Kenya Commercial Bank Ltd v Osebe (Civil Appeal 60 of 1982) [1982] KECA 35 (KLR)
The bottom line
#Kenya's Court of Appeal ruled damages cannot be awarded through originating summons proceedings, but sharply criticised a bank's low-price sale of a borrower's charged land.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether an application for extension of time was necessary where the notice of appeal was filed in time but the filing fee of Kshs 150 was paid only after demand
- 2.Whether a court has power to award damages in proceedings brought by originating summons under Order XXXVI rule 3A of the Civil Procedure Rules
- 3.Whether a point going to jurisdiction may be raised for the first time on appeal although not taken at the trial
- 4.Whether the Bank failed to have regard to the interests of the chargor in conducting the auction sale
Key legal issues
#Power to award damages on an originating summons
No jurisdiction exists under Order XXXVI to award unliquidated damages in tort or for breach of duty on an originating summons; the High Court judge acted in excess of jurisdiction.
Rule 3A of Order XXXVI enumerates the relief obtainable by originating summons (sale, foreclosure, possession, redemption, reconveyance) and damages are not among them. Section 77(3) of the Registered Land Act refers to the chargor's remedy in damages but does not prescribe the method of claim, which, as in Cuckmere Brick, is by suit. Disputed questions of fact such as value and mismanagement cannot be resolved on affidavit evidence. Authorities: Re Giles, Re Sutcliffe, Ramji Kulsumbhai, Standard Chartered Bank v Walker.
Taking a jurisdictional point for the first time on appeal
A point going to jurisdiction may be entertained on appeal even if not raised below; the general ban on new points on appeal does not apply to jurisdiction.
Counsel relied on Saggaf v Algeredi and Tanganyika Farmers Assn to argue that new points are not allowed on appeal. The court distinguished those cases as involving questions of fact, not jurisdiction. Following Balchin v Buckle and Oscroft v Benabo, where a decision is illegal or beyond jurisdiction the appellate court can and must reverse it regardless of whether the point was taken below.
Duty of a mortgagee/chargee exercising the power of sale
The chargee is not a trustee of the power of sale but must act honestly and take reasonable precautions to obtain the true market value; the court expressed sympathy with the chargor's complaint.
Relying on Cuckmere Brick Co Ltd v Mutual Finance Ltd, the court accepted the duty to take reasonable precautions to obtain true market value. Although the jurisdictional point disposed of the appeal, Hancox AG JA observed that the Bank's conduct - selling for about a tenth of the sum it lent on the same property a year later - was harsh, oppressive and uncompromising, and that the judge's finding of insufficient regard to the chargor's interests was arguable.
Payment of filing fee on lodging a notice of appeal
Subsequent acceptance of the fee by the Sub-Registry cured the initial omission to pay; extension of time was a precaution, though costs of the application went to the respondent.
Under rule 103(1) of the Court of Appeal Rules the fee is due when the document is lodged, but the Sub-Registry accepted the notice without contemporaneous payment and the fee was paid within a few days of demand; this cured the failure. The extension application was precautionary and might not have been strictly necessary.
Legal principles established
#- A court has no power to award damages in proceedings brought by originating summons under Order XXXVI rule 3A of the Civil Procedure Rules; a claim for damages must be pursued by suit.
- An appellate court can and must consider a point going to jurisdiction even though it was not raised before the trial judge.
- A mortgagee exercising a power of sale owes a duty to take reasonable precautions to obtain the true market value of the mortgaged property at the date of sale.
Court orders
#- 1.Extension of time to file the notice of appeal granted, with costs of that application to the respondent (confirmed)
- 2.Appeal allowed to the extent of setting aside the award of Kshs 180,000 damages made by the High Court
- 3.Respondent left at liberty to pursue his remedy for damages by suit, if so advised
- 4.No order for costs on the appeal
- 5.Each party to bear their own costs of the proceedings in the High Court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Hancox AG JA delivered the leading judgment. He held that Order XXXVI rule 3A of the Civil Procedure Rules confers no power to award damages on an originating summons, and that a point going to jurisdiction may be taken for the first time on appeal. He would have found the Bank's conduct harsh and oppressive had jurisdiction not been the obstacle, but allowed the appeal to the extent of setting aside the award of Kshs 180,000 damages and left the respondent to sue by way of a plaint. He made no order for costs on the appeal and ordered each party to bear their own costs in the High Court.
I would allow this appeal, to the extent of setting aside the award of Kshs 180,000 damages and leave the respondent to pursue his remedy in this respect by suit, if so advised.p. 6
Law JA agreed with Hancox AG JA, noting that the High Court judge, having been alerted by Scriven J's earlier order that the matter required oral testimony, nonetheless adjudicated on affidavit evidence and, in purporting to award general damages in tort on an originating summons, acted in excess of his jurisdiction.
In purporting so to do, the learned judge acted in excess of his jurisdiction. He should have left the respondent to pursue his claim for damages by way of a suit.p. 7
Potter JA concurred with the leading judgment and its proposed orders.
- On appeal from
- High Court of Kenya at Kisii
- not supplied (originating summons)
- Jurisdiction invoked
- Section 72 of the Civil Procedure Act (Cap 21) - statutory right of appeal
Relief refused
#Determination of the measure of damages and the respondent's claim to set aside the auction sale
The appeal succeeded on the jurisdictional point, so the other questions fell away; the respondent must pursue damages by ordinary suit.
Costs
No order for costs on the appeal; each party to bear their own costs of the proceedings in the High Court.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
I would allow this appeal, to the extent of setting aside the award of Kshs 180,000 damages and leave the respondent to pursue his remedy in this respect by suit, if so advised.
In purporting so to do, the learned judge acted in excess of his jurisdiction. He should have left the respondent to pursue his claim for damages by way of a suit.
a mortgagee in exercising his power of sale does owe a duty to take reasonable precautions to obtain the true market value of the mortgaged property at the date on which he decides to sell it.
this Court can and must consider a point going to jurisdiction even though it was not raised before the judge.
As no objection was raised at the hearing to the jurisdiction of the High Court to award damages on an originating summons, as claimed in paragraph (g) of the amended originating summons, and as the appeal has succeeded on a point not taken below, I would make no order for costs on this appeal.
I would also order that the parties bear their own costs of the proceedings in the High Court.
Issues in the judgment
#The text describes Balchin v Buckle as 'a case relating to the (hitherto overlooked) non-registration of a covenant' and quotes Stephenson LJ on statutory rights of appeal, but the report as reproduced gives no full citation; the quoted passage contains a slight grammatical anomaly ('In the difficulty I have felt...' versus 'The difficulty I have felt...') suggesting a transcription gap.
Bhari v Khan is rendered inconsistently in the text ('Bhari v Khan' and 'Bhariv Khan'), and the transcript contains OCR-style corruption throughout ('efiect', 'sufiered', 'afidavit').
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Odera & another v Wambia & 4 others (Civil Appeal E026 of 2021) [2026] KECA 1565 (KLR)[2026] KECA 1565 (KLR)31 Jul 2026
- Kazungu v Republic (Criminal Appeal E017 of 2024) [2026] KECA 1490 (KLR)[2026] KECA 1490 (KLR)24 Jul 2026followed
Cite this brief
#Cite this brief
Caselaw, "Kenya Commercial Bank Ltd v Osebe (Civil Appeal 60 of 1982) [1982] KECA 35 (KLR)", Case Analysis (1982). High Court Originating Summons, Kisii (appeal to Court of Appeal, Kisumu). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1982/35/eng@1982-12-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.