[2022] KEHC 650 (KLR)

Friendline Holdings Limited v Brand Imports (Africa) Ltd (Commercial Case E116 of 2021) [2022] KEHC 650 (KLR) (Commercial and Tax) (10 June 2022) (Ruling)

Neutral citation: [2022] KEHC 650 (KLR)

Republic of Kenya

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

Commercial Case E116 of 2021

DO Chepkwony, J

June 10, 2022

Between

Friendline Holdings Limited

Plaintiff

and

Brand Imports (Africa) Ltd

Defendant

Ruling

1. The Ruling herein relates to a Notice of Motion application dated 3rd February, 2022 and filed by the Plaintiff (hereinafter the Applicant) under Sections 1A, 1B, 3A, 63(e) and 94 all of the Civil Procedure Act, and Order 51 Rule 1 of the Civil Procedure Rules, 2010.

2. The Applicant is seeking for orders granting leave to execute the partial decree dated 1st February, 2022 for Kshs.53,421,778. 10 plus costs and interests at court rates from the 11th January, 2021. The applicant also seeks costs of the suit be provided for.

3. The application is supported by grounds on its face and on the Supporting Affidavit sworn by the Plaintiff’s Director, Nuh A. Hassan on the same date of the application.

4. The background facts culminating to that application are that on 17th December, 2021, the court entered Judgment on admission for the Applicant and against the Defendant in the sum of Kshs.53,421,778. 10 together with costs and interests from the 11th January, 2021 and the Applicant has consequently extracted a partial decree dated 1st February, 2022. The Applicant avers that the Defendant/Respondent is also facing execution in Milimani HCCOMM. No.E117 Of 2021 vide a decree dated 26th January, 2022. Since warrants of attachment have already been undertaken, it is likely that the Defendant’s assets will be disposed off and leave the Applicant with nothing to lean on hence exposing the Applicant to substantial loss and damage.

5. The Supporting Affidavit buttresses the above grounds with an addition that although the substantive claim is for Kshs.63,289,564. 58, the execution of the partial decree would not prejudice the Defendant/Respondent.

6. The Application was opposed based on the Replying Affidavit sworn by the Defendant’s Director, Dilpun Govindji Shah on 28th February, 2022. His argument is that the application is premature and lacks any legal basis since the Applicant is yet to pursue the entire claim wherein the court shall decide on the Respondent’s liability. He avers that the alleged execution in Milimani HCCOMM. No.E117 of 2021 and the attachment therein have since been set aside by an order of this court dated 13th February, 2022 and there is no threat of any loss exposed. The deponent further avers that any execution would be illegal owing to the existence of a fixed and floating debenture registered in favour of Diamond Trust Bank on all the Respondent’s assets and stock hence protecting it against any unsecured creditors. In any event, it is deponed that the Applicant is willing to settle the decree by monthly instalments of Kshs.500,000/- which proposal the Applicant has refused to agree with. Thus, the Respondent craves for the court to dismiss the present application for lack of merit.

7. By directions of the court, the application was canvassed by way of written submissions and the record shows that the Applicant’s submissions are dated 22nd March, 2022 whilst those for the Respondent are dated 23rd March 2022.

8. Having read through those submissions, the gist of the Applicant’s submissions is that the execution of a partial decree is permissible under Section 94 of the Civil Procedure Actbut only with the leave of the court. Therefore, unless a good reason is adduced, the Applicant should not be denied the execution of a lawful Judgment where there is no stay of execution. In this case, no such grounds were adduced, and the unrebutted facts are that the Applicant had supplied assorted goods to the Respondent sometimes in May, 2018 but the Respondent has refused to make payments necessitating the present suit. The court was then referred to a myriad of decisions with facts sitting on all fours in the instant case and urged not to depart from that precedent. They include the cases of, Prime Communications Ltd -vs- Kenya Medical Laboratory Technicians & Technologists Board [2014] eKLR, Machiri Ltd -vs- China Wu Yi Company Ltd; Kenya National Highways Authority (third party) [2021] eKLR and Kartar Singh Dhpar & Co. Limited -vs- Lianard Holdings -Ltd[2017] eKLR.

9. For the Respondent, it was submitted that Section 94 of the Civil Procedure Actis aimed at protecting the Judgment debtor from suffering -multiple executions in the same suit, one in respect of the principal sum and the other on costs. Therefore, in a case like the one at hand, execution cannot be allowed before taxation unless it is expressed that the Applicant wishes to forego the costs. Thus, the application for execution of partial decree is premature and should be dismissed. In support of the submissions, reliance was placed on the cases of Erad Suppliers & General Contractors -vs- NCPB, China Wu Yi Company Ltd -vs- Belgo Holding Limited [2018] eKLR, Landmark Holdings Ltd -vs- Robert Macharia Kinyua [2018] eKLR and Mercedes Sanchez Rau Tussel -vs- Samken Ltd & 2 others [2002] eKLR.

Analysis and Determination 10. From the Application before the court and the rival submissions of the parties, the issue which arises for determination is whether the Plaintiff/Applicant has made case for grant of leave to execute the partial decree dated 1st February, 2022.

11. Section 94 of the Civil Procedure Actallows the court to direct for partial execution where the court considers it necessary, and it states as follows:-[94]. Where the High Court considers it necessary that a decree passed in the exercise of its original civil jurisdiction should be executed before the amount of the costs incurred in the suit can be ascertained by taxation, the court may order that the decree shall be executed forthwith, except as to so much thereof as relates to the costs; and as to so much thereof as relates to the costs that the decree may be executed as soon as the amount of the costs shall be ascertained by taxation”

12. From the above section, a decree holder is at liberty, with the leave of the court, to execute a decree before costs are ascertained. I therefore do not agree with the defendant’s submissions that an application for leave to execute a partial decree is premature if the balance on the substantive claim is still pending determination. The leave for execution under Section 94 above, lays with the discretion of the court upon sufficient cause being shown by the Applicant.

13. As aforesaid, this court entered a partial Judgment in favour of the Plaintiff/Applicant on 17th December, 2021 for Kshs.53,421,778. 10 following the Defendant’s admission of the said debt. The said Judgment has so far not been overturned and the Defendant does not deny that the amount arises from goods supplied to it by the Applicant sometimes in 2018 which it has not paid todate.

14. In my view, the amount awarded on Judgment to the Applicant is severable from the remaining balance in the claim and can be delt with separately without defeating any of the parties’ right to be heard in relation to balance on the claim.

15. I fortify my finding with an excerpt from the case of Commercial Bank of Africa –vs- Lalji Karsan Rabadia & 2 Others[2013] eKLR, where Justice G.K Kimondo in circumstances similar to facts in the present case had the following to say;“it would be to turn logic onto its head for the Defendants to say, “wait a minute, let the Plaintiff wait until costs are taxed”. The taxation of the costs awarded to the Plaintiff can only be an added burden to the Defendants. Freezing the decree would only offer a temporary and costly relief considering the item of interest.”

16. I am of the similar view that since there is no challenge on the Judgment that was entered in favour of the plaintiff, freezing the partial decree would not obliterate it but merely offer a temporary relief which is not only prejudicial to Applicant’s right to reap the fruits of its Judgment but also financially detrimental to the Respondent taking into account that the interest continues to accrue on the decretal sum.

17. For the reason reasons discussed above, I am not persuaded that there is sufficient reason that has been put forth to prevent the Plaintiff/Applicant from executing its partial decree. I am inclined to exercise the discretion under Section 94 of the Civil Procedure Actin the favour of the Plaintiff/Applicant. The contention that the Respondent is facing execution in another matter or the proposal to repay the decretal sum in instalments, are in my view irrelevant in the instant application.

18. In the end, the Plaintiff/Applicant’s application dated 3rd February, 2022 is allowed and the Plaintiff/Applicant granted leave to execute the partial decree dated 1st February, 2022. The Plaintiff is also awarded the costs of the Application.

It is so ordered.RULING DELIVERED VIRTUALLY AT NAIROBI THIS 10TH DAY OFJUNE,2022. D. O. CHEPKWONYJUDGEIn the presence of:Mr. Kaaya counsel for Plaintiff/ApplicantNo appearance for and by Defendant/RespondentCourt Assistant - Sakina