Rai & another v Shem [2022] KEHC 11693 (KLR)

Rai & another v Shem (Civil Appeal 250 of 2017) [2022] KEHC 11693 (KLR) (Civ) (12 May 2022) (Judgment)

Neutral citation: [2022] KEHC 11693 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal 250 of 2017

CW Meoli, J

May 12, 2022

Between

Jaswant Singh Rai

1st Appellant

Joseph B. K. T/A Pyramid Auctioneers

2nd Appellant

and

Grant A. Shem

Respondent

(Being an appeal from the ruling of P. Muholi, SRM delivered on 26th April 2017 in Nairobi Milimani CMCC No. 7236 of 2016)

Judgment

1. The events leading to the present appeal are as follows. On October 19, 2016, Dr. Grant A. Shem, (hereafter the Respondent) filed a suit being Nairobi Milimani CMCCNo. 7236 of 2016 against Jaswant Singh Rai and Joseph B.K t/a Pyramid Auctioneers (hereafter the 1st and 2nd Appellant/Appellants). The suit was accompanied by a notice of motion expressed to brought under section 63 (c) & (e) of the Civil Procedure Act inter alia and Order 40 Rules 1, 2, 3, 4 & 8 of the Civil Procedure Rules. The key prayers sought therein were an interim injunction to restrain the Appellants whether by themselves, agents, servants or otherwise from selling, disposing off either by public auction or private treaty or in any manner interfering with the Respondent’s distrained goods pending hearing and determination of the suit and that the 1st Appellant be directed to render to the Respondent true and correct accounts respecting rents paid by the Respondent.

2. The Appellants opposed the motion by way of grounds of opposition and a replying affidavit and thereafter the motion was canvassed by way of written submissions. In her ruling delivered on January 20, 2017, the learned magistrate (Wachira,SPM) found the motion unmerited and dismissed it with costs.

3. Aggrieved by the ruling the Respondent moved the court vide a motion dated February 2, 2017 primarily anchored on Order 45 Rules 1 & 2 of the Civil Procedure Rules seeking the review, discharge and or setting aside of the ruling and order above. The grounds on the face of the motion were amplified in the supporting affidavit sworn by Respondent. To the effect that there was an error apparent on the face of the record as the Respondent’s evidence was not considered by the trial court; that there was new and important evidence or information not available earlier, namely, the bank statement indicating that the Respondent was not in arrears; and that the said evidence could not be procured and tendered before Wachira, SPM within time, as the Respondent’s bank was caught up with verifying the statement of accounts.

4. The Appellants filed grounds of opposition and a replying affidavit in opposing the motion. The deponent of the affidavit in reply deposed that the review motion had been overtaken by events as the distrained goods had already been sold by way of public auction; that the Respondent had not filed an appeal against the orders of 20th January 2017 and his review motion did not disclose any error apparent on the face of the record or new and important matter and was an abuse of the court process. It was further asserted that in any event the proceeds from the sale of the distrained goods were insufficient to settle the rent arrears due from the Respondent, and the motion was of no consequence.

5. In a further affidavit, the Respondent swore that the purported auction of his household goods was fraudulent and carried out in contravention of the Auctioneers Act, and therefore void ab initio. The motion was orally canvased before a different magistrate, Muholi, SRM, who by a ruling delivered on April 26, 2017 allowed the Respondent’s review motion having found that the Respondent had demonstrated his grounds and that the sale of the Respondent’s goods was unlawful. The said ruling provoked the instant appeal on the following grounds:“1. That the Learned Magistrate erred in law and in fact by holding that the Respondents motion for review was merited and that there was an error apparent on the face of the record in total disregard of the applicable principles governing and application for review.2. That the Learned Magistrate erred in law and in fact by failing to find that the Bank statements sought to be introduced at the review stage were always within the Respondent’s knowledge and access and no good grounds were made for their belated introduction.3. That the Learned Magistrate misdirected himself by sitting on appeal of the ruling by Hon. L.M Wachira (Mrs.) delivered on 20th January 2017. 4.That the Learned Magistrate misdirected himself by going into the merits of the suit at an interlocutory stage and by making conclusive findings on affidavit evidence that was untested in cross-examination at the hearing thereby usurping the role of the trial magistrate.5. That the Magistrate erred in making findings that the sale by public auction was illegal and further that the Respondent’s goods were undervalued during the sale in what was essentially an application for review of the orders of January 2017. 6.That the Learned Magistrate misdirected himself in both law and in fact by reaching a decision contrary to the principle of stare decisis and refusing to be bound by authorities of the superior court.7. That the Learned Magistrate’s ruling is alien and is so far removed from the established principles governing applications for review as to cause the Appellants reasonable apprehension of judicial bias.” (sic)

6. The appeal was canvassed by way of written submissions. Counsel for the Appellant consolidated grounds 1, 2 and 6 of the memorandum of appeal. He relied on several decisions including National Bank of Kenya Limited v Ndungu Njau [1996] KLR, Jameny Mudaki Asavi v Brown Otengo Asava & Another [2015] eKLRand Nyamogo & Nyamogo v Kogo (2001) EA170. His key arguments were that, concerning the ground respecting discovery of a new and important matter canvassed by the Respondent that there was no evidence to show the exercise of diligence by the Respondent to obtain in good time the statement of accounts annexed to the application for review , and which in any event was in the name of a stranger to the suit ; that the alleged error on the face of record being grounded upon the alleged failure of the previous magistrate to consider the Respondent’s evidence, was a ground for appeal, rather than review ; and that the finding by Muholi , SRM , that the bank statement though “not showing much” constituted sufficient ground for review, was erroneous.

7. Submitting on ground 3, counsel cited National Bank of Kenya Limited (supra), Jane Njeri Maina v Mwanajuma Mohamed Mwajinga & 9 Others [2012] eKLR and Jerioth Wangui Maina v Annah Wairimu Wachira [2015] eKLR as regards the proper province of a court in exercise of the review jurisdiction. That the purview of review did not admit the sitting on appeal on the earlier decision of the court but was intended for the correction of an apparent error or mistake, and that in this instance, the learned magistrate purported to sit on appeal regarding the decision of Wachira, SPM. Arguing grounds 4 and 5 together, counsel submitted that learned magistrate erred by prematurely making final findings on issues of fact as to the lawfulness of the contested auctioning of the Respondent’s distrained goods, thus occasioning gross miscarriage of justice. Lastly in addressing ground 7 of appeal, counsel emphasized that there was clear misdirection on the part of the learned magistrate and the appeal ought to be allowed with costs.

8. The Respondent had filed an affidavit sworn by the Respondent on May 27, 2021 in purported opposition to the appeal. The court had proposed to issue orders thereon on July 29, 2021 but inadvertently failed to do so. There is no provision for the filing of a replying affidavit as a response to an appeal. The affidavit by the Respondent is therefore struck out. Turning to the Respondent’s submissions, these were largely in defence of the lower court’s ruling. Citing the provisions of Section 80 of the Civil Procedure Act, Order 45 of the Civil Procedure Rules, and the Indian case of Ajit Kumar Rath v State of Orisa & Others, 9 Supreme Court Cases 596 and the decision in Republic v Advocates Disciplinary Tribunal ex Parte Apollo Mboya [2019] eKLRcounsel for the Respondent asserted that the application for review before the lower court was merited as alleged failure by the court (Wachira,SPM) to take into account certain material presented by the Respondent amounted to error on the face of the record.

9. He contended that the errors related to the previous court’s reliance on a disputed tenancy agreement, disregard of the alleged contemptuous advertisement of the auction of the Respondent’s goods on January 20, 2017, the date of the scheduled ruling, and the court’s failure to take into account some cheques payments tendered by the Respondent. Counsel asserted that the bank statements tendered in the review motion constituted new and important evidence that could not have been obtained earlier, and that the lower court (Muholi, SRM) was entitled to so find.

10. As to whether the ruling on the review application amounted to an appeal on the decision of Wachira, SPM, it was argued that the Appellants had misconstrued the principle of stare decisis as expounded in Okiya Omtata Okoiti & Another v Attorney General & 2 Others [2015] eKLR in that Order 45(1) (b) & (2) provides that an application for review may be heard by another judge, where the judge who passed the decree or made the earlier order was no longer attached to the court. That the ruling of Muholi, SRMmerely addressed the issues before the court and was not tantamount to sitting on appeal on a decision made earlier by a court of equal jurisdiction.

11. Disputing the Appellants’ complaint that the review ruling prematurely determined the merits of the suit, counsel relied on the case of R v Advocates Disciplinary Tribunalex ParteApollo Mboya(supra) to argue that the finding that the public auction of the Respondent’s goods was unlawful was justified. Lastly, emphasizing the Appellants’ alleged illegal conduct, counsel asserted that the appeal lacked merit and ought to be dismissed with costs.

12. The court has perused the record of appeal as well as the original record and considered the material canvassed in respect of the appeal. The duty of this court as a first appellate court is to re-evaluate the evidence adduced in the lower court and to draw its own conclusions, but always bearing in mind that it did not have opportunity to see or hear the witnesses testify. See Peters v Sunday Post Ltd (1958) EA424; Selle and Anor. v Associated Motor Boat Co. Ltd and Others (1968) EA 123; William Diamonds Ltd v Brown [1970]EA11 and Ephantus Mwangi and Another v Duncan Mwangi Wambugu (1982) – 88) 1 KAR 278.

13. The Court of Appeal stated in Abok James Odera t/a A. J. Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates [2013] eKLRthat:“This being a first appeal, we are reminded of our primary role as a first appellate court namely, to re-evaluate, re-assess and reanalyze the extracts on the record and then determine whether the conclusions reached by the learned trial Judge are to stand or not and give reasons either way.

14. The lower court in allowing the review motion expressed itself in part as follows:“I have considered the application, the affidavit and oral submissions by counsels for both parties. The issues I consider necessary for determination are:i.Whether the purported sale was lawful and whether the goods should be returned to the applicant?ii.Whether there is sufficient cause to order review of the orders issued on January 20, 2017? …The applicant herein states that he has obtained statement of account which indicates that he is not in any arrears and wishes the court to rely on the same. What I am called upon to determine is whether this is sufficient cause/ground for review. The applicant is therefore duty bound to show that he has new material which was not within his knowledge. The statement though not showing much would be sufficient ground for review.Secondly he also depones that he had not executed the agreement upon which the court made a finding that he was in breach of clause 2. The Applicant has annexed a copy of the tenancy agreement indeed it shows that it had not been executed by the applicant. The respondent on the other hand has also annexed a copy of the tenancy agreement which shows the applicant had attested to it. Both agreements are not dated as to when the applicant executed them, it is an important consideration because it is this agreement that the court relied upon to make a finding that the rent was payable quarterly and that the applicant had breached. This is a good ground that ought to have been adjudicated upon in a proper manner so that aspect litigated before the court can rely on the same…Further I also note that there were some cheques exhibited before the court towards payment of the rent. The court appears not to have taken consideration that the same may have an effect on the outstanding rental amounts and therefore order stay pending such reconciliation. In view of the above finding I am inclined to order as follows.That there is apparent error in the ruling dated 20/1/17….” (sic)

15. The Appellant’s motion before the subordinate court was anchored on Order 45 (1) of the Civil Procedure Rules which provides that:“(1)Any person considering himself aggrieved— (a) by a decree or order from which an appeal is allowed, but from which no appeal has been preferred; or (b) by a decree or order from which no appeal is hereby allowed, and who from the discovery of new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced by him at the time when the decree was passed or the order made, or on account of some mistake or error apparent on the face of the record, or for any other sufficient reason, desires to obtain a review of the decree or order, may apply for a review of judgment to the court which passed the decree or made the order without unreasonable delay.”

16. In the court’s view, the appeal turns on the question whether the lower court properly exercised its discretion in allowing the application for review, as the grant or refusal of an application for review of any decree or order involves the exercise of discretion. However, such discretion must be exercised judicially and upon reason, rather than arbitrarily or capriciously. The Court of Appeal in Mashreq Bank P.S.C v Kuguru Food Complex Limited[2018] eKLRstated;“This Court ought not to interfere with the exercise of a Judges’ discretion unless it is satisfied that the Judge misdirected himself in some matter and as a result arrived at a wrong decision, or that it is manifest from the case as a whole that the Judge was clearly wrong in the exercise of discretion and occasioned injustice. Conversely, a court exercising judicial discretion must be guided by law and facts and not ulterior considerations. This much was stated by the Court of Appeal in the case of Shah v Mbogo (supra):“A court of appeal should not interfere with the exercise of the discretion of a judge unless it is satisfied that the judge in exercising this discretion has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and as a result there has been injustice”. [Emphasis added]See also United India Insurance Co. Ltd v. East African Underwriters (K) Ltd [1985] E.A 898: -

17. In Jason Ondabu t/a Ondabu & Company Advocates & 2 others v Shop One Hundred Limited [2020] eKLRthe Court of Appeal stated that;“An application for review, therefore, involves exercise of judicial discretion. The circumstances in which this Court, as an appellate court, can interfere with the exercise of judicial discretion are limited”.

18. There is a long line of authorities concerning the principles governing an application for review brought under Order 45 (1) of the Civil Procedure Rules. In the judgment of Okwengu JAin Associated Insurance Brokers v Kenindia Assurance Co. Ltd [2018] eKLRthe Court of Appeal stated that:“It is clear that Order 45 rule 1(1) of the Civil Procedure Rules provides that a mistake or error apparent on the face of the record is one of the grounds upon which an application for review of a decree or order can be granted. In National Bank of Kenya Ltd v Ndungu Njau [1997] eKLR, this Court had this to say regarding a review arising from a mistake or error apparent on the face of the record:“A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established. It will not be a sufficient ground for review that another Judge could have taken a different view of the matter. Nor can it be a ground for review that the court proceeded on an incorrect exposition of the law and reached an erroneous conclusion of law. Misconstruing a statute or other provision of law cannot be a ground for review.” (Emphasis added)In Nyamogo and Nyamogo Advocates v. Kogo [2001] 1 E. A. 173 this Court further explained an error apparent on the face of the record as follows:“An error apparent on the face of the record cannot be defined precisely and exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case. There is a real distinction between a mere erroneous decision and an error apparent on the face of the record. Where an error on a substantial point of law stares one in the face, and there could reasonably be no two opinions, a clear case of error apparent on the face of the record would be made out. An error which has to be established by a long drawn process of reasoning or on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of the record. Again, if a view adopted by the court in the original record is a possible one, it cannot be an error apparent on the face of the record even though another view was also possible. Mere error or wrong view is certainly no ground for a review although it may be for an appeal.”See also Multichoice (Kenya) Ltd v Wananchi Group (Kenya) Limited & 2 Others [2020] eKLR.

19. The Respondent’s review motion dated 2nd February 2017 was premised on two grounds namely, error apparent on the face of the record and discovery of a new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced at the hearing of the application before Wachira, SPM. In that regard it was deposed by the Respondent at paragraph 5, 7, 8 & 9 in the supporting affidavit dated 2nd February 2017 that:“5. I am advised by my advocates on record which advise I believe to be correct that there are errors apparent on the face of the record in that the Plaintiff’s evidence was invariably ignored and/or not considered by the court.7. There is new and important information that I have acquired that was not available and/or on record (Annexed hereto and marked as exhibit GS-2 is true copy of the statement of accounts)8. The import of the statement of accounts indicates that I am not in any arrears. This information could not be procured within time as my bank was verifying the statement of accounts.9. The foregoing information had not been supplied to the court at the time of making its finding on my Application dated 19th October 2016. ” (sic).

20. Did the Respondent demonstrate before the lower court the asserted error or mistake apparent on the face of the record and or discovery of a new and important matter or evidence which, after the exercise of due diligence, was not within his knowledge or could not be produced in the application heard before Wachira, SPM? Concerning the former, the Court of Appeal in National Bank of Kenya Ltd v Ndungu Njau (1995-98)2EA 249 held that:“A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established. It will not be a sufficient ground for review that another judge could have taken a different view of the matter. Nor can it be a ground for review that the court proceeded on an incorrect exposition of the law and reached an erroneous conclusion of law. Misconstruing a statute or other provision of law cannot be a ground for review.In the instant case, the matters in dispute had been fully canvassed before the Learned Judge who made a conscious decision on the matters in controversy and exercised his discretion in favour of the Respondent. If he had reached a wrong conclusion of the law, it could be a good ground for appeal but not review. An issue hotly contested cannot be reviewed by the same court which had adjudicated upon it.”

21. Regarding the ground based on discovery of a new and important matter or evidence, the same court in Pancras T. Swai vs. Kenya Breweries Limited [2014] eKLR, stated that:“The discovery of new and important matter or evidence or mistake or error apparent on the face of the record or for any other sufficient reason in rule 1 of Order 44 (now Order 45 in 2010 Civil Procedure Rules) relates to issues of facts which may emerge from evidence. The discovery does not relate or refer to issues of law. The exercise of due diligence referred to in rule 1 refers to discovery of facts but does not relate to ascertainment of existing law which the court is deemed to be alive to.”

22. In concluding that there was demonstrated an error apparent on the face of the record, Muholi, SRMin his impugned ruling appeared to fault the findings of Wachira, SPM that were based on the tenancy agreement which according to the former was contested, and for her alleged failure to consider payment cheques tendered before her. Applying the test in National Bank of Kenya Ltdand established precedent, this court agrees with the Appellants that these were matters in controversy upon which the earlier court had pronounced itself, and even if they represented good grounds for appeal, they did not qualify as errors on the face of the record. The Respondent’s motion therefore ought to have failed on that ground.

23. As to the question whether the ground based on a new and important matter or evidence had been established, Muholi, SRMwas of the view that “the bank statement though not showing much would be sufficient ground for review.” This is an inherently contradictory finding, and one which, with respect, is equally erroneous for four reasons. First, the bank statement marked as Annexure GS-3, did not “show much”, in the words of the learned magistrate and was therefore of little consequence to the application at hand; the Respondent did not refer the court to any specific entries therein and literally tossed it at the court’s head. On the findings of the learned magistrate the bank statement could not qualify as an important matter or evidence. Secondly, the statement purportedly emanated from the Respondent’s bank and was in respect of transactions in his purported bank account, and to that extent could not amount to a “discovery of a new matter” in the sense envisaged in Order 45 Rule 1 of the Civil Procedure Rules. Transactions on the Respondent’s account were facts deemed to be in his personal knowledge. See also section 112 of the Evidence Act.

24. Thirdly, and for the same reason, there was no justification furnished as to why the bank statement in question could not have been obtained earlier and placed before the court at the hearing of the initial application. An applicant who premises his review application on the ground of discovery of a new and important matter or evidence must show concerning the alleged discovery that despite “the exercise of due diligence, (the new matter or evidence) was not within his knowledge or could not be produced by him at the time when the decree was passed, or the order made “. The Respondent merely claimed in his affidavit that his bank had been engaged in some sort of verification or reconciliation exercise prior to issuing the statement which, in any event was not certified by the bank. In this age of swift electronic commercial transactions and access to information, the explanation cannot be taken with any seriousness.

25. Finally, this court having examined the bank statement noted that it was in respect of an account held in the name of Ghana Exhibition Centre Ltd whose relationship with the Respondent was not explained in the affidavit to which it was annexed. It was too late in the day for the Appellant to seek to explain such connection through submissions, as he attempted to do on this appeal. In these circumstances, one must ask, how then did the “discovery” of the bank statement qualify as sufficient ground for review?

26. The learned magistrate failed to address himself to the relevant considerations under Order 45 Rule 1 of the Civil Procedure Rules and settled precedent concerning the grounds of error on the face of the record and discovery of new and important matter or evidence, hence fell into error. Similarly, and without going into the details, this court finds that the learned magistrate’s finding that the auctioning of the Respondent’s goods was unlawful, was not only an irrelevant consideration for the matter at hand but was also premature and uncalled for.

27. The learned magistrate clearly misdirected himself and his ruling amounted to judicial overreach; the learned magistrate could not sit on appeal on the decision of his counterpart. His conclusions cannot stand. The appeal is therefore merited and is allowed. Consequently, the ruling delivered on 26th April 2017 and orders flowing therefrom are set aside in toto. This court substitutes therefor an order dismissing the Respondent’s review motion dated 2nd February 2017 with costs to the Appellant. The costs of the appeal are awarded to the Appellant. The parties are directed to proceed expeditiously with a view to progressing the suit in the lower court which has been in abeyance during the pendency of this interlocutory appeal.

DELIVERED AND SIGNED ELECTRONICALLY AT NAIROBI ON THIS 12TH DAY OF MAY 2022C.MEOLIJUDGEIn the presence of:For the Appellants: Mr GachugiFor the Respondent: Mr OsundwaC/A: Carol