19th January 2017 before the Deputy Registrar.  The consent was in the following terms:-

“By consent,

(1) Outstanding decretal sum is agreed at Kshs. 700,000.

(2) Judgment debtor to pay advocates fees of

Kshs. 49,225/= by 2/2/2017.

(3)  The decretal sum be paid on installments as follows;-

(i)  Kshs. 250,000/= to be paid on or before 18th February 2017 and thereafter costs of 50,000/= on or before the 18th day of each succeeding month till payment in full

(4) In default of any installments, execution to issue.

5. The Supporting Affidavit of Parminder S. Saimbi, a Director of the Defendant Company, explains the basis of the Application now before Court. The Defendant is aggrieved that in the Application for execution, the Plaintiff’s  Advocate had failed to disclose that it had received a total of Kshs. 1,351,261. 10 which included interest earned from the Bank of Kshs. 351,261. 44.  It only disclosed receipt of Kshs. 1,000,000/=. That, it is said, was dishonesty on the part of the Plaintiff’s counsel.

6. Importantly, it is stated on behalf of the Defendant;

“Had the fact that the Plaintiff/Respondent had received Kshs. 1,352,261. 10 and not Kshs. 1,000,000/= been disclosed, it would have influenced Defendant/Applicant during negotiations and in their final decision.”

7. The Plaintiff conceded the non disclosure of the interest earned but states as follows in its submissions;-

“It is admitted on behalf of the Plaintiff that through an oversight (inadvertence) the interest earned of Kshs. 351,161. 44/= was not credit in the Application for execution.”

But this should not matter according to the Plaintiff because in the affidavit sworn by his counsel, Peter Mwendwa Malonza, the issue of interest now raised by the Defendant was considered before the consent was arrived at.

8. I take this view of the matter.  It is common ground that in its Application for execution the Plaintiff under-declared the amount it had received. The under-declaration consisted of the interest earned. Following that Application, negotiations ensued and culminated into a consent. The Parties are however not agreed on whether the element of interest was discussed prior to the consent of 19th January 2017. The Plaintiff maintains that the Defendant was well aware of it and discussed it on the one hand while the Defendant asserts that it only became aware of the interest element when it obtained a Bank statement from NIC Bank showing that kshs. 1,351,261. 10 had been transferred from the joint account of Memba Muriuki Company Advocates and Malonza & Company Advocates to Malonza & Company Advocates.

9. From the Court record there is no indication as to what was considered before the compromise was reached.  Secondly, while it is undisputed that the Plaintiff under-declared the amount received, the Defendant does not say the date on which it obtained a Bank statement from NIC Bank showing the amount actually transferred. In the absence of these two pieces of information, the Court must ask the question; is the issue of interest a matter which the Defendant knew or ought to have known when negotiating the compromise?

10. The interest was earned in a joint account of the firms of Memba Muriuki Company Advocates and Malonza & Company Advocates.  The former are the advocates for the Defendant and the latter those of the Plaintiff.  This Court is not told why the information as to interest earned, if any, was not available to the Advocates for the Defendant just as it would be to the Advocates of the Plaintiff when its firm was a joint account holder.

11. Whilst the Plaintiff’s Advocate is guilty of not disclosing the payment of the interest element, it cannot be said that this was information that was beyond the reach of the Defendant or its Advocates.  If the Defendant’s Advocates negotiated a consent without obtaining the full facts of the payments made, then it is not diligent enough and they only have themselves to blame.

12. This Court is not persuaded that it should grant the Motion and does hereby dismiss the Notice of Motion of 6th June 2017 with costs.

Dated, Signed and Delivered in Court at Nairobi this 1st Day of December, 2017.

F. TUIYOTT

JUDGE

PRESENT;

Ronald holding brief for Orenge for the Plaintiff/Respondent

Kaberia holding brief for Memba for the Defendant/Applicant

Alex -  Court Clerk