Shakila Bano Akram v Ismail Noorani [2015] KEHC 8024 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL DIVISION

CIVIL APPEAL CASE NO.  272 OF 2009

(Appeal arising from the ruling and order of Honourable Mr S.A.Okato, Principal Magistrate delivered on 26th May 2009 in Nairobi Milimani Chief Magistrate’s court civil suit No. 6594 of 2008)

SHAKILA BANO AKRAM ………….……………….APPELLANT

VERSUS

ISMAIL NOORANI…………….….……………….RESPONDENT

JUDGMENT

This appeal arises  from the ruling and order of  Honourable  Mr S.A.Okato, Principal Magistrate delivered on 26th May 2009 dismissing  the appellant’s application for setting   aside of  the judgment entered on 23rd January 2009 against the defendant/appellant in favour of the plaintiff/respondent in Nairobi Milimani Chief Magistrate’s court Civil suit No. 6594  of 2008.

The facts of the case as presented  in the lower court  are  that by a plaint dated  23rd September  2008 and  filed in court on the same day, the plaintiff  Ismail Noorani sued the defendant (appellant) herein  Shakila  Bano Akramid claiming for a liquidated sum of  shs  170,000- being consideration  for a motor vehicle  registration No.  KAN 22B which  the plaintiff allegedly sold  to the defendant  at an agreed purchase  price of  shs 500,000/- out of which he  paid shs 330,000/- leaving a balance  of shs 170,000. He also claimed for costs of the suit and interest at court rates.

The plaintiff/respondent through the firm of Jackson Omwenga & Company advocates took out summons to enter appearance   and on 31st October 2008 at 10. 30 a.m. the process server, Mr Nathan Pala did serve   to the defendant/appellant in person at her place of work at Mitsumi Computer Garage situated on Muthithi Road Nairobi.  The affidavit of service sworn on 19th November 2008 was filed in court on 24th November 2008.  On the same day of 24th November 2008 the respondent /plaintiff filed a request for judgment in default of appearance by the defendant/appellant.  However when the request was placed before the magistrate for endorsement, the magistrate remarked on   27th November 2008 that:

“Ihave seen the affidavit of service. Date and time of service not indicated.  Service not proper.  Request refused.

AG PM

27th November 2008”

In the intervening period, on 18th December, 2008 the defendant/appellant entered an appearance through the firm of Mohamed Madhani & Company Advocates. The Memorandum of Appearance is dated the same day of 18th December 2008.

Later on 23rd January 2009, the court entered  judgment  against  the defendant  in default  of  filing defence, following  the request made by the plaintiff dated 12th January 2009 and filed on 13th January 2009.  It is  that judgment  of 23rd  January  2008  that provoked an application by way of  Chamber Summons dated 17th February  2009 and filed in court  on 18th February 2009, seeking to set aside  the exparte judgment and praying  that the defence  filed be  deemed  to be duly filed  upon payment of the requisite court fees.

The defendant contended that the application by the plaintiff dated   12th January 2009 and filed on 13th January 2009 was premature. Secondly, that the  plaintiff had breached an  agreement  with the  defendant  in that he  did, through  his advocates deny  the defendant  the opportunity  of filing  her defence and that it  was only fair and just that  the defendant  be allowed to file her defence  to  enable  the court do justice to the parties.  The appellant’s said application was supported by the affidavit of Shiraz Magan advocate sworn on 17th February 2009.

The advocate deposed that according to him, having filed an appearance on 18th December 2008, the defence was not due until 19th January, 2009 bearing in mind the old civil Procedure Rules. Further, that he had been in communication with  Mr Jackson Omwenga advocate for the plaintiff  and that on 15th January 2009 the two had  met  and agreed that  the plaintiff’s advocate  would serve  Mr Shiraz with a written  notice giving fifteen (15) days to file the  defence.

The record  shows that  a fresh request  for  judgment dated  12th January 2009 was made  on 13th January  2009 after the first one dated 19th November 2008 was rejected for  reasons that the affidavit  of service  did not  disclose  the date  and time of  service upon the defendant.  Mr Shiraz also annexed copies of correspondences exchanged between his firm and the firm of Mr Jackson Omwenga on a without prejudice basis, contending that he only learnt of the judgment when on 9th February 2009 he took a precautionary measure and deputized his clerk to establish the status of the matter only to learn that judgment had been requested and entered and on writing to the plaintiff’s advocates he received no response.

The plaintiff filed a replying affidavit on 27th May 2009 outlining the steps taken by his advocate before the judgment was entered.  He conceded that there was an offer to settle the claimed sum of money by monthly installment of shs 7500 which had been rejected. Further, that a scheduled meeting between his advocate and the defendant’s advocate did not materialize.  He further deposed that the defence raised no triable issues.  He denied ever authorizing his advocate to undertake to the defendant not to file a defence or any pleading.  In addition, the plaintiff maintained that by the time the defendant was seeking to negotiate out of court, a request for judgment had already been made.

By a ruling  delivered on 26th May 2009, Honourable  Okato (Mr) Principal Magistrate  dismissed the appellant’s application  for setting aside of exparte judgment  entered on 23rd January 2009.  In the trial magistrate’s view, the defence which was on record did not raise any triable issues and that the reasons raised for not filing the defence within the stipulated period were not plausible. It is that ruling and order of Okato (Principal Magistrate) that provoked this appeal.

The appellant’s Memorandum of Appeal raises   14 grounds of appeal, challenging the decision of the trial magistrate.  The grounds are that:

The trial magistrate erred in law and in fact in returning a finding that the application dated 17th February 2009 lacked merit and dismissed the same accordingly.

That the learned magistrate erred in fact and law  in dismissing  the application before it  in spite  of the clear  provisions  of Order 9A of  the Civil Procedure Rules, in particular Rule 10.

The learned magistrate erred in law and  fact in dismissing  the application dated  17th February 2009 in spite of the fact  that the  appellant  was entitled to the setting aside of the exparte judgment ex-debito  justiciae  owing to the provisions of Order  49 Rule 3A  of the Civil procedure Rules .

The learned Magistrate failed to exercise his discretion judiciously in favour of the appellant in view of the nature of the application before him and the overall surrounding circumstances of the case.

The learned  magistrate erred in placing undue weight  to authorities  produced  by the respondent  which had been distinguished by the appellant  advocates and further, by failing to consider  the decisions  supplied by the appellant  in support of the application.

The learned magistrate erred in fact and in law in failing to consider and apply the decision of PatelVs EA cargo Handling Services Ltd (1974) EA for the guiding principles in an application for setting aside exparte judgment.

The  learned  magistrate erred in fact and in  law in  relying  heavily on  “ without prejudice” communication submitted  by the respondent  in opposition to the  application  contrary  to the express provisions  of the Evidence Act, Cap 75 (sic) of Laws of Kenya.

The learned magistrate erred in fact and in law in failing to address the issues raised by the appellant in support of the application.

The learned  magistrate erred in fact and in  law in  holding  that the  appellant had  failed to annex a copy of the draft defence  and consequently, that such failure was fatal to the application in spite of  the court  confirming that there  was a defence on record.

The learned  magistrate erred in fact and in  law in  relying  on the defence  on record  to return a finding that the applicant  had admitted  the claim and  subsequently holding that  the said  defence was a sham, frivolous  and vexatious  while at the same time  asserting  that  no defence    had been exhibited .

The learned magistrate erred in fact and in law in failing to consider that the defence on record raised triable issues.

The learned  magistrate erred in fact and in  law in  holding  that the appellant  failed to  demonstrate wholly  it failed to file a defence  within the time required  while  there was ample explanation provided in  support of the application.

The learned  magistrate erred in  law and in  fact in condemning  the appellant  unheard  in the matter  thereby  locking him from the seat  of justice  and further  visiting  the error of the  advocate  upon the client.

The learned magistrate erred in law and in fact in taking into account irrelevant considerations on determining the application before it, to the detriment of the appellant.

The appellant prayed that the ruling of 26th May 2009 be wholly overturned, the application dated 17th February 2009 be allowed, with costs of this appeal and of the lower court to the appellant.The appellant  further prayed  for such  other order  be made  to meet  the ends of  justice  as the Honourable  court may please.

The appeal was admitted to hearing on 12th October 2012 by Honourable M.Angawa J. Directions   on appeal  were given  on18th September  2014  when  parties  agreed  to have the  appeal disposed  of by way of written submissions  filed  and  exchanged.

The appellant’s submissions  were filed on  20th September  2014  whereas the respondent  filed  hers on 19th November 2014, which I  have considered in detail.

This being  the first appeal, this court  is enjoined  to apply the provisions  of Section 78  of the Civil Procedure Act to:

Determine  a case finally;

Remand a case;

To frame  issues  and refer them for trial

Take additional evidence or to require the evidence to be taken.

Order a new trial.

Thus, in determining this appeal, this court has the powers, and duties as those conferred and imposed by the Act on courts of original jurisdiction in respect of suits instituted therein.

From the record and submissions filed by the respondent’s advocates, the issues for determination in this appeal are:

Whether  the appeal is  competent, as the  same was prosecuted  by counsel  who  was not on record and or who came on record  after judgment  and or without  leave  of court.

Whether there was admission of the claim by appellant.

Whether  the appellant has satisfied the  conditions that warrant  interference  with the discretion of the subordinate  court  to refuse  to set aside  exparte judgment in default  of defence.

The commencement point is to determine the competence and merits of this appeal.  It is submitted by the respondent  that the  appeal herein is incompetent  because the  claim in the lower court  was instituted  by  the law firm of Jackson Omwenga  & Company  Advocates who are still on record for  the plaintiff/respondent.  On the other  hand, that the firm of Mohamed  Madhani & Company  Advocates  did enter appearance  on behalf of the  appellant/defendants on 18th December  2008. The said advocates for the defendant continued representing the appellant in the lower court, sought to have the exparte judgment set aside in vain and proceeded to file Memorandum of Appeal on 2nd June 2009.  Further, that it is the same law firm of Mohamed Madhani & Company Advocates that compiled, filed and served the record of appeal upon the respondent’s counsel on 11th December 2009.  From 25th January 2012, the firm of Njenga Mbugua & Nyanjua Advocates started featuring on record.  That here is no semblance of the latter firm of advocates filing of any application seeking leave to act on behalf of the appellant in the place of Mohamed Madhani advocates.

This court has perused the record  as a whole  and I do not find any consent  filed  by the firm of Mohamed Madhani & Company  Advocates and Njenga  Mbugua & Nyanjua  advocates  seeking  for an order  to have  the latter  firm come  on record  in the place  of the former. Neither is there any application by the firm of Njenga Mbugua & Nyanjua Advocates seeking to take over the conduct of this matter on behalf of the Appellant from their former advocates. Not even a notice of appointment or change of advocates, however irregular it may be, is on record to show how Njenga Mbugua & Nyanjua Advocates found their way to this file.

It is  for those reasons  that Mr Otieno holding brief for Mr Omwenga  advocate for  the  respondent  did on 18th September 2014 raise that point of  law that  the firm of Njenga  Mbugua & Nyanjua Advocates  were  Improperly  on record.  Mr Njenga  informed  the court that  they had  filed their  notice of change but they  had not  served upon the respondent’s  advocates, and this court did direct that  the firm of Njenga, Mbugua  and Nyanjua advocates  do ensure  the same is  on record  and served  upon the respondent’s advocates within 7 days,.  The issue thereof was not revisited until the submissions by the respondent were filed.  The appellant’s counsel on record did not respond to that issue which this court must address, as it touched on the competence of the appeal herein.

Order  9 Rule  9  of the Civil Procedure Rules provides that:

“ when  there is change of advocate, or  when a party decides to act in person  having previously engaged an advocate  after judgment  has been passed, such  change  or intention to act in person  shall not be effected without an  order of the court:-

Upon an application with notice to all parties ;or

Upon consent filed between the outgoing advocate and the proposed incoming advocate or party intending to act in person as the case may be.

In the  case of David James Mbogo  vs Alfred C  Asikoyo & 3 Others, Bungoma HCC 71/2000where  the court was confronted with  a similar  situation, it  was held that:

“ such an advocate  can only be  competently on record after  obtaining  the  order pursuant  to Order  111 Rule 9A now  Order  9 Rule 9 of the Civil Procedure  Rules  and after  first filing the notice  of change  of advocates.  Failure to comply with the above mentioned conditions renders any pleadings filed incompetent for being improperly on record.”

The respondent urges this court, on the basis of the above holding and law, to strike out the appeal as it was being prosecuted by a stranger in the name of Njenga Mbugua & Nyanjua advocates.

Order  9 Rule 9 of the Civil Procedure Rules is  clear  that no  new advocate can take  over the conduct  of a suit  which has been  finally determined by any  court while  any proceedings  or related  proceedings are continuing  before the same court or in continuation  of the determined  matter through notice of change  of  advocate without the  leave and  order of the court, through a formal  application or by consent  of the  outgoing and the incoming  advocates.  In  addition, even if  there was  such consent, the same  has to be acknowledged  and or ordered by the  court whose  leave is intended  to be sought  as  was correctly  held by Muchelule  J in the  case of John Lagat vs Kipkemoi Terer & 2 Others  (2013) e KLR that:-

“There  was no application made to change  advocate….the appellant  swore  an affidavit  that  there was  consent  entered  into between his  previous advocates and his present advocate to  effect changes.  This was done following the judgment.  He annexed the said consent.  There is no evidence that the respondents were put in the picture.  But more importantly, the consent could not effect the change of advocates, “without the order of the court”.  No such order was sought or obtained.  It follows …..  That Anyoka & Associates are not properly on record for the appellant, and therefore the appeal and the application are incompetent.”

In the instant appeal, the facts happen to be a little different though.  The  court  file does not  reflect  that the  firm of Njenga, Mbugua & Nyanjua and Company advocates ever filed a notice of change or even appointment of advocates  to take  over the  conduct  of this appeal on behalf  of the appellant  from the firm of  Mohamed Madhani  & Company Advocates, which latter advocates were  on record  right  from the subordinate  court up to the filing  of this appeal.

Assuming that there was such notice of change or appointment of advocates as the case may be, filed by the firm of Njenga Mbugua & Nyanjua advocates, this court would be faced with the task of determining whether such change or appointment if any was validly on record.

However, as I have stated above, I have perused through  the entire  record  both the  lower court and  this  appeal and I have  not seen  any  notice  of change   of advocates  or even  notice  of appointment  of advocates  filed  by the firm of  Njenga, Mbugua & Nyanjua  advocates, on behalf  of the appellant. That being  the case, the said firm  of advocates are indeed  not on record and even if  they were, which is not the  case here, I have not seen any application  for leave  to take over  the conduct of  the matter  from the firm of Mohamed  and Madhani  advocates, who have been  on record  on behalf  of the appellant/defendant  since  18th December  2008 when they  entered Appearance  on behalf  of  the defendant  appellant, and  before judgment was entered  in favour  of the respondent.  There is also no consent filed and endorsed by the court relating to the takeover of legal representation for the appellant.

There  is also no notice  of cessation of  advocates  filed by the firm of Mohamed & Madhani advocates ceasing  to represent  the  appellant  as required   under Order 9 Rule  5  of the Civil Procedure  Rules which provides that:

“ a party suing or defending  by an advocate  shall be at liberty to change  his advocate  in any cause or matter, without  an order  for that purpose , but unless  and until  notice  of any change  of advocate is filed in  the court  in which such cause  or matter is  proceeding and served  in accordance  with Rule 6, the former advocate  shall, subject  to Rules 12 and 13 be considered  the advocate  of the party  until the final conclusion  of the cause  or matter including any  review of appeal.”

In addition, Order 9 Rule  6 of the Civil Procedure Rules obliges that :-

“ The party  giving the notice shall serve  on every other party to the cause or matter (not being a party in default as to entry of appearances and on the former advocate a copy of the notice endorsed  with a memorandum  stating that  the notice has been duly filed in  the appropriate  court (naming it).”

In this  case, there is not only lack of evidence of filing of such notice of change of advocates,  but also  there is no evidence that the advocates  who were on record  for the appellant Mohammed  and Madhani advocates   were served  with a  copy of notice of change of advocates. Further, the firm of Mohamed Madhani & Co advocates never filed any notice of cessation to act for the appellants.  The only statement on record is by the respondent in his submissions to the effect that “On19th January 2012   the law firm of Njenga, Mbugua and Nyanjua advocates filed and served a notice of change of advocates purporting to replace the firm of Mohamed Madhani and Company advocates.”

As earlier stated, there is no such notice of change of advocates filed on record.  Filing of documents has to be proved by way of physical presence of the document, a court date stamp and official payment receipt where a fee is chargeable.  None of the above is visible on the court file.  With the above scenario in mind, and the court having directed that the notice of change be served but none was served up to the time of writing this judgment, it follows that this court considers the firm of Mohamed  Madhani & Company advocates  to be the advocates who are validly on record  for the appellants, and therefore  indeed, as  submitted by the  respondent’s advocates, the firm of Njenga, Mbugua and Nyanjua  advocates are strangers  to this appeal.

The net effect would therefore be that any participation by the said firm of Njenga, Mbugua and Nyanjua advocates, by way of submissions, whether oral or in writing   by them is a nullity and the same are accordingly struck out and expunged from the record.

That leaves the appeal as filed by the appellant through the law firm of Mohamed Madhani & Company advocates competently on record though unprosecuted and vigorously opposed by the respondent’s advocate.

However, assuming  that the  above position  as determined is erroneous  due  to some mistake  or inadvertent error which is not  apparent  on the face of the  record, I would  then proceed  to determine  the merits  of the appeal  as filed and  as  vigorously opposed  by the respondent  by the submissions  filed on 19th November 2014.

I would  then consider  the issue  whether  there  was an  admission by the appellant  of the claim  against  her by the  respondent, by  virtue of  the correspondence  exchanged  between  the appellant’s  and the respondent’s advocates when the  suit was  pending  in the lower  court, which correspondences  were  on a  “ without prejudice”  basis.

The respondent  submitted  that at pages  22 line  2 of the record of appeal  are letters of  the appellant’s advocates stating  that the  appellant  had authorized  her advocates to  offer the respondent  the sum of kshs  150,000 in full and final settlement  of the  case.  Further,  that there are  other letters  contained  on pages 30,31 and 32  of the record of appeal to show that  the appellant  even proposed to liquidate the claim in monthly installments of kshs 7,500 commencing 31st  January 2009, which proposal was rejected by the respondent. All those correspondences   referred to above took place while the case was pending in court.

The appellant  resisted any reference  to  those correspondence  maintaining that they are  inadmissible  since they  were exchanged between the parties’  advocates in reply  “without  prejudice”  basis.

Examining the  “defence” filed by the  appellant, which the learned trial magistrate  by her  judgment “stumbled” on as  it was not  annexed to the affidavit in support of an  application for setting  aside of exparte judgment but nonetheless filed on 18th February  2009, the appellant  denied the respondent’s claim, and particulars, that  the respondent  either  sold or  delivered  motor vehicle  registration No.  KAN 222B to the appellant.  She  also denied  that there  was any outstanding  amount  in respect  of the balance  of the purchase  price as stated  in the paragraphs 3 and 4  of the plaint  or at all.

At  paragraph 4 , the ‘defence’  states that :-

“ In the event  that the court holds  that the plaintiff has sold  to the defendant the said  motor vehicle the defendant  shall seek  an order for the delivery to her  of the  said motor vehicle  against  which the  defendant is prepared to pay to the plaintiff  such sum as may be due from  her to the plaintiff.”

At paragraph 6 of he said defence, the defendant/appellant  unequivocally admits that there  was a written  agreement  after the plaintiff  persuaded  her to sign  and  that she  undertook to pay the  plaintiff  shs 170,000/- and the plaintiff  verbally promised to  pay her shs  50,000 upon completion of  the agreement. She then proceeds at paragraph 7 to state that  it was  the plaintiff who  had breached the said agreement  by failing to pay shs  50,000/- and also  failing to  deliver the said motor vehicle to the plaintiff; and that she  was prepared  to abide by the said agreement  in return  for payment of the said shs  50,000/-  and delivery of  the motor vehicle  with a duly executed transfer  form of the said motor  vehicle to the  defendant.  She also sought an order for the return of the registration book for motor vehicle No.  KAH 985E then   held by the plaintiff as security.

In the ‘defence’ as filed by the appellant, there was no counterclaim or a claim for a set off by the defendant in the aforesaid “defence” dated 17th February 2009 which ‘defence’ was filed after judgment had been entered against the defendant.  In addition, the “defence” in question was not marked as one of the annextures to the defendant’s supporting  affidavit  in support  of her  chamber summons  dated 17th February 2009 and filed  on 18th February 2009. It is also the said supporting affidavit sworn by the defendant/appellant that annexes the correspondences  exchanged  between  Mohamed  Madhani & company Advocates  and Jackson  Omwenga  & Company Advocates, which  correspondence  were exchanged  on a “without  prejudice” basis.

Among  the correspondences is  letter dated  2nd  February  2009 wherein  the appellant’s  advocate  writes that he had persuaded  his client  to pay shs  150,000/- in full and  final settlement  in one lump sum on or about  16th February  2009.  The appellant’s advocate also asked for a consent  letter  to that effect  and stated “ we would be  happy to sign the same” and that  the log book  pertaining  to motor vehicle  KAH 985E to be  simultaneously  released to  their client.

When Mr S.G. Magani advocate failed to hear  from Jackson Mr Omwenga advocate  on the annexed  correspondence, he wrote  another letter  on 9th February 2009  inquiring whether  Mr Omwenga  had now heard  from  his client.

By the same annextures filed by the appellant, she had earlier  on  15th January  2009 through  her counsel written  to Mr Omwenga  indicating that  she had offered  to pay  shs 150,000/- in full and final  settlement  to be liquidated  in monthly installment  of shs  7,500/- commencing  30th January 2009 and that the  plaintiff  would retain possession of the log book  for motor vehicle  KAH 985 E as security  for  the decretal  amount.

Further, the letter  of 30th January 2009 stated that should  the defendant manage  to sell this  vehicle  the plaintiff  to release the  log book  to the defendant  on condition that from the proceeds  of sale, the balance  of the decretal amount be paid  in full to  the plaintiff and the defendant  was to retain  the balance  if any.

From the above letters  and others annexed  to the  defendant/appellant’s supporting affidavit  and marked “SGMJ” which affidavit  was sworn  on 17th February  2009, it is crystal  clear that  although the said  letters  were written on a “without prejudice”basis, it is the defendant/appellant  herself  through her  advocate who introduced  the said  privileged  communication and disclosed  them to the  court.  The appellant cannot, therefore, turn around and blame the respondent for referring to the said communication on “without prejudice” bases as amounting to an admission.  Nonetheless, I have  found that  the trial magistrate did not refer or  rely on the said communication in her ruling  but as  an appellate court, I am  entitled to  examine the said letters  and arrive at my own conclusion, and I find that  the appellant  did waive  that privilege  by relying  on the said  letters  written by her advocate on a “without prejudice” basis by annexing them to her affidavit filed in court hence, they are admissible  in evidence.

Iam fortified on this holding by many decisions of the court among them- Millicent  Wambui vs Nairobi  Botanica Gardening Ltd cause No. 2512 of 2012the court stated that:-

“……the application revolves around “without prejudice” communication. The  use of the  term “ without prejudice” is  used by  parties  as a means  to enable  offers  and  counter  offers to be made to settle  disputes  or claims  without  fear that  the said  letters would later  be  used  by the opposite  party as an  admission  of liability in the  ensuing law  suit.  The words “without prejudice” impose upon the communication an exclusion of the use against the party making the statement in subsequent court proceedings. It is a  well established  rule that  admissions, concessions  or statements made  by parties in the process of trying  to resolve  a dispute  cannot be used against  that party if the dispute  is not resolvedthus resulting in litigation .  A party making a  “without prejudice “ offer does so on the basis that  they reserve the right  to  assert   their original  position, if the offer  is  rejected and litigation ensues.  For correspondence between parties to be protected it must be made in a genuine attempt to settle a dispute between the parties.”

In the case of Re Dainty rey ex Holt (1893) 2 QB 116, the court per  Vaughan Williams J, stated at page 119 thus:-

“In our  opinion, the rule  which excludes  documents  marked “without prejudice” has no application unless  some person  is in dispute  or negotiation with another, and terms  are offered  for the settlement  of the dispute or negotiations, and it seems to us  that  the  judge must  necessary be entitled  to look at  the document   in  order to determine  whether   the conditions, under which the rule  applies, exist.  The rule is a rule adopted to enable  disputants  without prejudices  to engage  in  discussion for the purpose  of arriving at terms  of peace, and unless there is a  dispute  or  negotiations  and an offer, the rule  has no  application.  It seems  to us that  the judge must  be entitled  to look at  the document  to determine  whether  the document  does contain  an offer of terms.  Moreover, we think that   the rule has no application to a document   which, in its nature, may prejudice the person to whom it is addressed.  It may be that the words  “ without  prejudice” are  intended  to mean  without prejudice  to the writer if the offer if  rejected’ but, in our opinion, the writer is not  entitled  to make this  reservation in respect  of a document  which, from its character, may  prejudice  the person  to whom it is addressed  If he should reject  the offer, and for  this reason also we think the  judge in entitled  to look at the document to determine its character.”

In another case  of Kawamambajo Ltd vs  Chase Bank and Another C.C. 344/2013, the court  stated that:-

“………….the above notwithstanding in Halsbury’s Laws of England VOL 17 paragraph 213, it “without prejudice” lette.r” As therefore  been seen hereinabove contents of a communication  made “without prejudice” are admissible  when there  has been a binding  agreement  between  the parties  and that once  a contract  is concluded: one can giveevidence  of the terms of that  “ without  prejudice letter……”

In yet another case D. Light Design Incorporated vs PowerPoint Systems East Africa Ltd HCC NO.  93/2013 the court found that :

“………….As was correctly submitted  by the  plaintiff’s counsel, negotiations  that are done  out of court must be  guarded jealously  to allow parties  to be free to  explore all possibilities  of an out of court settlement with  a view  to compromising  a suit.  However, there  was nothing to jealously guarded in this matter  as regards  he correspondence  that had been stated:- “ the contents  of communication made “ without  prejudice” are admissible  when  there  has been a binding  agreement  between the parties  arising  out of it, or  for the purpose  of deciding  whether  such  an agreement  has been  reached  and the fact  that such  communications have been  made( though not  their contents) is admissible  to show that negotiations  have taken place, but  they are  otherwise  not admissible………..”(emphasis added).

Similarly as was held  in the case  ofLochab Transport  Ltd vs  Kenya Arab Orient Insurance  Ltd (1986) e KLR:-

“….If an offer is made “without prejudice” evidence cannot be given on this offer.  If this offer is accepted, a contract is concluded and one can give evidence of the contract   and give evidence of the terms of that was attached in the joint affidavit.  The plaintiff does not tell this court how the letters and credit dates by the defendant to its clients were privileged.  This is  because  as was also correctly stated by counsel  for the defendant , the documents  in the said  joint  affidavit  were not  privileged  for the reason that  the plaintiff  and the defendant  did  not  intent  them to be  confidential.  This was  illustrated by the fact that  the letter  marked “without prejudice” basis  was to be  acted upon  and it was copied to other  persons  other than to the  advocates  of  both the  plaintiff  and the defendant .

From the above exposition of the law on admissibility or inadmissibility of communication exchanged on a “without prejudice” basis, it is apparentlyclear that the “without prejudice” communication, though largely protected, is not  absolutely admissible.  There  are circumstances under which the court can hold such  communication admissible, having regard  to  and  upon  examination of the communication in question.  Once a judge has all the material placed before them, they are in a position to make a fair decision in the circumstances.  In this instance case, albeit  the appellant in  his Memorandum of Appeal ground No. 7 faults  the  trial magistrate  for relying heavily on “without prejudice “ communication submitted by the respondent  in opposition  to the application  for setting aside exparte judgment  contrary  to the express provisions  of the Evidence  Act  (Cap 75 (sic ) of the Laws of Kenya), my careful perusal of  the  ruling of the  learned trial magistrate delivered on 26th May 2009  does not reveal any single reference or reliance on any of  the letters  submitted in evidence on a “without prejudice”  basis to make her decision.  The trial  magistrate was clear in her ruling  that in that  application, “ it was incumbent  upon the  defendant to demonstrate  that  she has  a defence to the plaintiff’s  claim and annex  a draft defence  which raises  triable  issues,” and place before the court  reasons why the defence was  not filed in time. The trial magistrate further found that the applicant /appellant had not given any reasons why she did not file a defence.  She nevertheless did not ignore the contents of the “defence” which she had   stumbled upon while perusing the court file.  She  perused  that “defence” and found that  the paragraph  6 thereof admitted that there was an  agreement  signed by the defendant  who  undertook  to pay the plaintiff  shs 170,000 and the trial magistrate  stated  that assuming  that the said  defence  had been annexed,  then the same is  an admission of the defendant’s  indebtedness  to the plaintiff and as such a sham, frivolous and vexatious and that  it would be  unjust  to set aside  the judgment  entered  exparte.

Therefore, on whether or not there was an admission by the appellant of the respondent’s claim, the answer is in the affirmative. More evidence of admission of indebtedness for shs 170,000 by the appellant to the respondent is contained in the appellant’s annexture “SGM2” which is a bundle of letters as well as at paragraph 6 of the “defence”  dated 17th February 2009 which the trial magistrate stumbled upon.

As I have stated above, the story  that the  plaintiff /respondent breached  the agreement  between the parties or  that he never  delivered to her the  said  motor vehicle  does not  arise  as the appellant had already  by her letter  of 15th January 2009 made it  clear that she  had  the motor vehicle  and had intended  to sell  it.  How could she sell it without possessing it in the first place and or without asking to take possession of it? In addition, it  would not  have taken the defendant/appellant  all that time  trying  to persuade the  plaintiff /respondent to accept  payment of shs 150,000/- all inclusive or by installment  without  asking for  release of  the sold motor vehicle to her.

Although  the appellant in her “defence”  at paragraph  7 alleges that the plaintiff had not executed  the transfer form of the said motor vehicle to her, the  agreement  in question  as annexed  to the  replying affidavit  by the  respondent /plaintiff in opposition to an application for stay of  execution pending  appeal was  clear that the respondent  was just a  beneficial owner and the motor vehicle  was registered  in the names of Pearl Developers  Ltd  from whom the respondent  had bought, and transfer would therefore not be expected to come from one that had no legal title to the motor vehicle.  Furthermore, the sale agreement was clear    at paragraph 4) that“ the  official  transfer  of the said  motor vehicle shall  be effected  upon final payment, and the purchaser  shall pay  the stamp duty and/or attendant thereto,” which the appellant did not honour. Since there was no evidence of final payment having been made, the matter of transfer of the vehicle would not be issue at that time.

Further, the respondent  did depose at  paragraphs 3,5, of the replying  affidavit  sworn on 6th July 2009 that upon signing   the agreement  and receiving  shs 330,000 the appellant  took   possession of the motor vehicle  along with  its transfer  documents  for purposes  of registration. At paragraph 5 of the same affidavit  of 6th July 2009 the respondent deposed  that the appellant  had already sold the motor vehicle and that the respondent surrendered  the original  transfer  documents to the appellant  to enable  her receive  the purchase price of  the said vehicle from third parties.  This  affidavit  evidence  was never  controverted  or at all  by the appellant during the  proceedings  for stay of execution  pending  this appeal.  I therefore find  that the trial  magistrate  was  correct  in finding that  the defence which she stumbled  upon did not raise any triable  or arguable issues.

Accordingly, having found herein that the trial magistrate did not rely on the purported communication to arrive at her decision, I say no more than proceed to dismiss the ground No 7 of her Memorandum of Appeal.

In the same  vein, I dismiss  ground No 9 and 10, 11, 12  of the Memorandum of Appeal which allege  that the trial magistrate  erred in law  and fact in  holding  that the appellant  had failed to annex  a copy of the draft defence  and that  such failure   was fatal to the application  in spite  of the court confirming  that there  was a defence on record. In my view, the appellant’s grounds of appeal, contained therein have no basis or at all and must be disregarded.  As I have  expressed  above, the learned magistrate  indeed found, which finding I hold to have been  correct, as a  matter of fact  that  the appellant had not annexed  a draft defence to  demonstrate that it had  triable issues, to persuade  the court  to exercise  its discretion and set aside  the exparte judgment.  I find that it was clear  in the trial magistrate’s mind that since there was judgment  in default  of defence, she no doubt expected  that any semblance   of defence  would have  been in  a form of an  annexture to the affidavit, but  there was  none.  Instead, she indeed  stumbled  upon  a defence filed on  17th February 2009 and  she did examine  that defence  and  found that  it raised  no triable  issues  hence she  saw no need  of  exercising  her  discretion  to set aside the exparte  judgment  as it would not have served any  useful purpose.  The trial magistrate then concluded that “without a reasonable  defence to the plaintiff’s claim it  would be  unjust to set  aside the judgment exparte….”

Under those circumstances, it appeared as though the ‘defence’ as filed  was  irregular  and therefore  there was no  need to examining it.  However, I find that however irregular it was on record andthe trial magistrate correctly exercised her discretion in examining it and arriving at a conclusion that  the said defence  was in any event, an admission of the plaintiff’s claim.

I now move to the issue of whether  the trial magistrate erred in law and  fact in failing to exercise her discretion to  set aside  the  exparte judgment  in default of  defence and  whether   it was clear that the  said judgment  was applied   for  prematurely  contrary to the provisions  of  the then Order  9A of the Civil Procedure Rules and in particular Rule 10.  This issue when answered, in essence settles grounds 2, 3,4,5,6,8,13 and 14 of the Memorandum of Appeal.  The record shows that the suit in the lower court was filed on 23rd October 2008.  Summons to enter appearance  were issued  on 28th October 2008 and served upon  the defendant/appellant  herein on 31st  October 2008 at  the Mitsumi Computer Garage  situated  on Muthithi Road.  This is according to the affidavit of service sworn on 19th November 2008 by Nathan Pala a licensed process server and which is not rebutted or denied by the appellant.

On 18th December 2008, the appellant herein did enter appearance through the law firm of Mohamed Madhani & Company Advocates. Examining  the summons to enter appearance, they were clear on the  face thereof  and  as was  required under  Order  5  Rule  1  of the  old Civil Procedure Rules, that the defendant  was required  within 15 days  from the date  of service  thereof to enter an appearance  in the  said suit and in default the plaintiff  may proceed with the suit  and judgment  may be given in her absence.

The defendant/appellant entered appearance over 1 ½ months from the date when she was served.  She was expected to have entered an appearance on or before 16th November, 2008.  As at  18th December  2008 when the  defendant/appellant entered an appearance, the plaintiff/respondent  had on  24th November  2008 by a request  for judgment  dated 19th November, 2008, requested  for judgment  in default of appearance. However, when that request  for judgment was placed  before Ag Principal Magistrate on 27th November 2007 it was rejected on the ground that  the date  and time of service  was not indicated. Thus, the affidavit  of service  was  considered  improper. This prompted  the respondent/plaintiff’s  advocates to wait  and without filing a further affidavit  of service to  show that  there was a further service  of  Summons effected  on the appellant, they requested for judgment  on 13th  January 2009  in default  of defence.  The  trial magistrate  then on 16th January 2009  checked the record and  on 23rd January 2009 accepted and endorsed  the request  for judgment  for a liquidated  sum of shs  170,000/- as pleaded and a decree was issued  to that effect  on   23rd January 2009.

During that  period when  judgment  was entered  and from the annextures  on the affidavits filed by the appellant and respondent, the appellant  had opened  up a  channel of negotiations  with a view  to  settling  the matter out of court, which negotiations  were being  held on a “without prejudice” basis. However, from the onset, it appears  that the  appellant  was pushing  her offers  down the respondent’s throat  as there  is no positive  communication from the respondent  to show that there was willingness to resolve  the dispute  out of court.  Although  the appellant’s letter dated 15th January 2009 talks  of discussions, the response by Mr  Omwenga  dated   26th January 2009 was non committal and only asked  for the nature of the defendant’s  proposed  defence along  with copy of the agreement, and  rejecting  the proposal to liquidate the principal  sum by monthly installment  of shs  7,500.

In other words, there is nothing on record to show that the plaintiff’s advocate undertook not to obtain judgment in default of defence.  The defence  counsel’s assertion that the parties were negotiating for a settlement was countered  by the plaintiffs own replying affidavit  filed  on 27th February 2009 denying ever authorizing  his advocate  to undertake  not to file a defence  or any court proceedings.  Needless to say, it  appears that by the time the appellant’s counsel was  seeking  for notice  of 15 days  from the respondent, the latter had already  applied for judgment  in default of defence, although  the request  had not been endorsed by  the court.

The appellant claims that  judgment was entered  irregularly, contrary to the  provisions of Order 49  Rule 3A of the  Civil Procedure Rules  which provide  that the  period between 21st December  and 6th January are to be excluded  in computing time for  doing any act required  under the Act. That is the law.  However, it is clear  from the  record that  judgment  was  requested  on 13th January 2009 and  it was not until 23rd January 2009 that the same  was entered.  Calculating the days from 18th December 2008 when the defendant/appellant entered an appearance however   irregular, there were 18 clear days between 18th December 2008 and 23rd January 2009.  The law applicable only required 15 days within which to file defence from the date of entering an appearance thus, by 18th January 2009, excluding 21st December to 6th January. In the premise, it matters not, that the request  for judgment was made on 13th January 2009 as the said  judgment  was never entered  before  elapse of 15 days  from the date  of appearance; and neither was  such judgment  entered  within  the  period that  time legally stopped running.

Thus, assuming that the Memorandum of Appearance  was entered  regularly  on 18th December 2008, then the defence  was due  on or before 18th January 2009, as 21st December 2008 to 6th January 2009 were excluded from  computation of time for  filing such defence.   However, on record  is a defence dated 17th February 2009 and filed  on 18th February 2009, which defence in my view  cannot be said to  have been  validly  on record, having  been filed two months  from the date of appearance without leave of court.

Furthermore, albeit  that defence  was  filed together  with  Chamber Summons  seeking to set aside  exparte  judgment, there is  no evidence that  the same was an annexture.  It was therefore irregularly sneaked into the file. The appellant  was only awaken  by service  upon her  advocate of notice of entry of judgment dated 10th February 2009 and served   on  her 11th February 2009 that is when  she filed  chamber summons dated 17th February  2009 seeking to set aside  exparte judgment.  Nothing prevented the appellant from making reference to a draft defence in her supporting affidavit and neither did she say that such omission was inadvertent.  No reference was also made to that defence in the application to set aside exparte judgment, not even in the submissions by the appellant.

In my view, therefore, the fact that the respondent requested for judgment on 13th January 2009, which judgment was not entered against the defendant/appellant until 23rd January 2009 does not render the judgment entered irregular.  To hold otherwise would be to assist the appellant engage the court in theatrical procedural technical maneuvers to defeat justice.

Further, as at  12th February 2009 when the  appellant’s  advocate  was writing  to Mr Omwenga  advocate after being  served with  notice of entry of judgment, the appellant ought  to have   read the signs of the times that the respondent  was not interested in settling  the matter out of court, yet the advocate for the appellant  was still commanding  and issuing ultimatums to the respondent’s  counsel “ to confirm in writing by close of business on Friday  the 13th  February 2009 that  you are prepared  to set aside the judgment by consent” and threatening  that “ should we fail to  receive such written confirmation as aforesaid  we have instructions  to apply  for setting aside  the judgment whilst  at the  same time  filing the defence  as per our  “agreement.” There is no such thing as an agreement between the two advocates demonstrated on record.  Further, there is  absolutely no  reason why S.G.Maghani advocate  could  find himself considerably dismayed that  judgment  had been obtained, there being  no evidence of an agreement that no judgment would be  requisitioned, and without  such agreement being  brought to the attention of the court, the allegation only amounted to nothing that did not  warrant  the exercise  of the court ‘s judicial discretion.

Even the appellant’s annexture letter dated  15th January 2009  only shows that her advocates  had spoken  to Mr Omwenga  that morning  of 15th January 2009  by which time no  judgment  had been entered.  What  the appellant  is telling  this court  in her  Memorandum of Appeal  is that  she could  disregard  the  time frame  for entering  appearance  and filing  of defence to the claim  but still insist  that  the respondent  must abide by the rules  that time  stopped  running from 21st  December  2008 to 6th January 2009 and therefore  the respondent  should not  have filed a  request  for judgment  within that  period  of  time  otherwise it would have been premature.  Further, that in any event, the appellant could not have filed her defence because time had stopped running but could still not file it after the time started running because there was an agreement between their advocates which agreement is not in sight.

I therefore  find the  ground of appeal  challenging  the time within which  a request  for judgment  could be  made unmerited  and dismiss the same. I reiterate that the applicable provisions as at the time exparte judgment was entered are the old pre-2010 Civil Procedure Rules.

The last issue for determination  flows   from issue   No. 3 as to  whether this court  having found  that the judgment  as  entered against  the appellant  was regular, could  have exercised  its discretion in favour of the appellant  and set  aside the regular exparte judgment.

In dismissing the appellant’s application for setting aside exparte judgment, the  trial court was  obviously exercising  judicial discretion  as  was espoused  in the case of Mbogo vs Another  vs Shah EA [1968] page  15 that :

“ an appellate court will not interfere  with the exercise  of the trial court’s discretion unless it is satisfied  that the court  in exercising  its discretion misdirected  itself  in some matters and  as a result arrived at  a decision that  was erroneous, or unless  it is  manifest from the case as a whole that the court has been clearly wrong in the exercise of  judicial discretion and that as  a result there has been misjustice.”

The  above principles  further establish  that a court’s discretion to set aside  an exparte  judgment or order is  intended to avoid injustice of hardship resulting from an accident, inadvertent  or inexcusable mistake or error, but not  to assist  a person who deliberately seeks  to obstruct or delay  the cause of justice.  I am bound by the above principles for they espouse good law and I have no good reason to depart from them.

I have carefully examined the reasons for setting aside of exparte judgment as presented before the learned magistrate by the appellant,   the opposition thereto and the decision by the trial magistrate.  But first I have an observation that the sale agreement, subject matter of the dispute was never brought to the attention   of the trial court.  However, during   the hearing of an application  for stay pending  appeal herein, the  respondent  swore an  affidavit  and annexed  thereto  exhibit IN1 on 6th  July 2009.  I have therefore, upon serious examination  of the said agreement, anxiously  asked myself whether  this was  indeed a case that  deserved the exercise  of  judicial discretion in favour of the appellant  and have  come to  the conclusion that  it did not  merit the  discretion of the trial court  for the following reasons;-

That in the “defence” that was irregularly ob record, the appellant admitted entering into an agreement with the respondent for purchase of the motor vehicle registration No.  KAN 222B.

Although the appellant  maintains that  possession of the said motor vehicle had not been given to her and that she expected the respondent to surrender the log book  for motor vehicle  KAH 985E which  he held as security  in lieu until  she clears  the balance  of purchase price outstanding, the appellant  never attempted  to file  a semblance  of a counter claim to the  respondent’s claim.

It is also clear from the said sale agreement that the vendor was mandated to surrender the purchased motor vehicle upon the signing of the agreement.  The agreement  having  been signed, and the appellant having acknowledged that agreement in her sneaked in defence, no doubt, the motor  vehicle subject  matter of the  sale  must have  been surrendered  otherwise  she could have  demanded for it during the correspondence between the parties exchanged while the suit was pending and even filed  a counterclaim  for surrender of the purchased  motor vehicle to her.

That there was a clear admission by the appellant of the outstanding amount being balance of the purchase price of the subject motor vehicle.

For those reasons, I find that the  trial magistrate correctly exercised  his  discretion in rejecting the application for setting aside  the exparte  judgment  which application, in my view, was intended  to delay a fair  trial  of the suit  and an over reach  hence, delay  justice  for  the respondent.

In the end, I find that the appeal herein as filed lacks merit and I proceed to dismiss it on all the grounds of appeal.  I uphold the trial magistrate’s findings and find that he correctly exercised his discretion in rejecting   the appellants’ application for setting aside exparte judgment entered in favour of the respondent.

I award costs of this appeal, of the application and the suit in the court below to the respondent.

Dated, signed and delivered at Nairobi this 18th day of May 2015.

R.E. ABURILI

JUDGE

18. 5.2015

Coram R.E. Aburili J

C.A. Kavata

Miss Muinde holding brief for Omwenga for respondent

No appearance for appellant

Court- Judgment was rescheduled from 26th March 2015 when the court was on recess.  Judgment now read and pronounced in open court as notified to the parties and cause listed.

R.E. ABURILI

JUDGE

18/5/2015