Grain Industries Limited v Ali & 6 others [2023] KEHC 27009 (KLR)

Grain Industries Limited v Ali & 6 others (Civil Case E051 of 2023) [2023] KEHC 27009 (KLR) (14 December 2023) (Judgment)

Neutral citation: [2023] KEHC 27009 (KLR)

Republic of Kenya

In the High Court at Mombasa

Civil Case E051 of 2023

DKN Magare, J

December 14, 2023

Between

Grain Industries Limited

Plaintiff

and

Ali Mohamed Ali

1st Defendant

Juma Michael Atonya Chahanya

2nd Defendant

Swalah Mohamed

3rd Defendant

Wholesalers

4th Defendant

Said T/A New Gama Logistics

5th Defendant

Colins Otieno Ogada

6th Defendant

Ahmed Sousd Athman

7th Defendant

Judgment

1. This claim was filed by the Plaintiff seeking the following orders:-a.The payment of Kenya Shillings One hundred and forty-five million forty-two thousand four hundred and Eighty-five (Kshs. 145,042,485/=) by the 1st, 2nd, 3rd, 4th 5th, 6th and 7th Defendants severally and jointly.b.An order that pursuant to realization of the pledge in the Title Deed Title Number Chembe/Kibabamshe/108, the said land be transferred to the plaintiff and the Land Registrar of Kilifi be ordered to effect the transfer to the plaintiff.c.Costs of this suit.d.Interest on (a) above as from the date of filing of the suit.

2. The defendants were served. Only the 3rd Defendant entered appearance and was subsequently removed.by consent. The rest of the parties, despite being served did not enter appearance.

3. The matter proceeded for formal proof. The Plaintiff’s sole witness Mohamed Nabil testified and adopted his witness statement. He stated that the 1st Defendant was their employee who devised a scheme of having fictitious LPOs. He subsequently approved supplies which were done in the names of legitimate customers. He ensured the customers paid and refunded their credit limits to avoid red flags. This was stopped when other customers noted undercutting from the Kilifi depot.

4. At the end of the day the company had lost 145,042,485. The Defendant had acquired land parcel No. Chembe/Kibabamshe 108. When things went South, he and the fronts, the 4th, 5th, 6th and 7th Respondents pledged the said parcel but have not been transferred to the plaintiff. It is not a claim over the land itself but a pledge for part payment of the decree.

5. I have perused the humongous documentation. I am satisfied that the plaintiff proved on a balance of probability that the defendant owes Kshs. 145,042,485/= being the value of products fraudulently sold by the 1st defendants in cahoots with the 2nd, 4th, 5th, 6th and 7th defendant.

6. The defendant offered no defence. Indeed, they had no defence. I am aware that notwithstanding being formal proof, the plaintiff is undue duty to prove their case.

7. The defendants, know how they looted the plaintiff. They have special knowledge. They have not come out to dispute the figures. Under section 112 of the Evidence Act, an adverse inference will be made.

8. The said Section provides as follows: -“112. Proof of special knowledge in civil proceedings. In civil proceedings, when any fact is especially within the knowledge of any party to those proceedings, the burden of proving or disproving that fact is upon him.”

9. Under Sections 107 – 109 of the Evidence Act the burden is on whatsoever alleges. The said sections state as doth: -107. Burden of proof.(1)Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.(2)When a person is bound to prove the existence of any fact it is said that the burden of proof lies on that person.108. Incidence of burden.The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.109. Proof of particular fact.The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.

10. In this case the Plaintiff has proved the cost Kshs. 145,042,485. The evidence is uncontroverted. In Odinga & another v Independent Electoral and Boundaries Commission & 2 others; Aukot & another (Interested Parties); Attorney General & another (Amicus Curiae) (Presidential Election Petition 1 of 2017) [2017] KESC 42 (KLR) (Election Petitions) (20 September 2017) (Judgment) (with dissent - JB Ojwang & NS Ndungu, SCJJ), the Supreme Court stated as doth: -62. On this sole important issue, the law is clear that he who alleges must proof. The term burden of proof draws from the Latin Phrase Onus Probandi and when we talk of burden we sometimes talk of onus.63. Burden of Proof is used to mean an obligation to adduce evidence of a fact. According to Phipson on the Law of Evidence, the term ‘burden of proof’ has two distinct meanings:1. Obligation on a party to convince the tribunal on a fact; here we are talking of the obligation of a party to persuade a tribunal to come into one’s way of thinking. The persuasion would be to get the tribunal to believe whatever proposition the party is making. That proposition of fact has to be a fact in issue. One that will be critical to the party with the obligation. The penalty that one suffers if they fail to proof their burden of proof is that they will fail, they will not get whatever judgment they require and if the plaintiff they will not sustain a conviction or claim and if defendant no relief. There will be a burden to persuade on each fact and maybe the matter that you failed to persuade on is not critical to the whole matter so you can still win.2. The obligation to adduce sufficient evidence of a particular fact. The reason that one seeks to adduce sufficient evidence of a fact is to justify a finding of a particular matter. This is the evidential burden of proof. The person that will have the legal burden of proof will almost always have the burden of adducing evidence.

11. The question as to what amounts to proof on a balance of probabilities was discussed by Kimaru, J in William Kabogo Gitau vs. George Thuo & 2 Others [2010] 1 KLR 526 as follows:“In ordinary civil cases, a case may be determined in favour of a party who persuades the court that the allegations he has pleaded in his case are more likely than not to be what took place. In percentage terms, a party who is able to establish his case to a percentage of 51% as opposed to 49% of the opposing party is said to have established his case on a balance of probabilities. He has established that it is probable than not that the allegations that he made occurred.”

12. In Palace Investment Ltd vs. Geoffrey Kariuki Mwenda & Another (2015) eKLR, the judges of Appeal held that:“Denning J. in Miller Vs Minister of Pensions (1947) 2 ALL ER 372 discussing the burden of proof had this to say; -“That degree is well settled. It must carry a reasonable degree of probability, but not so high as is required in a criminal case. If the evidence is such that the tribunal can say; we think it more probable than not; the burden is discharged, but if the probability are equal it is not. This burden on a balance of preponderance of probabilities means a win, however narrow. A draw is not enough. So in any case in which a tribunal cannot decide one way or the other which evidence to accept, where both parties…are equally (un)convincing, the party bearing the burden of proof will loose, because the requisite standard will not have been attained.”

13. The duty to proof in formal proof was stated by justice J. B. HAVELOCK in the case of Rosaline Mary Kahumbu v National Bank of Kenya Ltd [2014] eKLR:“In light of the absence of a Defence on the file, it follows logically, that the matter would proceed to formal proof. What therefore is hearing by formal proof? In the case of Samson S. Maitai & Another v African Safari Club Ltd & Another [2010] eKLR, Emukule, J observed thus;“……. I have not seen judicial definition of the phrase "Formal Proof". "Formal" in its ordinary Dictionary meanings - refers to being "methodical" according to rules (of evidence). On the other hand according to Halsbury's Laws of England, Vol. 15, para, 260, "proof" is that which leads to a conviction as to the truth or falsity of alleged facts which are the subject of inquiry. Proof refers to evidence which satisfies the court as to the truth or falsity of a fact. Generally, as we well know, the burden of proof lies on the party who asserts the truth of the issue in dispute. If that party adduces sufficient evidence to raise a presumption that what is claimed is true, the burden passes to the other party who will fail unless sufficient evidence is adduced to rebut the presumption.”Can hearing, therefore, by formal proof, be similar to a full hearing? According to the observations of Emukule, J, in a formal hearing, all rules of evidence and procedure are observed and the party to a suit has to adduce evidence sufficient to sustain the suit. In adducing this evidence, the party has to raise a presumption that whatever is claimed is true and this therefore goes to the merits of the case. The Court considering a full hearing, to determine the matter based on the evidence that is presented before it by the parties. In contrast, at a formal proof hearing, if the party with the onus of adducing evidence fails to satisfy the truth threshold, the matter would stand to be dismissed on the basis that it was unmeritorious and did not raise sufficient proof of any issues of fact or law. It would be heard and determined on its merits.”

14. The Court will make an adverse inference when a party failed to call evidence they have. In the case of Nesco Services Limited v CM Construction [EA] Limited [2021] eKLR, justice Odunga J. as he then was stated as doth: -“Since the said author was for reasons unknown to the Court not called to testify and dispute its authenticity, adverse inference could be made thereon. In Kenya Akiba Micro Financing Limited vs. Ezekiel Chebii & 14 others [2012] eKLR the court stated as follows:“Section 112 of the Evidence Act Chapter 80 of the laws of Kenya provides:‘In civil proceedings, when any fact is especially within the knowledge of any party to those proceedings, the burden of proofing of disproving that fact is upon him.’Where a party has custody or is in control of evidence that that party fails or refuses to tender or produce, the court is entitled to make an adverse inference that if such evidence was produced, it would be adverse to such a party. In the case of Kimotho –vs- KCB (2003) 1 EA 108 the court held that adverse inference should be drawn upon a party who fails to call evidence in his possession.”

15. In the case of Leo Investment Limited v Mau West Limited & another [2019] eKLR justice C Kariuki, J, stated as doth: -“But what are the effect of failure by the appellant to tender evidence in rebuttal? The court in Shaneebal Limited vs County Government of Machakos [2018] eKLR (supra) addressed this issue in paragraphs 24 to 29 and while citing other case laws it held that where no defence is filed but no witness is called to give evidence in support of the defence, it means that the defence renders the plaintiff’s case unchallenged.39. That where a party fails to call evidence in support of its case, that party’s pleadings remain mere statements of fact since in so doing the party fails to substantiate its pleadings. In the same vein the failure to adduce any evidence means that the evidence adduced by the plaintiff against them is uncontroverted and therefore unchallenged.”

16. In this case there is not even a defence on record. The evidence reached a prima facie standard and is now uncontroverted. In the circumstances, I allow the claim as prayed in the plaint with costs of Ksh. 1,665,000/=

17. In the circumstances, I make the following orders: -a. Judgment is hereby entered against the 1st, 2nd and 4th, 5th and 6th and 7th defendant’s jointly and severally for Kshs. 145,042,485/=.b. The pledge for land parcel No. Chembe /Kibabamshe/108 be realized upon being valued by the County valuer of the County the said parcel of land is situated, and the forced sale value thereof be deducted from the judgment sum of Kshs. 145,042,485/= and the balance be recovered from the defendants jointly and severally.c. The 6th and 7th Defendants are to execute the transfer of the said parcel of land, Chembe/Kibabamshe/108 within 15 days failing which the Deputy Registrar of this Court do sign the transfer.d. An inhibition be registered pending registration of the transfer.e. Costs of Kshs. 1,665,000 to the plaintiff.f. The file is closed.

DELIVERED, DATED AND SIGNED AT MOMBASA ON THIS 14TH DAY OF DECEMBER, 2023. JUDGMENT DELIVERED THROUGH MICROSOFT TEAMS ONLINE PLATFORM.KIZITO MAGAREJUDGEIn the presence of:Mr. Hassan for PlaintiffNo appearance for the RespondentCourt Assistant - Brian