East African Development Bank Limited v Mujtaba Jaffer & 2 others [2021] KECA 459 (KLR)
The bottom line
#Kenya's Court of Appeal reinstated a bank's guarantee lawsuit, ruling a judge cannot strike out a case without examining all the evidence before him.
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 finding by the learned Judge that the guarantee was prepared by an unqualified person is well founded
- 2.Whether the Court of Appeal may interfere with the Judge's discretionary decision to strike out the suit
Key legal issues
#Whether the High Court's finding that the guarantee was prepared by an unqualified person (and hence void under Section 34 of the Advocates Act) was well founded
The finding was not well founded because the Judge failed to evaluate uncontroverted evidence, including correspondence showing the firm of Anjarwalla and Abdulhussein & Company Advocates prepared the security documents.
The guarantee document bore the legend that it was drawn by the Secretariat of the Bank, but correspondence exhibited to the replying affidavits showed the firm of advocates had been authorised to prepare and register the legal documentation and had transmitted the executed documents to the Bank. The Judge made no reference to this material and did not interrogate the affidavits filed in opposition. Because the presumption of preparation by Mr. Pesha was the fulcrum of the striking-out order, it could not stand.
The circumstances in which an appellate court may interfere with a discretionary decision
Interference is warranted where the judge misdirected himself in law, misapprehended the facts, took into account irrelevant considerations, failed to take into account relevant considerations, or where the decision is plainly wrong.
Relying on United India Insurance Co. Ltd vs. East African Underwriters (Kenya) Ltd and Mbogo vs Shah, the Court held the Judge's decision was an exercise of judicial discretion, interference with which is limited. Having found the Judge failed to consider all the facts and material before him, the Court was entitled to interfere on the fourth ground.
Whether a guarantee is a document whose preparation is reserved to an advocate under Section 34 of the Advocates Act
Left undecided as unnecessary in light of the finding that the preparation issue had not been properly determined.
The Court expressly declined to consider the secondary questions, including whether a guarantee may be prepared by an unqualified person and the application of National Bank of Kenya Ltd vs. Anaj Warehousing Ltd and Patel vs Mirza, since the foundational finding on who prepared the document had fallen.
Legal principles established
#- A court exercising the power to strike out a pleading must consider all the facts placed before it and may not act on a partial evaluation of the evidence.
- The Court of Appeal may interfere with a discretionary decision where the judge failed to take into account considerations he should have taken into account.
- A finding as to who prepared a document is a question of fact that cannot be conclusively answered by mere reference to the document itself.
Court orders
#- 1.Appeal allowed
- 2.Ruling and orders of the High Court given on 20th December 2016 set aside
- 3.Substituted order dismissing the respondents' application dated 26th May 2015
- 4.Costs of the application to the appellant
- 5.Costs of the appeal to the appellant
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Mombasa
- HCC Case No. 153 of 2003
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Appellate jurisdiction framework (Article 164 Constitution / Court of Appeal Act); appeal against a discretionary ruling of the High Court
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 conclusion therefore, we allow the appeal. We hereby set aside the ruling and orders given on 20th December 2016. We substitute therefor an order dismissing the respondents' application dated 26th May 2015 with costs to the appellant.
the power to strike out should be exercised only after the court has considered all the facts. Clearly, the learned Judge in this case did not consider all the facts placed before him.
It was not a clear case for striking out. The result is that in reaching his decision, the learned Judge failed to take into account considerations of which he should have taken account of.
Based on the correspondence, to which the learned Judge made absolutely no reference, it seems to us that the critical question, who prepared the security documents, was not one that could be conclusively answered by mere reference to the security documents themselves.
Issues in the judgment
#The judgment states the Supreme Court of England decision in Patel vs. Mirza as '(2014) EWCA Civ. 1047', an England and Wales Court of Appeal citation described as the Supreme Court of England.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "East African Development Bank Limited v Mujtaba Jaffer & 2 others [2021] KECA 459 (KLR)", Case Analysis (2021). Civil Appeal No. 33 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2021/459/eng@2021-07-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.