Pareto Sacco Ltd v Pyrethrum & other Industrial Crops Directorate & Agricultural & Food Authority [2019] KEHC 7162 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT AT NAKURU

CIVIL CASE NO. 80 OF 2016

PARETO SACCO LTD.............................................................PLAINTIFF

-VERSUS-

PYRETHRUM & OTHER INDUSTRIAL

CROPS DIRECTORATE..............................................1ST DEFENDANT

AGRICULTURAL & FOOD AUTHORITY.............. 2ND DEFENDANT

RULING ON THE PRELIMINARY OBJECTION (P.O)

DATED 10TH APRIL BY THE DEFENDANTS

1.  This suit was filed by plaint dated 26th August 2016 on the 1st September 2016. The defendants are represented by the Hon. The Attorney General through the Chief Litigation Counsel, Mr. Vincent Wahoro.  A statement of defence was filed on the 28th April 2017 denying the plaintiffs claim in its totality.

2.  By a Preliminary Objection dated 10th April 2018, the defendants sought that the plaint be struck out under Section 4(1) (d) of the Limitation of Actions ActandCivil Procedure Rules (CPR) and any other enabling provisions of law, on grounds that

(a) the plaintiffs claim is time barred.

(b)  the 1st defendant is not a legal entity capable of suing or  being  sued, that it is a directorate under the Agriculture and food Authority

(c)  that there is a misjoinder of the 1st and 2nd Defendants.

(d)  the suit is therefore incurably defective and a nullity ab initio.

Both parties filed submissions in support of their rival positions.

3.   Issues

1.  Whether the plaintiff’s claim against the defendants is statutory barred.

2.  Whether the 1st and 2nd defendants are capable of suing or being sued.

3.  Whether the suit ought to be struck out.

4.  Parties submissions

On time Limitation

It is submitted by the defendants that the suit is statutory barred under Section 4(1) of the Limitation of Actions Act, Cap 22 Laws of Kenya4(1)  states “The following actions may not be brought after the end of six years from the date on which the cause of action accrued.

a) Actions founded on contract

b) Actions to enforce a recognisance

c) Actions to enforce an award

d) Actions to recover a sum  recoverable by virtue of a written law ---

e) Actions including actions claiming equitable relief for which no other period of limitation is provided by the Act provided by the act or any other written law.

It is submitted that the cause of action arose in 2008, but the plaint was filed in 2016 eight years after and that negotiations between the parties do not constitute a bar to the limitation period.

5.   The Plaintiff’s submissions are based on Section 23 (3) of the Limitations of Actions Act that state

(3) where a right of action has accrued to recover a debt or other liquidated pecuniary claims, or a claim to movable property of a deceased person, and the person liable or accountable therefore acknowledges any payment in respect in respect of it, the  right accrues on and not before the date of the acknowledgement or the last payment.

Provided that a payment of a part of the rent or interest due at anytime does not extend the period for claiming the reminder then due, but a payment of interest is treated as a payment in respect of the principal debt.

6.  Citing the case Patrick S.K. Kimiti -vs- John Ngugi Gachau & Another(2-15) e KLR and Dickton Oruko Nyakach & Another -vs- Chemilil Sugar Co. Ltd (2015) e KLRheld, on Section 23 of the Act, that

“Actions based on contract accrue afresh, and are not caught up with limitation where there is acknowledgment or part payment.”

As such the court has been urged to find that the cause of action arose after the defendants made part payment of the claim in 2014 and thus not time barred under the Limitation of actions Act.

7.   Capacity to sue and be sued

The Pyrethrum Act No. 22 of 2013 Section 3established the Pyrethrum Regulatory Authority, a body corporate with perpetual succession which is the one that is capable of suing and being sued as submitted by the defendants.

It is further submitted that under Section 27 thereof all assets, funds, rights, obligations powers, liabilities, which immediately before the appointed day where vested in, imposed on or enforcement against the former Board shall be vested imposed on or enforceable against the Authority including the administrative directions, and shall continue to carry out the commercial functions of the former.

Based on the above, the defendants urge that they are incapable of being sued and urge for striking out of the suit.

8.  The plaintiff in response submits that by their conduct the defendants demonstrated in the various correspondences before and after the repeal of the Pyrethrum Board, and coming into effect of the Pyrethrum Act No. 22 of 2013, that they were at all material times liable and capable of being sued. They urge that part payment of the debt was made pursuant to numerous correspondence to the Director, Pyrethrum Board under the Ministry of Industrialization and Enterprise Development in 2014, 2015 and 2016.  Thus it is submitted that the defendants, by their conduct, could not purport to make part payment if they did not owe the money and hence are estopped from denying the plaintiff’s claim.

9.  Citing the case Gabriel Smith Otieno Awiti -v- Homabay County Assembly & Another (2013) e KLR the Court of Appeal held that

“the doctrine of estoppel operates as a principle of law which precludes a person from asserting  something contrary to what is implied by previous action or statement of that person --- that where one party by his words of conduct made to the other party a promise or assurance which was intended or affects the legal  relations between them and to be acted on, the other party --- the party who gave the promise of assurance cannot afterwards be allowed to revert to the previously legal relationship - he must accept their legal relations subject to the qualifications which he has himself introduced.”

10.   On whether the suit ought to be struck out, the plaintiff submits that under order 1 rule 9 of the Civil Procedure Rules a suit ought not be defeated only for mis-joinder and authorities cited in support.

11.   ANALYSIS AND DETERMINATION

Looking at the plaint and the defence as filed by the rival parties it is evident that there has been a legal relationship in existence before and after the Pyrethrum Act No. 22 of 2013 established the Pyrethrum Regulatory Authority which took over all the liabilities, assets, rights and obligations of the Pyrethrum Act (now repealed 2013), under which the cause of action arose, and debt to the plaintiff

12.   This newly established authority is the body capable of being sued. Having taken over the former’s liabilities and obligations it is its duty to perform as would the former including payment of debts owing to all persons including the plaintiff, subject to prove upon the legal and evidential burden of proof.

13.  On the face of the record, the plaintiffs claim is based on contract, payment of a debt. Under Section 4(1) of the Limitations of Actions Act, the claim is statute barred.  However, there are exceptions to this rule, under Section 23(3)  cited on Paragraph 7 above to the effect that once a party acknowledges a debt or makes part payment and fails to complete the payment the cause of action arises from the date of the acknowledgment or the date of the part  payment – See Patrick S.K. Kimiti case (Supra).

14.   This position has been stated in the cited authorities Patrick S.K. Kimiti -vs- John Ngugi Gachu & Another (Supra) Dickson Oruko Nyakach & Anther –vs- Chemilil Sugar Co. Ltd (Supra) among others.  Thus it is now trite that actions based on contract accrue a fresh and are not caught up with statutory limitation where there is acknowledgment of debt or part payment – Section 23(3) Limitations of Actions Act.

15.   I have considered that correspondence between the parties (documents filed by the plaintiff) go back to 2010. There is evidence of negotiations of payment proposals and plans by the Commissioner of Co-operatives under the Ministry of Co-operative Development and Marketing as well as the Commission on Administrative Justice (2015) to try to being the parties to an agreement.

16.  As such I decline to accept the defendants submission that there were no negotiations between the parties.  The said documents are self-evident.

Accordingly I come to a finding that the plaintiff’s claim against the defendant is not statutory time barred.

Further, it is my finding that the defendants are caught up with the doctrine of estoppel. Their conduct and promises created a legal relationship, of promises to pay upon which the plaintiff accepted evidenced by continued negotiations and intervention by other bodies prompting them to make part-payment in September 2014.

17.   It is only when the defendants failed to make further payments that this suit was filed.

It would be against the statutory provisions under Section 23(3) Limitations of Act and rules of natural justiceto turn around when sued to claim that the claim is time barred.  I decline to accept that submission.

18.  Having made a finding that the suit by the plaintiff’s against the defendants is not statutory barred the question that rises is whether it would be in the interest of justice to strike the suit out for the only reason that the defendants are not capable of being sued, even in the clear admissions by correspondence prior to the repeal of the Pyrethrum Board, abolishing the board?

19.   The answer is to be found in Order I rule 9 and 10 of the CPR where it is stated that

“No suit shall be defeated by reason of the misjoinder or non-joinder of parties and the court may in every suit deal with the matter in controversy so far as regards the rights and interests of the parties actually before it.”

20.  In the case Mary Wanjiru (suing as administrator of the estate of Richard Ndirangu) -vs- Enerald Stephen Kongo & Another (2014) e KLR, in similar circumstances the court declined to strike out the case.

Similarly, in John Michael Wanjau -vs- Municipal Council of Eldoret (2013) e KLR, the court declined to strike out the plaint for misjoinder of parties.

21.  I am minded that the Constitutional imperatives under Article 159(2) (d) of theConstitution that enjoins courts to administer justice without undue regard to procedural technicalities that do not go into the merits of a case, and the Court of Appeals holding in numerous decisions that a misjoinder of parties to a suit cannot defeat the whole of a suit – Local Building and Construction Ltd –vs- Institute of the Blessed Virgin Mary Loreto Msongari & 2 Others (2019) e KLR.

22.  Order 1 rule 9and10 of CPR states

Rule 10(2) states

“The court may at any stage of the proceedings of either upon or without the application of either party, and on such terms as may appear to the court to be just, order that the name of any party improperly joined, whether plaintiff or defendant, or whose presence before the court may be necessary in order to enable the court effectively and completely to adjudicate upon and settle all questions involved in the suit, be added.”

Rule 10 (4)  -Where a defendant is added or substituted the plaint shall, unless the court otherwise directs, be amended in such manner as may be necessary, and the amended copies of the summons and the plaint shall be served on the new defendant and if he court thinks fit on the original defendants.

23.  In Zephire Holdings Ltd -vs- Mimosa Plantations Ltd (2014) e KLR, the above provisions were applied as well as in the Court of Appeal case William Kiprono Towett & 1597 Others -vs- Farmland Aviation Ltd & 2 Others (2016) e KLR.

There is on record an application by the plaintiff, dated 12th March 2018 seeking leave to amend the plaint.  It is not yet heard and determined. By the said application, the purpose and objectives of the provisions of Order 10(2)(4) CPR may be achieved, and may give new breath to the plaintiff’s suit.

24.  Thus a court of law should not be tied to rules of procedure, but to do substantive justice to parties on merits but upon relevant circumstances and requirements of each particular case. I have in this ruling and conscientiously so, stated the substance and circumstances of this case and I am convinced that the suit ought to be sustained as opposed to be struck out.

25.   For the foregoing I decline to strike out the suit and instead, guided by the provisions of Order 1 rule 10(2)(4) CPR and precedent and for ends of justice to be met, direct and order that:

1. The preliminary objection filed by the defendants and dated 10th April 2018 is dismissed.

2.  The plaintiff shall within 45 days of this ruling move to regularise its pleadings in the suit in terms of entities or persons who ought to have been sued or enjoined in the suit as defendants.

3.  Upon (2) above being complied with, the Amended pleadings shall be served upon the new defendants and the original defendants

4.  The plaintiff is condemned to pay throw away costs to the defendants herein assessed at Kshs.30,000/= within 45 day of this ruling.

Dated, signed and delivered this 2nd Day of May 2019.

J.N. MULWA

JUDGE