Fly Aviation Services v Bravo Cargo Air Dwc Llc , Fredrick Ururuka & Cfs Logistics Services Ltd [2016] KEHC 130 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & ADMIRALTY DIVISION

CIVIL  SUIT  NO.  246  &  249  OF   2015

FLY AVIATION SERVICES…………........…PLAINTIFF/DECREEHOLDER

VERSUS

BRAVO CARGO AIR DWC LLC…………… …………. 1ST DEFENDANT

FREDRICK URURUKA …………………………………. 2ND DEFENDANT

CFS LOGISTICS SERVICES LTD………….…………………OBJECTOR

R U L I N G

1. This  matter  first  came  before  the  Court  under  a   Certificate  of  Urgency dated 22nd May 2015, on the Application of  the Plaintiff.  The Plaintiff is also a Decree Holder.  The  Judgment  Debtors are the First Defendant  Company  and  its  Director,  namely, Bravo Cargo Air and Captain  Fredrick  Ururuka.  The dispute and Decree relates to a lease for an aircraft.  The Lease Agreement between the Parties was dated 11thNovember  2014, pursuant to which US$ 178,450. 00  was  paid by the Plaintiff to the Defendants.

2. Previously, in the course of hearing this Application,  the  Parties  had  entered  into  and  recorded a consent in settlement of their dispute.  Unfortunately, that did not end the matter.  The  dispute  arose  after  the  Plaintiff  leased  one  of  the  Defendants’ aircraft.  The Plaintiff paid the fee agreed, however, the aircraft was not made available to the Plaintiff lessee.  The  Defendant’s  Director  thereafter  became  elusive  and  there  was  no  prospect   of  the  matter  being  resolved  without   litigation.  Subsequent to issue, the Parties informed the court the matter was resolved by consent.  The  Consent as entered provided  for  the  payment  and/or refund of the sum of   US$ 269,377. 73. It  was  dated  30th June 2015.   Under the Consent, the ex parte Orders of 24th May 2015 were discharged.

3. The Defendant defaulted on the terms agreed and the Director again became difficult to contact.  Prior to the Consent, and  possibly  the  reason  it being  given,  the  Plaintiff  brought an application for the arrest of  the  aircraft; a  DC8 -73-5 Registration: TT –DBC,  4 Engine CFM 56-2 M, which  was  then  at  Jomo  Kenyatta  International  Airport (JKIA).  The Application was filed on 22nd May 2015, under HighCourtCivil Case Number; 249 of 2015.  The Plaintiffs sought a temporary injunction preventing the removal of said aircraft from the jurisdiction.

4. The Application sought  the following Orders:

(1)  For reasons to be recorded, this Application be certified as urgent and the same be heard ex-parte in the first instance for purposes of prayers 2, 3, 4 and 5.

(2) The Honorable Court be pleased to grant leave of service of this Application, the Supporting documents, Notice of Summons and the Plaint in Dubai, United Arab Emirates where the Respondents ordinarily conduct business.

(3) Alternatively this Honorable as to meet the ends of Justice be pleased to order service of this Application, Supporting documents and any consequential orders through email address of the Respondents due to the urgency of this matter

(4) The Honorable Court be pleased to grant a temporary injunction restraining the Respondents from acting in any manner as to induce breach of the Wet-Lease Agreement between the and the Applicant pending the hearing and determination of this Application inter-partes.

(5) The Honorable Court be pleased to grant a temporary injunction restraining the Respondents whether by themselves, their Servants, Agents, employees, assigns or otherwise from flying, repositioning, Removing, transferring or disposing of Aircraft:  DC-8-73F; registration TT-DBC; 4 engines: CFM 56-2C pending the hearing and determination of this suit.

(6) That alternatively the court does issue an order as it deems just and convenient in the circumstances pending the hearig and determination of this Application inter-partes…..”

The Supporting Affidavit was sworn by a Emadeldeen Osmain of Al Khobaisi-Dubai

5. In  fact  the  Orders  sought in  the  Application  brought  by  the  Plaintiff  were  not  appropriate  to  the  circumstances  of  this case.  The Plaintiff’s Application was properly to be made under the Cape Town Convention.  It  was  subsequently  made  in  the  correct  way  on  the  basis  of monies  had  and  received  and  non-delivery  of  the  aircraft,  the  subject  of the  lease.  The  Application  prayed  for  the relevant order to be “pending  the  hearing  and  determination  of  the  suit.”.   However, to allow for service of the Application, the Order in terms of Prayer 5 was made for a limited period of 7 days.    Service proved difficult and the Court Ordered alternatively service.

6. The Defendants were served and on 23rd June 2015 they filed a Memorandum of Appearance together with a Notice of Preliminary Objection and a Defence.  The Preliminary Objection sought to challenge the Court’s jurisdiction.  Clearly, the Advocates were not  aware  of  the Cape  Town  Convention  or  were  misdirected  as  to the  facts.  In  the   circumstances  the  Preliminary Objection  was  heard  and  dismissed  and  each  of  the  Parties’  Advocates  were  provided  with  copies  of  the  Convention.  The  Court took  the  view  that  it  is  in  the  interests  of   justice  for  Advocates  to  be  well  prepared  and up  to  date  with  the   law  when  they  appear  in  Court  to  argue  a  matter.   The aircraft was still at JKIA and The  Order  under  the  Cape  Town  Convention  was granted  in  the  terms,  that “the Judgment Debtor and the Objector  were prevented from removing the aircraft Mc Donnel Douglas  DC8-7-5 Registration  Number; TT-DBC, 4 Engine CF 56-2M, out  of  the  jurisdiction  and  the  Kenya Civil  Aviation  Authority  (“KCAA”) was to facilitate that Order

7. As stated  above, shortly after that decision, the Parties entered  into “ a  consent”  whereby  they  agreed that the Defendants would pay to the  Plaintiff   the  sum  of  US$ 269,377. 73  in  relation  to both  suits  HCC. 249 of 2015and HCC 246 of 2015.  The said sum was to be paid in seven (7) monthly instalments.  Further, the  Parties  agreed  the  ex-parte  orders  were  to be  discharged  forthwith.  The  sums  were  not  paid   and  the  Plaintiff  obtained  a  decree  which  it  sought  to  enforce  through  its  Auctioneers  Dalali Traders Auctioneers.   Between  30th  June  and  12th August  2015  no  payment  was  received  and  a   warrant  of  sale was  issued  by a  Deputy  Registrar  of  this Court. The sum to be realised was said to be Kshs 18,095,328. 20/=.  The property against which it was to be executed was not identified.

8. On 19th August 2015 ( that  is  one  week after the threat of execution), an  entity  calling  itself CFS  Logistics Services  Limited  appointed  a  firm  of  Advocates  to  act  for  it.  The Notice of Appointment was filed calling itself an Objector.  At  the same  time  a Certificate  of  Urgency  was  also  filed  stating  that  the  aircraft  DC8-73F  & DC 8 -735   Registration  number; TT BC   Mc Donnel Douglas  was  going  to be  wrongfully  auctioned.  It  was  said  that  the  Auctioneer  had  proclaimed  it on 13th August  2015  and  would  proceed  to  Auction on 20th August 2015 (the following week and a day later).  The Chamber Summons  of  same  date  sought  leave  for  matter  to be  heard  in  the  vacation.  In  the Supporting Affidavit  sworn  by  the Advocate  with conduct  of  the  matter,  he states  that  the  aircraft  would  be  auctioned  on  20th August  2015.  He  says the Objector was  the  legal  and  beneficial  owner  of the  aircraft  having  purchased  the  same  in  July 2015.  That is when, albeit the injunction had been discharged, the Defendant was in breach of its obligations under  the Consent entered on 30th June 2015.  The same Advocates (J.S.Khakula) also filed a Notice of Objection to attachment in the Chief Magistrate’s Court.  A second Certificate of Urgency  also  asserted  that  the  aircraft  would be  auctioned  on  20th August 2015.  In fact the proclamation dated 12th August 2015, states;

“you are  hereby  notified   that  the moveable  property  etc,  left  in  your  custody  for 7 days.  At  expiry of 7  days  the  same  will  be  removed  to  auctioneers  premises  and  sale  by  public  auction.”

Therefore  there  is  no  evidence  before  the Court  to say  that;

(i) There  would  be  any  auction  on  20th  August 2015  and

(ii) That any aircraft would be auctioned on that day, or the Aircraft was located at premises of the Defendant.

9. The  Notice  of  Motion  also  filed  on  behalf  of  the  Objector  at  the  same time seeks the following orders:-

(i) Stay of Execution, of the Decree and Warrants.

(ii)  Lift or/ set aside warrants of attachment against aircraft.

The grounds are set out in the Application.  It is notable that Ground 2 states that the proclamation was issued on 13th August 2015. That means it would expire on 21st August 2015. The Objector  claims  it  will suffer  irreparable  loss  and  damages  unless  warrants  are  lifted.  That is not explained further. On 7th September, Mr. Onduso for the Plaintiff  gave  an  undertaking  that  the  aircraft  would  not be sold pursuant to the attachment until after this Ruling was delivered.

10. The Supporting Affidavit is sworn by one Vincent Amayer from Lagos  State in Nigeria.  He says he is Managing Director of the Objector.   He  says  the  Objector  acquired  the  aircraft  on  20th July 2015  and  has  been  using  it since 25th July 2015.  He does not state its whereabouts.  At paragraph 5 he  says  the  Auction  will be  on 26th  August  2015  as  that  is  when  the Proclamation /Notice  lapses.  He says the aircraft does not belong to Bravo Cargo.  He also states that the objector will suffer irreparable loss and damage.  He  does  not  say  what  that  loss  or  damage  would  be.  Save  for  loss  of  revenue, the  case on loss is not clear.  He  does  not  tell  the   Court  whether  negotiations  for  the  Sale  were  undertaken  before  or  after  30th  June 2015.   However,  given  the  proximity  of  the   purported  sale  to the  consent  order,  it  raises  concerns  as  to  timing.  These no doubt can be tested under cross-examination.

11. Clause 31 of Sale and Purchase Agreement dated  20th  July 2015,  provides  that  the Delivery  date  shall be  five (5)  days  after  receipt  of  payment. There is no evidence of proof of payment and therefore no proof of delivery.

12. On  24th  August 2015  the  Objector  filed   a  second  application  identical  to the  one  filed  19th August  2015  except  that the Supporting  Affidavit  was  sworn   by  the  Advocate.  In  it he notes  that the Court  declined  to  make   interim  orders  and the  Objector  has  not provided  further  proof  of  ownership.  He  states  that  there  is  a  need  to  preserve  the  status  quo  to  prevent  the  Objection  being  rendered  nugatory.  That   Application demonstrated   the aircraft was not sold on whether 20th or 21st August as alleged.

13. The Plaintiff filed Grounds of Opposition to the Objector’s Application on the basis that it is an attempt to review the order.  On 1st September 2015 it filed  an application seeking an order restraining the Objector from removing the aircraft from the jurisdiction.

14. In the meantime, the Judgment Debtor continued in default.  The  Affidavit   of  Chief Executive Officer of the Plaintiff Company filed  on 1st  September 2015  states  at   Paragraphs 9 to 16:

9. THATit  is  clear  from  the  foregoing  that  the  Judgment Debtor  and  the  Objector  are  colluding  to frustrate  the  Attachment  and  sale  of  the  aircraft.

10. THATI  have  shown  legitimate  reasons  on  why  this  application  should  be  allowed  and  I  pray  that  the  same  be  allowed  as  prayed.

11. THATas  can be  seen from  the  Objectors  documents  and  the  sequence   of   events,  the  Objector  and  the  Judgment  Debtor  have  conspired  to defeat  the  claim  of  the  Decree  Holder.

12. THATthe  Judgment  Debtor  purposely  and  without  informing  the Decree holder  entered  into a  sale  agreement  with  the  Objector  knowing  very  well  he   had  a  judgment  to  settle with the Decree  holder  and  did  not  even  bother  to  notify  the  Decree  Holder  of  his  intentions and  see  how  the  Decree  would  be  settled.

13. THATthe  Judgment Debtor  had  a duty  to disclose  his  intentions  to  the  Decree  Holder  and  also  inform  the Objector  but  he  failed  to do  so  and this  was  to ambush  the  Decree  holder  and  deny  him an  opportunity  to satisfy  his  claim  against  the  Judgment  Debtor  out  of  the  intended  sale  of  the  aircraft  herein.

14. THATI  am  advised  by  our  Advocates  on  record  which  advise  I  verily  believe  to be  true  that  the  purported  transfer   of  the  aircraft  to the  Objector  is fraudulent  and  calculated  to  defeat  or  frustrate  the  lawful  orders  of  this  Honourable  Court.

15. THAT I am informed  by  one Denis Kimani  of   Kenya  Civil Aviation  Authority,  telephone  number +254 723 309 209  which  information  I  verily  believe  to be true  that  the  Objector  has  received  the  Certificate of  change  of  ownership  from  Chad  and  the  same  is  undergoing  verification  upon  which  they  are  bond  to  issue  the  Air  Operator’s  licence  that  will  facilitate  the  relocation  of  the  aircraft  out  of  the  jurisdiction  of   this  Honourable  Court  anytime  from  now  and  defeat  or  frustrate  the  proclamation  and  attachment  of  the  aircraft  following  the  lawful  orders  of   this  Honourable  Court.

16. THATthe   applications  by the  Judgment  Debtor  are  thus  an  abuse  of  the   court  process  and  should  not  be  entertained.”

15. The   Parties have filed Written Submissions and highlighted them on 10th February 2016.  The Court has read and considered both the Written Submissions and the arguments raised in highlighting.

16. 16. The   underlying   issue here  is  onward payment  of  monies  received  by  the  Defendant.  The Defendant was in default.  The Defendant   was injuncted from disposing of the aircraft.  Suddenly, the Defendant was willing to consent to generous repayment terms.  Again, three was repeated default.  At the same time, the aircraft is purportedly transferred.  Amazingly that is said to have been done without payment nor appropriate regisration.  Even after the sale of the aircraft, it is found in the Defendant’s possession.  Was the supposed buyer not keen on taking possession?

17.  There is no cogent evidence that the aircraft was in fact disposed of at the  time of the first  application.   In fact, Kenya Civil Aviation  Authority (“KCAA”)  reports  attempts at disposal were ongoing on 24th  August 2015.  It could also be the case that the negotiations were taking place during the currency of the Court’s order of 22 May 2015 prohibiting attempts at disposal.  Again, that is a matter for Trial.

18. The order sought by the Objector is for equitable relief. The Defendant owner/previous owner is in default of an agreement and a consent order. The Objector obtains title through that Defendant.  Therefore, apart from the absence  of  any  cogent  believable   evidence   of  purchase,  the  Objector  is  tainted  by Defendant’s  unclean  hands  in  relation  to  its   conduct  regarding  failure  to  supply  the  aircraft  and  then   default in refund/payment.  Through its Application the Objector demonstrates knowledge of the facts.  The timing suggests the consent and purported sale was merely a device to evade payment.  That  is  supported  by  fact  that,  payment was forthcoming only after an interim stay was declined.

19. Further the application is defective. The evidence is inconsistent, incomplete and contradictory.   For   these   reasons the Objector’s application is dismissed with costs.

Order accordingly

FARAH  S .M. AMIN

JUDGE

SIGNED AND DELIVERED AT NAIROBI THIS 17th DAYOF October 2016.

In the Presence of:

Clerk:  Isaiah Otieno

No Appearance for Applicant

No Appearance for Respondent

Mr Ombwayo Holding brief for Mr Khakula for the Objector.