Mark K. Kariuki & 2 others (suing as Registered Trustees of Deliverance Church) v New Age Developers Construction Company Limited & 3 others [2021] KEELC 3749 (KLR)
The bottom line
#A Kenyan court ruled a bank cannot use a land fraud case to chase its separate loan debt; unrelated claims must be filed as their own suit.
What this practically means
#Executive summary
#Key legal issues
#Whether a counter-claim not involving the plaintiff is permissible under order 7 rules 3, 8 and 12 of the Civil Procedure Rules
A counter-claim must generally include the plaintiff; the 4th defendant's intended claim against the 1st defendant and two new parties was a civil debt claim independent of the plaintiffs' suit and should be brought separately
The court perused the draft amended defence and counter-claim and found no claim against the plaintiff; the intended counter-claim was a lender's debt claim against a borrower and guarantors, with no relief sought over the suit property. The causes of action, subject matter and reliefs differed from the main suit, so leave to introduce it as a counter-claim was refused.
Whether filing the claim as a separate suit would amount to multiplicity of suits
No; the claim was independent, unrelated to the main suit's cause of action, and could not conveniently be heard together with it
While public policy frowns on multiplicity of suits, the court found the 4th defendant's claim was independent and unrelated to the fraud claim in the main suit, could not be conveniently heard with it, and would not need consolidation even if filed separately.
Whether leave should be granted to substitute SBM Bank (K) Ltd. for Chase Bank (K) Ltd. (In receivership)
Granted; both the 4th defendant's defence and the plaintiffs' plaint were to be amended to reflect the substitution
The 4th defendant had been acquired by SBM Bank (K) Ltd., making substitution necessary, and no prejudice was shown to the other parties; the court allowed amendment of the defence and directed the plaintiffs to amend the plaint accordingly.
Legal principles established
#- Generally, a counter-claim must include the plaintiff; a claim by a defendant against co-defendants and third parties that is independent of the plaintiffs' claim should be brought by separate suit
Court orders
#- 1.The 4th defendant is granted leave to amend its statement of defence by substituting Chase Bank (K) Ltd. (In receivership) with SBM Bank (K) Ltd. as the 4th defendant and in any other manner deemed necessary
- 2.Leave to introduce a counter-claim in the nature set out in the draft 4th defendant's amended statement of defence and counter-claim is refused
- 3.The 4th defendant is at liberty to bring the claim by way of a separate suit
- 4.The plaintiffs shall amend their plaint further to substitute Chase Bank (K) Ltd. with SBM Bank (K) Ltd. as the 4th defendant within 14 days of service of the amended statement of defence by the 4th defendant
- 5.The costs of the application shall be in the cause
- Jurisdiction invoked
- Original civil jurisdiction over land claims; application under the Civil Procedure Rules (order 7 rules 3, 8 and 12)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mark K. Kariuki & 2 others (suing as Registered Trustees of Deliverance Church) v New Age Developers Construction Company Limited & 3 others [2021] KEELC 3749 (KLR)", Case Analysis (2021). Not stated in the extract. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3749/eng@2021-04-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.