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Court of AppealDismissedCivil Appeal No. 295 of 2014· [2017] KECA 725 (KLR)

Gelu Unicrafts Limited & 2 others v Usafi Services Limited [2017] KECA 725 (KLR)

Court of Appeal of Kenya
3 March 2017
ASAsike-MakhandiaWilliam OukoW. OukoKMK. M'inoti
2,570 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that clients who ignore court cases cannot blame their advocates and lose the chance to defend claims.

What this practically means

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Executive summary

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The appellants sold suit premises to the respondent under an agreement dated 30th December 1998 for Kshs.4,000,000, receiving Kshs.3,615,540. Their advocates failed to file a defence, interlocutory judgment was entered on 15th April 2008, and final judgment for the sum claimed with 30% per annum interest was entered on 18th May 2012 after formal proof. Waweru, J., by ruling of 12th February 2014, set aside the final judgment for improper service of the hearing notice but declined to set aside the interlocutory judgment or allow the appellants to defend. The appeal, limited to that refusal, was canvassed by written submissions. The Court of Appeal restated the settled principles for setting aside an interlocutory judgment: doing justice to the parties is the overarching consideration, and the court weighs the reasons for default, the delay, prejudice and whether costs compensate, whether a defence on the merits exists, the parties' conduct, Article 159 of the Constitution and the overriding objective under Sections 1A and 1B of the Civil Procedure Act. It held the learned judge fully appreciated and faithfully applied those principles, considering the unexplained failure to file a defence, the four-year delay, the admitted receipt of almost the whole purchase price, the vendor's lack of title causing total failure of consideration, and the staleness of the undue-influence claim. The record showed the appellants were aware of the interlocutory judgment and were indolent, so the sins-of-counsel principle did not avail them. Applying the rule that an appellate court will not disturb a discretionary decision absent misdirection or manifest wrongness, the court found no basis for interference and dismissed the appeal with costs to the respondent.

Key legal issues

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01

Principles governing setting aside an interlocutory judgment

Holding

The principles are settled: justice to the parties is the overarching interest; the court considers reasons for the default, delay, prejudice, whether costs compensate, whether there is a defence on the merits, the parties' conduct, Article 159 of the Constitution and the overriding objective under Sections 1A and 1B of the Civil Procedure Act.

Reasoning

The court restated the principles as largely settled and confirmed the trial judge had enumerated them, including that the power is exercised to avoid injustice from accident, inadvertence or excusable mistake, but not to assist deliberate obstruction or delay, and that denying a hearing is a last resort.

p. 3
02

Whether the trial judge misapplied the principles

Holding

He did not. He considered the absence of a good explanation for the failure to file a defence, the four-year delay, the 'advocate's fault' plea, the admitted receipt of almost the entire purchase price, the vendor's lack of title causing total failure of consideration, and the staleness of the undue-influence claim.

Reasoning

The court found the judge fully appreciated and faithfully applied the principles. The record showed the appellants' indolence: they were aware of the interlocutory judgment (counsel applied for an adjournment at formal proof on 4th July 2011), engaged in settlement negotiations, and gave no explanation for their inaction, so no misdirection was discernible.

p. 3
03

Interference with discretionary decisions on appeal

Holding

The Court of Appeal will not interfere with the exercise of a trial judge's discretion unless the judge misdirected himself resulting in a wrong decision, or it is manifest from the case as a whole that the judge has been clearly wrong.

Reasoning

Adopting the statement in Pithon Waweru Maingi v Thika Magina, the court held that no such misdirection was present; the appeal only challenged the manner of exercise of discretion, and the judge's consideration of the facts disclosed no error warranting appellate intervention.

p. 4

Legal principles established

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  • The discretion to set aside an interlocutory judgment is exercised on settled principles: to do justice, to relieve against excusable mistake or error, but not to reward deliberate obstruction or delay; the court considers the reasons for default, delay, prejudice, compensability by costs, the existence of a defence on the merits, the parties' conduct, and Article 159 of the Constitution and the overriding objective.
  • An appellate court will not interfere with a trial judge's exercise of discretion unless the judge misdirected himself on some matter and arrived at a wrong decision, or it is manifest from the case as a whole that the judge was clearly wrong.
  • The negligence and indolence of an advocate may be visited upon a client where the client was aware of the proceedings and did nothing, so that the principle that sins of counsel are not visited on a litigant does not apply.

Court orders

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  1. 1.The appeal was dismissed
  2. 2.Costs of the appeal awarded to the respondent

Authorities

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Legislation

  • Constitution of KenyaArticle 159
  • Civil Procedure ActSections 1A and 1B
  • Civil Procedure RulesOrder X rule 11

Cases cited (8)

  • Mbogo & Another v Shah
    [1968] EA 93
  • Mrao Ltd v First American Bank of Kenya Ltd & 2 Others
    [2003] eKLR
  • Tana and Athi Rivers Development Authority v Jeremiah Kimigho Mwakio
    [2015] eKLR
  • Shah v Mbogo
    (1969) EA 116
  • Jamnadas Sodha v Gordandas Hemraj
    (1952) ULR 7
  • Pithon Waweru Maingi v Thika Magina
    [1968] eKLR
  • Ketterman & Others v Hansel Properties Ltd
    [1988] 1 ALL ER 38
  • Madison Insurance Co. v Samuel Ndemo Makori
    [2004] eKLR
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 658 of 2007
Jurisdiction invoked
First appellate jurisdiction under the Civil Procedure Act and Appellate Jurisdiction Act over appeals from the High Court

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Gelu Unicrafts Limited & 2 others v Usafi Services Limited [2017] KECA 725 (KLR)", Case Analysis (2017). Civil Appeal No. 295 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/725/eng@2017-03-03

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