LUCY CHEPKEMOI KEROR V SARMA ENTERPRISES LTD & ANOTHER [2012] KEHC 3569 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT

AT NAIROBI

MILIMANI LAW COURTS

Environmental & Land Case 385 of 2011

LUCY CHEPKEMOI KEROR….…………….……………......PLAINTIFF

-VERSUS-

SARMA ENTERPRISES LTD........................................ 1ST DEFENDANT

STEKA COMMERCIAL AGENCIES...............................2nd DEFENDANT

RULING

Lucy Chepkemoi Keror the Plaintiff/Applicant has filed a Notice of Motion dated 25/10/2011 againstSARMA ENTERPRISES LTD 1st Defendant and STEKA COMMERCIAL AGENCIES 2nd Defendant and is seeking the following orders.

1. That Judgment be entered for the Plaintiff/Applicant against the Defendants/Respondents in the sum of Kshs.900,000/- together with interest thereon at 18% calculated on a monthly basis from the 30th day of January 2007 until payment in full.

2. Costs for the suit be awarded to the Plaintiff/Applicant.

3. Cost of this application be awarded to the Plaintiff/Applicant.

The application is based on the following grounds:-

a)The Defendant/Respondent received the sum of Kshs. 900,000/- from the plaintiff/Applicant on account of the sale of plots No: 15,16,17 and 18 of L.R. NO:12715/49 SYOKIMAU which plots were subsequently sold and transferred to third parties.

b)The Defendant/Respondent have expressly admitted receipt of the said sum of Kshs. 900,000/- on account of an agreement which cannot be completed.

c)The Defendants/Respondents do not have any defence to the alternative prayer in the plaint.

d)The Defendant/Respondents having acknowledged receipt of the said sum of Kshs. 900,000/- and having further confirmed that the suit properties have already been registered in favour of third parties, it would be an abuse of the process of this court to allow them leave to defend the suit herein.

The application is brought under section 3A of the Civil Procedure Act Cap 22 of Kenya and Order 36 Rule 1,2 and 3 of the Civil Procedure Rules and is supported  by the affidavit of Lucy Chepkemoi Keror  filed on the 10th of November 2011.

The applicant states as follows in brief; in January 2007 the Respondents offered for sale various plots  which were to be subdivided from L. R. No. 12715/49 Syokimau; that the Respondents agreed to sell to her 4 plots being plot Nos. 15, 16, 17, and 18 each measuring 50 x100 at a purchase price of Kshs. 250,000/- each; that pursuant to the said agreement she paid a total of Kshs. 900,000/- to the 2nd Respondent; that it was mutually agreed and understood that she would pay the balance of the purchase price of Kshs. 100,000/- together with payment for transfer and stamp duty upon completion of the sub-division and delivery of the completion documents; that between November 2007 and mid 2009 she made several visits to the offices of both Respondents to ascertain whether the completion documents were ready, but it became clear that both defendants were not ready to complete the agreement and consequently her lawyers wrote a demand letter annexture LCK2. Subsequently she verified and confirmed that the two plots were transferred and registered in the name of 3rd parties as stated in paragraph 6 of the replying affidavit of Sarah Mbeti Karingi sworn on the 19th day of August 2011; that the 2nd Respondent has also expressly admitted receiving a total sum of kshs. 900,000/= from her. She also seeks interest of 18% per annum from the 23rd of January 2007 and states that the refund of her payment cannot amount to sufficient compensation for her loss as the said properties are now selling at Ksh.1. 3 million per plot.

Sarah Mbeti Karingi the Director of the 1st Defendant/Respondent filed a replying affidavit dated 17th November 2011. She states in her affidavit the 1st defendant had contracted the 2nd Defendant to source buyers for the plots mentioned in the pleadings by the plaintiff; that the said 2nd Defendant had no power or authority to engage in the sale of the said properties and it was erroneous and lack of diligence on the part of the plaintiff to enter into a sale agreement with the 2nd  defendant; that the 1st Defendant did not receive any money from the Plaintiff and did not enter into any sale with the said Plaintiff; that the plaintiff without the knowledge of the 1st defendant executed a sale agreement with the 2nd Defendant and paid money which amount the 1st Defendant is not only unaware but did not receive apart from a Kenya Shillings One Hundred Thousand (Kshs.100,000/-) belatedly deposited in the 1st Defendant’s account by the 2nd Defendant when approached and questioned about the allegations raised by the Plaintiff. The 1st Defendant is ready and willing to return the said Kenya Shillings One Hundred Thousand (Kshs. 100,000/-), that the 1st Defendant was at all material time a stranger to the transaction entered between the plaintiff and the 2nd Defendant whose agreement does not bind it; that unaware of any transaction over its property, the 1st Defendant disposed its properties to other 3rd parties to whom title deeds were issued by the land registry; that the plaintiff’s pleadings do not explain why the plaintiff avoided to make a sale agreement with the 1st Defendant whereas it was the registered owner of the properties the Plaintiff intended to purchase; that if any money was paid to the 2nd defendant by the Plaintiff as alleged, then the plaintiff should have claimed the same from the 2nd Defendant without involving the 1st Defendant as there was no privity of contract between the 1st Defendant and the Plaintiff.

Stephen Kariuki Kanyirithe proprietor of the 2nd defendant company filed a replying affidavit sworn on 17th of November 2011.

He deponed as follows;  that they were specifically commissioned by the 1st defendant to dispose off the said properties which also included other plots at a commission and but the contract was terminated by the 1st Defendant before completion of the transactions; that he is aware that the plaintiff paid a total of Ksh. 900,000/- for the four plots in instalments within a period of 12 months but all documents pertaining to the sale of the plots were handed over to the 1st Defendant when their contract was terminated; that it was a term of the agreement that the plots were to be transferred once the purchase price, Title registration fees, legal fees and transfer fees was fully paid and the plaintiff balance as at the time the 1st Defendant terminated the contract was Kshs. 220,000 and not 100,000 as alleged by the Applicant; that the suit herein raises triable issues which can only be adjudicated once the matter is heard fully and by entering summary judgment at this juncture, the 2nd Defendant is at risk of suffering tremendous loss which might outlive this suit, that further, the interest claimed in paragraph 15 is unjustified because as far as their offices was concerned, the plots were paid for in bits within a period of 12 months beginning January 2007 to December 2007.

I have carefully read and considered the application the affidavits filed by the parties, the submissions made and the law that governs applications of this nature and find as follows, there is no dispute that the plaintiff in this case sought to buy four plots from the defendants and that she paid a sum of 900,000/- to the 2nd defendant. Receipts attached in “LSK 1” show that the 2nd defendant received the said sum. From the facts adduced in the affidavits of the defendants it is evident that the 1st and 2nd defendants had a principal agent relationship. The 1st defendant commissioned the 2nd defendant to sell the plots. The 2nd  defendant did so and received a sum of 900,000/- from the plaintiff/applicant. The 1st defendant in the affidavit sworn by the director states that they only received a sum of 100,000/- from the 2nd defendant. This is not denied by the 2nd defendant. The plaintiff did not get her plots and the defendants have held the monies paid by her. I note that none of the defendants have filed any defences, but from their affidavits they admit receipts of sums from the plaintiff.

Order 36  rule 5 states that:

“if it appears that the defence set up in the affidavit by the defendant applies only to a part of the plaintiff’s claim, or that any part of his claim is admitted, the plaintiff shall have judgment forthwith for such part of his claim as the defence does not apply to, or as is admitted, subject to such terms, if any, as to suspending execution, or the payment of the amount realised or any part thereof in court, the taxation of cost, or otherwise as the court thinks fit, and the defendant may be allowed to defend as to the residue of t he plaintiff’s claim”.

In this case each defendant has admitted the sums that were paid to them in the affidavits and therefore the plaintiff is entitled to judgement for such part of her claim as is admitted.

I note that the power to grant summary judgment under order 36 should be exercised cautiously and was intended to apply only to cases where there is no reasonable doubt and the plaintiff is entitled to judgement.

The affidavits filed raise no triable issues on the amount of 900,000/- that the plaintiff is claiming. On interest the applicant claims 18% to be calculated on a monthly basis from the 30th January 2007 until payment in full. The plaintiff’s counsel argument is that the plaintiff is entitled to the said interest on reasons that currently the plots are going for Ksh.1. 3million and there is an upward trend of prices of property.

Section 26 of the Civil Procedure Act gives the Courts powers to award interest as correctly pointed out by counsel for the plaintiff. A party claiming an interest above court interest needs to justify the percentage being claimed. In this case I find no proper justification to claim interest of 18% calculated on a monthly basis from the 30th January 2007 until payment in full. No reasonable ground has been laid for it. I find that the plaintiff is therefore entitled to interest at court rates from the date of filling suit.

I therefore grant the orders sought in the notice of motion dated 25th October 2011 as follows:

1. I enter Judgment for the plaintiff against the 1st defendant in the sum of Ksh.100,000/- (One Hundred Thousand) together with interests as Court rates from the date the suit was filed until payment in full.

2. I enter Judgment against the 2nd defendant in the sum of Ksh.800,000/- (Eight Hundred Thousand) together with interest at court rates from the date the suit was filed until payment in full .

3. Costs of the application and the suit are awarded to the plaintiff.

Dated and delivered this 10th Day of February 2012

R. OUGO

JUDGE

In the Presence of:-

Mrs Ochieng.           For the Applicant

Ms Obel                        For the Respondent

Mr. Kabiru                   Court Clerk