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JudgmentISABELLA MUTHONI VS ELIEZAH MWITHALI MWIKI8 min read

ISABELLA MUTHONI VS ELIEZAH MWITHALI MWIKI

High Court at Milimani High Court · · Njoki Mwangi

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND TAX DIVISION

MILIMANI LAW COURTS

MISC APPLICATION COMM ARB NO. E063 OF 2023

ISABELLA MUTHONI…………………DECREE HOLDER/ RESPONDENT

VERSUS

ELIEZAH MITHALI MWIKI……….....JUDGMENT DEBTOR/ APPLICANT

RULING

  1. The application before this Court is the judgment debtor’s Notice of Motion dated 5th October, 2023, brought under Order 21(1) and Order 22 of the Civil Procedure Rules, 2010 and Sections 1A, 1B and 31 of the Civil Procedure Act. The applicant seeks the following orders-
  2. Spent;
  3. Spent;
  4. That this Honourable Court be pleased to allow the judgment debtor/ applicant to satisfy the sum of Kshs.3,171,002.83 together with the costs of the suit and interest due to the decree holder/respondent by paying a deposit of Kshs. 500,000 and the remainder in 18 equal monthly instalments;
  5. That the Honourable Court be pleased to restrain the decree holder/respondent from levying execution herein for as long as the applicant pays the proposed monthly instalments;
  6. That the Honourable Court be pleased to issue any other order as may seem just; and
  7. THAT the costs of this application be provided for.
  8. The application is premised on the grounds on the face of the Motion and is supported by affidavit sworn on 5th October, 2023 by the applicant, Eliezah Mithali Mwiki. In summary, the grounds are that the parties had a dispute arising from a sale agreement dated 29th April, 2021. The dispute was determined by Arbitrator Christopher Kihara who delivered the award in favour of the respondent. The respondent applied for the recognition and enforcement of the award and the Court entered judgment against the applicant on 3rd October, 2023, for the sum of Kshs.3,171,002.83 together with costs of the suit and interest. A decree ensued, and the applicant is apprehensive that the respondent will instruct Auctioneers to proclaim his assets. The applicant states that he is willing to settle the sum but is faced with financial difficulties, due to the impact of the coronavirus (Covid-19) Pandemic, which caused substantial disruption to his business leading to temporary closure of the same.
  9. In opposition to the application, the respondent filed a replying affidavit sworn on 23rd November, 2023. The core depositions are that after the completion of the arbitration and issuance of the Final Award dated 18th May, 2023, the respondent’s Advocates sought settlement of the arbitration award together with Kshs.43,500/-, being the extra cost of the reference incurred after the applicant herein declined to settle part of the Arbitrator’s fees. That in response, the applicant sought to settle the award by payment of a deposit of Kshs. 500,000/-, and the balance in 24 equal monthly instalments but she was not agreeable to the said proposal. Instead, she proposed that the balance be cleared in 6 equal monthly instalments, and the applicant then proposed to pay the balance in 18 equal monthly instalments.
  10. The respondent urged this Court to dismiss the application with costs as it is an abuse of the Court process. She asserted that the applicant is undeserving of the orders being for not having made any payment after the award was issued, and three years after she paid the funds to him in the year 2020.
  11. The respondent averred that she ought to be allowed to proceed with execution to recover the decretal sum as she has already declined the applicant’s proposal to pay a deposit of Kshs. 500,000/- and the balance in 18 equal monthly instalments. The respondent deposed that to her knowledge, the applicant is a person of means with rental income among other sources. She opined that the proposal to pay the balance in 18 equal monthly instalments is completely ridiculous and a mockery to her.
  12. The applicant filed written submissions dated 10th November, 2023. The respondent elected not to put in any submissions, relying entirely on her replying affidavit.
  13. The applicant relied on the case of Supplies Services Limited v Murang’a Farmers Cooperative Union Limited [2021] KEHC 119 [KLR] to assert that it has met the conditions required for the Court to allow him to settle the decretal sum in instalments. The applicant asserted that this application was filed timeously, as soon as the award was recognized. In addition, the application has been brought in good faith, considering his proposal to settle the decretal sum in two years through a deposit of Kshs. 500,000/-, and the balance in 18 equal instalments. He expressed the view that the respondent will not be prejudiced as she will receive the sum within a reasonable period.

ANALYSIS AND DETERMINATION.

  1. I have considered the instant application, the grounds on the face of it and the affidavit filed in support thereof. I have also taken into account the replying affidavit by the respondent and the written submissions. The issue that arises for determination is whether the Court should allow the applicant to settle the decree by instalments.
  2. Order 21 Rule 12 of the Civil Procedure Rules, 2010 provides as follows-

        “(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.”

  1. From the above provisions, it is clear that determining whether an applicant can settle the decretal sum in instalments is a matter of discretion which must be exercised judiciously and with sound reasoning. In so doing, the circumstances of each case are pertinent.
  2. The factors to be considered in determining whether an applicant may be allowed to settle the decree by instalments were outlined by the Court in the case of Keshval Jethabhai & Brothers Ltd v Saleh Abdul (1959) EA 260, in the following terms-

“That is each case must be weighed on its merits and facts. The inability to pay the decretal sum at once may not be considered as a sufficient reason. While its possibly true that hardship to pay may account or the court to consider the application, but the judgment debtor must demonstrate good faith or bona fide on his conduct to make arrangements for prompt payment and in a variety of ways such leave to permit the judgment debtor to pay the debt by way of instalments should not prejudice the judgment creditor.”

  1. The circumstances of the present case are clear. The dispute emanated from a sale agreement dated 29th April, 2021. The respondent claims that she made payments in the year 2020 and that three years later, the applicant is yet to settle the sum owing. The dispute was referred to arbitration which was completed and the award was issued on 18th May, 2023. I note that prior to this Court’s order for enforcement and recognition of the Arbitral Award issued on 2nd October, 2023, the parties were engaged in negotiations on the mode of settlement of the award. The parties were however unable to agree, and this prompted the respondent to file the instant application.
  2. The applicant is willing to pay Kshs. 500,000/- to start with. The core issue is on the period for settlement of the balance of the payment. The applicant is willing to pay the balance in 18 equal monthly instalments but the respondent is only agreeable to the payment of the balance in 6 equal monthly instalments.
  3. In Astrazeneca Uk Ltd v Macnaughton [2016] eKLR, the Court outlined the factors to be considered in establishing if there is sufficient reason for allowing payment by instalments. The Court stated thus-

“[9]   From the totality of the authorities cited, it is common ground that, as a general rule, a judgment creditor is entitled to the immediate payment of the decretal sum; and that while the judgment debtor might genuinely be in a difficult position in paying the debt at once, the court must be convinced that there is sufficient reason for allowing payment by instalments. It is also common ground that to determine what amounts to sufficient reason, consideration should be given to:

[a] The circumstances under which the debt was contracted

[b]  The conduct of the debtor

[c]   His financial position

[d]   His bona fides in offering to pay a fair proportion of the debt at once.”

  1. The applicant claims that he is unable to pay the entire decretal sum due to financial difficulties attributed to the Covid-19 Pandemic. On the other hand, the respondent asserts that the applicant was a person of means, with rental income.
  2. As highlighted in the above authority, a judgment creditor is entitled to the immediate payment of the decretal sum. It is the applicant who must convince this Court that there is a sufficient reason to settle the amount in instalments. The applicant did not avail any evidence to demonstrate the current financial position of his business, but merely stated that it had been temporarily closed due to the Covid-19 Pandemic which occurred over 3 years ago. He also did not respond to the claim that he receives rental income. Further, I note that the applicant did not make any payment from the date of publication of the Arbitral Award made on 18th May, 2023.
  3. On the other hand, I note that when the application for enforcement and consideration came up for hearing on 2nd October, 2023, the applicant did not oppose it but sought 30 days stay of execution to enable it to file the instant application, which was filed within reasonable time, on 5th October 2023. I have considered that the applicant has offered to pay the amount due and owing to the respondent by instalments. It is however up to this Court to determine the amounts to be paid in monthly instalments as the Court notes that the period proposed by the applicant within which to settle the debt is not acceptable to the respondent.
  4. Accordingly, I allow the application dated 5th October, 2023 on the following terms-
  5. The judgment debtor/applicant shall satisfy the sum of Kshs. 3,171,002.83 together with the costs of the suit and interest due to the decree holder/respondent by making an initial payment of Kshs. 800,000/- and the remainder (balance) in five (5) equal monthly instalments. The payments shall take effect from the 5th March, 2024 and will thereafter be paid by the 5th day of each succeeding month until payment in full.
  6. Although costs follow the event. The costs of the instant application are awarded to the respondent who is owed money by the applicant and has been dragged to this Court for no fault on her part.

It is so ordered.

DATED, SIGNED and DELIVERED at NAIROBI on this 9th day of February, 2024. Ruling delivered through Microsoft Teams Online

Platform.

NJOKI MWANGI

JUDGE

In the presence of:

Mr. Saha h/b for Mr. Otieno for the applicant

Mr. Kamau h/b for Mr. Thiong’o for the respondent

Ms B. Wokabi – Court Assistant.

    ISABELLA MUTHONI VS ELIEZAH MWITHALI MWIKI ISABELLA MUTHONI VS ELIEZAH MWITHALI MWIKI