Client to pay Sh100 million in suit for lawyer’s mistakes

 By Nyakundi Nyamboga

One fine day, late this year, Benjoh Amalgamated Ltd was in court for the hearing of a suit they filed against Kenya Commercial Bank.

The firm, whose directors are Ngengi Muigai and Stephen Kungu, wanted the bank to compensate it Sh914 million for what it refers to as "breach of contract and negligent misstatement".

The dispute between the duo stems from an agreement between them entered into in 1989. Benjoh Amalgamated charged its security to acquire a sum of Sh30,125,000 to help finance a horticultural project.

It alleges only Sh10,200,000 was lent. It planted flowers in 1990 but because of the alleged failure by the bank to release the full loan, the project failed and the bank recalled its loans. The firm claims the breach cost it a loss of Sh3 million per year.

On the day of the hearing of the suit, Benjoh Amalgamated’s lawyer Tom Wachakana asked the court to adjourn the matter to a later date. The lawyer said he was not feeling well and needed time to consult his client on the way forward.

But Lady Justice Martha Koome, was not persuaded by the reasons and insisted the hearing must go on.

Mr Wachakana then walked out of the court in protest but this did not deter the hearing of the suit.

The bank’s lawyer Philip Nyachoti urged the court to strike out the suit on two grounds.

One, that matters in the suit were directly and substantially in issue in a multiplicity of previous suits the firm had filed against the bank.

Secondly, the suit was time barred, incompetent, scandalous and an abuse of the due process of court.

On July 31 this year, the court delivered a ruling in which the suit by the plaintiff was struck out.

In her ruling, Justice Koome sent a strong warning to Benjoh Amalgamated that courts shall not entertain any suits from it against the bank "unless they first seek permission to sue". The judge noted that the firm had, so far, filed 17 suits against the bank on the same subject matter.

She said it was regrettable the company was filing suit after suit despite losing in each of them. She ordered the firm to pay the bank and four of its officials costs estimated at Sh100 million.

Those to benefit from the costs are Halkano Molu, Chris Theuri, Joseph Kiambati and Evans Mose. Apparently unrelenting, the plaintiff filed an application dated August 4, this year, seeking orders that the ruling delivered on July 31, together with any consequential orders be set aside. The plaintiff also filed an appeal against the said ruling.

In support of the application, the firm said it was prejudiced by the decision not to allow it an adjournment sought for the first time.

And that it would be in the interest of justice to set aside the others because the plaintiffs had raised serious claims of breach of contract.

The bank opposed this application.

On the issue of the matter proceeding ex parte the bank’s lawyer, argued the hearing did not proceed ex parte because the plaintiff’s counsel was in court and deliberately abandoned the matter by walking away.

In a four-page ruling, Justice Koome held the application "lacks merit and is hereby dismissed with costs to the respondent".