Metropolitan Childcare Organization (MCO) v Childfund Kenya [2020] KEHC 1187 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL CASE NO.E051 OF 2020

METROPOLITAN CHILDCARE

ORGANIZATION (MCO)...............................APPLICANT/PLAINTIFF

-VERSUS-

CHILDFUND KENYA...............................DEFENDANT/ RESPONDENT

RULING

1)  The subject matter of this ruling is the motion dated 10th August 2020 taken out by Metropolitan Childcare Organization (MCO), the plaintiff/applicant whereof it sought for the following orders inter alia:

i. THAT the application be certified as urgent and the same be heard ‘exparte’ in the first instance.

ii. THAT a temporary injunction do issue suspending the respondent’s notice of non-renewal of letter of agreement dated 29th May, 2020 pending the hearing and determination of this application.

iii. THAT temporary injunctions do issue suspending the respondent’s notice of non-renewal of letter of agreement dated 29th may 2020 pending the hearing and determination of this suit.

iv. THAT the costs of this application be provided for.

v.  THAT any other order this honourable court may deem fit.

2) The motion is supported by the affidavit sworn by Geoffrey Gichuru Kariuki.  When served Childfund Kenya, the defendant /respondent filed the replying affidavit sworn by Chege Ngugi to oppose the motion.

3) In response to the replying affidavit, the plaintiff/applicant filed a supplementary affidavit sworn by Geoffrey Gichuru Kariuki.  With the concurrence of learned counsels appearing in this suit, this court gave directions to have the aforesaid motion to be disposed of by written submissions.

4) I have considered the grounds stated on the motion and the facts deponed in the rival affidavits.  I have also taken into account the written submissions and authorities filed by both sides.  The main order sought by the plaintiff/applicant is an order of temporary injunction to suspend the respondent’s notice of non-renewal of letter of agreement dated 29th May 2020 pending the hearing and determination of this suit.

5) The brief background of this dispute is short and straightforward.  The respondent is a donor organization whose parent organization namely ChildFund International based in the United States of America.

6) The respondent offers donor support to vulnerable children and families throughout the world.  The respondent and the applicant entered into a contract by executing the Letter of agreement (LOA) for the year 2019 dated 30th June 2019.  The letter of Agreement was to run for a year with effect from 30th June 2019 and lapse on 30th June 2020.

7) The Letter of Agreement is a comprehensive document which stipulates inter alia the duration of the contract and also gives guidelines on how the donor funds is utilized and audited.

8) By a letter dated 29th May 2020, the defendant/respondent gave the plaintiff/applicant a non-renewal notice which is to the effect that the respondent shall not be renewing the letter of agreement once it lapses on 30th June 2020.  The plaintiff/ applicant was basically given a thirty (30) days notice.

9)  The plaintiff/applicant is now before this court seeking to have aforesaid non-renewal notice suspended pending the hearing ofthe suit.

10) The applicable principles in determining an application for injunction were stated in the case of Giella =vs= CassmanBrown Co. Ltd (1973) E.A 358 as follows:First, an applicant must show a prima facie case with a probability of success.  Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable harm which would not adequately be compensated by an award of damages.  Thirdly, if the court is in doubt, it will decide an application on a balance of convenience.

11) It is the submission of the plaintiff that it has a prima facie case with a probability of success arguing that its case raises fundamental issues touching on the issue of failure to comply with the law and the terms of letter of agreement dated 30th June 2019 which was supposed to guide the parties herein.

12) The plaintiff averred that since 2017 to date there has been a lot of mismanagement of funds and lack of transparency because the respondent has been negatively influencing and interfering with the general running and operations of the applicant.

13) It is also pointed out by the plaintiff that the respondent no longer transmits funds to the applicant thus hindering it from carrying out its obligations, responsibilities and activities the way it used to.

14) The plaintiff further argued that the respondent irregularly went ahead and purported to have terminated its contract with the applicant through the letter dated 29th may 2020.

15) It is stated that the termination of the said agreement was because members of the applicant whistle blew on the misappropriation of funds aided and abated by the respondent and thus a vacade by the respondent to escape accountability and continue plundering funds meant for needy children.

16) The respondent on the other hand is of the submission that the plaintiff/applicant has not shown any prima facie case with any chance of success.  It is argued that the letter of agreement dated 30th June 2019 was not terminated but it instead lapsed on 30th June 2020.

17) The respondent argued that the letter of agreement dated 30th June 2019 was not terminated and therefore the notice dated 29th May 2020 was not a termination but rather it was a non-renewal notice.

18) In sum, the respondent is of the submission that the letter of agreement lapsed and that the plaintiff/applicant was given thirty (30) days notice that the letter of agreement would not be renewed.

19) The question is whether in the circumstances, the plaintiff has established a prima facie case with a probability of success?  In my humble view, I am not convinced that the plaintiff has discharged that burden.  The letter dated 29th May 2020 titled “Notice of non-renewal of Letter of Agreement” is quite explicit that the defendant would not renew the letter of agreement upon the same lapsing.

20) It is also apparent that the letter of Agreement dated 30th June 2019 would lapse on 30th June 2020 hence the same was not terminated but lapsed and was never renewed.  I therefore find that the plaintiff failed to show it has a prima facie case with a probability of success.

21) The second principle is that an applicant must show the irreparable loss it would suffer if the order for injunction is denied.  The applicant has stated that it would suffer irreparable loss in that vulnerable children and families who have been relying on donor assistance channeled through the respondent and the applicant stand to suffer.

22) On its part the respondent stated that the positions the Board of the plaintiff/applicant hold are honorary and thus they do not receive salaries or benefits save for allowances for meetings held, hence they do not stand to suffer any loss should the court fail to grant the  orders sought.

23) The respondent also stated that it has put in measures to cushion the lives of vulnerable children and families by employing volunteers follow up with the families and by also offering support to the beneficiaries under the applicant through a project called Nairobi Metropolitan Program to ensure that children and communities do not suffer and continue to get services as ChildFund Scouts for another partner.

24) Upon considering the rival arguments, I am convinced that the plaintiff/applicant has failed to show the irreparable loss itwould suffer if the order of injunction is denied.

25) The third principle to be considered is that of a balance of convenience.  Since this court is not in doubt, I do not need tobelabor considering this principle.

26) In the end, the motion dated 10th August, 2020 is found to be without merit.  It is dismissed with costs being awarded to thedefendant/respondent.

Dated, Signed and Delivered online via Microsoft Teams at Nairobi this 4th day of December, 2020.

.............................

J. K.  SERGON

JUDGE

In the presence of:

.........................for the Applicant

.........................for the Respondent