REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT

MALINDI

ELC CASE NO. 144 OF 2017

TSS SALT MANUFACTURERS LIMITED...........................................PLAINTIFF

VERSUS

NIC BANK LIMITED............................................................................DEFENDANT

RULING

1. By a Notice of Motion dated 14^th July 2020, TSS Salt Manufacturing Ltd [the Plaintiff/Applicant] prays for orders;

i. That this Honourable Court be pleased to issue summons against the  Managing Director  of the Defendant [now NCBA Bank] Mr. John Gachora, the  Company Secretary Livingstone Murage and the Regional Manager Coast Region Beatrice Kyanzi to appear before this court and show cause why they should not be arrested  and committed to civil jail for a term not less than six[6] months for disobeying or breaching the Court order dated 19^th April 2018 in Malindi ELC No. 144  and 145 of 2017 vide ruling  dated 19^th April 2018 [sic];

ii. That this Court be pleased to order that the Officers mentioned in prayer 2 above be detained in prison for a term not exceeding six [6] months for disobeying orders of this Court issued in ELC No. 144 and 145 of 2017.

iii. Spent

iv. That the orders issued by this Honourable Court to apply mutatis mutandi to Malindi ELC NO. 144  of 2017 which contain similar facts and in which this Honourable Court issued a similar ruling.

v. That this Honourable Court be pleased to grant further orders and/or directions as it deems fit and expedient in the circumstances; and

vi. That the costs of this application be borne by the Defendant/Respondent.

2. The application which is supported by an affidavit sworn by the Plaintiff’s advocate on record Mark Waziri is premised on the grounds that;

a. The court delivered a ruling herein on 19^th April 2018 and granted an order of injunction pending the hearing and determination of the suit. That ruling equally applied in ELC No. 145 of 2017

b. The Defendant has never issued any fresh notices as directed by the Court. That notwithstanding, they have again advertised the Plaintiff’s properties for sale by auction on 20^th July 2020;

c. The Defendant’s actions are in violation of the express terms of the ruling of the court;

d. As a result  the authority and dignity of this court and the fundamental principles of the rule of Law have been and continue to be exposed to ridicule and disrepute; and

e. It is in the interest of justice that the orders sought herein be granted.

3. But by its Notice of Preliminary Objection dated 28^th July 2020, NIC Bank Ltd [ the Defendant/Respondent] objects to the Plaintiff’s motion on the grounds that:

a. The Application is totally defective for not being supported by an Affidavit;

b. The Supporting Affidavit sworn by Mark Waziri on 14^th July 2020 deposing to evidentiary facts on contentious matters of fact offends the provisions of Rule 8 of the Advocate [practice] Rules, 1966 and is therefore not sustainable in law;

c. The averments contained in the Supporting Affidavit sworn by Mark Waziri on 14^th July 2020 cannot be relied upon on the basis that the affidavit has been improperly sworn.

d. The Supporting Affidavit sworn by Mark Waziri on 14^th July 2020 is therefore incompetent, vexatious, bad in law and ought to be struck out; and

e. As a consequence, the Application lacks merit and ought to be dismissed with costs.

4. In further response to the application, the defendant has filed a Replying Affidavit herein on 24^th September 2020 denying that the Plaintiff is entitled to the orders sought in the application. In the Replying Affidavit sworn on 31^st July 2020 by  its Senior Legal Counsel Stephen Atenya, the Defendant avers that the Plaintiff’s application is based on  an incorrect and misleading narrative and deliberate misrepresentation of the true facts.  

5. The Defendant avers that the import of the Court’s Ruling dated 18^th April 2018 was that the injunction was conditional upon the  issuance of proper notices to sell the suit properties and notifications of sale under Section 96 [2] of the Land Act as well as Rule 15 of the Auctioneers Rules. The Defendant asserts that it was therefore at liberty to exercise its statutory power of sale over the suit properties once it complied with those provisions of the law as the injunction would automatically lapse.

6. The Defendant denies that it has tried to sell both properties. On the contrary, the defendant confirms that it has only advertised LR No. 25986 [CR35612] for sale. The Defendant asserts that prior to the publication of the advertisement scheduling the sale for 20^th July 2020, all the requisite notices were issued to the Plaintiff as directed by the Court. Notwithstanding the notification, neither party responded to the same and the Applicant failed to take steps to remedy the default by paying the arrears. Accordingly, the Defendant avers that it was then at liberty to proceed with the Auction sale on 20^th July 2020 as scheduled.

7. I have given full consideration to the Plaintiff’s motion, the Preliminary Objection raised by the Defendant as well as the Defendant’s response to the Motion.  I have equally considered the submissions and authorities placed before me by the Learned Advocates for the parties.

8. Rule 8 of the Advocates [Practice] Rules provides thus:-

“ No advocate may appear as such before any Court or  Tribunal in a matter in which he has reason to believe that  he may be required as a witness to give evidence whether verbally or by declaration or affidavit, and if by appearing in any matter it becomes apparent  that he will be required  as a wittiness to give evidence verbally or by declaration or Affidavit, he shall not continue to appear.

Provided that this does not prevent an Advocate from giving evidence whether verbally or by declaration or Affidavit on formal or  non-contentious matters of fact if any of which he acts or appears”

9. My reading of the provisor to Rule 8 aforecited leaves me with no doubt that an advocate is allowed to swear an affidavit on non –contentious issues. In the Preliminary Objection before me, the Defendant asserts at ground two therefore that the Supporting Affidavit sworn by Mark Waziri, on 14^th July 2020 deposing evidentiary facts on contentions matter of facts offends the provisions of the said Rule 8.

10. As it were, the Defendant does not specify which provisions of the said Supporting Affidavit deposes on evidentiary facts and/or contentious issues. This court is in essence being invited by the said objection to speculate as to what the evidentiary and/or contentious matters have been deposed to by the Plaintiff’s Advocates. I did not however think that that is a path available to this court in a matter brought by way of Preliminary Objection.

11. As was stated in Mukhisa Biscuits Manufactures Ltd –vs- West End Distributors Ltd [1969] EA  696

“ A preliminary Objection is in the nature  of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct.”

12. In my mind, the question of what amounts to a contentious or non- contentious issue is a factual matter that can only be determined upon a proper inquiry by the Court on the subject matter of the dispute. As was observed by MK Ibrahim J. [as he then was] in Republic –vs – Eldoret Water and Sanitation Company Exparte Booker Onyango and 2 others [2007] eKLR:

“ …a party raising a Preliminary Objection on a point of law must proceed on the basis [only for the preliminary point] that all facts pleaded by the other side are correct and albeit this, the cause of action is not sustainable as a matter of law. The objector in such a situation is deemed to accept the correctness of the other party’s facts for purpose of the application. To do otherwise would render the Preliminary Objection to be not a true demurrer. An objector cannot introduce any factual dispute or controversy and must stick to pure points of law…”

13. In the matter before me, the Defendant has neither pointed out the contentious issues nor applied to cross- examine the Plaintiff’s Advocate on record on the alleged contentious issues. On the contrary, the Defendant has through its Senior Legal Officer sworn an affidavit in reply to the Plaintiff’s application. In response to the Replying Affidavit, the Plaintiff’s director one Osman Tahir Sheikh did on 3^rd November 2020 file a Supplementary Affidavit in which he deposes that he was out of the country and that the Defendant company gave authority for the averments made by their advocate.

14. Arising from the foregoing, I did not find any basis for the Defendant’s Preliminary Objection and I hereby dismiss the same.  

15. Turning to the Motion dated 14^th July 2020, the Plaintiff urges this Court to summon some three officers from the Defendant Bank and to require them to show cause why they should not be arrested and committed to civil jail for disobeying the order issued by this Court on 19^th April 2018.

16. Those orders arose from an application filed by the Plaintiff company dated 29^th June 2017 wherein it sought orders:-

3) That a temporary injunction do issue to restrain and prevent the Defendant/Respondent by  itself, and/or its agents, servants, employees, assigns or otherwise howsoever from interfering with the Plaintiff/ Applicant’s quiet possession of marketing and or advertising for sale or selling, leasing, sub-dividing, receiving or taking possession of the charged suit property being  LR NO. 24207 [CR 31954] or in any manner exercising or continuing to auction and/or exercise a statutory power of sale over the said property or any thereof pending the hearing and determination of the suit herein.

4)…..

5) That a temporary injunction do issue to restrain and prevent the Defendant/Respondent by  itself, and/or its agents, servants, employees, assigns or otherwise howsoever from interfering with the Plaintiff’s/ Respondent’s quiet possession of or marketing and or advertising for sale or selling, leasing, sub-dividing, receiving or taking possession of any charged suit property or interests  in its knowledge and possession and registered to the Plaintiff/Applicant pending a hearing inter-partes and final  determination of the suit herein.

6)….

17. Having considered the said application, this court rendered a Ruling thereon on the said 19^th day of April 2018 in which the court stated at paragraphs 31 to 33 thereof thus: -

31.  The absence of proof of service of the Notification of sale upon the Plaintiff means that the Defendant has not discharged the burden of proof as required under Section 107 of the Evidence Act. Invariably as it were, if the sale of the suit property is carried out in the absence of a proper notice to sell it, it will amount to a clog on the chargor’s equity  redemption.

32. Accordingly and while it is obvious to me that the Defendant has indulged the Plaintiff and the borrower enough times, I am prepared to grant an injunction to restrain the sale of the  suit property as long as a proper notice to sell the property and a Notification of sale under  Section 96 [2] of the Land Act and Rule 15 of the Auctioneers Rules  have not been issued.

33. The upshot is that I find merit in the application dated 29^th June 2017.

18. Both the Plaintiff and the Defendant were represented by counsel when the Ruling was delivered and it was apparent that no formal order was thereafter extracted by either party until the 14^th of July 2020. The extraction of the order was certainly prompted by an advertisement placed by the Defendant in the Daily Nation newspaper of 13^th July 2020 in which it sought to sell by public auction one of the suit properties.

19. The Defendant does not deny that it sought to sell the said property. On the contrary it has justified that same asserting that the orders issued by the court were conditional and that it complied with the said conditions by issuing fresh notices to the Plaintiff and the borrower to comply and that they had failed to take steps to remedy their default.  

20. I have looked at the annexures attached to the Defendant’s Replying Affidavit and it was clear to me that the only notice that was issued to the plaintiff is the forty days’ notice that is required to be issued pursuant  to Section 96 [ 2] of the Land Act. That notice annexed to the Defendant’s Replying Affidavit as annexure “ISA2” is dated 18^th June 2018, some two months after the impugned Ruling delivered herein on 19^th April 2018.

21. There is no explanation why no action was taken upon expiry of the 40 days given therein and why the Defendant waited for another 2 years before purporting to exercise its statutory power of sale. What was clear however was that no notice was issued to the Plaintiff pursuant to Section 90[2] of the Land Act. At paragraphs 21 to 30 of the Ruling dated 19^th April 2018, this court had explained at length the mandatory nature of the requirements of Section 90 and 96 of the Land Act including the requirement to notify the charger of the nature and extent of default.

22. From a perusal of the record herein, the Defendant had previously maintained that as at 21^st December 2015 two years before this suit was filed in 2017, the financial facilities availed to the borrower were in arrears of Ksh. 418,464,533.21. That was the figure indicated in the statutory Notice dated 11^th January 2016 that was addressed to the Plaintiff

23. A perusal of the notice issued herein pursuant to Section 96 [2] of the Land Act and dated 18^th June 2018 aforesaid puts the figures owing from the Plaintiff at Ksh. 2,656,794,777/= but there was no evidence that the said figure had been brought to the notice of the Plaintiff in the manner contemplated under Section 90 of the Act.

24. As was pointed out by Justice Amin in Yusuf Abdi Ali Co. Ltd –vs- Family Bank Ltd [2015] eKLR

“….failure by the Defendant to issue the  Notice  that strictly complied with the Provisions of Section 90 [2] of  the Land Act rendered the said Notice of  16^th May, 2014 defective and null and void ab initio.

Any subsequent notices issued pursuant to the Defendant’s exercise of its statutory power of sale were therefore invalid and could not confer any right on the Defendant to proceed as such….”

25. In the circumstances herein I am in concurrence with the submissions of the Plaintiff that the failure to issue a notice pursuant to Section 90 [ 2] of the Land Act renders any subsequent notices null and void.  

26. That being the case, I must now consider whether or not the actions taken by the Defendant in advertising the suit property for sale by auction on 20^th July 2020 was contemptuous of the orders issued herein on 19^th April 2018 and whether the orders sought ought to issue.

27. As Romer  L J stated in the celebrated case of Hadkinson –vs – Hadkinson [1952] 2 all ER 567;

“ It is the plain and unqualified obligation of every person, against or in respect of whom an order is made by a court of competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void”

28. Those sentiments were echoed by Ojwang J [as he then was] in B –vs- Attorney General [2004] KLR 431 where the Learned Judge observed thus:

“ The court does not, and ought not to be seen to, make orders in vain; otherwise the court would be exposed to ridicule, and no agency of the constitutional order would then be left in place to serve as a guarantee for legality and for the rights of all people”.

29. The application for committal for contempt is however a peculiar amalgam for it is a civil proceeding that invokes a criminal sanction. Given that the effect of allowing the same has consequences on an individual’s right to liberty, the standard of proof therefore has been elevated beyond that of a balance of probability.

30. As was stated by Mativo J in Katsuri Limited – vs- Kapurchand Depar Shah [2016] eKLR:

“ Although  the proceedings are civil  in nature, it is well established that an applicant must prove the elements beyond reasonable doubt, at least higher than the standard in civil cases. The fact that the liberty of the Defendant could be affected means that the standard of proof is higher than the standard in civil cases. It is incumberent on the applicant to prove that the Defendant’s conduct was deliberate in the sense that   he or she deliberately or willfully acted in a manner that breached the order.

The prayer sought is for committal for contempt. The power to commit  for contempt is one to be exercised with great care. An order committing a person to prison for contempt is to be adopted only as a last resort”.

31. Given that threshold, the requisite elements for proof of contempt were set out in the case of Samuel M. N Mweru & others –vs- National Land Commission & 2 others[ 2020] eKLR where the court observed as follows:

“ 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 bonafide [though unreasonableness could evidence lack of good faith]…”

32. In the matter before me, it was apparent that the attempt to sell the suit property by auction on 20^th July 2020 was actuated by some misinterpretation of the orders issued by this court on 19^th April 2018.  There was however nothing placed before me by the Plaintiff to persuade me that the misleading interpretations was either deliberate or actuated by malice. From the material placed before me, there was evidence that the plaintiff owes some money to the defendant and that the Defendant was only actuated by the desire to mitigate its losses. The Defendant should however realize that there shall be  no shortcuts and that the only way to a successful exercise of its statutory power of sale shall be through strict adherence to the law and  not otherwise.

33. That said, it was instructive that while the Plaintiff has sought to cite the Defendant’s senior officials for contempt of court orders, there was absolutely no evidence to link any of them to the violation of the said orders. There was no evidence that the order was served on any of the three [3] individuals calling for their compliance and or that they deliberately and willfully acted in a manner to defeat the same.

34.. In the premises I am not persuaded that there is any merit either in the Plaintiff’s motion dated 14^th July 2020 as the orders sought therein are untenable.

35. Accordingly, both the Objection and the Motion are dismissed. I make no orders as to costs.

DATED, SIGNED AND DELIVERED AT MALINDI THIS 31^ST DAY OF AUGUST 2021.

J.O. OLOLA

JUDGE