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Court of AppealAllowedCivil Appeal No. 222 of 1998

Central Kenya Ltd v Trust Bank Ltd & 5 others [2000] KECA 367 (KLR)

Court of Appeal of Kenya
18 February 2000
JGJ. E. GicheruSBS. E. O. BosireEOE. Owuor
2,791 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that courts must allow lawsuits to be amended and new defendants added unless this unfairly harms the other side.

What this practically means

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Executive summary

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Central Kenya Ltd, registered proprietor of LR No.7705/2 Thika, sued Trust Bank Ltd, Trust Finance Ltd, Floriculture International Ltd, First National Finance Ltd and the Registrar of Titles seeking declarations that two charges over its land were invalid, that a sale to Floriculture under statutory power of sale was null and void, and damages. After earlier litigation in which its originating summons was struck out as improperly commenced, and after the Court of Appeal in Civil Appeal No.215 of 1996 observed that certain parties should have been joined, Central Kenya applied before Kuloba J under Order 1 rule 10(2) and Order VIA rules 3 and 8 for leave to join seven additional defendants, including Anthony Muiruri Gachoka, and to amend its plaint. The Judge refused, finding the amendments too lengthy, belated, argumentative, mala fide and intended to delay the suit, and made colourful remarks about the appellant's case. The Court of Appeal allowed the appeal. It held the remarks were inappropriate on an interlocutory application and tended to prejudge the merits; that mere length or delay not causing prejudice beyond costs is no ground for refusing amendment; that the proposed defendants were prima facie necessary for the effectual and complete adjudication of the suit; and that compliance with rules for suing a director was irrelevant at the joinder stage. The Court set aside the ruling of 12th March 1998, granted the leave sought in prayers (1) and (2) of the chamber summons dated 4th February 1998, allowed 14 days to file an amended plaint, and awarded the appellant costs against all respondents.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the trial Judge's remarks showed bias or lack of dispassion in handling the interlocutory application
  2. 2.Whether the trial Judge considered extraneous matters and acted capriciously in refusing leave
  3. 3.Whether the trial Judge erred in refusing leave to join additional defendants under Order 1 rule 10(2) of the Civil Procedure Rules
  4. 4.Whether the trial Judge erred in refusing leave to amend the plaint under Order VI rule 3 of the Civil Procedure Rules

Key legal issues

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01

Leave to amend pleadings and join parties

Holding

The trial Judge erred in refusing leave; the proposed defendants were prima facie necessary parties and the amendments clarified the case without causing uncompensatable prejudice.

Reasoning

The court held that the decision as to who to sue is essentially the plaintiff's, and the court's duty is to consider whether other parties should be joined under O.1 rule 10(2). This court's earlier observations in Civil Appeal No.215 of 1996 suggested some proposed defendants should be joined to effectually and completely adjudicate the suit. Having found the amendments clarified the plaint, the Judge should have granted leave since no party would be prejudiced. Mere length or delay not causing prejudice beyond monetary compensation is no ground for refusal.

p. 4
02

Judicial remarks on interlocutory applications

Holding

The trial Judge's colourful remarks prejudging the merits were inappropriate on an interlocutory application.

Reasoning

Averments in a plaint are merely allegations which a party must be given the opportunity to prove. Remarks such as describing the amendments as a wheeling and peddling of wild accusations of imaginary fraud were uncalled for, tended to prejudice the affected party and suggested the Judge was not dispassionate. Such remarks are inappropriate where evidence is yet to be adduced.

p. 3
03

Suing a director and compliance with procedural rules for joinder

Holding

Whether the appellant had complied with rules for suing a director is not a relevant factor in an O.1 rule 10(2) application; raising it at that stage was premature.

Reasoning

The trial Judge declined joinder of Anthony Muiruri Gachoka on the basis that he was a director of the appellant company and would become both plaintiff and defendant absent prior compliance with rules for suing directors. The Court of Appeal held these issues were prematurely raised; the paramount consideration is necessity for effectual and complete adjudication, and several issues in the suit might not be fully answered in his absence.

p. 4
04

Litigation by instalments and belated amendments

Holding

The trial Judge's findings that the amendments were a calculated move to litigate by instalments and were mala fide did not justify refusal of leave on these facts.

Reasoning

While a litigant should plead the whole claim in respect of a cause of action, amendment and joinder exist to obviate multiplicity of suits. The guiding principle is that all amendments should be freely allowed at any stage provided no prejudice or injustice beyond costs results. The Judge's conclusions on bad faith and delay did not displace that principle here.

p. 3

Legal principles established

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  • An appellate court will not lightly interfere with the exercise of a trial court's discretion unless it was wrongly exercised or there is an error in principle.
  • Amendments to pleadings should be freely allowed at any stage unless the prejudice to the other side cannot be compensated in costs; mere length or mere delay is not a ground for refusal.
  • The paramount consideration in an application under Order 1 rule 10(2) is whether the party sought to be joined is necessary for the effectual and complete adjudication of all questions in the suit.
  • A trial judge handling an interlocutory matter should not make remarks that prejudge the merits of a party's case before evidence is adduced.

Court orders

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  1. 1.Appeal allowed
  2. 2.Superior court's order of 12th March 1998 refusing leave to join other parties as defendants and to amend the plaint set aside
  3. 3.Substituted order granting leave prayed for in prayers (1) and (2) of the appellant's chamber summons dated 4th February 1998
  4. 4.Appellant granted 14 days from the date of the judgment to file a proper amended plaint
  5. 5.Costs of the appeal awarded to the appellant against all the respondents

The bench

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One judgment of the whole court — no separate or dissenting opinions.

JG
majority
SB
majority
EO
majority
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 3590 of 1995
Jurisdiction invoked
First appeal to the Court of Appeal against an interlocutory ruling of the High Court (Court of Appeal Act jurisdiction; no specific constitutional provision stated)

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

It is trite law that an appellate court will not lightly interfere with the exercise of a court's discretion unless it is satisfied that the discretion was wrongly exercised or there is an error in principle.
p. 3appellate interference with discretion
The policy of the law is that amendments to pleadings are to be freely allowed unless by allowing them the opposite side would be prejudiced or suffer injustice which cannot properly be compensated for in costs.
p. 4amendment of pleadings
Mere length of proposed amendments is not a ground for declining leave to amend.
p. 4amendment of pleadings
Likewise mere delay is not a ground for declining to grant leave. It must be such delay as is likely to prejudice the opposite party beyond monetary compensation in costs.
p. 4delay in amendment applications
The paramount consideration is whether the party concerned is necessary for the effectual and complete adjudication of all the questions involved in the suit.
p. 4joinder of parties
We therefore allow it, set aside the superior court's order made on 12th March 1998 refusing the appellant leave to join other parties as defendants and to amend its plaint, and in place therefor substitute an order granting the leave prayed for in prayers (1) and (2) of the appellant's chamber summons dated 4th February, 1998 and allow the appellant 14 days from the date hereof to file a proper amended plaint.
p. 4final orders

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, "Central Kenya Ltd v Trust Bank Ltd & 5 others [2000] KECA 367 (KLR)", Case Analysis (2000). Civil Appeal No. 222 of 1998. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2000/367/eng@2000-02-18

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