[2022] KEHC 192 (KLR)

Allgate Limited v Vision Institute of Professionals Limited & 2 others (Civil Suit E247 of 2019) [2022] KEHC 192 (KLR) (Commercial and Tax) (11 March 2022) (Ruling)

Neutral citation: [2022] KEHC 192 (KLR)

Republic of Kenya

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

Civil Suit E247 of 2019

A Mshila, J

March 11, 2022

Between

Allgate Limited

Plaintiff

and

Vision Institute of Professionals Limited

1st Defendant

Anson Muyah

2nd Defendant

Michael Chirchir

3rd Defendant

Ruling

1. The Notice of Motion dated 28th July 2021 was brought under the provisions of Section 8 Rule 5(1) of the Civil Procedure Rules, Section 1A, 1B and 3A of the Civil Procedure Act and Article 159 (2)(d) of the Constitution of Kenya. The application was supported by the grounds on its face and by the supporting affidavit sworn on even date by Michael Chirchir. The Applicants sought the following orders;a.The Applicants be granted leave to amend the Amended Statement of Defence dated 21st September 2020 to factor in a counterclaim.

2. The parties were directed to canvass the application by filing and exchange written submissions. Hereunder are the parties respective submissions;

Applicants’ Case 3. The pleadings in this matter are closed yet the applicants have huge claims against the respondent to the tune of Kshs.5, 492, 242.

4. The amount comprised of Kshs.2, 700,00 deposited directly to the respondent’s account and have not been accounted for and Kshs.2, 792,242 being electricity surcharges irregularly surcharged by the Respondent’s managing agents and also not accounted for in both Plaintiff’s statements.

5. The Applicants stated that it was trite law that special damages have to be specifically pleaded and unfortunately the sum of Kshs.5, 492, 242 had inadvertently not been pleaded. It is only fair for the Applicants to be allowed to recover the amounts they are counter claiming and setting off.

6. The Applicants submitted that the court can order or exercise the power to amend at any stage of the proceedings. This is geared towards assisting the court to determine the true substantive merits of the case. (See: St. Patrick's Hill School Limited v Bank of Africa Kenya Limited [2018] eKLR)

7. Further, the claims being sought and/ or being added by way of amendments by nature are special damages and ought to be specifically pleaded. It is trite law as was held in Gichinga Kibutha Vs Caroline Nduku (2018) eKLRthat a party must present to the court all the evidence reasonably available on a litigated factual issue.

8. In the current application, the position is not different as the application is made in good faith and in any event the respondent can be compensated by way of costs.

9. It was the Applicant’s argument that it has met the legal threshold required to prove special damages thus the application to amend should be allowed as prayed in furtherance of the Constitutional parameter to advance substantive justice devoid of procedural technicalities.

Respondent’s Case 10. It was the respondent’s case that that the instant application does not introduce any claim or facts which have not already been pleaded in the Amended Defence.

11. Whilst Order 8 Rule 5 (1) of the Civil Procedure Rules gives the Court a wide discretion as far as amendment of pleadings is concerned, this section should equally act as a shield against inordinate, unfounded and punitive litigations that would in all circumstances be an abuse of the court process and would not warrant the exercise of the discretion.

12. The Respondent submitted that the Applicants have used irrefutable acts in delaying the conclusion of the suit. The respondent served the applicants with the Plaint and Summons on 3rd October 2019 and to demonstrate their disinterest to pursue this matter, the applicants entered appearance on 20th December 2019, two months after being in receipt of summons and thereafter filed their Statement of Defence on 16th January 2020, which having already abused the timelines under the Civil Procedure Rules, was actioned without leave of the court.

13. In a further effort to delay the matter, the Applicants filed a Notice of Motion dated 21st September 2020 seeking to amend their Statement of Defence on grounds that they had a counterclaim of approximately Kshs.38, 387,618. 85 which they claimed they had inadvertently forgotten to counterclaim, a ground similar to the instant application.

14. The Respondent placed reliance on the case of Central Kenya Ltd versus Trust Bank Ltd (2002) EALR as quoted in the case of Gladys N. Muchena v Aga Khan Education Services Kenya [2010] eKLR where the Court stated the ingredients that the Court will use as a yard stick for amendments.

15. Furthermore, the Applicants have not given a satisfactory explanation as to why they are entitled to the court’s discretion being exercised in their favour.

16. The Applicants filed the instant application a few hours prior to the hearing of the main suit; a move which not only displays their disinterest in the matter but also proves their motive to prolong litigation, abuse the court process and unjustly withhold the payments rightly due to the respondent. Therefore, the Respondent submits that the orders being sought in the application would greatly prejudice the Respondent and as such the application should not be allowed. The Respondent relied on the case of Daniel Nqetich Anor V K-Rep Bank Limited [2013] eKLR

17. By seeking to further amend their Amended Statement of Defence, the Applicants are merely adding two lines in the "Prayers" section to include an alleged Claim for Kshs.2, 792,242/= for electricity surcharges and Kshs.2, 700,000. 00 as direct deposits that were not reconciled in the Rent Statement produced in court by the Respondent. It was the Respondent’s submissions that such allegations are afterthoughts, unmerited and cannot be sustained in Court since in the said Rent Statement, the cheques mentioned have already been reconciled by the respondent.

18. The proposed amendments will greatly prejudice the Respondent as it is a complete waste of time and one which does not aid the course of justice. It was the Respondent’s fear that such prejudice cannot be compensated by the award of costs.

19. The Applicants have shown their intent to delay the main suit thus delaying the delivery of justice to the Respondent. It was therefore the Respondent’s submission that in the interests of justice, the instant application be disallowed as it will further delay determination of the main suit and in turn allow the applicants to unjustly withhold payments rightly due to the Respondent.

Issues for Determination 20. After reading the Application, the Response and the written submissions filed herein this court has framed only one issue for determination;a.Whether the Applicants should be granted leave to amend the Amended Statement of Defence dated 21st September 2020 after close of pleadings?

Analysis 21. The applicants herein had filed a Notice of Motion Application seeking to amend their Statement of Defence, which statement was filed out of time, on grounds that they had a counterclaim of approximately Kshs.38, 387,618. 85 which was inadvertently forgotten to counterclaim. That the application was allowed and the applicants proceeded to file an Amended Statement of Defence dated 21st September 2020.

22. The Applicants in the instant application are seeking orders to amend the Amended Statement of Defence. The Applicants Counterclaim against the respondent is to the sum of Kshs.5, 492, 242.

23. It is noteworthy that the Applicant is seeking to amend the Statement of Defence after close of pleadings.

24. Order 8, Rule 3 of the Civil Procedure Rules allows a party to seek leave of court to amend its pleadings and it reads as follows;(1)Subject to Order 1, Rules 9 and 10, Order 24, Rules 3, 4, 5 and 6 and the following provisions of this rule, the court may at any stage of the proceedings, on such terms as to costs or otherwise as may be just and in such manner as it may direct, allow any party to amend his pleadings.(2)Where an application to the court for leave to make an amendment such as is mentioned in sub-rule (3), (4) or (5) is made after any relevant period of limitation current at the date of filing of the suit has expired, the court may nevertheless grant such leave in the circumstances mentioned in any such sub-rule if it thinks just so to do.

25. Further, Order 8 Rule 5 of the Civil Procedure Rules provides;5. (1)For the purpose of determining the real question in controversy between the parties, or of correcting any defect or error in any proceedings, the court may either of its own motion or on the application of any party order any document to be amended in such manner as it directs and on such terms as to costs or otherwise as are just.

26. It was the Applicants’ case that it is trite law that special damages have to be specifically pleaded and unfortunately the sum of Kshs.5,492,242 had inadvertently not been pleaded. It is only fair for the applicants to be allowed to recover the amounts they are counter claiming and setting off.

27. The Respondent on the other hand argued that the instant application does not introduce any claim or facts which have not already been pleaded in the Amended Defence.

28. The Amendment in this instance introduces a Counterclaim against the Respondent for the amount of Kshs.5, 492, 242 which amount the Applicants argue could offset the Respondent’s claim.

29. It is trite that anamendment should not be allowed if it will cause injustice to the other side. In Institute for Social Accountability & Another versus Parliament of Kenya and 3 Others 2014 KLRthe court stated that;“The object of amendment of pleadings is to enable the parties to alter their pleadings so as to ensure that the litigation between them is conducted not on the false hypothesis of the facts already pleaded or the relief or remedy already claimed but rather, on the basis of the state of facts which the parties really and finally intend to rely on. The power to amend makes the function of the court more effective in determining the substantive merits of the case rather than holding it captive to form of the action and proceedings”

30. The Respondent argued that proposed amendments will greatly prejudice the Respondent as it is a complete waste of time and one which does not aid the course of justice. It is the Respondent’s fear that such prejudice cannot be compensated by the award of costs.

31. The Applicants herein had been given a chance to amend their Statement of Defence. The Applicants should thus be granted leave with a warning so that this is considered as the last amendment to avoid further prejudice to the Respondent.

32. It is in the court’s view that allowing the Application for amendment of the Statement of Defence is necessary for the purpose of determining the real questions in controversy between the parties and to avoid multiplicity of suits over issues involving the same parties. Indeed, the proposed Defence raises a fundamental triable issues.

33. Taking into account that the hearing of the case has not commenced and the basis of established principle that an amendment can be allowed at any stage on the conditions stated and from the material placed before it and in the interest of justice this court this court will allow the application but will compensate the respondent with costs thereof.

Findings And Determination 34. For the forgoing reasons this court makes the following findings and determinations;i.This court finds that the application has merit and it is hereby allowed;ii.The applicant to file and serve its Amended Statement of Defence within fourteen (14) days; the respondents do file Reply and Defence to Counterclaim within fourteen (14) days of service;iii.The Applicants shall bear the costs of this application.Orders accordingly.

DATED, SIGNED AND DELIVERED ELECTRONICALLY AT NAIROBI THIS 11THDAY MARCH, 2022. HON. A. MSHILAJUDGEIn the presence of;Andiwo for the Plaintiff/RespondentNo appearance for Defendants/ApplicantsLucy-----------------------Court Assistant