International Business Development Solutions Limited v Family Bank Limited & another [2022] KEHC 12925 (KLR)

International Business Development Solutions Limited v Family Bank Limited & another (Commercial Case 395 of 2018) [2022] KEHC 12925 (KLR) (Commercial and Tax) (14 September 2022) (Ruling)

Neutral citation: [2022] KEHC 12925 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Case 395 of 2018

DAS Majanja, J

September 14, 2022

Between

International Business Development Solutions Limited

Plaintiff

and

Family Bank Limited

1st Defendant

Viewline Auctioneers

2nd Defendant

Ruling

1. On record for determination are two applications. The first, is the 1st defendant’s (‘’the bank’’) notice of motion dated May 15, 2020 seeking to dismiss the suit for want of prosecution under order 17 rule 2 of the Civil Procedure Rules. It is supported by the affidavit of David Onsare, the bank’s advocate on record, sworn on May 15, 2019. The thrust of the application and deposition is that despite filing the suit and application for injunction under certificate of urgency, the plaintiff has failed and or neglected to take steps not only to prosecute the suit but also the application for injunction it had filed. Further that the suit has been fixed for hearing several times and the plaintiff has failed to take steps to prosecute the suit. That the last time the matter was in court was on June 4, 2020 and since then, the plaintiff has failed to prosecute the suit. The application was not opposed and was in fact reserved for ruling on November 20, 2020 but for some reason the file was not brought to the court’s attention.

2. While the ruling was pending, the plaintiff filed the notice of motion dated October 26, 2020 seeking an order deferring the ruling pending determination of a prayer,"That this honourable court be pleased to issue an order directing the 1st defendant/respondent to unconditionally release the plaintiff/applicant’s title documents in its possession.’’The application is supported by the affidavit of plaintiff’s director, Joseph Mwangi Gichuki, sworn on October 26, 2020. According to the deposition, the plaintiff states that it was unable to prosecute the suit as it elected to engage the bank directly and in that regard, it made an offer to the bank through Kamunye Gichigi and Company Advocates by a letter dated November 13, 2018 seeking to pay KES 10,330,446. 36 to clear the outstanding debt. That in response, the bank did write to the plaintiff’s advocate confirming that upon payment of KES 11,564,029. 83, it would unconditionally release the title documents to the plaintiff. It states that the amount was in fact paid but the bank refused to release the documents as agreed.

3. When both applications came up for ruling on March 25, 2022, I directed as follows:a.The notice of motion dated May 15, 2020 is adjourned and shall be heard together with the notice of motion dated October 26, 2020. b.The 1st defendant shall file and serve its replying affidavit within 14 days from the date hereof.c.The plaintiff shall be at liberty to file and serve a supplementary affidavit within 7 days from the date of service of the replying affidavit.d.The parties shall file and exchange written submissions not exceeding 3 pages.e.The matter shall be fixed for mention to take a ruling date.

4. In the said ruling I also stated that,"I decline to dismiss the suit for want of prosecution at this stage but to give the defendants an opportunity to show that the issue of indebtedness has been resolved bearing in mind that the issue arose at the time the suit was filed.’’I do not intend to revisit that application for dismissal in view of the observations I have already made. In response to the plaintiff’s application, I also stated that,"The plaintiff’s application dated October 26, 2020 seems to suggest that the suit has been now been compromised. This court has jurisdiction to determine whether the suit has been compromised under order 25 rule 5 of the Civil Procedure Rules and make an order accordingly.’’

5. In response to the plaintiff’s application, the bank filed the replying and supplementary affidavits of its legal officer sworn on April 19, 2022 and June 14, 2022 respectively. Despite the directions to that effect, it is only the bank that has filed written submissions.

6. I have considered the depositions and submissions and it appears that the bank concedes that the matter has been settled save for costs amounting to KES 360,719. 00 incurred by it in defending the suit and debited to the loan account. I agree with the bank that under clause 8. 3 of the letter of offer, the borrower is obliged to pay legal fees and is in fact required to indemnify the lender against any costs and expense incurred as a consequence of the lender’s default. In the circumstances, I hold that the plaintiff is obliged to pay costs of defending the suit on an indemnity basis in accordance with the parties’ agreement.

7. I therefore find that the suit has been compromised by settlement of the agreed amount save for costs to which the bank is entitled. I therefore allow the application dated October 26, 2020 on the following terms:a.The is suit is now marked as settled on the terms set out hereunder.b.The 1st defendant is directed to release to the plaintiff title documents including documents in relation to land reference No 14870/184 (IR No 111933) on condition that the plaintiff pay to the 1st defendant KES 360,712. 67 being legal costs incurred in defence of this suit.c.The plaintiff shall pay to the 1st defendant costs of the suit assessed at KES 40,000. 00 only.

DATED AND DELIVERED AT NAIROBI THIS 14TH DAY OF SEPTEMBER 2022. DS MAJANJAJUDGECourt of Assistant: Mr M OnyangoMr Papai instructed by EP Advocates for the plaintiff.Ms Kimathi instructed by Maina and Onsare Partners Advocates for the 1st defendant.