[2017] KEHC 10010 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND TAX DIVISION

CIVIL CASE NO. 126 OF 2017

REAL MEDICINE FOUNDATION………..............................PLAINTIFF

VERSUS

MWANAIDI KHEYO MAKOKHA………………………….......DEFENDANT

RULING

1. The application before me is for a temporary injunction to restrain the Defendant, MWANAIDI KHEYO MAKOKHA, from selling, transferring, disposing of, advertising for sale, charging, assigning interests in, mortgaging, effecting any changes to the current status of registration and/or the current status of ownership or in any other way dealing and/or interfering with the Defendant’s interest in her properties, including but not limited to;

(a) House No. 755 Green Park Estate. Phase 4;

(b) House No. 12 Unique Estate in Pipeline Embakasi, Baricho Block 46 L.R. No. 7109/166.

2. The plaintiff also sought an Order directing the National Transport and Safety Authority and the respective managements of EQUITY BANK LIMITED; NIC BANK LIMITED and KCB BANK LIMITED to deliver to the plaintiff and/or file herein a list of motor vehicles registered in the name of the Defendant, and a list of the bank accounts held in the name of the Defendant.

3. The plaintiff, REAL MEDICINE FOUNDATION is a Non-profit Public Charity, which has its headquarters in the United States of America.

4. It provides humanitarian support and development to people living in disaster and poverty – striken areas.

5. One of its programmes was in TURKANA COUNTY, where the plaintiff provided an upgrade of LODWAR DISTRICT HOSPITAL.

6. In February 2011, the plaintiff engaged the defendant as its PROJECT DIRECTOR in Kenya.

7. In the performance of her duties and functions, the defendant was provided with funds from the plaintiff.

8. It is the plaintiff’s case that the defendant had failed to account to the plaintiff for the sum of Kshs. 51,125,484/-. The defendant does not deny receiving that sum.

9. However, the defendant categorically denies the allegations of impropriety. She denied the allegations of misappropriation and mis-application of funds.

10. But the plaintiff insisted that the defendant had prepared or procured fraudulent or forged receipts to try and hoodwink the plaintiff that the money had been put to good use.

11. Apparently, some of the entities from whom the defendant purchased goods, did not exist, or they had disowned the receipts which the defendant had allegedly got from them.

12. At this stage, the court is not required to make a determination on the question as to whether or not the defendant had misappropriated the money which had been entrusted to her by the plaintiff. The said determination will only be made after the parties prosecute their respective substantive cases.

13. The plaintiff has provided evidence which suggests that the following entities have never existed;

i) DAYAH EXPRESS;

ii) APPEX ELECTRICALS AND GENERAL HARDWARE;

iii) BUNGOMA WEST PHARMACY LIMITED; and

iv) CHALLYMAX IMPORTERS LIMITED.

14. Further evidence produced by the plaintiff suggests that the receipts issued by the following entities were either false or forged:

a) SKYWARD EXPRESS LIMITED;

b) MARESI HEALTHCARE LIMITED;

c) MUTHAIGA TRAVEL LIMITED;

d) FLY 540 AVIATION LIMITED;

e) UCHUMI STORES;

f) KENRUSS MEDICS LIMITED; and

g) SALAMA HARDWARE.

15. In the face of that evidence, the defendant questioned the quality of the work done by Dr. Caleb Ochieng. The said doctor had visited the outlets named above.

16. However, the defendant described the conclusions of Dr. Ochieng as those of a layman, which cannot amount to “professional auditing?.

17. On a prima facie basis, I find that the defendant did not respond to the evidence. In other words, the evidence adduced thus far, appears to affirm the plaintiff’s assertions.

18. If the entities which are said to be non-existent, were actually in existence; and because the defendant had dealt with them, the easiest thing would have been for the defendant to get affidavits from those entities, confirming their existence.

19. Similarly, when it was alleged that invoices and receipts issued by some specified entities were false or forged, the defendant could easily have countered those assertions by getting the entities to confirm that their respective documents were authentic.

20. I am not suggesting that the burden of proof vested in the defendant. I am saying that once the plaintiff put forward some evidence which tended to confirm the allegations made against the defendant, then the evidentiary burden of proof shifted to the defendant. It is that evidentiary burden of proof which the defendant has, so far, not discharged.

21. Meanwhile, as regards the assertion that some supplies have not been proved to have been delivered to the project and to have been donated to the Lodwar District Hospital, I find that that statement is too generalized.

22. It was incumbent upon the plaintiff to be more specific, if the defendant were to be given a fair chance to know the case she was facing in that respect.

23. Indeed, as the defendant pointed out, it is the plaintiff who has control of the records at the hospital. Therefore, if there are supplies which were purchased, but which were not delivered to the hospital or to the project, the person who was best-placed to prove that assertion is the plaintiff.

24. There is a specific assertion by the plaintiff concerning fees which the defendant earned. The sum in question is Kshs. 2,000,593/-, which the defendant drew, for services allegedly rendered by her.

25. However, the plaintiff insists that during the time when the services were allegedly being rendered in Lodwar, the defendant was based in Nairobi.

26. It appears to be common ground that MRS EMMA MUTHONI KIRIUNGI performed most of the services which were allegedly being rendered by the defendant.

27. As the defendant says, Mrs. Kiriungi was being paid for the services she rendered.

28. Secondly, the said Mrs. Kiriungi confirmed that she used to perform the following tasks, amongst others;

“7(d) Receiving consignments of medicines, medical supplies and medical equipment sent by the Defendant, and storing them in the plaintiff’s office:

e) Issuing medicines, medical supplies and medical equipment to officers at the Hospital?.

29. It cannot therefore be said that the defendant had failed to account for all the money which she received from the plaintiff.

30. The problem appears to be that the defendant hiked prices of supplies. If that be the case, the plaintiff would need to demonstrate the proper prices, which would then be compared with the prices cited by the defendant.

31. Secondly, if some specified supplies were actually not delivered to the project, then the defendant could be called to account.

32. Thirdly, there would be need for the plaintiff to demonstrate that although some work was done at the Lodwar District Hospital, the defendant was not entitled to earn her fees, because the services were delivered by Mrs. Kiriungi. On a prima faciebasis, I find that for the work done, whether by Mrs. Kiriungi or by the defendant directly, the plaintiff would have made some payments. It cannot therefore be said that the defendant completely failed to account for all the money.

33. Of course, I am not suggesting that if the defendant was personally supposed to undertake some tasks, and if she led the plaintiff to believe that she personally undertook the said tasks, she should be exonerated from blame.

34. But the court is not dealing with moral issues.

35. I understand the plaintiff to be complaining about alleged lack of accountability for money.

36. If the defendant procured goods from non-existent entities, she could not possibly account for such procurement. And if she provided false or forged invoices and receipts for some of the supplies, then she was not being accountable.

37. To that extent, the plaintiff has established a prima facie case with a probability of success.

38. The plaintiff asked the court to grant interlocutory injunctions to restrain the defendant from dealing with 2 real properties, being;

a) House No. 755, Green Park Estate, Phase 4; and

b) House No. 12, Unique Estate in Pipeline Embakasi,

BarichoBlock 46 L.R. No. 7109/166.

39. There was no suggestion that the defendant had taken any steps to either dispose of to have them encumbered.

40. The plaintiff has not provided evidence to show that the properties belong to the defendant.

41. But it is equally noteable that the defendant has not denied ownership of the properties. Of course, it is not the responsibility of the defendant to prove that she did not own the properties.

42. Pursuant to Section 107 of the Evidence Act, the burden vested in the plaintiff to prove that the properties belong to the defendant.

43. If the plaintiff did not lead evidence to prove that the properties belonged to the defendant, it is the plaintiff’s case which would fail; that is what Section 108 of the Evidence Act provides.

44. A court of law cannot act in vain. It cannot issue an injunction in respect of a property whose ownership had not been proved, yet the property was being allegedly linked to the defendant.

45. Unless the issue of ownership was clearly proved, there was a possibility that the order may affect a property which belonged to someone other than the defendant.

46. In any event, the only proper way of identifying a property is through a “Land Reference Number?. It is not sufficient to talk about “House No. 755, Green Park Estate, Phase 4?.

47. And in respect to L.R No. 7109/166, where House No. 12, Unique Estate is said to be situtated, it should have been very easy for the plaintiff to provide the court with a Certificate of Official Search, to prove that the property belongs to the defendant.

48. I also find no evidence from the plaintiff that would link the properties to the money which the defendant had allegedly misappropriated from the plaintiff. There is nothing more than the bare statement that;

“All indications are that the Defendant acquired the above assets during the period when she was engaged by the plaintiff as Project Director, using the monies she fraudulently obtained from the plaintiff as above?.

49. If the plaintiff had the evidence to show that the properties were purchased by the defendant, it should have provided the evidence to the court. The plaintiff could then, possibly have shown not only that the defendant owned the properties, but also that she purchased the properties whilst she worked as the plaintiff’s Project Manager.

50. In the circumstances, I find that it would be inappropriate to grant injunctions in respect of the 2 properties.

51. Meanwhile, as regards the orders directed at the following entities, I hold the considered view that orders ought not to be made against Third Parties, who had not been accorded an opportunity to be heard;

i) National Transport and Safety Authority;

ii) Equity Bank Limited;

iii) Nic Bank Limited; and

iv) KCB Bank Limited.

52. If the plaintiff was seeking Discovery of Documents, it ought to lay a proper foundation, and the court may, if satisfied, issue orders directed against the defendant.

53. The plaintiff submitted that;

“…the balance of convenience heavily tilts in favour of conserving and protecting the status of ownership of the Defendant’s known assets until the case is heard and determined?.

54. Therein lies the difficulty which the plaintiff has failed to overcome. It has not been demonstrated, as I have already held, that the properties belong to the defendant.

55. In the result, the application dated 24th March 2017 is unsuccessful. It is therefore dismissed, with costs to the defendant.

DATED, SIGNED and DELIVERED at NAIROBI this4th dayof October2017.

FRED A. OCHIENG

JUDGE

Ruling read in open court in the presence of

Adogofor the Plaintiff

Wanjohi for Etole for the Defendant

Collins Odhiambo – Court clerk.