1. The plaintiff/applicant filed a Notice of Motion application dated 3rd May 2024, pursuant to the provisions of Order 2 Rule 15(1)(b), (c) & (d) of the Civil Procedure Rules 2010, and Sections 1A, 1B & 3A of the Civil Procedure Act. The plaintiff seeks for orders that the defendant’s statement of defence be struck out for being baseless, frivolous, vexatious, and an afterthought. The plaintiff contends that the plaint may prejudice, unnecessarily embarrass, or delay the fair trial of this action. The plaintiff prays for judgment to be entered in its favour as prayed in the plaint.
2. The application is premised on the grounds on the face of the Motion, and it is supported by an affidavit sworn on the same day by Purshottam Premji Vera, a Director and Shareholder of the plaintiff company. He averred that the defendant’s statement of defence is baseless, frivolous, and intended only to delay the judicial process, embarrass, and prejudice the plaintiff. He further averred that the said defence provides no substantive response to the plaintiff’s claims, thus it constitutes an abuse of the Court process.
3. In opposition to the application, the defendant filed a replying affidavit sworn on 28th May 2024 by Mr. Tribhovan Lalji Chavda. He averred that the allegations contained in the plaintiff’s plaint are uncorroborated. He further averred that the documents contained in the plaintiff’s list and bundle of documents have been addressed in his statement of defence. The defendant while admitting some documents namely, Certificate of Incorporation, CR-12 and the facility letter, he denied having received the demand letter dated 16th November 2023, and disclaimed knowledge of the spreadsheet on calculations prepared by the plaintiff. Mr. Chavda asserted that the plaintiff’s claims are untrue, unsubstantiated, and irrelevant. He argued that the plaintiff's claims lack a cause of action hence it should be struck out under the provisions of Order 2 Rule 15(1) of the Civil Procedure Rules, 2010.
4. The application herein was canvassed by way of written submissions. The plaintiff’s submissions were filed on 30th July 2024 by the law firm of Mbalu Associates Advocates LLP, whereas the defendant’s submissions were filed by the law firm of V. H. Awuor & Company Advocates on 26th September 2024.
5. Mr. Mbalu Mutava, learned Counsel for the plaintiff relied on the decisions of Raghbir Singh Chatte v National Bank of Kenya Limited [1996] eKLR, and Equatorial Commercial Bank Ltd v Jodam Engineering Works Limited & 3 others [2014] eKLR, to support his assertion that a party must specifically deny allegations in a plaint, or they are deemed as being admitted. He emphasized that blanket denials, as seen in the defendant's statement of defence lack specificity and substance. Counsel referred to the case of Peeraj General Trading & Contracting Co. Ltd Kenya & another v Mumias Sugar Co Ltd [2016] eKLR, and submitted that such denials, which merely put the plaintiff to strict proof without providing a factual basis, fail to meaningfully address the claims.
6. While citing the decisions in D.T. Dobie & Company (Kenya) Ltd v Muchina [1982] eKLR, Mr. Mbalu Mutava argued that the defendant's defence is deficient and should be struck out. He noted that the defence cites an inability to access documents, effectively admitting ignorance, and failing to provide a reasonable response to the plaintiff’s claims. He referred to the case of Mpaka Road Development Company Limited v Kana [2004] eKLR, and stated that the allegations that the plaintiff’s Directors are malicious and vexatious are unsubstantiated and amount to scandalous and frivolous allegations. Counsel further stated that the defence also relies on vague and irrelevant arguments and fails to engage meaningfully with the claims. He contended that these shortcomings demonstrate a strategy to delay justice. He urged this Court to strike out the defendant’s defence to ensure efficient Court proceedings.
7. Mr. Awuor, learned Counsel for the defendant relied on the case of TSS Investments Ltd v Blackstone Trading Company Ltd [2022] eKLR, and submitted that a statement of defence must be assessed against the plaintiff’s suit and documents, so as to determine if it raises triable issues. He further relied on the case of Gladys Jepkosgei Boss v Star Publication Limited [2021] eKLR, and argued that the defendant’s statement of defence raises at least three bona fide triable issues. He noted that the plaintiff's allegations of unlawful payments, unremitted sale proceeds, and incurred losses are unsupported by any corroborating evidence. Counsel referred this Court to paragraph 6 of the defendant’s statement of defence and argued that the defendant can only deny the plaintiff’s claims, and since he is no longer a Director of the plaintiff company, he lacks access to the plaintiff's bank statements, and that the plaintiff’s files and records which could aid in his defence, are in the custody of the plaintiff’s Directors and inaccessible to him, a fact that remains uncontested.
8. Mr. Awuor argued that the defendant disputes the plaintiff's claimed interest rate of 13.5%, citing the facility letter, which specifies a maximum rate of 12.25%, and emphasized that the plaintiff has not substantiated the higher rate, presenting this as a triable issue. He stated that additionally, the defendant challenges the plaintiff’s loss calculation, based on the disputed interest rate. Relying on the Court of Appeal decision in Meya Agri Traders Ltd v Elgon House (2010) Ltd [2023] KECA 574 (KLR), Counsel argued that the aforesaid issues warrant proceeding to trial, noting that a triable issue need not succeed to justify a trial. He cited the Court of Appeal case of Charterhouse Bank Limited (Under Statutory Management) v Frank N. Kamau [2016] eKLR, and also stated that even if the defence is struck out, the plaintiff’s suit must proceed undefended, with the plaintiff bearing the burden of proving its case at a formal proof hearing.
ANALYSIS AND DETERMINATION.
9. I have considered the instant application and the affidavit filed in support thereof. I have also considered the replying affidavit by the defendant, as well as the written submissions by Counsel for the parties. The issue that arises for determination is whether defendant’s statement of defence should be struck out and if judgment should be entered against him.
10. Striking out of pleadings is provided for under the provisions of Order 2 Rule 15 of the Civil Procedure Rules, 2010, which states as hereunder –
1) At any stage of the proceedings the court may order to be struck out or amended any pleading on the ground that—
a. it discloses no reasonable cause of action or defence in law; or
b. it is scandalous, frivolous or vexatious; or
c. it may prejudice, embarrass or delay the fair trial of the action; or
d. it is otherwise an abuse of the process of the court, and may order the suit to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
2) No evidence shall be admissible on an application under sub rule (1)(a) but the application shall state concisely the grounds on which it is made.
3) So far as applicable this rule shall apply to an originating summons and a petition.
11. I am alive to the fact that Courts have the discretion to strike out a pleading. However in doing so, we are reminded that striking out of a suit and/or pleading is a draconian and drastic measure which should be resorted to sparingly. It is only where a pleading cannot be salvaged by an amendment that Courts will utilize the procedure of striking out a pleading. The Court of Appeal in Yaya Towers Limited v Trade Bank Limited (In Liquidation) (Civil Appeal No. 35 of 2000) in addressing the said issue made the following observation -
A plaintiff (defendant) is entitled to pursue a claim in our courts however implausible and however improbable his chances of success. Unless the defendant (plaintiff) can demonstrate shortly and conclusively that the plaintiff’s claim is bound to fail or is otherwise objectionable as an abuse of the process of the Court, it must be allowed to proceed to trial...It cannot be doubted that the Court has inherent jurisdiction to dismiss that, which is an abuse of the process of the Court. It is a jurisdiction, which ought to be sparingly exercised and only in exceptional cases, and its exercise would not be justified merely because the story told in the pleadings was highly improbable, and one, which was difficult to believe, could be proved.
12. Similarly, the Court of Appeal in Crescent Construction Limited vs Kenya Commercial Bank Limited [2019] eKLR, stated as follows -
However, one thing remains clear, and that is that the power to strike out a pleading is a discretionary one. It is to be exercised with the greatest care and caution. This comes from the realization that the rules of natural justice require that the court must not drive away any litigant however weak his case may be from the seat of justice. This is a time-honored legal principle. At the same time, it is unfair to drag a person to the seat of justice when the case purportedly brought against him is a non-starter.
13. The plaintiff seeks an order that the defendant’s statement of defence be struck out on grounds that it is baseless, frivolous, vexatious, an afterthought, and that it may prejudice, unnecessarily embarrass or delay the fair trial of this action. The plaintiff averred that the defendant’s statement of defence contains mere denials, and that it provides no substantive response to the plaintiff’s claims, thus constituting an abuse of the Court process, and for that reason, the said defence ought to be struck out and judgment entered in favour of the plaintiff as prayed in the plaint.
14. This Court is therefore tasked with determining whether or not the defendant’s defence raises any triable issues that ought to be determined by this Court on merits. It is also worthy of note that in an application for summary judgment, Courts have to satisfy themselves that there are no triable issues raised by the defendant, either in his statement of defence or in the affidavit in opposition to the application for summary judgment. In the case of Osodo v Barclays Bank International Limited [1981] KLR 30, the Court when dealing with an application for summary judgment held as follows –
Where there are triable issues raised in an application for summary judgment, there is no room for discretion and the court must grant leave to defend unconditionally.
15. The plaintiff’s suit is that at the time when the defendant was a Director of the plaintiff company, he unlawfully paid out sums of money from the plaintiff’s bank accounts to himself and other companies, and he failed to remit proceeds of the sale of office units to the plaintiff, thereby causing the plaintiff to suffer loss and damage of Kshs.744,545,268.53, as at 11th December 2023. Upon perusal of the defendant’s statement of defence in opposition to the plaintiff’s plaint, it is noteworthy that save for what was expressly admitted, the defendant denied the averments contained in the plaintiff’s plaint and put the plaintiff to strict proof thereof.
16. The defendant contended that the allegations contained in the plaintiff’s claim are uncorroborated by any evidence, save for a spreadsheet on calculations prepared by the plaintiff, which he claims to be a stranger to.
17. Upon perusal of the plaint and the pleadings filed by the plaintiff in support of this case, I am inclined to agree with the defendant that other than allege that he unlawfully paid out sums from the plaintiff’s bank accounts to himself and other companies, and the claim that he failed to remit proceeds of the sale of office units to the plaintiff, the plaintiff has not annexed any evidence in support of the said allegations. I note that the calculations on the spreadsheet were prepared by the plaintiff, thus the said calculations cannot be sufficient to substantiate the plaintiff’s claim at this juncture, in the absence of further evidence.
18. In the premise, it is impossible for this Court to conclude that the defendant’s defence contains mere denials, since the plaintiff did not put forth anything to warrant any further responses from the defendant other than what is contained in his statement of defence. In the case of Kimere & another (Both t/a Gichuki Kimere & Co. Advocates) v Kihato (Sued in his Capacity as the Administrator of the Estate of Jane Mukuhi Matu - Deceased) [2023] KEHC 19986 (KLR), the Court held that -
The law is settled that striking out pleadings is a draconian act of last resort that must only be employed in very rare and clear cases. The jurisdiction to strike out pleadings being discretionary, must also be exercised judiciously and sparingly. If a party’s pleadings raise even one bona fide triable issue, then the party should be given leave to defend (Postal Corporation of Kenya v I.T.Inamdar & 2 others [2004] eKLR).
It must always be borne in mind that a triable issue is not necessarily one that would ultimately succeed. It need only be a bona fide issue. (Olympic Escort International Co. Ltd. & 2 Others v Parminder Singh Sandhu & Another [2009] eKLR).
19. Since the allegations against the defendant revolve around the defendant’s unlawful withdrawal of sums of money from the plaintiff’s bank accounts to himself and other companies, and failure to remit proceeds of the sale of office units to the plaintiff, I am of the considered view that in light of the pleadings and documents filed by the plaintiff in support of its case, the defendant’s defence is not only adequate, but also raises triable issues of whether the defendant unlawfully paid out sums from the plaintiff’s bank accounts to himself and other companies, and whether he failed to remit proceeds of the sale of office units to the plaintiff. These issues can only be determined at a full hearing where the plaintiff will have a chance to adduce evidence in support of its case, and the defendant will have an opportunity to test the said evidence in cross- examination and also controvert the same at the defence hearing.
20. It is therefore my finding that the defendant’s statement of defence is neither frivolous nor an abuse of the Court process.
21. In the end, this Court finds that an order for striking out of the defendant’s statement of defence and entry of judgment in favour of the plaintiff as against the defendant in favour of the plaintiff as prayed in the plaint, cannot issue.
22. The upshot is that the instant application is devoid of merits. It is hereby dismissed. Costs are awarded to the defendant
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 22nd day of NOVEMBER 2024. Ruling delivered through Microsoft Teams online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Mutava for the plaintiff/applicant
Mr. Awour for the defendant/respondent
Ms B. Wokabi – Court Assistant.
2. The application is premised on the grounds on the face of the Motion, and it is supported by an affidavit sworn on the same day by Purshottam Premji Vera, a Director and Shareholder of the plaintiff company. He averred that the defendant’s statement of defence is baseless, frivolous, and intended only to delay the judicial process, embarrass, and prejudice the plaintiff. He further averred that the said defence provides no substantive response to the plaintiff’s claims, thus it constitutes an abuse of the Court process.
3. In opposition to the application, the defendant filed a replying affidavit sworn on 28th May 2024 by Mr. Tribhovan Lalji Chavda. He averred that the allegations contained in the plaintiff’s plaint are uncorroborated. He further averred that the documents contained in the plaintiff’s list and bundle of documents have been addressed in his statement of defence. The defendant while admitting some documents namely, Certificate of Incorporation, CR-12 and the facility letter, he denied having received the demand letter dated 16th November 2023, and disclaimed knowledge of the spreadsheet on calculations prepared by the plaintiff. Mr. Chavda asserted that the plaintiff’s claims are untrue, unsubstantiated, and irrelevant. He argued that the plaintiff's claims lack a cause of action hence it should be struck out under the provisions of Order 2 Rule 15(1) of the Civil Procedure Rules, 2010.
4. The application herein was canvassed by way of written submissions. The plaintiff’s submissions were filed on 30th July 2024 by the law firm of Mbalu Associates Advocates LLP, whereas the defendant’s submissions were filed by the law firm of V. H. Awuor & Company Advocates on 26th September 2024.
5. Mr. Mbalu Mutava, learned Counsel for the plaintiff relied on the decisions of Raghbir Singh Chatte v National Bank of Kenya Limited [1996] eKLR, and Equatorial Commercial Bank Ltd v Jodam Engineering Works Limited & 3 others [2014] eKLR, to support his assertion that a party must specifically deny allegations in a plaint, or they are deemed as being admitted. He emphasized that blanket denials, as seen in the defendant's statement of defence lack specificity and substance. Counsel referred to the case of Peeraj General Trading & Contracting Co. Ltd Kenya & another v Mumias Sugar Co Ltd [2016] eKLR, and submitted that such denials, which merely put the plaintiff to strict proof without providing a factual basis, fail to meaningfully address the claims.
6. While citing the decisions in D.T. Dobie & Company (Kenya) Ltd v Muchina [1982] eKLR, Mr. Mbalu Mutava argued that the defendant's defence is deficient and should be struck out. He noted that the defence cites an inability to access documents, effectively admitting ignorance, and failing to provide a reasonable response to the plaintiff’s claims. He referred to the case of Mpaka Road Development Company Limited v Kana [2004] eKLR, and stated that the allegations that the plaintiff’s Directors are malicious and vexatious are unsubstantiated and amount to scandalous and frivolous allegations. Counsel further stated that the defence also relies on vague and irrelevant arguments and fails to engage meaningfully with the claims. He contended that these shortcomings demonstrate a strategy to delay justice. He urged this Court to strike out the defendant’s defence to ensure efficient Court proceedings.
7. Mr. Awuor, learned Counsel for the defendant relied on the case of TSS Investments Ltd v Blackstone Trading Company Ltd [2022] eKLR, and submitted that a statement of defence must be assessed against the plaintiff’s suit and documents, so as to determine if it raises triable issues. He further relied on the case of Gladys Jepkosgei Boss v Star Publication Limited [2021] eKLR, and argued that the defendant’s statement of defence raises at least three bona fide triable issues. He noted that the plaintiff's allegations of unlawful payments, unremitted sale proceeds, and incurred losses are unsupported by any corroborating evidence. Counsel referred this Court to paragraph 6 of the defendant’s statement of defence and argued that the defendant can only deny the plaintiff’s claims, and since he is no longer a Director of the plaintiff company, he lacks access to the plaintiff's bank statements, and that the plaintiff’s files and records which could aid in his defence, are in the custody of the plaintiff’s Directors and inaccessible to him, a fact that remains uncontested.
8. Mr. Awuor argued that the defendant disputes the plaintiff's claimed interest rate of 13.5%, citing the facility letter, which specifies a maximum rate of 12.25%, and emphasized that the plaintiff has not substantiated the higher rate, presenting this as a triable issue. He stated that additionally, the defendant challenges the plaintiff’s loss calculation, based on the disputed interest rate. Relying on the Court of Appeal decision in Meya Agri Traders Ltd v Elgon House (2010) Ltd [2023] KECA 574 (KLR), Counsel argued that the aforesaid issues warrant proceeding to trial, noting that a triable issue need not succeed to justify a trial. He cited the Court of Appeal case of Charterhouse Bank Limited (Under Statutory Management) v Frank N. Kamau [2016] eKLR, and also stated that even if the defence is struck out, the plaintiff’s suit must proceed undefended, with the plaintiff bearing the burden of proving its case at a formal proof hearing.
ANALYSIS AND DETERMINATION.
9. I have considered the instant application and the affidavit filed in support thereof. I have also considered the replying affidavit by the defendant, as well as the written submissions by Counsel for the parties. The issue that arises for determination is whether defendant’s statement of defence should be struck out and if judgment should be entered against him.
10. Striking out of pleadings is provided for under the provisions of Order 2 Rule 15 of the Civil Procedure Rules, 2010, which states as hereunder –
1) At any stage of the proceedings the court may order to be struck out or amended any pleading on the ground that—
a. it discloses no reasonable cause of action or defence in law; or
b. it is scandalous, frivolous or vexatious; or
c. it may prejudice, embarrass or delay the fair trial of the action; or
d. it is otherwise an abuse of the process of the court, and may order the suit to be stayed or dismissed or judgment to be entered accordingly, as the case may be.
2) No evidence shall be admissible on an application under sub rule (1)(a) but the application shall state concisely the grounds on which it is made.
3) So far as applicable this rule shall apply to an originating summons and a petition.
11. I am alive to the fact that Courts have the discretion to strike out a pleading. However in doing so, we are reminded that striking out of a suit and/or pleading is a draconian and drastic measure which should be resorted to sparingly. It is only where a pleading cannot be salvaged by an amendment that Courts will utilize the procedure of striking out a pleading. The Court of Appeal in Yaya Towers Limited v Trade Bank Limited (In Liquidation) (Civil Appeal No. 35 of 2000) in addressing the said issue made the following observation -
A plaintiff (defendant) is entitled to pursue a claim in our courts however implausible and however improbable his chances of success. Unless the defendant (plaintiff) can demonstrate shortly and conclusively that the plaintiff’s claim is bound to fail or is otherwise objectionable as an abuse of the process of the Court, it must be allowed to proceed to trial...It cannot be doubted that the Court has inherent jurisdiction to dismiss that, which is an abuse of the process of the Court. It is a jurisdiction, which ought to be sparingly exercised and only in exceptional cases, and its exercise would not be justified merely because the story told in the pleadings was highly improbable, and one, which was difficult to believe, could be proved.
12. Similarly, the Court of Appeal in Crescent Construction Limited vs Kenya Commercial Bank Limited [2019] eKLR, stated as follows -
However, one thing remains clear, and that is that the power to strike out a pleading is a discretionary one. It is to be exercised with the greatest care and caution. This comes from the realization that the rules of natural justice require that the court must not drive away any litigant however weak his case may be from the seat of justice. This is a time-honored legal principle. At the same time, it is unfair to drag a person to the seat of justice when the case purportedly brought against him is a non-starter.
13. The plaintiff seeks an order that the defendant’s statement of defence be struck out on grounds that it is baseless, frivolous, vexatious, an afterthought, and that it may prejudice, unnecessarily embarrass or delay the fair trial of this action. The plaintiff averred that the defendant’s statement of defence contains mere denials, and that it provides no substantive response to the plaintiff’s claims, thus constituting an abuse of the Court process, and for that reason, the said defence ought to be struck out and judgment entered in favour of the plaintiff as prayed in the plaint.
14. This Court is therefore tasked with determining whether or not the defendant’s defence raises any triable issues that ought to be determined by this Court on merits. It is also worthy of note that in an application for summary judgment, Courts have to satisfy themselves that there are no triable issues raised by the defendant, either in his statement of defence or in the affidavit in opposition to the application for summary judgment. In the case of Osodo v Barclays Bank International Limited [1981] KLR 30, the Court when dealing with an application for summary judgment held as follows –
Where there are triable issues raised in an application for summary judgment, there is no room for discretion and the court must grant leave to defend unconditionally.
15. The plaintiff’s suit is that at the time when the defendant was a Director of the plaintiff company, he unlawfully paid out sums of money from the plaintiff’s bank accounts to himself and other companies, and he failed to remit proceeds of the sale of office units to the plaintiff, thereby causing the plaintiff to suffer loss and damage of Kshs.744,545,268.53, as at 11th December 2023. Upon perusal of the defendant’s statement of defence in opposition to the plaintiff’s plaint, it is noteworthy that save for what was expressly admitted, the defendant denied the averments contained in the plaintiff’s plaint and put the plaintiff to strict proof thereof.
16. The defendant contended that the allegations contained in the plaintiff’s claim are uncorroborated by any evidence, save for a spreadsheet on calculations prepared by the plaintiff, which he claims to be a stranger to.
17. Upon perusal of the plaint and the pleadings filed by the plaintiff in support of this case, I am inclined to agree with the defendant that other than allege that he unlawfully paid out sums from the plaintiff’s bank accounts to himself and other companies, and the claim that he failed to remit proceeds of the sale of office units to the plaintiff, the plaintiff has not annexed any evidence in support of the said allegations. I note that the calculations on the spreadsheet were prepared by the plaintiff, thus the said calculations cannot be sufficient to substantiate the plaintiff’s claim at this juncture, in the absence of further evidence.
18. In the premise, it is impossible for this Court to conclude that the defendant’s defence contains mere denials, since the plaintiff did not put forth anything to warrant any further responses from the defendant other than what is contained in his statement of defence. In the case of Kimere & another (Both t/a Gichuki Kimere & Co. Advocates) v Kihato (Sued in his Capacity as the Administrator of the Estate of Jane Mukuhi Matu - Deceased) [2023] KEHC 19986 (KLR), the Court held that -
The law is settled that striking out pleadings is a draconian act of last resort that must only be employed in very rare and clear cases. The jurisdiction to strike out pleadings being discretionary, must also be exercised judiciously and sparingly. If a party’s pleadings raise even one bona fide triable issue, then the party should be given leave to defend (Postal Corporation of Kenya v I.T.Inamdar & 2 others [2004] eKLR).
It must always be borne in mind that a triable issue is not necessarily one that would ultimately succeed. It need only be a bona fide issue. (Olympic Escort International Co. Ltd. & 2 Others v Parminder Singh Sandhu & Another [2009] eKLR).
19. Since the allegations against the defendant revolve around the defendant’s unlawful withdrawal of sums of money from the plaintiff’s bank accounts to himself and other companies, and failure to remit proceeds of the sale of office units to the plaintiff, I am of the considered view that in light of the pleadings and documents filed by the plaintiff in support of its case, the defendant’s defence is not only adequate, but also raises triable issues of whether the defendant unlawfully paid out sums from the plaintiff’s bank accounts to himself and other companies, and whether he failed to remit proceeds of the sale of office units to the plaintiff. These issues can only be determined at a full hearing where the plaintiff will have a chance to adduce evidence in support of its case, and the defendant will have an opportunity to test the said evidence in cross- examination and also controvert the same at the defence hearing.
20. It is therefore my finding that the defendant’s statement of defence is neither frivolous nor an abuse of the Court process.
21. In the end, this Court finds that an order for striking out of the defendant’s statement of defence and entry of judgment in favour of the plaintiff as against the defendant in favour of the plaintiff as prayed in the plaint, cannot issue.
22. The upshot is that the instant application is devoid of merits. It is hereby dismissed. Costs are awarded to the defendant
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 22nd day of NOVEMBER 2024. Ruling delivered through Microsoft Teams online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Mutava for the plaintiff/applicant
Mr. Awour for the defendant/respondent
Ms B. Wokabi – Court Assistant.