Judge queries firm’s quest for justice after 14 suits in 17 years

By Nyakundi Nyamboga

The idea of a horticultural project sounded good and Benjoh Amalgamated Limited took deliberate steps to reap maximum benefits from it.

And in 1989, it approached its banker — Kenya Commercial Bank — for more than Sh30 million to partly finance a Sh3 million-flower project. In 1990, it planted flowers in its Nyandarua Njabini land.

However, the flowers later withered and the whole project became worthless. Who was to take the blame? According to the firm, it is the bank. How so? Because of its alleged failure to release the full loan, the flower project failed. The bank released Sh10.2 million in breach of the agreement to lend money.

After the collapse of the project, the bank recalled the loans advanced and advertised securities for sale. It is the bank’s case that it was not party to the flower project.

In efforts to stop sale of collateral securities, the firm, through lawyer Tom Wachakana, says in the suit papers it has previously filed a multiplicity of suits, which have never been determined on merits and that their judgements came out with conflicting and contradicting figures.

Economic loss

The firm says it has suffered damage and loss to the tune Sh914 million being estimated net profit of Sh853 million from the flower business and yearly economic loss of Sh3 million since 1988 for not using the charged property.

In the suit, the subject of this ruling, the firm wanted the court to enter judgement for damages against the bank and four of its employees for breach of contract and negligent misstatement.

It also sought a declaration that there is no loan outstanding and owing to the bank and the charges, if any, be discharged.

However, the bank was quick to point out to the court that like in other previous suits and others pending, Benjoh in this suit was asking the court to decide on issues already determined by both the High Court and the Court of Appeal.

Through lawyer Philip Nyachoti, the bank urged Justice Martha Koome to strike out the suit on that count and others including that it was scandalous, frivolous and an abuse of the court process.

The lawyer submitted that the firm’s claim against the bank employees was unfounded because whatever actions they took with respect to the suit properties was not in their personal capacity, but on behalf of the bank. The firm had sued the bank employees in their personal capacities for allegedly having misrepresented, and without any lawful excuse, instructed the bank’s agent — auctioneers — to dispose of LR no 12411/1, 12411/2 in Kiambu.

In an eight-page ruling, Justice Koome agreed with the submissions by the bank’s lawyer.

Multiplicity of suits

She allowed Nyachoti’s application, struck out the firm’s suit and ordered it to pay costs to the bank and its employees. According to the Advocates’ Remuneration Order, each of the defendants could take home Sh20 million as costs.

"I am vividly aware that the discretion to strike out a suit should be exercised sparingly, but going by the record of the multiplicity of suits by the plaintiff, which have been determined up to the Court of Appeal level, the suit by the plaintiff renders itself for striking out as res judicata (already decided), said the judge.

She noted that Benjoh has been in court since 1992, when it first moved the court to stop the bank from auctioning three securities, and has since filed "an amazing record of multiple suits against the fifth defendant over the same subject matter".

A consent order was recorded in court on May 4, 1992, in which Benjoh and the guarantor Muiri Coffee Estate Ltd admitted liability and undertook to pay the loan. It was also agreed the bank was at liberty to sell the charged property.

Despite this order, Benjoh has filed 14 other cases on the same matter and recorded a streak of losses in 13. Two others — HCCC No 90 of 2009, where the firm is seeking Sh2.2 billion from the bank and HCCC No 494 of 2008, where it has sued the bank and Bidii Kenya Ltd for Sh853 million — are awaiting determination in the High Court. Justice Joyce Khaminwa has since stayed hearing of the Sh2.2 billion case to await the ruling on the Sh853 million case she is expected to deliver on September 18.

Koome on Friday said filling a multitude of cases "is obviously an abuse of the court process and against public policy, which requires courts to dispose of matters expeditiously".

courts clogged

A multiplicity of suits creates confusion, clogs the court system and visits anxiety and unnecessary expenses on the parties.

Further, she said the decision of the Court of Appeal on the matter "is final and litigation must be brought to an end".

"It is for the above reasons that I am constrained to invoke the inherit powers invested in this court under Section 3 and 3A of the Civil Procedure Act, to protect the dignity of this court from abuse and bar Benjoh from instituting any other suit against KCB over the suit properties without first obtaining the leave of the High Court," held the judge.