1. The application before the court is Plaintiffs’ Notice of Motion dated 09.11.2022 made under Article 35(1) of the Constitution, sections 68(1) and 69 of the Evidence Act (Chapter 80 of the Laws of Kenya), sections 1, 1A, 1B, 3A and 22 of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) and Orders 11 Rules 2, 3(5)(b) and 51(1) of the Civil Procedure Rules (“the Rules”). They seek orders, inter alia, directing the Defendant (“the Bank”) to produce, make discovery on oath and deliver or avail copies of various documents relating to the matter in question in this suit, more particularly, all the documents particularized in their Notice to Produce Documents dated 02.11.2022 (“the Notice to Produce”). They also seek to strike out of the Bank’s defence for non-compliance.
2. The application is supported by the grounds on its face, the 1st Plaintiff’s supporting affidavit and supplementary affidavit sworn on 09.11.2022 and 09.12.2022 respectively. It is opposed by the Bank through the replying affidavit of its Legal Consultant, Timothy Kimani sworn on 01.12.2022. The parties have also filed written submissions in support of their respective positions.
3. Before I deal with the application, a brief background of the matter will suffice. On 17.09.2021, the court declined to issue an injunction that would have restrained the Bank from transferring NAIROBI/BLOCK/ 27/567 (“the suit property”). The court also declined to direct the Bank to provide a comprehensive audit by a qualified auditor of all the facilities advanced to the 1st Plaintiff by the Bank. It further declined to compel the Bank to produce details and documents it relied on during the auction of the suit property conducted on 06.07.2021. This was after the court found that the 1st Plaintiff was undeniably indebted to the Bank in respect of the aggregate loan facility of Kshs. 250,000,000.00 the Bank advanced her and that the Bank’s statutory power of sale in respect of the suit property had accrued. The court observed that the parties had entered into a consent in HC COMM E114 of 2021 permitting the Bank to sell the suit property by private treaty failing which it would sell it by public auction.
4. In respect of the demand for documents, the court held that the Bank received a request for certified statements from the 1st Plaintiff by the letter dated 12.03.2021 and the Bank responded to the letter by attaching statements where possible and informing the 1st Plaintiff that some of the accounts referred to had been closed. The Court also found that the Bank had already provided the documents relating to the sale of the suit property at the public auction and thus held that this prayer was moot.
5. In the Notice to Produce, the Plaintiffs seek the following documents:
1. The Bank Facility Letter for the Loan Credit Facility for Kenya Shillings 90,000,000.00 issued to Alice Wanjiku Kariuki vide a charge over property Land Reference No. Nairobi/Block 27/423/1-12 (later amalgamated to Nairobi/Block 27/567) and disbursed on 22nd October 2010.
2. Copies of Statements of Accounts for the following accounts and the attendant periods as particularized hereunder:
Account Number Amount Disbursed From To
I 060****76 90,000,000.00 21/10/2011 To date
ii. 060****76 16/12/2011
31/12/2012 04/01/2012
16/01/2013
iii. 010*******176 15/12/2012 Todate
6. The Plaintiffs’ case is that the 1st Plaintiff commissioned a firm of auditors to undertake a reconciliation of the accounts in issue to enable the Court appreciate and determine the tabulations under controversy. That the audit firm requested for the documents sought in the Notice to Produce to enable the auditors conclude their report so that the Plaintiffs can comply with pre-trial directions under Order 11 of the Rules.
7. The Plaintiffs contend that the documents are exclusively generated and maintained by the Bank and their efforts to obtain them same from the Bank have been futile. That the documents sought are material and will enable them establish and prosecute their case as well as aid the Court arrive at a fair resolution of the matter. They submit that unless the Court urgently intervenes and grants the application, they will suffer irreparable harm as the Bank would have succeeded in keeping away crucial information necessary for the dispensation of justice in this suit.
8. The Bank objects to the application. It avers that at all material times during negotiation and entering into the settlement agreement, the Plaintiffs were well aware of the status of their respective accounts and that upon default and through the respective statutory notices, the Plaintiffs were notified of the arrears and the outstanding amounts arising from the default of the facilities. The Bank states that the Plaintiffs have never requested for statements of accounts and/or raise any issues on the arrears and the outstanding amounts therein. That during the discussion between the 1st Plaintiff and the Bank regarding settlement of the outstanding loans which were ongoing for over 5 years, account statements have never been an issue and the Plaintiffs all along admitted to the debt. Further, that the details of the accounts were well within the knowledge of the Plaintiffs but that in any case, the Plaintiffs have at all material times been furnished with detailed account statements that accurately disclosed to the Plaintiffs the amounts owing and a trail of the debits made to the said accounts. The Bank adds that it responded to the Plaintiffs’ queries through letters dated 12.03.2021 which gave sufficient explanations on the accounts in question. That based on the information supplied on 12.03.2021, the Bank affirms that the only account that the Plaintiffs should be interested in is Account No. 10****-****4 in respect of the settlement agreement dated 23.11.2020 and that Account No. 10****- ****6, which corresponds to item 3 on the Notice to Produce is a current account which had a nominal balance of Kshs 4,000.00 as at 12.03.2021.
9. The Bank avers that it has inspected all the account records in its possession and ascertains that it does not have in its possession, the accounts subject of the Notice to Produce particularly, items (i) and (ii) which are the supposed account numbers 06*****76 and 00*****76 respectively. The Bank claims that the documents sought by the Plaintiffs are actually in the knowledge, possession and custody of the Plaintiffs and that the instant discovery application is unnecessary as it does not relate to the accounts in question, are not relevant and that the application is a fishing expedition.
10. The Bank submits that the application is premature as the Plaintiffs did not serve it with the Notice to Produce but that it is ready and willing to comply with pre-trial directions as the matter is still at the case management stage. Further, that the Plaintiffs have not made any request for production during the case management proceedings to inform the basis for their application. The Bank avers that it has always acted in good faith by according the Plaintiffs reasonable opportunity to negotiate and restructure their accounts and supplying them with information as and when requested. That on the contrary, the Plaintiffs have failed to reciprocate the acts of good faith extended by the Bank which is manifest in the instant application which misrepresents to this Court the accounts in question and the lack of response by the Bank on the request dated 03.02.2021.
11. The Bank contends that the Plaintiffs’ application is contrary to the consent order recorded in HCCC No. E114 of 2021 as they have admitted their indebtedness to the Bank and the contestation of the amounts payable is res judicata.
12. The application for determination is based on the Notice to Produce issued under section 69 of the Evidence Act. As I shall demonstrate, such a notice deals principally with the production of secondary evidence rather than discovery generally. The two issues should not be conflated as it is apparent that the parties’ submissions were grounded on the issue of discovery generally.
13. Section 69 aforesaid provides as follows:
69. Secondary evidence of the contents of the documents referred to in section 68(1)(a) of this Act shall not be given unless the party proposing to give such secondary evidence has previously given to the party in whose possession or power the document is, or to his advocate, such a notice to produce it as is required by law or such notice as the court considers reasonable in the circumstances of the case:
Provided that such notice shall not be required in order to render secondary evidence admissible in any of the following cases—
(i) When the document to be proved is itself a notice;
(ii) when from the nature of the case, the adverse party must know that he will be required to produce it;
(iii) when it appears or is proved that the adverse party has obtained
possession of the original by fraud or force;
(iv) when the adverse party or his agent has the original in court;
(v) when the adverse party or his agent has admitted the loss of the document;
(vi) when the person in possession of the document is out of reach of, or
not subject to, the process of the court;
(vii) in any other case in which the court thinks fit to dispense with the requirement.
14. The aforesaid provisions cannot be read in isolation. Section 68(1)(a) referred to therein provides as follows:
68. Proof of documents by secondary evidence
(1) Secondary evidence may be given of the existence, condition or contents of a document in the following cases—
(a) when the original is shown or appears to be in the possession or power of— (i) the person against whom the document is sought to be proved; or
(ii) a person out of reach of, or not subject to, the process of the court; or
(iii) any person legally bound to produce it, and when, after the notice required by section 69 of this Act has been given, such person refuses or fails to produce it;
and when, after the notice required by section 69 of this Act has been given, such person refuses or fails to produce it;
(b) when the existence, condition or contents of the original are proved to be admitted in writing by the person against whom it is proved, or by his representative in interest;
(c) when the original has been destroyed or lost, or when the party offering evidence of its contents cannot, for any other reason not arising from his own default or neglect, produce it in a reasonable time;
(d) when the original is of such a nature as not to be easily movable;
(e) when the original is a public document within the meaning of section 79 of this Act;
(f) when the original is a document of which a certified copy is permitted by this Act or by any written law to be given in evidence;
(g) when the original consists of numerous accounts or other documents which cannot conveniently be examined in court, and the fact to be proved is the general result of the whole collection
(2) (a) In the cases mentioned in paragraphs (a), (c) and (d) of subsection (1), any secondary evidence of the contents of the document is admissible.
(b) In the case mentioned in paragraph (b) of subsection (1) of this section, the written admission is admissible.
(c) In the cases mentioned in paragraphs (e) and (f) of subsection (1) of this section, a certified copy of the document, but no other kind of secondary evidence, is admissible.
(d) In the case mentioned in paragraph (g) of subsection (1) of this section, evidence may be given as to the general result of the accounts or documents by any person who has examined them, and who is skilled in the examination of such accounts or documents
15. A reading of both provisions I have cited shows that they deal with the production of secondary and documentary evidence. Under section 67 of the Evidence Act, documents must be proved by primary evidence which in this case means the original documents referred to by the Plaintiff. By issuing the Notice to Produce, the Plaintiffs evince their intention to produce secondary evidence. The Notice to Produce is intended to give the other side an opportunity to either produce the primary evidence or if it fails to do so, permit the party issuing the notice to adduce secondary evidence. A party who fails to contest the Notice to Produce loses the right to object to the production of secondary evidence in the manner provided for under the Evidence Act.
16. Turning to the facts of this case, the Plaintiffs’ case is that the documents they seek relate to the loan facility the Bank granted the 1st Plaintiff. Indeed, the Plaintiffs, as customers of the Bank, have a right to all documents that relate to the loan facility including the Letter of Offer and Statements of Account. However, as stated in the introductory part, the court, in its ruling of 17.09.2021 found that the said statements of accounts sought by the Plaintiffs had already been supplied and explanations given by the Bank for those accounts that had since been closed. The Plaintiffs have admitted as much but urge that there is no harm if the Bank re-issues the same but at the Plaintiffs’ cost.
17. The Bank has also stated it does not have in its possession the accounts listed as items (i) and (ii) in the Notice and that the only relevant account is Account No. 10****-****4 in respect of the settlement agreement dated 23.11.2020 and that Account No. 10****- ****6, which corresponds to item 3 on the Notice to Produce is a current account which had a nominal balance of Kshs 4,000 as at 12.03.2021. In their rebuttal, the Plaintiffs stated that the said accounts in items (i) and (ii) of the Notice do actually exist and that the Bank had at one point issued them with Statements of Account for the same which statements they have annexed.
18. As I have stated, the purpose of the Notice to Produce documents issued under section 69 of the Evidence Act is to enable the party issuing the notice to adduce secondary evidence. The only order that the court can issue based on the Notice to Produce it to permit the Plaintiffs to produce secondary evidence of the documents which the Bank has failed or refused to produce. In addition, the court is entitled to make a negative or adverse inference against a party who fails to produce a document that is in its power of possession (see Kimotho v Kenya Commercial Bank Ltd [2003] EA 108).
19. Falling back to the issue of discovery which the parties dwelt on, it is not in doubt that the court has broad powers to order disclosure of documents in a suit in order to prevent surprise at the trial, give parties adequate opportunity to prepare for their respective cases and ultimately ensure that there is a fair trial. Order 11 of the Rules deals with discovery and provides for sanctions for non- compliance. Orders 4 and 7 require the parties to file and serve documentary evidence with their pleadings, while Order 14 empowers the Court to order production, impounding and return of documents. In Concord Insurance Co. Ltd v NIC Bank Ltd [2013] eKLR, the court cited with approval the following passage in Black’s Law Dictionary (7th Ed.) where discovery is defined as, “The disclosure by the defendant of facts, titles, documents, or other things which are in his exclusive knowledge or possession, and which are necessary to the party seeking the discovery as a part of a cause or action pending or to be brought in another court, or as evidence of his rights or title in such proceeding”. The court noted that, “Discovery is therefore limited solely to the matter in contention. The Court, in exercise of its discretion to issue such orders as to discovery, will be guided by the relevance of the documents that the applicant seeks, in relation to the pleadings.” In addition, the court will not order discovery of documents not in the power or possession of the party against whom the order is sought (see Rafiki Microfinance Bank Ltd v Zenith Pharmaceuticals [2016]eKLR).
20. As relates to the issue of production of documents, this court pronounced itself in the ruling dated 17.09.2021 as follows:
[31] …… At the stage I would point out that every customer is entitled to account statements of account a bank usually issues in the course of the ordinary course of business upon request. Indeed, the Bank received a request for certified statements from the 1st Plaintiff by the letter dated 12th March 2021. The Bank responded to the letter by attaching statements where possible and informing the Plaintiff that some of the accounts referred to were closed.
21. It is clear from the evidence that the Bank furnished the statements which it was able to do so and which were in its possession and explained why it could not produce any other documents more so the those in items (i) and (ii) of the Notice to Produce. However, the Bank did not comment or state whether it had in its possession ‘The Bank Facility Letter for the Loan Credit Facility for Kenya Shillings 90,000,000.00 issued to Alice Wanjiku Kariuki vide a charge over property Land Reference No. Nairobi/Block 27/423/1-12 (later amalgamated to Nairobi/Block 27/567) and disbursed on 22nd October 2010.’ I therefore direct the Bank to produce this document within 14 days from date of this ruling or file an affidavit explaining why the same cannot be produced.
22. The last is issue is whether the court should strike out the Statement of Defence. In such instances, striking out a pleading is a sanction for noncompliance and the court will not strike out a pleading unless such noncompliance is willful and contumelious. In Eastern Radio Service v Tiny Tots [1967] EALR 392., Newbold P., observed that, “It is not, I think, in dispute that a litigant who has to comply with an order for discovery should not be precluded from pursuing his claim or setting up his defence unless his failure to comply was due to a willful disregard of the order of the court. Nor is it, I think, in dispute that willful means intentional as opposed to accidental.” On the same issue, Sir Clement De Lestang, VP., added, “The authorities show, and there is no dispute about it, that a court ought not to impose the penalty of dismissing a suit except in extreme cases and as a last resort and should only do so where it is satisfied that the plaintiff is avoiding a fair discovery or is guilty of willful default.” Based on the circumstances demonstrated herein, an order to strike out the Defence would be unwarranted.
Disposition
23. It is for these reasons that I allow the Plaintiffs’ application but only to the extent that the Bank is directed to produce the document listed and particularized as item no (i) in the Plaintiffs’ Notice to Produce Documents dated 02.11.2022, that is, The Bank Facility Letter for the Loan Credit Facility for Kenya Shillings 90,000,000.00 issued to Alice Wanjiku Kariuki vide a charge over property Land Reference No. Nairobi/Block 27/423/1-12 (later amalgamated to Nairobi/Block 27/567) and disbursed on 22nd October 2010’ within 14 days from date of this ruling or file an affidavit explaining why the same cannot be produced.
24. Costs of this application shall await compliance with the order issued herein.
DATED and DELIVERED at NAIROBI this 17th day of AUGUST 2023.
D. S. MAJANJA
JUDGE