Uneek Freight Services Limited v Typotach Imaging Systems Limited [2021] KEHC 9419 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI COMMERCIAL & TAX DIVISION

CIVIL SUIT NO. 219 OF 2019

UNEEK FREIGHT SERVICES LIMITED................................PLIANTIFF

VERSUS

TYPOTACH IMAGING SYSTEMS LIMITED.....................DEFENDANT

RULING

By Notice of Motion Application dated 9th January 2020, filed together with a supporting affidavit bought under the provisions of Order 2, Rule 15(1) (b) (c) and (d) and Order 51 Rule 1 and 4 of the Civil Procedure Rules, 2010 and Section 1A, 1B, and 3A of the Civil Procedure Act and all other enabling provisions of the law the Applicant/Plaintiff sought orders:-

a) The statement of defence dated 18th September 2019 be struck out.

b) The costs of this application be provided for.

c) Any other order be made as this Court may deem fit.

In the supporting affidavit sworn by Michael Mamuta an Accountant of the Plaintiff/Applicant herein, he stated that between August 2015 and May 2018, the Defendant received freight services from the Plaintiff, which services were rendered and accepted by the Defendant.

The Plaintiff stated that it issued invoices to the Defendant for the services rendered but the Defendant failed to pay for the same as agreed. Marked “MM1” are copies of invoices, delivery notes and waybills issued in respect of services rendered.

The Defendant admitted its indebtedness to the Plaintiff through a letter dated 6th May 2016, wherein the Defendant’s Managing Director gave a payment proposal and reiterated their commitment to clear the outstanding bill. Marked “MM2” is a copy of the said letter.

The Plaintiff vide a letter dated 9th May 2016 reluctantly agreed to the Defendants proposal and requested for a further commitment and postdated cheques. Marked “MM3” is a copy of the said letter.

The Defendant defaulted on its payment proposal and has remained indebted to the Plaintiff since then. The Plaintiffs claim is for € 180,078. 32 due and owing from the Defendant to the Plaintiff as shown in the stated of account marked “MM4”

On 17th July 2018, the Plaintiff issued a demand notice to the Defendant. A copy of the said demand is marked as “MM5”

The Plaintiff stated that the defence filed by the Defendant lacks substance and is only intended to delay the fair determination of this suit.

REPLYING AFFIDAVIT

The application is opposed vide a replying affidavit dated 27th January 2020, sworn by Alfred Kandarah the Managing Director of the Defendant/Respondent. He averred that the Defendant’s defence is merited and is not an abuse of the court process in anyway.

The Plaintiff has indeed confirmed that they filed CMCC NO. 4735 OF 2016 UNEEK FREIGHT SERVICE LIMITED VS TYPOTECH IMAGING SYSTEMS LIMITED which has been active in court until, the Plaintiff filed withdrawal notice on 2nd December 2019. Marked AK1 is a copy of the said notice.

The Defendant averred that its defence raises reasonable issues for trial and the Plaintiff’s rush to withdraw the Lower Court’s matter is a ploy to defeat the Defendant’s defence.

The Defendant stated that there was no greater duty for the court than to ensure that it maintains the integrity of the system of administration of justice and ensure that justice is not only done but is seen to be done by, amongst other measures, stopping litigation brought for ulterior and extraneous considerations.

That even though none of the previous suits were determined on merit, the fact that they were abandoned before determination and fresh ones brought was in itself an abuse of the process of the court sufficient under Order 2 Rule 15 (1) (b) and (d) to justify striking out. The Plaintiff’s application should therefore be dismissed with costs.

PLAINTIFF/APPLICANT’S SUBMISSIONS

The Plaintiff submitted that the Defendant’s defence is weak beyond redemption. The defence does not raise any triable issues. It simply denies the Plaintiff’s claim.

The issues raised in the Replying Affidavit are; first the suit CMCC NO. 4735 OF 2016 UNEEK FREIGHT SERVICES LIMITED VS TYPOTECH IMAGING SYSTEMS LIMITED which had been wrongly filed in the lower court and later withdrawn by way of notice dated 29th November 2019. The Defendant claims that the Plaintiff is abusing the court process with numerous pleadings targeting various forums. It is common knowledge that a Plaintiff can withdraw a suit at any time before hearing and such withdrawal shall not be a defence to any subsequent action.

In Beijing Industrial & Research Designing Institute vs Laggon Development Limited [2015]eKLR, the Court of Appeal stated that;

“The above provision presents three clear scenarios regarding discontinuance of suits or withdrawal of claims.

The first scenario arises where the suit has not been set down for hearing. In such an instance, the Plaintiff is at liberty, any time, to discontinue the suit or to withdraw the claim or any part thereof. All that is required of the Plaintiff is to give notice in writing to that effect and serve it upon all the parties. In that scenario, the Plaintiff has an absolute right to withdraw his suit, which we agree cannot be curtailed.”

The Defendants claim therefore that the Plaintiff’s withdrawal of the suit in the Lower Court is a ploy to defeat the Defendant’s defence is baseless since the Lower Court lacks pecuniary jurisdiction to determine it.

The Plaintiff submitted that it attached an account statement and invoices indicating the outstanding amount. The same invoices were issued to the Defendant Company on diverse dates between August 2015 and May 2018. Further, the Defendant has not provided any evidence to this Court to show that they settled the invoices.

The account statement shows how the aggregate amount was arrived at. In Muguga General Stores Ltd vs Pepco Distributors Ltd (1987) KLR 150, the court held that;

“It is not sufficient to just deny liability without giving some reasons….the defendant has to give a reason as to why he did not owe the money such as the absence of a contract or that payment had been made and could be proved.”

In Margaret NjeriMbugua vs Kirk MweyaNyaga[2016]eKLR, the following authorities were quoted with approval;

Thorn vs Holdsworth (1876) 3 Ch. 637 at 640, which was quoted with approval in Raghbir Singh Chatte vs National Bank of Kenya Limited [1996] eKLR, the court held;

“when a party in any pleading denied an allegation of fact in the previous pleading of the opposite party, he must not do so evasively, but answer the point of substance. Thus, if it be alleged that he received a certain sum of money, it shall not be sufficient to deny that he received that particular amount, but he must deny that he received that sum, or any part thereof, or else set out how much he received. And so, when a matter of fact is alleged with diverse circumstances, it shall not be sufficient to deny it as alleged along those circumstances, but fair and substantial answer must be given.”

In the Raghbir Singh Chatte case (supra) the court also quoted with approval the case of Magonga General Stores (Supra) where Platt JA (as he then was) stated as follows;

“First of all a mere denial is not a sufficient defence in this type of case there must be some reason why the Defendant does not owe the money. Either there was no contract or it was not carried out and failed. It could also be that the payment had been made and could be proved. It is not sufficient therefore simply to deny liability without some reason given.”

The Plaintiff submitted that if the Defendant had a complaint about the amount then they would have communicated officially to the Plaintiff. This claim is an afterthought, made in bad faith.

In the Plaintiff’s attached letter dated 6th May 2016 from the Defendant marked as “MM2” where the Defendant admitted the debt owed to the Plaintiff and gave a payment proposal which was never honoured. The Defendant in its Replying Affidavit has not addressed this letter at all.

The Plaintiff submitted that the Defendant’s defence is frivolous and vexatious and it is only intended at causing delay in the fair trial of this suit. There is clear and undisputed proof that the Defendant is indebted to the Plaintiff.

DEFENDANT/RESPONDENT’S SUBMISSIONS

The Respondent in its submissions relied on the case of Co-operative

Merchant Bank Ltd vs George Fredrick Wekesa- Civil Appeal No. 54 of 1999, the Court summarized the principles as follows;

“The power of the Court to strike out a pleading under Order 6 Rule 13(1) (b) (c) and (d) is discretionary and an appellate court will not interfere with the exercise of the power unless it is clear that there was either an error on principle or that the trial Judge was plainly wrong…. Striking out a pleading is a draconian act, which may only be resorted to, in plain cases …… whether or not a case is plain is a matter of fact….. A court may only strike out pleadings where they disclose no semblance of a cause of action or defence and are incurable by amendment.”

The Applicant filed a further affidavit on 2nd March 2020 trying to justify the reason why CMCC NO. 4735 OF 2016 UNEEK FREIGHT SERVICES LIMITED VS TYPOTECH IMAGING SYSTEMS LIMITED was filed then withdrawn after filing the present matter.

The Respondent submitted that the issue of pecuniary jurisdiction is neither here or there since the claim is within the jurisdiction of Chief Magistrate’s Court. The matter is therefore an abuse of the court process. The amount in Euros when converted to Kenyan shillings is less than Ksh 25 Million, which can be handled before the Lower Courts.

The Respondent submitted that the Applicant is not being candid with the Court. The said suit was dismissed by the court and therefore the exercise to withdraw the same was a mere gimmick to hood wink this Court. You cannot withdraw what doesn’t exit. The Plaintiff’s application must therefore fail.

The principles applied when striking out a pleading were laid down in

In Dupoto Group Limited vs Kenya Airport Authority & Another (2013) eKLR, where it was held inter alia that;

“…the overriding principle to be considered in an application for striking out pleadings is whether it raises triable issues. This is because a pleading that raises triable issues confirms existence of a reasonable cause of action, and it cannot consequently be said that the pleading is scandalous, frivolous or vexatious.”

It was the Respondents submission that the Applicant did not demonstrate to Court that the defence discloses no reasonable defense in law, how it is scandalous, frivolous or vexatious or that if it may prejudice or embarrass or delay the fair trial as set out under Order 2 Rule 15 of the Civil Procedure Rules.

DETERMINATION

The Court considered the pleadings and submissions and the issue for determination is whether the Defendant’s defence ought to be struck off.

Order 2 Rule 15 of the Civil Procedure Rules which provides that;

15.  (1) at any stage of the proceedings the court may order to be struck out or amended any pleadings on the ground that;

a) It discloses no reasonable cause of action or defense in law.

b) It is scandalous, frivolous or vexatious.

c) It may prejudice, embarrass or delay the fair trial of the action.

d) It is otherwise an abuse of the process of the court.

In the case ofDT Dobie &Co. Ltd vs Muchina (1982) KLR prescribesinstances of striking as;

a) That the remedy should only be exercised in the clearest of cases, in plain and obvious cases where the pleading in question were unsustainable.

b) That it is the power to be exercised with extreme caution and that it is a strong power to be sparingly exercised.

That the Learned JJA Madam Miller & Potter further stated that:

“No suit to be summarily dismissed unless it appears so helpless that it plainly and obviously discloses no reasonable cause of action and is so weak as to be beyond redemption and incurable by amendment”

The plaintiff’s claim against the Defendant is for payment for freight services rendered to the Defendant between 2015- 2018. The Plaintiff annexed copies of Invoices of various dates that services were rendered by the Plaintiff to the Defendant.

The plaintiff annexed to its application a letter dated 6th May 2016 by the Defendant Typotech to the Plaintiff Uneek Freight Services on outstanding Account of Euros 150,993. 88/-

The letter reads in part;

“We regret the account remained outstanding more than our normal trading terms with you……….we would like to give a proposal on how we intend to pay ½ outstanding balance of account……………………………..

We will give another proposal on how to clear the remaining balance by 1st August 2016. We wish to reiterate our commitment to pay your outstanding balance in full and to continue with our mutual business relationship. We believe you will find the proposal acceptable as we strive to wards paying as per the schedule.”

The content of the Defendant’s letter is a clear,plain and obvious that the Defendant admits and acknowledges indebtedness to the Plaintiff and even undertakes to settle the outstanding debt.

The Defense filed on 18thSeptember 2019 raises the following pertinent issues;

a) The Defendant denies indebtedness to the Plaintiff of USD 180,078. 32

b) The Defendant claims to be a stranger to the breakdown of Invoices attached neither do the Invoices reflect any services rendered to the Defendant and the Plaintiff is put on strict proof thereof

c) The Defendant specifically denies ever owing the Plaintiff the amount pleaded and puts the Plaintiff on strict proof thereof

d) The Defendant admits having received a written demand but states that the information stated there is inaccurate and the same is disputed.

The Defense does not disclose reasonable defense in law and is unsustainable because, the content of the letter dated 6th May 2016, the Respondent admits the outstanding debt of Euros 150,993. 88 for services rendered by the Plaintiff. The acknowledged amount has not been settled so as to pursue reconciliation of accounts of the balance of contested amount and/or pursue hearing and determination of the contested claim.

The Defendant cannot reasonably denythat the Plaintiff rendered services to the Defendant in light again of the letter authored by the Defendant admitting outstanding debt and further giving a proposal on howto defray the debt.If, the Plaintiff did not render services, then what is the Defendant admitting to pay the Plaintiff for and proposing the Payment Schedule?

In light of the letter of 6th May 2016, the Defenseraises no triable issue for hearing and determination. The outstanding amount that is admitted ought to be paid then the disputed amount is settled by reconciliation of accounts to confirm actual debt outstanding or hearing and determination of the same. Since the Defendant admitted the debt outstanding to the Plaintiff for services rendered at Euros150,993. 88, there can be no doubt that the Plaintiff rendered freight services otherwise what was/is the proposed payment schedule by the Defendant to the Plaintiff proposed in Letter dated 6th May 2016 for?

In light of admission by Defendant as enunciated in the case of Choitram vs NazariC.A.No 8 of 1982; the court stated that;

“Admissions of fact under Order XII Rule 6 need not be on the pleadings; they maybe in correspondence or documents which are admitted or they even be oral as the rule uses the words ‘otherwise’ which are words of general application and are wide enough to include such other admissions.

An order for judgment on admission under the Civil Procedure Rules Order XII Rule 6 should only be made if it is plain that there are either clear express, or clear implied, admissions….’

Mulla on the Code of Civil Procedure Pg 856 provides;

‘An order on admissions on the pleadings will not be made, unless the admissions are clear and unequivocal”

There is no reasonable Defense and it is hereby struck off and judgment entered for the Plaintiff against the Defendant for the admitted sum of EUROs 150,993. 88.

DISPOSITION

1. The application by Plaintiff/Applicant of 10th January 2020 to strike off the Defence filed on 18th September 2019 is granted with costs.

2.  Judgment on admission is entered for Euros150,993. 88/-

3. The balance shall be resolved either through reconciliation of Accounts by parties and/or hearing and determination of contested amount.

DELIVERED SIGNED & DATED IN OPEN COURT ON 26TH JANUARY 2021 (VIRTUAL CONFERENCE)

M.W.MUIGAI

JUDGE

IN THE PRESENCE OF;

OTIENO OGOLA & CO. ADVOCATES FOR THE RESPONDENT – N/A

MUCHERU LAW LLP ADVOCATES FOR THE APPLICANT – N/A

COURT ASSISTANT: TUPET