Vijay Morjaria v Harris Horn Junior & Harris Horn Senior [2018] KEHC 4911 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAKURU

CIVIL CASE NUMBER 285 OF 2004

VIJAY MORJARIA........................................................................PLAINTIFF/APPLICANT

-VERSUS-

HARRIS HORN JUNIOR................................................1ST DEFENDANT/RESPONDENT

HARRIS HORN SENIOR...............................................2ND DEFENDANT/RESPONDENT

RULING

1. Judgment in the suit was delivered in favour of the plaintiff/Applicant on the 16th June 2006 in the sum of Kshs.22,500,000/=.  All  attempts to recover the decretal sum by the plaintiff/decretal holder have been unsuccessful  including an attempt to commit the judgment debtors to civil jail as provided under Section 38(d) of the Civil Procedure Rules

- Ruling by Emukule J (retired) on the 30th June 2011.

2. By a consent Order dated the 28th March 2017 and adopted by the court on the 6th April 2017, the judgment debtors undertook to pay the decretal sum together with interest and  costs once the secured creditors have been settled.

3. The judgment debtors are the Defendants in the suit, Harrison  Horn Junior and Harrison Horn Senior.  The Applicant avers that the two are directors of three companies, Athinai Sisal Estates, Majani Mingi Sisal Estates and Lomolo(1962) Ltd.

4. By his application dated 29th August 2017, and brought under Section 1A, 1B and 3A of the Civil Procedure Act the plaintiff/applicant sought that:

(1) The debt owed to the Plaintiff/Applicant by the  respondents be registered as an adverse interest  against  the shares in the companies(named above).

(2) That the debt owed by the respondents to the applicant be noted as an adverse interest in debentures held by Kenya Commercial Bank (KCB) bank and any other bank that may be a beneficiary of debenture registered against the shares held by the respondents in the aforementioned companies.

5. In opposing the application the Respondents filed grounds of opposition on the 23rd May 2018 that there was no evidence that the named companies exist, and that the respondents are shareholders in the listed companies.

To buttress their respective positions, parties filed written submissions.

6. The applicants submissions  are that the respondents shares in the listed companies are the only known assets of the respondents that can be attached to satisfy the decree and that the companies are indebted to several banks and the liabilities are secured by debentures.

It is submitted that the shares are part of the debentures and therefore not available for attachment until all secured creditors are paid hence the need to have the applicants interest registered as an adverse interest to be paid once secured creditors are paid.

7. The Respondents submissionsare that  no evidence has been produced to demonstrate that they hold any shares in companies, and further that the reliefs sought are against the companies that are not parties to the suit citing Section 107 of the Evidence Act that:

(1) “whoever desires any court to give  judgment as to any legal right or  liability dependent on the existence of  facts  which he asserts must prove that those  facts exist.”

8. It was submitted that no certificate of incorporation of the companies were provided to confirm that the companies are duly registered and indeed their existence.  Further it was submitted that no evidence was tabled in court to authenticate that the Respondents are indeed shareholders in any of the companies, and therefore no basis was laid upon which the applicants interests can be registered against the shares – Litein Tea Factory Company Ltd & Another -vs- Davis Kiplangat Mutai & 5 Others (2015) e KLR.

9. I have considered the above rival submissions as well as authorities cited by the Respondents. I agree with the Respondents that existence of the listed companies and the respondents interest therein have not been demonstrated.  The applicant has not told the court why the vital documents to authenticate the respondents interests in the companies, if they exist, were not procured from the Registrar of Companies and shown to the court.

10. The consent oder executed by the parties advocateson the 29th August 2017, in my considered opinion, was on presumption that the respondents were shareholders in the companies listed and that such companies did exist – or was it a misrepresentation by the respondents? Why would the respondents now turn around and wish to detach themselves from the companies knowing very well that they are bound by the consent orders?

11. Citing the case Forthall Bakery Supply Company -vs- Fredrick Muigai Wangoe (1959)) EA 474 and quoted in Kenya Power & Lighting Co. Ltd -vs- Benzene Holdings Ltd T/A Wyco Paints (2016) e KLR, it was held that:

“The party seeking to maintain the action is in the eye of our law no party at all but a mere name only, with no legal existence---”

and therefore cannot sue, and once the court is made of its none  existence it cannot allow the action to proceed.

As no evidence was placed before this court on the existence of the listed companies and their legal status from the Registrar of Companies, it would be imprudent to allow the payers sought by the plaintiff.

12. In my view, this is yet another way of further delaying the realization of the decretal sum from the respondents and, as stated by Emukue J in his ruling dated he 30th June 2011, it is clear that the respondents are:

bend to stretch and postpone the payments of the decretal sum as long as they are able to engage in endless legal gymnastics which are clearly intended to abuse the court process.

13. Consequently, the plaintiff is left to explore other methods of  execution as by the law provided. The application dated 29th August  2017 is dismissed with no orders as to costs.

Dated, signed and delivered this 31st  Day of July 2018

J.N. MULWA

JUDGE