Republic v Commissioner for Cooperative Development & Mwiruti Savings & Credit Co-operative Society Limited Ex parte County Council of Kiambu [2017] KEHC 9409 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT ANAIROBI

JUDICIAL RIVIEW APPLICATION NO. 6 OF 2009

REPUBLIC................................................................................................................APPLICANT

VERSUS

COMMISSIONER FOR COOPERATIVEDEVELOPMENT…...................1ST RESPONDENT

MWIRUTI SAVINGS & CREDIT CO-OPERATIVE SOCIETY LIMITED...2ND RESPONDENT

EX PARTE: COUNTY COUNCIL OF KIAMBU

RULING

1. On 14th day of September, 2016, this Court expressed itself inter alia as hereunder:

“the manner in which the office of the Attorney General has conducted itself in these proceedings does not inspire confidence at all. The reasons relied upon in not settling the sum due herein are with respect flimsy and have no legal basis. Having considered this matter and in order to do substantive justice to the parties considering the fact that the ex parte applicant’s legal representatives have admitted that they in fact have Tax Compliance Certificate, I direct the Solicitor General to transmit the sum held by his office on behalf of the 1st Respondent herein which sum is payable to the ex parte applicant herein to the advocates for the applicant within 7 days of service on his office of the Tax Compliance Certificate and particulars of the said advocate’s account. In default of such payment, the learned Solicitor General shall be committed to serve 30 days for failure to comply with the orders of this Court.”

2. An application has now been filed herein on behalf of the Hon. Attorney General dated 7th October, 2016 seeking the following orders:

a.That the application herein be certified urgent and service thereof be dispensed with in the first instance.

b.That this Honourable court be pleased to stay the order issued on 14th September 2016 directing that The Solicitor General do serve 30 days in civil jail pending the hearing and determination of this application.

c. That this Honourable court be pleased to set aside and/or vary the orders issued byThe Deputy Registraron4th March 2016.

d. That this Honourable court be pleased to review the order dated 13th May 2016.

e. That the court gives directions on the correct decretal amount being taxed costs payable between Kshs54,049,134/= and taxed costs at Kshs. 1,243,361/=

f.That the costs of this application be in the cause.

3. According to the applicant, this matter originated from judicial review application in which a ruling was delivered on 17th December 2010 in favour of the ex-parte applicant with costs but with no interest. The ex-parte applicant then a filed a bill of costs for Kshs.20 Million which was taxed at Kshs.1,243,361/=. Dissatisfied with the decision, the ex-parte applicant filed a reference which was dismissed on 2nd March 2015 with costs to the respondent. Still not satisfied with the decision on the reference, the ex-parte applicant filed a notice of appeal dated 24th March 2015 and to which there is no clear indication as to when the appeal will be heard or whether he has intentions of pursuing the same.

4. It was averred that towards pursuing an out of court settlements vide a letter dated 18th February 2016 the Respondents wrote to the applicant/respondent asking him to avail certain documents to facilitate payment notably certificate of order against the government which was missing. On the Friday of 4th March 2016 at about 4;00pm the Respondents received a certificate of order against the government for a sum of Kshs.54,049,134/= including overpayment of Kshs.28,000,000/= together with interest though the only figure in question was the issue of costs taxed at Kshs. 1,243,361/=. Upon further consultation with the clients and upon perusing the rulings from the High court, the Attorney General came to the conclusion that there was no finding on the issue of overpayment and who should bear responsibility. Further to the foregoing, from the judgment, it’s clear that overpayments were made to Mwiruti Sacco and not into the coffers of Commissioner for Cooperative to warrant responsibility for overpayment. Accordingly, the Attorney General foresaw a difficulty in settling the matter because of the discrepancies in figures and out of courtesy wrote to the Counsel for the Decree holder expressing his views over the issue, requesting him to consider amending the order but to no avail. Instead on the 13th May 2016, the ex parte applicant herein extracted an order indicating that costs are to be paid with interest from date of taxation till payment in full.

5. It was the Respondent’s case that from the judgment, it is clear that there were observations that there were overpayments to Mwiruti Savings and Credit Cooperative society by Kiambu County Council but it was not a question for determination, neither was there a finding as to who should shoulder responsibility for such overpayment as the certificate of order dated 4th March 2016 seems to suggest by placing it on the government.

6. It was revealed that the respondent/applicant deposited the money into the state law office account and subsequently the Solicitor General was ordered on the 14th September 2016 to pay the costs assessed at Kshs. 1,243,361/= within 7 days of being furnished with the tax compliance certificate by the applicant/respondent advocate failure to which he would serve 30 days in civil jail. According to the Respondent, the applicant/respondent only availed a tax compliance certificate on the 23rd September 2016 and towards settling the matter the state law office prepared a payment voucher and a discharge voucher for the sum of Kshs. 1,243,361/=being the taxed costs and forwarded copies to the applicant respondent requesting him to sign and return a copy of the discharge voucher. In response the applicant/respondent wrote a letter dated 29th September 2016 and returned the signed discharge voucher with a bizarre figure of kshs.2,224,276. 00/=inclusive of interest on costs instead of Kshs. 1,243,361/= being the taxed costs. In the respondents’ opinion, the same does not tally with the payment voucher which is a serious accounting anomaly. It was their case that such action by the applicant/respondent has made it difficult for the Solicitor General to comply with the orders issued on 14th March 2016 because it is erroneous as the primary judgment did not provide for interest and the same cannot be introduced post judgment as per the orders dated 4th March 2016 and 13th May 2016. It was averred that the Respondents’ attempts to notify counsel for the ex-parte applicant about the erroneous calculation on interest on costs and asking him to sign another discharge voucher were to no avail.

7. The Respondents therefore sought that the court stays the order directing The Solicitor General to be committed to civil jail for 30 days in default, sets aside the certificate of order against the government dated 04th march 2016, reviews the order dated 13th May 2016  and gives directions as to the correct amount payable between 54,049,134/= and taxed costs at Kshs. 1,243,361/= so as to bring this matter to an end.

8. The Respondents averred that they are at all times ready and willing to comply with court orders. If however the application is not allowed they will suffer prejudice if the application is not allowed. The Court was therefore urged to exercise its inherent powers and discretion in order to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court in order to avoid an injustice or hardship resulting from inconsistent and incorrect application of the law.

Ex parte applicant’s case

9. The application was however opposed by the ex parte applicant.

10. According to it, the application for stay of the order of 14/9/2016 is contemptuous, mischievous, arrogant and lacks merit. It was averred that the orders of 4/3/16 made by the Deputy Registrar which now the 2nd respondent applicant seeks to stay were made pursuant to the Ruling of the court given on the 9/12/2010. However there is no appeal filed or pending against the said ruling and any application for stay or setting aside of any orders flowing therefrom would be frivolous and vexatious and the same is calculated at delaying justice as the same is an afterthought.

11. It was further contended that there is no appeal either against the orders of the court (Hon. Mr. Justice W. Korir) of 13/5/201 and no application for review has been made throughout the time this matter has been in court. According to the ex parte applicant, this court confirmed the interest awarded on costs in its ruling of 13/5/2016 and the same is payable together with costs.

12. The ex parte applicant contended that despite having taken part in the proceedings from the inception of the suit todate, the 1st respondent has sought to dodge the orders of the court by filing numerous applications. This, the ex parte applicant explained, was because it costs the Respondents nothing and the same are calculated to wear the ex parte applicant down and to put it to unnecessary unrecoverable cost.

13. It was the ex parte applicant’s case that the only issue the 1st respondent wanted determined in the certificate of order against the government was who between the two respondents was liable for the decretal sum. It was deposed that previously when the Notice to show cause why execution should not issue was issued, counsel for the 1st respondent stated and informed the court that all they were waiting for to enable them pay the certificate of order against the government and that warrants of arrests were first issued against the 1st respondent on 3/2/2016 after doggedly pursuing the notice to show cause from 8/5/2015.

14. The ex parte applicant denied that there was overpayment and disclosed that the figure of Kshs. 28,131,168/= overpayment was arrived at after a joint audit undertaken by an auditor K. Njoroge and Associates appointed by counsel for all parties and thereafter his report filed in court which said joint audit formed the basis of the court ruling and the amount found to have been overpaid is now due together with interest thereon. To the ex parte applicant, the 1st respondent cannot therefore at this late stage be heard to challenge or question the certificate of order whose contents were arrived at pursuant to a ruling given in accordance with the report of the Joint Audit and there would have been no reason to engage or undertake an exercise of an audit whose report was going to be futile.

15. To the ex parte applicant, the ruling of the court (Hon. Musinga, J) or any other ruling is not a recitation of folklore incantations and platitudes but legitimate directions by the court grounded on findings of fact and law. In its view, failure by the 1st respondent to settle the decretal sun has been as a result of misinterpretation of the ruling of the court and the exercise undertaken jointly by all parties.

16. The ex parte applicant explained that in the order of the court (Hon. Korir J) given on 11/5/2016, order number 3 stated as follows:-

“That the balance in the certificate of Order issued on 4/3/2016 to await a decision by a judge of the division as to who is liable to pay that amount.”

17. However thereafter the 1st respondent has taken this court and the ex parte applicant round in circles and has failed to settle even the costs that were not in dispute yet the only issue the 1st respondent wanted determined was who between the 2nd respondents was liable for the refund of the overpayment. This is despite the fact that the decree holder has already elected to move against the 1st respondent to recover the decretal sum.

18. It was therefore the ex parte applicant’s case that it is futile and a time wasting tactic for the 1st respondent to keep this matter pending in court to avoid scrutiny for the fraud he committed against the ex parte applicant, and the public at large..

Determination

19. I have considered the foregoing.

20. Pursuant to leave by the Court, the ex parte applicant herein, County Council of Kiambu vide its Notice of Motion dated 22nd January, 2009 sought t following orders:

1. Certiorari to bring into this Court and quash the decision made on the 23rd December, 2008 by the Commissioner for Co-operative Development, purporting to exercise the powers conferred on him by section 35 of the Co-operative Societies Act and to declare the Branch Manager, Kenya Commercial Bank Limited – Kiambu an agent of Mwiruti Savings & Credit Co-operative Society Limited the 2nd Respondent herein for the purposes of recovering the amount of Kenya Shillings Nine Hundred and Ninety Three Million, Four Hundred and Seventy Nine Thousand, Four Hundred and Forty One Cents Ninety Four (Kshs 993,479,441/94) from the bank account numbers  24970032, 245970588 and 245291459, Kenya Commercial Bank Kiambu or any other account belonging to the County Council of Kiambu, the Applicant herein to be paid to Account Number 011206348000 Cooperative Bank Kiambu or to any other accounting belonging to the 2nd Respondent.

2. Prohibition to prohibit the 1st Respondent from enforcing section 35(1) and (2) of the Cooperative Societies (Amendment) Act, 2004 against the County Council of Kiambu by appointing the Branch Manager, Kenya Commercial Bank Limited – Kiambu in regard to the recovery of the amount of Kenya Shillings Nine Hundred and Ninety Three Million, Four Hundred and Seventy Nine Thousand, Four Hundred and Forty One Cents Ninety Four (Kshs 993,479,441/94) or any other amount from the bank account numbers  24970032, 245970588 and 245291459 or any other future credits made to the accounts of the said County Council of Kiambu held with the Kenya Commercial Bank Limited – Kiambu or any other accounts of the said County Council wherever held to be remitted to the 2nd Respondent.

3. Compelling the 1st Respondent to personally pay the costs of this application.

4. Costs of the application to borne by the Respondents in any event.

21. Following the hearing, a decree was given on 9th December, 2010 issued on 13th January, 2014 in the following terms:

1. That an order of certiorari quashing the decision of the Commissioner for Co-operative Development made on 23rd December, 2008 be and is hereby issued.

2. That an order of prohibition prohibiting the 1st Respondent from enforcing section 35(1) and (2) of the Cooperative Societies (Amendment) Act, 2004 against the County Council of Kiambu by appointing the Branch Manager, Kenya Commercial Bank Limited – Kiambu in regard to the recovery of the amount of Kenya Shillings Nine Hundred and Ninety Three Million, Four Hundred and Seventy Nine Thousand, Four Hundred and Forty One Cents Ninety Four (Kshs 993,479,441/94) be and is hereby granted.

3. That the Respondents pay the costs of this application to the applicant.

22. I have perused the record of these proceedings and I have not seen any other decree apart from that decree. Accordingly, it is only that decree that is capable of being executed. I have however read Musinga, J’s ruling dated 9th December, 2010 in which the learned Judge expressed himself as hereunder:

“The Court stated that the applicant had made an overpayment amounting to over Kshs 23,000,000. 00. The Court therefore quashed the 1st Respondent’s decision by way of an order of certiorari. That decision was not appealed against and if there was any appeal the same was not brought to this court’s attention by any of the parties herein. The assumption is therefore that there was an overpayment by the applicant to the tune of Kshs 23,000,000/=”

23. I have set out the prayers which were sought by the applicant as well as the reliefs which the Court granted according to the decree.  Whereas Musinga, J (as he then was) held that the trial judge found that there was overpayment of over Kshs 23,000,000/= there is no order on record compelling the payment of the said amount in these proceedings. Accordingly the only relief capable of execution by the ex parte applicant was that of costs.

24. Subsequently the ex parte applicant’s costs were taxed by the Taxing Master vide a ruling dated 18th April, 2012 in the sum of Kshs 1,243,361/= all inclusive. Section 27(2) of the Civil Procedure Act provides as hereunder:

The court or judge may give interest on costs at any rate not exceeding fourteen per cent per annum, and such interest shall be added to the costs and shall be recoverable as such.

25. Accordingly the decision whether or not to give interest on costs and the rate of such interest is at the discretion of the trial Court and in my view where the order on costs is silent on interests, it cannot be assumed that it automatically follows that the costs accrue interest. I associate myself with the opinion of Wendoh, J in Arthur Kinuthia Albert vs. Permanent Secretary, Ministry of Health [2008] eKLR in which the learned Judge expressed herself inter alia as follows:

“The question I pose is whether it is this court to determine what sum is payable in terms of interest. Judicial review merely deals with the decision making process but not the merits of the decision. In my view, the applicant’s Counsel is calling upon this court to determine whether or not interest was payable to them and I am of the view that that is not the purview of this court’s jurisdiction. The figure of interest included in the decree is foreign to the judgement in CMCC 773/03. Interest may vary according to what the Plaintiff has pleaded in the plaint. It is outside this court’s jurisdiction to assume and to determine whether or not interest was payable or how much is payable. Since the court in CMCC 773/03 had not specifically ordered for payment of interest it was upon the Applicant to move the court which gave the judgement for a review of its orders on account of there being an error on the face of the record. This court’s jurisdiction is limited to compelling the Respondent to pay based on the judgement, decree and certificate of order but it is not to determine what is due to the Applicant and this court would decline to grant the order prayed.”

26. In that case the Court was clear that in deciding to compel payment, all the three instruments, the Judgement, the Decree and Certificate of Order for Decretal Sum and Costs Against the Government must be considered and not just one of them.

27. The issue for determination in this application seems to me to be simply this: How much is due for payment to the ex parte applicant herein and by who?

28. Section 34(1) of the Civil Procedure Act provides as hereunder:

“All questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the court executing the decree and not by a separate suit.”

29. In this case the Respondents are questioning the lawfulness of the order of the Deputy Registrar made on 4th March, 2016. The said order dated 4th March, 2016 is in fact a Certificate of Order for Decretal Sum and Costs Against the Government issued pursuant to Order 29 Rule 3 of the Civil Procedure Rules. Where an issue arises as to the correctness of such a certificate, it is my view and I hold that since it is the decree of this Court that is being executed this Court is properly seised of jurisdiction to determine the matter. That was the position adopted by Makhandia, J (as he then was) in Florence Achieng Abuoro vs. Tom Stephen Mauya & 2 Others Kisii HCCA NO. 198 of 2008 where the Learned Judge expressed himself as hereunder:

“Section 34(1) aforesaid provides that all questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction shall be determined by the court executing the decree and not by a separate suit. It is clear therefore that since the appellant’s suit arose from the execution, any challenge and or claim touching on or concerning the propriety, validity and legality of the same could only be mounted in the said suit.”

30. Kimaru, J on his part in Ernie Campbell & Co. Ltd vs. Githunguri Dairy Plant Co. Ltd & Another Nairobi (Milimani) HCMCA No. 719 of 2003 held that:

“Under section 34(1) of the Civil Procedure Act all questions arising between the parties to a suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree shall be determined by the court executing the decree and not by a separate court. Therefore the court has jurisdiction to hear and determine the matters in dispute in this application.”

31. Having found that from the decree, the only relief capable of being executed in these proceedings is that of costs, it is clear that both the said overpayment and the interests are foreign to the substratum of the judgement and the decree. Therefore the Certificate of Order for Decretal Sum and Costs Against the Government can only be valid if it is in compliance with the judgement and the decree.

32. In the premises to the extent that the Certificate of Order for Decretal Sum and Costs Against the Government was not in agreement with the decree, that Certificate cannot be allowed to remain on record. Accordingly the said Certificate of Order for Decretal Sum and Costs Against the Government dated 4th March, 2016 is hereby set aside. For avoidance of doubt the only sum payable by the Respondents to the Applicant in respect of the decree issue herein is Kshs 1,243,361/= and any other or further disbursements or costs that may have been expressly awarded to the ex parte applicant.

33. Each party will bear own costs of this application.

34. Orders accordingly.

Dated at Nairobi this 9th day of October, 2017

G V ODUNGA

JUDGE

Delivered in the presence of:

Mr Mwaura for the ex parte applicant

Mr Odhiambo for the 1st Respondent

CA Ooko