Ronald Ndirangu Ndegwa & Eunice Muringo Mutahi v Wilfred Kashonga Saroni & Liberty Graphics (K) Limited [2017] KEHC 2017 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & TAX  DIVISION

CIVIL CASE NO. 211 OF 2010

RONALD NDIRANGU NDEGWA…………………………………1ST PLAINTIFF

EUNICE MURINGO MUTAHI……………………………………..2ND PLAINTIFF

VERSUS

WILFRED KASHONGA SARONI………………………………1ST DEFENDANT

LIBERTY GRAPHICS (K) LIMITED……………………………2ND DEFENDANT

RULING

(Reasons for decision)

1. On 2 November 2017, at the conclusion of counsels’ submissions on the opposed application dated 27 July 2017, I made the following decision:

“The Application dated 27 July 2017 is dismissed with costs to the Respondent/decree holder. Reasons for this ex tempore decision are to be delivered on 6 November 2017”

2. The following are my reasons pursuant to Rule 32(2) of the High Court (Organization and Administration) (General) Rules, 2016.

3. The application dated 27 July 2017 was launched by the Defendants. The application sought of this court an order to review and set aside the judgment entered in default against the Defendants. The default judgment was entered on 28 May 2010. The Defendants argued that the judgment was irregular. According to the Defendants, the irregularity was founded on the fact that the suit was a derivative suit and under the law permission of the court was required to commence or proceed with such action against the company or any other person.

4. The application was opposed by the Plaintiffs. According to the Plaintiffs the matter as to whether or not the default judgment should be set aside had twice been previously considered by the court. First, an application to set aside the default judgment was made on 14 June 2010 and dismissed by Hon. Justice L. Njagi on 5 March 2011. Secondly, an application to review Hon. Justice Njagi’s orders was made on 16 September 2011. The latter application was dismissed by Hon. Justice A. Mabeya on 19 April 2013. More than four years later, the Defendants have revisited the attempt to vacate the default judgment.

5. The Defendants do not deny the filing, hearing and dismissal of the previous applications. The Defendants have concerned themselves with the fact that, as far as the Defendants are concerned, the suit as framed and filed by the Plaintiffs was a derivative suit and no permission of the court had been sought by the Plaintiffs to commence or continue the suit. Consequently, according to the Defendants, the court lacked the requisite jurisdiction, even to enter the default judgment.

6. Having heard counsel and having also reflected on the litigation history of this suit and further having reflected on the applicable law, I was on 2 November 2017 immediately convinced that the application was misconceived and an abuse of the process. I am still so convinced.

7. First, I have perused the plaint again. The suit as framed cannot rank as a derivative cause. There was no allegation that a wrong had been done to the company. No relief could possibly be sought and or obtained on behalf of the company. The wrong complained of and the rights sought to be enforced by the Plaintiffs were not rights vested in the company. It was a straight forward claim where the Plaintiffs sought to have an amount of Kshs. 5,000,000/= paid to them as purchase price for shares sold by the Plaintiffs to the Defendants.

8. Secondly, the Defendants had previously made an application for review. They sought to review the orders declining to set aside the default judgment. The review application was declined. Order 45 Rule 6 of the Civil Procedure Rules expressly bars an application to review an order made on an application for a review. The rule states as follows:

“No application to review an order made on an application for a review of a decree or order passed or made on a review shall be entertained”.

9. The Defendant is simply, in my view, seeking to do that which is prohibited by the rules.

10. Thirdly, the Defendants had made an application to set aside the default judgment. It was denied after arguments on merit. The Defendants then had the opportunity to raise the issue(s) they seek to raise but did not. The principle established in the case of Henderson  v Henderson [1843] 3 Hare 100 and enshrined under Section 7-Explanation (4) of the Civil Procedure Act (Cap 21) would be applicable in the circumstances. The principle is simply that no court ought to try any issue which has been determined by a court of competent jurisdiction where there is a commonality of parties and issues including any issue which ought to have constituted a ground of defence or attack but were not so made a ground of defence or attack.

11. The Defendants ought to have made the issue of the alleged derivative action a ground in their previous application for review, they did not. They are not entitled to revive their previous application on the basis of such a ground.

12. The application is truly an abuse of process given as well the myriad of applications made by the Defendants in this matter. All the applications have previously been dismissed. In the case of Perotti v Collyer Bristow (a firm) [2004] 4All ER 53, the appellant made 25 applications for permission to appeal all which were rejected. The court held that the filing of persistent unmeritorious suits or applications before the court will equate abuse of court process. Essentially, a party who makes numerous obviously unwinnable applications abuses the court process. A similar situation obtains in the instant case. The Defendants in the instant case have so proceeded. They are in abuse of the court process.

13. For the above reasons, the Defendants’ application of 27 July 2017 still stands dismissed with costs to the Plaintiff.

14. Orders accordingly.

Dated, signed and delivered at Nairobi this   6th day of  November 2017.

J.L.ONGUTO

JUDGE