Case ID:171926

International Air Transport Association & another v George Town Travel & Tours Limited & 2 others [2021] eKLR

Case Metadata

Case Number:

Civil Case E313 of 2019

Parties:

International Air Transport Association & Saham Assurance Company Kenya Limited v George Town Travel & Tours Limited, George Mwangi & Damaris Njeri Mwangi

Date Delivered:

12 Mar 2021

Case Class:

Civil

Court:

High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Case Action:

Ruling

Judge(s):

Maureen Akinyi Odero

Citation:

International Air Transport Association & another v George Town Travel & Tours Limited & 2 others [2021] eKLR

Court Division:

Commercial Tax & Admiralty

County:

Nairobi

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 NAIROBI

COMMERCIAL & TAX DIVISION

CIVIL CASE NO. E313 OF 2019

INTERNATIONAL AIR TRANSPORT ASSOCIATION....1

ST

PLAINTIFF

SAHAM ASSURANCE COMPANY KENYA LIMITED....2

ND

PLAINTIFF

VERSUS

GEORGE TOWN TRAVEL & TOURS LIMITED..........1

ST

DEFENDANT

GEORGE MWANGI...........................................................2

ND

DEFENDANT

DAMARIS NJERI MWANGI............................................3

RD

DEFENDANT

RULING

(1) Before this Court is the Notice of Motion dated

31

st

January 2020

in which

INTERNATIONAL AIR TRANSPORT ASSOCIATION (‘IATA’)

the 1

st

Plaintiff and

SAHAM ASSURANCE COMPANY KENYA LIMITED

the 2

nd

Plaintiff (hereinafter jointly referred to as ‘the Plaintiffs’) seek the following orders:-

“1.

THAT

the Defence dated 16

th

October 2019 and filed on 22

nd

October 2019 be struck out and Judgment be entered as prayed in the Plaint.

2.

THAT

the Defendant pays the costs of this application in any event.”

(2) The application which was premised upon

Sections 1A & B

and

3A

of the

Civil Procedure Act

,

Order 2 Rule 15(1) (b) (c)

and

(d)

and

Order 31 Rule 1

of the

Civil Procedure Rules

, and all other enabling provisions of the law was supported by the Affidavit of even date sworn by

KAREN NJAGI

the Company Secretary of the 2

nd

Plaintiff.

(3) The Defendants

GEORGE TOWN TRAVEL & TOURS LTD

(1

st

Defendant),

GEORGE MWANGI

(the 2

nd

Defendant) and

DAMARIS NJERI MWANGI

(the 3

rd

Defendant) opposed the application through the Replying Affidavit dated

24

th

February 2020

sworn by

GEORGE MWANGI

the Managing and sole Director of the 1

st

Defendant. The application was canvassed by way of written submissions. The Plaintiff/Applicants filed their written submissions dated

7

th

May 2020

whilst the 1

st

Defendant / Respondent did not file any written submissions.

BACKGROUND

(4) The Plaintiffs instituted this suit vide a Plaint dated

28

th

August 2019

seeking Judgment jointly and severally against the 1

st

, 2

nd

and 3

rd

Defendants for:-

“(a) Kshs. 3,654,362.95 and USD 463,999.60 together with interest thereon at Court rates from 22

nd

November 2018 until payment in full.

(b) Costs of this suit on an Advocate Client basis and interest thereon at Court rates.”

(5) The Defendant entered appearance in the matter and filed a Defence dated

16

th

October 2019

in which they prayed that the Plaintiffs suit against the Defendants be dismissed with costs. The Plaintiffs filed a Reply to the Defendants Statement of Defence dated

31

st

October 2019

. By the present application the Plaintiffs seek to have the said Defence dismissed and for Judgment to be entered in favour of the Plaintiffs as prayed.

(6) The facts of this dispute as derived from the Plaint dated

28

th

August 2019

are as follows. By an agreement dated

17

th

September 2003

the 1

st

Plaintiff (

IATA

) appointed the 1

st

Defendant Company as its travel agent for the sale of airline tickets in Kenya. It was agreed that all the proceeds were to be held in trust for

IATA

until satisfactorily accounted for and settlement made. The Defendant Company claimed that the Defendants breached their agreement by failing, neglecting and/or refusing to pay to

IATA

the sum of

Kshs. 3,654,362.95

and

USD 1,114,108.71

derived from the sale of airline tickets during the months of

July, August

and

September 2018

. That the Defendants further failed to account for and remit monies from the ticket sales.

(7)

IATA

then lodged a claim with

Saham Assurance Company Kenya Ltd

(the 2

nd

Plaintiff herein) who were the insurers of the specified agents of

IATA

including the 1

st

Defendant, seeking settlement of the amount owed to it which the 2

nd

Defendant was obliged to settle upto an amount of

USD 500,000

.

(8) The Plaintiff avers that vide a Deed of Indemnity dated

14

th

August 2017

executed between the 2

nd

Plaintiff on the one hand and the 2

nd

and 3

rd

Defendants on the other, the Defendants undertook to indemnify and to keep fully indemnified the 2

nd

Plaintiff against all actions, proceedings, claims, demands, losses and default arising from the Agreement between

IATA

and the 1

st

Defendant Company.

(9) Through a letter of subrogation dated

22

nd

November 2018

, the 2

nd

Plaintiff paid

IATA

the sums of

Kshs. 3,654,362.50

and

USD 463,999.60

to cover the default by the 1

st

Defendant. Following the default by the 1

st

Defendant and the subsequent settlement by the 2

nd

Plaintiff, the Plaintiffs both claim that the 2

nd

and 3

rd

Defendant’s obligations under the Deed of Indemnity dated

14

th

August 2017

crystallized making the 2

nd

and 3

rd

Defendants liable as per the terms of the Deed of Indemnity. It is on this basis that the Plaintiffs now claim from the Defendants this amount of

Kshs. 3,654,362.95

and

USD 463,999.60

.

(10) Through their Defence the Defendants all deny owing the Plaintiffs the sums claimed in the Plaint. The Defendants further allege that the Deed of Indemnity upon which the Plaintiffs base their claim is of no legal effect due to the failure to have the same registered, sealed and stamped as required by law.

ANALYSIS AND DETERMINATION

(11) I have carefully considered this Notice of Motion, the Affidavit filed in Reply, the written submissions filed in Court and the relevant law. The Plaintiffs contend that the Defence dated

16

th

October 2019

ought to be dismissed for the following reasons:-

(i) It discloses no reasonable defence in law.

(ii) It is a sham as it contains mere denials.

(iii) It is vexatious, frivolous and scandalous and may delay, embarrass or prejudice the fair trial of the suit.

(iv) It is otherwise an abuse of the court process.

(v) It is in the interest of expeditious disposal of suits that the Defence be struck out and the application be allowed as prayed.

(vi) It is in the interest of expeditious disposal of suits that the Defence be struck out and the application e allowed as prayed.

(12) The Defendant submits that their Defence ought not be dismissed as the same raises cogent and triable issues which they ought to be allowed an opportunity to ventilate through a full hearing of the suit. That striking out of any pleading is a drastic action, which a Court should only resort to in clear cases.

(13)

Order 2 Rule 15

of the

Civil Procedure Rules, 2010

provides for the striking out of pleadings as follows:-

“(1) At any stage of the proceedings the court may order to be struck out or amended any pleading on the ground that—

(a) it discloses no reasonable cause of action or defence in law; or

(b) it is scandalous, frivolous or vexatious; or

(c) it may prejudice, embarrass or delay the fair trial of the action; or

(d) it is otherwise an abuse of the process of the court, and may order the suit to be stayed or dismissed or judgment to be entered accordingly, as the case may be.

(2) No evidence shall be admissible on an application under subrule (1) (a) but the application shall state concisely the grounds on which it is made.

(3) So far as applicable this rule shall apply to an Originating Summons and a Petition.”

(14) It is trite law that striking out of any pleading is a decision which ought not be taken lightly as its effect is to shut out a litigant without being given the opportunity to be heard. In the celebrated case of

D.T. DOBIE & COMPANY (KENYA) LTD –VS- MUCHINA [1982]KLR

it was held:-

“

No suit ought to be summarily dismissed unless it appears so hopeless that it plainly and obviously discloses no reasonable cause of action and is so weak as to be beyond redemption and incurable by amendment

. If a suit shows a mere semblance of a cause of action, provided it can be injected with real life by amendment it ought to be allowed to go forward for a court of justice ought not to act in darkness without the full facts of a case before it.” [own emphasis]

(15) In

THE CO-OPERATIVE MERCHANT BANK LTD –VS- GEORGE FREDRICK WEKESA CIVIL APPEAL NO. 54 OF 1999

the Court of Appeal also stated as follows:-

“The power of the Court to strike out a pleading under Order 6 rule 13(1)(b)(c) and (d) is discretionary and an appellate Court will not interfere with the exercise of the power unless it is clear that there was either an error on principle or that the trial Judge was plainly wrong...Striking out a pleading is a draconian act, which may only be resorted to, in plain cases...Whether or not a case is plain is a matter of fact...Since oral evidence would be necessary to disprove what either of the parties says, the appellant’s defence cannot be said to present a plain case of a frivolous, scandalous, vexatious defence, or one likely to prejudice, embarrass or delay the expeditious disposal of the respondent’s action or which is otherwise an abuse of the process of the court …

A Court may only strike out pleadings where they disclose no semblance of a cause of action or defence and are incurable by amendment …

” [own emphasis]

(16) Further, in

YAYA TOWERS LIMITED –VS- TRADE BANK LIMITED (In Liquidation) CIVIL APPEAL NO. 35 OF 2000

the Court of Appeal expressed itself thus:-

“

A Plaintiff is entitled to pursue a claim in our courts however implausible and however improbable his chances of success

. Unless the defendant can demonstrate shortly and conclusively that the plaintiff’s claim is bound to fail or is otherwise objectionable as an abuse of the process of the Court, it must be allowed to proceed to trial...It cannot be doubted that the Court has inherent jurisdiction to dismiss that, which is an abuse of the process of the Court. It is a jurisdiction, which ought to be sparingly exercised and only in exceptional cases, and its exercise would not be justified merely because the story told in the pleadings was highly improbable, and one, which was difficult to believe, could be proved...

If the defendant assumes the heavy burden of demonstrating the claim is bound to fail, he will not be allowed to conduct a mini trial upon affidavits

... It is not

the length of arguments in the case but the inherent difficulty of the issues, which they have to address that

, is decisive... The issue has nothing to do with the complexity or difficulty of the case or that it requires a minute or protracted examination of the documents and facts of the case but whether the action is one which cannot succeed or is in some ways an abuse of the process of the Court or is unarguable ...

No suit should be summarily dismissed unless it appears so hopeless that it is plainly and obviously discloses no reasonable cause of action and is so weak as to be beyond redemption and incurable by amendment

.” [own emphasis]

(17) I have carefully perused the Notice of Motion dated

31

st

January 2020

. The Plaintiffs are in effect attempting to argue their suit through this application. The issues and arguments being raised in the application can only properly be considered during a full hearing of the suit

not

at the application stage.

(18) I am in agreement with the holding of

Hon. Justice Jessie Lessitt

in the case of

PIONEER HOLDINGS (AFRICA) LTD –VS- INTRA AFRICA ASSURANCE CMPANY LTD [2008]eKLR

who quoting the decision in the case of

WEST LOCK –VS- MALONEY & OTHERS (1965)WLR 1238

stated as follows:-

“… This summary jurisdiction of the Court was never intended to be exercised by a minute and a protracted examination of documents and the facts of the case in order to see whether the Plaintiff really has a Cause of Action. To do that is to usurp the position of the Trial Judge and to produce a trial of the case in Chamber … on Affidavits, only without discovery and without evidence tested by cross-examination in the ordinary way. This seems to me to be an abuse of the inherent power of the Court and not a proper exercise of the Courts power…”

(19) The Plaintiffs are attempting to conduct a trial through their Motion. The Defendants in my view raises pertinent and triable issues not least of which is the question of the legal effect of the Deed of Indemnity. These are issues which can only be ventilated through a trial of the suit at which parties will be at liberty to call witnesses and adduce evidence.

(20) In the premises I find no merit in this application and I decline to strike out the Statement of Defence dated

16

th

October 2019

. Accordingly I dismiss the Notice of Motion dated

31

st

January 2020

in its entirety and award costs to the Defendant/Respondents.

DATED IN NAIROBI THIS 12TH DAY OF MARCH, 2021.

…………………………………..

MAUREEN A. ODERO

JUDGE