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ELCDismissed· [2017] KEELC 3810 (KLR)

K-Rep Bank Limited v Mumo Maleve & 2 others [2017] KEELC 3810 (KLR)

High Court of Kenya (Environment and Land jurisdiction, Nairobi)
31 August 2017
LGL. Gacheru
1,609 words in judgment
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The bottom line

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The High Court refused the bank's shortcut to a Kshs.2.7 million judgment, ruling the defendants' defences raised real issues that must go to full trial.

What this practically means

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Executive summary

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The Plaintiff bank sought, by Notice of Motion under Order 36 Rule 5, Order 2 Rule 15(1) and Order 51 Rule 1 of the Civil Procedure Rules 2010 and Sections 1A, 1B and 3A of the Civil Procedure Act, to strike out the defences of the 2nd and 3rd Defendants and to enter judgment for Kshs.2,707,342/34, alternatively judgment on the alleged express admissions, in a suit arising from a loan facility of Kshs.4,942,808 granted to the 1st Defendant secured by an Allotment Letter over Plot No.102 Kaveta Bricks. The Plaintiff alleged that the 1st Defendant, while still indebted, transferred the property to the 2nd Defendant without consent, and that the 3rd Defendant (County Government of Kitui) effected the transfer without due diligence. The 2nd Defendant averred he was a bona fide purchaser for value without notice and not privy to the loan contract; the 3rd Defendant denied any liability, asserting the property was free of encumbrances and that a letter of allotment is not a certificate of title, and pleaded misjoinder. L. Gacheru J found no clear and unambiguous admission of the claim; the defences raised bona fide triable issues, and striking out being a draconian remedy to be exercised sparingly, the application was dismissed entirely with costs to the 2nd and 3rd Defendants. The Court further directed transfer of the suit to the Machakos Environment and Land Court for final hearing and determination, the suit property falling within that court's jurisdiction.

Key legal issues

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01

Entry of judgment on admissions under Order 36 Rule 5

Holding

Order 36 Rule 5 cannot apply where there is no admission of any part of the claim by the defendants

Reasoning

The Court examined the Defences and found only the 2nd Defendant's statement that he was a bona fide purchaser free of encumbrances, which was not an admission of the plaintiff's claim. The 3rd Defendant denied all allegations. Without clear admissions, judgment on admission is unavailable.

p. 3
02

Striking out pleadings under Order 2 Rule 15(1)

Holding

The Defences raise bona fide triable issues and should not be struck out; the discretion must be exercised judicially and sparingly

Reasoning

The 2nd Defendant pleaded bona fide purchase for value without encumbrances; the 3rd Defendant contended a letter of allotment is not a certificate of title and lending on it was negligent. These are not mere denials but reasonable defences warranting full trial.

p. 3
03

Nature of triable issues

Holding

A triable issue need not be one the defendant would ultimately succeed on; it need only be bona fide

Reasoning

Following Olympic Escort International Co. Ltd & 2 Others v Parminder Singh Sandhu, the Court adopted the principle that a defence raising prima facie triable issues is a reasonable defence, justifying that the matter proceed to full trial on the merits.

p. 3

Legal principles established

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  • Admissions upon which a court may strike out a defence and enter judgment must be clear and unambiguous
  • Striking out pleadings is a draconian remedy to be exercised sparingly and only in hopeless cases

Court orders

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  1. 1.Dismissal of the Plaintiff's Notice of Motion dated 10th March 2015 entirely
  2. 2.Costs to the 2nd and 3rd Defendants/Respondents
  3. 3.Transfer of the case to Machakos Environment and Land Court for final hearing and determination

Authorities

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Legislation

  • Civil Procedure Rules 2010Order 36 Rule 5
  • Civil Procedure Rules 2010Order 2 Rule 15(1)
  • Civil Procedure Rules 2010Order 51 Rule 1
  • Civil Procedure ActSections 1A, 1B, 3A

Cases cited (3)

  • Equatorial Commercial Bank Ltd v Jodam Engineering Works Ltd & 2 Others
    (2014) eKLR
  • Olympic Escort International Co. Ltd & 2 Others v Parminder Singh Sandhu
    null
  • National Bank of Kenya v Daniel Opande Asnam
    (2002) eKLR
Jurisdiction invoked
Order 36 Rule 5, Order 2 Rule 15(1) and Order 51 Rule 1 of the Civil Procedure Rules 2010; Sections 1A, 1B, 3A of the Civil Procedure Act

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, "K-Rep Bank Limited v Mumo Maleve & 2 others [2017] KEELC 3810 (KLR)", Case Analysis (2017). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3810/eng@2017-08-31

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