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Court of AppealDismissedCivil Appeal No. 5 of 1997· [1997] KECA 128 (KLR)

Nairobi Golf Hotels (kenya) Limited v Lalji Bhimji Sanghani Builders and Contractors

Court of Appeal of Kenya
15 July 1997
RKR. O. KwachPhilip Kiptoo TunoiP. K. TunoiASA. B. Shah
0 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that employers cannot dodge paying contractors by blaming the architect's final certificate unless they can prove fraud or collusion.

What this practically means

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Executive summary

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The Court of Appeal (Kwach, Tunoi and Shah JJA) dismissed an appeal against a ruling of Bosire J in Nairobi High Court Civil Case No. 1900 of 1995, delivered on 27 November 1996, entering summary judgment against Nairobi Golf Hotels (Kenya) Limited for Shs. 5,784,782 under a standard building contract for the Windsor Golf and Country Club. The respondents, the contractor, had sued on a final certificate No. 30 issued by the architect on 27 October 1994 under Clause 30 of the contract. The appellant, the employer, contended that the architect acted ultra vires by issuing a final certificate without first complying with Clause 15(4) by issuing a Certificate of Making Good Defects. At the hearing of the appeal, counsel argued a single ground: that the defence raised triable issues entitling the appellant to unconditional leave to defend, and that the judge erred in deciding the matter on affidavits alone. The court reaffirmed that under Order XXXV rule 1 the onus lies on the defendant to show prima facie bona fide triable issues, and that a shadowy or sham defence earns the plaintiff summary judgment, following Continental Butchery v Nthiwa and Jacob v Booths Distillery. It held that the architect was the appellant's agent, so any complaint about the certificate lay against the architect, not the contractor; and that once the final certificate was issued within the architect's contractual jurisdiction, he was functus officio and, absent fraud or collusion, payment could not be resisted. The appeal was dismissed with costs.

Key legal issues

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01

Onus on a defendant resisting summary judgment under Order XXXV

Holding

The defendant must show prima facie bona fide triable issues or an arguable case; a shadowy or sham defence earns the plaintiff summary judgment.

Reasoning

The court restated the principle from Continental Butchery Ltd v Samson Musila Nthiwa, adopting Madan JA's formulation and Lord Halsbury's statement in Jacob v Booths Distillery on the purpose of the summary procedure: to prevent sham defences defeating plaintiffs' rights by delay. The appellant bore the onus and failed to discharge it.

p. 2
02

Role of the architect and complaints about the final certificate

Holding

The architect is the employer's agent; any ultra vires complaint about the final certificate is between the employer and the architect and cannot found a defence against the contractor.

Reasoning

Relying on Halsbury's Laws of England on the position of the certifier, the court held the architect must act impartially and independently and owes duties to the employer. Breaches regarding the final certificate, if any, were the architect's, not the contractor's, rendering the suit against the respondents ill-advised and the defence untriable.

p. 2
03

Effect of the final certificate under Clause 30

Holding

Once the architect certifies the final balance due within his contractual jurisdiction, he is functus officio and, absent fraud or collusion or impugnment under sub-clause (7), the employer cannot resist payment.

Reasoning

The effect of a final certificate depends on the terms of each contract. Under Clause 30 the architect had power to certify the final balance; having done so within his jurisdiction, the certificate bound the employer unless impugned under sub-clause (7) or vitiated by fraud or collusion. The appellant's Clause 15(4) objection therefore raised no triable issue.

p. 3
04

Whether the judge misdirected himself by deciding on affidavit evidence only

Holding

No misdirection; a defendant may demonstrate entitlement to leave to defend by affidavit evidence, oral evidence, written statement of defence or otherwise, and the material here disclosed no triable issue.

Reasoning

The court noted the onus could be discharged by affidavit evidence, oral evidence or a written statement of defence. The judge properly appreciated the principles in Camille v Merali and Gupta v Continental Builders Ltd. The complexity argument did not assist because the defence, on the material before the court, was untriable.

p. 2

Legal principles established

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  • In a summary judgment application under Order XXXV rule 1, the defendant bears the duty of showing prima facie bona fide triable issues or an arguable case; a plaintiff who shows the defence is shadowy or a sham is entitled to summary judgment.
  • Where a defence filed does not raise prima facie triable issues or is a sham, leave to defend may be refused even though a defence has been filed.
  • An architect or engineer exercising a contractual power to certify must act impartially and independently; complaints about his certificates are matters between him and the employer who is his principal, and cannot be raised against the contractor.
  • Once an architect issues a final certificate within the jurisdiction conferred by the contract, he becomes functus officio and, absent fraud or collusion or impugnment under the contract's machinery, the employer cannot resist payment.

Court orders

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  1. 1.Appeal dismissed with costs to the respondents

Authorities

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Legislation

  • Civil Procedure RulesOrder XXXV rules 1 and 2
  • Civil Procedure RulesOrder XXXV rule 1

Cases cited (4)

  • Continental Butchery Ltd vs Samson Musila Nthiwa
    Civil Appeal No. 35 of 1977 (CA)
  • Jacob vs Booths Distillery Co
    85 LTR at Page 262
  • Camille vs Merali
    [1966] E.A. 411
  • Gupta vs Continental Builders Ltd
    [1978] KLR 83
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 1900 of 1995
Jurisdiction invoked
First appeal to the Court of Appeal under the Constitution and the Appellate Jurisdiction Act (appeal from High Court ruling; specific provision not stated in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Nairobi Golf Hotels (kenya) Limited v Lalji Bhimji Sanghani Builders and Contractors", Case Analysis (1997). Civil Appeal No. 5 of 1997. Source:

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.