Kenya Commercial Bank Ltd V Osede EKLR
|Civil Appeal 60 of 1982||29 Dec 1982|
Eric John Ewen Law, Alan Robin Winston Hancox, Kenneth D Potter
Court of Appeal at Kisumu
Kenya Commercial Bank Ltd v Osede
Kenya Commercial Bank Ltd v Osede eKLR
Kenya Commercial Bank Ltd v Osebe
Court of Appeal, at Kisumu
December 29, 1982
Law, Potter JJA & Hancox Ag JA
Civil Appeal No 60 of 1982
Civil Practice and Procedure - originating summons - matters determinable by originating summons - whether damages may be awarded on such an application - object of the originating summons procedure - Civil Procedure Rules Order XXXVI.
Land - charge - exercise of statutory power of sale over charged land - chargor’s interest therein - sale and market value - whether sale ignorant of chargor’s interest - Registered Land Act (Cap 300) Section 71(1),(3).
Appeal - grounds of appeal - new facts raised at appeal - absence of fair notice on new issue.
The respondent charged his land to the appellant bank to secure a loan of Kshs 30,000 on April 25, 1978, at which time the bank’s own valuation of the land was Kshs 93,000. The respondent fell into arrears but endeavoured to reduce his indebtedness up to Kshs 8,027.20 after the bank had expressed its intention to exercise its right of sale of the property. As the respondent was unable to clear the outstanding balance, the property was sold by auction at the instance of the appellant bank and the sale realized Kshs 20,000. About a year after the auction sale, the buyer of the land sold it for Kshs 180,000. In the meantime, a valuer appointed by the respondent had placed the value of the property at Kshs 160,000. When the respondent tried to lodge a caution against any dealings with the land on the grounds that he had filed an originating summons for the purpose of determining the validity of the auction sale, he discovered that the new owner had charged the same property to the same appellant bank for Kshs 200,000, less than six months after the discharge of the charge against him. The respondent filed an amended originating summons alleging fraud, a conspiracy between the bank and the two buyers to swindle him out of his property, and asking that the auction sale be set aside with a request for a determination of whether he had suffered damage. The respondent also made an express claim for damages. The judge held that the bank had ignored the rights of the chargor and purported to award him Kshs 180,000 by way of damages. The appellant appealed.
- The procedure of originating summons is intended for simple matters, and enables the court to settle them without the expense of bringing an action. The procedure is not intended for determination of matters that involve a serious question. The procedure should not be used for the purpose of determining disputed questions of fact.
- The procedure of originating summons is designed for the summary or ad hoc determination of points of law, construction or certain specific facts or for obtaining of specific directions of the court such as trustees, administrators or the courts execution officers.
- The question of whether or not the sale was at an under value and whether it was mismanaged, are disputed matters of fact and should not be resolved on affidavit evidence upon an application by way of originating summons.
- It is not permissible for matters and issues not raised at the trial court to be raised for the first time on appeal. In this instance, permitting an issue to be raised for the first time in reply to the appellant is improper, as the appellant had no fair notice of this issue. Such an issue should not be decided on appeal.
- There is no power conferred on a judge to award damages on an originating summons.
- The right of appeal conferred by Section 72 of the Civil Procedure Act (Cap 21) is statutory and confined to the grounds stated in subparagraphs (a), (b) and (c) thereof.
- While Section 77(3) of the Registered Land Act (Cap 300) refers to a chargor’s remedy in damages, it does not provide for the method by which those damages may be claimed.
- The Court of Appeal can and must consider a point going to jurisdiction even though it was not raised before the judge.
- (Obiter Law JA) The fee payable in lodging a document in the appeal registry is due for payment when the document is lodged but where the fee is not paid out of an oversight on the part of the advocate, the subsequent acceptance of that fee by a sub-registry cures the original failure to pay.
- (Obiter Hancox Ag JA) “My reluctance stems from the consideration that the Judge obviously felt disturbed, as I do, at the incontrovertible facts that the respondent’s property, despite his strenuous efforts to repay, was sold by auction for about a tenth of the sum which the same Bank, barely a year later, saw fit to lend on the security of the same property to a subsequent owner. To say that all the Bank was required to do was virtually to cover its own outstanding debt is an attitude which I find not only unrealistic, but also harsh, oppressive and uncompromising in the circumstances of the case. Had it not been for the point of jurisdiction to award damages, the Judge in my view delivered a very good judgment, fully sensitive to the rights of the parties and to the issues before him; and, as I have said, his mind was never directed to this question, as it should have been. The Bank’s conduct has to my mind been shown in a most unmeritorious light, and the judge’s finding that it did not have sufficient regard to the chargor’s interests on the sale is certainly arguable.”
- Kennedy v De Trafford  1 Ch 762 Referred
- In Re Sutcliffe  1 Ch 453 Referred
- Vidyarthi v Ram Rakha  EA 527 Referred
- Ramji Kulsumbhai v Ramji’s Executors and Others  EA 699 Applied
- Tanganyika Farmers Association Ltd v Unyamwezi Development Corporation Ltd  EA 620 Applied
- Saggaf v Algeredi  EA 767 Applied
- Bhari v Khan  EA 94 Applied
- BAT Kenya Ltd v Express Transport Co Ltd  EA 171 Referred
- Official Receiver v Sukhdev  EA 243 Applied
- Cuckmere Brick Co Ltd v Mutual Finance Ltd  2 All ER 633 Referred
- Industrial & Commercial Development Corporation v Kariuki & Gatheca  KLR 52 Applied
- Balchin v Buckle  79 LS Gaz 921 Referred
- Standard Chartered Bank Ltd v Walker  3 All ER 938 Applied
- In Re Giles (2) (1880) 43 Ch D, 391 Referred
- Salehmohamed Mohamed v PH Saldanha (3), Kenya Supreme Court (Mombasa) Civil Case No 243 of 1953, (unreported) Applied
Simonds, Viscount (Rt Hon), et al, (Ed), Halsbury’s Laws of England, Butterworths & Co: London, 3rd Edn (1952 - 64) Vol XXVII para 567
- Civil Procedure Act (Cap 21) Section 72(1)(a), (b), (c)
- Civil Procedure Rules (Cap 21 Sub Leg) Order XXXVI rules 3A, 10
- Indian Contract Act, 1872, Section 139
- Court of Appeal Rules (Cap 9 Sub Leg) rule 103(1)
- Registered Land Act (Cap 300) Sections 74; 77(1), (3)
RO Kwach for Appellant
JO Soire for Respondent