Lalji t/a Vakkep Building Contractors v Carousel Limited [1989] KECA 60 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that summary judgment can only be granted in the clearest cases; any arguable defence, even on contract wording or trade custom, earns a full trial.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the High Court judge failed to consider the effect of the supplemental sub-contract on the main contract
- 2.Whether the judge failed to consider the effect of clause 27(a) of the main contract and clause 2 of the sub-contract on the payment scheme
- 3.How the apparent contradiction between clause 27 of the main contract and clause 13 of the sub-contract should be resolved
- 4.Whether the plea of a custom in the building trade, whereby a sub-contractor's entitlement to payment is conditional upon the contractor first being paid by the employer, was a triable issue requiring evidence
- 5.Whether the issues raised were unarguable such that summary judgment under Order 35 was properly granted
Key legal issues
#Whether summary judgment under Order 35 was properly entered
The appeal succeeded: the case involved a difficult question of construction of documents and an untried issue of custom, which could not be fairly dealt with under Order 35; the issues were arguable.
Order 35 is a stringent procedure equivalent to English RSC Order 14, shutting the defendant out of the courtroom. Precedents from Cow v Casey through Zola v Ralli Brothers and later Kenyan decisions require the jurisdiction to be exercised only in plain cases where there is clearly no good defence. Here the main contract and sub-contract contained conflicting payment provisions (clause 27 versus clause 13), and the custom plea required parol evidence. These matters needed full argument at trial, so the judge erred in granting summary judgment.
Construction of the payment provisions of the main contract and sub-contract
Clause 13 of the sub-contract conflicted with clause 27 of the main contract, and clause 27 departed from the RIBA standard form by making payment to nominated sub-contractors conditional upon the contractor's receipt of payment from the employer.
The court compared clause 27(a)(vii) with the RIBA standard contract and found this contract made payment to the nominated sub-contractor conditional on receipt of payment by the contractor from the employer - a significant and novel departure only noticed on appeal. Since the sub-contract was expressly supplemental to the main contract and clause 2 deemed the sub-contractor to have notice of its provisions, the contradiction in the payment scheme was a serious unresolved conflict of construction, unsuitable for summary determination.
The plea of building-industry custom
The alleged custom that payment to a sub-contractor is conditional upon payment first being made to the main contractor was a question of fact requiring evidence and could not be disposed of summarily, particularly as it was raised late without opportunity to adduce evidence.
The custom plea first surfaced in written submissions before Butler-Sloss J, having never been pleaded or raised in the replying affidavit. Because existence of a custom must be proved by parol evidence, the judge's rejection of it without an opportunity to lead evidence compounded the unfairness. Combined with the documentary conflicts, the plea made the defence arguable and entitled the appellants to leave to defend.
Legal principles established
#- Summary judgment under Order 35 is a draconian procedure to be granted only in the clearest of cases; where a triable or fairly arguable issue exists, a trial must be ordered.
- A supplemental deed must be read in conjunction with the instrument to which it is expressed to be supplemental.
- On appeal from summary judgment, the appellate court examines the decision below together with the material before the judge to determine whether an arguable defence or triable issues existed.
- Whether a custom exists is a question of fact requiring parol evidence; whether it is reasonable is a question of law for the court.
Court orders
#- 1.Appeal allowed
- 2.Judgment and decree of the High Court set aside
- 3.Order substituted refusing the application for summary judgment
- 4.Leave to defend granted on terms that the amount involved be placed in an interest-bearing account in the joint names of the advocates for both parties
- 5.Appellants to have the costs of the appeal, to be taxed if not agreed
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court at Nairobi
- Civil Case No 587 of 1985
- Jurisdiction invoked
- First appellate appeal from the High Court (Civil Procedure Rules Order 35 summary judgment matter)
Relief refused
#Unconditional leave to defend
Leave granted only on terms, given the respondent had completed the work and the employer had benefited
Costs
The appellants will have the costs of this appeal to be taxed if not agreed.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Summary judgment is a draconian measure and should be given in only the clearest of cases. And a trial must be ordered if a triable issue is found to exist or one which is fairly arguable.
It is in our view more unjust to shut out a defendant with a good defence than to require a plaintiff to wait a little longer and prove his claim against such a defendant on the merits.
It follows that this appeal succeeds and is allowed and the judgment and decree of the High Court is set aside and we substitute therefor an order refusing the application for summary judgment.
The amount involved will be placed in an interest bearing account in the joint names of the Advocates for both parties.
The appellants will have the costs of this appeal to be taxed if not agreed. Those then are the orders of the Court.
Issues in the judgment
#The sub-contract is described as dated 12th March, 1983 early in the judgment but the reproduced sub-contract is dated 29th June 1981
Typographical errors in the delivery date line and in the judgment text ('Butler-Sloss J' as High Court judge; '18 th ady of January')
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lalji t/a Vakkep Building Contractors v Carousel Limited [1989] KECA 60 (KLR)", Case Analysis (1989). Civil Appeal (from Nairobi High Court Civil Case No 587 of 1985). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1989/60/eng@1989-01-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.