Guardian Bank Limited v Deposit Protection Fund Board the Liquidation of the Euro Bank Limited (In Liquidation) & another [2010] KECA 297 (KLR)
The bottom line
#Kenya's Court of Appeal allowed a depositors' Sh804 million claim appeal to proceed, refusing to strike it out on technical naming objections at an early stage.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether an appeal by the Deposit Protection Fund Board lies when the Board was not a party to the proceedings in the High Court, the suit having been filed in the name of the Deposit Protection Fund
- 2.Whether the issues sought to be resolved by the striking-out application should instead be left to the full hearing of the appeal
Key legal issues
#Whether the appeal is competent where the notice and record of appeal were filed by the Board rather than the Fund, the entity named as plaintiff in the High Court
The court declined to strike out the appeal on this ground because the question of which entity - the Fund or the Board - should have filed the notice of appeal is intertwined with the substantive grounds of appeal, and striking it out would merely produce a vicious circle of competency challenges.
The court reasoned that even if the appeal were struck out for having been filed by the Board instead of the Fund, the respondents would likely have objected whichever entity filed, and the underlying question of whether the suit should have been brought in the name of Euro Bank Ltd would remain unresolved. That question is one of great public importance involving recovery of a large sum for depositors, and the court held the appeal on it is not frivolous.
Whether an appeal challenging the competency of a suit filed in the name of a non-existent plaintiff, and the correct plaintiff for a statutory liquidation under the Banking Act, is frivolous
The appeal is not frivolous; the appellate court must construe Section 241 of the Companies Act in conjunction with Sections 36(2) and 35 of the Banking Act and spell out their interrelationship.
The court noted that Section 36(2) of the Banking Act, authorising the Board to sue in its corporate name or in the name of the institution under liquidation, was not brought to the attention of the superior court. Prima facie, the liquidation is one by the Central Bank under court supervision, with the Board as a statutory liquidator. The interplay between the Banking Act and the Companies Act provisions requires full appellate consideration.
Whether the overriding objective favours dismissal of the striking-out application
Having regard to the other issues raised, the large sum claimed for depositors and the public body nature of the claimant, the overriding objective under Section 3A(1) of the Appellate Jurisdiction Act is served by leaving the appeal to be heard on the merits.
The court weighed the public interest in depositors recovering a very large sum of money, the fact that the claim is brought by a public body, and the existence of multiple substantive issues in the appeal. It concluded that determining the contentious issues at an interlocutory stage would not serve the overriding objective, which favours a full merits hearing of the appeal.
Legal principles established
#- Where the issues raised in an application to strike out a notice of appeal are intertwined with, and similar to, the substantive issues in the appeal, the court should not pre-emptively resolve them at an interlocutory stage but should leave the appeal to be heard on the merits, in furtherance of the overriding objective.
- Where a suit is instituted in the name of the wrong plaintiff, the court has discretion under Order I rule 10(1) of the Civil Procedure Rules to order substitution or addition of the correct plaintiff, and may do so even on its own motion under rule 10(2).
Court orders
#- 1.The notice of motion dated 16th May 2007 is dismissed with the costs in the appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Milimani Commercial Courts, Nairobi
- H.C.C.C. No. 399 of 2005
- Jurisdiction invoked
- Rule 80 of the Court of Appeal Rules (application to strike out a notice of appeal and record of appeal)
Relief refused
#Striking out of the notice of appeal and the record of appeal in Civil Appeal No. 64 of 2003
The issues raised in the application and the appeal are intertwined and similar; it would be pre-emptory to resolve them at an interlocutory stage, and the overriding objective favours determination of the appeal on the merits
Costs
The notice of motion dated 16th May, 2007 is dismissed with the costs in the appeal.
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.
The issue as to which entity – the “Fund” or the “Board” should have filed the notice of appeal or the appeal is intertwined with the issues raised in the appeal.
We are satisfied that the appeal as it relates to the issue of the name of the correct plaintiff is not frivolous.
it would serve the overriding objective of the court as spelt out in Section 3A (1) of the Appellate Jurisdiction Act, if the appellate court was left to hear the appeal on the merits and sort out all the contentious issues.
For those reasons, the notice of motion dated 16th May, 2007 is dismissed with the costs in the appeal.
Issues in the judgment
#The judgment refers to the appeal as both Civil Appeal No. 64 of 2007 (in the title) and Civil Appeal No. 64 of 2003 (in the body), an internal inconsistency in the appeal number.
The judgment miscites the Committee of Inspection under Section 36(2) of the Banking Act as the 'Committee of Experts' in one passage, conflicting with the quoted statutory text.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Guardian Bank Limited v Deposit Protection Fund Board the Liquidation of the Euro Bank Limited (In Liquidation) & another [2010] KECA 297 (KLR)", Case Analysis (2010). Civil Appeal (Application) No. 64 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/297/eng@2010-05-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.