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ELRCDismissedNot stated in the judgment· [2022] KEELRC 153 (KLR)

Christone Charo Matsesho v Charles Richard Newton [2022] KEELRC 153 (KLR)

Employment and Labour Relations Court
28 April 2022
1,707 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan employment court refused to let an employer add a Ksh. 665,690 counterclaim because it was filed years too late.

What this practically means

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Executive summary

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The Respondent in a pending employment claim, who had engaged the Claimant as manager of his Bofa, Kilifi farm and entrusted him with funds and co-signatory access to his bank account, applied on 15th February 2022 to amend his defence to introduce a counter-claim for Ksh. 665,690/= allegedly misappropriated before the Claimant's summary termination in August 2014. The Claimant opposed the application principally on two grounds: limitation of actions and unexplained delay. Manani J held that the power to permit amendment is freely exercisable where no injustice not compensable by costs would result, but amendments that would defeat an accrued limitation defence are allowed only in exceptional circumstances. Applying section 90 of the Employment Act, which requires suits arising from employment or a contract of service to be filed within three years, the court found the counter-claim became time barred in August 2017. Rejecting the Applicant's reliance on Ramco Investment, the court held it proper to inspect the draft amendment to determine whether the proposed cause of action is evidently time barred. The court further found the delay unexplained: the Applicant gave no reason for waiting until February 2022 to amend pleadings filed in 2018, and might in any event fail to secure an extension of time, rendering the amendment futile. The application was dismissed with costs to the Claimant. The ruling was delivered online pursuant to the Covid-19 pandemic directives, with the parties waiving compliance with Rule 28(3) of the ELRC Procedure Rules.

Key legal issues

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01

Whether leave to amend pleadings may be granted where the proposed amendment introduces a time-barred counter-claim

Holding

No; the amendment was declined because the proposed counter-claim accrued in or before 2014 and was time barred by August 2017 under section 90 of the Employment Act

Reasoning

The court held that a counterclaim stands as an independent suit and is subject to the same limitation rules. The funds were allegedly misappropriated in or before 2014, so any claim arising from the August 2014 termination was time barred three years later in August 2017. Amendments that would defeat an accrued limitation defence are only allowed in exceptional circumstances, none of which were shown; the application was made roughly seven years after accrual with no explanation for the delay.

p. 2
02

Whether allowing an amendment that is evidently time barred amounts to prejudging the merits of the case

Holding

No; the court held it is proper to examine the draft amendment to determine whether the new cause of action is evidently outside the limitation period

Reasoning

The Applicant, relying on Ramco Investment Limited v Nairobi City Water and Sewerage Company Limited, argued that considering limitation would amount to determining merits before trial. The court respectfully disagreed, reasoning that the purpose of attaching a draft amendment is precisely to enable the court to assess its merits; where the proposed cause of action is plainly outside the limitation laws, the court should not ignore that fact.

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03

Whether the unexplained delay in seeking the amendment justified refusal

Holding

Yes; the Applicant offered no explanation for moving the court only in February 2022 to amend pleadings filed in 2018

Reasoning

The court noted that while amendments may be sought at any stage and in good faith, undue and unexplained delay is a recognised ground for refusal. The Applicant's supporting affidavit gave no reason for the seven-year delay; only the written submissions attempted an explanation. Combined with the time bar and the improbability of obtaining an extension of time, the application was a futile exercise.

p. 2

Legal principles established

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  • A counterclaim is a standalone suit and is subject to the law of limitation in the same way as an ordinary claim
  • Where a proposed amendment introduces a cause of action that is evidently time barred, the court should not permit it notwithstanding that this engages the merits of the amendment
  • An amendment whose effect is to take away accrued rights under the law of limitation ought to be declined, amendments being permitted at any stage only if made in good faith and without defeating accrued defences

Court orders

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  1. 1.The application dated 15th February 2022 seeking leave to amend the defence to introduce a counter-claim is declined
  2. 2.Costs are granted to the Claimant

Authorities

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Legislation

  • Employment ActSection 90
  • Limitation of Actions Act (Cap. 22)Section 4(1)
  • ELRC Procedure RulesRule 28(3)

Cases cited (7)

  • Institute for Social Accountability & another v Parliament of Kenya & 3 others
    [2014] eKLR
  • Kenneth Kariuki Githii v Royal Media Services Ltd
    [2009] eKLR
  • Kenya Wine Agencies v Yobesh Amoro
    [2018] eKLR
  • G4S Security Services (K) Limited v Joseph Kamau & 468 others
    [2018] eKLR
  • Ramco Investment Limited v Nairobi City Water and Sewerage Company Limited
    (2017) eKLR
  • Denis Ksang Ripko v Kenya Commercial Bank Limited
    [2016] eKLR
  • Elijah Kipngeno Arap Bii v Kenya Commercial Bank Ltd
    (2013) eKLR
Jurisdiction invoked
Original employment and labour relations jurisdiction of the ELRC; application under the ELRC Procedure Rules (Rule 28(3) referenced) to amend pleadings

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Christone Charo Matsesho v Charles Richard Newton [2022] KEELRC 153 (KLR)", Case Analysis (2022). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2022/153/eng@2022-04-28

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