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Court of AppealDismissedCivil Appeal No. 34 of 2015

Erwen Electronics Limited & 3 others v Radio Africa Limited & another [2018] KECA 589 (KLR)

Court of Appeal of Kenya
18 May 2018
3,953 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~16 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal refused to rescue litigants who skipped a hearing, held them to their pleadings, and dismissed their appeal with costs.

What this practically means

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Executive summary

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This was a first appeal against a High Court ruling by L. Kimaru, J. dated 29 April 2010 declining to set aside his earlier orders of 10 December 2009, by which he struck out the appellants' joint defence as scandalous, frivolous and vexatious and entered judgment for the 1st respondent for Kshs. 4.3 million. The application to strike out had proceeded exparte because the appellants' counsel failed to attend or file papers in opposition. Before the Court of Appeal, the appellants argued, in four compressed grounds, that the judge erred in entering judgment without proof of assignment of debts from KRA and KBC to the 1st respondent, in rejecting their evidence of payment of taxes and the KBC debt, in finding no reasonable defence, and in failing to exercise his discretion to set aside his ruling. The 1st respondent countered that the assignment issue was raised for the first time on appeal, that parties are bound by their pleadings, and that the defence was a mere denial. The court framed a single issue: whether the judge exercised his discretion judiciously. Applying the settled principles in Mbogo v Shah and United India Insurance v EA Underwriters, the court held that the judge had applied the correct principles and the DT Dobie test, and that the defence raised no triable issue. The assignment argument was rejected as unpleaded new matter on appeal. The appeal was dismissed with costs to the 1st respondent both on appeal and in the court below.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the learned Judge exercised his discretion judiciously in declining to set aside his orders of 10th December 2009 striking out the appellants' joint defence

Key legal issues

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01

Whether the High Court judge exercised his discretion judiciously in refusing to set aside the ex parte striking out of the defence

Holding

The judge applied the correct principles (Shah v Mbogo; Maina v Muguna; Kanji Naran v Velji Kimji) and correctly found no triable issue; the appeal court found no basis to interfere with that discretion.

Reasoning

The Court of Appeal applied the classic principles on interference with discretionary decisions (Mbogo v Shah; United India Insurance v EA Underwriters). The trial judge had appraised himself of the pleadings, applied the DT Dobie principles on striking out, and found the joint defence a mere denial raising no triable issue. The appellants failed to exhibit proof of payment of the KRA taxes or the KBC debt, and the most prudent proof would have been a KRA certificate of compliance or a KBC acknowledgement receipt.

p. 4
02

Whether the issue of non-assignment of debts from KRA and KBC to the 1st respondent could be raised on appeal

Holding

No - the issue was never pleaded or agitated before the trial court, and parties are bound by their pleadings; the appellate mandate is limited to matters determined by the trial court.

Reasoning

The joint defence nowhere pleaded a total denial of liability on account of lack of assignment. The 1st respondent correctly submitted the assignability issue was not raised before the trial judge. The court adopted the pleading-binding principle from Odd Jobs v Mubia and related cases and rejected the argument as new matter raised for the first time on appeal.

Legal principles established

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  • An appellate court will not interfere with a judge's exercise of discretion unless the judge misdirected himself, misapprehended the facts, took into account matters he should not have, failed to take into account matters he should have, or his decision is plainly wrong.
  • An appellate court is limited to interrogating matters that were considered and determined by the trial court; issues raised for the first time on appeal are rejected.
  • Parties are bound by their pleadings.

Court orders

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  1. 1.Appeal dismissed with costs to the 1st respondent both on appeal and in the court below

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
High Court of Kenya at Nairobi
H.C.C.C. No. 579 of 2008
Jurisdiction invoked
First appeal to the Court of Appeal under the Civil Procedure Act/Court of Appeal jurisdiction over the High Court ruling

Relief refused

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Setting aside the High Court orders striking out the joint defence and entering judgment

No basis for improper exercise of judicial discretion; issue of assignment of debts raised for first time on appeal; defence raised no triable issue

p. 4

Costs

Appeal dismissed with costs to the 1st respondent both on appeal and the court below

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

The Court of Appeal is only entitled to interfere if one or more of the following matters are established: first that the Judge misdirected himself in law; secondly, that he misapprehended the facts; thirdly that he took account of considerations of which he should not have taken account; fourthly, that he failed to take account of consideration of which he should have taken account of; or fifthly, that his decision albeit a discretionary one is plainly wrong.
p. 4Principles for interference with judicial discretion on appeal
In our view, the most prudent way of proving discharge of any liability to KRA should have been simply by way of production of a certificate of compliance issued by KRA to that effect. None was exhibited.
p. 4Proof of discharge of tax liability
We therefore agree with the 1 st respondent's submission that this issue was being raised for the first time on appeal and is accordingly rejected.
New issues on appeal; parties bound by pleadings
The upshot of the above is that we find no merit in this appeal. It is accordingly dismissed with costs to the 1 st respondent both on appeal and the court below.
p. 4Disposition and costs order

Issues in the judgment

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minor

Minor typographical errors in the judgment text ('joint efence', 'sriking out', inconsistent spelling of Mbogo v Shah as Shah versus Mbogo [1967] with citation 1968 EA 93 later)

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, "Erwen Electronics Limited & 3 others v Radio Africa Limited & another [2018] KECA 589 (KLR)", Case Analysis (2018). Civil Appeal No. 34 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/589/eng@2018-05-18

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