BY SAM ALFAN.
Former Attorney General Prof Githu Muigai has suffered a major set back in a case where his company has sued Housing Finance Corporation (HF) over a botched deal for purchase of properties.
This after Justice Wilfrida Okwany dismissed application by Fairview Estate ltd, a company associated with Prof Muigai, seeking to strike out the defence filed by HF.
The court rejected the application and ruled that HF had raised triable issues which can only be unpacked at the hearing.
“I find that the application dated 27th September 2021 is not merited and I therefore dismiss it with orders to costs shall abide the outcome of the main suits,” ruled Judge Okwany.
The commercial court judge said the totality of the evidence presented by the parties in support or opposition of the application, it was clear that all was well between the parties from the time of auction upto the tail end of the deal when it appears that there could have been a hitch.
“In the circumstances of this case, I am unable to find that the defence tendered by HF herein can be said to be frivolous or vexatious,” said the Judge.
The judge further noted that HF laid bare all facts of the case before the court and the court is not , at interlocutory stage , expected to determine the merits of each parties’ case but it suffices to state that such evidence to be tendered at the hearing.
Fairlake Estate ltd filed an application seeking to strike out the defense by HF saying the company failed to adequately respond, traverse or give proper defence to the claims it made.
The company told the court that HF statement of defense largely comprises admissions of the facts recounted and any denials are of a general nature and do not specifically traverse the allegations of the facts raised.
The company added that HF expressly admitted to the occurrence of an auction and the company was the successful bidder and also that the completion period under the auction sale was contemplated to be 90 days after the fall of the hammer.
Prof Muigai also said HF admitted to issuing a completion notice requiring the company to complete the sale at and to receive the proceeds of the auction.
He also claimed that HF admitted to the non-existent of title for each individual lot put up for auction and admits to their failure to deliver the title to the auction property.
“Housing Finance corporation statement of defence consists of mere denials which cannot amount to a defence in law as they do not raise any triable issues.
The company added that in as much as Housing Finance is entitled to make it’s defence , Fairlake Estate is equally entitled to prompt and efficacious determination of its claim which will be defeated if the court entertains the vexatious defense.
“The sham defence filed by the Housing Finance corporation will unreasonably prolong the determination of this suit to the Fairlake’s detriment and is therefore an abuse of the court process. It is in the interest of Justice that the defence be struck out and therefore be a speedy resolution to this dispute,” company told the court.
The corporation opposed the application through the litigation manager Christine Wahome saying Fairlake Estate’s application was based on material misrepresentation, non-disclosure, is misconceived, mischievous, unmeritorious, frivolous, vexatious and should be dismissed.
HF told the court whereas the company sought the court to struck out their defence, it was important to note that Fairlake Estate has never filed a reply to the defence and the weighty issues raised in the defence on an application before evidence is tendered and tested.
“Fairlake Estate ltd application, just like the plaint, does not give full disclosure of the facts of the transaction between Fairlake Estate ltd and Housing Finance corporation which is an attempt to mislead the court, and is otherwise an abuse of the court process,” HF told the court.
HF told the court that considering company’s non-disclosure and dishonesty , HF has in the replying affidavit and defense disclosed the material facts of the transaction in question supported by material evidence which Fairlake’s application and main suit a non-starter.
HF further told the commercial court judge that Fairlake sole claim in the case is that HF has refused or declined to transfer the suit properties to the company which not true. The company said Githu’s advised that the leases be prepared for each of the 14 units and HF Bank to execute as the lesser.
“The crucial communication has been concealed by Fairlake but has now been disclosed and produced,” HF told the court.
According to the HF, by an email of 9th November, 2020, the Fairlake’s lawyer confirmed that the lease registration process for the apartment units in favour of Fairlake was currently ongoing. However, Fairlake had opted for the creation of sectional titles for the units as the option would entail less administrative processes at the land’s registry.
HF told the court on 7th June 2021, Fairlake’s Advocates informed HF that that the title deeds for the apartments were ready (save for sealing and signing) and proceeded to request for the Transfer by Chargee for the respective units purchased by the Plaintiff. The said transfers were duly forwarded to the Fairlake’s advocates on 15th June 2021.
Finally on 17th June 2021, Fairlake’s Advocates acknowledged receipt of the duly executed Transfer instruments for all the apartments and confirmed that they were proceeding to submit the documentation to the land registry for registration and that “We note to keep you posted on the developments as they arise.”
HF said that instead of the Fairlake Estate updating them on the progress of the registration, Fairlake filed this suit in court despite having received all the completion documents and being solely in charge of the registration process.
“On the face of the critical revelations made by Housing Finance in this matter as evidenced by the various emails and letter correspondence between Fairlake’s Advocates and HF’s Advocates, Fairlake has challenged the admissibility of the said email correspondence under Section 134 (1) and 137 of the Evidence Act by claiming that the same is confidential and privileged correspondence,” said HF.
HF said Fairlake’s application is an attempt to avoid full trial where its witness will be cross examined on the veracity and merits of his suit and the Plaintiff may have realized that a full trial will be embarrassing for the plaintiff given the material non-disclosure by the Plaintiff which renders the suit a non-starter.
HF told the court application for striking of its defence and judgment is ill-conceived, without merits and should be dismissed with costs.
