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Court of AppealDismissedCivil Appeal No. 64 of 2007· [2016] KECA 804 (KLR)

Deposit Protection Fund Board in Liquidation of Euro Bank Limited (In Liquidation) v Rosaline Njeri Macharia & another [2016] KECA 804 (KLR)

Court of Appeal
5 February 2016
AVAlnashir VisramGKG.B.M. KariukiJMJ. Mohammed
4,533 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~18 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that a lawsuit filed by a body with no legal identity is a complete nullity that no amendment can revive.

What this practically means

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Executive summary

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This Court of Appeal judgment (Visram, G.B.M. Kariuki and J. Mohammed, JJ.A) affirmed Ochieng', J's decision striking out a plaint instituted in the name of the Deposit Protection Fund rather than the Deposit Protection Fund Board, the former having no legal personality under the Banking Act. The court framed three issues: competency of the suit, survival after repeal of sections 36 and 37 of the Banking Act, and limitation. On the first, it held a suit instituted by a non-legal body is a nullity, incapable of amendment or resuscitation, distinguishing D.T. Dobie & Co. Ltd v Muchina, which presupposes a suit in being. It followed Lesiit, J's decision in John Gachoki Ndenge on the same point. On the second issue, the court found the question academic, but observed that had a valid suit existed, section 23(3) of the Interpretation and General Provisions Act would have preserved it, repeals operating prospectively absent express provision. On limitation, the contractual claim pleaded as accruing in July 1999 was filed in 2007, outside the six-year period under section 4(1)(a) of the Limitation of Actions Act. The court also rejected the public-interest argument, holding that national values under Article 10 of the Constitution require adherence to the rule of law, and a null suit is not recognised. The appeal was dismissed with each party bearing its own costs. The ruling binds lower courts: capacity to sue is a jurisdictional threshold, and defects going to the existence of a plaintiff cannot be cured by amendment.

Key legal issues

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01

Capacity to sue of a non-corporate plaintiff

Holding

The Deposit Protection Fund had no legal personality; only the Deposit Protection Fund Board was a body corporate under the Banking Act, so the suit was a nullity

Reasoning

Sections 36 and 37 of the Banking Act (before repeal) established the Deposit Protection Fund Board as a body corporate capable of suing and being sued, while the Fund was merely an account with the Central Bank. Nowhere was the Fund given legal status. A suit instituted by a non-legal body is incompetent and cannot be brought to life by substituting the proper plaintiff or by amendment.

p. 5
02

Amendment as a cure for a null suit

Holding

The amendment principle in D.T. Dobie does not apply where the suit is a nullity; that case is distinguishable because there a suit existed in being

Reasoning

The court distinguished D.T. Dobie & Co. Ltd v Muchina, where a suit existed and amendment could sustain it. Here, there was no suit before the trial judge at all, since the purported plaintiff was unknown to law. The doctrine of sustaining suits rather than terminating them presupposes a subsisting suit, which was absent.

p. 6
03

Survival of proceedings after repeal of the establishing statute

Holding

The question was academic given there was no suit; had a valid suit existed, section 23(3) of the Interpretation and General Provisions Act would have preserved it from the repeal

Reasoning

Since no suit existed, survival could not arise. In any event, the court held hypothetically that a validly instituted suit pending at the repeal of sections 36 and 37 of the Banking Act would have been preserved by section 23(3)(e) of the Interpretation of the General Provisions Act, since statutes should not be read retrospectively to divest accrued rights absent express provision.

p. 6
04

Limitation of the contractual claim

Holding

The claim founded on contract was time-barred, the breach having occurred in July 1999 and the suit filed only in 2007, outside the six-year period

Reasoning

Section 4(1)(a) of the Limitation of Actions Act bars actions in contract brought more than six years after accrual. The plaint pleaded the cause of action as accruing on the alleged breach in July 1999, so the 2007 filing was outside the period. The court rejected the argument that time runs from discovery for this contractual claim.

p. 6

Legal principles established

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  • A suit instituted by a person or body without legal personality is a nullity, incapable of resuscitation or amendment
  • The amendment-saving principle in D.T. Dobie applies only where there is a suit in being; it cannot apply to a suit that is a nullity
  • In the absence of express transitional provision, repeal of a statute does not affect pending legal proceedings; amendments are not to operate retrospectively

Court orders

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  1. 1.Appeal dismissed
  2. 2.Each party shall meet its own costs in this appeal

Authorities

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Legislation

  • Civil Procedure RulesOrder V rule 13(1)(a)
  • Civil Procedure Rules 2006Order 1 rule 10
  • Companies Act, Cap 486section 241(1)(a)
  • Limitation of Actions Act, Cap 22section 4(1)(a)
  • Banking Actsections 34(2)(a), 34(3), 34(4), (5), 35, 35(6)(b), 36(1),(2),(3), 36(2), 37, 38, 38 to 42
  • Kenya Deposit Insurance Act, No. 10 of 2012sections 75(1), 76(7)
  • Interpretation and General Provisions Actsections 23, 23(3), 23(3)(e)
  • Limitations of Actions Actsection 4(1)
  • Constitution of KenyaArticle 10
  • Children's Act
  • Adoption Act (Cap 143)

Cases cited (12)

  • PANAFRICA BUILDERS & CONTRACTORS LIMITED V SINGH
    [1984] KLR 121, 133
  • VINCENT ONDIEKI ORIAO vs R
    [2012] eKLR
  • MUTONGI v AMALEMBA & ANOTHER
    [2002] 2 KLR 383, 385
  • D.T. Dobie & Co. (K) Ltd. v Muchina
    [1982] KLR 1
  • D. T. Dobie & Company (Kenya) Limited v Joseph Mbaria Muchina & Another
    Civil Appeal No. 37 of 1978
  • NITIN PROPERTIES LIMITED v KALSI & ANOTHER
    [1995-1988] KLR 257
  • AUTO GARAGE v MOTOKOV
    [1971] EA 514
  • David Stephen Gatune v Idealmaster, Nairobi Technical High School & Another
    [1986] eKLR
  • Leah Kambui Githutha v Attorney General
    [2005] eKLR
  • GEORGE MUSYOKI v SAROVA HOTELS
    Industrial Court Cause No. 67 of 2013
  • Gathoni v Kenya Cooperative Creameries Limited
    Civil Application No. 122 of 1981
  • John Gachoki Ndenge v Kiambu Dandora Farmers Company Limited & Another
    Civil Suit No. 481 of 2006 [2008] eKLR
On appeal from
High Court of Kenya at Nairobi (Milimani Commercial Courts)
H.C.C.C. No. 399 of 2005
Jurisdiction invoked
First appeal to the Court of Appeal against an interlocutory ruling of the High Court (Constitution of Kenya, Court of Appeal's appellate jurisdiction)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "Deposit Protection Fund Board in Liquidation of Euro Bank Limited (In Liquidation) v Rosaline Njeri Macharia & another [2016] KECA 804 (KLR)", Case Analysis (2016). Civil Appeal No. 64 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/804/eng@2016-02-05

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