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Court of AppealDismissedCivil Appeal No. 270 of 2010· [2013] KECA 23 (KLR)

Yasmin Abdulkarim T/A Y.A. Ali Advocates v Southern Credit Banking Corporation Limited [2013] KECA 23 (KLR)

Court of Appeal of Kenya
12 June 2013
EGE. M. GithinjiASAsike-MakhandiaFSF. Sichale
1,696 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that a claim against an advocate for a defective charge only starts when a court declares the document invalid, so the bank's suit was not time barred.

What this practically means

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Executive summary

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This is a single judgment of the Court of Appeal at Malindi (Githinji, Makhandia and Sichale JJ.A) dismissing an appeal against a ruling of the High Court at Mombasa (Azangalala J, 22 April 2010) which refused to strike out the respondent bank's suit against the appellant advocate for damages for breach of a professional legal services contract by way of negligence. The bank alleged that the advocate negligently prepared a charge under the Registration of Titles Act over land registered under the Registered Land Act; the charge was later declared invalid, null and void in litigation between the bank and its borrower, and an appeal was dismissed for the advocate's non-attendance. The appellant struck out the suit on two grounds: limitation and that the claim for damages was irrecoverable, rendering the suit frivolous, vexatious and an abuse of process. The Court of Appeal held that, since the bank relied on the advocate's advice and could not have known of the defect, the cause of action in contract crystallised upon the High Court's declaration that the charge was invalid, not upon registration of the charge in 1996; the suit was therefore not time barred. It further held that a party who raises limitation in a striking-out application cannot complain that the court determined the point conclusively, limitation being a point of law to be decided in limine. Finally, the pleadings disclosed genuine triable issues on both liability and damages, which are for the trial court. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

When the cause of action for negligent preparation of a legal charge accrued for limitation purposes

Holding

The cause of action crystallised on the delivery of the judgment declaring the charge invalid, not on the registration of the charge in 1996, so the suit was not time barred.

Reasoning

The claim was founded on breach of a professional legal services contract subject to the six-year limitation period in section 4(1)(a) of the Limitation of Actions Act. The bank instructed and relied on the advocate and could not have known the charge was invalid unless the advocate so advised. Both parties treated the charge as valid security until the High Court declared it invalid, null and void; that declaration gave rise to the cause of action.

p. 3
02

Whether the High Court erred by conclusively determining the limitation issue

Holding

No error: limitation is a point of law to be decided in limine, and having raised it herself, the appellant could not complain that the High Court determined it conclusively.

Reasoning

The appellant itself raised limitation as a ground in the striking-out application and supported it by affidavit. The trial judge was therefore obliged to make a preliminary finding on whether the suit was time barred before deciding whether to strike out the suit. The complaint that the issue received a final determination was misconceived.

p. 3
03

Whether the suit was frivolous, vexatious or an abuse of the process of the court

Holding

The suit was not frivolous, vexatious or an abuse of process because the plaint pleaded substantial facts on liability and damages, most of which were admitted, disclosing genuine triable issues for the trial court.

Reasoning

The basis of the striking-out application was that the damages claimed were irrecoverable. However, the plaint pleaded facts constituting a cause of action on both liability and damages, most of the primary facts were admitted in the defence, and the appellant herself pleaded facts in answer. The appellant was in effect seeking a determination of the merits, particularly on damages, at a preliminary stage, which is the function of the trial court.

p. 4

Legal principles established

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  • In a claim against an advocate for negligent preparation of a security document, where the client relied on the advocate's advice, the cause of action in contract accrues when a court declares the document invalid, not when the document was prepared and registered.
  • Where a party raises limitation as a ground in a striking-out application, the High Court is required to make a preliminary determination of that point of law and cannot later be faulted for having done so conclusively.
  • A suit may not be struck out as frivolous or an abuse of process where the pleadings disclose genuine triable issues on both liability and damages; the merits of such issues are for the trial court.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs of the appeal awarded to the respondent

Authorities

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Legislation

  • Limitation of Actions Actsection 4(1)(a)
  • Limitation of Actions Actsection 27
  • Civil Procedure RulesOrder 6 Rule 13(1)(b)(1) and 16 (former)
  • Registered Land ActCap 300
  • Registration of Titles ActCap 281

Cases cited (1)

  • Civil Appeal No. 202 of 2012 (as printed in the judgment)
On appeal from
High Court of Kenya at Mombasa
H.C.C.C. No. 34 of 2009
Jurisdiction invoked
First appeal to the Court of Appeal under the Constitution and the Court of Appeal Act (appeal from the High Court; 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 (17)

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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, "Yasmin Abdulkarim T/A Y.A. Ali Advocates v Southern Credit Banking Corporation Limited [2013] KECA 23 (KLR)", Case Analysis (2013). Civil Appeal No. 270 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/23/eng@2013-06-12

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