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ELCDismissedNot stated in the judgment as provided· [2023] KEELC 488 (KLR)

GC Residential Limited v Directline Assurance Company Limited & another; Kenya Revenue Authority (Interested Party) (Environment & Land Case E134 of 2022) [2023] KEELC 488 (KLR)

Environment and Land Court
26 January 2023
EWE. K. WABWOTO
1,502 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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The Environment and Land Court refused to strike out a property dispute suit against the 2nd Defendant, ruling genuine disputes must be decided at trial, not on paper.

What this practically means

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Executive summary

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This ruling by the Environment and Land Court at Nairobi (E. K. Wabwoto, J) determined the 2nd Defendant's notice of motion dated 14th June 2022 seeking to strike out the Plaintiff's suit against it for want of a cause of action, under Order 2 rule 15(1)(a) of the Civil Procedure Rules and sections 1A, 1B and 3A of the Civil Procedure Act. The 1st Defendant supported the application while the Plaintiff, through a Replying Affidavit sworn by Ravindranath Santosh Kumar and grounds of opposition, opposed it. The Defendants argued that the sale agreement was between the Plaintiff and the 1st Defendant only, that the 2nd Defendant was merely a nominee assuming no contractual obligations, and that no prayers were sought against it, relying on Savings & Loan (K) Limited v Kanyenje Karangatia Gakombe & Another. The Plaintiff countered that the Plaint disclosed reasonable cause of action against both defendants, pointing to correspondence from the 1st Defendant's legal counsel asking the Plaintiff to prepare 18 leases in favour of the 2nd Defendant, leases executed in the 2nd Defendant's name with unpaid stamp duty, and the 2nd Defendant's own Defence. The court reviewed the established jurisprudence that striking out is draconian and sparingly exercised, that a triable issue need only be bona fide, and that a suit with a mere semblance of a cause of action should proceed to trial. It found the Plaint raised triable issues against the 2nd Defendant concerning privity of contract over the 18 apartments, execution and transmission of the leases, their binding effect, and payment of stamp duty. The application was accordingly dismissed with costs to the Plaintiff, and the matter was left to proceed to full trial.

Key legal issues

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Whether the suit against the 2nd Defendant should be struck out for want of a cause of action

Holding

No. The Plaint raises bona fide triable issues against the 2nd Defendant, including privity of contract over the 18 apartments, execution and transmission of leases, and payment of stamp duty, which can only be determined at trial.

Reasoning

The court applied the settled principles that striking out is a draconian remedy exercised sparingly, that a triable issue need only be bona fide not ultimately successful, and that a suit showing a mere semblance of a cause of action should proceed to trial. Perusing the Plaint and the 2nd Defendant's Defence dated 14th June 2022, the court found issues of privity of contract, execution of the 18 leases and unpaid stamp duty requiring determination at a full hearing.

p. 3

Legal principles established

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  • The jurisdiction to strike out pleadings is discretionary and must be exercised judicially; if a defence raises even one bona fide triable issue, the party must be given leave to defend
  • Striking out a pleading is a draconian act, resorted to only in plain cases

Court orders

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  1. 1.The 2nd Defendant's Notice of Motion dated 14th June 2022 is dismissed
  2. 2.Costs of the application awarded to the Plaintiff

Authorities

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Legislation

  • Civil Procedure RulesOrder 2 rule 15(1)(a)
  • Civil Procedure Actsections 1A, 1B and 3A

Cases cited (6)

  • Savings & Loan (K) Limited vs Kanyenje Karangatia Gakombe & Another
    (2015) eKLR
  • Postal Corporation of Kenya v I.T Inamdar & 2 Others
    [2004] 1 KLR 359
  • Olympic Escort International Co. Ltd. & 2 Others v. Parminder Singh Sandhu & Another
    [2009] eKLR
  • The Co-Operative Merchant Bank Ltd. v George Fredrick Wekesa
    Civil Appeal No. 54 of 1999
  • Yaya Towers Limited v Trade Bank Limited (In Liquidation)
    Civil Appeal No. 35 of 2000
  • D.T. Dobie & Company Kenya Limited v Joseph Mbaria Muchina & Another
    [1980] eKLR
Jurisdiction invoked
Order 2 rule 15(1)(a) of the Civil Procedure Rules and sections 1A, 1B and 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, "GC Residential Limited v Directline Assurance Company Limited & another; Kenya Revenue Authority (Interested Party) (Environment & Land Case E134 of 2022) [2023] KEELC 488 (KLR)", Case Analysis (2023). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/488/eng@2023-01-26

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