KENYA NATIONAL CAPITAL CORPORATION LTD vs ROSE N. MUIA & MARGARET M. NGUI [2001] KEHC 143 (KLR)

REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA

AT NAIROBI

MILIMANI LAW COURTS

CIVIL CASE NO. 5853 OF 1993

KENYA NATIONAL CAPITAL CORPORATION LTD.……PLAINTIFF

-VERSUS

ROSE N. MUIA ……………..…………………………1ST DEFENDANT

MARGARET M. NGUI………………………………….2ND DEFENDANT

JUDGEMENT

The Plaintiff applies for judgement to be entered against the Defendants as prayed in the Further Amended Plaint on the grounds that the Defendants are truly indebted to the Plaintiff and there is no defence raising triable issues against the Plaintiff’s suit.

The claim arises out of an agreement for a loan of Kshs.500,000/- of which Kshs.110,000 was to be applied to offset an outstanding loan balance with interest Kshs.50,000/- was to cater for the minimum amount required to open a savings account and Kshs.340,000 was to be disbursed to the Defendants.

It is not disputed that the defendants applied for a loan of kshs.500,000/- which was to be applied to offset a previously advanced amount of Kshs.110,000/- to the second Defendant, to meet the required minimum balance to open a savings account and a further disbursement of kshs.340,000 to both Plaintiffs. It is also not in dispute that the facility was to be secured by a mortgage over plot No. 36/11/231 Nairobi belonging to the first Defendant which was consequently registered.

Subsequently, the 1st Defendant’s title to the security given was challenged on allegation of fraud, which culminated in civil case No. HCCC No. 1880 of 1992 and Criminal Case No. 4788 of 1993. This state of affairs did not only jeopardize the security given but it left the Plaintiff without security. In the meantime the previous outstanding amount of Kshs.110, 000/- continued to attract interest. This sum had been advanced to the 2nd defendant. It is sought in the application which is supported by the annexed affidavit, that the Defendants are jointly truly indebted to the plaintiff and there cannot be any triable issues arising from any possible defence the defendants may have and that summary judgement be entered for the Plaintiff as prayed. The 1st Defendant entered appearance and filed defence. The 2nd Defendant only entered appearance but did not file defence. According to her defence, the 1st Defendant admits applying together with the 2nd Defendant for a loan of kshs.500,000/- The 1st defendant also admits that her plot No. 38/11/231 was to be used as security.

The 1st Defendant however averred in her defence that she has no accounts with the Plaintiff and therefore could not have had an outstanding amount of Kshs.110,000/-. This is not inconceivable. When the Plaintiff saw it had no viable security the sum of kshs.340,000 was withheld. Neither was the Kshs.110,000/- applied to offset the outstanding loan nor the Kshs.50,000/- used to open a saving account for the Defendants. This position is admitted by the Plaintiff’s at paragraphs 9 and 10 in the affidavit filed. I find that the sum under the mortgage was not disbursed to the Defendants. The 1st defendant denies owing the sum of kshs.110,000/-. The Plaintiff state in the affidavit that the sum had been disbursed to the 2nd Defendant previously and was unsecured. The loan was intended to offset the amount but the loan was not disbursed. The mortgage was only prepared and registered but the money was not disbursed. In my view there are triable issues raised in the 1st Defendant’s defence.

The law on Summary Judgment is clear as the Court of Appeal observed in the case of Dhanjal Investments Ltd v. Shebane Investments Ltd. Nairobi C.A. No. 232 of 1997 (Omolo, Shah and Bosire JJ.A.) following the decision of the Court of Appeal for Eastern Africa in the case ofDe Souza Fiquerido and Company Ltd. vs. Moorings Hotel Ltd. (1959) EA 425 in which it was held that if the defendant shows bona fide triable issues he must be allowed to defend without conditions.

The 1st Defendant’s defence raises triable issue(s). Accordingly, the application against the 1st Defendant fails with costs. The 2nd Defendant did not file any defence and therefore has no defence against the plaintiff’s claim. I therefore allow the application against the 2nd Defendant and order that judgement be accordingly entered against the 2nd Defendant as prayed in the Plaint with costs of this suit and those of the application.

Delivered and dated this 31st day of January, 2001

KASANGA MULWA

JUDGE