Ternic Enterprises Limited v Waterfront Outlets Limited [2018] KECA 764 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that even one genuine triable issue defeats a summary judgment application, forcing parties to 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 there was proper exercise of discretion by the learned Judge in holding there were triable issue(s) arising from the respondent's response in opposition to the notice of motion seeking summary judgment
- 2.Whether the application for summary judgment met the threshold under Order 36 Rule 1(1)(a) and (2) of the Civil Procedure Code
- 3.Whether the defence set up by the respondent in the affidavit raised triable issue(s)
Key legal issues
#Whether the trial Judge properly exercised discretion in finding triable issues and dismissing the summary judgment application
The Court of Appeal found no fault in the trial Judge's exercise of discretion, holding that allegations of mistake and fraud in the replying affidavit raised triable issues requiring a full trial.
The learned Judge fastidiously examined the averments in both parties' affidavits and posed pertinent questions answerable only after trial. The respondent's allegations that it entered the sale agreement under a mistake as to the appellant's share, and the allegation of fraudulent transfer, raised prima facie defences. A preliminary finding of triable issues at interlocutory stage does not guarantee the respondent's success, but stringent measures ensure every litigant gets an opportunity to ventilate their case.
Whether the claim was a liquidated claim suitable for summary judgment
The claim was not a straightforward liquidated claim because the value of one third share of the suit property would require evidence, moving the claim from the realm of a liquidated claim.
Although the claim was framed as a liquidated sum of Ksh 28 million, the respondent appeared to admit entitlement to only a one-third share. Determining what constitutes one third of the share of the land would require evidence, so partial judgment for that admitted portion could have been entered, but the whole matter was best resolved at trial where all issues, including the apparent admission of a one-third share, could be determined.
Legal principles established
#- If a defence raises even one bona fide triable issue, the defendant must be given leave to defend; a triable issue need not be one that will succeed.
- Summary judgment is a drastic remedy available only in the clearest of cases where there is no bona fide defence.
- Where a bona fide triable issue is raised, the defendant must be given unconditional leave to defend, unless the defences raised are a sham.
Court orders
#- 1.Appeal dismissed with costs to abide the outcome of the suit
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- High Court of Kenya at Nairobi, Milimani Law Courts
- High Court Civil Case No. 164 of 2016
- Jurisdiction invoked
- First appeal to the Court of Appeal from the High Court (Appellate Jurisdiction Act, Appeals from the High Court)
Relief refused
#Setting aside the High Court ruling dismissing the application for summary judgment and entry of summary judgment for Ksh 28 million with interest at 15% per annum
The Court found triable issues arising from the allegations of mistake and fraud in the respondent's replying affidavit, and found the claim was not a straightforward liquidated claim.
Costs
Appeal dismissed with costs to abide the outcome of the suit
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 law is now settled that if the defence raises even one bona fide triable issue, then the Defendant must be given leave to defend.
A preliminary finding of triable issues made at an interlocutory stage does not at all guarantee that the respondent will succeed after trial, just that the courts and the law have set very stringent measures to ensure every litigant is given an opportunity to ventilate their case.
If a bona fide triable issue is raised the Defendant must be given unconditional leave to defend but not so in a case in which the Court feels justified in thinking that the defences raised are a sham
Accordingly, having found as we have there are triable issues, it goes without saying, this appeal lacks merit and we do order it dismissed with costs to abide the outcome of the suit.
Issues in the judgment
#The respondent's citation of Isaac Awuondo vs Surgipharm Ltd & Another carries inconsistent years/citations in the judgment ([2001] e KLR with Civil Appeal No. 134 of 2003, and [2011] eKLR), suggesting possible duplication or citation error in the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ternic Enterprises Limited v Waterfront Outlets Limited [2018] KECA 764 (KLR)", Case Analysis (2018). Civil Appeal No. 136 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/764/eng@2018-02-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.