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Court of AppealPartially AllowedCivil Appeal No. 193 of 1999· [2001] KECA 1 (KLR)

Kenya Trade Combine Ltd v N. M. Shah [2001] KECA 1 (KLR)

Court of Appeal
16 March 2001
ROR. S. C. OmoloSBS. E. O. BosireEOE. O. O'Kubasu
1,348 words in judgment
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The bottom line

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Kenya's Court of Appeal threw out a Shs 34 million judgment, ruling a company couldn't lose its case without being properly heard first.

What this practically means

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Executive summary

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This is a Court of Appeal decision (Omolo, Bosire and O'Kubasu JJA) on summary judgment. N. M. Shah sued Kenya Trade Combine Ltd for Shs 34 million plus general damages under an alleged agreement for the supply of 2,000 tons of sugar. The appellant entered appearance and filed a defence and counter-claim on 8 September 1997. At the hearing of the respondent's notice of motion under Order XXXV Rules 1 and 2 of the Civil Procedure Rules, the High Court at Nakuru (Rimita J) barred the appellant's counsel from addressing the court because grounds of opposition and a replying affidavit had not been filed within the time prescribed by Order L rule 16. This left the plaintiff's averments uncontroverted, and on 22 October 1997 the Judge granted judgment for Shs 34 million, reserving the residual claims for trial. The appeal was argued on a single consolidated ground: that the Judge erred in law in barring the appellant from being heard. The Court of Appeal allowed the appeal. It held that although a judge has discretion to shut out counsel for procedural default, that discretion does not permit the court to ignore a defence and counter-claim already on file. Relying on The Central Bank of Kenya v Uhuru Highway Development Ltd (quoting Gibbings v Strong) and Gupta v Continental Builders Ltd, the Court reaffirmed that a defendant need only show that the defence on record raises triable issues, which need not be defences that must succeed, and that it is as much against natural justice to shut out a litigant without proper cause as to keep a plaintiff out of his dues. The ruling was set aside, the motion remitted for rehearing before a judge other than Rimita J, and costs of the appeal awarded to the appellant.

Key legal issues

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01

Whether a judge who shuts out a defendant's counsel for non-compliance with Order L rule 16 may disregard the defence and counter-claim already on file when determining a summary judgment application.

Holding

No. The discretion to bar counsel does not extend to ignoring pleadings already filed; a defence and counter-claim on record must be considered on the summary judgment application.

Reasoning

The defence and counter-claim were filed on 8 September 1997, before the motion was heard on 23 September 1997. Following The Central Bank of Kenya v Uhuru Highway Development Ltd, which adopted Gibbings v Strong, a defence put in though irregularly will not be disregarded if it raises material grounds of defence. There being a genuine dispute over the contract for delivery of sugar, the defence on record was not a sham; had the Judge considered the pleadings, the Court could not say he would still have granted the orders sought in the notice of motion.

p. 2
02

What a defendant must show to resist summary judgment.

Holding

A defendant need only show that the defence on record raises triable issues which ought to go to trial; such a defence need not be one that must succeed, and a defendant who raises a prima facie triable issue is entitled to unconditional leave to defend.

Reasoning

The Court adopted Madan JA's statement in Gupta v Continental Builders Ltd that if a defendant raises a prima facie triable issue he is entitled to unconditional leave to defend, while if none is raised the court must enter summary judgment; it is as much against natural justice to shut out a litigant without proper cause as to keep a plaintiff out of his dues. Applying that test, the dispute over the contract for delivery of sugar meant the defence on record was not sham or bogus and ought to have gone to trial.

p. 2
03

Whether the summary judgment for Shs 34 million could stand where the plaintiff's averments were left uncontroverted only because the defendant's counsel was barred from being heard.

Holding

It could not. The uncontroverted state of the plaintiff's averments was the direct product of shutting out counsel, and the filed defence and counter-claim disclosed triable issues; the ruling was therefore set aside.

Reasoning

Rimita J himself recorded that his ruling shut out the grounds of opposition and the replying affidavit and that this unfortunately left the plaintiff's averments uncontroverted. The Court held that the defence and counter-claim already filed could not be ignored, and that on considering the plaint against the defence and counter-claim it was unable to say the respondent was entitled to the orders in the notice of motion dated 2nd September 1997. The appeal was accordingly allowed and the motion remitted for rehearing on merits before another judge.

p. 2

Legal principles established

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  • On a summary judgment application, a judge may in the exercise of discretion shut out a defendant's counsel from being heard (for example for failure to file grounds of opposition within the prescribed time), but the defence and counter-claim already on file cannot be ignored and must be considered.
  • To resist summary judgment a defendant need only show that the defence on record raises triable issues which ought to go to trial; a defence raising triable issues is not one that must succeed.
  • A defendant who raises a prima facie triable issue is entitled to unconditional leave to defend, and it is as much against natural justice to shut out a litigant from defending himself without proper cause as it is to keep a plaintiff out of his dues in a proper case.

Court orders

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  1. 1.The appeal was allowed.
  2. 2.The ruling of the superior court (Rimita J) delivered on 22 October 1997 was set aside.
  3. 3.The notice of motion dated 2 September 1997 was remitted back to the High Court for a re-hearing and determination on merits by a judge other than Rimita J.
  4. 4.The costs of the appeal were awarded to the appellant.

Authorities

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Legislation

  • Civil Procedure RulesOrder XXXV Rules 1 and 2
  • Civil Procedure RulesOrder L Rule 15(2)
  • Civil Procedure RulesOrder L rule 16

Cases cited (3)

  • The Central Bank of Kenya v. Uhuru Highway Development Limited and Others
    Civil Appeal No. 75 of 1998 (Unreported)
  • Gibbings v. Strong
    (1884) Ch D 66
  • Gupta v. Continental Builders Ltd
    (1978) Kenya L. R. 83
On appeal from
High Court of Kenya at Nakuru
H.C.C. No. 355 of 1997
Jurisdiction invoked
Not stated in the judgment. The matter is an appeal from a ruling of the High Court of Kenya at Nakuru to the Court of Appeal; no constitutional or statutory provision conferring jurisdiction is cited.

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, "Kenya Trade Combine Ltd v N. M. Shah [2001] KECA 1 (KLR)", Case Analysis (2001). Civil Appeal No. 193 of 1999. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2001/1/eng@2001-03-16

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