[2022] KEHC 9957 (KLR)

Gatheru Gathemia t/a Gatheru Gathemia & Co. Advocates v Wanja G. Wambugu t/a W. G. Wambugu & Co. Advocates & 2 others (Civil Case 293 of 2016) [2022] KEHC 9957 (KLR) (Commercial and Tax) (12 July 2022) (Ruling)

Neutral citation: [2022] KEHC 9957 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Case 293 of 2016

WA Okwany, J

July 12, 2022

Between

Gatheru Gathemia t/a Gatheru Gathemia & Co. Advocates

Plaintiff

and

Wanja G. Wambugu t/a W. G. Wambugu & Co. Advocates

1st Defendant

Salome Gichura

2nd Defendant

Sevington Investment Limited

3rd Defendant

Ruling

1. This ruling is in respect to the application dated March 30, 2020 wherein the 2nd and 3rd defendants/applicants seek the following orders:-1)That leave be granted to the 2nd & 3rd Defendants to amend the Defence dated January 10, 2018 and filed on February 12, 2018 in terms of the draft Amended Statement of Defence and Counterclaim annexed hereto2)That should leave be granted as sought, time be limited for the 2nd and 3rd Defendant to file and serve the said Amended Statement of Defence and Counterclaim as well as other allied documents including Witness Statement and Supplementary List & Bundle of Documents.3)That the costs of this Application be provided for.

2. The application is supported by the affidavit of the 3rd defendant’s Director Ms. Salome Gichura and is premised on the grounds that: -(a)Upon review of the pleadings herein as well as well as the documents in the 2nd and 3rd Defendants, it was realized that it is necessary to file a separate distinct, amended Statement of Defence on behalf of the 2nd and 3rd Defendants in terms of the draft Amended Statement of Defence and Counterclaim, so as to plead all the matters in issue between them and the Plaintiff and allow for their full and effectual determination.(b)No irreparable prejudice will be occasioned to the Plaintiff should the 2nd and 3rd Defendants be granted leave to amend as sought.(c)It is just and equitable to grant relief.

3. The plaintiff swore a replying affidavit in opposition to the application wherein he states that the suit was filed six years ago on 22nd July 2016 and that efforts to resolve the dispute through arbitration did not bear any fruits. He states that the parties entered into a mediation agreement dated 6th April 2018 wherein the 1st defendant made certain payments towards settling the debt in question. He further states that the instant application is brought in bad faith as the defendants failed to make further payments after February 2019. He contends that the suit is part heard and that delaying the matter further would prejudice him as the defendants have not undertaken to compensate him for the time and costs already spent in prosecuting the case. He states that the 3rd defendant’s counterclaim time barred under the Limitation of Actions Act and was therefore an abuse of the court process.

4. The application was canvassed by written submissions which I have considered. The issue for determination is whether the defendant has made out a case for the granting of the orders sought in the application.

5. Section, 100 of the civil procedure Act (Cap 21) laws of Kenya, states that: -“The court may at any time, and on such terms as to costs or otherwise as it may think fit, amend any defect or error in any proceeding in a suit; and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on the proceeding”.

6. Order 8 rule 3 of the Civil Procedure Rules, 2010, states as follows:-“(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 sub-rule (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 sub-rule if it thinks just so to do.(3)An amendment to correct the name of a party may be allowed under sub-rule (2) notwithstanding that it is alleged that the effect of the amendment will be to substitute a new party if the court is satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause any reasonable doubt as to the identity of the person intending to sue or intended to be sued.(4)An amendment to alter the capacity in which a party sues (whether as plaintiff or as defendant by counterclaim) may be allowed under sub-rule (2) if the capacity in which the party will sue is one in which at the date of filing of the plaint or counterclaim, he could have sued.(5)An amendment may be allowed under sub-rule (2) notwithstanding that its effect will he 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.

7. The defendant seeks leave to amend its statement of defence dated 10th January 2018 in terms of the annexed draft Amended Statement of Defence and Counterclaim. It is the 2nd and 3rd defendants’ case that upon perusing the pleadings, they realized that it is necessary to file a separate and distinct amended statement of defence and Counterclaim.

8. The plaintiff opposed the application on the basis that it is filed in bad faith considering the fact that the defendants have not remitted the payment according to the mediation agreement. The plaintiff further observed that the suit is part heard and that any further delay in the finalization of the case would prejudice his case. It was the plaintiff’s case that the 3rd defendant’s Counterclaim is barred by the Limitations of Actions Act.

9. In Ochieng and Others vs First National Bank of Chicago Civil Appeal Number 147 of 1 (unreported) as cited with approval in St. Patrick’s Hill School Ltd vs Bank of Africa Kenya Ltd [2018] eKLR the Court of Appeal set out the conditions under which Courts may grant leave to amend 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 an amendment notwithstanding the expiry of current period of limitation.

10. In the case of Joseph Ochieng & 2 Others v First National Bank of Chicago Civil Appeal No. 149 of 1991 the Court of Appeal while citing, with approval, Bullen, Leake & Jacobs in Precedents of Pleadings, 12th Edition remarked regarding amendment of pleadings as follows:-“The power to so amend can be exercised by the court at any stage of the proceedings (including appeal stage); 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…that if the proposed amendment introduces a new case or new ground of defence it can be allowed unless it would change the action into one of a substantially different character which would more conveniently be made the subject of a fresh action..”

11. The principle that emerges from the above cited cases is that the court has the discretion to allow amendment of pleadings at any stage of the proceedings as long as the amendment is made timeously, in good faith and would not deprive the opposing side of its right to rely on Limitations of Actions Act. The court’s discretion to allow amendment of pleadings is however so wide that the court may still allow an amendment notwithstanding the expiry of period of limitation. It is however worthy to note that the court’s power to exercise its discretion is only invoked only in deserving cases where sound basis has been set out and not in a whimsical or capricious manner. In other words, to allow the amendment of pleadings, the Court must be satisfied that the same is necessary in the interest of justice. (See National Bank of Kenya Ltd & 2 Others vs Kisumu Paper Mills Ltd [2009] eKLR).

12. The question which arises is whether the instant application meets the threshold of the circumstances under which the court may allow an amendment. In other words, was the instant application filed timeously, in good faith, and would it allow the defendants to reframe their case thus depriving the plaintiff the right to rely on Limitation of Actions Act?

Time 13. The plaintiff instituted this suit on 22nd July 2016. The defendants filed a joint statement of defence dated 10th January 2018 and the hearing commenced almost 4 years later on 7th December 2021. The plaintiff has already testified and was in the middle of being cross examined when the applicants filed the present application to amend their defence and counterclaim.

14. I find that considering the age of the case and the timing of the instant application, the same cannot be said to have been brought timeously. The court also notes that the defendants did not explain the reasons for the delay in filing the application despite the fact that they have all along been represented by advocates.

Good faith 15. The plaintiff contended that the application is not brought in good faith and is merely intended to delay the speedy conclusion of their case owing to its timing and the fact that the defendants reneged on their obligations under the terms of the Mediation Agreement. The plaintiff also noted that the defendants have previously made numerous applications to adjourn the hearing of the case.

16. As I have already stated in this ruling, the defendants did not explain the reason for their belated decision to amend the defence long after the plaintiff had testified in the matter. I find that the instant application was not brought in good faith considering the history of the case, and the fact that the defendants did not fulfil the terms of the Mediation Agreement.

Limitation of Actions 17. The plaintiff maintained that the proposed amendment introduces a counterclaim that runs afoul the Limitation of Actions Act. This averment was not controverted by the defendants. I find that looking at the totality of the circumstances of this case, the proposed amendment of defence will occasion great prejudice to the plaintiff going by the adage that ‘justice delayed is justice denied’. I am not persuaded that the defendants deserve the exercise to this courts discretionary powers in their favour.

18. In sum, I find that the application dated 30th March 2022 is not merited and I therefore dismiss it with costs to the plaintiff.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 12THDAY OF JULY 2022. W. A. OKWANYJUDGEIn the presence of: -Mr. Kanjama for Plaintiff.Mr. Amoko for 2nd and 3rd Defendants.Mr. Janmohamed for 1st Defendant.Court Assistant- Sylvia