Workers’ assets got on hire purchase risk repossession

Republic of Kenya

IN THE HIGH COURT OF KENYA

AT MOMBASA

CIVIL SUIT NO 13 OF 2008

ARGOS FURNISHERS LIMITED........PLAINTIFF

MUNICIPAL COUNCIL OF MOMBASA.......DEFENDANT

BENCH: J K SERGON

RULING: 13.03.2009

By Nyakundi Nyamboga

In 2003, Argos Furnishers Limited struck a deal with the Municipal Council of Mombasa.

It was to allow the council’s employees collect an assortment of goods from its stores on hire purchase terms. Payment would be through a check off system.

The council was to deduct the monthly installments from the employees and remit it to the trader.

And for this service, it was to withhold five per cent of the deductions as administrative charges. By January 2007, Argos had issued the council’s employees with goods valued at Sh61,792,955.

The council remitted the amounts as agreed, except for Sh20,720,923.84.

Argos claims that despite numerous requests, the council failed, refused and or neglected to remit the amount in issue.

And on April 18, 2008, it moved to the High Court seeking judgement against the council in the sum of Sh22,188.056 plus costs. The motion was supported by the affidavit of Shusheel K Shah sworn on the same date. Argos also urged the court to strike out the defence the council had filed. In its view, the defence was "an abuse of the court process".

Argos thought the defence filed by the council did not disclose any reasonable ground to resist its claim.

It is also argued the council had admitted owing the sum claimed. There was even part payment in an attempt to settle the claim. The defence was, therefore, a mere denial hence there was no issue to be taken for a full trial.

The council filed the replying affidavit of Wisdom Mwamburi sworn on May 15, 2008 to resist the motion.

It argued this was no clear case to enter summary judgement because there were serious issues that needed to be clarified in a full trial.

The issues were: Whether the nature and terms of the contract were agreed on; whether the 5 per cent service charge was agreed on; whether some of the forms produced and attached to the affidavit of Shusheel Shah were genuine and; whether there was need to reconcile accounts.

After considering the plaint, grounds set out on the face of the motion, the facts deponed in the affidavit filed in support and against the application and, after taking into account the oral submissions by counsel, the judge ruled in favour of Argos.

Breach of deal

Said the Judge: "I have perused the summarised statement of account and I am convinced the defendant is truly and justly indebted to the plaintiff that is a sum of Sh20,720,923.84 as at the time of filing suit, and a further sum of Sh4,212,320 being monies that ought to have been recovered by the defendant from its employees, but has neglected to do so in breach of the aforesaid agreement. I am also convinced the amount stood at Sh22,188,056.29 as of January 31, 2008 plus Sh4,212,320, which the defendant ought to have recovered and remitted to the plaintiff."

The judge said he was convinced Argos had answered all the issues the council had raised and "there is nothing which can go for trial".

He proceeded to strike out the defence and enter judgement against the council for Sh24,933,243.84 plus interest at court rates from the date of judgement.

The judge said he had perused the council’s letter dated June 6, 2003 annexed to the affidavit of Shusheel Shah "and it is quite evident the defendant acceded to the plaintiff’s request to revive the Hire Purchase Scheme, which had earlier stalled".

Bearing stamp

In the letter, the council indicated it would be charging 5 per cent administrative charges and that all forms must have the treasurer’s signature with the official stamp before issuance of the items.

The plaintiff presented to the court copies of the forms duly executed by the council’s treasurer and bearing its official stamp.

The court held there was sufficient evidence in form of payment vouchers and cheques issued by the council and acknowledgement receipts issued by the plaintiff and banking slips that payments were deducted from employees’ salaries to the plaintiff’s account and towards settlement of the amount due.

There was also no denial the council failed to collect and remit a further sum of Sh4,212,320 owing from its employees under the agreement between it and Argos.

　

My take

Do the wheels of justice in Kenya move too slowly or it is the litigants who are reluctant to enforce their rights?

This question is informed by the time it has taken the plaintiff in this case to realise the fruits of the ruling in its favour made 10 months ago.

Granted, there may have been negotiations on how to settle the amount due, but surely this appears to be leniency bordering on sitting on one’s rights.

Once a court of law rules in favour of a litigant, it is incumbent upon the beneficiary to move expeditiously to realise the fruits of a judgement or ruling. I notice Argos Furnishers Limited in this case sought and was given leave last August to file an application to compel the Town Clerk to pay the amount due — Sh24,212,320 — to them pursuant to the orders of March.

And after Justice Festus Azangalala’s nod, Argos filed a motion on September 2 to that effect. A date for its hearing is yet to be given.

It is sad to note that none may be given until February when the High Court at Mombasa resumes from the December vacation.

Seeking order

In the motion, Argos is also seeking an order to commit the Town Clerk to civil jail for alleged failure to settle the claim.

The Town Clerk, as chief executive of a local authority, is the officer required under the Local Government Act to satisfy any judgements or orders against the local authority.

If I may ask, does it have to get to this point, Mr Town Clerk? I am thinking aloud here: Suppose Argos Furnishers decides to send its agents to repossess goods the council employees took through the hire purchase scheme and which they have either completed paying for or are still paying for? I see a backlash and quite some storm in the offing against the council, a situation that could be avoided by giving to Caesar what belongs to him.

The writer is Standard Group Associate Editor—Legal

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