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JudgmentTHE JOINT LIMITED VS IMMEDIATE AUCTIONEERS14 min read

THE JOINT LIMITED VS IMMEDIATE AUCTIONEERS

High Court at Milimani High Court · · Njoki Mwangi

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

COMMERCIAL AND TAX DIVISION

HCCOMM NO. E489 OF 2020

THE JOINT LIMITED...............................................PLAINTIFF/APPLICANT 

VERSUS 

SUSAN KARANJA......................................1ST DEFENDANT/RESPONDENT 

MUNGAI KALANDE & COMPANY ADVOCATES…………………………..…2ND DEFENDANT/RESPONDENT

GEORGE MBABU T/A IMMEDIATE AUCTIONEERS…………………………...3RD DEFENDANT/RESPONDENT

RULING

  1. The plaintiff/applicant filed a Notice of Motion dated 21st December, 2021, brought under Section 5 of the Judicature Act seeking the following orders-
  2. Spent;
  3. That the Honourable Court be pleased to cite the 1st, 2nd and 3rd respondents for contempt of this Honourable Court's order issued on 25th November, 2020;
  4. That the Honourable Court be pleased to order that the 1st, 2nd and 3rd respondents be committed to civil jail for contempt for the wilful disobedience of the Court order made on 25th November, 2020 by the Honourable Justice W. Okwany virtually in HCCC No. E489 of 2020 - The Joint Limited vs Susan Karanja and others;
  5. That this Honourable Court be pleased to punish the 1st, 2nd and 3rd respondents herein by imposing a fine upon the 1st, 2nd and 3rd respondents for wilful disobedience of the Court order made on 25th November, 2020 and further issued on 25th November, 2020 by the Honourable Justice W. Okwany virtually in HCCC No. E489 of 2020 -The Joint Limited vs Susan Karanja and others;
  6. That this Honourable Court do issue a declaration that the sale through public auction of the applicant's tools of trade and stock on 22nd June, 2020 is unlawful, illegal, null and void for being a contravention of the Court order made on 25th November, 2020 and further issued on 25th November, 2020 by the Honourable Justice W. Okwany virtually in HCCC No. E489 of 2020 - The Joint Limited vs Susan Karanja and others;
  7. That this Honourable Court be pleased to order the attachment of the 1st, 2nd and 3rd respondents’ property and that the same be attached for the amount to be determined pending the purging of the 1st, 2nd and 3rd respondents’ contempt of this Honourable Court in disobeying and/or wilfully disregarding the order and directions made on 25th November, 2020 and further issued on 25th November, 2020 by the Honourable Justice W. Okwany virtually in HCCC No. E489 of 2020 - The Joint Limited vs Susan Karanja and others; and
  8. That the costs of and occasioned by the contempt of court proceedings herein be met by the 1st, 2nd and 3rd respondents herein personally and in default thereof execution to issue forthwith.
  9. The application is supported by the grounds set on the face of it, and the supporting affidavit sworn by the applicant’s director, Daniel Kipchumba Koech.
  10. The Court orders that were allegedly contravened by the respondents were preceded by an application dated 23rd November, 2020, filed on the same date, seeking a temporary injunction to restrain the respondents, their servants, officers, employees, assigns and/or agents or any other person acting for and/or on their behalf from advertising for sale, disposing of, alienating, dealing with, selling by public auction the applicant’s tools of trade and stock pending the hearing and determination of the application. The application was heard ex parte and the order of 25th November, 2020 was issued.
  11. The applicant stated that the order dated 25th November, 2020 was clear, unambiguous and binding on all the respondents. That by a letter dated 25th November, 2020, the plaintiff's Counsel notified the 2nd respondent of the order, and it was extracted and served on the respondents. The applicant contended that in defiance of the said order, the respondents sold the applicant’s tools of trade and stock through a public auction conducted by the 3rd respondent on 22nd June, 2021.
  12. In response to the instant application, the respondents filed a replying affidavit sworn on their behalf by Advocate Migui Mungai on 1st February, 2022. He conceded that there were interim orders of injunction issued by the Court on 25th November, 2020. He however asserted that on 10th June, 2021, when the matter was listed for mention for directions for the application dated 23rd November, 2020, before the Deputy Registrar, the applicant did not seek extension of the interim orders. That he inquired whether the interim orders were still in place and confirmed with the Court that there was no extension of the interim orders. He averred that again on 10th June, 2021, when the matter came up for mention for directions, the Court directed that the respondents’ Preliminary Objection (PO) dated 2nd February, 2021 be heard first and scheduled the hearing for 27th July, 2021. That on the said date, the Court directed that the PO be disposed of by way of written submissions, and in both instances, the Court did not extend the interim orders. That it was based on the foregoing that the 2nd respondent instructed the 3rd respondent to proceed and advertise and later sell the attached property by public auction.
  13. The application was canvassed by way of written submissions. The plaintiff filed written submissions dated 12th May, 2023, whereas the defendants filed written submissions dated 20th June, 2023. Ms Wathuta, learned Counsel for the applicant relied on decisions in Sheila Cassatt Issenberg & another v Antony Machatha Kinyanjui [2021] eKLR and Republic v Attorney General & another Exparte Mike Maina Kamau [2020] eKLR, to show that the applicant had met the conditions required to make a case for contempt.
  14. Counsel contended that the order in issue was to remain in effect until the hearing and determination of its application dated 23rd November, 2020, which remains pending to date. To support the contention, Ms Wathuta relied on Order 40 Rule 6 of the Civil Procedure Rules, 2010 to the effect that where a suit in respect of which an interlocutory injunction has been granted is not determined within a period of twelve months from the date of the order, the injunction shall lapse unless for any sufficient reason the Court orders otherwise.
  15. Counsel also relied on Section 5 of the Judicature Act on the power of a Court to punish for contempt and Order 40 Rule 3 of the Civil Procedure Rules, 2010 on the Court’s power to punish for disobedience or breach of any terms of a temporary injunction. She cited Kenya Human Rights Commission v Attorney General & another [2018] eKLR on the rationale for the power to punish for contempt; Bhanderi Enterprises Ltd v Daniel Kamunda T/A Kamunda Njue & Company Advocates & 3 others [2015] eKLR, where the Court found the respondents guilty of contempt for proceeding with the sale and attachment of motor vehicles in breach of a Court order, and Robert Ouma Oduori & another v Thomas Muka Maulo & another [2020] eKLR, where the Court ordered compensation for the applicant, having found that the attachment and sale of the defendants' properties were done in contravention of the orders of stay of execution in place.
  16. Mr. Mungai, learned Counsel for the respondents relied on Order 40 Rule 4(2) of the Civil Procedure Rules, 2010 and submitted that an exparte injunction may only be granted once for not more than fourteen (14) days and shall not be extended thereafter except once by consent of the parties or by an order of the Court for a period not exceeding fourteen (14) days. The respondent’s Counsel faulted the applicant for failure to apply for extension of the interim orders.
  17. Counsel argued that the respondents could not wilfully defy orders that had already lapsed. He submitted that the interim orders were obtained through deceit and material non-disclosure as the applicant did not adduce any evidence of payment of the rent arrears which triggered the distress for rent. They relied on Benl Development Limited v First Community Bank Limited [2021] eKLR, for the proposition that a borrower that obtains an interim order of injunction is not absolved from his obligations under the contract with the lender, pending the resolution of the dispute; National Social Security Fund v John Ochieng Opiyo [2006] eKLR, to the effect that the Court cannot validate orders which upon expiry have ceased to exist and Desmond Boi and Willis Oloo t/a Institute of Applied Studies & Research v Mbichi Mboroki Chairman Business Premises and Rent Tribunal & another [2016] eKLR, that an untruthful exparte applicant is not entitled to the exercise of the Court’s discretion in his favour, and that where it is discovered that he had gained an advantage by misrepresentation or non-disclosure of material facts, the same may be set aside at once without a determination of the merits of the case.

ANALYSIS AND DETERMINATION.

  1. Having considered the application, the supporting affidavit, the response filed in opposition and the written submissions, the issues that arise for determination are:

(i) Whether the interim orders issued on 25th November, 2020 lapsed on 10th June 2021; and

(ii) Whether the applicant has made out a case for contempt of the order of 25th November, 2020.

  1. On 25th November, 2020, Ho. Judge Okwany granted prayer 2 of the plaintiff's Notice of Motion dated 23rd November, 2020 in the following terms:

"THAT the Honourable Court do grant an order of injunction restraining the Respondents, their servants, officers, employees, assigns and/or agents or any other person acting for and/or on their behalf from doing the following acts or any of them, that is to say from advertising for sale, disposing of, alienating, dealing with, selling by public auction the Applicant’s tools of trade and stock pending the hearing and determination of this application."

  1. None of the party disputes the existence of the Court order of 25th November, 2020. There is also no dispute that the respondents sold the applicant’s tools of trade and stock on 22nd June, 2021. The issue in contest is whether the interim orders issued on 25th November, 2020 lapsed on 10th June, 2021.
  2. According to the respondents, the Court order lapsed on 10th June, 2021 when the matter came up for mention for directions before the Deputy Registrar. On its part, the applicant contended that the Court order did not lapse as it was to stay in effect until its application dated 23rd November, 2020 was finally heard and determined.
  3. From my reading of the order, I am inclined to agree with the applicant that the order was to stay in effect until the hearing and determination of the application dated 23rd November, 2020. I am not persuaded that the orders lapsed on 10th June, 2021.
  4. The second issue is whether the applicant has made out a case for contempt of the Court orders of 25th November, 2020. In Kenya Human Rights Commission v Attorney General & Another (Constitutional Petition No. 87 of 2017) [2018] eKLR the Court declared the Contempt of Court Act No. 46 of 2016 unconstitutional. As such, the prevailing law on contempt in Kenya is the applicable English law on contempt at the time of the commission of the contempt. This is pursuant to Section 5 of the Judicature Act which reads as follows-

“(1) The High Court and the Court of Appeal shall have the same power to punish for contempt of court as is for the time being possessed by the High Court of Justice in England, and that power shall extend to upholding the authority and dignity of subordinate courts.”

  1. At the time the alleged contempt was committed in this matter, on 22nd June 2021, the law applicable was Part 81.4 of the English Civil Procedure Rules (Amendment No. 3) Rules, 2020, which stipulates as follows-

“81.4. (1) Unless and to the extent that the court directs otherwise, every contempt application must be supported by written evidence given by affidavit or affirmation.

(2) A contempt application must include statements of all the following, unless (in the case of (b) to (g)) wholly inapplicable—

(a) the nature of the alleged contempt (for example, breach of an order or undertaking or contempt in the face of the court);

(b) the date and terms of any order allegedly breached or disobeyed;

(c) confirmation that any such order was personally served, and the date it was served, unless the court or the parties dispensed with personal service;

(d) if the court dispensed with personal service, the terms and date of the court’s order dispensing with personal service;

(e) confirmation that any order allegedly breached or disobeyed included a penal notice…..”

  1. The Court of Appeal has on numerous occasions reiterated the importance of an applicant meeting the above requirements on a standard that is above a balance of probabilities and almost beyond reasonable doubt, that is intermediate standard. The reason being that punishment for contempt involves deprivation of one’s liberty. In Ochino & another v Okombo & 4 others (Civil Appeal No 36 of 1989) [1989] eKLR, the Court of Appeal observed stated that:

“The power to deal with contempt of court is provided for under section 5 of the Judicature Act (cap 8) and order 39 rule 2(3) of the Civil Procedure Rules. We have to follow the procedure and practice in England. As we read the law, the effect of the English provisions is that as a general rule, no order of court requiring a person to do or abstain from doing any act may be enforced (by committing him for contempt) unless a copy of the order has been served personally on the person required to do or abstain from doing the act in question. The copy of the order served must be indorsed with a notice informing the person on whom the copy is served that if he disobeys the order, he is liable to the process of execution to compel him to obey it. As this court pointed out recently in the case of Mwangi Mangondu v Nairobi City Commission (Civil Appeal No 95 of 1988):

“This requirement is important because the court will only punish as a contempt a breach of injunction if satisfied that the terms of the injunction are clear and unambiguous, that the defendant has proper notice of the terms and that breach of the injunction has been proved beyond reasonable doubt.”

  1. What’s more, in Samuel M. N. Mweru & Others v National Land Commission & 2 others (Miscellaneous Civil Application No. 443 of 2017) [2020] eKLR Mativo J., (as he then was) underscored the following guiding factors in a case of contempt-

“38. The test for when disobedience of a civil order constitutes contempt has come to be stated as whether the breach was committed ‘deliberately and mala fide. A deliberate disregard is not enough, since the non-complier may genuinely, albeit mistakenly, believe he/she is entitled to act in the way claimed to constitute the contempt. In such a case good faith avoids the infraction. Even a refusal to comply that is objectively unreasonable may be bona fide (though unreasonableness could evidence lack of good faith).

39. These requirements – that is the refusal to obey should be both wilful and mala fides, and that unreasonable non-compliance, provided it is bona fide, does not constitute contempt – accord with the broader definition of the crime, of which non-compliance with civil orders is a manifestation. They show that the offence is committed not by mere disregard of a court order, but by the deliberate and intentional violation of the court’s dignity, repute or authority that this evinces.  Honest belief that non-compliance is justified or proper is incompatible with that intent. The Constitutional Court of South Africa, underlined the importance to the Rule of Law, of compliance with court orders in the following terms-

“Compliance with court orders is an issue of fundamental concern for a society that seeks to base itself on the rule of law. The Constitution states that the rule of law and supremacy of the Constitution are foundational values of our society. It vests the judicial authority of the state in the courts and requires other organs of state to assist and protect the courts. It gives everyone the right to have legal disputes resolved in the courts or other independent and impartial tribunals. Failure to enforce court orders effectively has the potential to undermine confidence in recourse to law as an instrument to resolve civil disputes and may thus impact negatively on the rule of law.”

40. It is an established principle of law that in order to succeed in civil contempt proceedings, the applicant has to prove (i) the terms of the order, (ii) Knowledge of these terms by the Respondent, (iii). Failure by the Respondent to comply with the terms of the order. Upon proof of these requirements the presence of willfulness and bad faith on the part of the Respondent would normally be inferred, but the Respondent could rebut this inference by contrary proof on a balance of probabilities. Perhaps the most comprehensive of the elements of civil contempt was stated by the learned authors of the book Contempt in Modern New Zealand who succinctly stated:-

"There are essentially four elements that must be proved to make the case for civil contempt. The applicant must prove to the required standard (in civil contempt cases which is higher than civil cases) that:-

(a) the terms of the order (or injunction or undertaking) were clear and unambiguous and were binding on the defendant;

(b) the defendant had knowledge of or proper notice of the terms of the order;

(c) the defendant has acted in breach of the terms of the order; and

(d) the defendant's conduct was deliberate.” (Emphasis added).

  1. The Supreme Court of India’s decision in Indian Airports Employees Union v Ranjan Catterjee & another [AIR 1999 SC 880: 1999(2) SCC:537, was cited with approval in Sheila Cassatt Issenberg & another v Antony Machatha Kinyanjui [2021] eKLR as follows-

“that in order to amount to “civil contempt” disobedience must be willful. If disobedience is based on the interpretation of court’s order, notification and other relevant documents, it does not amount to willful disobedience.”

  1. Applying the principles elucidated in the two decisions above, to the matter at hand, I am not satisfied that the applicant has established wilful disregard of the Court order by the respondents to the required standard of almost beyond reasonable doubt. In my considered view, the respondents honestly believed that their actions were proper due to the mistaken belief that the injunctive order had elapsed.
  2. In the upshot, the application dated 21st December, 2021 is found to be without merits and is hereby dismissed with costs.
  3. Since the application dated 23rd November, 2023 has been overtaken by events, parties shall proceed to take directions on the expeditious disposal of the suit.

It is so ordered.

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:

      Ms Nyambura h/b for Mr. Wathuta for the applicant

      No appearance for the respondents

      Ms B. Wokabi – Court Assistant.

    THE JOINT LIMITED VS IMMEDIATE AUCTIONEERS THE JOINT LIMITED VS IMMEDIATE AUCTIONEERS