Frontier Haulage & Construction Company Limited v Put Sarajevo General Engineering Company Limited (C. 98786) & Put Sarajevo General Engineering Company Limited (F. 21/80) [2020] KEHC 8423 (KLR)

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI COMMERCIAL & TAX DIVISION

CORAM: D. S. MAJANJA J.

CIVIL CASE NO. 134 OF 2017

BETWEEN

FRONTIER HAULAGE & CONSTRUCTION

COMPANY LIMITED...............................................................................PLAINTIFF

AND

PUT SARAJEVO GENERAL ENGINEERING

COMPANY LIMITED (C. 98786) ..................................................1ST DEFENDANT

PUT SARAJEVO GENERAL ENGINEERING

COMPANY LIMITED (F. 21/80)...................................................2ND DEFENDANT

RULING

1.  The plaintiff’s claim set out in its amended plaint dated 17th October 2019 is for goods sold and delivered. It has filed a Notice of Motion dated 17th October 2019 made under Order 13 rules 2 of the Civil Procedure Rules, 2010. The plaintiff seeks the following order;

[2] THAT judgment on admission be entered for the Plaintiff/Applicant against the Defendants/Respondents in the sum of Kshs. 53,658,585. 48 owing from the Defendants/Respondents to the Plaintiff/Applicant plus interest thereon.

2. The application is supported by the affidavit of Taghi Hossein Zaddeh, the plaintiff’s managing director, sworn on 17th October 2019. He depones that sometime in 2012, the plaintiff entered into a bitumen purchase agreement with the respondents for the supply of bitumen. Following the agreement, the plaintiff delivered to the respondents at their request bitumen valued at Kshs. 286,285,873. 50 between 21st May 2012 and 29th February 2013. He added that the respondents paid Kshs. 228,967,357. 00 leaving a balance of Kshs. 57,315,517. 55 which the respondents have refused to pay. Mr Zaddeh further deponed that following demand by its advocates, the respondents by a letter dated 7th January 2016 admitted that it owed Kshs. 53,657,585. 48 which they committed to pay.

3. The 2nd defendant entered appearance and filed a statement of defence dated 18th December 2019. It stated that it has never done any business with the plaintiff or authorised any person or agent to transact on its behalf. It is also denied that it has any affiliation with the 1st defendant and only knew of its existence in February 2019 when it learnt that it was registered in Kenya on 5th June 2002 as Put Africa Limited but later changed its name to PUT SARAJEVO GENERAL ENGINEERING COMPANY LIMITED (C. 98786) which it contends was illegal and unprocedural as the 2nd defendant was already in operation in Kenya for at least 20 years prior to the 1st defendant’s registration.

4.  The 2nd defendant further stated that in fact, the Registrar of Companies wrote to the 1st defendant on 14th May 2018 directing it to change its name within 60 days. The 2nd defendant therefore contends that the foregoing facts are prima facie indicative of fraud. The 2nd defendant further contended that its current and former directors have never dealt with the plaintiff in any manner whatsoever hence the admission relied on by the plaintiff was not written with its authority.

5. The 2nd defendant’s opposed the application for judgment on admission through the affidavit of Usamah Yusuf Timimi, the Executive Chairman of the 2nd defendant, sworn on 21st January 2020. The thrust of his deposition was along the lines set out in the statement of defence which I have outlined above. More importantly he stated that the author of the letter dated 7th January 2016 containing the admission, Ramo Gagula, is according to the CR 12 dated 14th February 2014, a director of Put Sarajevo General Engineering Company Limited (C. 98786) and not its director hence he could not bind the 2nd defendant. He affirmed that he never dealt with the plaintiff as alleged or at all as the evidence in support of the application emanate from the 1st defendant.

6.  Both counsel for the plaintiff and the 2nd defendant made brief oral arguments to support their respective submissions. They also cited various authorities dealing with the principles applicable in an application for judgment on admission under Order 13 rule 2 of the Civil Procedure Rules. The common thread running through the cases cited is the decision of the Court of Appeal in Choitram v Nazari [1984] KLR 327in which Madan JA., observed as follows:

For the purpose of order XII rule 6, admissions can be express or implied either on the pleadings or otherwise, eg in correspondence. Admissions have to be plain and obvious, as plain as a pikestaff and clearly readable because they may result in judgment being entered. They must be obvious on the face of them without requiring a magnifying glass to ascertain their meaning. Much depends upon the language used. The admissions must leave no room for doubt that the parties passed out of the stage of negotiations onto a definite contract. It matters not if the situation is arguable, even if there is a substantial argument, it is an ingredient of jurisprudence, provided that a plain and obvious case is established upon admissions by analysis. Indeed, there is no other way, an analysis is unavoidable to determine whether admission of fact has been made either on the pleadings or otherwise to give such judgment as upon such admissions any party may be entitled to without waiting for the determination of any other question between the parties.

7.  The plaintiff’s case is that the letter dated 7th January 2016 written by Ramo Gagula is a clear and unequivocal admission The 2nd defendant’s defence is that the it did not deal with the plaintiff and that Ramo Gagula was in fact a director of the 1st defendant which is an entirely different company. I also note that although the 1st defendant is a party to these proceedings, it is not clear whether it was served hence its position is not known. The court cannot enter judgment against it without giving it an opportunity to be heard. Since there are two defendants sued by the plaintiff, the issue that must be resolved is which of the defendants is liable.

8.  While I am convinced that the admission contained in the letter dated 7th January 2016 is clear and unequivocal, the issue whether the 1st or 2nd defendants are liable either separately or jointly cannot be decided, on the available evidence, on an interlocutory application.

9.  The Notice of Motion dated 17th October 2019 is dismissed with costs.

DATEDand DELIVERED at NAIROBI this 12th day ofFEBRUARY2020.

D. S. MAJANJA

JUDGE

Court Assistant: Mr M. Onyango.

Mr Muumbi instructed by Muumbi and Company Advocates for the plaintiff/applicant.

Mr Wachira with him Mr Ogola instructed O & M Law LLP Advocates for the 2nd defendant.