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Court of AppealPartially AllowedCivil Appeal No. 84 of 2014· [2016] KECA 123 (KLR)

Eurobank Limited v Shah Munge & Partners [2016] KECA 123 (KLR)

Court of Appeal of Kenya
4 November 2016
3,094 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal revived a Kshs.86 million case dismissed for delay, confirming courts should apply settled principles before killing suits.

What this practically means

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Executive summary

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The Court of Appeal at Nairobi (Makhandia, Ouko and M'inoti, JJ.A.) allowed an appeal by Eurobank Limited against the ruling of Kimondo, J. of 17th February 2012 dismissing its suit - a claim of about Kshs.86 million against Shah Munge & Partners - for want of prosecution under Order 17 rule 2 of the Civil Procedure Rules. The suit, filed in 2006, had twice been taken out of the hearing list after the appellant's counsel failed to attend call-overs, following which the court issued a notice to show cause. The High Court concluded no cause had been shown and dismissed the suit without addressing the respondent's counterclaim and without awarding costs. The Court of Appeal reiterated that dismissal for want of prosecution is a judicial discretion governed by settled principles: whether the delay is inordinate, whether it is inexcusable, and whether the defendant is prejudiced. It found the learned judge failed to apply these principles: he did not determine whether a step had been taken in the suit within one year, did not consider the appellant's explanation for missing call-overs, and did not address prejudice, which the respondent never demonstrated and whose counsel did not even positively support dismissal. The Court emphasised that the discretion under Order 17 rule 2 is permissive rather than mandatory, and that delay compensated by costs and not impeding a fair trial is never deemed fatal. The appeal was allowed with no order on costs, and the appellant was directed to list the suit for hearing within 45 days.

Key legal issues

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01

Principles governing dismissal for want of prosecution

Holding

The trial court must apply the settled principles: consider whether the delay is inordinate and inexcusable and whether the defendant will suffer prejudice, and must address whether a step has been taken in the suit within one year under Order 17 rule 2.

Reasoning

The Court held the learned judge failed to advert to the guiding principles at all. He did not determine whether a step had been taken in the suit within the preceding year, a central element of Order 17 rule 2; he did not consider the appellant's explanation for missing the call-overs; and he did not address prejudice, since the respondent never demonstrated any prejudice and did not even positively support dismissal.

p. 4
02

Nature of the discretion under Order 17 rule 2

Holding

The power to dismiss a suit for want of prosecution is a judicial discretion to be exercised judicially, and its language is permissive rather than mandatory; courts may save suits by imposing conditions.

Reasoning

The discretion must be exercised judicially rather than irrationally or capriciously. The rationale is that suits be determined expeditiously, giving effect to Article 159(2)(b). Even where delay is inordinate and unexplained, the court may refrain from dismissal by requiring an undertaking to list the suit within a specified time or imposing conditions for expeditious hearing.

p. 3
03

Appellate interference with discretion

Holding

The appeal is against exercise of discretion; the appellate court may interfere where the trial court failed to take into account relevant considerations, as happened here.

Reasoning

Applying the Mbogo v Shah principle, the Court found the judge did not take into account all relevant considerations - the one-year requirement, the appellant's explanation for missing call-overs, and the absence of demonstrated prejudice - and therefore allowed the appeal rather than substituting its own preference for that of the trial court.

p. 5

Legal principles established

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  • Dismissal of a suit for want of prosecution is an exercise of judicial discretion governed by settled principles: whether the delay is inordinate, whether it is inexcusable, and whether the defendant is likely to be prejudiced.
  • The discretion under Order 17 rule 2 is permissive, not mandatory; a court may save a suit from dismissal by imposing conditions to secure expeditious hearing.
  • Delay that can be compensated by costs and does not make a fair trial impossible is not fatal to a suit.
  • An appellate court will not interfere with a trial court's exercise of discretion unless it is shown the court misdirected itself, considered irrelevant matters, or failed to consider relevant matters, arriving at a wrong decision.

Court orders

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  1. 1.Appeal allowed
  2. 2.No order on costs
  3. 3.Appellant directed to list the suit before the trial court for hearing and determination within 45 days from the date of the ruling

Authorities

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Legislation

  • Constitution of Kenya 2010Article 159(2)(b)
  • Civil Procedure ActSection 1A
  • Civil Procedure RulesOrder 17 rule 2

Cases cited (19)

  • Allen v. Sir Alfred McAlpine & Sons Ltd
    [1968] 1 All ER 543
  • Mwangi S. Kimenyi v. Attorney General & Another
    HC Misc. S. No. 720 of 2009
  • Phillip Chemwolo & Another v. Augustine Kubede
    [1982-88] KAR 103
  • Chevona v. Seventh Day Adventist Church of East Africa Union
    NET CS No. 254 of 2009
  • Ngwambu Ivita v. Akton Mutua Kyumbu
    [1984] KLR 441
  • Agip (K) Ltd v. Highlands Tyres Ltd
    [2001] KLR 630
  • Biguzzi v. Rank Leisure PLC
    [1999] 1 WLR 1926
  • Deepak Chamanlal Kamani & Another v. Kenya Anti-Corruption Commission & 3 Others
    CA (A) No. 152 of 2009
  • Eliud Munyua Mutungi v. Francis Murerwa
    CA No. 114 of 2008
  • Governors Balloon Safaris Ltd v. Skyship Co. Ltd
    HCCC No. 461 of 2008
  • Royal Media Services Ltd v. Telkom Kenya Ltd & 13 Others
    CA No. 31 of 2008
  • Saarel Investment Ltd v. Pyramid Construction Co. Ltd & Another
    HCCC No. 181 of 2010
  • E.T. Monks & Co. Ltd v. Evans
    [1985] KLR 584
  • Mbogo & Another v. Shah
    (1968) EA 93
  • United India Insurance Co. Ltd v. East African Underwriters (Kenya) Ltd
    [1985] E.A 898
  • Fitzpatrick v. Batger & Co Ltd
    [1967] 2 ALL ER 657
  • Victory Construction Co v. A. N. Duggal
    [1962] EA 697
  • Chipchase v. Rosemond
    [1965] 1 ALL ER 145
  • Moses Miriira Maingi & 2 Others v. Maingi Kamuru & Another
    CA No. 151 of 2010 (Nyeri)
On appeal from
High Court of Kenya at Nairobi
HCCC No. 232 of 2006
Jurisdiction invoked
First appeal under the Civil Procedure Act and Rules against the exercise of judicial discretion by the High Court dismissing the suit for want of prosecution

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, "Eurobank Limited v Shah Munge & Partners [2016] KECA 123 (KLR)", Case Analysis (2016). Civil Appeal No. 84 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/123/eng@2016-11-04

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