Josephat Munyua Kariuki t/a JM Kariuki & Company Advocates v John Patrick Machira t/a Machira & Company Advocates [2022] KEHC 16183 (KLR)

Josephat Munyua Kariuki t/a JM Kariuki & Company Advocates v John Patrick Machira t/a Machira & Company Advocates (Civil Suit E199 of 2020) [2022] KEHC 16183 (KLR) (Civ) (8 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16183 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Suit E199 of 2020

JN Mulwa, J

December 8, 2022

Between

Josephat Munyua Kariuki t/a JM Kariuki & Company Advocates

Applicant

and

John Patrick Machira t/a Machira & Company Advocates

Respondent

Ruling

1. Before the court is a Notice of Motion application dated June 29, 2022. It is brought by the Respondent in the Originating Summons taken out on the November 26, 2020 by the Applicant therein.The Applicant Josephat Munyua Kairuki trading as JM Kariuki & Company Advocates seeks the following orders: -1. – Spent2. – Spent3. That the Applicant be allowed One Hundred and Twenty (120) days to settle the decretal sum of Kshs 1,743,315. 10/- with interest as Kshs 2,181,293. 04/-.4. That cost of the application be provided for.

2. It is premised on provisions of Sections 1A, 1B, 3A of the Civil Procedure Act, and Order 21 Rule 12 and Order 52 Rule 7 of theCivil Procedure Rules.The grounds for the application are stated at the face thereof, and supported by the affidavit sworn by the Applicant on the June 29, 2022, and a further affidavit sworn on 5th of October 2022, and annextures thereon.

3. It is the Applicant’s case that the liability against him is secondary based on a professional undertaking on behalf of his client, and that he has already paid to the Respondent Kshs 16,000,000/- leaving the balance, interest, the subject of this application; explaining himself that the delay to settle the balance was due to hardship in business caused by the Covid – 19 pandemic; that, despite his willingness to pay the said balance, it has become impossible to pay the whole in a lump sum, and therefore seeks the court’s indulgence to settle in instalments spread over 120 days from the date of the application; upon a scheme of arrangement that the court may consider.

4. In opposing the application, the Respondent John Patrick Machira Trading as Machira & Company Advocates filed a replying affidavit on the June 12, 2022 and a further responding affidavit sworn on the September 30, 2022 as well as grounds of opposition to the application dated July 7, 2022.

5. The Respondent’s case in opposing the application is contained in the Grounds of Opposition that; the application is incompetent as no leave had been obtained, that the supporting affidavit is comprised of falsehoods and the Applicant has committed perjury in the supporting affidavit purely to mislead the court, among other allegations.

6. The Respondent avers, and it is his case that the professional undertaking given to him on the May 13, 2022 is irrevocable, and therefore the Applicant is simply and arrogantly refusing to pay the balance and the accrued interest. He vehemently objects to the Applicant’s application to pay in instalments stating that it is meant to delay the cause of justice, to defeat the claim yet the claim was undefeated; and thus urges that the application is unmerited and preposterous.

7. It is the Respondent’s further averments that the Applicant has the financial means to honour the professional undertaking by honouring court orders issued on the April 15,2022.

8. To buttress their rival positions, the parties filed written submissions that I have carefully considered.

9. The issue that arises for determination in my view is only one:Whether the Applicant has shown sufficient cause to invoke the court’s inherent power in exercise of its discretion in favour of the Applicant

10. Order 21 Rule 12 of the Civil Procedure Rules (2010) grants the court power to allow a judgment debtor to pay the decretal sum by instalments. It provides:“(1) where and in so far as a decree is for the payment of money, the court may for any sufficient reason at the time of passing the decree order that payment of the amount decreed shall be postponed or shall be made by instalments, with or without interest, notwithstanding anything contained in the contract under which the money is payable.After passing of any such decree, the court may on the application of the judgment debtor and with the consent of the decree holder or without the consent of the decree holder for sufficient cause shown, cause order that the payment of the amount decreed be postponed or be made by instalments on such terms as to the payment of interest, the attainment of the property of the judgment debtor or the taking of security from him, or otherwise as it thinks fit!

11. The exercise of discretion by the court in a matter as is case must be exercised judiciously, upon considering the merits of the peculiar circumstances. The Applicant must show bonafides by arranging for prompt payment. Suffice to state that mere inability to pay at once in full may not be sufficient reason for the court to exercise its discretion.

12. The court ought to consider whether allowing the judgment debtor to pay in instalments will cause prejudice to the decree holder. The judgment debtor therefore has the onus to show sufficient cause to justify the court’s indulgence – See Keshavji Jethabhai & Brothers Limited v Saleh Abdul (1959) EA 260 wherein the above principles were stated.

13. The same proposition that the judgment debtor is merely hard pressed or is unable to pay in full at once is not sufficient reason for granting leave to pay by instalments were held in the case Mohamed Akbar Khan v Kasturchaud Daga cited in the Keshavji Jethabhai case.

14. I have considered the Respondent’s lamentations caused by the Applicant’s failure to pay in full, yet he believes that the Applicant has enough finances to pay. Other than stating so, no material facts have been placed before the court to support the allegation.

15. It is however important that a judgment creditor is paid his full decretal sum promptly to reap benefit of the fruits of the judgment.In the case Hildergard Ndelut v Letkina Diaries Limited & another[2005] e KLR, and cited in KTK Advocates v Baringo County Government [2018] e KLR, the court rendered itself thus:“…….. The judgment debtor might genuinely be in a difficult position in paying the decretal amount at once. However, he has to show seriousness in paying the amount. In that event, he should show his bonafides by arranging fair payment proposals to liquidate the amount”

16. On the April 2022, upon an application dated November 26, 2021 by the Respondent, the court (Meoli Judge), ordered that: “The Respondent (now Applicant) do forthwith pay the Applicant (now Respondent), an outstanding sum of Kshs 1,743,315. 00 together with interest at court rates at 14% per annum from the August 15, 2020 until payment in full.”

17. The Applicant did not pay as directed and ordered by the court. The court can clearly see why the Respondent is extremely unhappy with the Applicant’s failure to comply with the court orders.

18. It is common ground that indeed the Covid – 19 pandemic affected almost all businesses; and legal firms were not spared.I agree with Respondent in his submissions that the debt having arisen from a professional undertaking the Applicant gave on behalf of his client, he must have had some special arrangements with his client regarding the transactions he undertook for the client in order for him to commit himself to discharge the professional undertaking.

19. I am however aware that the bulk of the money secured by the professional undertaking has since been settled; a sum of Kshs 16 million. Is it a matter of the Applicant trying to retain the balance to enrich himself unfairly as posed by the Respondent?

20. The Applicant has fallen short of placing material disclosure to the court, for the failure to pay the balance since the orders of court issued on the April 14, 2022. The only reason given by the Applicant at his supporting affidavit is that: -“That post COVID era, this sum will be near impossible to raise as a lump sum payable at one go by myself especially with the modification by interest which continues to accrue forthwith…

21. Though not very persuasive, the court has taken note of the reasons stated, and the fact that the Applicant has put forth an arrangement or scheme to pay, if allowed by this court, in instalments – and clearly states, within 120 days from the date of this application the June 29, 2022.

22. The Applicant has not told the court whether he has paid anything to the Respondent from the June 29, 2022; if so, the Respondent would have stated so in his submissions dated October 4, 2022.

23. The Applicant must show seriousness and not to play around with words, or flaunting court orders as whims, as an officer of the court. If indeed he was serious about his proposals, he would, by the time of delivery of this ruling, be through with the payments, the 120 days having lapsed.

24. In the circumstances, the court is constrained against condemning the Applicant to execution proceedings yet; but will allow the application upon stringent terms:1. That the Applicant shall settle the balance of the decretal sum of Kshs 1,743,315. 10/- with interest at Kshs 2,181,293. 04/- in two equal instalments; on or before the January 30, 2023; and; on or before the February 28, 2023. 2.That, in default in either of the instalments stated at (1) above, the Respondent to be at liberty to execute the Decree.3. The costs of this application shall be borne by the Applicant.Orders accordingly

DATED, DELIVERED AND SIGNED AT NAIROBI THIS 8TH DAY OF DECEMBER 2022J. N. MULWAJUDGE