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Court of AppealDismissedCivil Appeal No. 37 of 2014· [2015] KECA 881 (KLR)

Dubai Bank Kenya Limited v Kwanza Estates Limited [2015] KECA 881 (KLR)

Court of Appeal
12 March 2015
OKOkwenguASAsike-MakhandiaSISichale
7,442 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~30 min to read original · ~4 min brief

The bottom line

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The Court of Appeal ruled that a judge who did not make the original order can still hear a review based on newly discovered evidence, dismissing the bank's appeal.

What this practically means

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Executive summary

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Kwanza Estates Ltd sued Dubai Bank Kenya Ltd seeking injunctions to restrain sale of charged Watamu properties, a refund of a call deposit of KShs.197,801,205.48, and declarations that the statutory power of sale had not accrued. Muya, J. granted interlocutory orders including a direction that the bank deposit KShs.197,801,205.48 in court. The bank then applied under section 80 of the Civil Procedure Act and Order 45 to review and set aside that ruling on the basis of newly obtained evidence that the Memorandum of Agreement underlying the claim was a forgery. Kasango, J. dismissed the review application, triggering this appeal. The bank argued, among other things, that Kasango, J. lacked jurisdiction because Order 45 Rule 2(3) required the review to be heard by the same judge or one designated by the Chief Justice. The Court of Appeal first held that a jurisdictional issue may be raised for the first time on appeal. On the merits, it construed Order 45 Rule 2: only reviews based on 'some other sufficient reason' must go before the judge who made the order; reviews founded on discovery of new and important matter or clerical error may be heard by any judge at the station, rendering Rule 2(3) inapplicable. On the second issue, the court found the learned judge properly exercised her discretion: the validity of the Memorandum of Agreement did not influence the underlying ruling, the forgery allegation was not new, and the appellant failed to demonstrate due diligence, having delayed reporting the alleged forgery despite earlier knowledge. Relying on Shah v Mbogo, the court declined to disturb the discretionary decision. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Whether a jurisdictional issue can be raised for the first time on appeal

Holding

Yes. The normal rule against raising new points on appeal does not apply where the point goes to jurisdiction; failure to raise jurisdiction below does not confer jurisdiction on a court that had none.

Reasoning

The court relied on the Motor Vessel Lilian 'S' principle that jurisdiction is everything, coupled with Floriculture International, which held that the bar on raising new points on appeal does not apply to jurisdictional issues. Since jurisdiction flows from the Constitution and statute, absence of a jurisdictional objection below cannot cure a lack of jurisdiction. Accordingly the appellant was entitled to raise the issue on appeal.

p. 8
02

Whether Kasango, J. lacked jurisdiction to hear the review because she was not the judge who made the impugned ruling

Holding

No. The review was founded on discovery of new and important matter, so Order 45 Rule 2(3) did not apply; such a review could be heard by any judge at the station, and the requirement of the same judge is a procedural technicality.

Reasoning

The court construed Order 45 Rule 2: only reviews based on 'some other sufficient reason' must go before the same judge; reviews on discovery of new matter or clerical error may be heard by any judge attached to the court. The three-month and Chief Justice designation requirements in Rule 2(3) were therefore inapplicable. Both judges being of coordinate jurisdiction under Article 165, Kasango, J. was properly seized.

p. 9
03

Whether the learned judge misdirected herself in dismissing the review application

Holding

No. The judge properly found the purported new evidence did not influence the underlying ruling, that the forgery allegation was not new, and that the appellant lacked due diligence.

Reasoning

The impugned ruling of Muya, J. rested on defective statutory notices under the Land Act, undervalue sale, and the call deposit, not on the Memorandum of Agreement. The police letter undermined the charge sheet relied on, the expert report lacked supporting documents, and the appellant's delay of over three months before reporting alleged forgery showed want of due diligence. Review could not be used to re-litigate decided issues or appeal against the ruling.

p. 10

Legal principles established

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  • A party is not precluded from raising the issue of jurisdiction for the first time on appeal even where it was not raised in the superior court.
  • The requirement under Order 45 Rule 2(3) that a review be heard by the same judge who made the order, or by a judge designated by the Chief Justice, applies only to reviews not founded on discovery of new and important matter or clerical error; such reviews may be heard by any judge at the station.
  • The requirement that a review application go before the judge who made the order is a procedural technicality rather than a substantive statutory provision.
  • An appellate court will not interfere with the exercise of discretion by an inferior court unless the decision is clearly wrong, based on misdirection, or on failure to consider relevant matters.

Court orders

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  1. 1.The appeal is dismissed with costs to the respondent

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 165
  • Civil Procedure Actsections 1A, 1B, 3A, 7, 63(c) & (e), 80(a)
  • Civil Procedure RulesOrder 40 Rule 1, Order 45 Rules 1 and 2(1)-(3), Order 51 Rule 1 (and former Order 20 Rule 1, Order 44 Rule 1)
  • Land Act, 2012sections 78, 103(3) & (4), 104, 106
  • Banking Actsection 44
  • Penal Codesection 353

Cases cited (7)

  • The Owners of the Motor Vessel Lilian 'S' v Caltex Kenya Ltd
    (1989) KLR 1
  • Floriculture International Ltd v Central Kenya Ltd & 3 Others
    (1995) eKLR
  • Kenidia Assurance Co. Ltd v Otiende
    (1989) 2 KAR 162
  • Francis Origo & Another v Jacob Kumali Mungalia
    [2000] eKLR
  • John Peter Kamau Ruhangi v Kenya Reinsurance Corporation
    [2012] eKLR
  • National Bank of Kenya v Ndungu Njau
    Civil Appeal No. 211 of 1996 (Unreported)
  • Shah v Mbogo
    [1968] E.A. 93
On appeal from
High Court of Kenya at Mombasa, Commercial & Admiralty Division
H.C.C.C No. 44 of 2013
Jurisdiction invoked
Article 165 of the Constitution; sections 80 and 3A of the Civil Procedure Act and Order 45 of the Civil Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Dubai Bank Kenya Limited v Kwanza Estates Limited [2015] KECA 881 (KLR)", Case Analysis (2015). Civil Appeal No. 37 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/881/eng@2015-03-12

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