Safaricom Limited v Nasimiyu & another [2023] KEHC 24135 (KLR)

Safaricom Limited v Nasimiyu & another (Civil Appeal 95 of 2022) [2023] KEHC 24135 (KLR) (19 October 2023) (Judgment)

Neutral citation: [2023] KEHC 24135 (KLR)

Republic of Kenya

In the High Court at Bungoma

Civil Appeal 95 of 2022

DK Kemei, J

October 19, 2023

Between

Safaricom Limited

Appellant

and

Violet Nasimiyu

1st Respondent

African Merchant Assurance Company Limited

2nd Respondent

(Being an appeal from the ruling and decree of the Senior Principal Magistrate Hon. Mildred Munyekenye delivered on the 19th day of January, 2022 in Webuye SPMCC No. 190 of 2017)

Judgment

1. This is an appeal by the Appellants from the ruling and decree of the Senior Principal Magistrate Hon. Mildred Munyekenye delivered on the 19th day of January 2022 vide Webuye SPMCC No,190 of 2017, wherein she allowed the 1st Respondent’s application dated 15th November, 2021 to the effect that a garnishee order nisi and made absolute is to issue in favour of the 1st Respondent against the Appellant /Garnishee herein and that the 1st Respondent’s claim was to rank as number five in priority in the sum of Kshs 2, 265, 110/ plus interest at court rates and that the costs were t6to be borne by the 2nd Respondent who is the Judgement debtor.

2. The Appellant, being dissatisfied with the ruling and Garnishee Order Nisi and Absolute, appealed against the whole of the said ruling and Garnishee Order Nisi and Absolute issued in its entirety on the following grounds: -a.That the learned magistrate erred in law by upholding enforcement of execution of the Garnishee Order Absolute to a tune of Kshs. 2,265,119/-. plus, interest at court rates and costs without considering that other Garnishee Order Nisis’ ranking in priority culminate to a total of Kshs. 10,598,365. 36/- and that there were no sufficient funds in the 2nd Respondent/Judgement Debtor’s M-pesa Pay bill Account Number 545400 to satisfy the decree herein apparently ranking 5th in priority (sic).b.That the learned trial magistrate misdirected herself by appreciating the contents of Appellant/Garnishee’s account statements on one hand and copies of the other Garnishee Nisis and applications contained in the Appellant/Garnishee’s replying affidavit sworn on 30th November 2021 and disregarding the fact that the monies in M-pesa Pay bill Account number 545400 are insufficient due to the Garnishee Order Nisis’ ranking in priority , which amounts will go into settling the said Garnishee Order Nisis’ ranking in priority.c.The learned trial magistrate misdirected herself by ranking the Garnishee Order Nisi 5th in priority, devoid of any legal reasoning. The Decree Order Absolute issued on 4th March 2022 is itself in error as it is issuing a garnishee Order Nisi to rank 5th in priority.d.The learned trial magistrate erred in law and in fact by inter alia failing to issue a Garnishee Order Nisi pending the hearing of the application inter partes as per the provisions of the law under Order 23 Rule 1 of the Civil Procedure Rules, 2010 and instead issuing the Garnishee Order Nisi and Garnishee Order Absolute whilst delivering the Ruling on the 19th of January 2022. e.The learned trial magistrate erred in law and in fact by making a blanket condemnation of the Appellant/Garnishee by upholding enforcement of execution of the Garnishee Order Absolute to a tune of Kshs. 2,265,119/- plus interest at court rates and costs without considering the account statements on M-Pesa Pay Bill Account number 545400 which had not been challenged;f.That the learned magistrate erred in law in failing to find that a Garnishee Order Absolute cannot issue going by the rendered letter evidence of Diamond Trust Bank Kenya Limited on M-pesa Pay Bill Account number 516600. g.The learned magistrate erred in law in failing to find that a Garnishee Order Absolute cannot issue going by the rendered statements of account of the 2nd Respondent/Judgement Debtor on M-pesa Pay Bill Account Number 545400;h.That the purported ruling of the learned trial magistrate offends the mandatory provisions of Order 21 Rule 4,5 of the Civil Procedure Rules 2010 and should be set aside ex-debito justiciae.i.The purported Ruling of the learned trial magistrate flies against the weight of the evidence adduced by the Appellant/Garnishee and is prejudicial to the Appellant/Garnishee in its entirety.j.The learned magistrate erred in law and fact in declining to issue a stay of execution of the subject Garnishee Order Absolute by incorrectly considering that the Garnishee Order Nisi was to rank 5th in priority to the prior Garnishee Orders; and was to be satisfied once the other Garnishee Order Nisi had been settled and that the operation of the Garnishee Order Nisi/Absolute ranking 5th in priority by itself apparently operated as a stay of execution.k.The ruling of the learned trial magistrate flies against the weight of the evidence adduced by the Appellant/Garnishee, as the funds available were insufficient to satisfy previous Garnishee Order Nisis and is prejudicial to the Appellant/Garnishee in its entirety.l.That in all the circumstances of the case, the findings of the learned magistrate are in supportable in law or on the basis of the evidence on record.m.That the learned magistrate erred in law and fact in considering extraneous factors in determining the application before her;n.That the learned magistrate erred in law and fact in making conclusive findings on issues of fact based on diametrically opposed affidavit evidence;o.That the learned magistrate erred in law and in fact by failing to consider the authorities tendered by the Appellant/Garnishee in their written submissions and thereby trashing the principle of stare decisis.

3. The Appellants prayed for orders that: -a.The Appellant/Garnishee’s appeal be allowed.b.That the entire ruling and decree of the learned trial magistrate issued on 19. 01. 2022 against the Appellant/Garnishee’s be set aside and be substituted with a decree dismissing the 1st Respondent’s /Decree Holder’s Notice of Motion Application dated 12th November, 2021. c.That the Decree Order Absolute issued on 4th March 2022 is itself in error as it is issuing a Garnishee Order Nisi to rank 5th in priority and must be vacated with immediacy.d.That in its place an order be issued by this court setting aside the Garnishee Order Absolute issued on 19. 1.2022 together with the orders consequential thereto.e.That the 1st Respondent/Decree Holder be condemned to pay the Auctioneer’s costs of Kshs. 193,489/- following the proclamation of attachment from Kalya Auctioneers dated 18th July, 2022 as the Appellant/Garnishee is unable to comply with Garnishee Order Absolute since the 2nd Respondent/judgement Debtor’s account has no funds to be attached in order to satisfy the decreef.That costs of this appeal be awarded to the Appellant/Garnishee’s in any event.g.That such other and /or further relief as this Honourable court may deem fit to grant.

4. This appeal was canvassed by way of written submissions. Both parties filed and exchanged their respective submissions. The Appellant’s submissions are dated 20/9/2023 while those of the 1st Respondent are dated 20th July, 2023.

5. Learned counsel for the Appellant submitted on most of the grounds of the appeal and which boiled to one main issue namely whether the learned trial magistrate’s finding was proper in law. Learned counsel kicked off her submissions with a confirmation that the Garnishee’s M-pesa Pay Bill number 545400 operated in favour of the Judgement Debtor had a credit balance at the time the garnishee proceedings were initiated but maintains that the same had already been garnished by earlier Garnishee Order Nisis which ranked in priority and hence the trial magistrate was in error when she made the order against the Appellant as it was plainly clear that the sums available cannot satisfy the Garnishee Order as it does not rank in priority. Towards that end, learned counsel pointed out that the Appellant had already rendered the requisite explanation that it did not have the requisite funds with which to satisfy the Decree Nisi or Absolute. Reliance was placed in the case of International Air Transport Association (IATA) & Another V. Akarim Agencies Company Limited & 2 Others; Equity Bank Limited (Garnishee) [2021] Eklr. It was also submitted that the trial magistrate erred when she failed to issue a Garnishee Order Nisi pending the hearing of the application inter-partes as per the provisions of Order 23 Rule 1of the Civil Procedure Rules and instead issued the Garnishee Nisi and Garnishee Order Absolute whilst delivering the ruling on the 19/1/2022. Learned counsel also faulted the trial magistrate for erroneously issuing a Nisi and Absolute simultaneously whereas the Nisi ought to have been issued prior to the hearing of the application inter-partes. It was also submitted that the trial magistrate erred when she directed the Garnishee Order to affect M-Pesa Bill number 516600 which belonged to another entity namely Diamond Trust Bank Limited. It was finally submitted that the ruling of the trial magistrate flies in the face of the weight of the evidence presented by the Appellant regarding its ability to satisfy the Garnishee Order. Reliance was placed in the case of Ngaywa Ngigi & Kibet Advocates V. Invesco Assurance Company Limited; Diamond Trust Bank (Tom Mboya & Koinange Street Branches) (Garnishee) [2020] Eklr. Learned counsel finally urged this court to find that the Appellant had explained itself and ought to have been discharged by the trial magistrate. Counsel now seeks that the appeal be allowed with costs.

6. Learned counsel for the 1st Respondent submitted extensively on most of the Appellant’s grounds of appeal. On the issue that the trial magistrate erred when she failed to issue a garnishee order nisi pending the hearing of the application inter-partes, it was submitted that a garnishee order can be made either before or after the examination of the judgement-debtor and that a garnishee order nisi was duly issued and upon the Appellant admitting vide its replying affidavit that it held money in the 2nd Respondent’s Pay Bill account number 545400 which was still operational, the trial magistrate duly proceeded to issue a garnishee order absolute as there was no need for oral examination of the judgement-debtor. Reliance was placed in the case of Francis Kaiga V. Institute for Security Studies; ECO Bank (K) Ltd (Garnishee) [2009] Eklr.

7. It was also submitted for 1st Respondent that the trial magistrate was right in upholding enforcement of execution of the garnishee order absolute to a tune of over Kshs 2 million and which was to rank 5th in priority and would be settled once the earlier ones have been settled. Reliance was placed in the case of Ngaywa Ngigi & Kibet Advocates V. Invesco Assurance Co. Ltd; NCBA Bank Kenya PLC & Another (Garnishee) [2021] Eklr. It was pointed out that the Appellant has no problem with the 1st Respondent being ranked 5th in priority as long as the earlier ones are catered for first.

8. As regards the failure by the trial court to grant the Appellant an order of stay of execution, it was submitted for the 1st Respondent that the Appellant suffered no prejudice upon the 1st Respondent being ranked 5th in priority and who has to wait for the earlier garnishee orders. It was also pointed out that the Appellant has since obtained an order of stay granted by this court vide the ruling dated 5/10/2022. Learned counsel therefore sought for the dismissal of the appeal with costs.

9. I have given due consideration to the record of appeal as well as the submissions by the learned counsels for the parties herein. This being the first appellate court, its duty is well spelt out namely, to re-evaluate the evidence tendered before the trial court and subject the same to an independent analysis so as to come to its own conclusion and to bear in mind that it did not have the opportunity to see or hear the witnesses testifying. See Selle Vs Associated Motor Boat Co. Ltd [1968] E.A 123.

10. It is not in dispute that the 1st Respondent had filed a declaratory suit against the 2nd Respondent herein vide Webuye Spmcc No. 170 of 2017 and thereafter obtained a judgement against it and that the issue of execution of the decree led to the commencement of garnishee proceedings which are now the subject of this appeal. The 1st Respondent upon obtaining a decree filed an application dated 12/11/2021 wherein she sought for a garnishee order to compel the Appellant herein to pay to the 1st Respondent sums held vide M-pesa Pay Bill account numbers 545400 and 516600 and maintained and operated by the 2nd Respondent (Judgement-Debtor) through the supervision of the Appellant herein. The application also sought for an order to be served upon the Appellant/ Garnishee herein to show cause why it should not pay to the 1st Respondent/decree holder the debt due from it to the judgement-debtor or so much thereof as may be sufficient to satisfy the decree and costs of the garnishee order. The Appellant/Garnishee filed a replying affidavit sworn on 20/11/2021 wherein it averred inter alai; that the M-pesa Pay Bill number 545400 is held and operated by the 2nd Respondent/Judgement-debtor while Pay Bill number 516600 is operated by another entity namely Diamond Trust Bank (K) Limited; that M-pesa Pay Bill number 545400 had a balance of about Kshs 2 million shillings as at 30/11/2021; that the said account has been garnished vide four other Garnishee Order Nisis that rank in priority and which totaled to about Kshs 10. 5 million; that the Garnishee is not in a position to meet the amount sought by the decree holder since it is already burdened by the other four garnishee order Nisis; that the Garnishee should be discharged from the proceedings.

11. The learned trial magistrate in her ruling dated 19/1/2022 held as follows:‘’Having considered the submissions and the case law, I find that the claimant herein has also a right in terms of her claim against the Defendant/Judgement debtor. However, there being other garnishee orders that were issued prior to the one herein, I find as held in Ngaywa Ngigi & Kibet Advocates V. Invesco Assurance Co. Ltd; NCBA Bank Kenya PLC & Another (Garnishee) that the garnishee order herein will only be satisfied to the extent that there is balance on the pay bill number 545400 once the other Garnishee orders have been settled. I thus issue a garnishee order Nisi and make the same absolute in favour of the claimant as against the Garnishee to rank 5th in priority in the sum of Kshs 2, 2265, 119/ plus interest at court rates and the costs of these garnishee proceedings be borne by the Defendant/Judgement debtor.’’

12. With the above salient issues noted, I find the only issue for determination is whether the finding by the learned trial magistrate was proper.

13. It is noted that the Appellant has taken great exception in the manner the learned trial magistrate handled the 1st Respondent’s application dated 15/11/2021 leading to the impugned ruling. The main grouse of the Appellant is that a garnishee order Nisi ought to have been issued by the trial court before the interpartes hearing of the application and due to the fact that the same was not issued then the trial magistrate went into error when she granted both the garnishee order Nisi and made the same absolute in one fell swoop. It is thus the contention of the Appellant that in view of the said lapse by the trial court, then it should have been discharged from the Garnishee proceedings and hence the appeal should be allowed in its entirety.

14. It is imperative to look at the relevant provisions of the law as well as case law regarding the procedure of garnishee proceedings. Order 23 Rule 1 of the Civil Procedure Rules provides as follows:‘’A court may, upon the ex-parte application of the decree-holder, and either before or after an oral examination of the judgement-debtor, and upon affidavit by the decree-holder or his advocate, stating that a decree has been issued and that it is still unsatisfied and to what amount, and that another person is indebted to the judgement-debtor and is within jurisdiction, order that all debts (other than salary or allowances coming within the provisions of Order 22 Rule 42 owing from such third person (hereinafter called the ‘’garnishee’’) to the judgement-debtor shall be attached to answer the decree together with costs of the garnishee proceedings; and by the same or subsequent order it may be ordered that the garnishee shall appear before the court to show cause why he should not pay the decree-holder the debt due from him to the judgement-debtor or so much thereof as may be sufficient to satisfy the decree together with costs aforesaid.’’

15. From the above provision, a garnishee order Nisi can be made either before or after the oral examination of the judgement-debtor. It is noted that the learned trial magistrate issued a garnishee order Nisi before examining the judgement-debtor upon the filing of a replying affidavit by the Garnishee admitting that it held some monies on behalf of the judgement-debtor vide an M-pesa Pay Bill account number 545400 operated by the judgement debtor.

16. Going by the direction given under Order 23 Rule 1 of the Civil Procedure Rule, I find it is not mandatory that a judgement debtor must first be examined before a garnishee order Nisi can be issued. I agree with the sentiments of Onesmus Makau J in the case of Francis Kaiga V. Institute for Studies; ECO Bank (K) Limited (Garnishee) [2019) Eklr when he held thus:‘’It is clear from the foregoing rule that a garnishee order nisi can be made either before or after an oral examination of the judgement-debtor. I believe such oral examination is meant to verify the existence of attachable debts from third parties and alert him of execution through garnishee proceedings. In this case, the claimant was not examined by the court which granted the garnishee order nisi. The counsel was heard in opposition to the application herein and did not dispute the existence of the attached bank accounts and the fact that the funds therein was held to the credit of the judgement-debtor. Although the counsel contended that the order should not be made absolute before oral examination of the judgement-debtor, he did not specify on what matters was the oral examination necessary in assisting the court decide whether or not to make the garnishee order nisi absolute. Consequently, I return that in this case the judgement-debtor need not be orally examined before the garnishee order nisi is made absolute.’’

17. In the case of International Air Transport Association (IATA) & Another V. Akarim Agencies Company Limited & 2 Others; Equity Bank Ltd (Garnishee) [2021] Eklr Majanja J held that garnishee proceedings are in their very nature proceedings where the garnishee is required to prove whether or not it is indebted to the judgement debtor and that ordinarily, the decree-holder only makes allegations of the garnishee’s indebtedness based on sound evidence whereupon the burden of proof shifts to the garnishee to prove otherwise and further that in order to discharge that burden, the garnishee has to produce strong, sufficient and convincing evidence that the funds in its hands or the debt is not due or payable.

18. Also in the case of Ngaywa Ngigi & Kibet Advocates V. Invesco Assurance Co. Ltd; Diamond Trust Bank (Tom Mboya & Koinange Street branches) (Garnishee) [2020] Eklr It was held that the primary duty of a Garnishee in garnishee proceedings is for the garnishee to appear in court upon receipt of the order nisi and show cause why the funds in the judgement- debtor’s account should not be paid over to the judgement-creditor in satisfaction of the judgement debt and that the same is done by filing an affidavit to show cause with all the relevant documents, disclosing the true picture, status or standing of the judgement-debtor’s accounts at the time of the service of the Garnishee Order Nisi on it.

19. From the above provision of the Civil Procedure Rules and the cited authorities, it is clear that the judgement- creditor ought to move the court for garnishee proceedings the moment evidence is available that a third party is in possession of funds on behalf of the judgement-debtor. In the present case, the 1st Respondent as judgement-creditor commenced garnishee proceedings vide an application dated 15/11/2021 and sought for a notice to show cause and for a garnishee order nisi to be issued against the Appellant/Garnishee herein. At the inter-parte hearing of the application the Appellant/Garnishee filed a replying affidavit wherein it confirmed that it held funds via an M-Pesa account number 545400 operated by the Judgement-debtor/2nd Respondent and that it had a balance of Kshs 2, 807,258/ which was not sufficient to cater for four other garnishee Order Nisi totaling Kshs 10, 598,336/36. The Garnishee provided the details of those four Garnishee Order Nisi. The Garnishee contended that it is not in a position to meet the 1st Respondent’s garnishee order Nisi and sought to be discharged from the proceedings. Even though the Appellant has taken issue with the trial court issuing a garnishee order nisi and making it absolute at the same time, iam unable to fault the learned trial magistrate for the reason that the Appellant having admitted the existence of funds in favour of the judgement-debtor, there was no need to require the garnishee to appear in court over the claim since it had already provided the requisite evidence. The maxim that equity treats as done that which ought to be done is applicable in the circumstances and hence it was quite in order for the learned trial magistrate to issue both the garnishee order nisi and making it absolute. Indeed, the Appellant suffered no prejudice whatsoever as it had complied with the notice to show cause. The only bit of concern by the Appellant was that it already had four garnishee order Nisis to shoulder and it did not have more funds to cater for the 1st Respondent. However, that concern seems to have been taken care of by the trial court when it ordered that the 1st Respondent’s garnishee order nisi/absolute was to be ranked 5th in priority. The order did not compel the Appellant to forthwith settle the claim but directed it to place the 1st Respondent’s garnishee order nisi/absolute as number five in priority and thus the same would be attended to after the appellant has paid up the others.

20. It is noted that the orders made by the trial court were discretionary in nature and hence an appellate court ought not to interfere with that exercise of discretion unless its decision is clearly wrong or has misdirected itself or that it acted on matters on which it should have taken into consideration and in doing so arrived at a wrong conclusion. See Mbogo & Another V. Shah [1968] EA 93.

21. The Appellant took issue with the 1st Respondent’s claim over a different M-pesa Pay Bill number 516600 yet the same related to a different entity namely Diamond Trust Bank (K) Ltd. Indeed, the trial court in its ruling noted the said concerns and made no findings thereon and only found the Appellant to be involved in M-pesa Pay Bill number 545400 operated by the judgement debtor/2nd Respondent. The wrong account number did not prejudice the Appellant in any way.

22. Finally, the Appellant complained that the trial court did not grant it an order of stay of execution upon the delivery of the impugned ruling. It transpired that the Appellant subsequently approached this court and was granted an order of stay pending appeal vide the ruling dated 5/10/2022. Hence, the issue appears to have been overtaken by events and ought to be a non-issue in this appeal. On the whole, I find the finding by the learned trial magistrate was sound and proper. I see no need to interfere with it since she did not take into account irrelevant factors into consideration.

23. In view of the foregoing observations, it is my finding that the Appellant’s appeal is devoid of merit. The same is dismissed with costs to the 1st Respondent.

Dated and delivered at Bungoma this 19th day of October 2023D.KEMEIJUDGEIn the presence of:Miss Rweya......................for AppellantNo appearance Mtiwa for 1st RespondentOmusula Court Assistant