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Court of AppealDismissedCivil Appeal No. 277 of 2014· [2017] KECA 721 (KLR)

Printing Industries Limited & another v Bank of Baroda [2017] KECA 721 (KLR)

Court of Appeal of Kenya
3 March 2017
ASAsike-MakhandiaWilliam OukoW. OukoKMK. M'inoti
2,222 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that courts can allow a party to amend pleadings late in a case if the change is honest, connected to existing facts, and the other side gets costs.

What this practically means

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Executive summary

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This is a unanimous judgment of the Court of Appeal at Nairobi (Asike-Makhandia, Ouko and M'inoti, JJ.A.) dismissing the appellants' challenge to a High Court ruling by Havelock, J dated 30 January 2013 in H.C.C.C. No. 335 of 2008. The respondent bank had advanced the appellants financial facilities of Kshs.49,132,286.25 secured on LR 209/6857. Litigation ensued in which the appellants claimed the debt was fully settled and sought refunds and injunctive relief. Mid-trial, after three of its witnesses had testified, the bank sought to re-amend its defence to counterclaim the debt of Kshs.49,132,286.25 plus receivership charges of Kshs.3,293,108. The High Court allowed the amendment, compensating the appellants with costs. The Court of Appeal, applying section 100 of the Civil Procedure Act, Order 8 rules 3-5, and its own precedents in Joseph Ochieng and United India Insurance, held that the learned Judge had properly exercised his discretion: the law permits amendment at any stage before judgment if made in good faith, the sums claimed arose out of the same facts already pleaded, and no real prejudice was shown, costs having been awarded for any inconvenience. The appeal was accordingly dismissed with costs to the respondent. The judgment binds lower courts on the principles governing late amendments and appellate restraint vis-à-vis discretionary decisions.

Key legal issues

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01

Interference with discretionary decisions of the High Court

Holding

The Court of Appeal is slow to interfere with a discretionary decision unless one of the established grounds of misdirection, misapprehension of facts, wrong considerations, or plain wrongness is demonstrated.

Reasoning

The Court restated the Madan JA test in United India Insurance, emphasising that discretion belongs to the trial court and cannot be substituted by the appellate court's own view. The appellants identified no misdirection or prejudice warranting interference.

p. 3
02

Amendment of pleadings at a late stage

Holding

Amendment may be allowed at any stage before judgment if made in good faith, even after long delay, provided costs can compensate the other side and the amendment serves the object of determining the real issues in controversy.

Reasoning

Relying on section 100 of the Civil Procedure Act, Order 8 rules 3-5 and the Joseph Ochieng formulation, the Court held that delay alone does not bar an amendment where no real prejudice is shown and the amendment would resolve the real issues with finality, saving time and costs.

p. 4
03

Whether the re-amendment introduced a new cause of action

Holding

It did not; the counterclaimed sums arose out of the same facts as the debt already pleaded in the original defence and the receivership acknowledged in the appellants' own pleadings.

Reasoning

The respondent had consistently pleaded the indebtedness since the original defence of 10 July 2008, and the receivership charges flowed from the receivership the appellants themselves acknowledged. The amendment could not change the defence into one of a substantially different character requiring a fresh suit.

p. 4

Legal principles established

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  • An appellate court will not interfere with a trial judge's exercise of discretion unless the judge misdirected himself in law, misapprehended the facts, took into account irrelevant considerations, failed to take into account relevant considerations, or his decision is plainly wrong.
  • Amendments to pleadings may be sought at any stage before judgment and, however late, should be allowed if made in good faith, provided costs can compensate the other side and no real prejudice is caused.
  • An amendment adding or substituting a new cause of action may be allowed where the new cause of action arises out of the same facts or substantially the same facts as a cause of action already claimed in the suit.

Court orders

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  1. 1.Appeal dismissed
  2. 2.Appellants to pay costs of the appeal to the respondent

Authorities

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Legislation

  • Civil Procedure ActSection 100
  • Civil Procedure RulesOrder 8 rules 3-5
  • Civil Procedure RulesOrder 11

Cases cited (2)

  • Joseph Ochieng T/A Aquiline Agencies versus First National Bank of Chicago
    Civil Appeal No. 149 of 1991
  • United India Insurance Co. Ltd v. East African Underwriters (Kenya) Ltd
    [1985] E.A 898
On appeal from
High Court of Kenya at Nairobi, Milimani
H.C.C.C. No. 335 of 2008
Jurisdiction invoked
First appellate jurisdiction over an appeal from the High Court (Civil Procedure Act and rules; interlocutory appeal)

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, "Printing Industries Limited & another v Bank of Baroda [2017] KECA 721 (KLR)", Case Analysis (2017). Civil Appeal No. 277 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/721/eng@2017-03-03

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