[2022] KEHC 16475 (KLR)

Mohamud & another v First Community Bank (Commercial Civil Suit 154 of 2018) [2022] KEHC 16475 (KLR) (Commercial and Tax) (15 December 2022) (Ruling)

Neutral citation: [2022] KEHC 16475 (KLR)

Republic of Kenya

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

Commercial and Tax

Commercial Civil Suit 154 of 2018

MW Muigai, J

December 15, 2022

Between

Abdikadir Arab Mohamud

1st Plaintiff

Mohammed Issa Bare

2nd Plaintiff

and

First Community Bank

Defendant

Ruling

1. The Plaintiffs’ (herein 'Abdikadir Arab Mohamud and Mohamed Issa Bare') through an amended Plaint dated April 20, 2018 pursuant to Order 8 rule 1(1) of the Civil Procedure Rules 2010, instituted a claim against the Defendant (herein 'First Community Bank Limited') .

2. The Plaintiff also filed under Certificate of Urgency on April 17, 2018 Notice of Motion seeking grant of interim/temporary injunction. The injunction was/is to restrain the defendant bank, its agents servants agents and or officers from selling by public action or otherwise dealing with Suit Property LR 36/11/318; by purporting to transfer ownership or possession or in any way interfering with the Plaintiff’s quiet possession and enjoyment of the suit property pending hearing and determination of the application and/or suit.

3. This Court vide its Ruling dated February 7, 2020 whilst serving in Milimani Commercial & Tax Division gave the following orders:-(i)The Plaintiffs/Applicants have not established prima facie case to warrant grant of temporary injunction to stop the sale of the Suit Property LR 36/11/318. (ii)The Application of April 18, 2018 is dismissed with Costs to the Respondent.(iii)The Defendant shall exercise statutory power of sale over the Suit Property 36/11/318 except the 3rd parties interests subject to the following terms:a)Within 30 days from today, the parties meet and agree on the debt due and owing.b)The Defendant to provide as per the Plaintiff’s request comprehensive statement of accounts outlining the facilities amounts and what has been paid from 2011 to date.c)Compliance with Section 90, 96 and 97 of Land Act and Rule 15 Auctioneers Act.(iv)The statutory power of sale shall exclude the Flats Numbers 101, 201, 104, 202, 301, 304, 403, 303, 301 & 302 purchased by 3rd Parties bona fide purchasers who were not served with statutory notice or heard on protection of their proprietary interest in the suit property.(v)The interim injunction granted on April 20, 2018 and extended by Consent on April 23, 2019 shall vacate after 30 days from today on the rest of the Suit Property LR 36/11/318 and remaining Units/Flats save for those held by 3rd parties bonafide purchasers Flats Number 101, 201, 104, 202, 301, 304, 403, 303, 301 & 302.

4. On October 26, 2020 the Applicant(s) filed another application under certificate of Urgency seeking this Court to correct the error apparent on the fact of the record as follows:a)This Court’s Ruling of February 7, 2020 in its Order 4 read as follows;The statutory power of sale shall exclude the Flat Numbers 101,201,104,202,301,304,403,303,301 & 302 purchased by 3rd parties’ bona fide purchasers who were not served with statutory notices or heard on protection of their proprietary interest in the suit property.'b)The net effect is that this Court repeated Unit 301 twice; referred to 201 instead of 102; omitted unit numbers 204,402 & 404 and included Unit Numbers 403 & 303 among the flats purchased by 3rd Parties.c)The Defendant by order of the Court sold 19 units and not 18 units as inferred by the Court.d)The correct numbers of the 10 Units sold are 101,102,104,202,204,301,302,304,402 & 404. e)The Parties/Counsel Consent of 4th April 2019 filed in Court and adopted as an order of this Court also included the following units belonging to the Plaintiffs to be excluded G1, G2, G3 & G4 which ought to have been included in the Court orders from Ruling of this Court delivered on February 7, 2020.

5. The application was/is supported by Affidavit by Abdikadir Arab Mohamud of October 26, 2020.

6. The Parties’ through Counsel filed Consent on November 20, 2020 to amend, vary and/or correct the Court’s Ruling of February 7, 2020. This Court declined to adopt the Consent as order of the Court as the law envisages such situations and prescribes Sections 99 & 100 of CPA and/or Order 45 CPR 2010 for review of Court Judgment/Ruling /Decree/Order where there is an error on the face of the record.

7. On February 8, 2021 this Court amended Order 4 of the Ruling of February 7, 2020 to read as follows:-'The statutory power of sale shall exclude the Flat Numbers/Units 101,102,104,202,204,301,302,304,402 & 404 purchased by 3rd parties’ bona fide purchasers who were not served with statutory notices or heard on protection of their proprietary interest in the suit property and Units belonging to the Plaintiffs also to be excluded also are G1, G2, G3 & G4. '

8. This Court was transferred thereafter and serves Machakos High Court.

9. On July 20, 2022 the Parties appeared before Justice EC Mwita. The Counsel representing both parties requested that this matter be transferred to Machakos High Court to be placed before Lady Justice MW Muigai (this Court) for consideration of the application dated March 18, 2021 for review of this Court orders made on February 8, 2021.

10. On November 16, 2022 the parties appeared before this Court virtually and they were directed to file their written submissions in respect of the Defendant’s/Applicant’s Application dated March 18, 2021.

Written Submissions Defendant/applicant’s Written Submissions Dated March 8, 2022. 11. On behalf of the Defendant/Applicant it is submitted that they are seeking a review of the ruling and orders of this Court made on February 8, 2021 stating that the impugned Ruling erroneously limited its Statutory power of sale by prohibiting the sale of apartment units numbers G1, G2, G3 & G4 which apartments units form part of the Suit property LR No 36/11/318.

12. This Court in a strange turn of events, declined to adopt the consent and directed the Plaintiff/Respondent to file its response to the application. This Court thereafter delivered its revised Ruling on February 8, 2021 referencing the 10 units sold to 3rd parties as recorded in the Consent dated April 4, 2019. The said ruling further proceeded to erroneously exclude the Ground Floor unit numbers G1, G2, G3 and G4 from sale by the Defendant Applicant despite the parties having informed the Court of the status of the said units and even filing a consent thereto.

13. That contrary to the averments in the Respondents Replying Affidavit dated August 30, 2021, the relationship between the parties herein was a fencing agreement and not a partnership. The Musharaka agreements executed between the parties were not independent but were and are to be read together with the corresponding letters of Offer.

14. The Applicant advanced money to the borrower equivalent or proportionate to its investment in the property. The borrower was required to pay monthly instalments in line with recital D of the Musharaka and or make pre-sales, in exchange for which the Applicant’s share in the investment reduced proportionately. At all times the Applicant did not assume ownership or control of the property as evidenced by clauses 2. 6 2. 8 and 2. 9 of the Musharaka which provides that the Client retains exclusive right to use and occupy the property including the duty to repair and maintain the property.

15. Reliance is made on the law on review is provide under Section 80 of the Civil Procedure Act as read with Order 45 Rule 1, of the Civil Procedure Rules, 2010.

16. In Nyamogo & Nyamogo v Kago [2001] EA 170 as quoted in Republic v Advocates Disciplinary Tribunal Exparte Apollo Mboya [2019] eKLR discussing what constitutes an error on the face of the record, the court rendered itself as follows:-

'An error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element in definitiveness, inherent in its very nature and it must be determined judicially on the facts of each case.' 17. It is finally submitted that the Ruling delivered on February 8, 2021 is erroneous as follows:-i)It is manifestly clear that the consent entered between the parties on April 4, 2019 was only applicable prior to the hearing and determination of the motion dated April 17, 2018. Upon hearing of the application on its merits, this Court pronounced itself by its ruling dated February 7, 2020. ii)That the Ruling dated February 7, 2020, dismissing the plaintiffs motion and allowed the sale of all apartment units save for those purchased by 3rd party purchasers. This Court however partly listed the wrong unit numbers, which was the subject of the Respondent’s Motions for review. The Applicant reiterates and invites this Court to take notice of the fact the Respondent’s application for Review did not call for the inclusion of the ground floor units.iii)The parties via a consent dated November 20, 2020, reaffirmed the position regarding the Applicants right to dispose off the ground floor Unit Numbers G1, G2, G3 and G4 in a completely shocking turn of events, this Court refused and/or rejected to adopt the consent. This is against the laid down legal principles on setting aside/varying of consent orders as was enunciated in the case of Kenya Commercial Bank Ltd –vs- Specialized Engineering Co ltd [1981] KLR 485. iv)This court of its own motion albeit erroneously in reviewing the ruling to February 7, 2020 delivered its ruling dated February 8, 2021 prohibiting the sale of the ground floor unit numbers G1, G2, G3 and G4 which units were admittedly disposed off via a public auction on September 2, 2020. See Bomet Beer Distributors limited v Kenya Commercial Bank Ltd & 4 others [2005] eKLR.

18. It is finally submitted that the litigation over the ground floor unit numbers G1, G2, G3 and G4 be put to rest via a review of this Court’s Ruling dated February 8, 2021. That the Plaintiff/Respondent claims against the Defendant/Applicant if any as regards the said units G1, G2, G3 and G4 lies in an action of damages.

1St & 2Nd Plaintiffs Submissions 19. It is submitted that it is clear that Order 45 of the Civil Procedure Rules, 2010 only envisages the determination of a review application by the Court that made the decision that is under review and not parties and therefore the Court was correct in declining to admit the consent as an order of the Court.

20. Further the defendant herein had been granted ownership of 14 apartments that formed part of the 28 apartments in the said LR 36/11/318 from which the Defendant had derived rental income and which apartments had later been sold at a sum of Kshs 76,000,000/-. The Defendant did not provide an account of the rental income that was derived from the 14 units which income was colossal. The remaining 14 units were therefore not available to the Defendant as per the terms of the Arbitral award and that formed the basis of the consent of the parties herein dated April 4, 2019. The Plaintiffs submit that the defendant herein is inviting the court to sit on its own appeal in a matter that the court is functus officio on a previous review application.

21. Reliance is made in the case ofZablon Mokua v Solomon M Choti & 3 others [2016] eKLR.

22. The Plaintiffs therefore submit that the matters stated by the Defendant in the application require long drawn process of hearing and are points which are of two opinions. There was no error apparent on the face of the record as the court has made itself clear on the ratio decidendi in the subject ruling. The Defendant is therefore not entitled to an order of review as the instant application has not satisfied the grounds for review as provided under Order 45 of the Civil Procedure Rules 2010 and the same should therefore be dismissed with costs to the Plaintiffs.

23. On the question of whether the application for review is available herein Order 45 Rule 6 of the Civil Procedure Rules 2010 provides that; No application to review an order made on an application for a review of a decree or order passed or made on a review shall be entertained.

24. The law does expressly prohibits a situation where the Court can review its own order arising from a previous review application. The Defendant’s recourse therefore only lies on appeal. See the Case ofJacqueline Macha Damon & Another v High George Cholmondeley Fifth Baron & 5 Others [2022] eKLR.

25. The Plaintiffs therefore urge this Court to dismiss the instant application on that score too with costs to the Plaintiffs.

Determination 26. This Court outlined the various applications and Rulings that culminated to the instant Ruling; the 3rd Ruling over the same matter.

27. The Court considered the application of April 17, 2018 on merit and made its finding.

28. The Court was moved vide a Consent signed by both advocates of the parties to correct an error apparent on the face of the record in terms of mis-numbering the 3rd Parties Units and inclusion of agreed Units to be omitted in the statutory power of sale.

29. The Court declined to adopt consent as an order of the Court to correct a Court’s judgment and undertook the exercise vide Sections 99 & 100 CPA and included contents of the said Consent as agreed by parties/counsel.

30. In a turn of events, almost 2 years later, this Court is faced with yet another application to review and/or amend the Ruling again and exclude the Units G1, G2, G3 and G4 that were included by Consent of the Parties. It is important to note that at the initialRuling of February 7, 2020 did not refer to the said Unit G1, G2, G3 and G4. It was raised in the subsequent application of review of October 26, 2020 and had a consent.

31. The Court and Parties are bound by pleadings and the Court was appropriately moved by the parties by their pleadings and submissions that culminated to the Rulings of this Court.

32. Order 45 (1) & (3) CPR 2010 envisages a review of a decision/ruling/judgment by Trial Court from the aggrieved party. That review was in form of correcting the error apparent as was done vide the Ruling of February 8, 2021. There is no legal provision that allows for series of reviews over the same matter. Hence this Court is functus officio.

33. Supreme Court in Raila Odinga & 2 others v IEBC & 3 Others [2013] eKLR that:'A Court is functus when it has performed all its duties in a particular case. The doctrine does not prevent the court from correcting clerical errors nor does it prevent a judicial change of mind even when a decision has been communicated to the parties. Proceedings are only fully concluded, and the court functus, when its judgment or order has been perfected. The purpose of the doctrine is to provide finality. Once proceedings are finally concluded, the court cannot review or alter its decision; any challenge to its ruling on adjudication must be taken to a higher court if that right is available'

34. Reliance is made in the case of Telkom Kenya limited –vs- John Ochanda (suing on his own behalf and on behalf of 996 former employees of Telkom Kenya Limited) [2014] eKLR the Court observed thus;'Functus officio is an enduring principle of law that prevents the re-opening of a matter before a Court that rendered the final decision thereon. It is a doctrine that has been recognized in the common law tradition from as long as the latter part of the 19th Century.'

35. The issue(s) as to which Units are to be left out from the sale , this Court in its Ruling of the Application left out ALL units by 3rd Parties/Purchasers who were not joined as 3rd Parties or heard as interested parties.

36. The parties/through their respective lawyers by Consent informed the Court of errors that were corrected in the 2nd Ruling and by their own Consent included Units G1, G2, G3 and G4.

37. In the present Ruling if the Court reopens the matter again substantially it will amounts to rehearing the substantive matter again thereby sitting on its own appeal, and it lacks the requisite jurisdiction. The parties are at liberty to pursue an appeal not review or any rectification by Consent in the High Court.

38. National Bank of Kenya Limited v Ndungu Njau [1997] eKLR the Court of Appeal had the following to say on the subject:'A review may be granted whenever the court considers that it is necessary to correct an apparent error or omission on the part of the court. The error or omission must be self-evident and should not require an elaborate argument to be established. It will not be a sufficient ground for review that another judge could have taken a different view of the matter. Nor can it be a ground for review that the Court proceeded on an incorrect exposition of the law and reached an erroneous conclusion of law. Misconstruing a statute or other provision of law cannot be ground for review.''The learned Judge made a conscious decision on the matters in controversy and exercised his discretion in favour of the respondent. If he had reached a wrong conclusion of law, it could be a good ground for appeal but not for review. Otherwise we agree that the Learned Judge would be sitting in appeal on his own judgment which is not permissible in law. An issue which has been hotly contested as in this case cannot be reviewed by the same Court which had adjudicated upon it.'

Disposition 1. The instant application for review is dismissed.

2. The Court File shall be returned to Nairobi High Court Commercial & Tax Division.

It is so ordered.

DELIVERED, DATED AND SIGNED IN OPEN COURT AT MACHAKOS THIS 15TH DAY OF DECEMBER 2022 (VIRTUAL/PHYSICAL CONFERENCE)M. W. MUIGAIJUDGEIN THE PRESENCE OF:Mr. Kiiru - For the PlaintiffsMr. Ochieng - for the DefendantsGeoffrey/Patrick - Court Assistant(s)