Elizabeth Osiche Apwora v National Bank of Kenya Limited [2018] KEELRC 1318 (KLR)
The bottom line
#A Kenyan employer lost its bid to deduct an employee's alleged loan from a court award because the loan was never raised during the actual court case.
What this practically means
#Executive summary
#Key legal issues
#Whether a judgment debtor may withhold part of a decree as set off against an unpleaded loan debt
No. The set off was without legal or contractual basis; the letter of offer did not contain a right of set off against a decree, and the loan was never pleaded as a counterclaim or set off.
The court examined the letter of offer exhibited by the applicant's Credit Manager and found it conferred only a right to be paid, to debit the claimant's account and to hold land as security, not a right of set off against a decree. Since the loan did not form part of the proceedings that yielded the decree, the applicant, having fought and lost the suit, could not introduce a new claim at the execution stage. The proper course would have been to amend the defence to plead a set off or counterclaim, pay the requisite court fees and prosecute it.
Whether the applicant's reliance on Francis Kalama Mutewa and Alfred Muthoni Mutiria could support the set off
No precedent cited supported the applicant; the court had itself declined a similar request in the Francis Kalama Malewa case where the bank had pleaded no counterclaim.
The court observed that no law or judicial precedent supported the applicant's case. In the earlier Francis Kalama Malewa decision, the court had held that in the absence of a counterclaim the suit proceeds must be paid to the claimant. Nothing distinguished the present case from that prior holding, so the application was declined in its entirety as an afterthought by a litigant who had opposed the claimant's suit.
Legal principles established
#- A judgment debtor cannot unilaterally set off an unpleaded debt against a court decree; a party is bound by its pleadings and cannot introduce a new claim during execution
Court orders
#- 1.The Notice of Motion dated 16.3.2018 is dismissed with costs
- 2.The stay order granted on 19.3.2018 is set aside forthwith
- Jurisdiction invoked
- Order 22 rule 49 of the Civil Procedure Rules 2010
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Elizabeth Osiche Apwora v National Bank of Kenya Limited [2018] KEELRC 1318 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2018/1318/eng@2018-07-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.