Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
Court of AppealPartially AllowedCivil Appeal No 298 of 2001· [2003] KECA 192 (KLR)

Muthaiga Road Trust Company Limited v Five Continents Stationers Ltd, Deepan Shah & Pankaj Thaker

Court of Appeal
5 December 2003
Philip Kiptoo TunoiP.K. TunoiEOE.O. O'KubasuEGE.M. Githinji
2,512 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

#

Kenya's Court of Appeal ruled that admitting you owe money while asking for more time is not a defence, so the landlord's judgment stood.

What this practically means

#

Executive summary

#
The appellant landlord sued the three respondents for Shs 1,180,551.40 plus interest at 25% per annum for outstanding rents, service charges and electricity charges, the 2nd and 3rd defendants having covenanted as guarantors of the 1st defendant's tenancy of Mobil Plaza. The defendants failed to enter appearance and the Deputy Registrar entered final judgment on 22nd December, 2000. The defendants then applied under Order IXA rules 5, 6 and 10 and section 3A to set aside the ex parte judgment, stay execution and deem a defence filed. Visram J found service on the 1st and 2nd defendants proper but, holding that the defence raised triable issues and that the matter should have gone to formal proof, set aside the ex parte judgment on 31st July, 2001. The Court of Appeal allowed the landlord's appeal. It held the claim was a liquidated demand, so the judgment entered was a regular final judgment under Order IXA rule 3(1), settable aside only under Order IXA rule 10 on proof of a bona fide defence. The defendants' two letters acknowledged the debt and sought time or a waiver, which is not a denial; hence no triable issue existed. The judge erred in requiring formal proof and in setting aside the judgment. The appeal was allowed, the High Court ruling set aside, the defendants' application dismissed with costs, and the appellant awarded costs of the appeal and in the Superior Court.

Key legal issues

#
01

Nature of the judgment entered on a liquidated demand

Holding

The claim for Shs 1,180,551.40 plus interest was a liquidated demand, so the judgment entered was a regular final judgment under Order IXA rule 3(1), settable aside only under Order IXA rule 10.

Reasoning

The plaint claimed a fixed sum for outstanding rents, service charges and electricity plus interest. That is a liquidated demand, so the Deputy Registrar properly entered final judgment under Order IXA rule 3(1). Such a regular judgment is not a nullity and can be set aside only in the exercise of the court's wide discretion under Order IXA rule 10 upon proof of a defence on the merits.

p. 3
02

Whether the defendants' letters disclosed a bona fide defence

Holding

The letters acknowledged the debt and sought time or a waiver; acknowledgment is not denial and discloses no triable issue.

Reasoning

In both letters the 1st defendant admitted owing the rent, service charges and electricity, pleading inability to pay due to low business and asking for time or a waiver with a promise to pay when funds were available. The Court held that acknowledging a claim and seeking indulgence is not the same as denying it, so no bona fide or triable defence was raised.

p. 4
03

Error of the High Court in directing formal proof

Holding

Since the judgment entered was final judgment on a liquidated demand, there was no basis for the matter to go to formal proof; the judge erred in so holding and in setting aside the judgment.

Reasoning

The Court agreed with counsel that formal proof was unnecessary because the judgment entered was final judgment on a liquidated demand. Having found no bona fide defence, the judge's conclusion that the matter should have gone for formal proof under Order IXA rule 5 was erroneous, and his order setting aside the ex parte judgment fell with it.

p. 3

Legal principles established

#
  • A regular ex parte judgment on a liquidated demand can only be set aside under Order IXA rule 10 if the defendant shows a bona fide defence raising a triable issue; an acknowledgment of the debt coupled with a request for time or waiver is not a defence.

Court orders

#
  1. 1.Appeal allowed
  2. 2.Ruling of the learned judge dated 31st July, 2001 set aside
  3. 3.In its place, an order dismissing with costs the defendants' application dated 22nd June, 2001
  4. 4.Appellant to have the costs of this appeal and the costs in the Superior Court

Authorities

#

Legislation

  • Civil Procedure RulesOrder IXA rule 3(1)
  • Civil Procedure RulesOrder IXA rule 5
  • Civil Procedure RulesOrder IXA rule 10
  • Civil Procedure RulesOrder IXA rules 5, 6 and 10
  • Civil Procedure Actsection 3A
  • Civil Procedure RulesOrder V rule 2

Cases cited (1)

  • Patel v EA Cargo Handling Services Ltd
    [1974] EA 75

    Principles for setting aside regular judgment: court's main concern is to do justice; a regular judgment will not usually be set aside unless there is a defence on the merits raising a triable issue.

On appeal from
High Court at Nairobi
HCCC No 1707 of 2000
Jurisdiction invoked
First appellate jurisdiction over appeals from the High Court (Civil Appeal from ruling and order of the High Court)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (25)

#

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

Cite this brief

#

Cite this brief

Caselaw, "Muthaiga Road Trust Company Limited v Five Continents Stationers Ltd, Deepan Shah & Pankaj Thaker", Case Analysis (2003). Civil Appeal No 298 of 2001. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2003/192/eng@2003-12-05

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