[2017] KEHC 7184 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

MILIMANI LAW COURTS

COMMERCIAL & ADMIRALITY DIVISION

CIVIL SUIT. NO. 408 OF 2016

IDEAL CERAMICS LIMITED.........................................................PLAINTIFF

VERSUS

SURAYA PROPERTY GROUP LTD……………..……..………DEFENDANT

RULING

Introduction

1. I am called upon to adjudicate an application for judgment on admission. The relevant motion was filed on 7th October 2016 with an affidavit sworn in support on the same day by Anish Doshi, a director of the Plaintiff Company.

2. In response, the Defendant filed two relatively prolix affidavits both sworn by Joseph Gicheru Kariuki, the Defendant’s manager in charge of construction.

Background

3. The brief background to the suit may be stated as follows.

4. The Defendant is a realtor. It also engages in the business of developing property. The Plaintiff on the other hand is a general trading company with a focus on housing accessories, fittings and fixtures. The two parties previously transacted business together with the Plaintiff supplying the Defendant and its subsidiaries with goods at the Defendant’s request and at agreed prices.

5. When payment was not forthcoming, the Plaintiff demanded payment and subsequently moved to court. The Defendant then agreed to settle the apparently budding dispute amicably.

6. A detailed settlement was struck. A settlement agreement ( “the Settlement Deed”) was then executed by the parties on 28 July 2016. The Defendant bound itself to pay the amount of Kshs. 26,551,181/98 by way of monthly installments effective 30 July 2016. One installment was honoured and then when there was default, the Plaintiff moved to court again.

7. The Plaintiffs claim is for an outstanding principal sum of kshs. 21,551,181/98. The Plaintiff also seeks interest on the said amount at the rate of 18% per annum amounting to kshs. 4,479,890/14. The claim is for goods sold and delivered and for breach of the Settlement Deed executed on 28th July 2016.

The application and respective submissions

8. In the contested application brought under Order 13 of the Civil Procedure Rules 2010, the Plaintiff contends that its claim is admitted by the Defendant. The basis of the application is the Settlement Deed as well as the fact of partial honour or part performance of the same.

9. It is contended that the Defendant has unequivocally acknowledged and admitted its indebtedness and liability to the Plaintiff.

10. Urging the application on behalf of the Plaintiff, Mr. H.I Mude contended that there was in existence a clear and unequivocal admission of liability freely and fully made by the Defendant. The admission, according to counsel, was made both in the Settlement Deed as well as in the pleadings (at paragraph 5 of the statement of defence and paragraph 9 of the Affidavit filed in reply to the instant application).

11. Mr. Mude submitted that the admissions fell within the purview of Order 13 of the Civil Procedure Rules and urged the court to enter judgment as prayed. Counsel referred the court to the cases of Choitram vs. Nazari [1984] KLR 327and Cassam vs. Sachani [1982] KLR 191both for the proposition that judgment on admission will be entered in favour of a Plaintiff where the admission is clear, plain and unequivocal and in the absence any issues of the fact or law. Mr. Mude also referred the court to the case of 747 Freighter Conversion LLC vs. One Jet One Airways Ltd [2014]eKLRfor the proposition that an admission will be deemed clear and unequivocal if the answer by a bystander to a question whether there was admission would be: ‘of course, there was’.

12. In response, as already stated, the Defendant filed two affidavits. According to the Defendant, notwithstanding the Settlement Deed there were still triable issues of fact and law raised by the defence statement. The Defendant contended that a reconciliation of the accounts revealed that the Plaintiff had not delivered certain goods. That the Settlement Deed itself revealed that the Plaintiff had been overpaid. Additionally, the Defendant contended that there were already pending in court various cases filed by the Plaintiff. It was also stated that the Plaintiff was not in court in good faith.

13. Mr. Onsare urged the Defendant’s case.

14. Counsel submitted that there was no unequivocal admission of the debt or liability as the Settlement Deed was an analysis of the transactions between the Plaintiff and the Defendant, and the Defendant was always entitled to question the amounts due to the Plaintiff. Counsel urged the court to direct a reconciliation of the amounts due.

15. Mr. Onsare then submitted, and correctly so, that judgment on admission could not be obtain as of right as it was granted through the exercise of the court’s discretionary powers and where there was shown an issue of fact or law then full trial of the issue had to be ordered. For this proposition counsel referred to the case of True North Construction Ltd vs. Kenya National Highways Authority [2014]eKLR, Mr. Onsare wound up his submissions by urging the court to exercise its discretionary powers and direct the parties to reconcile their accounts as the Defendant was committed to paying the amounts due, if any, and further that the Defendant would not suffer any prejudice as it would be compensated by way of interest.

Analysis

16. The law on summary procedure vide a judgment on admission is now relatively clear. The purpose of the law laid out under Order 13 of the Civil Procedure Rules is to ensure that a party whose entitlement is evidently due and admitted does not wait for determination by the court of a non-existence question. It is undesirable to litigate when there is no question or issue of fact or law. The summary process in this regard assists in ensuring that unnecessary costs and delays are not invited.

17. The court’s power to enter judgment on admission is discretionary: see Cassam vs. Sachania (supra).The discretion is to be exercised only in cases where the admission, whether express or implied, is plain, clear, unconditional, obvious and unambiguous: see Choitram vs. Nazari (supra) and Momanyi vs. Hatimy & Another [2003]2 EA 600. The admission ought to be obvious on the face thereof and leave no room for doubt.

18. An admission may be formal (typically an admission made in the pleadings) or informal (typically admissions made pre-action being filed in court but after demand has been made).

19. Once the unequivocal admission is established the court ought to ordinarily enter judgment at the request of the plaintiff who has also exhibited good faith. There is judicial involvement and in exercising its discretion, the court considers not just the admission but all the circumstances of the case and the issues of fact or law raised by the defendant. In my view as well, it is not enough to simply find an issue has been raised. The issue must be a bona fide issue and must have some prospects of success otherwise it would amount to disproportionate use of court resources to simply allow an ‘issue’ bound to fail to proceed to trial.

20. In casu, the Plaintiff contends that there exists both pre-action admission as well as formal admission by the Defendant to the Plaintiff’s claim for the value of goods sold and delivered. The Plaintiff points to the Settlement Deed and contends that the admission is clear and final. The Plaintiff also points to paragraph 5 of the defence statement as well as the Replying Affidavit.

21. The Defendant however contends that there are issues to be determined before any judgment can be entered in favour of the Plaintiff. The Defendant points to the suits filed before the subordinate court. Secondly, it is stated that the Plaintiff is not before the court with clean hands. Finally, the Defendant contends that the Settlement Deed is subject to a reconciliation of the accounts.

22. I have perused the Settlement Deed. It clearly sets, in the recitals, a detailed background to the claim. The Defendant admitted its relationship with various companies. The various companies were indebted to the Plaintiff. The Defendant also then admitted its indebtedness to the Plaintiff. The Defendant and the Plaintiff then settled out terms of payment. The parties then agreed at clause 7 of the Settlement Deed that if there was any default on the agreed mode of payment, the Plaintiff would move to court for the full amount. The parties further agreed (at Clause 9) that the Settlement Deed constituted the whole agreement between the parties.

23. Foremost, the Defendant does not contest the Settlement Deed. There is no attempt to amend or withdraw the admission through any explicit counterclaim for rectification on the basis that the Settlement Deed does not express the parties’ true intention or on the basis of some common mistake or correction of an obvious error. The Settlement Deed must thus stand and speak for itself and the court may not unilaterally seek to have either party withdraw from it.

24. The Defendant’s contention that there is an issue of reconciliation does not appear to originate either from the parties transactions or the claim herein. The Plaintiff apparently only commenced action after the settlement of accounts by the parties. The parties firmly agreed to specific amounts, to the cent. The issue of reconciliation in my view appears fanciful and an afterthought. No evidence was laid before me to give an indication that the admission after careful appraisal was made in error and that there was need for a trial. Indeed, clause 9 of the Settlement Deed fully and finally bound the parties. I hold the view that the alleged issue of reconciliation is not bona fide and may only have been invoked to obstruct the just disposal of the proceedings herein.

25. With regard to the pendency of certain suits before the subordinate court, it is clear that the parties even as they executed the Settlement Deed were very conscious of the effect of the subsisting suits. Clear mention was made of the subsisting suits. They are to be withdrawn once recovery was made and one way of recovery was the enforcement of the Settlement Deed.

Conclusion

26. It is clear to me that the Plaintiff has met the threshold of judgment on admission. The admission relied up is clear. The amounts sued for are explicit. Likewise, I find no mala fides in the claim as well as the application which was filed timeously following the closure of pleadings. The Defendant’s indebtedness to the Plaintiff is unequivocal.

27. I find that the Defendant has not shown any issue of fact or law worthy of trial and attempts to renege on the Settlement Deed by calling for reconciliation, in my view, amounts to nothing more than strategic maneuvering by the Defendant. It would be fit to invoke the summary procedure and enter judgment.

Disposal

28. The Plaintiffs application has merit.

29. I consequently enter judgment in favour of the Plaintiff in the sum of kshs. 26,031,072/00 together with interest thereon at court rates until payment in full.

30. The Plaintiff will also have the costs of both the suit and of the application

Dated, signed and delivered at Nairobi this 23rd day of February, 2017.

J. L. ONGUTO

JUDGE

In the presence of:-

Ms. Hanaan for the Plaintiff

Mr. Onsare for the Defendant