John Kinyanjui Gateru v Family Bank Limited [2014] KEELRC 811 (KLR)

Industrial Court of Kenya (now Employment and Labour Relations Court)

10 February 2014

MMM. Mbaru

787 words in judgment

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The bottom line

A Kenyan employment court let an employer add a counter-claim mid-hearing and froze the employee's car to protect unpaid loan security.

What this practically means

Executive summary

This was a ruling on a Notice of Motion dated 18th December 2013, filed by the respondent in a part-heard employment claim in which the claimant, a former employee, sued for unfair termination. The respondent, which had extended a financial facility to the claimant secured by a chattel mortgage over motor vehicle KBH 513N registered jointly in their names, sought leave to amend its defence to incorporate a counter-claim, to have the draft defence deemed filed and served, and a prohibitory order restraining the claimant from parting with possession of or transferring the vehicle pending hearing. The respondent argued the vehicle was its only tangible security for the outstanding facility, which the court had ordered released to the claimant pending the hearing fixed for 4th February 2014. The claimant opposed, contending the repossession contravened an existing order, that he had been servicing the loan by check-off before termination, and that introducing a counter-claim mid-hearing would be illegal and require changes to all pleadings. The court, per M. Mbaru J, held that in view of the ongoing hearing and the need to secure all parties' interests, the application was reasonable, filed without delay and fair and just. No prejudice was shown, as a draft amended defence existed and the claimant would have a right of reply. The application was granted: the claimant was restrained from parting with possession of or transferring ownership of the vehicle until final conclusion; the respondent was granted seven days to file the amended defence; the claimant was given fourteen days to reply after service; and costs were made costs in the cause. The substantive claim remains part-heard.

Key legal issues

Leave to amend defence to add a counter-claim during a part-heard matter

Holding

Leave granted; the amendment is fair and just and causes no prejudice since the claimant will have a right of reply and has seen the draft amended defence

Reasoning

The court weighed the ongoing hearing against the respondent's need to have all issues between the parties determined together. It found the application promptly filed, noted a draft amended defence was already in existence so the claimant could not claim ambush, and held the claimant would have an opportunity to reply to the new issues. Securing all parties' interests pending final conclusion justified the amendment.

p. 2

Preservation of security (chattels mortgage over motor vehicle) pending hearing

Holding

A prohibitory order restraining the claimant from parting with possession of or transferring the vehicle was issued to secure the outstanding loan facility

Reasoning

The vehicle was the only tangible security for the unpaid financial facility granted to the claimant while employed by the respondent. The court considered it necessary, in the circumstances and with the hearing ongoing, to preserve the status quo so the balance of the facility remains secured until judgment.

p. 1

Legal principles established

Where a matter is part-heard and interests are unsecured, a court may permit amendment to introduce a counter-claim where the application is filed without delay and no prejudice is shown

Court orders

1.The claimant is restrained by himself or through any other person or entity from parting with possession of or transferring ownership of motor vehicle KBH 513N until the final conclusion of this matter
2.The respondent is granted leave to file the amended defence within 7 days
3.The claimant will have a right of reply within 14 days after service
4.Costs in the cause

Authorities

Legislation

Civil Procedure RulesOrder 8 Rule 5
Industrial Court ActSections 3 and 12
Industrial Court RulesRule 16

Jurisdiction invoked: Section 3 and 12 of the Industrial Court Act and Rule 16 of the Industrial Court Rules, with Order 8 Rule 5 of the Civil Procedure Rules

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "John Kinyanjui Gateru v Family Bank Limited [2014] KEELRC 811 (KLR)", Case Analysis (2014). Cause No 743 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/811/eng@2014-02-10

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