Oriental Commercial Bank (formerly Delphis Bank Limited) v Rajni K Somaia [2015] KEHC 2693 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT KISUMU

CIVIL SUIT NO.34 OF 2015 (O.S.)

ORIENTAL COMMERCIAL BANK (formerly

DELPHIS BANK LIMITED  ......................................  PLAINTIFF/APPLICANT

VERSUS

RAJNI K. SOMAIA  ............................................  DEENDANT/RESPONDENT

RULING

On 20th August, 2015 Oriental Commercial Bank Limited (formerly Delphis Bank Limited) (the applicant) took out an originating summons in which it sought several points for determination.  The main ones being:-

1.      What is the state of accounts between the parties?

2.     Should the parties reconcile the accounts between them and set off the debts owed to each party?

3.      As at 31st July 2015 does the defendant owe the plaintiff the sum of Kshs.33,065,906. 14/-?

4.     As at 31st July 2015 is the total amount claimed by the defendant from the plaintiff on account of taxed cost Kshs.31,125,879. 06?

There are other questions for determination which I do not find necessary to re-state.

Simultaneous with the originating summons, the applicant took out a Notice of Motion dated 19th August 2015 under certificate of urgency brought under Order 40 rules 2 and 11of the Civil Procedure Rules, 2010 and section 63 of the Civil Procedure Act (Cp 21) Laws of Kenya in which the applicant sought the following prayers:-

1.       spent

2.      spent

3.       Pending the hearing and determination of this suit an order of injunction be granted restraining the defendant whether acting by himself or through his agents, assigns or representatives from executing, proclaiming the plaintiff’s property or recovering any taxed costs or sums owed to the defendant by the plaintiff.

4.    Pending the hearing and determination of this suit the defendant be and is hereby ordered to deposit in court the sum of Kshs.1,940,027. 08 and subject to further directions of the court.

The application is based on the grounds appearing on the face of the motion and the supporting affidavit of Wilfred Wachini sworn on 19th August 2015.  The supporting affidavit of some 36 paragraphs gives in graphic detail the history of the dispute between the parties which appears to have arisen from what was once an Advocate-Client relationship.

The application is opposed and the respondent has filed an equally lengthy replying affidavit of 45 paragraphs with numerous annextures, signifying the serious legal battles that the parties herein have fought over the years.

During the hearing of the application Mr Gitau appeared for the applicant while Mr Gichaba was for the respondent.  Mr Gitau urged the motion and pleaded with the court to grant the prayers in the Notice of Motion saying that the respondent was intent on executing against the applicant and that if that happened, the applicant would be prejudiced as it also claims over Kshs.33 million against the respondent while the respondent claims about Kshs.31 million against the applicant hence according to counsel, there is a basis for granting the injunction to maintain the status quo until the Originating Summons is heard and determined.  He relied on the principles set out in the celebrated case of Giella vs Casman Brown.

On his part Mr Gichaba, learned counsel for the respondent opposed the application terming it an abuse of the court process.  Counsel submitted that the application was seeking to stop a lawful execution issued by a court of competent jurisdiction.  He maintained that the respondent as an advocate had his bills of costs taxed by the Deputy Registrar and the sums sought to be recovered from the applicant had been certified to be due and payable to him by the applicant.  According to counsel, the respondent had rendered accounts as ordered by the court in High Court Civil Case No.66 of 2008 (O.S.) and as such the issue of accounts between the parties had been fully and finally determined.  Counsel was of the considered view that reconciliation of accounts does not form the threshold for granting an injunction as envisaged in the principles laid down by Giella v Casman Brown, and sought the dismissal of the application.

I have considered the application, the affidavits in support and that in reply.  I have also perused the documents attached to the affidavits, considered submissions by counsel and the authority cited.

The application before court seeks to stop execution or recovery of any taxed costs or sums owed to the defendant by the plaintiff until a reconciliation of accounts sought in the originating summons is done.  The plaintiff/applicant admits that the respondent who was its advocate at some point had his bills of costs taxed and certified payable.  That amount now stands at Kshs.31,125,879/06 as at 31st July 2015.  This is the amount the respondent is moving to execute against the applicant and which the applicant seeks to delay.

The legal battle between the parties saw the applicant file High Court Civil Case No.66 of 2008 (O.S.) in which the applicant sought taking of accounts among other issues that were for determination.  In a ruling delivered on 22nd October, 2010 the court, Ali-Aroni J ordered as follows:-

“1.     That the advocates do deliver a cash account to the client in respect of monies received from the client and on behalf of the client.

2.      That the advocates do deliver an account to the client for monies received for and on behalf of the client including the sum of Kshs.8,100,000 including interest earned from the date of receipt of the said sum to date.

3.       That the advocate do compile a list of all bills taxed so far both paid and unpaid.

4.      The advocate to comply with order 1, 2 and 3 within the next 21 days of the date hereof.”

The respondent says that he rendered accounts as ordered by the court in the above decision while the applicant held the opposite view.  This culminated in the applicant taking out contempt proceedings citing the respondent for contempt in July, 2013.  That application was heard and in a ruling delivered on 30th July 2014 Chemitei, J. dismissed the application holding thus:-

“I do not find sufficient reasons regardless of the applicant’s application format to suggest that the respondent breached the court order.  The accounts though unsatisfactory in the eyes of the applicant were supplied as demanded by the court.  Consequently I shall dismiss the application with costs to the respondent.”

With this ruling, the issue of accounts seems to have been laid to rest the court having found that accounts were duly rendered as ordered.

The applicant has once again despite the above suits, filed an originating summon seeking reconciliation of accounts and an injunction to restrain the respondent from executing the taxed and certified costs.  Its application for injunction is premised on Order 40rules 2 and 11 of the Civil Procedure Rules 2010, and section 63 of the Civil Procedure Act.

Section 63 of the Act provides where relevant as follows:-

“In order to prevent the ends of justice from being defeated, the court may if it is so prescribed

(c)  grant a temporary injunction and in case of disobedience commit the person guilty thereof to prison and order that his property be attacked and sold.”

Pursuant to section 63, we have Order 40 of the Civil Procedure Rules which governs grant of temporary injunctions under appropriate circumstances.  The principles governing grant of injunctions were laid in the celebrated case of Giella vs Casman Brown & Co. Ltd[1973] 358. Spry VP, speaking for that court, stated as follows at page 360:-

“The conditions for grant of an interlocutory injunction are now, I think, well settled in East Africa.  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 injury, which would not adequately be compensated by an award of damages.  Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.”

Prima facie case, an applicant must show by clear evidence that he has more than a mere arguable case for him to successfully urge an application for injunction.

In the case of Nsubuga & Another vs Mutawe [1974] EA 487, a tenant who had failed to pay rent had his goods distrained and the premises locked with the tenants goods inside for non-payment of the rent.  The tenant moved the court for a temporary injunction which was granted.  The landlord applied to set that injunction aside but lost.  On appeal, Mustf, J.A. had the following to say at page 491 while referring to Giella vs Casman Brown:-

“As regards the conditions for grant of an interlocutory injunction, I think they are now well settled in East Africa.  I would refer to a decision of this court,Giella vs Casman Brown, [1973] EA, 358 ...  Briefly the two of the main ones are (1) the applicant must show that he has a probability of success and (2) that unless the injunction is granted the applicant would suffer irreparable damage which would not be adequately compensated by an award of damages.  As regards the first point, that of probability of success, the plaintiff had not, on the evidence adduced, shown how he could succeed, let alone probably succeed.  As regards the second point it is difficult to imagine how a tailor like the plaintiff could have suffered irreparable loss by delay in handing over clothes to his customers which could not have been compensated adequately by an award of damages.” (emphasis added)

What is clear from the statement of Mustafa J.A. is that it must be demonstrated by clear evidence that there is a probability of the applicant succeeding when his case goes for trial.  The Court of Appeal in the case of Mrao vs First American Bank of Kenya Ltd&2 others discussed what a prima facie case and said:-

“A prima facie case in a civil application includes but not confined to a ‘genuine and arguable case.’ It is a case which on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter .”

More recently in the case of Nguruman Limited vs Jan Bonde Nelsen & 2 others (C. A. No.77 of 2012), [2014] eKLR the Court of Appeal had similar sentiments when it said:-

“We reiterate that in considering whether or not a prima facie case has been established, the court does not hold a mini- trial and must not examine the merit of the case closely.  All that the court is to see is that on the face of it, the person applying for an injunction has a right which has been or is threatened with violation.  Positions of the parties  are not to be proved in such a manner as to give a final decision in discharging a prima facie case.  The applicant need not establish title.  It is enough if he can show that he has a fair and bona fide question to raise as to the existence of the right, which he alleges.  The standard of proof of that prima facie case is on a balance or as otherwise put, on a preponderance of probabilities.  This means no more than that, the court takes the view that on the face of it, the applicant’s case is more likely than not to ultimately succeed.”

What this therefore means is that, based on the materials, the applicant has placed before court, the court should be able to discern that the applicant’s right has been infringed or is threatened with infringement which would necessitate the respondent to be called upon to explain.

Has the applicant in this case satisfied the test applicable?  The applicant has admitted that it owes the respondent in excess of Kshs.31 million in taxed costs.  This means that there is no dispute as to the amount payable to the respondent.  On the other hand, the applicant says that in its estimation, the respondent owes it in excess of Kshs.33 million and wants accounts reconciled.

From the nature of the pleadings contained in the originating summons filed by the applicant, and the questions for determination, the real issue is whether parties should reconcile accounts and once that is done, there should be a set off between the parties of the amount they owe each other and the amount found to be over and above what the respondent is owed, should be paid to the applicant.  In other words, this is an issue of balancing accounts between the parties herein.

The question I have to decide is whether on the basis of the facts of this case and the material before court, the applicant’s application for injunction should be granted.  This application obviously seeks to stop the respondent from executing his taxed costs which are not in dispute.  Having previously sought accounts from the respondent and the same having been rendered to the satisfaction of the court, I do not see how the intended execution for costs which are not in dispute amount to an infringement of the applicant’s right which would necessitate grant of an interlocutory injunction in order to refrain the respondent from continuing to infringe that right.

The applicant is seeking the court’s exercise of discretion in his favour, but as is always the case that being a judicial discretion it must be exercised judiciously, fairly and on the basis of the Law and facts.  Furthermore, the applicant is seeking an equitable remedy yet it admits that it owes the respondent money which has been certified payable.  The applicant is not alleging that the respondent is engaged in an unlawful process but rather that because it also believes that the respondent owes it money, the respondent should not be allowed to execute until a reconciliation of account is done.  I do not think this can be a basis for granting an injunction.  In my view, the applicant has failed to demonstrate utmost good faith while approaching the court for assistance.  The applicant is obviously in default and as the respondent is following due process there is no way the applicant can possibly be granted an injunction to stop that legal and lawful process.

In my respectful view, the applicant has not established that it has a prima facie case with a probability of success to require this court to exercise its discretion and grant the injunction sought.  The application therefore falls short of the first condition for granting an injunction.

On the second principle, that of irreparable loss that cannot be adequately compensated by an award to damages, I note that the dispute as it stands is one that can be adequately compensated.  The applicant has admitted that it owes the money and between its claims and that of the respondent, the difference is Kshs.1,940,027/08 which the applicant wants deposited in court.  I do not see the loss that the applicant will suffer that the respondent cannot adequately compensate, if the suit were to succeed.

Finally, regarding the balance of convenience, the same tilts in favour of the respondent who has had his bills of costs taxed and certificate payable.  He has a right that has crystalised and is entitled to recover the money due from the applicant.  Forestalling a lawful process of execution will infringe on the respondent’s right to recover his costs.

For these reasons, I am not persuaded that the applicant has made a case for the grant of the orders sought.  The application dated 19th August, 2015 I is thus declined and is hereby dismissed with costs to the respondent.

Dated and delivered at Kakamega this 24th day of September, 2015.

E. C. MWITA

J U D G E