Kabuito Contractors Limited v David Mukii Mereka T/A Mereka & Co Advocates

The Court read the two rules in the context of the whole of Order VIII. Rules 7 to 10 recognise that a counterclaim may raise questions between the defendant and persons other than the plaintiff, who must be served with the defence and counterclaim, appear, and may deliver a reply. Rule 2, by contrast, involves only the plaintiff and the defendant, with the plaintiff's application to be made before trial on the grounds that the counterclaim cannot be conveniently disposed of or ought not to be allowed. Rule 11 caters for the plaintiff or any party joined in the counterclaim seeking exclusion before filing a reply. The respondents confused the purport of the two rules by invoking both.

Rule 11 is engaged only where a defendant, by his counterclaim, has joined persons other than the plaintiff, who must then be summoned, appear, and may reply. Here the counterclaim was directed against the respondents alone, so only rule 2 was relevant. The trial judge asked whether there was inconsistency in the two rules but never answered the question, instead following the period prescribed by rule 2. The Court supplied the answer: there is no inconsistency, the rules address different situations, and the invocation of rule 11 was misconceived - though for a wrong reason the judge came to the correct conclusion.

Rule 2 permits the plaintiff, before trial, to apply for an order that a set-off or counterclaim cannot be conveniently disposed of in the pending suit or ought not to be allowed. The only sanction the rule provides is refusal of permission to avail himself of it. Because Khamoni, J had granted an order that the counterclaim be excluded and/or struck out while purporting to act under rule 2, the Court amended the order to record a refusal of permission, preserving the counterclaim on the record but denying the appellants any entitlement to rely on it.

The appellants' defence pleaded that the respondents had agreed to limit their fees to Kshs 225,000 with a further fee to be negotiated, and prayed for dismissal of the suit - a total denial that any fees were owed, not a challenge to reasonableness or quantum. Whether those averments were true was beside the point at that stage; the plea of an agreement took the case outside section 49. The trial judge was therefore right to dismiss prayer No 2 of the notice of motion, and the cross-appeal failed with costs to the appellants.

Counsel for the appellants contended, as a last-ditch effort, that even if the judge's interpretation of rules 2 and 11 was right, the judge was not entitled on the material before him to conclude that the counterclaim could not be conveniently disposed of in the suit. The Court answered that the judge was exercising a discretion and the appellants had not shown any breach of the injunctions in Mbogo & Another v Shah on the exercise of discretion by a trial judge and when an appellate court will interfere. The finding that the application was made before trial and was valid therefore stood.