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Court of AppealDismissedCivil Application No. NAI. 40 of 2013· [2014] KECA 281 (KLR)

Printing Industries Limited & another v Bank of Baroda Kenya Limited [2014] KECA 281 (KLR)

Court of Appeal of Kenya
7 November 2014
2,038 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to pause a Kshs 52 million bank counterclaim, holding that money lost defending it can be recovered through costs.

What this practically means

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Executive summary

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This is a single-judgment ruling of the Court of Appeal at Nairobi (Githinji, Musinga and Kiage, JJ.A.) on a rule 5(2)(b) application by Printing Industries Limited and Multiple Industries Limited seeking a stay of further proceedings in Nairobi HCCC No. 335 of 2008 pending an intended appeal against a ruling of Havelock, J. dated 30th January 2013. The High Court had granted the Bank of Baroda Kenya Limited leave to re-amend its defence and to introduce a counterclaim of Kshs. 52,425,394.25 at an advanced stage of the trial, after three plaintiff witnesses had testified. The applicants argued the appeal was arguable on the basis that the judge failed to consider authorities on amendments at a late stage and that the amendment amounted to an abuse of process; the respondent submitted the appeal was not arguable and that the applicants, already enjoying injunction orders, would suffer no irreversible prejudice. The Court restated the settled principles in Stanley Kangethe Kinyanjui v Tony Ketter and Daniel Migwi Njai v Highview Farm Limited. It held that the trial Judge had exercised judicial discretion which the applicants had not shown was exercised unjudicially, and that even having to defend the counterclaim would not render the appeal nugatory because any loss on success could be compensated by costs. The application was dismissed with costs to the respondent.

Key legal issues

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01

Whether the intended appeal challenging leave to re-amend a defence and introduce a counterclaim was arguable

Holding

The Court entertained considerable doubt that the appeal was arguable because the trial Judge had exercised judicial discretion and no misdirection was demonstrated.

Reasoning

The ruling under challenge was a discretionary decision granting leave to amend pleadings under the Civil Procedure Rules. Following Mbogo v Shah, an appellate court will not disturb such a decision absent demonstration that the judge misdirected himself on some matter and arrived at a wrong decision. The applicants failed to show such a misdirection, so the arguability threshold was not met.

p. 4
02

Whether the intended appeal would be rendered nugatory if stay was not granted

Holding

The applicants' claim that they would suffer prejudice from defending the counterclaim did not establish nugatory-ness, since any loss upon success could be compensated by an award of costs.

Reasoning

Applying the nugatory principle, the Court asked whether what is sought to be stayed is reversible or compensable by damages. Having to defend a counterclaim before the appeal is determined merely expends resources; costs are an adequate remedy. The applicants already enjoyed injunction orders, and delay in finalising the suit worked to the respondent's detriment rather than theirs.

p. 4

Legal principles established

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  • An appellate court may only interfere with a trial judge's exercise of discretion if it is demonstrated that the discretion was not exercised judicially.
  • An applicant under rule 5(2)(b) must satisfy both twin principles: arguability of the appeal and that it would be rendered nugatory absent stay.
  • On arguability, a single bona fide arguable ground of appeal suffices.
  • The mere expenditure of resources in defending a counterclaim whose amendment is under appeal does not render an intended appeal nugatory, as loss can be compensated by costs.

Court orders

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  1. 1.Declined to grant stay of further proceedings in Nairobi HCCC No. 335 of 2008 pending hearing and determination of the applicants' intended appeal
  2. 2.Dismissed the application with costs to the respondent

Authorities

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Legislation

  • Court of Appeal RulesRule 5(2)(b)
  • Court of Appeal RulesRule 75
  • Civil Procedure RulesOrder VIA rule 3(1)
  • Civil Procedure RulesOrder VIA rule 5(1)

Cases cited (13)

  • Republic v Kenya Anti Corruption Commission & 2 Others
    [2009] KLR 31
  • Karuturi Networks Ltd & Others v Daly & Figgis Advocates
    [2010] 2 E.A. 205
  • Silverstein v Chesoni
    [2002] 1 EA 296
  • Mbogo & Another v Shah
    [1968] EA 93
  • Stanley Kangethe Kinyanjui v Tony Ketter & 2 Others
    [2013] eKLR
  • Ruben & 9 Others v Nderitu & Another
    [1989] KLR 365
  • Halai & Another v Thornton & Turpin (1963) Ltd
    [1990] KLR 365
  • David Morton Silverstein v Atsango Chesoni
    Civil Application No. NAI 189 of 2001
  • Damji Pragji Mandavia v Sara Lee Household & Bodycare (K) Ltd
    Civil Application No. NAI 345 of 2004
  • Joseph Gitahi Gachau & Another v Pioneer Holdings (A) Ltd & 2 Others
    Civil Application No. 124 of 2008
  • Reliance Bank Ltd v Norflake Investments Ltd
    [2002] 1 E.A. 27
  • International Laboratory for Research on Animal Diseases v Kinyua
    [1990] KLR 403
  • Daniel Migwi Njai v Highview Farm Limited & Another
    Civil Appeal No. 139 of 1989 (unreported)
On appeal from
High Court of Kenya at Nairobi
HCCC No. 335 of 2008
Jurisdiction invoked
Rule 5(2)(b) of the Court of Appeal Rules

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Printing Industries Limited & another v Bank of Baroda Kenya Limited [2014] KECA 281 (KLR)", Case Analysis (2014). Civil Application No. NAI. 40 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2014/281/eng@2014-11-07

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