Scania Credit Solutions (PTY) Limited v Matunda (Fruits) Bus Services Limited [2022] KEHC 16591 (KLR)

Scania Credit Solutions (PTY) Limited v Matunda (Fruits) Bus Services Limited (Civil Case E834 of 2021) [2022] KEHC 16591 (KLR) (Commercial and Tax) (8 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16591 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Case E834 of 2021

WA Okwany, J

December 8, 2022

Between

Scania Credit Solutions (PTY) Limited

Plaintiff

and

Matunda (Fruits) Bus Services Limited

Defendant

Ruling

1. This ruling is in respect to the application dated September 29, 2021 wherein the Plaintiff/Applicant seeks orders as follows: -a.Spent.b.Spent.c.Spent.d.THAT pending the hearing and determination of the suit an Order do issue compelling the Respondent to release, surrender and/or return to the Applicant, the vehicles registration numbers; KCH XXXN, KCH XXXN, KCH XXXN, KCH XXXN, KCH XXXN, KCH XXXT, KCH XXXT, KCH XXXT, KCH XXXT and KCH XXXT which vehicles are currently in the custody and/or possession of the Defendant/Respondent; with the vehicles being placed at a premises designated by the Applicant;e.THAT pending the hearing and determination of the suit an Order do issue authorizing the Plaintiff/Applicant and/or its authorized agents to enter upon or into any land or building in the possession of the Defendant/Respondent and/or its agents and/or housing the subject motor vehicles and take possession of the Applicant's motor vehicles registration numbers; KCH XXXN, KCH XXXN, KCH XXXN, KCH 3XXN, KCH XXXN, KCH XXXT, KCH XXXT, KCH XXXT, KCH XXXT and KCH XXXT, which vehicles are currently in the custody and/or possession of the Respondent.f.THAT costs of this Application be borne by the Respondent.

2. The application is brought under Article 50 (l) of the Constitution and is supported by the affidavit of the Plaintiff’s Credit Risk Manager Mr. Roger Hutton and on the grounds that: -a.Under Order 40 Rule 1 (a) and (2) of the Civil Procedure Rules, 2010, this honourable Court is mandated to make an order for the purpose of staying and/or preventing the wasting, damaging of property the subject of court proceedings and to restrain the Defendant from committing a breach of contract.b.On or about October 28, 2016, and pursuant to the Defendant/Respondent's (hereinafter "the Respondent") application, the Applicant and the Respondent concluded Ten (10) individual Financial Lease Agreements (consisting of 10 Transaction Schedules with deal numbers 3310000493, 3310000494, 3310000495, 3310000495, 3310000496, 3310000497, 3310000503, 3310000504, 3310000505, 3310000506 and 3310000507 for the lease of Ten (10) motor vehicles/buses, or a period of 36 months.c.The Applicant complied with the terms of the Lease Agreements and delivered the motor vehicles to the Respondent who took and acknowledged possession thereofd.At all material times, while the Lease Agreements were in force, the Applicant remained the owner of the subject motor vehicles and the Respondent had no right to the vehicles, other than the limited right to possess and use the vehicles subject to the terms of the Lease Agreements.e.The Respondent committed a material breach of the terms of the Lease Agreements in that it failed to effect payment of the rental amounts as required. In the premise, the Applicant terminated the Agreement by way of Notice dated July 11, 2019 and demanded an immediate return of the leased vehicles pursuant to the terms of the Lease Agreements.f.Under the Lease Agreements, should the Agreements be terminated, the Respondent is required to forthwith forego possession of and return the leased vehicles to the Applicant at the Respondent's cost.g.Notwithstanding the termination of the Lease Agreements and notwithstanding the demands by the Applicant for the Respondent to return the Applicant's vehicles, the Respondent has in breach of the Lease Agreements refused and/or failed to surrender the Applicant's vehicles, and remains in unlawful possession of all the Applicant's vehicles.h.The Applicant is apprehensive that if left in the custody of the Respondent, the said vehicles are in danger of being wasted, damaged and/or misused so as to be left in such a depreciated state that their value will be considerably diminished and the Applicant would not be able to subsequently lease or dispose them to other third parties.i.The Applicant is apprehensive that since the vehicles are subject to constant use by the Respondent, the value of the vehicles diminishes with every use and by the mere passing of time.j.The Applicant is further apprehensive that whatever losses the Applicant will suffer as a result of the Respondent's continued unlawful possession and use of the vehicles, will be substantial and cannot be recovered and/or adequately compensated.k.The Applicant cannot mitigate its losses until it regains possession of its motor vehicles.l.Unless the Applicant obtains the orders sought from this honourable Court for the repossession of its vehicles as a matter of urgency, the Respondent will continue to utilize the Applicant's vehicles, at the Applicant's risk and loss and without paying for the use of the vehicles.m.The application herein seeks to enforce the express terms of the Lease Agreements which are binding on the parties.n.It is in the interest of justice that the Court grants the orders as prayed.

3. The defendant opposed both the application and the main suit through the Notice of Preliminary Objection (PO) dated May 10, 2022 wherein it listed the following grounds: -a.The Plaintiff/Applicant Plaint and Application both dated the September 29, 2021 are sub-judice, incompetent, misconceived and devoid of any merit as they both run afoul and contravene Section 6 of the Civil Procedure Act.b.The Plaintiff/Applicant Plaint and Application both dated the September 29, 2021 is a disguised attempt by the Claimant to have this Honourable Court adjudicate over a suit that is being adjudicated in Cause Number 366 of 2019; Matunda (Fruits) Bus Services Limited versus Scania credit Solutions (PTY) Limited.c.The Plaintiff/ Applicant Plaint and Application both dated the September 29, 2021 as drawn and filed are a non- starter, bad in law and misguided and should be struck out as it is tantamount to trifling with the Court.d.The Plaintiff /Applicant Annexures to the Application dated the September 29, 2021 offend the mandatory provisions of Rule 9 of the Oaths and Statutory Declaration Rules hence ought to be expunged.e.The Plaintiff/ Applicant exhibits to his Supporting Affidavit dated the 29th of September, 2021 are under the seal of a commissioner in Kenya and marked with serial letters of identification in Kenya while the Affidavit itself was notarized in South Africa on the same date.f.The Plaintiff/ Applicant Plaint, Application and all annexures thereto both dated the 29th of September are fatally defective, frivolous and otherwise an abuse of Court process and should be dismissed with costs.

4. The Applicant replied to the PO through the replying affidavit sworn by its advocate Mr. Geoffrey Nyakundi who avers that the alleged subordinate court case No. 366 of 2019 Matunda Bus Services Limited vs Scania Credit Solutions Ltd stands automatically dismissed for want of prosecution by dint of Order 17 Rule 2(5) of the Civil Procedure Rules there having been no action taken in the matter for a period of more than two years. He adds that the Respondent has already filed an application dated November 10, 2021 seeking the dismissal of the said Subordinate Court case.

5. The Respondent’s deponent further states that Rule 9 of the Oaths and Statutory Declaration Rules does not apply to documents notarized outside Kenya’s jurisdiction as it is only applicable to Commissioners for Oaths appointed under Section 6 of the Oaths and Statutory Declarations Act. It is the Respondent’s case that the alleged defect to the Applicant’s supporting affidavit and annexures, if any, are not fatal and amount to mere curable procedural technicalities.

6. Parties canvassed the PO by way of written submission which I have considered. The main issue for determination is whether the PO, founded on the doctrine of sub judice and alleged non-compliance with Rule 9 of the Oaths and Statutory Declaration Rules, is merited.

Sub Judice 7. Section 6 of the Civil Procedure Act provides for the sub judice rule as follows: -No Court shall proceed with the trial of any suit or proceeding in which the matter in issue is also directly and substantially in issue in a previously instituted suit or proceeding between the same parties, or between parties under whom they or any of them claim, litigating under the same title, where such suit or proceeding is pending in the same or any other Court having jurisdiction in Kenya to grant the relief claimed.

8. What constitutes a preliminary objection was discussed in the case of Mukisa Biscuits Manufacturing Company Limited vs West End Distributors (1969) EA as cited in the case of Oraro vs Mbaja (2005) 1 KLR 141 as follows: -“So far as I am aware, a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are: - an objection to the jurisdiction of the court, or -a plea of limitation, or -a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration.”

9. Further Sir Charles Newbold, JA stated that: -“A preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law, which is argued on the assumption that all facts pleaded by the opposite side are correct. It cannot be raised if any fact is to be ascertained or if what is sought is the exercise of judicial discretion.”

10. In Oraro vs Mbaja (2005) 1KLR 141 it was held: -“The improper raising of points by way of preliminary objection does nothing but unnecessarily increase costs and, on occasion confuse issues and this improper practice should stop... The principle is abundantly clear.A “preliminary objection” correctly understood, is now well defined as, and declared to be, a point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the processes of evidence.Any assertion, which claims to be a preliminary objection, yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication, is not, as a matter of legal principle, a true preliminary objection which the court should allow to proceed.Where a court needs to investigate facts, a matter cannot be raised as a preliminary point.... Anything that purports to be a preliminary objection must not deal with disputed facts, and it must not itself derive its foundation from factual information which stands to be tested by normal rules of evidence (Our emphasis).If the applicant’s instant matter required the affidavit to give it validity before the Court, then it could not be allowed to stand as a preliminary objection clearly out of order and, apart from amounting to a breach of established procedure, it had the unfortunate effect of provoking filing of the respondent’s very detailed “affidavit in reply to an affidavit in support of preliminary objection”, which replying affidavit was expressed to be “under protest”...The applicant’s “notice of preliminary objection to representation” cannot pass muster as a procedurally designed preliminary objection. It is accompanied by affidavit evidence, which means its evidentiary foundations are not agreed and stand to be tested. Secondly, the essential claims in the said preliminary objections are matters of great controversy, as their factual foundations are the subject of dispute.”

11. The principle that emerges from the above cited cases is that a PO is a point of law that speaks for itself and does not require the ascertaining of facts or the production of evidence in order to establish. The question which then arises is whether, in the circumstances of this case, the sub judice doctrine is a pure point of law. The court answered this question in Cyrus Mucebiu Irungu vs Martha Wanjiru Irungu & Another [2022] eKLR wherein it was held: -“I agree with the submission by counsel for the plaintiff that the issue of sub-judice does require the ascertaining of facts or probing of evidence in the two earlier suits mentioned by the 1st defendant which this honorable court is not privy to. It therefore follows that the issue of sub-judice is not a pure point of law capable of being considered as a preliminary objection properly raised and does not meet the litmus test of what in law amounts to a preliminary objection.”

12. In the present case, it is not in doubt that this court is not privy to the alleged proceedings before the Lower Court or if the same has abated or stand dismissed as has been alleged by the Respondent. Similarly, in Margaret Wachu Karuri vs John Waweru Ribiro (2021) eKLR, it was held: -“For the Court to determine whether the issues herein were directly and substantially in issue with the other suit, it is this court’s considered view that it will have to ascertain facts and probe evidence by ascertaining whether the issues raised in the instant suit are the same as the ones in the Appeal aforesaid and further interrogate the prayers sought whether they are the same and relate to the same issues. On whether or not the same is sub-judice, facts have to be ascertained and a preliminary objection cannot be raised on disputed facts. Therefore, this court holds and finds what has been raised by defendant/objector does not amount to a preliminary objection, and thus the preliminary objection is not merited.Consequently, the court finds and holds that the notice of preliminary objection dated August 30, 2019, by the defendant/objector is not merited and the same is dismissed entirely with costs to the Plaintiff/Respondent.”

13. My finding is that the Preliminary Objection on the ground of sub judice is not merited.

Supporting Affidavit 14. On whether the Application dated the September 29, 2021 complies with the provisions of Rule 9 of the Oaths and Statutory Declaration Rules, the Applicant argued that the said Rule does not apply to documents notarized by a Notary Public outside the jurisdiction of Kenya and only applies to Commissioner of Oaths appointed as such under Section 6 of the Oaths and Statutory Declaration Act. It was submitted that should the court find that the said documents are defective, then the same ought to be treated as a procedural technicality that is curable under Article 159 (2)(d) of the Constitution. It was the Applicant’s case that the court should exercise its discretion and allow the Applicant to rectify any errors on the affidavit. For this argument, the Applicant cited the decision in Francis A. Mbalanya vs Cecilia N. Waema [2017] eKLR, wherein it was held that;-“However, considering that the Supporting Affidavit in itself complies with the law, it is only the annexures that can be expunged from the record, and not the Supporting Affidavit and the Application. Of course, it would not be prudent for the Plaintiff to proceed with his Application in the absence of documents in support of the depositions in the Affidavit. However, and with the leave of the court, the Plaintiff can still exhibit the properly sealed and marked annexures either by filing a Supplementary or Further Affidavit.I say so because under the provisions of Order 51 Rule 4 of the Civil Procedure Rules, an Application can proceed for hearing notwithstanding that it is not accompanied by an Affidavit, meaning that where annexures on an Affidavit are expunged, the Applicant can still introduce those annexures by filing a Supplementary Affidavit without having the Application, or the initial Affidavit, struck out.”

15. The Respondent, on the other hand argued that since Rule 9 of the Oaths and Statutory Declarations Rules is couched in mandatory terms, there is no discretion in the choice of affixing the seal and serializing the exhibits forming part of the affidavit. Reliance was placed in the decision in Kenya National Union of Nurses vs Kiambu County Public Service & 5 Others [2019] eKLR where it was held: -“The law peremptorily uses “shall” to denote that there is no discretion in the choice of affixing the seal and serializing the exhibits forming part of the affidavit. Without the said seal by the Commissioner there is no proper affidavit before the court.”

16. Rule 9 of the Oaths and Statutory Declaration Rules stipulates that: -All exhibits to affidavits shall be securely sealed thereto under the seal of the commissioner, and shall be marked with serial letters of identification.

17. The question that this court has to deal with is whether a defective affidavit is fatal to the application that it supports. The answer to this question is to the negative. Courts have adopted the position that it is more desirable to sustain a suit instead of dismissing it and that the defective nature of an affidavit is not fatal to the entire suit. This position is fortified by the provisions of Article 159(2) of the Constitution which exhorts Courts to administer substantive justice without undue regard to technicalities. The cure to any lapse in an affidavit is to strike it out and direct the affected party to file and serve a fresh compliant affidavit.

18. For the above reasons, I find that the Preliminary Objection is not merited and I therefore dismiss it with orders that costs shall abide the outcome of the application.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 8TH DAY OF DECEMBER 2022. W. A. OKWANYJUDGEIn the presence of: -Mr. Kimaiti for Ms Odongo for defendant.Ms Oseko for Nyakundi for plaintiffCourt Assistant- Sylvia