[2022] KEHC 12438 (KLR)

Nairobi Enterprises Limited v Kenya Medical Supplies Authority & 2 others; Medox Pharmaceuticals Limited (Interested Party) (Judicial Review 313 of 2017) [2022] KEHC 12438 (KLR) (Judicial Review) (7 July 2022) (Ruling)

Neutral citation: [2022] KEHC 12438 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Judicial Review

Judicial Review 313 of 2017

AK Ndung'u, J

July 7, 2022

Between

Nairobi Enterprises Limited

Applicant

and

Kenya Medical Supplies Authority

1st Respondent

Public Procurement Administrative Review Board

2nd Respondent

Chief Registrar Pharmacy and Poisons Board

3rd Respondent

and

Medox Pharmaceuticals Limited

Interested Party

Ruling

1. The applicant moved this court vide a notice of motion application dated January 13, 2022 seeking the following orders:1. Spent2. Spent3. Spent4. Spent5. That the honourable court be and is hereby pleased to allow the applicants to liquidate the decretal sum of kshs 2,468,757. 21/- by way of monthly installments of kshs 200,000/- until payment in full.6. ThaT the costs of this application be in the cause.

2. The application is founded on the grounds set out on the face therein and the Supporting Affidavit sworn by Rajan Rajnikant Dhanani on even date. The applicant’s case is that vide a ruling delivered by this honourable court, the interested party was awarded costs in the sum of kshs 2,468,757. 21/-. Further and on the basis of the said award of costs, this court on December 8, 2021 issued warrants of attachment to Ms Mbusera auctioneers who under the instructions of the interested party proceeded to proclaim the goods belonging to the applicant herein for purposes of selling them at a public auction.

3. The auctioneers had proclaimed the applicant’s tools of trade contrary to section 44 (1) of the Civil Procedure Act which will affect the applicant’s ability to trade thereby making it impossible for the applicant to settle the decretal amount. Furthermore, the valuations indicated in the proclamation according to the applicant were oppressive and ridiculously below forced valuation to enable quick sale to the disadvantage of the Applicants.

4. The applicant is also facing financial hardships owing to the adverse impact that the Covid-19 pandemic has had on its business that has led to its business taking a hit. Nonetheless the applicant is desirous of settling the decretal sum by way of monthly instalments of kshs 200,000/- until payment in full of the entire decretal sum. That it is just and mete that the application herewith be allowed as prayed to mitigate the irreparable prejudice visited on the Applicant.

5. The Applicant also filed written submissions dated February 15, 2022 in support of the motion. On whether the applicant has satisfied the criteria for grant of an order of stay of execution, counsel submitted that it has demonstrated sufficient cause and has deposited security to warrant the grant of stay of execution of the decree and warrants of attachments issued to Rosemary Mbuthia t/A Mbusera Auctioneers.

6. On whether the applicant stands to suffer substantial loss should the stay not be granted, counsel submitted that the goods that have been proclaimed by the auctioneers are its tools of trade contrary to section 44(1) of the Civil Procedure Act. As such, the court will be perpetuating an illegality and furthermore, the applicant will not be in a position to trade thereby making it impossible for the Applicant to settle the decretal costs awarded to the Interested Party herein.

7. On security of costs, counsel submitted that on January 14, 2022 granted a conditional stay to the applicant to deposit kshs 200,000/- as security which the applicant did on January 19, 2022. On whether the application has been brought without undue delay, counsel submitted that the application was brought within two (2) months by excluding the Christmas vacation.

8. On whether the applicant has satisfied the threshold for the grant of an order of payout of the decretal amount in installments, counsel urged this honourable court to be guided by order 21 rule 12 of the Civil Procedure Rules, 2010 which empowers this court to order that monies due and granted pursuant to a judgment of the Court be paid in installments where sufficient reasons have been adduced. Indeed, counsel urged that sufficient reasons have been adduced.

9. Counsel further submitted that this honourable court ought to be guided by the key factor of recognizing and considering the circumstances of each case be determined in light of its surrounding facts in order to issue the orders of payment in installments. Secondly, in terms of the conduct of the applicant to settle the decretal sum, counsel submitted that before the application was filed, the applicant tried to engage the interested party with a view of settling the matter out of court. Regarding the applicant’s financial position, counsel urged that the applicant is ready and willing to settle the decretal amount albeit in installments. Lastly, counsel urged that the fact that the applicant has arranged for the fair payment proposal to liquate the said amount in the payment of installment of kshs 200,000 /= is sufficient good faith on the part of the applicant necessitating the court to grant the order for payment in installments. As such, it was urged that the application be allowed as prayed.

The interested party/respondent’s case 10. The interested party filed a Replying Affidavit sworn by Phanuel Omondi on January 21, 2022 opposing the motion. It was contended that the applicant raises no allegation that the decree was irregular and makes no contestation that the process undertaken by the interested party or the assigned auctioneer has been tainted by any impropriety in the lawful attempt to recover costs awarded to the interested party. Further, that substantial loss is that which cannot be quantified in monetary terms yet the applicant proclaimed goods are those whose value can easily be established in monetary value. It was also contended that the applicant has made no attempt to provide security in the application and the order issued by the court was regarding security for the auctioneer charges.

11. The interested party further urged that the applicant is seeking stay of the ruling delivered by the deputy registrar on November 14, 2019 and not the one on December 8, 2021 as alleged by the applicant. Indeed, it was contended that the applicant did not challenge the said ruling and even when the interested party moved to court to convert the certificate of costs into a decree for purposes of enforcement against the applicant and a ruling delivered on October 8, 2021 and served on the applicant’s advocate, the same did not elucidate any response in terms of compliance with the court order. Therefore, a delay of four (4) years is inordinate as no explanation has been provided.

12. It is urged therefore, that the applicant herein has not demonstrated to the court why the orders should be granted. Further, they urged the court to take note of the acts of intentional delay and falsehoods propagated the applicant. It was therefore urged that the application be dismissed with costs.

13. The interested party also filed written submissions dated February 23, 2022 opposing the motion. On the issue whether the applicant has satisfied the criteria for grant of an order of stay of execution, counsel submitted that the applicant has failed satisfy the criteria for grant of stay set as under rder 22 Rule 22 (l) and (3) of the Civil Procedure Rules.

14. On whether the goods proclaimed by the auctioneer are tools of trade thus exempt from execution, counsel while relying on section 44(1) of the Civil Procedure Act}} submitted that the goods attached do not fall under the said category. Furthermore, no prayer has been sought to set aside the proclamation in the application herein.

15. On whether the applicant ought to be allowed to liquidate the decretal sum of kshs 2,468,757. 21/- vide monthly instalments of kshs 200,000/-, counsel submitted that the criteria/ conditions for the court to consider or indeed accept instalment payment by the judgment sebtor is set as follows; the circumstances under which the debt was contracted; the conduct of the debtor; his financial position and his bona fides in offering to pay a fair proportion of the debt at once.

16. Counsel submitted that for the court to grant such orders this court must balance the interest of the applicant and that of the interested party. Further, there is no justification for this prayer, the applicant having refused to make any offer for part payment since November 14, 2019 and now seeking to enforce their mode of payment on a decree lawfully issued by this honourable court is ludicrous. On costs, counsel urged that costs follow the event and litigation must come to an end. Consequently, they urged that the application be dismissed with costs to the interested party.

Analysis and determination 17. I have considered the pleadings and the arguments advanced by the parties herein. The issue for determination is whether the applicant has provided sufficient reasons to warrant this court to stay the execution of the decree and warrants of attachment issued on December 8, 2021.

18. The law on stay of execution is provided in order 42 rule (6) (2) of the Civil Procedure Rules 2010. An application of stay of execution according to the Civil Procedure Rules can only succeed if the applicant satisfies the following criteria:-“(1)The applicant must show that he or she has filed the notice of appeal and that the stay of execution has been filed without undue delay.(2)Secondly, from the facts of the case appealed from the applicant would suffer substantial loss unless stay of execution is granted.(3)That the application has provided security for due performance of the decree or any such order which may be issued by the court at the end of the determination of the appeal.”

19. In the instant application, the applicant has stated that they brought the application within two (2) months which was not inordinate. The interested party on the other hand contends that the applicant is seeking to stay execution of a ruling delivered on November 14, 2019 four (4) years down the line. From the proceedings, it is clear that the applicant stayed close to four (4) years after the bill was taxed and was only jolted to action on January 13, 2022 way after the respondent had started execution proceedings to file the instant application. The question is whether the delay was inordinate or unreasonable.

20. The question of unreasonable delay was dealt with in the case of Jaber Mohsen Ali & Another v Priscillah Boit & Another (2014) eKLR where it was stated:-“The question that arises is whether this application has been filed after unreasonable delay. What is unreasonable delay is dependent on the surrounding circumstances of each case. Even one day after judgment could be unreasonable delay depending on the judgment of the court and any order given thereafter. In the case of Christopher Kendagor v Christopher Kipkorir, Eldoret ELC 919 of 2012 the applicant had been given 14 days to vacate the suit land. He filed an application one day after the 14 days. The application was denied, the court holding that, the application ought to have come before expiry of the period given to vacate the land.”

21. In George Kagima Kariuki & 2 Others v George M. Gichimu & 2 Others (2014) eKLR, the court clarified the issue of delay. It was his view that:-“The law does not set out any minimum or maximum period of delay. All it states is that any delay should be explained. A plausible and satisfactory explanation for delay is the key that unlocks the court’s flow of discretionary favour. There has to be valid and clear reasons, upon which discretion can be favorably exercisable.”

22. Similarly, in Stanley Kahoro Mwangi & 2 Others V Kanyamwi Trading Company Limited (2015) eKLR the court was of the view that:-“A plausible and satisfactory explanation for delay is the key that unlocks the court’s flow of discretionary favour. There has to be valid and clear reasons, upon which discretion can be favorably exercised.”

23. The applicant has stated that the prior to approaching this honourable court, they were exploring an out of court settlement. No evidence of the said negotiations has been adduced , neither has any part payment been made. A delay of four (4) years is, in my view, inordinate in the absence of a plausible explanation. In the circumstances, I find that the delay was unreasonable.

24. The applicant has also argued that they are likely to suffer substantial loss because the proclaimed goods are their tools of trade within the meaning of section 44(1) of the Civil Procedure Act. The interested party maintains that the goods are not tools of trade and are liable to attachment.

25. Section 44 of the CPA provides as follows;(1)All property belonging to the judgment debtor, including property over which or over the profits which he has a disposing power which he may exercise for his own benefit, whether that property is held in his name or in the name of another but on his behalf, shall be liable to attachment and sale in execution of a decree:Provided that the following shall not be liable to attachment or sale-i.the necessary wearing apparel, cooking vessels, beds and bedding of the judgment debtor and of his wife and children, and those personal ornaments from which, in accordance with religious usage, a woman cannot be parted;ii.the tools and implements of a person necessary for the performance by him of his trade or profession;iii.where the judgment debtor is an agriculturalist,a)the first ten thousand shillings in value of his livestock, if any; andb)the first five thousand shillings in value of all implements, tools, utensils, plant and machinery used in connection with stock or dairy farming or in the production of crops or plants; andc)the first one thousand shillings in value of agricultural produce necessary to enable him earn his livelihood.

26. I have reproduced a substantial part of the above section because I find merit in the interested party’s submission that the entire wording and phrasing of the section clearly refers to natural persons. A reading of section 44(1) of the Civil Procedure Act clearly shows that none of the attached goods fall under the category of tools of trade. In any event the applicant is not a natural person.The applicant has not offered security for the performance of the said decree which is a condition precedent in granting the application save stating that they can satisfy the decretal sum in installments of kshs 200,000/- until payment in full.

27. Whether or not to allow a party to settle a decree by instalment is a matter of exercise of discretion and the court must be satisfied that the Applicant deserves exercise of that discretion. Order 21 rul 12 of the Civil Procedure Rules (2010), grants the court power to allow a judgment debtor pay decretal sum by instalments. The rule provides that;“(1)Where and in so far as a decree is for the payment of money, the court may for any sufficient reason at the time of passing the decree order that payment of the amount decreed shall be postponed or shall be made by instalments, with or without interest, notwithstanding anything contained in the contract under which the money is payable.(2)After passing of any such decree, the court may on the application of the judgment debtor and with the consent of the decree- holder or without the consent of the decree holder for sufficient cause shown, order that the payment of the amount decreed be postponed or be made by instalments on such terms as to the payment of interest, the attachment of the property of the judgment-debtor or the taking of security from him, or otherwise, as it thinks fit.”

28. In Hildegard Ndelut v Letkina Dairies Ltd & Another[2005]eKLR it was stated that “a judgment creditor is entitled to payment of the decretal amount, which he should receive promptly to reap the fruits of the judgment. The judgment debtor might genuinely be in a difficult position in paying the decretal amount at once. However, he has to show seriousness in paying the amount. In that event he should show his bona fides by arranging fair payment proposals to liquidate the amount.” (emphasis)

29. Applying the above principles to this application, it is clear to me that the applicant who has come seeking the court’s discretion, must show that the discretion is deserved and such grant will not cause prejudice to the interested party. Looking at the circumstances of this case, a ruling awarding costs was delivered in favour of the interested party on November 14, 2019. This ruling was never challenged by the applicant up until the interested party began the execution process. During the said period, the applicant has not made any efforts to settle part of the decretal sum and it is only now that the applicant seeks the indulgence of this court. The interested party has been trying to recover costs from a suit filed in 2017 up until now and it is only fair that they enjoy the fruits of their judgment. In the premises, I find that the applicant has not established sufficient grounds to warrant a stay of execution. The application dated January 13, 2022 is hereby dismissed with no orders as to costs.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 7TH DAY OF JULY2022. ............................A K NDUNG'UJUDGE