Five Continents Ltd v Mpata Investments Ltd [2003] KECA 156 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that a defendant showing even one genuine dispute over what is owed cannot be denied the chance to defend.
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 defence raised a bona fide triable issue entitling the defendant to unconditional leave to defend
- 2.Whether the accounts analysis relied on by the plaintiff had evidential value to support summary judgment
- 3.Whether the learned judge erred in striking out the defence and entering summary judgment on secondary documentation
Key legal issues
#Whether summary judgment was properly entered where the defence raised a genuine dispute on liability
It was not; a genuine dispute on liability, resolvable only at trial, precludes summary judgment.
The Court reaffirmed the long-standing law that a defendant showing a bona fide triable issue is entitled to unconditional leave to defend. On the affidavits, both parties accepted that there had been mutual dealings and a settlement of accounts, but the quantum of the debt each owed at settlement was disputed. That dispute was genuine and triable, so the case was not plain and obvious and summary judgment could not stand.
The evidential value of an accounts analysis prepared for litigation
Such an analysis has no evidential value and cannot alone charge a defendant with liability.
The plaintiff relied mainly on an accounts analysis apparently prepared for the suit. It was not a book of account regularly kept in the course of business, and even a regularly kept statement of account would not by itself be sufficient evidence to charge the defendant, by analogy with Section 37 of the Evidence Act. The judge erred in accepting it at face value without scrutiny.
Whether the guest folios and absence of vouchers left the claim unproven for summary judgment purposes
The guest folios, showing debit and corresponding credit leaving a nil balance, did not support the plaintiff's case, and the unproduced vouchers were the best evidence of indebtedness.
Both counsel agreed the guest folios showed each debt fully paid. The plaintiff's own pleaded practice was for the defendant to issue vouchers instructing the plaintiff; the plaintiff neither produced nor relied on those vouchers, which would have been the best evidence of the state of indebtedness before settlement. Reliance on secondary documentation therefore could not sustain summary judgment.
Legal principles established
#- If a defendant shows a bona fide triable issue, he must be allowed to defend without conditions.
- Even one bona fide triable issue entitles a defendant to unconditional leave to defend in a summary judgment application.
- A defendant need only show that the defence on record raises triable issues which ought to go to trial; the defence need not be one that must succeed.
- An accounts analysis prepared for use in a suit is not a book of account regularly kept in the course of business, and even if it were, it would not alone be sufficient evidence to charge a defendant with liability.
Court orders
#- 1.Appeal allowed
- 2.Judgment and decree of the superior court set aside
- 3.Defence restored
- 4.Defendant granted unconditional leave to defend
- 5.Plaintiff's motion for summary judgment dismissed with costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Civil Procedure framework (order XXXV rule 2, Civil Procedure Rules, summary judgment procedure)
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.
In our judgment this was not a plain and obvious case on which summary judgment could have been entered. There was a genuine dispute on the defendant's liability to the plaintiff which can only be resolved at the trial.
if the defendant shows a bona fide triable issue he must be allowed to defend without conditions
It follows that the accounts analysis on which the learned judge relied has no evidential value.
The judgment and decree of the superior court is set aside and the defence is restored. The defendant is granted unconditional leave to defend. The plaintiff's motion for summary judgment is hereby dismissed with cost.
Issues in the judgment
#The judgment inconsistently records the debt figures: the opening narrative and the judge's quoted ruling refer to Shs 2,567,337/80 and Shs 2,567,334/80 respectively for the same debt
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Five Continents Ltd v Mpata Investments Ltd [2003] KECA 156 (KLR)", Case Analysis (2003). Civil Appeal (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2003/156/eng@2003-06-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.