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Court of AppealDismissedCivil Appeal 87 of 2015· [2016] KECA 843 (KLR)

Giro Commercial Bank Ltd v Mwangula

Court of Appeal
14 October 2016
ASAsike-MakhandiaWilliam OukoW. OukoKMK. M'inoti
2,977 words in judgment
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The bottom line

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Kenya's Court of Appeal refused to strike out a land suit, confirming that striking out pleadings is a last resort and one triable issue saves a case.

What this practically means

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Executive summary

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The respondent had sued Mauli Limited and the Land Registrar, Kwale, claiming title to Kwale/Diani Beach Block/202 by adverse possession. By consent, Giro Commercial Bank (the appellant) and Car & General (K) Ltd were joined as defendants, with the respondent to amend the plaint within 14 days. He amended three months late, without leave and without serving the amended plaint with summons. The two new defendants applied to strike out the suit against them under Order 2 rule 15 and sections 1A, 1B and 3A of the Civil Procedure Act. Omollo, J dismissed the applications, holding that parties who sought joinder could not complain of want of cause of action, and a day later the respondent obtained interlocutory judgment in default of appearance. The Court of Appeal dismissed the bank's appeal. Applying DT Dobie and Mbogo v Shah, it held that striking out is a draconian, last-resort power; the amended plaint disclosed a clear cause of action against each party; the delay, though unexplained, caused no prejudice to applicants who had instigated the amendment and participated actively; and the Judge's discretion was exercised on proper principles. Although the non-service and the default judgment were irregular - interlocutory judgment being unavailable for unliquidated claims - the court, invoking sections 3 and 3A of the Appellate Jurisdiction Act, set aside the interlocutory judgment and granted the appellant and Car & General (K) Ltd 14 days to file and serve their defences, with costs of the appeal to the respondent.

Key legal issues

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01

Whether the suit should have been struck out for failure to amend the plaint within the 14 days fixed by the consent order

Holding

No. The delay of three months was not inordinate in the circumstances; the amendment was prompted by the applicants themselves, no prejudice was suffered, and the court retained power under Order 8 rule 6 to extend the time for amendment.

Reasoning

The consent order required amendment within 14 days, but the respondent filed three months late without explanation. The Judge, applying Article 159 and the overriding objective, found no prejudice to the applicants, who had sought joinder to protect their interests and had actively participated. Under Order 8 rule 6 the court could extend the period, so the order to amend did not automatically render the suit incompetent.

p. 5
02

Whether failure to serve the amended plaint with summons to enter appearance was fatal

Holding

The requirements of Order 5 were admittedly not complied with, but the applicants were aware of the suit, had sought joinder, and could not complain of non-service; the resulting default judgment was, however, irregular and was set aside.

Reasoning

Summons requirements exist so that no proceedings are conducted to a party's detriment in its absence. Here the applicants instigated the amendment, filed notices of appointment and appearance, and participated actively, contradicting any claim of prejudice. Yet the respondent obtained interlocutory judgment without proof of service and on an unliquidated claim, which was irregular and closely intertwined with the appeal.

p. 5
03

Whether the amended plaint disclosed a reasonable cause of action against the newly joined defendants

Holding

Yes. The amended plaint pleaded a clear cause of action against each party, and Order 4 rule 5 only requires that a defendant be interested in the subject matter and liable to answer the plaintiff's demand.

Reasoning

The amended plaint alleged that Car & General (K) Ltd illegally entered and alienated the suit property, and that the appellant lent money on the security of subdivisions of land to which Mauli Limited and Car & General had no title to transfer or charge. That was a clear cause of action; the applicants, having sought joinder themselves, could not contend otherwise.

p. 3

Legal principles established

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  • An appellate court will not interfere with the exercise of judicial discretion unless it is shown to have been exercised wrongly, unjudicially, or on wrong principles, or the reasons given are insufficient.
  • Striking out a pleading is a draconian power to be exercised sparingly, only in clear cases, and one triable issue suffices to save a suit.
  • An order under Order 2 rule 15 is discretionary; even where the grounds are satisfied, striking out is a last resort and the court may instead order amendment, stay, dismissal or judgment.
  • Interlocutory judgment in default of appearance is only available for liquidated claims; for unliquidated claims the plaintiff must prove the claim by formal proof.

Court orders

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  1. 1.Appeal dismissed with costs to the respondent
  2. 2.Interlocutory judgment entered on 18th September 2015 set aside pursuant to sections 3 & 3A of the Appellate Jurisdiction Act and Rule 1(2)
  3. 3.Appellant and Car and General (K) Ltd granted 14 days from the date of the judgment to file and serve their respective statements of defence

Authorities

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Legislation

  • Constitution of KenyaArticle 159
  • Civil Procedure ActSections 1A, 1B, 3A
  • Civil Procedure RulesOrder 1 rule 10(4)
  • Civil Procedure RulesOrder 2 Rule 15(1)(a),(b),(c),(d)
  • Civil Procedure RulesOrder 4 rule 5
  • Civil Procedure RulesOrder 5 Rule 1(1),(3) and rule 3
  • Civil Procedure RulesOrder 8 rule 6
  • Civil Procedure RulesOrder 10 Rules 2, 4, 5, 6, 7 and 9
  • Appellate Jurisdiction ActSections 3 & 3A; Rule 1(2)

Cases cited (4)

  • John Kamunya & Another v John Nginyi Muchiri
    Civil Appeal No. 123 of 2007

    After amendment of a plaint, service of summons on newly added parties is mandatory unless dispensed with by the court.

  • DT Dobie & Co. (K) Ltd v Muchina
    (1982) KLR 1

    Striking out is draconian, to be sparingly exercised in clear cases; one triable issue suffices to save a suit.

  • Mbogo & Anotehr v Shah
    (1968) EA 93

    An appellate court will not interfere with judicial discretion exercised on grounds a reasonable person could adopt.

  • Supermarine Handling Services Ltd. v Kenya Revenue Authority
    Civil Appeal No. 85 of 2006

    Discretion may be interfered with where the order is wrong, unjudicial, on wrong principles, or reasons are absent or insufficient.

On appeal from
High Court of Kenya (ELC, Mombasa)
ELC No. 177 of 2011 (ruling by Omollo, J)
Jurisdiction invoked
Appellate jurisdiction under the Appellate Jurisdiction Act (sections 3 & 3A invoked in the final orders)

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, "Giro Commercial Bank Ltd v Mwangula", Case Analysis (2016). Civil Appeal 87 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/843/eng@2016-10-14

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