Royal Ngao Holdings Limited v N. K. Brothers Limited & Allan Odhiambo Otieno [2021] KEHC 12723 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL & TAX DIVISION

HCCC NO. 156 OF 2019

ROYAL NGAO HOLDINGS LIMITED............................................PLAINTIFF/RESPONDENT

VERSUS

N. K. BROTHERS LIMITED...................................................1ST DEFENDANT/RESPONDENT

ALLAN ODHIAMBO OTIENO..................................................2ND DEFENDANT/APPLICANT

RULING

1. In the Notice of Motion dated 16th December 2019, Allan Odhiambo Otieno (the 2nd Defendant) seeks that the suit against him be struck out.

2. Royal Ngao Holdings Limited (Royal Ngao or the Plaintiff) contracted N. K. Brothers Limited (N. K. Brothers or the 1st Defendant) to construct an office block on L. R. No. 209/11077. The firm of Dimensions Architects and Interior Designers Limited (Dimensions Limited) was engaged by the Plaintiff as the project architect. It seems, common ground, that the 2nd Defendant was appointed by Dimensions Limited to oversee the project on its behalf.

3. In the Plaint of 12th July 2019, which is the target of the striking out application, the Plaintiff complains that the project was plagued by delays which it attributes to the 1st Defendant. Royal sees a role of the 2nd Defendant in that delay and in Paragraph 9 of the Plaint sets out purported extensions of time which were fraudulently granted by him to the 1st Defendant. In that paragraph are listed particulars of the alleged fraud and incapacity:-

i. Failure to consult and obtain the written approval of the Plaintiff, the Project Manager and the Managing Director of Dimensions Architects and Interior Designers Limited prior to purportedly granting any extensions to the 1st Defendant.

ii. Granting purported extensions of time to the 1st Defendant whimsically and without sufficient of any basis or grounds.

iii. Granting purported extension of time to the 1st Defendant even after having been terminated from employment by Architects and Interior Designers Limited.

iv. Granting purported extension of time to the 1st Defendant in an attempt to aid them escape their obligations under the Construction Agreement as revised by the Plaintiff and the 1st Defendant.

4. As an illustration of the wrongdoing on the part of the 1st Defendant, the Plaintiff avers that he (the 1st Defendant) continued to issue extension of time even after disengaging from Dimensions Limited. In the documents filed accompanying the Plaint are a letter of disengagement of 27th March 2015 and a certificate of extension dated 3rd March 2015.

5. The gist of the application by the 2nd Defendant is that Dimensions Limited were the project architects and Dimensions Limited are a distinct legal entity. That the contract was between the Plaintiff and Dimensions Limited, and that he is not privy to that contract. Further, that the Applicant was only an employee of Dimensions Limited.

6. On the other hand, the Plaintiff alleges a wrongdoing of a personal nature in the 2nd Defendant.

7. Striking out of a pleading is drastic. At this stage, the Court is called upon to terminate a suit on affidavit evidence that is untested. For that reason it is a power to be used sparingly and only in the clearest of cases that no cause of action exists.

8. In the matter before me, one of the allegations is that the 2nd Defendant personally made unlawful and fraudulent extensions to the 1st Defendant after he had disengaged from Dimensions Limited. In the letter of 27th March 2015 he writes as follows:-

“27th March 2015

RE: DISENGAGEMENT FROM DIMENSIONS ARCHITECTS & INTERIOR DESIGNERS LTD.

This is to inform you that I Arch, ALLAN OTIENO will cease to be a member of Dimensions Architects and Interior Designers Ltd from 1/4/2015. I take this opportunity to thank you for your continued support. I hope this support and relationship continues, going forward. I shall be reachable as follows:

1. Cell 0722724934

2. Email: allan@craftanddesignslimited.com

Yours faithfully

Allan Otieno”

9. Yet four or so days later, on 31st March 2015, he issues an extension in which he signs off as a director of Dimensions Limited. An issue raised, and which I think deserves interrogation through tested evidence is whether, for instance, the 2nd Defendant had the capacity to issue that extension. And if not, whether on this and other allegations of wrongdoing, he is personally liable.

10. While it is not for this Court to say that the Plaintiff will successfully prove its assertions against the 1st Defendant, it thinks that on the material currently before Court, a triable issue is disclosed. One that deserves further scrutiny after evidence has been tested but which does not necessarily have to prevail.

11. The Notice of Motion of 16th December 2019 is dismissed with costs.

DATED, SIGNED AND DELIVERED IN COURT AT NAIROBI THIS 1ST DAY OF MARCH 2021

F. TUIYOTT

JUDGE

ORDER

In view of the declaration of measures restricting Court operations due to the COVID-19 pandemic and in light of the directions issued by his Lordship, the Chief Justice on 17TH April 2020, this Ruling has been delivered to the parties through virtual platform.

F. TUIYOTT

JUDGE

PRESENT:

Mr Onyango holding brief for Mr Okatch for the Applicant.

Ms Omamo holding brief for Ms Abuya for 1st Respondent.

Mr Onyango for 2nd Respondent.