Hellen Atieno Mboya Legal representative of George Omolo Ogoma (Deceased) v Eagle Millers Limited [2017] KEHC 9435 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COUR OF KENYA AT KISII

CIVIL SUIT NO. 192 OF 2004.

HELLEN ATIENO MBOYA Legal representative

of GEORGE OMOLO OGOMA (DECEASED)...PLAINTIFF/APPLICANT

VERSUS

EAGLE MILLERS LIMITED....................................................DEFENDANT

AND

ALFRED SAGWA MDEIZI t/a PAVE AUCTIONEERS.......RESPONDENT

RULING

1. In her application dated 26th September 2016 brought under Order 22 Rule 70 (2) of the Civil Procedure Rules, the applicant herein seeks orders that the respondent/court broker pays into court, the proceeds of sale amounting to Kshs. 4,000,000/= and that an order be issued directing the respondent to file his bill of costs in court for taxation which costs are to be deducted from the said proceeds of the sale. The applicant also prays for the costs of the application.

2. In the grounds in support of the application, the applicant states that the respondent executed a warrant of attachment against the property of the defendant/judgment debtor by attaching and selling its property known as LR 1432/541 Homa Bay Municipality (hereinafter “the suit property”) through a public auction in which the purchase price of Kshs. 9,600,000/= was realised.

3. She contends that despite the fact that the respondent recovered the sum of Kshs. 500,000/=, as his costs, from the said proceeds of the sale, he has to-date not paid the purchase price to court or to her advocate and neither has he filed his bill of costs in court for taxation. The applicant’s case is that there is a total sum of Kshs. 4,500,000/= which is still being held by the respondent and which ought to be released to her forthwith less the respondent’s reasonable taxed costs.

4. The application is supported by the applicant’s affidavit dated 26th September 2016 wherein she deposes that she is the legal representative/administratix of the estate of the original plaintiff/decree holder, George Omollo Ogoma (deceased) and that on 5th September 2006, judgement was entered in favour of the plaintiff for the sum of Kshs. 4,979,560/= together with costs of Kshs. 226,780/= and further, that on 14th August 2009 the total amount due to the plaintiff plus interest stood at Kshs. 8,425,463/40.

5. She avers that the respondent executed the decree in order to recover the decretal sum by selling the judgment debtor’s property being LR 1432/541 Homabay Municipality which sale, she claims, must have realised the total sum of Kshs. 9,600,000 in view of the fact that the purchaser paid the sum of Kshs. 2,400,000/= representing 25% of the purchase price at the fall of the hammer. She attached, to her affidavit, copies of the decree, Certificate of costs, attachment in execution of decree and Certificate of sale which were marked as HA2, HA2B, HA3 and HA6A respectively.

6. She further states that out of the full purchase price recovered from the sale of the suit property, the purchaser remitted the sum of Kshs. 5,600,000/= directly to the applicant’s advocate and that she suspects that the purchaser must have remitted the sum of Kshs. 1,600,000/= to the respondent thereby making a total of Kshs. 9,600,000/= in view of the fact that a certificate of sale was subsequently issued to the purchaser after which the suit property was transferred to the buyer.

7. She contends that the sum of Kshs. 2,400,000/= which was paid to the respondent at the fall of the hammer during the auction of the suit property has not been paid to her thereby precipitating the instant application. She accuses the respondent of issuing contradictory receipts, documents and affidavits which she claims are pointers to the fact that the respondent could have committed some fraud.She attached copies of receipts and cheques to her affidavit which were marked as HA-6B, HA-7, HA-8, HA-9A and HA-9B.

8. The respondent opposed the application through the Grounds of Opposition filed dated 25th March 2017 wherein he enumerated the following grounds:

1. The application is res-judicata the Notice of Motion dated 30/7/2011 complete with Ruling of 3rd February, 2016.

2. The applicant is not entitled to the prayers sought as inter alia: -

(i) She is representing the estate of the Decree Holder (and not the Judgment Debtor for purposes of Rule 55 read with 7 of the Auctioneers Rules).

(ii) The applicant received, and retains the decretal sum form the proceeds of sale, to date.

(iii) She has not deposited the entire proceeds she has received for the purpose of present application.

(iv) She is, for all intents and purposes a busy-body on a fishing expedition (as the record clearly shows) pushing the interest of an objector whose objection stands dismissed vide ruling of 4th March, 2010. Annexed is a copy of Ruling of 4th March 2010 marked “PI”.

(v) The issue of 25% of purchase price in subject auction was explained in the respondent’s (Alfred Sagwa Mdeizi) Replying Affidavit sworn on 29/9/2011 to Notice of Motion of 30/7/2011 and accepted by court in its ruling of 3/2/2016.

Attached and relied upon are: -

(a) Replying affidavit of Alfred Sagwa Mdeizi sworn on 29/9/2011; marked “PII”.

(b) Ruling of 3/2/2016-marked “PIII”.

3. To the extent that decree herein was never part of the estate of the deceased in Homa Bay SRM’s Succession Cause No. 157 of 2010, the applicant lacks capacity.

9. The respondent also filed a replying affidavit dated 5th June 2017 in response to the application in which he avers that he sold the suit property by way of public auction in execution of the court’s decree and that the highest bid at the said auction was Kshs. 8,000,000/= out of which Kshs. 2,000,000 was paid at the fall of the hammer being 25% of the purchase price. He adds that he made returns to court and to the plaintiff’s counsel after conducting the sale after which the court issued a certificate of sale and vesting orders for issuance of Title Deed to the purchaser.

10. The respondent further avers that he was surprised when more than one year after marking the matter as settled, the decree holder filed an application dated 29th July, 2011 (hereinafter the “earlier application”) seeking inter alia, orders to set aside the sale of the suit property which application was dismissed on 3rd February, 2016. He states that the instant application is therefore res judicata and has come as another surprise to him as he had already made returns to the court and explained, in the earlier application that was dismissed, that he only received Kshs. 8,000,000/= from the sale and therefore, the claim that he received a total of Kshs. 9,600,000/= was mere speculation.

11. The respondent’s case is that the issues raised in the instant application had already been dealt with and determined in the earlier application that was dismissed on 3rd February 2016.

12. He reiterates that the orders sought by the applicant herein can only be sought by a judgment debtor under Rule 7 and 55 of the Auctioneers rules and states that the applicant is a busy body who lacks the capacity to file this application in view of the fact that the suit property does not form part of the estate of the deceased according to the grant of letters of administration issued to her in Homa Bay SRMC SUCC cause No. 157 of 2010.

13. At the initial stages of the application, the parties herein informed the court that they were pursuing an out of court settlement, however, when the case came up for hearing on 28th June 2017, they informed the court that they had already canvassed the application by way of written submissions whereupon the matter was listed for ruling.

Analysis and determination

14. I have carefully perused the pleadings filed herein and the parties’respective submissions and I note that the main issues for consideration are:

a) Whether the application is re-judicata.

b) Whether the applicant is clothed with the requisite capacity to file the application.

c) Whether the applicant is entitled to the orders sought.

d) What should be the order on costs?

15. On the applicant’s capacity/locus standi, I note that she described herself as the administratix of the estate of the deceased, who was the original plaintiff herein, having been issued with grant of letters of administration in respect to his estate. The respondent, on his part contended that since the suit property herein did not form part of the deceased’s estate then the applicant was a busy body who had no business filing the application. I do not agree with the respondent’s position on this point because the subject matter in dispute herein is not the suit propertyper se but rather, the proceeds of its sale thereof following the execution of a court’s decree in which the deceased was the decree holder. I therefore find that, to the extent that the applicant is pursuing the proceeds of the decree which she alleges were not remitted to the decree holder, she has the locus standi in this case as the representative of the deceased’s estate.

16. Turning to the first issue, which to me is the main issue in this application is the question of whether or not the application is res judicata. I note that in her earlier application to this court dated 29th July 2011, the applicant herein sought orders, inter alia, for the setting aside of the sale of the suit property on the basis that it was sold to the purchaser in an opaque manner and at the gross under value of an amount much lower than the decretal sum alleged to be Kshs. 8,000,000/= out of which the decree holder had been paid Kshs. 5,100,000/= only. In the said earlier application, the purchaser, who was cited as a third party, filed an affidavit in which he confirmed that he had indeed paid the total sum of Kshs. 8 million as the purchase price for the suit property. This court, upon considering the merits of the earlier application, found that it lacked merit and dismissed it. The question which therefore arises is whether this application is res judicata.

17. The doctrine of res judicata in Kenyan law is anchored on Section 7 of the Civil Procedure Act as follows: -

“7. Res judicata

No court shall try any suit or issue in which the matter directly and substantially in issue has been directly and substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such court.”

Black’s Law Dictionary (8th Edition) defines Res Judicata as follows: -

“An issue that has been definitely settled by judicial decision. An affirmative defense barring parties from litigating a second lawsuit on the same claim, or any other claim arising from the same transaction or series of transactions and that could have been – but was not – raised in the first suit. The three essential elements are (1) an earlier decision on the issue, (2) a final judgment on the merits, and (3) the involvement of the same parties in privity with the original parties.”

18. From the above definitions, the ingredients of res judicata are firstly, that the issue in dispute in the former suit between the parties must be directly or substantially be in dispute between the parties in the suit where the doctrine is pleaded as a bar. Secondly, that the former suit should be between the same parties, or parties under whom they or any of them claim, litigating under the same title and lastly that the court or tribunal before which the former suit was litigated was competent and determined the suit finally (see Karia & Another v the Attorney General and Others [2005] 1 EA 83.

19. Res judicata is not a new subject as it is a discourse on which courts have made numerous pronouncements and is now sufficiently settled.  The doctrine was captured many centuries ago in the case of Henderson v Henderson [1843] 67 ER 313as follows: -

“…..where a given matter becomes  the subject  of litigation in and adjudication by, a court of competent jurisdiction, the court requires  the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit  the same parties to open the same subject of litigation in respect of matter which might have been brought  forward, as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case.  The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time….”See also Kamunye & others v Pioneer General Assurance Society Ltd [1971] E.A. 263.

20. Simply put res judicata is essentially a bar to subsequent proceedings involving same issue as had been finally and conclusively decided by a competent court in a prior suit between the same parties or their representatives.The reasoning behind res judicata is double-fold, firstly, to promote public interest by protecting parties from facing repetitive litigation and secondly, to observe the age-old adage that litigation must come to an end.

21. Res judicatatherefore ensures the economic use of court’s limited resources and the timely termination of cases. It is a matter of public notoriety that Courts are already clogged and overwhelmed by a backlog of cases and can therefore hardly spare time to repeat themselves on issues already decided upon. The doctrine also promotes stability of judgments by reducing the possibility of inconsistency in judgments of concurrent courts and further promotes confidence in the courts through predictability which is one of the essential hallmarks in maintaining respect for justice and the rule of law. The res judicata rule does not countenance a scenario where a litigant presents his/her case in court by instalments or in a piecemeal manner as has been witnessed in this case. Without res judicata, the very essence of the rule of law would be in danger of unraveling uncontrollably.

22. In the instant case, it is not in dispute that the parties in the earlier application are the same parties in this application except that the purchaser of the suit property has not been cited in this application.  As I have already stated in this ruling, it is the dismissal of the earlier application that has precipitated the filing of this application which the respondent herein now contends is res judicata.The subject matter in question herein is the purchase price of the suit property or the sum actually recovered during the auction.

23. I notice that there are certain glaring contradictions in the applicant’s case that lends credence to the respondent’s contention that the applicant has been on a fishing expedition in the hope of eventually succeeding one way or the other. While in the earlier application, the applicant’s main complaint was that the suit property was sold at a gross undervalue of the Kshs. 8 million and that only Kshs. 5,100,000 was remitted to her advocates thereby prompting her to seek the setting aside of the sale and the re-advertisement of the suit property for sale afresh, in the instant application, the applicant has changed tune and now states that the amount recovered from the sale was Kshs. 9,600,000 out of which Kshs. 5,600,000 was paid to her advocates. From the above foregoing, it would appear that the applicant cannot even make up her mind on how much money was actually remitted to her advocate. It is also apparent, from the tone of the applicant’s application, that she seems to be unsure of the actual amount recovered at the auction as can be seen from her affidavit at paragraph 5 where she states:

“5. That the buyer thereafter paid in two instalments the sum of Kshs. 5,600,000/= through my advocate and later the purchaser must have paid to the respondent the further sum of Kshs. 1,600,000/= making in total Kshs. 9,600,000/= since a Certificate of Sale was issued to the purchaser and the court transferred the sold property to the purchaser. (vide copy of cheques annexed and marked “HA-7”).”

24. From the above paragraph, I find that the applicant is either feigning ignorance of the facts of the sale or is intent on engaging this court in a game of guess work or trial and error by filing different applications, one after the other, in the hope that she will eventually get the desired outcome. I say so because during the hearing of the earlier application, which I find to be similar to the instant application in all aspects, the purchaser of the suit property swore an affidavit to confirm that he actually purchased the suit property for Kshs. 8,000,000 only. This averment was not challenged by the applicant. I therefore find it quite dishonest for the applicant to claim, in this application, that the purchase price was or ‘must have been’ Kshs. 9,600,000 in the face of the clarification of the actual purchase price by the buyer himself. To my mind, no other party was better placed to state the amount paid for the suit property other than the buyer himself. It is therefore my finding that the instant application offends the Res Judicata rule as the applicant was under a duty in the earlier application, to exercise reasonable diligence and present her whole case for determination. The applicant’s prayer for an order that the respondent pays into court the proceeds of the sale of the suit property amounting to Kshs. 4,000,000 is therefore not tenable in view of the fact that the said prayer is not only res judicata but is also unproven going by the applicant’s own uncertainty on the actual amount recovered from the auction.

25. The applicant also sought orders directing the respondent to file his bill of costs in court for taxation. Once again, this is a prayer, which to my mind, has not only been overtaken by events, but is also res judicata in view of the fact that the applicant ought to have canvassed it in the earlier application in which the subject of the purchase price of the suit property was canvassed. It has not been disputed by the applicant that the respondent, upon finalising the auction of the suit property, through a letter dated 20th April, 2010, made returns in court the basis of which a Certificate of Sale and a Vesting Order were issued by the court and the case marked as settled. My take is that it is at the point that the respondent made his returns in court that the applicant ought to have sought the taxation of the auctioneer’s costs and not in this application filed almost 7 years after the warrants were returned to the court and the sale of the suit property sealed. The applicant has not even attempted to explain her delay in seeking the orders for the taxation of the auctioneer’s costs and it is therefore my finding that the applicant is guilty of laches.

26. In conclusion, having found that the instant application is not only unmerited but is also Res Judicata,the order that commends itself to me is the order to dismiss it with costs to the respondent.

Dated, signed and delivered in open court this 10th day of October, 2017

HON. W. A OKWANY

JUDGE

In the presence of:

Mr. Bosire holding brief for G.S. Okoth  for the decree holder/plaintiff

N/A for the Defendant

Omwoyo: court clerk