Gention AG v Beloilco Holdings Limited & Bhavasar Anadkumar t/a Sarax Enterprises [2017] KEHC 7073 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

HC.COMM. 146 OF 2015

GENTION AG...................................................................PLAINTIFF

VERSUS

BELOILCO HOLDINGS LIMITED……….…………DEFENDANT

BHAVASAR ANADKUMAR T/A

SARAX ENTERPRISES…………. ..…………INTERESTED PARTY

R U L I N G

1. Before court for determination are two applications seeking orders as follows:-

Plaintiff’s Application

i) That this matter be certified urgent and heard ex-parte in the first instance.

ii) That a Temporary Injunction be issued restraining the Defendant/Judgment Debtor whether by itself, officers, Directors, Servants and or its agents or whomsoever is acting on its behalf from terminating the lease, evicting the Decree Holder/Applicant/from and/or, interfering with the Decree Hlder’s quite possession, control and occupation of L.R. No. 13053 Kilifi in Title No. C.R. 14391 pending the hearing and determination of this application.

iii) That a Temporary Injunction be issued restraining the Defendants/Judgement Debtor whether by itself, officers, Directors, Servants and or its agents or whomsoever is acting on its behalf from terminating the lease, evicting the Decree Holder/Applicant/from and/or interfering with the Decree Holder’s quite possession, control and occupation of L.R. No. 13053 Kilifi in Title No. C.R. 14391 pending the attachment, execution and sale of L.R. No. 13053 Kilifi in Title No. C.R. 14391 in satisfaction of the Court Decree herein.

iv) Costs of this application.

Defendant’s Application

i) That this Application be heard ex parte in the first instance.

ii) That execution of the judgment entered against the Defendant on 11th February 2016 and the resultant decree dated 29th February 2016 be stayed pending the hearing and determination of this Application.

iii) That the judgment entered against the Defendant on 11th February 2016 in default of filing a defence and the resultant decree dated 11th February 2016 be set aside.

iv) That the costs of and occasioned by this Application be provided for.

2. On 11. 10. 2016 the Court gave directions that the two applications be heard together and that the parties file written submissions and attend court to highlight the same.  The plaintiff did not file any submissions but the defendant did on the 7/10/2016.

3. The reason behind the court’s orders that the two applications be heard together is that the defendants application seeks to set aside the default judgment of 11/2/2016 and the resultant decree on the basis that upon service the defendant did file an Appearance Under Protest and thereafter lodged an application dated 29/1. 2016 seeking to strike out the suit for wait of jurisdiction while the defendants application is for an injunction stopping the defendant from terminating the lease or evicting the plaintiff pending the attachment and sale of LR No. 13053 Kilifi Title No. CR. 14391 in satisfaction of the decree.  It follows therefore that the plaintiffs/application and its outcome would largely depend on the outcome of the defendants application.  It will so depend because, an attachment and sale pursuit to the judgment will only be a consideration if the defendants application fails but will not be an issue at all should the judgment be set aside.

4. The two applications were opposed by either sides by grounds of opposition dated 15th June 2016, by the plaintiff, and those dated 4/7/2016, by the defendant.  For the purposes of this ruling, as I have said before, I will consider the defendants application first and only seek to consider the plaintiff’s application should the defendants/application fail.

Submissions by Parties

5. In the submissions filed by the defendant the defendant takes three points of attack on the judgment to be that; there was no jurisdiction to outer a final judgment as the plaint did not make a liquidated demand; that the court’s jurisdiction was ousted by an agreement between the parties and that as filed the suit was filed without the authority of the plaintiff company.

6. In the grounds of opposition the plaintiff contends that there has not been proffered any reason for delay to file a defence and that the plaint makes a liquidated claim and thus the judgment was regularly and duly entered.  On the propriety of the suit on the agreement between the parties the plaintiff contend that is a side show intended to divert the court’s attention to the real issue in controversy.

Analysis and determination

7. Whether or not to set aside a judgment, the court considers whether or not the Judgment was regularly entered.  In the event the judgment was regular then, the court moves to the next question whether or not there is a defence that raises a triable issue to enable the defendant be granted an opportunity to defend.  To that extent setting aside is essentially a judicial discretion designed to achieve end of justice while noting that a court of law exist for purpose of resolving disputes reserves to set aside its order or judgment not given on the merits and due to a default by a party to the proceedings.

8. In this matter the question of service is not in dispute.  It is admitted that the amended plaint was served upon the advocates on the 15/12/2015 well after the appearance had been entered on the 9/12/2015.  For that reason the request for interlocutory judgment made on 5/2/2016 was thus regularly made.  The contention is however whether the request as made ought to have resulted into an interlocutory judgment or a final judgment.  The request for judgment was expressed to be pursuant to Order 10 Rule 4 and in own words requested:-

“The request is for interlocutory judgment as prayedfor in the plaint”.

9. The prayers in the Amended plaint are worded as follows:-

a) Special Damages of Kshs. 149,655,283. 30 as pleaded in paragraph 19

b) Special Damages of Ksh.514,560,720. 80 as pleaded in paragraph 19

c) General Damages of Kshs.500,000,000/= as pleaded in paragraph 20

d) Indemnity for Kshs.256,445,894/= as pleaded in paragraph 14(b)

10. Senantics aside, the plaintiff prayed for exact sums but described those sums as special damages, general damages and indemnity payments.

11. In this courts’ understanding general damages are damages at large due and liable for proof by evidence.  The author of Halburys Laws of England 14th Edition determine general damages as:-

“Those damages which will be presumed to be thenatural or probable consequence of the wrong complained of, with the result that the plaintiff is required only to assess that damage that have been suffered…., general damages are those losses, usually but not exclusively precuniary which are not capable of precise quantification in monetary terms”.

This definition leads me to find that general damages ought and must be proved by evidence.

12. Generally, as a rule, no general damages are due on a claim for breach of contract over and above what would naturally flow for the breach by the offending party.  This is what I understand the decisions by the Court of Appeal for East Africa in Dharanishi vs Karau [1974] EA 4 as consistently followed by the Court of Appeal, Kenya, in Provincial Insurance Company of East Africa vs Mordekai Mwanga Nandwa [1995 – 1998] 2 EA 41, Habib Zurich Finance (K) Ltd vs Muthoga & Another [2002] EA 81 and Visoi Saw Mills vs Attorney General [1977] eKLR.

13. I understand the court of appeal in the authorities to say that generally no general damages are awardable beyond what the parties contemplated in their agreement but a party is free to prove that the breach has occasioned to it some financial or pecuniary loss.  In my view such loss need to be proved, the moment is expressed as general damages and assessment therefore is at the discretion of the court based on the evidence adduced.  I hold the view that the plaintiff was always aware that he needed to prove the general damages as well as what it called indemnity hence the reason why he sought an interlocutory judgment.  That interlocutory judgment out to have been followed by some proof by production of evidence and it matters note that these are notes on the request directing that a Judgment be entered for liquidated sum.

14. I think whether or not the sums claimed as general damages and indemnity are special damages which are themselves liquidated claim, needing no further proof is a matter that can only be determined at trial.  Such a trial cannot take place unless the doors shut by the interlocutory judgment is opened by set aside.

15. It is equally contested in the affidavit of WALTER AMOKO in support of the application to set aside that the courts jurisdiction was expressly ousted by the agreement between the parties.  That to me is not frivolous or mundane question.  I think it is a question that when presented to court, goes to jurisdiction and ability of the court to entertain the matter, the court would have to address it before moving forward.  The foregoing two issues are enough to say that it is evident that the defendant has one or two issues to be tried by the court.  Once again that can only be achieved if setting aside is allowed.

16. This court in Abdulhakim Abdulla Mohammed & Anothervs Kenya Power & Lighting Co. Ltd [2016]eKLR said:-

“That leniency with which a court treats a defaulting defendant is the image mirror of the vigour with which the court seeks to protect the right of a party to be heard.  The words of Apaloo JA, in PHILLIP CHEMWOLO & ANOR -vs- AUGUSTINE KUBEBE, have been quoted, and I think for a long time to come will always be quoted, as a guide in circumstances where a default is attributed to inadvertence or mistake”.

The Judge said:-

“Blunders will continue to be made from time to time and it does not follow that because a mistake has been made that a party should suffer the penalty of not having his case heard on merits.  I think the broad, equity approach to this matter is that unless there is fraud or intention to overreach, there is no error or default that cannot be put right by payment of costs.  The court as is often said exists for the purpose of deciding the rights of the parties and not for the purpose of imposing discipline”.

17. I have said before that the judgment was prima facie regularly entered as service was effected and acknowledged.  Where the judgment sought to be set aside is a regular judgment then the defendant has to demonstrate that he has a triable case to present at trial.  In Sebei District Administrator vs Gasyali [1968] EA 300 the court said:-

“The nature of action should be considered, thedefence, if one has been brought to the attention of the court, however irregularly, should be considered.  The question as to whether the plaintiff can be compensated by an award of costs for any delay caused should be considered and finally, I think it should always be remembered that to deny the subject a hearing should be the last resort of a court”.

18. I have considered the Amended plaint filed and the fact that there have been related cases between the parties and the lease agreement between the parties as well as the application by the defendant dated 27/1/2016 and filed in court on the 17/3/2017 and I have come to the conclusion that the interest of the justice of this case will be served by setting aside.  I set aside but order that the defendant shall pay to the plaintiff thrown away costs in the sum of Kshs.50,000/= within 30 days from the date of this ruling.

19. As the Defendants contest jurisdiction and have invoked the provisions of section 6, Arbitration Act 1995, I direct that the application be fixed for hearing on the 19/6/2017 and the parties  be at Liberty to file and exchange written submissions within 40 days from today.

It is so ordered.

Dated and delivered at Mombasathis 20th day of March 2017.

HON. P.J.O. OTIENO

JUDGE