Joseph Kingsley Karuri v Housing Finance Co. Ltd & another [2019] KECA 108 (KLR)
The bottom line
#Kenya's Court of Appeal allowed a property owner to present new evidence of fraud and irregularities in a bank auction that sold his land.
What this practically means
#Executive summary
#Key legal issues
#Test for admission of additional evidence on appeal under Rule 29
The application met the Wanje threshold: the evidence was new, apparently credible, and capable of importantly influencing the appeal.
The court applied Rule 29 and the Mzee Wanje principles, holding that the evidence on the branch manager's relationship with the 2nd respondent, the frustration of the highest bidder, and the lack of auctioneer licensing was not available at trial, was apparently credible, and went to the root of the statutory power of sale. The evidence was not a mere attempt to fill gaps or make out a fresh case.
Nature and weight of allegations of fraud
Fraud must be distinctly pleaded and proved to a standard above a balance of probabilities, and courts must uphold integrity in commercial transactions.
Relying on Vijay Morjaria and Aiman v Muchoki, the court stressed that fraudulent conduct must be distinctly alleged and distinctly proved, with the burden on the party alleging fraud to lay a basis by way of evidence. Because the appeal turned on alleged fraud in the exercise of the chargor's power of sale, the proposed evidence was relevant to the determination of the substantive appeal.
Whether the alleged conflict of interest and auction irregularities warranted investigation
The father/daughter relationship between the deceased branch manager and the purchaser, the alleged frustration of the highest bidder, and the lack of auctioneer licensing were fundamental and weighty issues warranting investigation.
The court held that the relationship between the branch manager and the purchaser, the internal memo suggesting Gikuhi was the highest bidder, and the Auctioneers Licensing Board letter showing the auctioneers were unlicensed raised fundamental questions going to the root of the power of sale. These new factual situations were never before the trial court and needed proper investigation, justifying remission.
Legal principles established
#- Fresh evidence on appeal will only be admitted where it could not with due diligence have been obtained at trial, would probably have an important influence on the appeal, and is apparently credible.
- The discretion to admit additional evidence is not for filling gaps in evidence or enabling a party to make out a fresh case on appeal.
- Fraud must be distinctly alleged and distinctly proved; the standard of proof exceeds a balance of probabilities.
- Except on grounds of fraud or surprise, the Court will not admit fresh evidence unless it was not available at trial or reasonable diligence would not have made it available.
Court orders
#- 1.Leave granted to the appellant to tender new evidence in documentary form
- 2.Leave granted for oral evidence by Richard K Gikuhi
- 3.The matter remitted to the High Court for taking of the additional evidence before any Judge other than Sergon, J
- 4.Application allowed with costs
- On appeal from
- High Court of Kenya at Nyeri
- HCCC No. 102 of 1997
- Jurisdiction invoked
- Rule 29 of the Court of Appeal Rules - power to take additional evidence on appeal from a superior court exercising original jurisdiction
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Joseph Kingsley Karuri v Housing Finance Co. Ltd & another [2019] KECA 108 (KLR)", Case Analysis (2019). Civil Appeal No. 17 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/108/eng@2019-12-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.