Dataguard Distributors Limited v Virginia Njeri Kigo, Valz Distributors, Vidi Fabricators Limited, Nairobi Tyre Mart Company Limited & Jackson Waweru [2014] KEHC 5982 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI COMMERCIAL & ADMIRALTY DIVISION

HIGH COURT CIVIL SUIT NO. 641 OF 2012

DATAGUARD DISTRIBUTORS LIMITED:::::::::::::::::::::::::::PLAINTIFF

- VERSUS -

VIRGINIA NJERI KIGO::::::::::::::::::::::::::::::::::::::::::::::: 1ST DEFENDANT

VALZ DISTRIBUTORS:::::::::::::::::::::::::::::::::::::::::::::: 2ND DEFENDANT

VIDI FABRICATORS LIMITED:::::::::::::::::::::::::::::::::: 3RD DEFENDANT

NAIROBI TYRE MART COMPANY LIMITED::::::::::: 4TH DEFENDANT

AND

JACKSON WAWERU :::::::::::::::::::::::::::::::::::::::::: INTERESTED PARTY

R U L I N G

Before me are four applications as follows:-

The Notice of Motion application dated 20th December 2012 and filed on 21st December 2012 by the Defendants.

The Notice of Motion Application dated 7th January 2013 and filed on 15th January 2013 by the 1st Defendant.

The Notice of Motion Application dated 7th January 2013 and filed on 15th January 2013 by the interested party.

The Notice of Motion Application dated 14th January 2013 and filed on 15th January 2013 by the Plaintiff.

The factual background leading to the four applications is as follows. Briefly, the Plaintiff filed a Notice of Motion dated 9th October 2012 seeking orders, inter alia, that the Defendants be compelled to furnish security in the sum of Kshs. 43,000,000/= in satisfaction of a decree that may be passed. The application was allowed by a ruling delivered on 6th November 2012 in which the Defendants were ordered to furnish security in the sum of Kshs. 43,000,000/= within 7 days failing which the order for attachment before Judgment be executed.

The ruling and order was served upon the Defendants who failed to furnish security as ordered. The Plaintiff commenced the execution process and upon successful attachment on 19th December 2012, the Defendants filed a Notice of Motion Application on 21st December 2012 seeking, among other orders, a stay of the orders of attachment and an unconditional release of the goods. The application was placed before the duty Judge on 24th December 2012, on which day the said Judge ordered the Defendants to deposit Kshs. 500,000/= in Court and upon deposit, the goods attached be released to them. The application was to be heard inter partes on 16th January 2013.

The Defendants did not deposit the money and as soon as the application was served, the Plaintiff filed its application dated 14th January 2013 on 15th January 2013seeking to set aside and/or vary the orders made by the duty Judge ex parte and also sought to stay compliance with the Order for deposit of Kshs. 500,000/= and release of the goods. On 15th January 2013, the 1st Defendant and the interested party filed their applications both dated 7th January 2013, seeking for orders for unconditional release of Motor Vehicles KBT 529P and KBQ 019Q respectively, which vehicles were attached during the execution process on 19th December 2012.

The foregoing applications are now before this Court for consideration. I will deal with the applications as listed above.

Notice of Motion filed on 21st December 2012 by the Defendants

The first Application is expressed to be brought under Order 40 Rules 1 and 2of the Civil Procedure Rulesand Sections 1, 1A, 1B, 3, 3A and 63 (e) of the Civil Procedure Act. In the said application, the Defendants are seeking the following orders:-

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The Honourable Court be pleased to set aside its orders issued against the Applicants on the 16th November 2012 for attachment before judgment of the Applicants products/Assets pending the hearing and determination of the suit.

An injunction do issue directed at the Plaintiff/Respondent his agents, servants, assigns and or any other person/body restraining them from advertising, selling, alienating, and or in any manner whatsoever dealing with the attached goods by Kiriiyu Merchants in execution of warrants of attachment before judgment and the said goods be preserved.

That the Honourable court be pleased to order for unconditional return of the goods attached by Kiriiyu Merchants to the Applicants’ premises.

That summons do issue to Elvis Muthoka of P.O Box 1853-00200, Nairobi to be cross-examined on the contents of his affidavit of service sworn on the 15th October 2012 and he committed [sic] to imprisonment for a period not exceeding 6 months if found to have perjured himself.

That costs of this application be provided for.

The application is based on the several grounds stated on the face thereof and is supported by the affidavit of VIRGINIA NJERI KIGO,the 1st Defendant herein, sworn on 20th December 2012.

The 1st Defendant lays the background to the application and avers that on 19th December 2012, while at her work place along Mombasa Road in Nairobi, auctioneers walked into her premises accompanied by police officers and started moving her properties from the premises. She avers that the in-charge of the police that had accompanied the auctioneer informed her that the attachment was in regard of a Court case in which warrants of attachment had been issued.

It is the 1st Defendant’s case that the orders so issued are irregular in the sense that she had not been served with any application that made the orders being granted. She avers that the affidavit of service by the process server which alleged that she had been served was all but false. According to her, the concealment of service was well choreographed to deny her the opportunity to defend herself or raise protestations.

The 1st Defendant avers that at no time has she disposed off her property or company property to defeat the ends of justice from being achieved. She further avers that the motor vehicle KBQ 019Q Toyota Rav 4 is not hers as can be attested to by an official search. It is also averred by the 1st Defendant that the Plaintiff is not right by alluding to an attachment of properties not in her possession. It is her position that no evidence on ownership of the tyres at the high seas has been advanced for the orders to be granted.

It is the 1st Defendant’s case that unless the orders are stayed, she risks losing all her wares in trade as they shall be auctioned unduly whereas this is to be an attachment before judgment where the final decree has not been reached. It is further her case that the claim of theft of Kshs. 43,000,000/= belonging to the Plaintiff is neither here nor there as the matter is actually before the Courts for determination and it should not in any way infer that she stole the cash as alleged.

The 1st Defendant avers that the orders for furnishing of security were not served on her or any of the companies that have been sued and therefore she couldn’t have known of the pendency of that order. She further avers that no notice of the attachment was served on her or the Co-defendants.

The Application is opposed vide a Replying Affidavit filed on 20th February 2013 and sworn on 15th February 2013 by one JAMES KINYUA, described as a director of the Plaintiff’s Company.

The deponent avers that the Defendants did not comply with the provision of security despite service of the Order and hence the Plaintiff proceeded with the attachment. He further avers that it is not true that the Defendants were not served with the Court pleadings and that they merely ignored and/or assumed the matter until the same went from bad to worse only to rush to Court at the last minute.

According to the deponent, the Court duly scrutinized the Affidavit of Service and prodded the Advocate on record orally in Court about service prior to allowing the application to proceed for hearing. Thereafter, the Court made an Order that the Defendants deposit the sum of Kshs. 43,000,000/= as security failing which the attachment was to proceed. The deponent avers that the Order was served upon the 1st Defendant but she took her time and when finally attachment was made, she rushed to Court with the present application.

It is the deponent’s case that if the Application was to be allowed, he would suffer irreparable loss and damage since the Defendants will proceed without doubt to dispose off the goods or conceal them to defeat justice. He avers that the Plaintiff is only to hold the attached goods awaiting the final determination of the suit. He further avers that the goods are in safe hands and they are not attempting to dispose any until the truth is found.

Notice of Motion filed on 15th January 2013 by the 1st Defendant.

The second application is the Notice of Motion dated 7th January 2013 and filed on 15th January 2013 by the 1st Defendant. It is expressed to be brought under Order 1 rule 15 (1) (b) & (c), Order 40 rules 1, 2 and 3 of the Civil Procedure Rules as well as Sections 1, 1A, 1B, 3 & 3A of the Civil Procedure Act.

The Application is seeking for one main order that the honourable Court be pleased to order the immediate and unconditional release of motor vehicle registration KBT 529P to the 1st Defendant/Applicant. It is based on the grounds stated therein and is supported by the affidavit of the 1st Defendant sworn on 7th January 2013.

It is the 1st Defendant’s averment that she is a joint registered owner of motor vehicle registration KBT 529P together with Chase Bank. She referred to an annexture marked VNK-1 as the copy of the log book for the said Motor Vehicle registration. Unfortunately there was no such attachment. However I have noted that in the 1st Defendant’s further affidavit sworn on 19th March 2013 and filed in Court on 20th March 2013, she attached a copy of the logbook as annexture VNK-1. The said logbook indicates that the said motor vehicle is jointly owned by Chase Bank and the 4th Defendant.

It is averred by the 1st Defendant that on 19th December 2012, the Plaintiff’s agents unlawfully attached her said vehicle without giving any proclamation or serving her with orders. She further avers that the said motor vehicle was not among the vehicles in the order issued on 6th November 2012 by this Court. It is also the 1st defendant’s averment that the motor vehicle registration KBT 529P has been bought and fully financed by chase Bank Ltd and she is yet to start servicing the loan.

The Application is opposed by the Plaintiff through a Replying affidavit sworn by JAMES KINYUA on 8th February 2013 and filed in Court on 11th February 2013.

The Notice of Motion filed on 15th January 2013 by the interested party

The third application is the Notice of Motion dated 7th January 2013 and filed on 15th January 2013 by the interested party. The application is expressed to be brought under Order 40 rules 1, 2 and 3 of the Civil Procedure Rules as well as Sections 1, 1A, 1B, 3 & 3A of the Civil Procedure Act.

The application is seeking for orders that the Applicant be admitted as an interested party to the suit and that this honourable court do issue an order against the Plaintiff/Respondent, its agents, servants, representatives, assigns and more specifically Kiriiyu Merchants to unconditionally release and return motor vehicle KBQ 019Q to the Applicant/interested Party.

The Application is based on the grounds stated on the face of the application and is supported by the affidavit of Jackson Waweru, the applicant/interested party herein and sworn on 7th January 2013 as well as a Supplementary affidavit sworn by him on 4th March 2013. It is averred by the interested party that he is the registered owner of motor vehicle registration KBQ 019Q. To this end he annexed copies of the logbook and search certificate [marked JW-1(a) and (b)] to ascertain ownership.

He further avers that he has never been a party to this suit, he has not had any dealings with the Plaintiff and he does not owe the Plaintiff any monies. He also avers that the auctioneers, Kiriiyu merchants have never proclaimed his motor vehicle or any other property.

It is the Applicant’s prayer that  since he has nothing to do with the case and since the Plaintiff is not seeking any orders against him, the Court do direct the unconditional return of his motor vehicle and that the Plaintiff/Respondent be ordered to pay him reasonable damages/compensation for the unlawful and malicious attachment. He further avers that his business has been affected due to the unlawful attachment and he intends to seek general damages from the plaintiff for its unlawful acts.

The application is opposed by the Plaintiff through the Replying Affidavit sworn by JAMES KINYUA on 8th February 2013 and filed in Court on 11th February 2013.

Notice of Motion filed on 15th January 2013 by the Plaintiff.

The fourth and last application is the Notice of Motion dated 14th January 2013 and filed on 15th January 2013 by the Plaintiff. It is expressed to be brought under Order 45 Rule 1(1) of the Civil Procedure Rules and Section 80 of the Civil Procedure Act. The application is seeking for one main order that the honourable court be pleased to review, set aside, vary and/or discharge the Orders made on 24th December, 2012.

The application is based on the grounds stated therein and is supported by the affidavit of JAMES KINYUA sworn on 14th January 2013. The deponent avers that the Order to remove attachment was made in error since the Court had already imposed the security to be provided by the Defendants failure to which the attachment was to be done. He further avers that at no time did the Defendants apply to have the security varied and that it was an error to vary the earlier Order without formal application or affording the Plaintiff opportunity to respond.

It is averred for the Plaintiff that the law requires that security that had been ordered be furnished before removing an attachment before judgment and considering that the Defendants are yet to comply with the same, it would be premature to release the goods.

The Application is opposed vide the Defendants’ Grounds of Objection dated 13th February 2013 and filed in Court on 14th February 2013. The grounds are that the Defendants did not apply for the variation of the orders made on 16th November 2012 but to have them set aside. Further, that the said orders were never varied by the Order of 24th December 2012. According to the Defendants, the Honourable Judge exercised his discretion by granting the orders on the 24th December 2012.

All the four applications were prosecuted by way of written submissions. The Plaintiff filed written submissions dated 22nd April 2013 on even date while the Defendants filed theirs on 9th October 2013. The interested Party filed his written submissions on 10th October 2013.

ANALYSIS

First Application

The first application is mainly asking for orders that the honourable Court be pleased to set aside its orders issued against the Defendants on 16th November 2012 for attachment before judgment and that there be unconditional return of the goods attached by Kiriiyu Merchants to the Applicants’ premises.

The Defendants’ main contention is that they were never served with the Court pleadings herein. The Plaintiff denied the same and on record is an affidavit of service filed on 16th October 2012 by the process server who depones that he effected service on 11th October 2012.

The process server was not cross examined and therefore the evidence given in his affidavit is uncontroverted. The Defendants had the chance and time to apply for summons to issue against the process server for cross examination but they did not do so. In other words the Defendants have not substantiated before this Court their claim that they were not served with the Court Pleadings.

With regard to the unconditional release of the goods attached, this Court can only grant such an order once the Defendants deposit the sum of Kshs. 43,000,000 required as security.

In the result, the Defendants’ Application dated 20th December 2012 is not warranted and is therefore dismissed.

Second Application

This is the 1st Defendant’s application seeking for one main order that the honourable Court be pleased to order the immediate and unconditional release of motor vehicle registration KBT 529P to the 1st Defendant.

The main question to be answered here is whether the said motor vehicle should be released.

It is the 1st defendant’s contention that the motor vehicle registration KBT 529P has been bought and fully financed by chase Bank Ltd and she is yet to start servicing the loan. To this end I would refer to Order 39 rule 10 of the Civil Procedure Rules which provides that attachment before judgment shall not affect the rights, existing prior to the attachment, of persons not parties to the suit. Therefore, there is no concern in the fact that Chase Bank is a joint co- owner to the said motor vehicle and that the 1st Defendant is yet to service the loan.

Though from the copy of the logbook it is evident that the said motor vehicle is jointly owned by Chase Bank and the 4th Defendant, the 1st Defendant has associated herself as the co-owner. Understandably so, as she is a Director of the 4th Defendant Company. The 4th Defendant Company has been sued as well and for that reason there is no anomaly in attaching a property belonging to it.

However, It is the 1st Defendant’s argument that the Plaintiff unlawfully attached her said vehicle without giving any proclamation and that the said motor vehicle was not among the vehicles in the order issued on 6th November 2012 by this Court. It is correct that the said motor vehicle was not part of the property to be attached as per the Orders of 6th November 2012.

Order 39 rule 5(2) of the Civil Procedure Rules requires that the plaintiff unless the Court otherwise directs, specify the property required to be attached and estimated value thereof. It is plain that the Plaintiff did not mention motor vehicle registration KBT 529Pin its application and consequently the same was not part of the Orders of 6th November 2012. On that ground alone, the 1st Defendant’s application succeeds.

Third Application

The application is seeking for orders that the Applicant be admitted as an interested party to the suit and that this honourable court do issue an order against the Plaintiff, its agents, servants, representatives, assigns and more specifically Kiriiyu Merchants to unconditionally release and return motor vehicle KBQ 019Q to the Applicant.

It is clear and the same is not controverted that the interested party herein is the registered owner of motor vehicle registration KBQ 019Q. This is evidenced by the annexed copies of the logbook and search certificate [marked JW-1(a) and (b)] attached to the interested party’s supporting affidavit.

The Plaintiff’s argument is that the applicant became the owner barely 8 days before the current suit was filed and long after investigations had commenced. It is the Plaintiff’s case that the applicant is being used by the 1st Defendant to hide properties and that he is simply registered as the owner of the said vehicle for convenience. I understand the Plaintiff’s concerns.  However, there is no proof to these allegations and the same amount to mere speculations.

What the Court can rely on at this stage is the Logbook presented before this Court showing that the applicant/interested party is the owner of KBQ 019Q. The authenticity of the said document is not in question.

Without saying more, there was no basis of attaching the Interested Party’s property by the Plaintiff and the said attachment must be condemned as illegal. I thereby allow the Interested Party’s application and order for the unconditional release and return of the said motor vehicle KBQ 019Q to the Applicant/interested Party. Having, done so I don’t find it necessary to grant the Applicant’s order that he be admitted as an interested party. The same has been overtaken by events.

I further direct that the Plaintiff will incur the storage charges incurred up to the date of release of the said motor vehicle.

Fourth Application

The fourth and final application is the Plaintiff’s Notice of Motion filed on 15th January 2013. The Plaintiff seeks to set aside the ex parte orders made by the duty Judge on 24th December 2012.

The orders of this Court given on 6th November 2012 were clear to the effect that the Defendants were to deposit a sum of Kshs. 43,000,000 as security failing which an order for attachment before Judgment would issue. The Defendants failed to furnish security and upon attachment by the Plaintiff, they moved to Court vide the Notice of Motion Application dated 20th December 2012 seeking to set aside the orders of attachment, an unconditional release of the goods among other orders. On 24th December 2012, the duty Judge made an ex parte order that the Defendants do deposit a sum of Kshs. 500,000/= and upon deposit the goods attached be released to them.

From the foregoing it is clear that the latter order of 24th December 2012 varied this Court’s orders given on 6th November 2012. The orders of 24th December 2012 were made ex parte pending the inter partes hearing of the Defendant’s application filed on 21st December 2012.

I have already dealt with the said application filed on 21st December 2012 herein above, being the first application, which application has been dismissed. Having determined the said application, the ex parte orders of 24th December 2012, in essence have been discharged or set aside. In any case the Defendants did not comply with the said Orders. Therefore, I do not find it necessary to venture into whether the orders of 24th December 2012 by the duty Judge were made in error or otherwise.

In the upshot, the Plaintiff’s application to set aside the ex parte orders made by the duty Judge on 24th December 2012succeeds.

CONCLUSION

As a result of the foregoing and in a synopsis, the Court makes the following orders:-

The Notice of Motion application dated 20th December 2012 and filed on 21st December 2012 by the Defendants is hereby dismissed with no order as to costs.

The Notice of Motion Application dated 7th January 2013 and filed on 15th January 2013 by the 1st Defendant is hereby allowed with no order as to costs.

The Notice of Motion Application dated 7th January 2013 and filed on 15th January 2013 by the interested party is hereby allowed with costs.

The Notice of Motion Application dated 14th January 2013 and filed on 15th January 2013 by the Plaintiff is hereby allowed with no order as to costs.

DATED, READ AND DELIVERED AT NAIROBI

THIS 11TH DAY OF MARCH 2014

E. K. O. OGOLA

JUDGE

PRESENT:

No appearance for Plaintiff

Nyaberi for Defendants

Nyaberi holding brief for Ougo for Interested Party

Teresia – Court Clerk