Background and Introduction
1. The plaintiff, a duly registered banking institution, instituted this suit against the defendant seeking reimbursement of Kshs. 55,710,637.91, which it contends was wrongfully deducted from its accounts pursuant to a garnishee order issued by the High Court. The plaintiff contends that the defendant was the judgment debtor in High Court Miscellaneous Cause No. 148 of 2013, where it consented to pay Kshs. 50,988,985/= to the law firm of Otieno Ragot & Company Advocates.
2. On 5th May 2015, the High Court issued a garnishee order nisi against the plaintiff, attaching funds held in three accounts at its Kenyatta Avenue Branch, which were alleged to belong to the defendant. However, the plaintiff contends that the said accounts were held by the Nairobi City County Assembly Board, a separate and distinct legal entity from the defendant.
3. This notwithstanding, on 10th July 2015, the Court issued a garnishee order absolute, directing the plaintiff to pay the sum of Kshs. 50,987,985/= to Otieno Ragot & Company Advocates in satisfaction of the decree against the defendant. Under the continuous threat of execution, the plaintiff complied with the court orders and, on 25th November 2015, paid the decretal sum of Kshs. 50,987,985/=. Thereafter, on 18th December 2015, it paid a further sum of Kshs. 2,721,652.91, and subsequently, on 10th May 2019, paid Kshs. 2,001,000/= to M/s Victoria Blue Services as auctioneer's fees incurred in the execution of the decree.
4. The plaintiff maintains that the said funds did not belong to the defendant and were wrongfully appropriated from its accounts. Despite a formal demand and notice of intention to sue, the defendant has failed to reimburse the amounts claimed. Consequently, the plaintiff seeks an order compelling the defendant to refund the sum of Kshs. 55,710,637.91 together with interest at commercial rates, costs of the suit, and such other relief as the Court may deem just and appropriate.
5. During the hearing Mr. Eric Murai testified on behalf of the plaintiff and adopted the witness statement of Ms. Rebecca Mbithi dated 13th May 2016. The plaintiff also produced a list of documents dated 13th May 2016 and a supplementary list dated 10th March 2023. The witness statement and testimony mirror the facts as I have briefly set them out.
6. Upon cross-examination, he testified that he had been employed by the plaintiff for four and a half years and was not present when the proceedings began in 2013. He confirmed that he had consulted with his predecessor regarding the matter and stated that while there was no express consent from the defendant, the plaintiff relied on the court orders in executing the decree. Mr. Murai maintained that the plaintiff complied with the court orders, and that consent from the defendant was not required in doing so.
7. On re-examination, Mr. Murai clarified that the payments made were from the plaintiff’s own funds and not from customer accounts. He testified that the plaintiff acted under pressure to comply with the orders and had intended to recover the sums by debiting the defendant’s accounts. He stated that the plaintiff ultimately did not debit the defendant’s accounts, leading to the institution of this suit for reimbursement.
Analysis and determination
8. The record shows that this matter proceeded to formal proof after the defendant’s statement of defense was struck out. The plaintiff filed written submissions dated 16th April 2024, while the defendant filed submissions dated 15th May 2024. I have considered the submissions and the plaintiff’s evidence.
9. The defendant in this case is deemed not to have defended the suit but the plaintiff is still required to prove its case on a balance of probabilities. The striking out of the defence does not automatically result in judgment in favour of the plaintiff. The court must be satisfied that the plaintiff’s evidence sufficiently establishes its claim. This position is well captured in Peri Formwork Scaffolding V White Lotus Projects Ltd, [2021] eKLR, where the court observed:
“In a formal proof hearing, a party with the onus of adducing evidence must produce such sufficient evidence which must satisfy the court as to its truth.”
10. In Rosaline Mary Kahumbu V National Bank of Kenya Ltd, [2014] eKLR, the Court also held:
“In contrast, at a formal proof hearing, if the party with the onus of adducing evidence fails to satisfy the truth threshold, the matter would stand to be dismissed on the basis that it was unmeritorious and did not raise sufficient proof of any issues of fact or law. It would be heard and determined on its merits.”
11. Therefore, although the defendant’s submissions were filed after the defence had been struck out and carry no legal weight in challenging the claim, the court must independently assess the merits of the plaintiff's evidence to determine whether it has proved its case.
12. In the present case, the plaintiff seeks the sum of Kshs. 55,710,637.91 from the defendant. The plaintiff contends that it made the payments pursuant to a garnishee order absolute issued on 10th July 2015, and that the funds used were its own, not those of the defendant. The garnishee order absolute dated 10th July 2015 appears at pages 6 and 7 of the plaintiff’s bundle of documents. The order was reviewed in a ruling delivered by Mabeya J. on 31st July 2015, specifying the two accounts to be attached in satisfaction of the decree. That ruling is found at pages 8 to 19 of the defendant’s bundle of documents.
13. The plaintiff produced statements of account evidencing payment of the decretal sum to Otieno Ragot & Company Advocates and the auctioneer’s fees to M/s Victoria Blue Services. These documents are found in both the plaintiff’s main and supplementary bundles. The plaintiff’s witness explained that the payments were made under threat of execution. This position is corroborated by a demand letter from Otieno Ragot & Company Advocates dated 20th November 2015 and annexed at page 20 of the plaintiff’s bundle.
14. Upon reviewing the evidence, I am satisfied that the plaintiff has proved its claim on a balance of probabilities. The plaintiff paid the defendant’s debts in order to comply with court orders, and the defendant has failed or refused to reimburse those amounts.
Disposition
15. Accordingly, and in the interests of justice, I grant the prayers sought in the Amended Plaint dated 8th October 2020.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 22ND DAY OF APRIL 2025.
F. MUGAMBI
JUDGE