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Court of AppealPartially AllowedCivil Appeal No. 110 of 2018· [2019] KECA 350 (KLR)

Housing Finance Co. of Kenya Ltd & 2 others v Samuel Kiti Lewa [2019] KECA 350 (KLR)

Court of Appeal
26 September 2019
4,314 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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The Court of Appeal ruled that a judge cannot decide issues nobody raised, and a property interest cannot be cancelled without hearing its owner.

What this practically means

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Executive summary

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This Court of Appeal at Mombasa, in a single judgment of the court (Ouko, P., Makhandia and M'Inoti, JJ.A.), allowed two consolidated appeals (Civil Appeals Nos. 110 and 111 of 2018) from the judgment of Mwangi, J. of the High Court at Mombasa dated 28th July 2017 in HCCC No. 357 of 2007. The High Court had declared null and void the sale of the respondent's charged property to Kagete and the subsequent charge in favour of Savings & Loan, on the ground that the statutory notice served under section 69(1) of the Indian Transfer of Property Act was defective for not expressly stating that default would result in sale. The Court of Appeal identified two threshold errors. First, the trial judge determined the validity of the statutory notice, an issue neither pleaded nor addressed by the parties, having already found that a notice was served; parties are bound by their pleadings and a court may not, on its own motion, raise and determine an unpleaded issue without affording the parties an opportunity to address it. Secondly, the judgment nullified Savings & Loan's charge without joining, serving or hearing that company, violating the rules of natural justice and Article 47 of the Constitution. The respondent was also barred from contending no notice was served at all, having filed no notice of cross-appeal under rule 93. The Court set aside the High Court judgment, dismissed Lewa's suit, allowed HFCK's and Kagete's counterclaim with costs, and awarded the appellants the costs of the appeal.

Key legal issues

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01

Determination of unpleaded issues

Holding

The trial judge erred by raising and determining the validity of the statutory notice on her own motion when the pleaded and framed issue was only whether notice had been served.

Reasoning

Lewa's plaint complained only that no statutory notice was served. The judge framed the issue of service, found notice was served, then without invitation held the notice invalid for failing to state the consequences of default. Where a plaintiff alleges a statutory notice is defective, the defendant is entitled to be told through pleadings what the defect is. A court is as bound by the pleadings as the parties themselves.

p. 4
02

Right to be heard of a party whose property interest is nullified

Holding

The judgment nullifying Savings & Loan's charge without joining, serving or hearing it violated natural justice and Article 47.

Reasoning

Lewa challenged the Savings & Loan charge in his plaint but never made it a party or served it. The company learnt of the suit only after judgment nullified its charge. Natural justice requires that a person be heard before an adverse decision is made against him; a decision arrived at in breach of natural justice must be declared to be no decision at all.

p. 3
03

Necessity of notice of cross-appeal

Holding

The respondent could not attack the finding that a statutory notice was served without filing a notice of cross-appeal under rule 93.

Reasoning

The notice of cross-appeal gives other parties due notice and an opportunity to prepare to answer the issues raised. A respondent who has indicated satisfaction with the judgment cannot out of the blue attack aspects of it. No cross-appeal having been filed, the finding of service stood and the Court had no basis to question it.

p. 4

Legal principles established

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  • Parties are bound by their pleadings and a court may not, on its own motion, raise and determine an unpleaded issue without inviting the parties to address it.
  • A respondent who wishes to challenge any aspect of the trial court's findings must file a notice of cross-appeal; the appellate court cannot entertain such a challenge without one.
  • A judgment that divests a party of property rights without giving that party an opportunity to be heard violates the rules of natural justice and cannot stand.

Court orders

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  1. 1.Appeal allowed
  2. 2.Judgment of the High Court dated 28th July 2017 set aside and substituted with an order dismissing Lewa's suit
  3. 3.HFCK and Kagete's counterclaim allowed with costs
  4. 4.HFCK and Kagete awarded the costs of this appeal

Authorities

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Legislation

  • Indian Transfer of Property Act (repealed)section 69(1)
  • Indian Transfer of Property Act (repealed)section 69
  • Constitution of KenyaArticle 47
  • Court of Appeal Rulesrule 103
  • Court of Appeal Rulesrule 93(1)

Cases cited (15)

  • Global Vehicles Kenya Ltd v. Lenana Road Motors
    [2015] eKLR
  • Trust Bank Ltd v. Eros Chemists Ltd & Another
    [2000] eKLR
  • Joseph N. K. Arap Ng’ok v. Moijo ole Keiwua & 4 Others
    [1997] eKLR
  • Nancy Kahoya Amadiva v. Expert Credit Ltd & Another
    [2015] eKLR
  • JMK v. MWM & Another
    [2015] eKLR
  • Selle & Another v. Associated Motor Boat Co. Ltd & Others
    [1968] EA 123
  • Margaret Njeri Mbiyu v. David Njunu Mbiyu Koinange & 13 Others
    CA No. 47 of 2016
  • Mohamed Fugicha v. Methodist Church in Kenya
    CA No. 22 of 2015
  • IEBC & Another v. Stephen Mutinda Mule & 3 Others
    [2014] eKLR
  • Malawi Railway Corporation v. Nyasulu
    [1998] MWSC 3
  • Gandy v. Caspar Air Charters Ltd
    [1956] 23 EACA 139
  • Odd Jobs v. Mubia
    [1970] EA 476
  • Kenya Ports Authority v. Kuston (Kenya) Ltd
    (2009) 2 EA 212
  • Pashito Holdings Ltd. & Another v. Paul Nderitu Ndun’gu & Others
    [1997] 1 KLR (E&L)
  • Onyango Oloo v. Attorney General
    [1986-1989] EA 456
On appeal from
High Court of Kenya at Mombasa
HCCC No. 357 of 2007
Jurisdiction invoked
First appellate jurisdiction under the Court of Appeal Rules (appeal from the High Court), consolidated under rule 103 of the Court of Appeal Rules

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, "Housing Finance Co. of Kenya Ltd & 2 others v Samuel Kiti Lewa [2019] KECA 350 (KLR)", Case Analysis (2019). Civil Appeal No. 110 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/350/eng@2019-09-26

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