Heritage Insurance Co Ltd v Imara Steel Mills Ltd [2022] KEHC 15135 (KLR)

Heritage Insurance Co Ltd v Imara Steel Mills Ltd (Miscellaneous Civil Application 43 of 2017) [2022] KEHC 15135 (KLR) (6 July 2022) (Ruling)

Neutral citation: [2022] KEHC 15135 (KLR)

Republic of Kenya

In the High Court at Kajiado

Miscellaneous Civil Application 43 of 2017

SN Mutuku, J

July 6, 2022

Between

Heritage Insurance Co Ltd

Applicant

and

Imara Steel Mills Ltd

Respondent

Ruling

1. On May 4, 2021, Heritage Insurance Company Ltd (Heritage) filed a notice of motion dated September 17, 2020 against Imara Steel Mills Ltd (Imara or Imara Steel Mills) seeking orders to have Imara and M/s Maina Njuguna & Associates ordered to jointly and severally pay Heritage a sum of Kshs 1,067,450 together with interest at court rates from February 15, 2019 until payment in full; secondly to have the firm of Kiriiyu Merchants (Auctioneers) ordered to pay Kshs 267,937 to the applicant together with interest at court rates until payment in full and costs of this application.

2. These monies were paid to M/s Maina Njuguna & Associates and the auctioneers, respectively, pursuant to recalled and cancelled warrants of attachment dated February 6, 2019, issued on the strength of a certificate of costs issued on May 15, 2018 asreflected in a Ruling of this court (Mwita, J) delivered on October 11, 2019.

The Preliminary Objection 3. Before the notice of motion could be set down for hearing, Imara Steel Mills Ltd raised a preliminary objection (PO) to the effect that:i.The application is an abuse of the court’s process as it seeks orders against individuals who are not parties to this suit.ii.The court is functus officio on the matters raised by the applicant.iii.The applicant seeks judgment for a substantial sum of money by way of an application whereas its remedy, if any, lies in filing a civil suit.iv.The court did not fault the amount taxed but the procedure and this does not entitle the applicant to a refund.

4. This court directed that the PO be disposed of first by way of written submissions. Parties have filed their submission and I have read them.

Rival Submissions 5. Imara, through their advocates raised four issues to be determined. Firstly, they submitted that the application is an abuse of the court process as it seeks orders against individuals that are not parties to this suit. They cited Zephir Holdings Ltd v Mimosa Plantations Ltd & others [2014] eKLR where the word “party” is defined as follows:“A proper party is one who is impleaded in the suit and qualifies the threshold of a plaintiff or defendant under order 1 rule 1 and 2 respectively, or a third party or as an interested party and whose presence is necessary or relevant for the determination of the real matter in dispute or to enable the court effectually and completely adjudicate upon and settle all questions involved in the suit. And the court has a wide discretion to ever order suo moto for a party to be impleaded whose presence may be necessary to enable the court to effectually and completely adjudicate upon and settle all questions involved in a suit.”

6. It is submitted that under the above definition, the firm of Maina Njuguna & Associates and the auctioneer are not parties to this suit; that the two firms have been instructed by the plaintiff and are therefore agents of the plaintiff; that judicial or adverse order cannot be sought against agents of a disclosed principal.

7. The second issue raised is that this court is that this court functus officio on the matters raised by the applicant. On this issue, it is submitted that this court is being asked to enter another judgment against the firm of Maina Njuguna & Associates and the auctioneer when there is already another judgment against them and that the court cannot revisit this matter under sections 1A, 1B and 3A of the Civil Procedure or under section 34 to grant the orders sought in the pending application.

8. The third issue raised is that the applicant seeks judgment for substantial sum of money by way of an application whereas the remedy, if any, lies in filing a civil suit. On this issue it is submitted that the only remedy, it at all, is for Heritage to file for a fresh civil suit against the plaintiff for recovery of monies it alleges to have paid to the agents of the plaintiff; that a miscellaneous application applies to instances where there is no substantive suit or where a party is required to seek leave of the court before instituting a suit.

9. The fourth issue raised is whether the court ordered a refund of any money. While citing the orders of this court (Mwita, J) in the ruling delivered on October 11, 2019, counsel for Imara submitted that the court did not direct any refund to the applicant; that the applicant did not inform the court that the warrants had already been executed and that there was nothing to recall.

10. Heritage, through their advocates M/s Mbai Waweru Advocates, submitted on the issues raised by Imara.

11. On the first issue that the orders are being sought against individuals that are not parties to this suit, it is submitted that by the time the application filed by Heritage under certificate of urgency dated February 11, 2019 seeking to have warrants of attachment and sale issued on February 6, 2019 recalled, revoked or cancelled, was determined Heritage had been forced to un procedurally pay a sum of Kshs 1,451,730 to M/s Maina Njuguna & Associates, advocates for Imara, and Kshs 267,937 to the auctioneer. It is submitted that the decision of the taxing master was set aside, giving rise to this application; that no new parties are being introduced in this application but it is only sought to have orders issued against the advocates for Imara Steel Mills and the auctioneer, both officers of this court by dint of section 19 of the Auctioneers Act and that Imara Steel Mills and the auctioneer are jointly and severally liable for the charges arising from the defective attachment procedure. It is submitted that the application herein is not an abuse of court process.

12. On the issue that this court is functus officio, several authorities were cited on the doctrine of functus officio including Telcom Kenya Ltd v John Ochanda (2014) eKLR and Brian Muchiri Waihenya v Jubilee Hauliers Ltd & another, Geminia Insurance Co Ltd (Interested Party) [2018] eKLR to support this issue. It was submitted that the orders sought in the application by Heritage are supplemental and relate to execution proceedings which this honourable court rendered a ruling; that the court does not become functus officio merely because it has delivered a final decision in civil proceedings and that the court retains its power to undertake several actions including stay, review, execution proceedings and such other acts and steps as may be necessary towards closure of the suit. On this point they cited Leisure Lodge Ltd v Japhet Asige & another (2018) eKLR.

13. It is submitted that this application is an incidental consequence of a decision notably the ruling delivered on and certificate of taxation issued on February 15, 2018 which was annulled.

14. On the issue of what remedy, if any, does Heritage have, it was submitted that the remedy for the orders sought lie with this court; that this court reserves the discretion on an application by an aggrieved party to give additional orders clarifying issues that are in contention and that section 99 of the Civil Procedure Act confers this court with the jurisdiction to entertain applications of this nature.

15. On whether the applicant is entitled to a refund, it was submitted that although the court in its ruling delivered on October 11, 2019 did not expressly direct that a refund to the applicant be made, it was implied. It was submitted that the payments to Imara’s advocates and the auctioneer were founded on an unsustainable process and the payments made accordingly were annulled; that Imara was only entitled to Kshs 383,180 pursuant to certificate of costs dated April 25, 2018 and not on the certificate of costs dated May 15, 2018 which was ultimately annulled.

Determination 16. I have considered the PO and the arguments for and against it. A PO is discussed in Mukisa Biscuits Manufacturers Ltd v West End Distributors Ltd [1969] EA 696, where the court stated that a PO consists of:“…a pure point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary objection may dispose of the suit. Examples are an objection to the jurisdiction of the court, or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit, to refer the dispute to arbitration.”

17. I have considered the issues raised by Imara Steel Mills which is the respondent in this application. On their first issue identified for determination, it is clear to me that the firm of M/s Maina Njuguna & Associates as well as the auctioneers M/s Kiriiyu Merchants, were acting under the instructions of Imara Steel Mills. The monies alleged to have been paid to them were so paid for and on behalf of Imara Steel Mills. For this reason I agree with the position taken in their submissions that the principal in this matter is known and therefore no orders can be sought against an agent where the principal is disclosed.

18. In Victor Mabachi & Another v Nurtun Bates Limited, [2013] eKLR, the Court of Appeal cited with approval its earlier finding inAnthony Francis Wareheim T/A Wareheim & 2 Others v Kenya Post Office Savings Bank, Civil Application Nos. NAI 5 & 48 of 2002, wherein it stated thus:“It was also prima facie imperative that the court should have dismissed the respondent’s claim against the second and third appellants for they were impleaded as agents of a disclosed principal contrary to the clear principal of common law that where the principal is disclosed, the agent is not to be sued. Furthermore, the court having found on the evidence that the second and third appellants were principals in their own right and not agents of the first appellant in the transaction giving rise to the suit, it should have dismissed the suit against the first appellant who had been sued as the principal.”

19. The application dated September 17, 2020 seeks orders directed at M/s Maina Njuguna & Associates and M/s Kiriiyu Merchants to pay Heritage the monies specified therein. These monies were paid to the two firms in respect of warrants of attachment issued by the taxing master in this matter pursuant to a certificate of costs that ultimately was annulled by this court for reasons that it could not be sustained. The two are not parties to this suit but acted in their capacity as agents of Imara Steel Mills.

20. On the issue of this court being functus officio, I do not agree with the argument that this court is functus officio. As argued in opposing this issue, this court did not pronounce itself on this issues being raised in this application but on other issues touching on this matter.

21. In Jersey Evening Post Limited v Al Thani [2002] JLR 542 at pg. 550 where the court stated that:“A court is functus when it has performed all its duties in a particular case. The doctrine does not prevent the court from correcting clerical errors nor does it prevent a judicial change of mind even when a decision has been communicated to the parties. Proceedings are only fully concluded, and the court functus, when its judgment or order has been perfected. The purpose of the doctrine is to provide finality. Once proceedings are finally concluded, the court cannot review or alter its decision; any challenge to its ruling on adjudication must be taken to a higher court if that right is available.” [own emphasis].

22. Further, in Telcom Kenya Limited v John Ochanda (suing on his own behalf and on behalf of 996 former employees of Telcom Kenya Ltd) [2014] eKLR, the Court of Appeal rendered itself thus:“the doctrine is not to be understood to bar any engagement by a court with a case that it has already divided or pronounced itself on. What it does is a merit-based decisional re-engagement with the case once final judgment has been entered and a decree thereon issued…”

23. This ground has no basis and must fail.

24. It is true that the court in its ruling dated October 11, 2019 did not order for a refund of the monies alleged paid. The court must have had its reasons for not doing so. This does not mean that the applicant in this matter does not have a claim under the law. It is upon him to tailor his claim to fit in the legal framework against suitable parties and file it if he believes he is entitled to the orders he will be seeking. The doors of the courts are always open to any party who feels aggrieved. It is upon that party to make its claim within the legal framework and prove it.

25. Before making my conclusions, I hasten to point out that this matter came to court through a miscellaneous application. It is the wrong place to ventilate the issues raise in the application date September 17, 2019 which are substantive in nature without a substantive suit being filed.

26. In conclusion of this matter, it is my finding that given the reasoning in this ruling, the PO has merit based on the first issue that the principal is known and therefore orders ought not to be sought against the agents. With that finding, I hereby uphold the PO dated August 24, 2021. Consequently, the application dated September 17, 2019 cannot succeed and is hereby dismissed with costs to the respondent.

27. Orders shall issue accordingly.

DATED, SIGNED AND DELIVERED THIS 6TH JULY 2022. S N MUTUKUJUDGE