KENYA AIRWAYS v DONALD OSEWE OLOUCH [2012] KEHC 3253 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT

AT NAIROBI

MILIMANI COMMERCIAL AND ADMIRALTY DIVISION

Civil Case 754 of 2009

KENYA AIRWAYS …………………….........................................…………………... PLAINTIFF

VERSUS

DONALD OSEWE OLOUCH ……..……........................................……………. DEFENDANT

RULING

1. Before this court is a Notice of Motion dated 30 March 2010 and filed herein on 9 April 2010. It is brought by the plaintiff under the provisions of Order XXXV Rule 1 of the old Civil Procedure Rules which is now Order 36 Rule 1 of the Civil Procedure Rules 2010. The application seeks summary judgment against the defendant as prayed in the Plaint. It is supported by the affidavit of the legal counsel for the plaintiff, John Rono dated 30th of March 2010. The defendant opposes the application.

2. Mr. Rono depones to the fact that by way of a letter of appointment dated 23rd of November 2006, the plaintiff offered the defendant employment as a Second Officer commencing service with effect from 2 January 2007. Paragraph 4 of the said affidavit details that the plaintiff further offered to take the defendant through a conversion training course for a period of six months. In consideration thereof, the defendant duly executed a Sponsorship Bond on 4 December 2006 (“the Bond”). The plaintiff maintained that by executing the Bond, the defendant bound himself in the sum of Kshs.8 million being the total cost of the training together with interest thereon at 10% per annum. The defendant also covenanted in the Bond that upon completion of the training he would resume or continue service with the plaintiff for a period of three-years. Such period was determined the "Bond Duration". Should the defendant not complete the Bond Duration then he would be liable to the plaintiff for the amount of the Bond as liquidated damages.

3. Mr. Rono thereafter stated that on or about 18 June 2007, the defendant informed the plaintiff that it was his desire to pursue further studies rather than being a pilot and therefore wished to resign from employment. The defendant confirmed this by way of a letter dated 25th of June 2007. It was the position of the plaintiff that the defendant acknowledged owing money under the Bond and confirmed such by letter dated 17th of July 2007. Thereafter, the defendant left his employment with the plaintiff and on 8 October 2009, the plaintiff filed suit against the defendant for breaching the terms of the Bond claiming a liquidated sum of KShs.9,666,666. 67 plus interest at 10% per annum, as damages.

4. The defendant swore a replying affidavit only on 23 March 2012 filed herein on 26 March 2012. He acknowledged that he had been offered employment by the plaintiff and annexed a copy of his letter of appointment as "DOO-1". He drew the court\'s attention to clause 2 of the letter of appointment which detailed that he would be on probation for a period of six months and during probation either party could terminate the employment contract by giving one month’s notice. He noted that at clause 3 of the letter of appointment, it was provided that he was to execute the Bond in which he would bind himself to work for the plaintiff as per the terms detailed therein. He attached a copy of the Bond marked "BOO-2”. He then went on to say that he had tendered his resignation on 25 June 2007 while still on probation. He noted that at the time of his resignation he had not completed the conversion training which although scheduled to take six months, had been delayed by the plaintiff due to poor administration of the training programme. He maintained that as he had not completed the conversion training, the terms of the Bond were not applicable and he was not bound to continue to work for the plaintiff or pay the sums set out in the Bond. It was his position that the terms of the Bond were in conflict with the terms of the appointment letter which provided that either party could terminate employment by giving one month\'s notice or by paying one month\'s salary in lieu of notice.

5. The defendant further deponed that the plaintiff having accepted his resignation, he had requested it to furnish him with details of the total sum expended as regards his incomplete training by way of letter dated 17 July 2007. He noted that the plaintiff had not responded thereto. He maintained that the letter was not an admission of any sums being owed to the plaintiff as the latter had alleged and he attached a copy of the said letter to his affidavit marked "DOO-3”. He noted that the total cost of this training as per the Bond was Shs.8 million. This sum, he maintained, was not due and payable as he had never completed the training and such was not payable unless there had been a breach of the terms of the Bond. The defendant maintained that resignation during probation was an agreed term of the letter of appointment and could not amount to a breach of the terms of the Bond. Finally, the defendant noted that he had an appeal pending before the Court of Appeal in Civil Appeal No.5 of 2012, in which he was challenging the jurisdiction of this court in relation to the hearing of employment matters.

6. Before summarising the plaintiff\'s and defendant\'s submissions herein, I had noted from the record that Lady Justice Koome (as she then was) had ruled on two applications brought by the defendant that this court lacked jurisdiction to hear this suit. I noted that the Lady Justice\'s Ruling on the point was now the subject of the aforementioned Civil Appeal. I also took note of the defendant\'s application before Justice Kihara Kariuki (as he then was) in the Constitutional Court seeking to transfer this suit to the Industrial Court. Again, the learned judge declined the defendant\'s application with costs to the plaintiff.

7. Mr. Mbaluto appearing on behalf of the plaintiff in highlighting the facts informed the court that the plaintiff had offered to take the defendant for a training programme for conversion purposes for six months. The defendant had executed the Bond on 4 December 2006 in which he bound himself to the plaintiff for Shs.8 million being the total costs of the training. Interest was to accrue on the same at 10% per annum. The Bond had been exhibited to both the plaintiff\'s and defendant\'s affidavits filed in connection with this application. The Bond speaks for itself and it is fully binding on the defendant. In breach of the Bond, pursuant to which the defendant was to serve the plaintiff for three years after completion of the training. On or about 18th of June 2007, slightly under six months from the date of appointment, the defendant had informed the plaintiff of his intention to resign. This the defendant had confirmed in writing by letter dated 25th of June 2007. By letter dated 17th of July 2007, Mr. Mbaluto maintained that the defendant confirmed that he was bound by the Bond and indeed had asked the plaintiff as to whether he had overlooked anything. The only sum that can be due is the sum under the Bond – Shs.8,000,000/- plus interest. Counsel submitted that there were no triable issues as these were uncontroverted matters of fact and law. The plaintiff had filed a list of authorities on 26 March 2012 and counsel wished to underline the finding in the case ofKenya Horticultural Exporters V Pape (1986) KLR 705. The plaintiff maintained that for comparison purposes, the defendant\'s letter of 22nd of July 2007 stands as an unequivocal admission that the sums under the Bond are due and owing to the plaintiff.

8. In his turn, Mr. Issa for the defendant referred the court to the statement of Defence and the plaintiff\'s Reply to the Defence. He was also relying upon the defendant\'s affidavit. He maintained that the sum governed by the Bond is not due as the defendant did not undergo the conversion training course. The Reply to the Defence had not controverted that fact. The second issue that Mr. Issa wished to raise was that at the time of the defendant\'s resignation, he was still under probation and could give one month’s notice or payment in lieu under his letter of appointment. That provision did not affect and was independent of the Bond. The defendant was perfectly entitled to resign and if the Bond was in conflict with the letter or contract of employment, it became null and void. The Bond does not say that the defendant could not resign. There was no provision for that. This is one of the issues, counsel maintained, that the defendant would be asking the court to determine. In Mr. Issa’s view, the consideration of the Bond was the training of the defendant as stipulated in the Bond. That training was never completed and has not been controverted by Kenya Airways. The defendant had not finished his training. The Bond sponsorship was to cover the training and if the defendant did not finish the training, then the sum of Shs.8 million was not payable. There was nothing in the letter of appointment/contract of employment that a pilot had to undergo the training and then work three years for the plaintiff.

9. Further, counsel maintained that there was still a live issue as to the determination of Civil Appeal No. 5 of 2012, challenging the court\'s jurisdiction. In Mr. Issa’s opinion this is not a suitable case for summary judgement as Kenya Airways was in default for not having completed the training. He maintained that the sum of Shs. 8 million is not due to the plaintiff and referred the court to authority number three, as quoted by the plaintiff, being the case of Gicien Construction Company v Amalgamated Trades & Services (1983) KLR 156. Mr. Mbaluto briefly replied on behalf of the plaintiff by saying that the defendant had left employment for his own reasons and cannot now be heard to say that as a consequence of his own resignation that he is released from the Bond. That would defeat the very reason why the Bond was entered into i.e. to secure the continued service of the defendant. In counsel’s opinion, the issue of whether the defendant was on probation or otherwise is wholly irrelevant. It would be relevant only if it was an employment dispute which it is not. Kihara Kariuki J had upheld the submission that there were two distinct contracts.

10. It is trite law that as a general rule, for a defendant to be granted leave to defend a suit, all that is required to be shown is that there is a triable issue of fact or of law. In such circumstances, unconditional leave to defend will be given except in instances where a judge considers that there are grounds for believing that the defence is a sham. In such circumstances, the judge may impose conditions upon the defendant whilst giving him leave to defend. Such is clear from the Kenya Horticultural case (supra) as perNyarangi JA when he said:

"the stream of authority runs uniformly and clearly in favour of the general principle that all that a defendant has to show is that there is a triable issue of fact or law. The general principle is exemplified by Churanjilal & Co. v Adam (1950) EACA 92. Leave will normally be given unconditionally except where a judge considers that there are grounds for believing that the defence is a sham in which case he may exercise his discretion to impose conditions".

Similarly, in Gohil v Wamae (1983) KLR 489, it was simply held that Order XXXV rule 2 (1):

“requires the defendant to show by an affidavit or by oral evidence that he should have leave to defend. The burden is on the defendant to satisfy the court that he is entitled to leave to defend the suit. Leave to defend will not be granted if he merely states that he has a good defence on merit; he must go further and show that the defence is genuine or arguable or raises triable issues.”

11. Mr. Issa had referred me to the Giciem Construction case in which it was held that the object of Order XXXV or Order 36 is to enable a plaintiff with a liquidated claim, in which the defendant has no reasonable defence, to obtain judgement without being subjected to a lengthy unnecessary trial. However the court should not grant an application for summary judgement where there is a reasonable ground of defence reference Zola v Ralli Brothers (1969) EA 691. Similarly it follows, that a party who opposes an application for summary judgement ought r to put in an affidavit containing evidence showing some reasonable ground of defence. As perChesoni Ag JAin that case:

"As a general principle where a defendant shows that he has a fair case for defence or reasonable grounds for setting up the defence or even a fair probability that he has a bone fide defence, he ought to have leave to defend. Leave to defend must be given unless it is clear that there is no real substantial question to be tried; that there is no dispute as to facts or law which raises a reasonable doubt that the plaintiff is entitled to judgement."

12. In this matter before me, the defendant through his counsel raised 2 issues. First of all he stated that he had not completed the conversion training to which the Bond applied. The defendant maintained that by his letter dated 17th of July 2007, he had enquired of the plaintiff as to just how much he owed the plaintiff in terms of the incomplete course of training. The defendant maintained that he had not received a reply to that letter. It seems to me that the defendant has a legitimate query in that regard. The full cost of the conversion training was said to be Shs 8 million. He did not go through the whole course, consequently was he entitled to a reduction of the overall Bond amount? Secondly, the defendant has stated that he resigned from his employment with the plaintiff during the probation period under his letter of appointment/contract of employment. This seems to have been acknowledged by the plaintiff. Where there is a dispute as between plaintiff and defendant is whether he could so resign or, under the terms of the Bond, he was obliged to remain in employment with the plaintiff for a period of three years. To my mind, these points amount to triable issues. On top of that, there is still outstanding the question of the jurisdiction of this court being the subject of Civil Appeal No. 5 of 2012.

13. Accordingly, I am of the opinion that this matter should go to full hearing. The plaintiff\'s Notice of Motion dated 30 March 2010 is thus hereby dismissed with costs to the defendant.

DATED and DELIVERED at NAIROBI this 3rd day of July, 2012.

J. B. HAVELOCK

JUDGE