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JudgmentVISHVA BUILDERS LIMITED VS MOI UNIVERSITY7 min read

VISHVA BUILDERS LIMITED VS MOI UNIVERSITY

High Court at Eldoret High Court · · P. J. Otieno

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT ELDORET.

MISC CIVIL APPLICATION NO. 215 OF 2024

BETWEEN

VISHVA BUILDERS LTD................................................................................APPLICANT

VERSUS

MOI UNIVERSITY......................................................................................RESPONDENT

                                                                 RULING.

  1. Pursuant to the Notice of Motion dated 16.8.2024, Mrima j, issued garnishee orders nisi on the 16.08.2024. To that application, both the judgment debtor and the Garnishees filed responses as at the 29th August 2024 when the matter was argued before this court.
  2. The application was initially placed before Wananda j, as the recess duty judge, on the 23.08.2024, when the judge made the orders, regarding the application and the 1st garnishee, to the effect that sums of Kshs 13,041,837.37 and 360,337.39, be attached towards settlement of the applicant’s decree from accounts Nos 01020062991100 and 01021027999700, respectively, and kshs 50,000 be paid to the 1st garnishee’s advocate as legal fees.
  3. However, because there had been no evidence of service upon the judgment debtor, the payment out of the two accounts was restrained pending the judgement debtor being given a chance to show cause. The matter was thus adjourned to the 29th August 2024 when the file was placed before this court, as the then recess duty court, for purposes of showing cause. Wananda j, further directed that the judgment debtor be at liberty to file responses to the application.
  4. When the matter was called out on the appointed date, the judgment debtor had filed a response in which it contended, in the main, that the attachment was premature for failure to take out a notice to show cause pursuant to order 22 rule 18; that the costs had not been taxed and decree drawn in accordance with the law. It was equally contended that the sum claimed was unknown to the judgment, that any money to the decree holder was due from the National Government, through the ministry of education, and not the judgment debtor; but again, ambivalently that the judgement debtor had identified the sum as a pending bill in the sum of Kshs 185,105,011.35 as part of aggregate pending bill of about seven billion.
  5. Those same points of law and facts were reiterated by Ms Odwa, counsel for the Judgment debtor, in her oral submissions before the court with emphasis being on the fact of execution being premature for failure to take out notice to show cause, there having been no taxation and issuance of certificate of costs and decree. There was also pointing out that there was duplication in execution in that two applications had been filed seeking similar orders.
  6. For the applicant /decree-holder, it was pointed out that the 1st garnishee had in fact admitted and confirmed holding disclosed amount of money to the credit of the judgment debtor on the disclosed accounts, that the costs had in fact been agreed upon and decree drawn and extracted by consent and a payment plan agreed upon.

                                                 Analysis And Determination

  1. From the papers filed, it is only the judgment debtor who resists the making of the order nisi absolute on the ground alluded to above. On its part, the 1st garnishee confirms being indebted to the judgment debtor and ready to satisfy the demand to pay on behalf of the judgment debtor only subject to its costs of these proceedings.
  2. Garnishee proceedings, are no doubt execution proceedings against the judgement debtor’s movable property in possession of a third party. In this case, and in consonance with order 23 Rule 2, the property targeted are sums of money held in the various accounts said to be operated by the judgment debtor with the two garnishees. Having perused the application, Mrima j, issued the garnishee order nisi ex-parte as the law permits. When the matter went before Wanada j, he effectively made the order nisi absolute, save that the actual payment /disbursement to the decree holder was delayed pending the judgment debtor showing cause why the payment should not be effected. Because the garnishee did not deny holding money on account of the judgment debtor, the court was by dint of Rule 4 expected to make the order absolute, thus commanding the garnishee to pay the decree holder and in default execution to issue against its own property.
  3. The court however appreciated the need to hear the judgment debtor before the money was paid out. In enforcing its right to be heard, the judgment debtor raised four issues the court must assess and determine if sufficient to negate the attachment.
    1.    Need for notice to show cause.
  4. The requirements of 0rder 22 rule 18 are not absolute or obligatory upon the court but reserves the discretion of the court, so that ends of justice are met and not defeated. The law thus provides for exceptions to the general need to issue a Notice to show cause where the decree is older than one year. One of the exceptions is that the court reserves the discretion to issue process in execution where to issue the notice would cause unreasonable delay or defeat the ends of justice.
  5. Garnishee proceedings remain a good tool where a judgment debtor is a ware of an obligation to settle a decree but refuses or procrastinates in meeting that obligation by obscuring its attachable assets or keeps or entrusts same in the custody of a third party. The design of the process itself, is to achieve timely seizure of the property and secure it from dissipation by instant and ex-parte issuance of the order nisi. It would, to this court, be moot and extremely inefficacious to warn the judgment debtor, who has done nothing to settle a decree for years, by way of a notice to show cause. Upon being served with the notice and made aware that the decree holder has identified its attachable property, there is every likelihood that the same property may be further obscured or just dissipated. That would be a sure way to allow defeat of the course and ends of justice.
  6. The court thus finds and holds that in this case to issue a notice to show would not have served to achieve the ends of justice but to delay and defeat such ends. For that reason, failure to issue a notice to show cause against the judgment debtor is not fatal to the execution process initiated by way of garnishee proceedings.

b.     Failure to Tax Costs and Extract a Decree

13. The court has perused the physical file of the matter and seen that there is indeed a decree     extracted on the 29.7.2019. Before that decree was signed and sealed by the Deputy Registrar, there is a letter, in the letterheads of Nyairo and Company advocates, who continue to be on record for the judgment debtor. That letter was addressed to the advocate for the applicant/ decree-holder and forwarding a draft decree which counsel had approved.

14.  The court has read that draft decree and the sealed copy and detects no incongruence or variation at all. It is thus not candid to assert that the decree was not drawn. If there be a question on how is outstanding on that decree, the recourse is to seek accounts before the Deputy Registrar but not to resist execution.

15. On taxation the court notes that the decree itself, the letter on payment scheme and what the judgment debtor acknowledges as a pending bill due to the decree-holder, all point to there being an agreement on costs at Kshs 16,147,894.32. once again there is lack of candour on the part of the judgment debtor.

c. Public Interest Tilts Against Execution Against the Subject Money in Banks

16. The court recognises the judgment debtor as a public institution. Public institution are vehicles by which government sets out to serve the public and spur development. Public institutions and bound by the national values and principles of governance and all the dictates of the constitution including the bill of rights. Public institution thus must be at the forefront in promoting the rule of law, due process and respect for court orders. In fact, being a creature of the law, a public institution must the first in line in respecting its creator.

17. it is thus not acceptable that a public institution engages a citizen into a contract, negotiated at arms length, gets and enjoys the contractual services or goods in full but declines to pay. It is akin to forceful, arbitrary and unlawful seizure or deprivation of property. Such is the kind of approach to contractual obligations not expected of a public body and must be frowned upon. It cannot be the basis to decline to issue a garnishee order absolute.

d. The national government funded the project and should pay the sum

18. a decree is only due for enforcement by execution against the judgment debtor and not third parties. The decree in the court file points at the judgment debtor and nobody else. It shall thus not be legal to expect payment from one other than the judgment debtor. The court thus find the argument by Ms Odwa that it is the government to pay to be untenable in law. It cannot be the basis to forestall or delay execution.

19. The upshot is that the court finds no basis to refuse the issuance of a garnishee against the 1st Garnishee as prayed in un the motion and acknowledged by the 1st Garnishee. Let all the money in the two disclosed accounts operated with the 1st garnishee be attached towards the satisfaction of the applicant’s decretal sum. For avoidance of doubt, the decretal sum here means the principal sum, costs at the arbitral tribunal and here, as well as the interests on such principal sum and costs.

20. Of the sum in those accounts, let Kshs 50, 000 be paid to the 1st garnishee’s lawyer as his fees for these proceedings.

21. The cost of the proceedings are hereby awarded to the applicant/ decree holder.

22. It is so ordered.

Dated, signed and delivered Virtually, this 9th day of September, 2024

      Patrick J O Otieno

    VISHVA BUILDERS LIMITED VS MOI UNIVERSITY VISHVA BUILDERS LIMITED VS MOI UNIVERSITY