https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1235

Family Bank Ltd v Step Up Holding Ltd (Civil Appeal E004 of 2022) [2026] KECA 1235 (KLR) (3 July 2026) (Judgment) Neutral citation: [2026] KECA 1235 (KLR) Republic of Kenya In the Court of Appeal at Nakuru Civil Appeal E004 of 2022 JM Mativo, MB Kairaria & AI Hassan, JJA July 3, 2026 Between Family Bank Limited Appellant and Step Up Holding Limited Respondent (Being an appeal against the ruling and decision of the High Court of Kenya at Nakuru (Chemitei, J.) dated 18th November 2021 in HCCC No. 306 of 2011) Judgment 1.By an application dated 25th May 2019, the respondent applied for leave to amend its plaint in HCCC Case No. 306 of 2011. It also prayed for costs of the application to be provided for. The grounds in support of the application were that: (a) there were salient issues which specifically dealt with its frozen accounts with the appellant involving amounts to the tune of Kshs.9,500,000/- or thereabouts; (b) that the said amount had not been released by the appellant for unexplained reasons hence the need to amend the plaint; (c) the freezing of the said accounts took place between 2012 and 2014 which caused the overdraft facility to increase from Kshs.3,500,000/- to Kshs.5,500,000/- million. Accordingly, it prayed that its plaint be amended as per its amended draft plaint annexed to its supporting affidavit. 2.In opposition to the application, the appellant filed a replying affidavit dated 24th May 2021 sworn by Kahinga Watindi Advocate. The salient averments were: (a) the issues cited in the intended amendment were novel and contravened section 4 of the Limitation of Actions Act; (b) the issues cited did not arise from the same facts as the cause of action; (c) the only recourse for the applicant is to file a new suit, (d) allowing the application would greatly prejudice the appellant; and, (e) the respondent failed to provide the nexus between what took place in 2013 and 2011. Accordingly, the appellant prayed for the application to be dismissed with costs. 3.In response to the said affidavit, the respondent filed a further affidavit dated 2nd June 2021 sworn by Bernard Mwarania essentially detailing several other suits between the respondent, the appellant and Mount Kenya University and accused Mr. Watindi of being complicit since he previously acted for the said parties in other cases. 4.In the impugned ruling dated 18th November, 2021, the trial Judge in the definitive paragraphs citing previous precedents stated:“12.Taking cue from the above authority can it be said that the issues raised by the respondent in opposing the amendment plausible? (sic). Are they time barred and therefore run contra to the Limitation of Action (sic) Act, Section 4 thereof?13.The court has perused the further affidavit by the applicant and it is apparent that there have been and perhaps are still various suits between the parties herein and other third parties. The common denominator are the two accounts held by the applicant namely nos. 019000015726 and 01900001365. There were issues surrounding the freezing of the same by the respondent. The applicant felt aggrieved and filed this suit. It appears that there exists some amount in those accounts which is a subject of contest.14.The (sic) reading of the annexures to the applicant's further affidavit demonstrate that the issues between them began way back in the year 2011 and they persist to date. For the foregoing reasons it is not therefore possible to entirely determine when the question of limitation ended. This will naturally need further adduction of evidence. To deny the applicant an amendment to its plaint may lock it out yet probably there are germane issues which this court would have gladly determine (sic).15.All, in my view, is not lost to the respondent. In fact, the issue of limitation can be raised at any time even before trial begins. For now, I do not see any prejudice that will be suffered by the respondent. The court (although the amendment has been sought after a long time does not see any reason to deny it as the matter in any case had not formally been heard save for the applications on record.16.ln the premises the application is hereby allowed, the applicant shall file and serve its amended plaint within 14 days from the date herein. 17.Costs to the respondent.” 5.Aggrieved by the above decision, the appellant in its memorandum of appeal dated 17th January 2022 faults the learned judge for:a.Allowing the respondent to resuscitate a statute barred claim (grounds 1 and 2);b.Contrary to settled principles of law, allowed an illegality to the appellant’s prejudice (ground 3);c.Invoking sympathy and pity to litigation proceedings instead of dire consideration of the underpinning principles of law especially Section 4 of the Limitation of Actions Act (ground 4);d.Allowing the respondent to reframe his case to the appellant’s prejudice (ground 5);e.Failing to appreciate that the power to amend pleadings ought to be exercised to enable a party introduce a new cause of action (ground 6);f.Allowing an amendment brought after 11 years (grounds 8 and 9);g.Allowing the amendments without citing any plausible reasons (grounds 11 & 12). 6.The applicant prays that the appeal be allowed, the impugned ruling be set aside, an order directing HCCC No. 306 of 2011 to proceed without amendments before a different judicial officer, and costs of the application be awarded to the appellant. 7.During the virtual hearing of the appeal on 25th May 2022, learned counsel Mr. Karanja appeared for the appellant. He relied on his written submissions dated 10th May 2026 which he orally highlighted. Counsel maintained that the appeal turns on the proper application of the law governing amendment of pleadings, a jurisdiction which he argued though discretionary, is circumscribed by well settled legal principles developed to preserve fairness, certainty and the integrity of adjudicative process. Citing Order 8 of the Civil Procedure Rules, 2010 and Section 4 of the Limitation of Actions Act, Mr. Karanja argued that those provisions do not permit amendments which seek to introduce a new cause of action that is statute barred or to fundamentally alter the character of a suit. Counsel maintained that the impugned ruling evidently departs from these foundational principles, hence, the need for this Court’s intervention. 8.Mr. Karanja contended that the learned judge erred in the manner in which he construed the law on limitation of actions, despite acknowledging the principles set out in St. Patricks Hill School Ltd vs. Bank of Africa Ltd [2018] eKLR and Ochieng & Others vs. First National Bank of Chicago, Civil Appeal No. 147 of 1991 which underscored that a plaintiff is not allowed to reframe his case if the amendment seeks to defeat the defendant’s right to raise the defence of limitation. Counsel also cited James Ochieng Oduol T/A Ochieng Oduol & Company Advocates vs. Richard Kuloba [2008] KECA 53 (KLR) in support of the proposition that in special circumstances, amendment of a plaint may be allowed notwithstanding that the effect will be to defeat a defence of limitation, but such amendment may be allowed where peculiar circumstances are present. The Court in the said case proceeded to hold that an amendment cannot be sought to introduce new facts or to aid a negligent pleader. Counsel maintained that once an accrued defence of limitation is apparent, the Court must interrogate whether exceptional and peculiar circumstances exist to justify the amendment that would defeat such a defence. Counsel contended that the learned judge neither applied nor did he consider this threshold, but instead, he permitted the amendment without undertaking the requisite legal analysis. 9.Mr. Karanja also faulted the learned judge for failing to properly apply the law relating to amendments that introduce new causes of action. To buttress this argument, Mr. Karanja cited WAB Hotel Ltd (in receivership) & Ano. vs. Industrial Development Bank Ltd & Others [2020] KECA 750 (KLR) where this Court upheld a High Court decision disallowing an application for amendment on grounds that allowing it would be prejudicial to the respondents. Counsel maintained that a court is obligated to satisfy itself whether a proposed amendment alters the substratum of the dispute or whether it introduces legally untenable claims. He faulted the learned judge for justifying his decision on a generalized notion that the dispute persisted over a long period of time and deferring the issue of limitation to the main trial yet this being a point of law could be determined at the interlocutory stage. In support of this assertion, counsel cited George Mbuthia vs. Consolidated Bank of Kenya & Ano. [2015] KECA 452 (KLR) where this Court agreed with a High Court decision declining amendment that would introduce a new cause of action. Counsel also argued that the impugned ruling is vitiated by the inconsistency acknowledged by the trial judge and the conclusions arrived at which was basically premised on the Court’s reasoning that declining the amendment would lock out some issues. Therefore, the learned judge failed to interrogate the reasons for the delay. Accordingly, Mr. Karanja urged this Court to order the proceedings before the trial court to continue before a different judicial officer. He also urged this Court to award costs to the appellant. 10.The respondent’s counsel Mr. Ratemo did not file written submissions. Instead, he submitted orally. In a nutshell, he argued that the issues complained of arose in the year 2011, and over a period of time, while the appellant continued breaching its contractual obligations to the respondent over time. Therefore, it was necessary for the respondent to amend its plaint to bring in all the facts to support their claim against the appellant, and the amendments are permitted under Order 8 Rule 3 of the Civil Procedure Rules, 2010. He submitted that Order 8 Rules (2) and (5) of the Civil Procedure Rules, 2010 provide that even where a cause of action may be time-barred, the Court has discretion to allow the amendments. Mr. Ratemo argued that the amendments were done to enable the Court to completely adjudicate the dispute between the appellant (a bank), and its customer (the respondent). 11.Further, counsel maintained that pursuant to the leave granted by the trial court, the amendments were done and the appellant filed the amended defense and responded to the amendments, and the suit before the Superior Court is pending hearing. Therefore, this being an interlocutory appeal arising from exercise of discretion, it has been overtaken by events because whatever the appellant is complaining about, they have already raised it in their defense before the Superior Court. Accordingly, the Superior Court should be allowed to determine the issues of limitation on merit and should the appellant fail to succeed, it has the right to appeal. Mr. Ratemo urged this Court to uphold the decision of the Superior Court and dismiss this appeal with costs. 12.The germane issue urged by the appellant is that the impugned amendment resuscitated the respondent’s statute barred claim. At the outset, it is important for us to acknowledge that across common law jurisdictions, courts generally maintain that an amendment will not be allowed if its effect is to introduce a completely new claim or a cause of action that has become statute-barred. The rationale behind this reasoning is that allowing such a claim is tantamount to unjustly depriving a defendant of a vested statutory defense under the Limitations of Actions Act. However, as we will demonstrate shortly, decided cases clearly demonstrate that courts have carved out specific, strict circumstances under which a pleading can be amended even if the limitation period has lapsed. This position enjoys statutory underpinning courtesy of Order 8 Rule 3 (2) and (3) of the Civil Procedure Rules, 2010 which provides:1.Subject to Order 1, rules 9 and 10, Order 24, rules 3, 4, 5 and 6 and the following provisions of this rule, the court may at any stage of the proceedings, on such terms as to costs or otherwise as may be just and in such manner as it may direct, allow any party to amend his pleadings.2.Where an application to the court for leave to make an amendment such as is mentioned in Subrule (3), (4) or (5) is made after any relevant period of limitation current at the date of filing of the suit has expired, the court may nevertheless grant such leave in the circumstances mentioned in any such subrule if it thinks just so to do....(5)An amendment may be allowed under subrule (2) notwithstanding that its effect will be to add or substitute a new cause of action if the new cause of action arises out of the same facts or substantially the same facts as a cause of action in respect of which relief has already been claimed in the suit by the party applying for leave to make the amendment. 13.From the above provisions, it is clear that an amendment allowed by sub-rules (2) and (5) can be made even after the relevant period of limitation has lapsed, if the court thinks it is just to do so. The above provisions allow amendments to add or substitute a new cause of action if it arises from the same facts as the cause of action in respect of which relief has been sought. The primary objective of Order 8 is to ensure that the real questions and issues in controversy between the parties are justly and comprehensively determined. Courts lean heavily toward allowing amendments to avoid determining cases on mere technicalities, provided the amendment does not cause injustice or prejudice to the opposing party that cannot be compensated by an award of costs. (See Cobbold vs. Greenwich LBC [1999] EWCA Civ 2074). This Court in Joseph Ochieng & 2 Others Trading as Aquiline Agencies vs. First National Bank of Chicago [1995] KECA 31 (KLR) set out the principles under which courts may grant leave to amend the pleadings as follows:a.the power of the court to allow amendments is intended to determine the true substantive merits of the case;b.the amendments should be timeously applied for;c.power to amend can be exercised by the court at any stage of the proceedings;d.that as a general rule however late the amendment is sought to be made it should be allowed if made in good faith provided costs can compensate the other side;e.the plaintiff will not be allowed to reframe his case or his claim if by an amendment of the plaint the defendant would be deprived of his right to rely on limitations Act subject however to powers of the court to still allow and amendment notwithstanding the expiry of current period of limitation.” 14.The primary rule is that a court will allow an amendment, even if it introduces a new cause of action provided that the underlying right of action remains substantially the same as originally claimed, meaning it relies on the same or a closely related factual matrix. The test is that the court must ask whether the plaintiff is seeking to enforce substantially the same right in the amendment as they did in the original pleading. If the plaintiff is merely shifting the legal nomenclature or clarifying the details, but still seeking to enforce the same foundational right arising from the same bundle of facts, it does not constitute a completely "new debt," and the amendment is permissible. (See the South African Constitutional Court decision in Affordable Medicines Trust vs. Minister of Health [2005] ZACC 3). For example, an amendment that simply alters the quantification of damages or clarifies the facts does not introduce a new debt. In CGU Insurance Ltd vs. Rumdel Construction (Pty) Ltd [2003] 2 All SA 597 (SCA), the court ruled that even if an amendment introduces a "new cause of action" in the strict technical sense, it will be allowed if the underlying debt claimed is the same as the one originally sued upon. 15.Back at home, as was held by the High Court in Erastus Chooba Wahome & 2 Others vs. David Kariuki Githiga & 4 Others [2006] eKLR, if a claim for special damages is introduced late but is based on the same set of facts originally pleaded, the amendment will be allowed to determine the real matters in controversy. When it is not clear on the face of the papers whether the claim has actually prescribed (e.g., if there is a dispute about when the plaintiff discovered the facts), the court will often allow the amendment and let the defendant raise limitation as a special plea at trial. 16.The proper approach is for this Court to compare the allegations and relief in the original plaint with those in the amendment. If the amendment is based on the same set of facts, or substantially the same facts that were originally placed before the court, the amendment should be granted, allowing the defense of prescription to be properly ventilated during the main trial. (See Cordier vs. Cordier 1984 (4) SA 524 (C)). 17.However, when a claim's prescription or statutory limitation is not apparent on the face of the pleadings due to factual disputes (such as the exact date of discovery of material facts), courts treat limitation as a mixed question of fact and law that must be determined at trial rather than at an interlocutory stage. Consequently, the Courts routinely allow the amendment of pleadings, directing the defendant to raise the limitation defense as a special plea or triable issue during the main hearing. (See Standard Chartered Financial Services Limited & Ano. vs. Manchester Outfitters (Suiting Division) Limited (Now Known as King Woollen Mills Limited) & 2 Others [2014] eKLR). 18.A reading of the respondent’s original plaint dated 19th October 2011, particularly paragraphs 3 to 11 and the reliefs sought clearly show that the transactions in question took place way back on 10th September 2011 or thereabouts. The averments in paragraphs 7A to 16 of the amended plaint not only relate to the same period but also they evidently arise from the same set of facts and circumstances. Further, the averments in the amendments are clearly issues of both fact and law which are squarely matters for determination by the trial court. Therefore, we refrain from delving into the merits or otherwise of the said issues. As was held by the Supreme Court of India in Revajeetu Builders & Developers vs. Narayanaswamy & Sons [2009] 10 SCC 84, the test is: (a) whether the amendment is absolutely essential to resolve the core dispute:(b)whether the proposed amendment will cause irreversible prejudice to the opposing party that cannot be compensated by an order of costs; (c) whether the application for amendment was not made in good faith and was intended to delay the trial unnecessarily; and, (d) whether the amendment fundamentally alters the original nature and character of the suit. In our view, the contested amendments fall within the ambit of the above parameters. 19.We can only add that the settled principle of law is that: (a) all amendments that are necessary for an effective decision must be allowed; (b) merely because an amendment application is delayed is not a valid ground for rejection; (c) if a fresh suit based on the amended claims would be barred by the law of limitation on the date of the application, the Court should generally decline it. However, this is a rule of prudence not an absolute bar, if exceptional circumstances exist, an amendment will be allowed. (See the Supreme Court of India decision in Life Insurance Corporation of India vs. Sanjeev Builders Pvt. Ltd.[2022]. 20.Decided cases are in agreement that the court’s approach in dealing with amendment of pleadings has always been that an application for amendment should be allowed unless the application to amend is mala fides or it will prejudice the other party. The decision whether to grant or refuse an application to amend a pleading rests in the discretion of the court. The courts emphasize that this discretion is judicial, meaning it must be exercised reasonably and to advance the ends of justice rather than based on caprice or technicalities. This Court in Njiri & Ano. vs. Wangui & 2 Others [2026] KECA 789 (KLR) explicitly affirmed that while the discretion to grant or refuse an amendment is wide, it is a discretionary power that must be exercised judiciously based on reason. The court reiterated that the primary goal of the court's latitude is to ensure the real dispute between parties is adjudicated without being obstructed by rigid technical considerations. An Appellate Court will only interfere with a trial court’s exercise of discretion if it is demonstrated that the discretion was exercised on wrong principles or if the decision is clearly wrong or if it has resulted in a miscarriage of justice. The absolute authority on this principle is Mbogo and Ano. vs. Shah [1968] EA 93 in which the court stated:"An appellate court will not interfere with the exercise of which discretion by a judge unless it is satisfied that he has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been injustice." 21.In United India Insurance Co. Ltd vs. East African Underwriters (Kenya) Ltd [1985] KLR 898, this Court reaffirmed Mbogo vs. Shah (supra). It emphasized that: (a) an appellate court must always start with a presumption of correctness regarding the trial court's decision; (b) it is not enough for the appellate court to think it would have decided the matter differently; (c) the appellant carries a heavy burden to prove that the trial court ignored relevant evidence, took into account irrelevant considerations or applied the wrong legal principles. 22.The appellant has not demonstrated that the learned judge improperly exercised his discretion to warrant this Court’s intervention. Similarly, as alluded to earlier, a reading of the original plaint and the amended plaint clearly shows that the amendments arise from the same cause of action. We note from the respondent’s response; the appellant has since filed a defence to the amendments. The trial court is seized of the matter and the appellant will have its day in court, and, in the event the appellant fails before the trial court, it will have the right to appeal against the decision. The realization of justice between the parties is not to be obstructed by a too rigid consideration. A litigant must be given leave to amend his or her pleading unless it is absolutely clear that the deficiencies of the pleading cannot be cured by the amendment. We have said enough to demonstrate that this appeal is devoid of merit. Accordingly, we dismiss it with costs to the respondent. DATED AND DELIVERED AT NAKURU THIS 3RD DAY OF JULY, 2026.J. MATIVO................................ JUDGE OF APPEALMURUNGI B. KAIRARIA ................................ JUDGE OF APPEALAHMED ISSACK...................................JUDGE OF APPEALI certify that this is a true copy of the original.Signed.Deputy Registrar.