[2020] KEHC 521 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW MISC. APPLICATION NO. 433 OF 2009

BETWEEN

REPUBLIC.....................................................................................................APPLICANT

VERSUS

THE CITY COUNCIL OF NAIROBI.....................................................RESPONDENT

AND

SIMON MORINTANT LEBOO...........................................1ST INTERESTED PARTY

PAULINE KAHIGA.............................................................2ND INTERESTED PARTY

HALKANO D. WAQO........................................................3RD INTERESTED PARTY

JOHNSON AKONGO.........................................................4TH INTERESTED PARTY

EX PARTE APPLICANTS:

1. IRIS PROPERTIES LIMITED

2. PROLAND LIMITED

RULING

1. Judgment was delivered herein on 17th March 2011, wherein an order of mandamus was issued compelling the Town Clerk of the then City Council of Nairobi to pay the ex parte Applicant’s the decretal sum of Kshs 35,000,000/- and interest compounded at court rates of 12% p.a from 25th September 2002 until payment in full. The parties subsequently entered into a consent order dated 9th November, 2016 where the Respondent undertook to pay monthly instalments of Kshs. 7,000,000/ on the 15th of every month until payment in full. Upon default, contempt of Court proceedings were instituted against officials of the City Council of Nairobi, and its successor, the County Government of Nairobi, culminating in various Notices to Show cause and warrants for arrest being issued against the County Secretary and Chief Officer Finance on 5th December 2017.

2. This ruling is on three (3) applications related to the said consent and warrants of arrest that have been filed by the parties herein. Two of the said applications are filed by the Respondent herein. The first one is a Notice of Motion application dated 28th October 2019, and the second is a Notice of Motion Application dated 30th June, 2020.

3. The Respondent in its application dated 28th October 2019 is seeking the following outstanding substantive orders:

a) THAT this matter be referred to the Deputy Registrar of this Court for purposes of computation of the accurate amount, if any. due and/or owing between the parties herein.

b) THAT Iris Properties Ltd and Proland Ltd be compelled to refund to the Nairobi City County the sum of Ksh. 131,210,423. 12 or any other amount of public money overpaid and or that will be found due and owing to Nairobi City County as overpayment together with compound interest at the rate of 12 % per annum thereof until payment in full.

c) THAT the warrants of arrest issued on 5/12/2017 and or thereafter be vacated/discharged as they are spent and or no longer tenable.

4. In the second application dated 30th June, 2020, the Respondent is seeking stay of execution of the warrants of arrest issued herein, on account of the having deposited Kshs 14,000,000/= in Court as ordered on 22nd January 2020. It is notable that this particular application was dispensed with by orders given by this Court on 16th July 2020 which stayed execution of the warrants of arrest issued herein on 5th December 2017 pending the hearing and determination of the instant applications.

5. The third application that is the subject of this ruling is the ex parte Applicants’ Notice of Motion Application dated 15th July, 2020, seeking orders that the Deputy Registrar releases to them the said sum of Kshs 14,000,000/= deposited by the Respondent with interest thereon, and that the Respondent transmit to the ex parte Applicants Kshs 40,000,000/= alleged to have been received on the ex parte Applicant’s account, together with interest thereon.

6. As the Respondents’ applications were first in time, and the ex parte Applicant’s application is essentially consequential thereto, I will commence with a summary of the Respondents’ case before that of the ex parte Applicants’.

The Respondent’s Case

7. The Respondent averred that on 5th December 2017, this Court issued warrants of arrest against the Respondent’s officers, and that the ex parte Applicants/Respondents were in the process of executing the warrants of arrest. Further, that the execution of the warrants of arrest was patently illegal as the ex parte Applicants had been overpaid the decretal sum together with interest, and that the decretal sum payable to the ex parte Applicants was Ksh. 35,000,000 and interest on the stated sum compounded at court rates of 12% p.a. from 25/9/2002, yet the ex parte Applicants had so far been paid over Ksh. 297,083,794. 00. The Respondent contended that the ex parte Applicant’s calculations had been falsified as they had been computing the interest payable on the decretal sum as from 1/1/2001 yet the in its judgment ordered interest on the decretal sum to be calculated as from 25/9/2002. The Respondent annexed a copy of a schedule evidencing payment of the Ksh. 297,083,794. 00, and copies of the calculations by the ex parte Applicants evidencing that they had been basing their calculations since 1/1/2001.

8. According to the Respondent, on or around 20/7/19, the payment vouchers as well as the entire ex parte Applicant’s original file at the Respondent’s offices went missing leading to investigations regarding the circumstances in which the said documents were lost. Further, that it had since obtained the Respondent’s bank statements as well as Real Time Gross Settlement from Central Bank of Kenya evidencing payment of Kshs. 164,083,794 to the ex parte Applicants, and copies of the said bank documents were annexed. The Respondent stated that according to its calculations, the amount due and owing to the ex parte Applicant is Kshs. 1,789,576. 88 as at October 2019 and not Kshs. 76,199,296. 56 as claimed by the ex parte Applicants as at July 2019. The Respondent therefore urged the court to compel the ex parte Applicants to refund the excess payment of Kshs 131,210,423. 12 made to it together with compound interest at the rate of 12% per annum until payment in full.

9. The Respondent also averred that the constant arrests of its officials had paralyzed its operations service delivery to the residents of Nairobi City County as its officials were unable to report to work and to diligently execute their functions for fear of being arrested Further, that the warrants of arrest had been personalized to unfairly target Mr. Simon Leboo Ole Morintant who was neither an accounting officer nor a signatory to the any of the Respondent’s bank accounts. In addition, that if the warrants of arrest are not stayed, the ex parte Applicants will continue with their execution based on their miscalculations yet they have been paid their entire decretal sum together with accrued interest. The Respondent contended that it was in the best interest of the public, in the interest of justice, so as to safeguard Nairobi City County’s funds and owing to the amounts so far paid by the County that this matter be marked as closed and the ex parte Applicants/Respondents be compelled to refund Nairobi City County the overpayments made.

10. Whereas the Respondent confirmed that it did enter into a consent on 9th November, 2016 with the ex parte Applicants to pay the decretal sum in monthly instalments of Ksh. 7,000,000/= on the 15th of every month until payment in full, and an agreement 17th May, 2019 as to payment of Kshs 14,000,000/- as parte payment of the decretal sum due, it stated that the said consent and further agreement was entered into in the mistaken belief that the Respondent was owing theex parte Applicants. However, that it subsequently came to the Respondent’s attention that the ex parte Applicant had been overpaid the decretal sum plus interest and that the ex parte Applicants cannot therefore enforce an agreement that was pegged on coercion, misrepresentation and deceit, and that the decree had now been fully satisfied.

11. It was further contended by the Respondent that its application was not res judicata, as it does not challenge the legality of the interest but rather challenges the manner in which the ex parte Applicants had computed the amount they claim due and owing to them. It was averred that the issues raised in the present application were never raised and neither were they determined by the Deputy Registrar in the ruling delivered on 18/8/2016, and that the issues determined by the said ruling were whether limitation of action arise in proceedings against the government and local authorities and whether interest was payable pursuant to Section 4 of the Limitation of Actions Act. The Respondent averred that in the event that the court finds the application res judicata, it still has jurisdiction to hear and determine the application by applying the exception where the Court has made a mistake would result in grave injustice if its decision were to form the basis of an estoppel against the aggrieved party. The Respondent averred that in the present application, the granting and extension of the impugned warrants of arrests when the ex parte Applicants had been overpaid their decretal sum constitutes an egregious mistake that has occasioned grave injustice to the Respondent. In conclusion the Respondent stated that the exact amount paid to the ex parte Applicants could easily be ascertained by tabulating the payments it made.

The ex parte Applicants’ Case

12. The ex parte Applicants filed several affidavits on the three applications. Their application dated 15th July, 2020 was supported by a Supporting Affidavit dated 15th July, 2020 and Further Affidavit dated 6th August, 2020, both sworn by Fredrick Kenneth Mungai, a director of the 2nd ex parte Applicant. The ex parte Applicant’s case is that on 17th May, 2019, the parties herein entered into an agreement for part payment of the decretal sum as a condition for stay of execution, pursuant to which the Respondent was to pay to the ex parte Applicants the sum of Kshs. 14,000,000/= on or before 30th June, 2019, in order to reduce its indebtedness. The ex parte Applicants annexed a copy of the said agreement. However, that the Respondent did not honour that agreement and therefore the ex parte Applicants proceeded with execution, and that upon application for stay by the Respondent, this Court ordered the Respondent and alleged interested party to deposit into court, within 30 days, the sum of Kshs 14,000,000/=, which was the subject of the payment agreement dated 17th May 2019, as a condition for granting stay.

13. The ex parte Applicants averred that the Respondent and interested party did not deposit the said sums as directed and therefore the stay order lapsed. Further, that on 13th July 2020, they received a letter dated 10th July, 2020 from the Respondent's advocates informing the Deputy Registrar that the sum of Kshs. 14,000,000 had been deposited in court. According to the ex parte Applicants’ the said deposit was not made in accordance with the court order since it was made more than six months after the date on which it ought to have been deposited. Further, that at the time the said deposit was made, the orders of stay had long lapsed and it is in the interest of justice that the said sums be released to them forthwith.

14. The ex parte Applicant also relied on the Respondent’s averments made in the application dated 28th October, 2019 that an alleged sum of Kshs 40,000,000/= was paid to them through the firm of M/S Rachier & Amollo Advocates, which represented the ex parte Applicants at the initial stages in this matter. However, that Rachier & Amollo Advocates had denied ever receiving the sum of Kshs 40,000,000 or any other from the Respondent for onward transmission to the ex parte Applicants, and they annexed copies of the correspondence. Therefore, that the assertion that the Respondent had fully settled this matter was therefore based on fallacious allegations that they had been unable to prove. It was thus deponed that it is in the interest of justice that the Respondent be ordered to release the said sum of Kshs. 40,000,000 together with interest that had accrued from the time it was allegedly sent to the said firm.

15. The ex parte Applicants gave a detailed explanation on the circumstances the said consent dated 17th May, 2019 was entered into, and stated that on that date, the County Secretary, one Pauline Kahiga was arrested by officers from Nairobi area police station in execution of the warrant of arrest issued on 5th December, 2017 and that the said County Secretary and the Respondent's lawyer, Mr. Stephen Mogaka, informed the police in the presence of the ex parte Applicants’ lawyer that they had a proposal to make and that if the same was acceptable to them, then there would be no need to take the said County Secretary to court, and that they were ready and able to pay to a sum of Kshs 14,000,000 immediately and that the balance of the decretal amount after payment of Kshs 14,000,000/= would be paid in the new financial year. He stated that it was on that basis that the consent dated 17th May, 2019 was recorded which consent gave the Respondent upto 30th June, 2019 to pay the said sum of Kshs. 14,000,000/=.

16. It was also averred that it is trite that consent just like a contract, is binding on parties thereto upon its execution and this Court cannot interfere therewith unless there is proof of fraud. Further, that that in this case, there had been no attempt to plead, particularize nor prove fraud against the ex parte Applicants He added that it was clear that the Respondent is confused as to whether they had actually overpaid the Applicants to the tune of Kshs 6,762, 511/= as or whether they still owe the Applicants Kshs 1,789,576/= as alleged in their affidavits. In addition, that the Respondent has also averred it had overpaid the ex parte Applicants by Kshs. 131,210,423.

17. The ex parte Applicants averred that from this constant change of goal posts by the Respondent, it is clear that the Respondent does not know its case and is using these applications to further unnecessarily prolong, these proceedings thereby prejudicing the ex parte Applicants. The ex parte Applicants further averred that they now have in their possession a Report of the Auditor General on pending bills of the Respondent for the period between 1st March, 2013 to 30th June, 2018 wherein the Auditor General found that the Respondent owed the ex parte Applicants Kshs. 35,000,000 as at 30th June, 2018. Therefore, that the said report further buttresses the fact that the Respondent is factually indebted to the ex parte Applicants.

18. In reply to the Respondent’s applications, the ex parte Applicants contended that the Respondent was in contempt of this Court orders and had no right to audience of this court to raise its claims until they purged themselves of contempt. They added that this court should not condone deliberate disobedience of its orders or waiver from its responsibility to deal decisively with court contemnors. and had continually embarrassed the dignity and disregarded the authority of this court through filing numerous application while they were in fact cited for contempt of this court. It was also averred that there were mandamus orders in force compelling the Respondent to pay amounts due to the ex-parte Applicant and those orders had never been set aside by any court.

19. Furthermore, that the Respondent had defaulted on the consent it entered with the ex parte Applicant in court 9th November, 2016 where the Respondent undertook to pay monthly instalments of Ksh. 7,000,000/ on the 15th of every month until payment in full. In addition, that the Respondent had wilfully misled this court as to the question of the warrants of arrest in force in their present applications as the same emanate from contempt proceedings against the said county official for their failure to obey court judicial review orders, and not as a means of extortion as indicated therein.

20. It was further deponed that the Respondent’s application to set aside the warrants in force is res judicata, and that the said issue was discussed at length vide a ruling of this court delivered by Hon. Mr. Justice G.V. Odunga J on 11th February, 2019 in which he dismissed a similar application. Further, that the said warrants of arrest were lawfully and procedurally issued and that the Respondents were served with notices to show cause why the Respondent’s County Secretary and Chief Officer Finance should not be punished for contempt. The ex parte Applicants stated that it was after failing to show cause that the court issued the impugned warrants, and that in any event, the same had never been set aside and they Applicants were properly in order in seeking to execute the same. In addition, that on 5th June, 2018, this Court through Hon. Mativo J. clarified that the warrants of arrest issued on 5th December, 2017, despite mentioning the names of those who occupied the offices of County Secretary and Chief Officer-Finance at the time it was issued, were not personal and should be executed against anybody holding those offices as long as the decree had not been fully satisfied.

21. The ex parte Applicants also stated that the questions of challenging the legality, and the arithmetic computation of the decretal amounts and interest due from the Respondent are also res judicata and that those issues were determined by the learned Deputy Registrar Hon. Mburu, at the request of the Respondent, in a ruling delivered on 18th August, 2016. Further, that the Respondents challenged the determination of the Hon. Deputy Registrar and sought stay of her ruling pending an alleged appeal in the High Court against the same, and that Hon. Mr. G.V. Odunga J in a ruling delivered on 22nd September, 2016 dismissed the said application for lack of merit.

22. Lastly, the ex parte Applicants averred that the Respondent’s application is supported by unauthenticated and uncertified statements purported to be from the Cooperative Bank of Kenya and the Central Bank of Kenya and should be dismissed with cost. In addition, that this Court should take into account the Respondent’s dishonest conduct whereby it had on occasions falsified payment vouchers from the Banks and Central Bank to seek favourable orders in the matter. The example was given that it was in the courts’ record that on 27th November, 2017, the Respondent produced to court a falsified RTGS slip as proof of payment of Kshs 7,000,000/= to the ex-parte Applicant, upon which dishonesty they were compelled by this court to pay the Respondent the said amount

The Determination

23. The applications herein were canvassed by way of written submissions, in which the parties reiterated the arguments made herein above. There are two issues for determination arising from the pleadings filed by the parties herein. The first is whether the Respondent’s applications are res judicata, and the second is whether the remedies sought by both the ex parte Applicants and Respondent are merited.

24. On the issue of res judicata, the test to be applied to determine whether a suit is res judicata is set in section 7 of the Civil Procedure Act, and as explained in Uhuru Highway Development Limited v Central Bank of Kenya & 2 Others[1996] eKLR, by the Court of Appeal as follows:

(i) [There must be] a previous suit in which the matter was in issue;

(ii) the parties were the same or litigating under the same title;

(iii) a competent Court heard the matter in issue;

(iv) the issue has been raised once again in a fresh suit.

25. I am also guided by the decision of the Court of Appeal inJohn Florence Maritime Services Limited & Another vs Cabinet Secretary for Transport and Infrastructure & 3 others(2015) eKLR,wherein it was observed as follows in this regard:

“The rationale behind res judicata is based on the public interest that there should be an end to litigation coupled with the interest to protect a party from facing repetitive litigation over the same matter. Res judicata ensures the economic use of Court’s limited resources and timely termination of cases. Courts are already clogged and overwhelmed. They can hardly spare time to repeat themselves on issues already decided upon. It promotes stability of judgments by reducing the possibility of inconsistency in judgments of concurrent Courts. It promotes confidence in the Courts and predictability which is one of the essential ingredients in maintaining respect for justice and the rule of law. Without res judicata, the very essence of the rule of law would be in danger of unraveling uncontrollably.”

26. Two rulings by Hon. Mr. Justice Odunga have been referred to by the ex parte Applicants as having decided on the issues raised by the Respondent in its applications. The first is the ruling delivered herein on 22nd September, 2016, on an application in which the Respondent sought a stay of the ruling herein of the Deputy Registrar dated 18th August 2016 pending the hearing and determination of the Applicant’s appeal. The ruling by the Deputy Registrar, made findings to the effect that the amount due to the Respondents is as per the order by Gacheche J. made on 17th March 2011 less the amount already received by them, and that interest on the decretal sum shall continue to accrue until payment in full. While noting that the application was an abuse of the process of Court, Odunga J. noted as follows:

“The plain truth is that the applicant in the instant application has been unable to pay it just debt and has used the machinery of the Court to postpone, what to it, must be the day of reckoning. That day has now come and the court has the duty to tell them so in plain terms.”

27. On the other hand, the ruling dated 11th January 2019 by Hon. Mr. Justice Odunga was on two applications. The first application was was a Notice of Motion dated 29th June 2019 brought by the Respondent herein, seeking a stay of execution and enforcement of the order of arrest of its officials, that the consent orders issued on 9th November 2016 be varied and set aside, and that the suit be marked as settled and the parties take accounts of the monies so far paid to the ex parte Applicants. The Respondent raised the same arguments in the said application as those raised herein as regards the overpayment to the ex parte Applicants and the extortion by the said Applicants, s well as the fraudulent nature of the consent orders. The second application was by the ex parte Applicants seeking an order that the Respondent to release to it Kshs 7,000,000/= being the instalment for the month of November 2017.

28. In dismissing the Respondent’s application, and allowing the ex parte Applicant’s application, Odunga J. found that there was no evidence that the advocate who recorded the impugned consent had no authority to do so; that there was no provision cited to demonstrate that the payment of interest on the decretal sum was unlawful; and that an account had been undertaken by the Deputy Registrar and no allegation that the sums found due by the Deputy Registrar has since been settled.

29. It is evident from the said rulings that the issue of taking accounts and setting aside the consent order and warrants of arrest has been previously decided upon by this Court, and the same reasons propounded by the Respondent herein were considered and found not to be justified. In addition, it is evident from the said rulings that the orders of mandamus in place as regards the payment of the decretal sum to the ex parte Applicant remain unsatisfied. To this extent the Respondent’s applications are largely res judicata and in abuse of the process of court. If the Respondent is dissatisfied with the pronouncements given by the Court in its previous rulings, the option available to it is to seek review of, or appeal the said orders.

30. As regards the ex parte Applicants’ application, to the extent that the previous rulings herein have acknowledged that the decretal sum is still due and owing by the Respondent, and there are consents and orders still in place as regards payment of the said decretal sum, I find that the ex parte Applicants are entitled to the sum of Kshs 14,000,000/= deposited in Court by the Respondent. However, as regards the prayer that they be paid an additional sum of Kshs 40,000,000/=, the ex parte Applicants did not bring any evidence of the alleged transmission of the said amount by the Respondent, and instead relied upon denials made by Rachier & Amollo Advocates who are not parties in this suit, and did not participate in the applications. There is thus no credible basis established for the said payment.

31. The relief sought by the Respondent is therefore not merited, save for only ascertaining the exact amount of the decretal sum and accrued interest outstanding that requires to be paid to the ex parte Applicant. The ex parte Applicant’s application is on the other hand found to be partially merited.

The Disposition

32. The upshot of the foregoing is that the Respondents application dated 28th October 2019 and 30th June 2020, and the ex parte Applicants application dated 15th July 2020 are allowed only to the extent of the following orders and strictly on the following terms:

I. TheDeputy Registrar of the Judicial Review Division of the High Court at Nairobishall release to the ex parte Applicants herein the sum of Kshs 14,000,000/= deposited by the Respondent in this Court forthwith.

II. After the said release, the Deputy Registrar of the Judicial Review Division of the High Court at Nairobi shall withinsixty (60) days of today’s date, and after hearing the parties, compute the sums if any, of the decretal sum and interest thereon that remains unpaid to the ex parte Applicants, taking into account and various rulings, consents and admissions by the parties made herein, and shall file a report thereon within the saidsixty (60) days.

III. The warrants of arrest issued on 5th December 2017 shall remain in force, and shall be stayed for sixty (60) days from today’s date pending the computation by the Deputy Registrar to ascertain the exact amount of monies unpaid or otherwise on the decretal sum and interest.

IV.This matter shall be mentioned on 15th February 2021to confirm compliance and for further directions.

V. There shall be no order as to the costs of theRespondent’s application dated 28th October 2019 and 30th June 2020, and the ex parte Applicants’ application dated 15th July 2020.

33. Orders accordingly.

DATED AND SIGNED AT NAIROBI THIS 11TH DAY OF DECEMBER 2020

P. NYAMWEYA

JUDGE

FURTHER ORDERS ON THE MODE OF DELIVERY OF THIS RULING

In light of the declaration of measures restricting Court operations due to the COVID -19 Pandemic, and following the Practice Directions issued by the Honourable Chief Justice dated 17th March 2020 and published in the Kenya Gazette on 17th April 2020 as Kenya Gazette Notice No. 3137, this ruling will be delivered electronically by transmission to the email addresses of the ex parte Applicants’ , Respondent’s and Interested Parties’ Advocates on record.

P. NYAMWEYA

JUDGE