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Court of AppealPartially AllowedCivil Appeal No. 168 of 2011· [2015] KECA 14 (KLR)

Dakianga Distributors (k) Ltd v Kenya Seed Company Umited)

Court of Appeal of Kenya
25 February 2015
3,551 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that defendants can only rely on facts and payments specifically stated in their court pleadings, raising the debt owed by Kshs 2.3 million.

What this practically means

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Executive summary

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This was a first appeal and cross-appeal from the High Court at Kisii (Asike Makhandia, J), which had awarded Kenya Seed Company Limited Kshs. 8,776,580/= against its distributor, Dakianga Distributors, on delivered seeds paid for by cheques that were dishonoured. The trial judge had found the appellant's director not truthful, held that the three replacement cheques pleaded in the defence were payments for other transactions, and that evidence of six additional unpleaded cheques departed from the pleadings - yet nonetheless gave the appellant credit for certain unpleaded sums, producing the reduced award. The Court of Appeal re-evaluated the evidence as it is bound to do on a first appeal, applying Mwanasokoni v Kenya Bus Service Limited on interference with findings of fact. The court held that the trial judge fell into internal inconsistency: having correctly stated that parties are bound by their pleadings, he erred in giving credit on sums not pleaded in the defence at all, even though the evidence was admitted without objection. A set-off of Kshs. 2,448,000/= also failed because it related to an independent transaction and was not specifically pleaded as a set-off or counter-claim as Order 7 of the Civil Procedure Rules requires. The court invoked Bullem and Leake and Jacob, Sir Jack Jacob's article, and Adetoun Oladeji to affirm the primacy of pleadings: in the adversarial system the parties set the agenda and evidence at variance with pleadings goes to no issue. The appeal was dismissed with costs; the cross-appeal succeeded and judgment was entered for the respondent for Kshs. 11,104,180/= after credit for the admitted Kshs. 1,000,000/= payment, with costs of the cross-appeal to the respondent.

Key legal issues

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01

Whether the appellant was entitled to credit for unpleaded cheques tendered in evidence

Holding

No - the appellant was bound by its pleaded case; the trial judge erred in giving credit on sums not pleaded in the defence even though the evidence was admitted without objection

Reasoning

The defence pleaded only three specific cheques as replacements for the dishonoured cheques. The appellant's own witness admitted those were payments for other transactions, and the cheques he instead produced, totalling Kshs. 10,892,245/=, were not pleaded, not listed in the appellant's list of documents, and not part of the agreed issues. Having correctly held that parties are bound by their pleadings, the judge inconsistently gave credit for the unpleaded sums. Admission of evidence without objection did not license a departure from the pleadings.

p. 6
02

The importance and binding force of pleadings in adversarial litigation

Holding

Pleadings define and delimit the matters in controversy; parties and the court are bound by them and cannot raise or adjudicate fresh issues without due amendment

Reasoning

Relying on Bullen and Leake and Jacob's Precedents of Pleadings, Sir Jack Jacob's article quoted in Malawi Railways v Nyasulu, and the Nigerian decision in Adetoun Oladeji, the court held that in the adversarial system the parties set the agenda for trial by their pleadings; evidence at variance with the pleadings goes to no issue and must be disregarded, and a decision on a claim or defence not raised amounts to denying a party a hearing.

p. 5
03

Whether the pleaded Kshs. 2,448,000/= cheque supported a set-off

Holding

No - the cheque related to an independent transaction and was not pleaded as a set-off or counter-claim in the manner required by Order 7

Reasoning

The defence did not specifically state that the claim was made by way of set-off or counter-claim as Order 7 rule 7 requires. On the evidence the payment was withheld by the respondent to offset the appellant's indebtedness, and the trial judge found it related to a transaction independent of the claim in the plaint. The appellant's submission that the absence of a reply to defence converted it into an admitted claim was rejected.

p. 4
04

The cross-appeal on the quantum awarded

Holding

It succeeds - judgment is entered for the full sum claimed less the admitted credit, being Kshs. 11,104,180/=

Reasoning

Since the unpleaded credits of the cheques not captured in the respondent's records could not stand, the only lawful credit was the Kshs. 1,000,000/= admitted by the respondent as paid after institution of the suit, as per the amendment of the plaint recorded by the trial judge. The decretal sum therefore rises from Kshs. 8,776,580/= to Kshs. 11,104,180/=.

p. 6

Legal principles established

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  • Parties are bound by their pleadings; a party may not rely at trial on a case at variance with, or unpleaded in, its pleadings without due amendment, and evidence that does not support the averments in the pleadings must be disregarded
  • On a first appeal the Court of Appeal will interfere with a finding of fact by the High Court only where the finding is based on no evidence, on a misapprehension of the evidence, or where the judge demonstrably acted on wrong principles
  • A set-off or counter-claim must be specifically pleaded in the statement of defence; a defence that does not state that a ground is relied on by way of counter-claim does not support such a claim

Court orders

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  1. 1.The appellant's appeal is dismissed with costs
  2. 2.Judgment is entered for the respondent in the sum of Kshs. 11,104,180/= after giving credit for Kshs. 1,000,000/= paid after institution of the suit
  3. 3.The respondent is awarded costs of the cross-appeal
On appeal from
High Court of Kenya at Kisii
Kisii HCCC No. 146 of 2005
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (the judgment does not cite a specific provision)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (3)

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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, "Dakianga Distributors (k) Ltd v Kenya Seed Company Umited)", Case Analysis (2015). Civil Appeal No. 168 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/14/eng@2015-02-25

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