NOVA INDUSTRIES LTD v ZE YUN YANG, ALEX GATUNDU, KIHARA MUTTU & STANDARD CHARTERED B ANK LTD [2010] KEHC 417 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & TAX DIVISION – MILIMANI

CIVIL CASE NO. 307 OF 2003

NOVA INDUSTRIES LTD ...............................................................................................................PLAINTIFF

VERSUS

ZE YUN YANG.......................................................................................................................1ST DEFENDANT

ALEX GATUNDU..................................................................................................................2ND DEFENDANT

KIHARA MUTTU...................................................................................................................3RD DEFENDANT

STANDARD CHARTERED B ANK LTD...............................................................................4TH DEFENDANT

RULING

The application before the court is brought by way of a Chamber Summons dated 20th June, 2003, and taken out under Order VIA Rule 13(b), (c) and (d) of the Civil Procedure Rules. The applicants’ seek from the court orders that this Honourable Court do strike out the Plaint and verifying affidavit herein with costs to the 1st Defendant; and that the cost of this application be borne by the Plaintiff in any event.

The application is supported by the affidavit of Ze Yun Yang, the 1st Defendant herein, and is made on the grounds that –

a)The suit herein is vexatious and an abuse of thecourt process.

b)The pleadings filed by the plaintiff are bad in law andfatally defective.

c)The Plaintiff’s pleadings do not disclose anymaintainable cause of action against the 1st Defendant.

d)The suit offends the provisions of Section 69 of theI.T.P.A. of India as amended and interpreted by KenyanCourts.

The application is opposed by the replying affidavit of John Kilolo Mangeli, the Plaintiff's Managing Director, sworn on 12th September, 2003, and also by grounds of appeal filed on the same date.  At the oral hearing of the application, Mr Wambugu for the 1st, 2nd and 3rd Defendants submitted that the suit offends the provisions of Section 69 of the Indian Transfer of Property Act as amended and interpreted in Kenya, and that no cause of action can arise unless the Plaintiff can prove fraud, which the Plaintiff Company had not done.

Mr Muthee for the 4th Defendant associated himself with Mr Wambugu’s arguments. He submitted that the Plaintiff filed HCCC No 2622 of 1997 by which it sought injunctive orders against the 4th Defendant, and further that whatever the Plaintiff is seeking in this suit ought to have been raised in the former suit. He further contented that this suit contravenes Sections 6, 7 and 8 of the Civil Procedure Act and also that the verifying affidavit herein commits perjury by stating that there is no other suit, yet there is another suit. He therefore urged the court to strike out the verifying affidavit with costs.

In response, Mr King’ara for the Plaintiff/Respondent argued that HCCC No. 2622 of 1997 was withdrawn and that it was not pending when the present suit was filed. He relied on the replying affidavit and grounds of opposition and submitted that it has been alleged by the Applicants that the plaint should be struck out as it does not disclose a cause of action against the 1st Applicant and that it would lie only where there is fraud against the Applicant and also where there is a claim in the nature of damages.He then submitted that Paragraph 16 of the plaint pleads fraud, while in the prayer there is a claim for general and special damages which pleas raised causes of action.

Mr King’ara then referred to the consolidation of this suit with HCCC No. 9 of 2003. He submitted that the two are intertwined and cannot be separated and therefore there was no basis for striking out this suit and that if there was no cause of action in HCCC 307 of 2003, then there was no cause in HCCC 9 of 2003. Finally, he submitted that the application was an abuse of court process as the parties had agreed on issues which should go to trial. He also submitted that once parties have framed issues for trial, one of them cannot turn around and argue that there was no cause of action. He referred to MPAKA ROAD DEVELOPMENT LTD vs. KANA [2004] 1 EA 163 and urged the court to dismiss the application.

In his reply, Mr Wambugu submitted that the particulars of fraud against the 1st Defendant were not set out. Secondly, he contended that just because the two suits were consolidated did not mean that they were the same, and that the authority cited was distinguishable. He prayed that the plaint herein be struck out against the 1st Defendant as it was scandalous and vexatious.

After considering the pleadings and submissions by the respective parties, I note that although the application is stated to be brought under the provisions of Order VI A, it is actually brought under Order VI Rule 13 (1), (b), (c) and (d) of the Civil Procedure Rules. In the circumstances, the issues to be determined are whether the pleadings are scandalous, frivolous, or vexatious; or whether they may prejudice, embarrass or delay the fair trial of the action; or whether they are otherwise an abuse of the process of the court.

The first issue deals with the allegation in the application that the Plaintiff’s Managing Director committed perjury by averring in the verifying affidavit that there was no other suit which was untrue. At the time of swearing of the verifying affidavit on 1st April, 2003, there was HCCC No. 2622 of 1997 pending between the Plaintiff and the 4th Defendant only. Although Mr King’ara submitted that the said suit had been withdrawn at the time of the swearing of the verifying affidavit herein, that was not correct. HCCC No 2622 of 1997 was withdrawn by a notice dated 3rd July, 2003 and filed in court on 7th July, 2003. But since the verifying affidavit in respect of this suit was sworn on 1st April, 2007, it stands to reason that at the date of swearing the said affidavit, HCCC No 2622 of 1997 was still alive. However, I also note that the first three Defendants in this suit were not parties to that other suit. Technically, it was therefore correct for the Plaintiff to attest in the manner be did since the first three Defendants were not parties in the earlier suit. I would, therefore, give the deponent the benefit of doubt.

The second issue touches on the stage at which the suit has reached. The record shows that the Plaintiff and the first three Defendants signed a statement of agreed issues on 12th August, 2003 and filed the same in court on 13th August, 2003. I understood Mr Wambugu for the 1st, 2nd and 3rd Defendants to argue that the Plaintiff has no cause of action unless it can prove fraud which has not been done. The Amended Plaint which Mr Kingara told the court was dated 16th May, 2003, is not on record. Even without it, Paragraph 17 of the original plaint dated 1st April, 2003 gives the Plaintiff’s perceived particulars of fraud. And in paragraph 19 thereof, the 1st Defendant herein is alleged to be the beneficiary of that fraud. To crown it all, the question as to whether there are particulars of fraud is one of the agreed issues filed in court on 13th August, 2003. By reason thereof, it was premature for Mr Wambugu for the Applicants to submit that there is no cause of action unless the Plaintiff can prove fraud and that the Plaintiff had not done so. With the parties having agreed that fraud was an issue, the moment for proof is yet to come and the parties should hold on to their horses and wait for that moment.

Finally, I note from the record that this suit has been severally fixed for hearing. It was first fixed for hearing on 25th October, 2005, when it was taken out for a fresh date as “the Judges hands were full”. It was listed for hearing again on 22nd November, 2006, when it was taken out as only two Judges were sitting; and then again on 8th October, 2007, when it was taken out due to shortage of Judges. It was then fixed for hearing on 29th January 2008, when it was again taken out of the hearing list due to shortage of Judges and only two Judges were sitting. It then came for hearing on 24th November, 2009, when it could not proceed as the bank’s key witness was indisposed and the matter was adjourned to 30th November, 2009 for mention with a view to fixing a fresh hearing date. On that date, counsel for the 1st, 2nd and 3rd Defendants did not attend court and the matter was stood over generally. All this while, the application now before the court was still pending for hearing.

If the pleadings in this case had been truly scandalous, frivolous, or vexatious; or an abuse of the court process, that point ought to have been taken long before the suit was fixed for hearing on five different occasions. In my humble view, once a suit has come up for hearing, all pending interlocutory applications fall by the wayside.  The fixing of the hearing of this application was an afterthought which was probably provoked by the failure of the suit to proceed to hearing for the reasons narrated above. In the context of what has happened, to grant the orders sought at this stage would be tantamount to putting the clock back while time is still ticking away.

For the above reasons, I find that the application by Chamber Summons dated 20th June, 2003, has no merit at this stage and it is hereby dismissed with costs.

It is so ordered.

DATED and DELIVERED at NAIROBI this 23rd day of November 2010

L.  NJAGI

JUDGE