Maina v Njanga [2022] KEHC 14915 (KLR) | Matrimonial Property Division | Esheria

Maina v Njanga [2022] KEHC 14915 (KLR)

Full Case Text

Maina v Njanga (Originating Summons 6 of 2013) [2022] KEHC 14915 (KLR) (4 November 2022) (Ruling)

Neutral citation: [2022] KEHC 14915 (KLR)

Republic of Kenya

In the High Court at Mombasa

Originating Summons 6 of 2013

JN Onyiego, J

November 4, 2022

IN THE MATTER OF DIVISION OF MATRIMONIAL PROPERTY AND IN THE MATTER OF SECTION 17 OF THE MARRIED WOMENS PROPERTY ACT (1882) (NOW REPEALED) AND IN THE MATTER OF THE MATRIMONIAL PROPERTY ACT NO.49 OF 2013

Between

JWM

Applicant

and

EMN

Respondent

Ruling

1. The parties herein solemnized their marriage on December 10, 2005 and parted ways as husband and wife through divorce proceedings declared absolute on April 30, 2015. However, during the pendency of the divorce proceedings, they engaged in a matrimonial property dispute over division of the said property which was allegedly acquired during coverture. Fortunately, they arrived at an amicable settlement thereby recording a consent dated May 23, 2014 and adopted as an order of the court on May 26, 2014.

2. The said consent provided as follows;“By consent of both parties this case is hereby settled as follows; 1. That the respondent will purchase a house no.36 in [Particulars Withheld] in the name of the applicant within 90 days or such a period as the parties to the agreement of sale may agree as the completion period.

2. That for the avoidance of doubt the title documents and vacant possession of the house no.36 shall be handed over to the applicant as per the terms of the sale agreement.

3. That to facilitate 1 and 2 above the respondent will pay for the accommodation at house number 36 at [Particulars Withheld] until vacant possession of house no.36 is availed to the applicant.

4. That the respondent will buy out the applicant’s property interest and liabilities for a sum of Kshs 15 million (hereinafter ‘the consideration), the said consideration will be paid in respect of any of the applicant’s claim to the matrimonial property including the following.a.50% shareholding in the following companies;i.Mawa Dairy Farm Ltdii.Villa Spring Ltdiii.Fourty Fields Investment Ltdiv.Three Eez Ltdb.50% interest in Kilifi/mtepeni/518

5. That the said consideration shall be paid as follows;a.Kshs 3 million payable upon execution and filing of the consent in court.b.The balance in the sum of Kshs 12 million shall be paid in twelve equal monthly instalments in the sum of Kshs 1 million per month payable on the 8th of each succeeding month until payment in full.in default of payment of any instalment, the entire outstanding amount shall become due forthwith and execution shall issue.c.The balance of Kshs 12 million will be further secured by issuance by the respondent to the applicant the following upon the execution and filing of the consent;i.Post-dated cheques in respect of the entire balance.ii.The applicant’s law firm’s irrevocable professional undertaking on terms to be approved by the applicant.d.The payment of the sum of Kshs 3 million upon execution and filing of consent will be exchanged with the following documents;-a.The applicant’s resignation as director and transfer of shares by the applicant to the respondent or any of his nominees in the following companies;Mawa Dairy Farm LtdVilla SpringsltdFourty Fields Investments LtdThree Eez Ltdb.A transfer document of the applicant’s interest in Kilifi/mtepeni/518

6. That the respondent will furnish the applicant with the following original documents.i.Counterpart discharge of change over Kilifi/mtepeni/518ii.Certificate of discharge or re-conveyance of mortgage in respect of personal guarantees and or liabilities that the applicant has executed in respect of:--Mawa Dairy Farm Ltd-villa Springs Ltd-fourty Fields Investments-three Eez Ltd-kilifi/mtepeni/518iii.Certificate of closure of all joint accounts to which the applicant is a signatory.

7. That in default of any of the above terms of the consent each party be at liberty to execute.

8. Each party be at liberty to seek the court’s intervention in the enforcement of this consent.

3. Following allegations of non -compliance of the said consent order, the applicant moved to this court vide a chamber summons application dated July 10, 2017 seeking the following orders;a.Spentb.That this honourable court be pleased to issue an order nisi forthwith attaching the sum of Kshs 14,000,000. 00(Kenya shillings fourteen million)plus interest at the rate of 12%per annum being the decretal sum due and payable in this suit which sum is severally held to the credit of Edward Maina Njanga,the judgement debtor to his credit in this suit held by the garnishees herein that is to say,Stanbic Bank of Kenya Limited(Account No.xxxx)Standard Chartered Bank of Kenya Limited(Account No.xxxx )and Commercial Bank of Africa Limited (Account Nos.xxxxx and xxxxxx and any other account held by the defendant in the above mentioned banks.(spent allowed on October 24, 2017)c.That this honourable court be pleased to order the above named garnishee and the judgement debtor to attend before the court on a date to be appointed, to show cause why the said garnishee should not pay to the decree holder the decretal sum herein or so much thereof as may be sufficient to satisfy the said sum of Kshs 14,000,000. 00(Kenya shillings fourteen million) plus interest at the rate of 12% per annum.d.That upon inter parties hearing of this application, this honourable court be pleased to issue a garnishee order absolute in terms of prayer 2 herein above.e.That this honourable court be pleased to order that pending full performance of the consent judgement dated May 23, 2014 the properties therein be deemed to be held in trust for and to the benefit of the petitioner and full and proper accounting and disclosure in respect of any transactions undertaken by Messrs Mawa Dairy farm ,Forty Fields Investment Limited, Villa Springs Limited and Three EEZ Limited be rendered to the petitioner; andf.That costs of this application be provided for by the defendant /judgement debtor.

4. The application is premised on the grounds stated therein and the averments contained in the supporting affidavit of the applicant sworn on July 10, 2017.

5. The applicant averred that despite her discharging her obligations as per the said consent order, the respondent had failed on his part despite his advocates making a professional undertaking to execute the consent.

6. The applicant stated that from March 2014 to December, 2015 the respondent duly made the payments amounting to Kshs 8,000,000. 00(Kenya shillings eight million). That the respondent called her and advised that he required financing for the purchase of the house No.36. That he requested her to execute a notice of withdrawal of caveat to enable his financiers approve his facility quickly which she did on July 21, 2014 and the same forwarded to the respondent by her advocates.

7. She further stated that after several telephone conversations the respondent made her believe that the fastest way to finalise the sale transaction was to withdraw the caveat which would enable him meet his obligations under the consent before the end of 2014. That the respondent agreed to execute and forward transfer documents relating to Bridge Banks Holding Limited which he has failed, neglected and/or refused to do to date.

8. The applicant averred that the respondent’s facility was approved and annexed several documents to support the same and instead of paying off the outstanding balance on house No.36 as agreed, he went ahead to launch his business which received media coverage in October, 2014. That by a letter dated October 22, 2014, the respondent’s lawyers wrote to hers indicating that there remained an outstanding balance of Kshs 6. 500, 000. 00(Kenya shillings six million five hundred thousand).

9. The applicant annexed copies of bounced cheques issued to her by the respondent as proof that the respondent was not keen in discharging his part of the bargain. That to avoid defaulting in paying the seller of the subject house, she was forced to take out a charge on the house in the amount of Kshs 8,000,000(Kenya shillings eight million) to cover the remaining Kshs 6,500,000 (Kshs six million five hundred thousand) as well as the stamp duty and legal costs thereon.

10. According to her, the outstanding amount due for payment by the respondent is as indicated below;a.Kshs 6,000,000(Kenya shillings six million ) remains due and outstanding in respect of the consideration ;andb.Kshs 8,000,000(Kenya shillings eight million) in respect of the purchase of house No.36 [Particulars Withheld] including the stamp duty paid thereon. This continues to accrue compound interest at Barclays bank of Kenya limited rates compounded daily.

11. She urged the court to allow her recover the said amount by way of executing garnishee proceedings against; Messrs Stanbic Bank Limited ,Standard Chartered Bank of Kenya Limited and/or Commercial Bank of Africa ( hereafter the garnishees) who are holding funds to the credit of the respondent /judgement debtor in the following accounts; Stanbic Bank of Kenya Limited (Account No. xxxxxx),Standard Chartered Bank of Kenya Limited(Account No.xxxxxxx) and Commercial Bank of Africa Limited (Account Nos.xxxxx and xxxx and any other account held by the respondent in the said banks.

12. It was the applicant’s apprehension that the defendant /judgement debtor may withdraw and/or move funds held to his credit by the garnishees herein in the event the orders sought are not granted.

13. The applicant deponed that she believes that since the respondent has failed, neglected and/or refused to settle the terms of the consent she retains a lien over the following properties and further that the respondent continues to hold them in trust for her;a.Title No.CR .xxxxx -Land Reference No.12411 Section 1 Mainland North (matrimonial home)b.50% interest in Kilifi/Mtepeni/518c.Mawa Dairy Farm Limitedd.Villa Springs Limitede.Forty Fields Investment Limited; andf.Three EEZ Limited

14. That she is entitled to full and frank disclosure in regards to the properties held by the following companies and the proceeds thereof:-a.Mawa Dairy Farm Limitedb.Villa Springs Limitedc.Forty Fields Investment Limited; andd.Three EEZ Limited

15. In response, the respondent filed a preliminary objection dated October 6, 2017 stating that; the prayers sought are incapable of being granted in law; the orders sought are not available; the orders sought are premature and unfounded in law for non-compliance with order 22; the court has no jurisdiction to entertain the application and make the orders sought as the default terms are clear in the consent.

16. The applicant responded through grounds of opposition dated October 23, 2017 stating that; the applicant is entitled to the orders sought under Art.68 of the constitution and Section 6 and 7 of the Matrimonial Property Act; by virtue of the consent order the applicant is a decree holder; clause 7 of the consent order allows any party to execute or seek court’s intervention; order 23 of the CPRs recognizes attachment and issuance of garnishee orders; the respondent has not denied the claim hence liable; the court to apply Art.59 and Section 1A and 3A of the CPA not to strike out the suit; the preliminary objection lacks merit and the same is frivolous and vexatious.

17. Consequently, the respondent filed a replying affidavit sworn on November 14, 2017 denying the claim. He averred that; the standard charted bank account the subject of garnishee orders is not his but that of his law firm; he has made full payment as per the consent order taking into account that the house he was to buy for the applicant was worth kshs 28,000,000 million and not kshs 35,000,000; any claim of payment over and above kshs28,000,000 was not his responsibility hence the excess amount paid by the applicant is not recoverable from him.

18. He denied the claim that the applicant holds any lien over any property as he has fully satisfied his part of the bargain hence prayer 5 is not applicable. He attached some money transfer documents to show that he had paid the money required of him. Further, that he had paid 9 million in settlement of divorce proceedings plus kshs 1,200,000 to meet other expenses for the children.

19. The applicant filed a further affidavit sworn on November 21, 2017 in which she reiterated her position in the supporting affidavit. She averred that it is not true that the respondent was the sole proprietor in the law firm of Njanga and co. advocates as the applicant was a senior partner; the amount of 9million referred to by the respondent has no connection with the consent order as the said amount was paid earlier in settlement of divorce proceedings and not matrimonial property claim

20. She further stated that the purchase price of house No.36 in [Particulars Withheld] estate was Kshs 35,000,000 (Kenya shillings thirtyfive million) of which the respondent paid 28,500,000. 00 (Kenya shillings twenty eight million five hundred thousand) to the seller’s advocates. It was her contention that it was the respondent’s default which resulted to the possible rescinding of the sale agreement leaving her with no choice other than to salvage the situation by takinga loan of Kshs 8,000,000 (Kenya shillings eight million) to cover the outstanding Kshs 6,500,000 (Kenya shillings six million five hundred thousand) as well as the stamp duty, registration costs and legal fees.

21. That after securing bank approvals, she informed the respondent of the steps taken and advised on repayment. That the respondent executed the notice of withdrawal of caveat which completed the completion documents for the house. That when the respondent learnt that she had obtained the bank facility, he stopped paying the monthly rent.

22. The applicant averred that the respondent had only paid Kshs 9,000,000 towards his obligation to purchase her interest in the family businesses and properties at a consideration of Kshs 15,000,000 (Kenya shillings fifteen million). That in December 2014, the respondent wrote to her seeking her indulgence and not to bank the cheques that he issued her with. He also stopped cheques issued in February 2015. As a result of his actions the outstanding amount in respect of this item is Kshs 6,000,000(Kenya shillings six million).

23. In response to the further affidavit, the respondent filed a reply on November 29, 2017 stating that the consent judgement did not provide any basis for the amounts sought by the applicant.

24. He stated that; he was the sole proprietor of the firm known as Maina Njanga & Co.Advocates; the applicant has never been a partner of the firm as the firm was established in 1998 long before he met the applicant and any money given during their separation was part of a settlement of which he had to pay money for the applicant to vacate his office and home.

25. He further stated that they had agreed with the applicant that he would purchase a house for Kshs 28,500,000 but unfortunately another person purchased the said house. That in good faith he agreed to transfer the offer to another house on the understanding she would contribute to the purchase price which is what she did with the money she borrowed. That he removed the caveat on the understanding that the applicant would complete the sale without expecting any further payment from him.

26. The 3rd garnishee (Commercial Bank of Africa) filed a replying affidavit sworn on January 24, 2018 by one Brenda Kasili, head of the document processing unit. She stated that the garnishee is not able to comply with any garnishee order absolute issued by the court for reasons that the respondent’s account with the garnishee does not have enough funds to meet the payment of the sum of Kshs 14,000,000plus the interest rate of 12% per annum.

27. The applicant through her advocates P.A Osino & Co. Advocates filed written submissions dated December 18, 2017 and submitted on three issues namely; whether the applicant is entitled to the orders sought; jurisdiction and variation of the consent

28. On the first issue, counsel submitted that the applicant was entitled to the orders sought by virtue of the provisions of Article 68(3) of the Constitution 2010 read together with Section 6 and 7 of the Matrimonial Property Act, Order 23 Rule 1 of the Civil Procedure Rules and Section 2 of the Civil Procedure Act. That the applicant is the decree holder herein by virtue of the consent judgement entered into on May 23, 2014 and adopted by the court. To support this position counsel relied on the case of SSS v EM (2017) eKLR.

29. Counsel further submitted that the order is capable of being executed by virtue of item no.7 and 8 of the consent order. That Order 23 of the Civil Procedure Rules, 2010 which recognizes attachment and garnishee of debts as a legitimate method of execution is applicable.

30. On the second issue, counsel submitted that court’s jurisdiction is granted by both the law and the terms of the consent as agreed by the parties in paragraphs 7 and 8. That the jurisdiction to grant prayer no.5 is granted to the court by section 17 of the matrimonial property act and urged the court to grant the same. That the garnishee did not oppose the application nor had the applicant shown that he had complied with the court order.

31. On the third issue, counsel submitted that the consent order was never varied as the debt is still outstanding since the applicant had to borrow money from the bank to complete the transaction in order to salvage it.

32. Counsel contended that the preliminary objection is frivolous, vexatious and otherwise an abuse of the court process. Further, it is ill conceived and unsustainable in law. That it raises matters of facts and evidence and therefore fails to meet the requirements set out in Mukisa Biscuits Manufacturing Co.Ltd v West End Distributors Limited (1969) EA 696.

33. The respondent through his advocates Judy Thongori & Co. Advocates filed written submissions dated January 23, 2018 and supplementary submissions dated February 7, 2018. Counsel submitted on two issues namely; garnishee orders are not available to the applicant as no decree has been extracted and the applicant is not entitled to the orders sought in prayer 5 against entities which are not parties to the suit.

34. On the first issue, counsel submitted that the applicant had not met the necessary threshold to move the court for a garnishee order as the figures she is seeking to support are different from those of the consent order. That she should have made an appropriate application for the court to determine if any amount is owing and if so, issue fresh order or decree. Counsel relied on the case of Morara Aplemi & Co. Advocates v Deshpal Sian Singh & 2 Others [2007] eKLR and Order 22 rule 6 and Order 23 rule 1 of the CPRs and submitted that execution proceedings must be preceded by the existence of a decree.

35. That the applicant would therefore be making reference to the decree and not consent order thus this is a defect that cannot be cured. Counsel further relied on the case of Rubo Kimngetich Arap Cheruiyot v Peter Kiprop Rotich (2006) eKLR and Danson Muriithi Ayub v Evensong Mithamo Muroko (2015)e KLR to express the position that after entry of judgment, a decree must be extracted for execution. Counsel further submitted that without legal instrument for execution, this honourable court has no jurisdiction to grant orders of execution.

36. On the second issue, counsel asserted that it is trite law that a court must not issue orders against persons or entities that are not party to proceedings before it. In that regard the court was referred to the case of Andrew Meme M’mwereria v Registrar Igembe South District & Another [2014]

Determination 37. I have considered the application herein, responses therein and the rival submissions by counsel for both parties. Issues that emerge for determination are;a.Whether the court is properly seized with this application.b.Whether the orders sought should be granted.

38. It is not in dispute that the orders sought are based on the consent dated May 23, 2014 and filed in court on May 26, 2014. The content of the consent is not in dispute. It was the parties’ consent under item 7 that in default of any of the terms of the consent, the aggrieved party would have recourse to the execution process. Item 8 goes further to provide that each party was free to seek court’s intervention in its enforcement. Clearly therefore, this court’s authority and jurisdiction is derived from order 23 of the CPRs and the terms of the consent. Item 8 does clothe the court with wide powers and unfettered discretion to intervene and make any order it may deem fit to enforce the consent order.

39. The respondent herein argued that the applicant does not have the necessary threshold to move the court for a garnishee order as the figures she is seeking to support are different from those of the consent order.

40. From the record and parties’ submissions, the issues in dispute to me are; the actual amount due for recovery via a garnishee order; whether this court can issue a garnishee order for recovery of such amount without a decree in place and If not; whether the applicant holds any lien or interest on the properties listed under items 4 of the consent order’.

41. On the amount due, the respondent does not deny that he was to buy house number 36 in [Particulars Withheld] Estate. The house was bought at 35million shillings out of which both parties are in agreement that the respondent paid 28. 5 million and the balance inclusive of stamp duty was paid by the applicant. The respondent insisted that the initial agreement was for him to buy for the applicant a house worth 28million. Apparently, this initial agreement is not captured in the consent agreement. In my view, any other agreement outside the consent order is not enforceable. To that extent, the amount of 8million which the applicant had to top up using a charge is recoverable from the respondent. This is in the spirit of consent order number 8.

42. Regarding recovery of 15 million under order number 4 of the consent, the applicant claimed that only 9million was paid and the balance of 6million was not paid after a bunch of cheques given by the respondent bounced. The respondent admitted as such but then introduced the fact that he had paid 9million earlier in settlement of divorce proceedings. M/ s Osino submitted that the said amount was paid much earlier before the consent order was entered. Clearly, the amount paid in settlement of divorce proceedings has nothing to do with the orders under the consent order.

43. In any event, the respondent has not proved that after the issued cheques bounced he did pay the amount in question. For those reasons, the only explanation available is that the amount of 6million under order 4 is due and owing hence recoverable through execution in terms of order number 7 of the consent.

44. Can the court make a declaration that the properties listed under prayer 5 of the application are held by the respondent in trust for the applicant or that the applicant holds lien over them? The answer is no. This is because, the consent order is self -executing. The only remedy available for any party in case of breach is execution. To make such orders would mean condemning other parties who are not party to this suit (companies) unheard. The applicant cannot run away from the execution process which has so many options. To that extent that prayer cannot issue.

45. I am now left with the issue whether this court can issue the garnishee order sought. Ms Thongori SC, contended that in the absence of a decree duly extracted under order 22 of the Civil Procedure Rules, this court cannot issue execution order in the nature of garnishee order. There is no dispute that this court has powers under order 23 of the civil procedure rules to issue execution orders in the nature of a garnishee order.

46. On the other hand, Ms Osino contended that an order of the court is as good as a decree hence executable. Order 22 of the civil procedure provides;“where the holder of a decree desires to execute it, he shall apply to the court which passed the decree, or, if the decree has been sent under the provisions hereinbefore contained to another court, then to such court or to the proper officer thereof”

47. Order 23 of the Civil Procedure Rules, allows a decree holder to execute a court order through garnishee proceedings to realize a debt owed to a Judgment debtor by the garnishee to a judgment creditor. Section 2 of the civil procedure does define “a decree” as a formal expression of an adjudication which so far as regards the court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and it may be either preliminary or final…”

48. Ultimately, the consent herein disposed of the matter with finality hence a judgment of the court from which a decree can be extracted for execution. It is trite that a judgment cannot be executed without first extracting a decree. This is a legal requirement which in my opinion is not curable under Article 159 of the constitution. The applicant cannot claim to be a decree holder when in actual sense there is no decree in place. The consequence therefore is that there is no decree in place capable of execution.

49. The fact that the 1st and 2nd garnishee did not oppose the application does not mean that the application is properly before the court. An application does not automatically succeed simply because it is not opposed. The party seeking grant of such orders must fully discharge his or her obligation. See Sitelu Konchellah vs Julius Lekakeny Ole Sunkuli & 2 others (2018)e KLR.

50. The court in the case of Mengich t/a Mengich & Co Advocates & another v Joseph Mabwai & 10 others [2018] eKLR in dealing with the issue of garnishee proceedings laid down guidelines on the procedure to be followed when applying for a garnishee order as follows;“Generally, Garnishee proceedings is done in two different stages.[2] The first stage is for the garnishee order nisi, while the second stage is for the garnishee order absolute. At the first stage, the judgment creditor makes an application ex parte to the Court that the judgment debt in the hands of the third party, the Garnishee, be paid directly to the judgment creditor unless there is explanation from the Garnishee why the order nisi should not be made absolute. If the judgment creditor satisfies the Court on the existence of the Garnishee who is holding money due to the judgment debtor, such third party (Garnishee) will be called upon to show cause why the judgment debtor's money in its hands should not be paid over to the judgment creditor, and if the Court is satisfied that the judgment creditor is entitled to attach the debt, the Court will make a garnishee order nisi attaching the debt.[3]The essence of the order nisi is to direct the Garnishee to appear in court on a specified date to show cause why an order should not be made upon him for the payment to the judgment creditor of the amount of debt owed to the judgment debtor. It is a requirement that a copy of the order nisi must be served on the Garnishee and judgment Debtor at least 7 days before the adjourned date for hearing. The second stage is for the garnishee order absolute, where on the adjourned date, the Garnishee fails to attend court or show good cause why the order nisi attaching the debt should not be made absolute, the Court may subject to certain limitations make the garnishee order absolute. The Garnishee, where necessary also have an option of disputing liability to pay the debt. The applicants ignored these procedures.The primary object of a garnishee order is to make the debt due by the debtor of the judgment debtor available to the decree holder in execution without driving him to the suit. The court may, in the case of debt (other than a debt secured by a mortgage or charge), upon the application of the attaching creditor, issue a notice to garnishee liable to pay such debt, calling upon him either to pay into court the debt due from him to the judgment debtor or so much thereof as may be sufficient to satisfy the decree and costs of execution, or to appear and show cause why he should not do so.”

51. Drawing wisdom from the above citation, am satisfied that the court is properly seized of this application hence has jurisdiction to hear and determine this application.

52. In the case of Mengich t/a Mengich & Co Advocates & another v Joseph Mabwai & 10 others (supra) while faced with a similar situation the court held as follows;“… The above rule contemplates the existence of a decree for the amount claimed. There is no decree before me. The applicants base their application on a consent recorded on October 10, 2017… the document is not a court decree to satisfy the requirements of the above rule. The applicants never filed their Bills of Costs in court for taxation. There is no judgment-debtor before me as the law requires. It follows that the application lacks both substance and legal basis to stand on. The applicant's application is fatally and incurably defective.”

53. I must note that the applicant has not provided any decree in relation to the subject matter. She has referred to the consent order recorded on May 23, 2014 which is not a court decree. For all purposes and intent, I do agree with Ms Thongori SC that there is no decree capable of execution. A proper decree should be extracted for execution.

54. Accordingly, it’s my finding that the applicant’s application is fatally defective and it’s hereby dismissed and the order nisi issued herein discharged. As to costs, I shall order that each party bears own costs.

DATED, SIGNED AND DELIVERED IN MOMBASA THIS 4THDAY OF NOVEMBER, 2022J.N.ONYIEGOJUDGE