Tumaz & Tumaz Enterprises Limited & 2 others v San Elecricals Limited [2022] KEHC 15485 (KLR)

Tumaz & Tumaz Enterprises Limited & 2 others v San Elecricals Limited (Civil Appeal E068 of 2022) [2022] KEHC 15485 (KLR) (15 November 2022) (Ruling)

Neutral citation: [2022] KEHC 15485 (KLR)

Republic of Kenya

In the High Court at Kisumu

Civil Appeal E068 of 2022

RE Aburili, J

November 15, 2022

Between

Tumaz & Tumaz Enterprises Limited

1st Appellant

Mwal-Mart Limited

2nd Appellant

Julius Mwale

3rd Appellant

and

San Elecricals Limited

Respondent

Ruling

1. The appellants herein are also the appellants. They filed the instant application pursuant to the provisions of sections 1A, 1B, 3A and 63(c) and (e) of the Civil Procedure Act and Order 42 Rule 6 of the Civil Procedure Rulesseeking the following orders:a.spent.b.That there be stay of proceedings in Kisumu CMCC no 457 of 2018 San Electricals Limited v Tumaz and Tumaz Enterprises Limited & 2 others pending the hearing and determination this application inter parties.c.That there be stay of proceedings in Kisumu CMCC no 457 of 2018 San Electricals Limited v Tumaz and Tumaz Enterprises Limited & 2 others pending the hearing and determination of the appeal.d.Other orders or directions as may appear to this court and convenient to grant.e.Costs of the application be in the cause.

2. The application is supported by the affidavit of Julius Mwale as well as the grounds contained on the face of the application which briefly are that the learned trial magistrate struck out the appellants’ defence vide a ruling delivered on 9/6/2022 on the basis of a disputed CR-12 and that the applicants have already filed their Memorandum of Appeal against the said ruling. He avers that despite the pendency of the appeal, the subordinate court has listed the matter for hearing on 8/11/2022 and therefore if the orders of stay of proceedings sought herein are declined, the matter will be heard and determined hence the appeal will ultimately be rendered nugatory. He avers that the stay will aid in preserving the subject matter of the appeal pending the resolution of the contested issues.

3. The respondent opposed the application by filing a replying affidavit sworn on October 11, 2022 by Nishit Chotal. He deposes that the respondent supplied electricals and electronics to the 1st appellant which were paid for by cheque which was subsequently dishonoured on the grounds that the drawer had stopped payment. As a result of the dishonour, the respondent filed suit in the subordinate court claiming USD 31, 320 and thereafter an application seeking to strike out the appellants’ statement of defence. The application was allowed and judgement entered against the 1st respondent.

4. He further depones that whereas the application is premised on Order 42 Rule 6 of the Civil Procedure Rules, the appellants have failed to demonstrate the substantial loss they stand to suffer as well as furnish security for the due performance of the decree. He also accuses the appellants of unreasonable delay in bringing forth the application. He thus beseeches the court to dismiss the application.

5. The application was heard orally in court with counsel for the parties making their respective rival submissions. Mr. Mbeka learned counsel for the appellants submitted that the court has the discretion to grant the orders sought pursuant to the decisions In Re Global Tours and Travel Limited; Winding Up Cause No 43 of 2000.

6. Learned counsel cited Niazsons (K) Ltdvchina Roads and Bridges LimitedNrb HCC 126 of 1999 and Ezekiel Mule MusembivH Young & Co Ltd CA 24 of 2018 for the proposition that both the appeal and the application are not vexatious for the reason that the appeal may be rendered nugatory if the subordinate court matter is allowed to proceed to its determination.

7. Counsel urged the court to accord the appellants an opportunity to ventilate the issues through the appeal in that they will suffer substantial loss since the suit relates to breach of contract and interest at the rate of 21%. That in any event of delay, the respondent will be compensated.

8. Mr. Mwesigwa counsel for the respondent submitted in opposition that judgement in the subordinate court was entered only against the 1st appellant and there are no proceedings to be stayed, that the appellants were therefore required to pursue an application for stay of execution. That if the court is inclined to allow the application, the sum of USD 31, 320 or its equivalent in Kenyan currency be deposited in court as security for due performance of the decree.

9. On the issue of inordinate delay, counsel for the respondent submitted that the application was filed nearly 9 months after the ruling by the subordinate court which period he terms inordinate.

Analysis and determination. 10. I have considered the application, the opposition thereto and oral rival submissions by both parties’ counsel as well as the applicable law and find that the issue commending itself for determination is whether the appellants are entitled to the orders sought.

11. The ruling that is impugned struck out the appellants’ statement of defence. The respondent on its part contends that only the 1st appellant’s statement of defence was struck, judgement entered and a bill of costs filed. It is the respondent’s contention therefore that there are no proceedings to be stayed. In support, a bill of costs filed at the subordinate court registry on 16/9/2022 is annexed to the respondent’s replying affidavit. If this be the position, then the respondent’s argument that there are no proceedings to be stayed is true.

12. I have perused the respondent’s replying affidavit and thereon, is annexed the appellants’ joint statement of defence which shows that the defence was filed on behalf of the 3 appellants although judgment was entered against the 1st defendant alone and the suit is to proceed as against the other 2 defendants.

13. The memorandum of appeal filed herein lists 11 grounds of appeal among them, the ground that the trial magistrate misapprehended the law by striking out the defence only against the 1st appellant yet the same was a joint statement of defence. It is further stated that the striking out of the defence violates the appellants right to fair hearing enshrined in article 50 of the Constitution.

14. It is now settled law that striking out a pleading is a draconian measure that has the effect of driving a litigant out of the seat of justice so that the power is reserved for the rarest of cases where the pleading is so hopeless that even an amendment cannot cure.

15. As to when courts can unleash the power to strike out a pleading, it was stated inD T Dobie and Company (Kenya) LtdvMuchina(1982) KLR 1 where Madan JA held that:“The power to strike out should be exercised after the Court has considered all facts, but it must not embark on the merits of the case itself as this is solely reserved for the trial Judge. On an application to strike out pleadings, no opinion should be expressed as this would prejudice fair trial and would restrict the freedom of the trial Judge in disposing the case.”

16. Similarly, in Wachira Waruru &anotherv Francis Oyatsi (2002) 2 EA 664 the Court of Appeal held that:“In an application for stay of proceeding pending appeal where the Judgement is entered in an application for striking out a defence, it cannot be gainsaid that unless a stay is granted the appeal will be rendered nugatory since if the process of assessing damages goes on and the appeal is allowed that process would be an exercise in futility.”

17. It is worth noting that at this point in time, the court does not have the benefit of the subordinate court’s record since the record of appeal has not been filed as yet. What is before me is a scanned copy of the impugned handwritten ruling. For the court to be in a position to make an informed decision on the propriety of the trial court’s order, the court ought to have carefully inspected the learned magistrate’s reasoning for the decision so arrived at.

18. In determining the instant application, I am duty-bound to delicately balance the conflicting appellant’s right to have their matter heard on the appeal to ventilate their grievances and the respondent’s right to enjoy the fruits of its judgement.

19. This court is cognizant of the fact that what is before the court is an interlocutory application where the parties have not been heard on the real issues raised in the appeal. The less is said of the merits of the appeal the better lest the court make a determination of the appeal prematurely which is reserved after hearing the appeal on merit. OurConstitution under article 50 guarantees every person the right to be heard, the appellants are no exception.

20. On the issue of delay, I note that the impugned ruling was delivered onJune 9, 2022 while the application was filed on September 21, 2022 which is three months apart and not 9 months.

21. I also note that the appellants wrote a letter to the executive officer on June 10, 2022requesting for the proceedings. They state that they are yet to obtain the proceedings to prepare and compile the record of appeal. The delay is 3 months or thereabouts which I find and hold not to be inordinate in the circumstances of this case.

22. For the reasons stated in the preceding paragraphs, I am inclined to allow the application in the following terms:a.The appellants are granted orders of stay of further proceedings in Kisumu CMCC no. 457 of 2018 San Electricals Limited vs tumaz and Tumaz Enterprises Limited & 2 others pending the hearing and determination of the appeal.b.The appellants to prepare, file and serve the record of appeal within 30 days from the date hereof failure of which the order in paragraph (a) above shall automatically lapse unless extended by the court.c.Costs shall be in the appeal.

DATED, SIGNED AND DELIVERED AT KISUMU THIS 15TH DAY OF NOVEMBER, 2022R.E. ABURILIJUDGE