KEYA KIGANGA VS SPIRE BANK LIMITED AND ABDULAHI IDRIS BASHIR AND 2 Others

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT VIHIGA

ELC APPEAL  NO.   11 OF 2022

KEYA KIGANGA…………………………………………...……APPELLANT

VERSUS

SPIRE BANK LTD………………………………………….1^ST RESPONDENT

ABDULLAHI IDRIS BASHIR…………………………….2^ND RESPONDENT

NOOR RARI BARAKO…………………………………….3^RD RESPONDENT

PRESTON WOOD CO. LTD………………………………..4^TH RESPONDENT

(An appeal from the ruling of Hon. M. Ochieng PM, delivered on 28^th day of January 2022 in HAMISI PM E & l CASE NO 8 OF 2020

BETWEEN

KEYA KIGANGA……………………………………………….….PLAINTIFF

VERSUS

SPIRE BANK LTD……………………………………….……1^ST DEFENDANT

ABDULLAH IDRIS BASHIR………………………………….2^ND DEFENDANT

NOOR RARI BARAKO………………………………………..3^RD DEFENDANT

PRESTON WOOD CO. LTD…………………………………4^TH DEFENDANT)

JUDGEMENT

Introduction

1. The Appellant Keya Kiganga was the plaintiff in HAMISI PMC ELC NO. 8 OF  2020 (the suit).  He had Vide the plaint dated 25^th July 2020 sued the Respondents herein over a parcel of land known as TIRIKI/CHEPTULU/830 (the suit land) and sought for:
2. An order cancelling the Title TIRIKI CHEPTULU/830 issued to the 2^nd and 3^rd Defendants.
3. In the alternative, the 1^st and 4^th Defendants do compensate the plaintiff for the loss of his land TIRIKI/CHEPTULU/830
4. Costs of the case
5. Any other order considered just and fit.
6. The Appellant’s case before the trial court was that he was the registered owner of the suit land which he gave as security for the 4^th Respondent to secure a loan from the 1^st Respondent.  That the 4^th Respondent defaulted in the loan repayments and the land was illegally sold and transferred to the 2^nd and 3^rd Respondents. That the 2^nd and 3^rd Respondents obtained title by fraud.
7. In response to the appellants claim the 1^st Defendant in the suit filed a Notice of Preliminary objection dated 5^th August 2020.  Similarly, the 2^nd and 3^rd Defendants raised a preliminary objection dated 4^th August 2020.
8. The record of Appeal shows that the Preliminary Objection were argued before the trial court which vide its ruling  dated 28^th January 2022 upheld the preliminary objections and dismissed the suit with costs.
9. Aggrieved by the Ruling, the appellant preferred the present appeal vide the Memorandum of Appeal dated 19^th January 2022 seeking that the Appeal be allowed with costs.
10. The grounds of Appeal as contained in the Memorandum of Appeal are that:
11. The Magistrate erred in law and fact in holding that there was a proper preliminary objection before her when the same did not satisfy the law regarding preliminary objection.
12. The Magistrate erred in law to find that the cause of action in Case No. 8 of 2020 was the same as that of KAKAMEGA ELC No. 27 of 2015 without any evidence being adduced.
13. The learned Magistrate treated the case casually and made a lot of presumptions which are illegal and injudicious.
14. Directions were given inter alia that the appeal be argued by way of written submissions.

Submissions

1. Written submissions dated 8^th December 2023 were filed by the firm of MOMANYI MANYONI & CO. ADVOCATES on behalf of the appellant.  Similarly, written submissions dated 7^th February 2024 were filed on behalf of the 1^st Respondent by the firm of OLEL, ONYANGO, INGUTYA & CO. ADVOCATES for the 1^st Respondent. Further written submissions dated 28^th February 2024 were filed by the firm of SWAKA & CO. ADVOCATES on behalf of the 2^nd and 3^rd Respondents. No submissions were filed by or on behalf of the 4^th Respondent.

Issues for determination

1. The grounds of appeal form the issues for determination herein.

Analysis and determination

1. This being a first appeal, the court reminds itself of the duty to re-examine and re-analyze the evidence placed before the trial court so as to arrive at an independent conclusion.
2. The first ground of Appeal raises the issue of whether or not the Preliminary objections placed before the trial court satisfied the law regarding preliminary objections Counsel for the Appellant submitted that the ingriendents which must be present in a suit for it to qualify to be deemed a Preliminary Objection are that :
3. both the pleadings of the plaint and defence must agree on the factual averments leading to the objection.
4. the plaintiff’s claim is based on paragraphs 8 and 9 of the plaint.  It is based on events which took place on 8^th July 2020 so the cause of action took place in 2020.

Counsel submitted that the contradicting positions of the parties in the suit required a full hearing of the case to enable parties get an opportunity to adduce evidence for the court to be persuaded in one or other of their averments.  That the court could not determine the issues on a Preliminary Objection.  That for the court to determine the issues raised by the plaintiff, the court needed:

1. evidence that the plaintiff was the owner of the title in dispute.
2. evidence that the land was sold and whether the sale was lawful.
3. evidence whether the defendant observed legal statutory provisions of the eland laws meant to protect the rights of the guarantor,
4. evidence whether the sale was fraudulent
5. evidence on whether the tile to the 2^nd and 3^rd defendant could be recalled or cancelled.

Counsel submitted further that the Defendant also raised issues which could not be determined at a preliminary stage.

1. On behalf of the 2^nd and 3^rd Respondents it was submitted in respect of the first ground of appeal that the question as to what constitutes a preliminary objection is now well settled by a long line of authorities. Citing the case of Mukisa Biscuits Manufacturing Company Ltd Vs West End Distributors (1969) EA  696 and Hassan Ali Joho & others (2014) eKLR, Counsel submitted that the question that the court must address is whether the Preliminary objection raised by the Defendant was premised on pure point of law or on contested facts.  That the grounds set in the Notice of Preliminary Objection dated 4/8/2020 by the 2^nd and 3^rd Respondents is that the court did not have jurisdiction to hear and determine the application because the suit was res judicata.  Counsel relied on the case of Agnes Mukani and 5 Others Vs Ngewahi & Company (2005) eKLR where it was held that a clear and well taken Preliminary Objection may expedite disposal of matters before a court and on the other hand a vague Preliminary Objection often causes delay in determining matters.
2. I have considered these submissions and the Preliminary Objection raised.  The ingredients of a valid preliminary objection as stated in the case of Mukisa Biscuits (Supra) is that the preliminary objection must be based on pure points of law which flow from the pleadings and which may dispose of the suit.
3. The Preliminary Objection raised by the 1^st Respondent vide Notice of Preliminary Objection dated 5^th August 2020 was on the following grounds;

“ i) That the suit is res judicata and offends the provisions of Section  7 of the Civil Procedure Act as there has been two previous suits filed in the High  Court in Kakamega between the same parties and touching on the same issues  and determination has been made conclusively in favour of the bank.  The suit are; -

1. Kakamega H.CC Civil Case No. 12 of 2023. Piston (K) Woods Ltd Vs Equatorial Commercial Bank Ltd & Nyaluoyo Auctioneers.
2. Kakamega HCC (ELC) No. 27 of 2015. Joyce Minayo Keya Vs Keya Kiganga, Preston (K) Woods Ltd, Equatorial Commercial Bank Ltd & Nyaluoyo Auctioneers.

ii)  That there exists and still pending a third Civil suit being:

Kapsabet CMCC No. 109 of 2019 Keya Kiganga Vs Spire Bank Ltd, J.K Wandera Auctioneers Preston Woods (k) Ltd which matter arises from the cause of action in this matter and thus this suit should be stayed pursuant to provisions of Section 6 of the Civil Procedure Act (in the alternative).”

1. The Preliminary Objection by the 2^nd and 3^rd Respondents was based on the grounds that;
2. the honourable court is bereft of jurisdiction to hear and determine this impugned application in view of the fact that the matter is res judicata, the substratum of the suit having been in issue in ELC No. 12 of 2013 (Kakamega) Preston Woods Co Ltd VS Spire Bank Ltd (formerly Equatorial Commercial Bank) and others and ELC No. 27 of 2015 (Kakamega) Joyce Keya Vs Keya Keganga & 3 Others.
3. THAT the conduct by the applicant is an abject abuse of the process of the honourable court.
4. THAT the instant application is frivolous, vexatious and embarrassing”
5. The substantive ground of both preliminary objections was that the suit before trial court was res judicata.  The doctrine of res judicata is a pure point of law based on the provisions of Section 7 of the Civil Procedure Act.  It is also clear that this matter were raised in the defences. In paragraph 12,13 and 14 of the 1^st Respondents statement of defence dated 5^th August 2020, the 1^st Respondent raised the issues the subject of its preliminary objection.  Similarly, in paragraph 6, 9, and 12 of the 2^nd and 3^rd Respondents statement of defence dated 22^nd September 2020, the 2^nd and 3^rd.  Respondent pleaded grounds of their preliminary objection. 
6. I find that the preliminary objection raised by the Respondent satisfied the requirements of law as to what constitutes a preliminary objection.
7. The next grounds of appeal raised the issue of whether or not the Trial Magistrate erred in finding that the cause of action in case No. 8 of 2020 was the same as that of Kakamega ELC No.  27 of 2015 and KAKAMEGA ELC NO. 12 OF 2013 without any evidence being adduced.

The applicant claims that no evidence of the judgment in the former suits was adduced.  It was submitted on behalf of the appellant that the cause of action in the cases filed in 2015 and 2013 was different from the present case filed in 2022.  That the cause of action did not exist in the years 2013 and 2015.  That it started with the transfer done in 2019 and that there was therefore no way courts could have decided an issue happening in 2019 in 2013 and 2015.  That the court did not investigate   each of the ingredients and the pleadings of the parties.  That the court avoided to analyse the pleadings and failed to apply the law.

1. Counsel submitted further that the court mis-directed itself when it held that the issue   was on the statutory power to sale the property charged.  That the issue in the present suit was different. That it may have arisen out of the loan advanced by the 1^st defendant to the 4^th Defendant.  That the origin of the present suit was the said loan but that the cause of action was different.  That the manner of sale was illegal for failure to follow the law.  That the cause of action in the present case was the sale done in the year 2022 without following statutory provisions of the law.  That this was not an issue in the previous suits.  That the cause of action as per paragraph 7 of the plaint took place on 8^th July 2020.  That the transfer of the suit to the 2^nd and 3^rd Defendant took place on 20^th November 2019.
2. Citing Section 96(3) and 97 of the Land Act, Counsel submitted that the appellant’s case was that in selling his property the law was not followed.  That Section 96 (3) makes it mandatory that notice be served on the appellant. That these are substantive provisions of the law which protect the rights of guarantors such as the appellant herein.  That hence it was wrong for the court to hold that the case before it was a case challenging its procedure of conducting the sale.
3. Counsel submitted further that the cases quoted were not produced hence it is not clear how the court arrived at the decision that the suit was sub- judice.
4. On behalf of the 1^st Respondent it was submitted that the substantive law on Res judicata is found in section   7 of the Civil Procedure Act.  Counsel relied on Black’s Law Dictionary 10^th Edition on the definition of res judicata as

“an issue that has been definitely settled by judicial decision.  The three essentials are (1) an earlier decision on the issue (2) a final Judgment on the merits and (3) the involvement of same parties or parties in privity with the original parties.”

Counsel submitted that in order to decide whether a matter is res judicata, the court should always look at the decision claimed to have settled the issues in question and the entire application and the instant application.  That the issues raised in the 3 cases are fundamentally the same namely; all of them sought to restrain the 1^st Respondent bank from disposing off several properties including the suit land herein.

1. Counsel submitted that the appellant through the 4^th Respondent who is his son in law first began by filing suit No. 12 of 2013 in Kakamega wherein he sought orders barring the 1^st Respondent from exercising its statutory power of sale and when the said suit was heard and determined, he proceeded to file Case No. ELC 27 of 2015 at the High court in Kakamega through Joyce Minayo Keya who is the wife of the 4^th Respondent herein.  That the suit just like the former was dismissed by court for being res judicata vide ruling dated 23^rd November 2017.  That in ELC Case No. 8 of 2020 filed in Hamisi, the appellant how filing the suit by himself sought yet again to bar the 1^st Respondent from taking possession of the suit land.  That the parties to the suit have always been the same save that the 1^st Respondent bank was previously named Equatorial Commercial Bank Ltd but now goes by the name Spire Bank Ltd. Counsel relied on the case of Court of Appeal decision in Independent Electoral & Boundaries Commission Vrs  Maina Kiai & 5 Others (2017) eKLR.
2. On behalf of the 2^nd and 3^rd Respondents it was submitted that Section 7 of the Civil Procedure Act reveals that for the bar of res judicata to be effectively raised and upheld the party raising it must satisfy the doctrine’s five essential elements.  Counsel relied on the case of IEBC Vs Maina Kiai & 5 Others (2017) eKLR for this submissions.
3. Counsel relied on the case of Kenya Commercial Bank Limited Vs Benjoy Amalgamated Limited (2017) eKLR where the court held that all elements prescribed under Section 7 of the Civil Procedure Act must be present before a suit or issue can be found to be res judicata and submitted that the suit   that was before the trial court was res judicata because:
4. The suit was directly and substantially in issue in the former suits namely; KAKAMEGA ELC NO. 12 OF 2013 and KAKAMEGA ELC NO. 27 OF 2017.  That the suit property was the subject in both former suits and that both suits were conclusively determined in favour of the 1^st Respondent.  That hence, the matter is res judicata and a nullity ab initio.
5. That the suit was between the same parties. That the appellant’s substitution of the parties in each suit was but a cunning tactic employed.  That it is not disputed by the appellant that the property in dispute was charged by the 1^st Respondent as security for the 4^th Respondent to be able to obtain a loan.  That the appellant has sought various orders against the Respondent from taking possession of land parcel NO. TIRIKI/CHEPTULU/830.
6. That the suit before the trial court was not any different from all the other former decided cases.  Counsel relied on the case of Dioceses of Eldoret Trustees (Registered) Vs Attorney General (On behalf of the Principal Secretary Treasury) & Another (2020) eKLR where it was held inter alia that courts should always be vigilant to guard against litigants who metamorphosize to bring suits as new litigants or add others to circumvent the doctrine of res judicata. Counsel further relied on the case of Satya Bhama Gandhi Vs Director of Public Prosecution & 3 Others (2018) eKLR where it was held that it is trite that the mere addition of parties in a subsequent suit or omission of a party or parties does not necessarily render the doctrine of res judicata inapplicable since a party cannot escape the said doctrine by simply undertaking cosmetic surgery to his pleadings.
7. Counsel submitted further that the issues were heard and finally determined in the former suits by a court of competent jurisdiction. Counsel submitted that the decision of the court in the former suits in 2013 and 2015 dealt with the issue of ownership of the subject land and decided in favour of the 1^st   Respondent conclusively.  That the appellant is therefore estopped from raising issues which have been the subject of judicial litigation and which have been fully determined in the previous suits.
8. In order for the court to determine whether a mater is res judicata or not, evidence of the existence previous suits, the pleadings therein, the issues raised and the determination thereon must be availed to the trial Court. I have perused the entire record of Appeal and I find no pleadings, proceedings or Judgments/Rulings in the former suits.
9. A reading of the impugned ruling does not reveal that the trial court had any of the documents.  The ruling was based only on the preliminary objection dated 5^th August 2020, the written submissions and the case law that was relied upon by the parties.  The ruling read partly.

“Accordingly having considered the preliminary objection dated 5^th August 2020 the written submissions and case law that was relied upon by the parties herein, I don’t think that this suit can be sustained.”

1. I find that having not seen the pleadings, proceedings and judgment of the former suits the trial court was not at a position to decide whether the suit before  court raised the same issues that were directly and substantially in issue in the former suits, whether the former suits were between the same parties or parties under whom they sued, whether the issues raised in the present suit had been  heard and finally determined in the former suits and whether the court which determined the issues had jurisdiction.
2. Secondly the suit before the trial court had, as one of the orders sought, a prayer for compensation for the loss of the sold suit land as against the 1^st and 4^th Respondents.  The 4^th Respondent has so far filed no response to the appeal.  There is no evidence that he filed defence in the suit.  There is no specific finding whether that claim was res judicata as well.
3. As much as there appears to have been former suits relating to the suit before the trial court, it was imperative that the trial court interrogates  the pleadings/ proceedings and judgments and rulings therein in comparison with the current suit so as to come to the conclusion that the suit was res judicata or not. The trial court therefore erred in finding that the suit was res judicata.
4. For the foregoing reasons, I find that the appeal herein has merit and allow it as follows:
5. The ruling of the trial court dated 28^th January 2022 upholding the Preliminary Objections and dismissing the suit is hereby set aside and replaced with an order dismissing the preliminary objections.
6. The suit is hereby reinstated to hearing and disposal before the Principal Magistrate at Vihiga.
7. No order as to costs.

Orders accordingly.

Judgement dated and signed at Kisumu and delivered this 9^th day of May 2024 virtually through Microsoft Teams Online Application.

E. ASATI,

JUDGE.

In the presence of:

Ajevi-Court Assistant.

No appearance for the appellant.                  

Owino holding brief for Onyango for the 1^st Respondent.

Swaka for the 2^nd and 3^rd Respondents.

No appearance for the 4^th Respondent