Gold Lida Limited v Nic Bank Limited & Joseph M Gikonyo t/a Garam Investment Auctioneers [2018] KEELC 4535 (KLR) | Reinstatement Of Suit | Esheria

Gold Lida Limited v Nic Bank Limited & Joseph M Gikonyo t/a Garam Investment Auctioneers [2018] KEELC 4535 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT NAIROBI

ELC CIVIL SUIT NO. 177 OF 2017

GOLD LIDA LIMITED.................................................................PLAINTIFF

=VERSUS=

NIC BANK LIMITED…...................................................1ST DEFENDANT

JOSEPH M.  GIKONYO T/A

GARAM INVESTMENT AUCTIONEERS….................2ND DEFENDANT

RULING

1. On 22/9/2017, the plaintiff brought a Notice of Motion of even date praying for an order reinstating this suit.  This suit stood dismissed effective from 19/8/2017 upon expiry of the period of 30 days within which the plaintiff was required to serve upon the defendants summonses to enter appearance and file an affidavit of service to confirm that indeed summonses had been served.

2. On 19/7/2017, in exercise of the powers conferred by Rule 43 of this Court’s Practice Directions, the Court noted that the plaintiff had not taken any step to prosecute the suit since 21/3/2017 when the court delivered a ruling on the plaintiff’s application seeking injunctive orders. The court then directed the plaintiff to retrieve and serve summons to enter appearance and file an affidavit of service. In default of compliance, the suit herein was to stand dismissed. The plaintiff did not comply with the directions of the court, leading to the automatic dismissal of the suit. The present application was necessitated by the automatic dismissal which took effect on 19/8/2017

3. The application is supported by an affidavit sworn by Mr. Appell Kwengu, advocate for the plaintiff.  It is also supported by a further affidavit sworn by Da Li sworn on 30/10/2017.   Mr.  Kwengu deposes that he took conduct of this case on 13/9/2017 and he was not aware of the directions given on 19/7/2017 to the effect that the plaintiff was to retrieve summons to enter appearance, serve them, and file an affidavit of service within 30 days, and that in default, this suit would stand dismissed.  He contends that he got to learn about the directions on 20/9/2017 when the matter came up for mention to confirm compliance with pre-trial requirements.

4. In urging the court to reinstate the suit, Mr. Kwengu submits that the failure to retrieve and serve summons was due to an inadvertent error by the plaintiff’s previous advocates and the same should not be visited on the plaintiff. He further contends that the dismissed suit raises triable issues.  Third, he argues that the defendant will not suffer any prejudice if the suit is reinstated. Fourth, he contends that it is in the best interest of justice that this suit should be reinstated. Lastly, he submits that reinstatement of this suit would meet the overriding objective of our constitutional framework and civil procedure rules.

5. The defendants have opposed the application through a replying affidavit sworn on 17/10/2017 by Waweru Mathenge, the 1st defendant’s Deputy Company Secretary and Head of Legal Affairs. The defendants contend that the application under consideration lacks merit and is an abuse of the court process.  The defendants take the position that, in the administration of justice, the provisions of Article 159 of the Constitutionand the overriding principle in the Civil Procedure Act apply to all the litigants both as a shield and as a sword, and the plaintiff cannot invoke the same to justify its indolence in this suit.  Thirdly, the defendants contend that a perusal of the plaint and the reliefs sought therein discloses that the only outstanding relief capable of determination if the suit were alive would be the issue of costs of the suit. This contention is premised on the three grounds:  (i) prayers (a) and (c) of the plaint were granted for a period of 45 days vide the ruling delivered on 21/3/2017;  (ii) prayers (b) was also granted on  21/3/2017 save that the valuation of the charged property was to be undertaken by the 1st  defendant in accordance with  Section 97 of the Land Act 2012; and (iii) the charged property was subsequently sold on 13/6/2017 in tandem with the ruling of the court which gave the 1st defendant  the leeway to exercise its statutory power of  sale in the event that the plaintiff failed to redeem the title within 45 days.

6. Mr. Kabaiku, Counsel for the defendants, submitted that the present application lacks merit and is an abuse of the court process for two reasons.  First, the plaintiff never collected summons to enter appearance within 30 days as required under Order 5 of the Civil Procedure Rules.  Second, the dispute in this suit revolves around the statutory valuation of the suit property under the framework of Section 97 of the Land Act and this court’s ruling delivered on 21/3/2017 resolved that issue.  Mr. Kabaiku urged the court to dismiss the application.

7. The issue for determination in the present application is whether there is a basis for the court to exercise its discretionary power to set aside the order of 19/7/2017 and reinstate this suit.

8. Section 3A of the Civil Procedure Act gives this court inherent power to make such orders as may be necessary for the ends of justice to be met. Order 51 rule 15 of the Civil Procedure Rules gives the court power to set aside any order made ex parte. The court's discretionary power should, however, be exercised judiciously, with the overriding objective of ensuring that justice is done to all the parties.

9. The guiding principle in the court’s exercise of this judicial discretion was laid down in Mbogo & Another Vs Shah EALR 1908.  The court’s discretion to set aside an ex-parte order of the nature of a dismissal order is intended to avoid injustice or hardship resulting from an accident, inadvertence or excusable mistake or error.  In the same vain, this discretion is not intended to assist a litigant who deliberately seeks to obstruct or delay the course of justice.

10. In the case of Belinda Murai & Others Vs Amoi Wainaina (1978), Madan J set out the following approach to be adopted when dealing  with the question as to whether or not a party should be completely locked out of the seat of justice on account of a mistake;

“The door of justice is not closed because a mistake has been made by a lawyer of experience who ought to know better. The court may not condone it but it ought certainly to do whatever is necessary to rectify it if the interests of justice so dictate.  It is known that courts of justice themselves make mistake which is politely referred to as erring in their interpretation of laws and adoption of a legal point of view which courts of appeal sometimes overrule……”

11. Apaloo JA outlined the following approach to a similar question in Philip Chemwolo & Another Vs Augustine Kubede (1982-88) KAR 103;

“Blunder 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 merit.  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 the purpose of imposing discipline”.

12. In the present suit, the material directions were issued within the framework of Rule 43 of this Court’s Practice Directions promulgated under Legal Notice No. 5178. They were issued as a result of the plaintiff’s failure to take steps to prepare the suit for hearing.  This followed a ruling delivered on 21/3/2017 in which the court made the following orders;

(i) The intended auction of Land Reference Number 15099 Title No. IR 72132 by the Defendants is suspended for a period of 45 days from today.

(ii) The Plaintiff shall within the said period of 45 days deposit into the Loan Account United States Dollars 4,395,964. 62, Kshs.6,469,183. 72 and all subsequently accruing interest.

(iii) In default of payment of the said sums, the 1st Defendant shall be at liberty to undertake a valuation of the suit property within the framework of Section 97 of the Land Act and proceed to realize the security in tandem with the terms of the charge instruments.  The valuation shall bedone by a registered valuer other than M/S Mwaka Musau Consultants and Landmark Realtors Limited.

(iv) Costs shall be in the cause.

(v) This Matter shall be mentioned on 24/5/2017 with a view to giving further directions taking into account that the only dispute before court is about the value of the suit property and Section 97 of the Land Act gives the chargee the mandate to undertake a valuation of the charged property.

13. When the matter came up in court on 24/5/2017, both the plaintiff and its advocate were absent despite being aware that the matter was slated for pre-trial directions. Consequently, the court rescheduled pretrial for 19/7/2017.  It is after the plaintiff and its advocates failed to attend court on 19/7/2017 that the court noted that the plaintiff had not taken any step to prosecute the suit since 21/3/2017 when the ruling was delivered.

14. In pleading for reinstatement, the plaintiff contends that it was not aware of the directions made on 19/7/2017.  In opposing the application, the defendant contends that the application is unmerited because, among other reasons, the only outstanding issue is that of costs of the suit.

15. In my view, the overriding objective of our constitutional and statutory framework on civil procedure is to achieve substantive justice to the litigants.  It is contended that the issue of costs of the suit is outstanding. If that be case indeed, there would be a basis for a hearing to determine that single issue.  This view is informed by Article 50 of the Constitution of Kenya which secures the right to a hearing before the court. This court is obligated to safeguard that right. In light of this, I am of the view that the inconvenience to be suffered by the defendants as a result of reinstatement of this suit can be adequately remedied through an award of costs.

16. Consequently, I make the following orders in disposing the Notice of Motion dated 22/9/2017.

a) The suit herein is hereby reinstated

b) The Deputy Registrar shall sign summons to enter appearance and the plaintiff shall cause the same to be served upon the defendants within 21 days and an affidavit of service shall be filed within the same period.

c) In default of service and filling of the affidavit of service within 21 days, this suit shall stand dismissed.

d) The plaintiff shall pay each of the defendants throw away costs of Ksh. 20,000/- within 21 days and in default, the order reinstating this suit shall stand vacated.

DATED, SIGNED AND DELIVERED AT NAIROBI ON THIS 16TH DAY OF FEBRUARY 2018.

B  M  EBOSO

JUDGE

In the presence of:-

M/s Wanjiku  Advocate for the Plaintiff

Kabaiku  Advocate for the Defendant

Halima -  Court clerk