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Court of AppealDismissedCivil Appeal No. 252 of 2009· [2018] KECA 692 (KLR)

Kenya Hotels Limited v Oriental Commercial Bank Limited [2018] KECA 692 (KLR)

Court of Appeal
23 February 2018
KMK. M'Inoti
3,158 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal refused to let a litigant add a brand new legal argument years into its appeal — plead every ground at trial or lose it.

What this practically means

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Executive summary

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This is a single-judge ruling of the Court of Appeal at Nairobi delivered on 23 February 2018 by M'Inoti JA in Civil Appeal No. 252 of 2009, Kenya Hotels Limited v Oriental Commercial Bank Limited. It is not a judgment on the appeal itself but on a notice of motion by the appellant, filed eight years after the memorandum of appeal, seeking leave to amend that memorandum to add a 31st ground alleging that the equitable mortgage at the heart of the dispute was void for want of Land Control Board consent, the suit properties having been declared agricultural land under the Land Control Act. The underlying High Court suit, decided by Kimaru J on 28 August 2009, had found the applicant indebted to the bank under an equitable mortgage and allowed sale of the suit properties. The judge held that amendment introducing a ground already founded on the trial record is readily allowed, but an entirely new point is subject to strictures: it must be pleaded or canvassed below, must not raise disputes of fact, the evidence must all be on record, and the fully investigated facts must establish beyond reasonable doubt that they support the new plea. Since the Land Control Board issue was never pleaded, no evidence was led on it, and the Gazette notice relied on did not identify the suit properties as agricultural land, the new ground depended on contested evidence. The application was dismissed with costs to the respondent. The binding proposition for lower courts: a new point of law, including statutory illegality, may be taken on appeal only sparingly, where it is substantial and disposable without further evidence, and the overriding objective and Article 159(2)(d) cannot be invoked as a matter of course to admit it.

Key legal issues

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01

Whether the Court should allow amendment of a memorandum of appeal to introduce an entirely new ground not raised before the trial court

Holding

The application was refused. Where a proposed amendment introduces a totally new ground not pleaded, canvassed or determined by the trial court, the Court applies strictures preventing it from acting as a trial court and avoiding prejudice to a party who would have to meet a different case without adducing counter-evidence.

Reasoning

The Court distinguished amendments founded on evidence already adduced (readily allowed) from entirely new points (allowed only sparingly). The new ground on Land Control Board consent was never pleaded, no evidence was led on it, the parties did not address it, and the judge did not consider it. The Gazette notice relied on did not identify the suit properties as agricultural land, and there is a fundamental dispute of fact on that status. Allowing the amendment would require the Court to make first-instance determinations and would prejudice the respondent.

p. 4
02

Whether a statutory illegality not pleaded at trial may be raised for the first time on appeal

Holding

No. A party alleging that a transaction is rendered void by statute must specially plead the illegality; the point cannot be raised for the first time on appeal where, as here, it depends on contested evidence.

Reasoning

Although new points going to jurisdiction or statutory illegality may in principle be entertained, the qualification is that the question must be substantial and capable of disposal without further evidence. Here the status of the suit properties as agricultural land was not established by the Gazette notice and is hotly contested, so the exception does not apply.

p. 4

Legal principles established

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  • The power to amend a memorandum of appeal under rule 44(1) of the Court of Appeal Rules is discretionary and must be exercised judiciously and upon reason
  • A new point may be taken on appeal only where it is founded on the record, raises no disputes of fact, and the evidence establishes that fully investigated facts would support it; the discretion must be exercised sparingly
  • A party who claims a transaction is contrary to a statute must specially plead the alleged illegality; the trial judge is under no duty to raise it on the parties' behalf
  • The overriding objective and Article 159(2)(d) cannot be invoked as a matter of course to admit a new point on appeal; a clear basis for their invocation must be established

Court orders

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  1. 1.The application for leave to amend the memorandum of appeal is dismissed
  2. 2.Costs of the application awarded to the respondent

Authorities

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Legislation

  • Court of Appeal Rulesrule 44(1)
  • Appellate Jurisdiction Actsections 3A and 3B
  • Constitution of KenyaArticle 159(2)(d)
  • Land Control Actsection 2 (Cap. 302)

Cases cited (13)

  • Nyangau v. Nyakwara
    [1986] KLR 712
  • Securicor (Kenya) Ltd v. EA Drapers Ltd & Another
    [1987] KLR 338
  • Openda v. Ahn
    [1983] KLR 165
  • Kenya Commercial Bank Ltd v. Osebe
    [1982] KLR 292
  • Stallion Insurance Company Ltd v. Ignazzio Messina & C SpA
    [2007] eKLR
  • Kanawal Sarjit Singh Dhim v. Keshavji Jivraj Shah
    [2010] eKLR
  • Uhuru Highway Development Ltd v. Central Bank of Kenya
    [2002] 1 EA 314
  • Nathan Muhatia Pala t/a Muhatia Pala Auctioneers & Another v. Joseph Nyaga Karingi
    [2013] eKLR
  • North Staffordshire Railway Co v. Edge
    [1920] AC 254
  • United Dominion Trust Ltd v. Bycroft
    [1954] All ER 455
  • Attorney General v. Faroe Atlantic Co Ltd
    [2005-2006] SCGLR 271
  • DEN v. PNN
    [2015] eKLR
  • Westmont Power (K) Ltd v. Commissioner of Income Tax
    CA No. 128 of 2006
On appeal from
High Court
HCCC No. 195 of 2005 (OS)
Jurisdiction invoked
Court of Appeal Rules, rule 44(1), read with sections 3A and 3B of the Appellate Jurisdiction Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (16)

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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, "Kenya Hotels Limited v Oriental Commercial Bank Limited [2018] KECA 692 (KLR)", Case Analysis (2018). Civil Appeal No. 252 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/692/eng@2018-02-23

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