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|Case Number:||Civil Case 1914 of 1999|
|Parties:||Tamil Enterprises Limited v Official Receiver & Liquidator of Continental Credit Finance Ltd & Kisauni Properties Limited|
|Date Delivered:||31 Jul 2014|
|Court:||High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)|
|Judge(s):||Jonathan Bowen Havelock|
|Citation:||Tamil Enterprises Limited v Official Receiver & Liquidator of Continental Credit Finance Ltd & another  eKLR|
|Court Division:||Commercial Tax & Admiralty|
|Case Outcome:||Plaintiff's application dismissed|
|Disclaimer:||The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information|
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROB
MILIMANI COMMERCIAL & ADMIRALTY DIVISION
CIVIL CASE NO. 1914 OF 1999
TAMIL ENTERPRISES LIMITED ……………………….…… PLAINTIFF
OFFICIAL RECEIVER & LIQUIDATOR
OF CONTINENTAL CREDIT FINANCE LTD ……… 1ST DEFENDANT
KISAUNI PROPERTIES LIMITED ………………….. 2ND DEFENDANT
R U L I N G
“1. The Court issued the decree herein on 20th April 2001 for Kshs. 34,852,659.80.
2. The Defendant partially settled the decree on 20th December 2001 by paying Kshs. 16,177,152.40 thereby leaving an outstanding balance of Kshs. 18,675,507.40.
3. The Defendant obtained a stay against the settlement of the decree herein which stay has since been set aside vide this Court’s decision made on the 17th day of October 2012.
4. The decretal amount has been outstanding since April 2001 for a period over 12 years and it is only fair that further interest be paid on the outstanding decretal sum for the said period of time.
5. The further applicable commercial interest rate be determined and fixed at 29.43% per annum being the original rate of interest applied to the judgment amount herein.
6. The Plaintiff/Applicant has been greatly prejudiced and has suffered substantial loss and damage as a result of the Defendants refusal to settle the decretal sum herein for the said period over 12 years.
7. It is only fair and just that additional interest be paid to the Plaintiff on the outstanding balance of the decretal sum”.
“1. That the subject application is misconceived and the prayers sought therein are incapable of being granted by this Honourable Court.
2. That the Plaintiff/Applicant is deliberately misleading this Honourable Court.
3. That there is no valid decree in existence that can be enforced as the said decree upon which the applicant relies was declared unenforceable in law and its execution stayed on the 5th of November 2003.
4. The stay referred to in ground 3 hereof has never been lifted or set aside by this Honourable Court.
5. As per the Replying Affidavit filed herein”.
“(a) Did the Honourable Court set aside the stay orders which were previously subsisting in this matter?
(b) Is the Plaintiff entitled to the prayers sought in the Application herein?”
The Plaintiff did not dispute that the Court, on 5th November 2003, granted a stay of execution of the Decree herein at the instance of the first Defendant. It is noted that it was aggrieved by the said Ruling and filed a Notice of Appeal together with an application for the typed proceedings before this Court. The first Defendant had also been dissatisfied with the said Ruling and had made application for review thereof. In his Ruling dated 17th August 2012, Ibrahim J. at the last paragraph thereof had detailed that he set aside the Orders made in respect of sections 218, 235 and 241 of the Companies Act and the stay order. In the Plaintiff’s view it was clear that the learned Judge indeed set aside the Order for stay of execution of the Decree herein. The first Defendant had not challenged that Ruling and, as such, the same was valid and applicable.
“This Section, in our understanding, confers upon the court the discretion to award and fix the rate of interest to cover three stages…
We further understand these provisions to be applicable only where the parties to a dispute have not, by the agreement, fixed the rate of interest payable. If by the agreement, the parties have fixed the rate of interest payable, then the court has no discretion in the matter and must enforce the agreed rate unless, it be shown in the usual way either that the agreed rate is illegal or unconscionable, or fraudulent.”
The Plaintiff requested this Court to exercise its discretion to award additional interest in this matter from the date of judgement to the date of payment of the outstanding decretal sum due.
“I am compelled to invoke the court’s inherent jurisdiction and those under Section 218, 235, and of more direct application Section 241 (3) and all other enabling powers under the Companies Act and declare that the judgment herein, decree and all consequential orders are unenforceable in law and execution thereof is hereby stayed.” (Underlining mine).
In his said Ruling dated 17th August 2012, the learned Judge commenced by detailing that the application before him was as regards a review of his Ruling delivered on 5th November 2003 on the grounds that there was an error apparent on the face the record. Having recorded the submissions of counsel for both parties in relation to the said application, the learned Judge detailed as follows:
“I have carefully after hearing this application and the submissions by counsel gone through the ruling which the 1st defendant prays to be reviewed. The first Defendant argues that there is an error apparent on the face of the record. He submits that the court was to consider the oral application to amend the Chamber Summons Application dated 23.7. 2001 to delete section 241 (1) (a) and (c) of Cap.486 and to replace the same with Section 228 of Cap. 486. According to the Applicant the court should not have delved into the provisions of section 241 of the Companies Act.
I agree with the Applicant’s counsel that they had amended their application with leave of the Court before me. I accept that this Court invoked other provisions including Section 241 at its instance. In view of the difficulties this has created, I do hereby accept to review which I hereby do the Ruling dated 5th of November 2003. None of the counsels had submitted on the other provisions. I hereby set aside the orders made in respect of sections 218, 235 and 241of the Companies Act and stay order. With this review there is no need for an appeal which will only protract this matter. I also appreciate that no steps were taken to file the record of appeal. The result is that the Application is allowed with no orders as to costs.” (Underlining mine).
“The result is that the Application is allowed with no orders as to costs.”
Accordingly it is necessary to look at what the said Application prayed for. Simply put it was:
“That this Honourable Court do hereby review its Ruling delivered on 5th of November, 2003.”
The Ground upon which the Application was based was equally simple:
“A) There was an error apparent on the face of the record.”
The said Application was supported by the Affidavit of one Kennedy Asinuli sworn on 20th May 2004. That Affidavit reviewed the proceedings before Court and thereafter concluded at paragraphs 8 and 9 the following:
“8. That none of the parties herein made any submissions touching on the provisions of Section 241 of the Companies Act and the Honourable Court ought not to have delved into the provisions of the said Section. However, this notwithstanding the 1st Defendant and its Advocates had already obtained the Court’s leave to commence proceedings by an order given by the Honourable Justice Ransley on the 19th of July, 2001. This fact had not been disclosed to the Court because it was never raised (Annexed hereto and marked ‘KA 1’ is a copy of the said Order).
9. That in view of the foregoing reasons stated herein it would only be proper and just for this Honourable Court to review its ruling delivered on the 5th of November, 2003 to rectify this apparent error on the face of the record”.
“218. The High Court shall have jurisdiction to wind up any company registered in Kenya.
235. (1) The court may appoint the official receiver to be the liquidator provisionally at any time after the presentation of a winding-up pending and before the making of a winding-up order.
(2) Where a liquidator (in this Act referred to as an interim liquidator) is so appointed by the court, the court may limit and restrict his powers by the order appointing him.
241. (3) The exercise by a liquidator in a winding up by the court of the powers conferred by this section shall be subject to the control of the court, and any creditor or contributory may apply to the court with respect to any exercise or proposed exercise of any of those powers.”
The salient finding of Ibrahim J. in his said Ruling of 5th November 2003 was contained in the penultimate page thereof where he detailed:
“In view of the foregoing, I do hereby hold that once again this suit is null and void ab initio. It is a nullity for Want of the Mandatory leave required under Section 228 of the Companies Act.”
In other words, the first Defendant was successful in its Chamber Summons dated 23rd July 2001 as a result of the Plaintiff herein failing to apply for mandatory leave to file its suit before Court under the provisions of section 228 of the Companies Act. The error on the face of the record as above related to completely different sections of the Act. As a result and in my view, there was no question of Ibrahim J. lifting the stay Order as per his said Ruling of 5th November 2003. Further, his declaration that the Judgment herein, Decree and all other consequential Orders were unenforceable, still remains the position to this day.
DATED and delivered at Nairobi this 31st day of July, 2014.
J. B. HAVELOCK