Nextgen Office Suits Limited v Standard Chartered Bank Limited [2022] KEHC 10346 (KLR)

Nextgen Office Suits Limited v Standard Chartered Bank Limited (Civil Suit 150 of 2018) [2022] KEHC 10346 (KLR) (Commercial and Tax) (3 June 2022) (Ruling)

Neutral citation: [2022] KEHC 10346 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Suit 150 of 2018

A Mabeya, J

June 3, 2022

Between

Nextgen Office Suits Limited

Plaintiff

and

Standard Chartered Bank Limited

Defendant

Ruling

1. This is a ruling on the plaintiff’s Notice of Motion dated 29/9/2021. The Motion was brought, inter-alia, under Order 8 Rule 3 of the Civil Procedure Rules.

2. The plaintiff sought leave to amend its plaint in the manner shown in the draft plaint annexed to the application. The grounds were that it is imperative to amend the plaint to include further prayers that were not captured in the plaint at the time of filing. That it is necessary to amend the plaint to effectively bring out the issues in dispute and that the defendant will suffer no prejudice from the intended amendment.

3. The defendant opposed the application through grounds of opposition dated 10/11/2021 and a replying affidavit sworn by its head of legal in Kenya and East Africa on 10/11/2021.

4. In the grounds of opposition, the defendant contended that the amended plaint sought to introduce a claim for fraud against the defendant more than three years after the alleged fraud took place. That it was time barred and cannot be introduced through an amendment. That the plaintiff had failed to particularize how the defendant knew or ought to have known that any claim on the Stand By letter of Credit was fraudulent. That the delay had prejudiced the defendant as its witness in this matter has since left its employment. That this loss cannot be compensated by an award of costs.

5. The replying affidavit opposed the application on similar grounds. It was emphasized that the defendant will be prejudiced if the amendment is allowed as the defendant’s officer who was its witness in this suit has since left the defendant’s employment which will affect its ability to defend the case.

6. That the plaintiff failed to make any steps regarding this case from 16/4/2018 until the matter was fixed for a Notice to Show Cause by the court on 22/9/2021.

7. The plaintiff lodged a further affidavit sworn by Kevin Mogeni, its counsel on record, on 3/12/2021 in response to the opposition by the defendant.

8. He averred that the Civil Procedure Rules allow for the amendment of pleadings without leave of the court, once, before the pleadings are closed and that the defendant is yet to file a defence therefore they cannot oppose the defendant’s right to amend its pleadings.

9. Order 8 Rule 1(1) of the Civil Procedure Rules provides: -“A party may, without the leave of the court, amend any of his pleadings once at any time before the pleadings are closed.”

10. On the other hand, Order 8 Rule 3(1) of the Civil Procedure Rules provides that the court may at any stage of the proceedings, on such terms as to costs or otherwise as may be just and in such manner as it may direct, allow any party to amend his pleadings.

11. The record shows that when the parties appeared in court on 22/9/2021, the court granted the plaintiff the last opportunity to prosecute the suit. The plaintiff’s advocate asked for leave to amend the plaint. The court directed that he does file and serve a formal application within 14 days failure to which the suit would stand dismissed. That directive was adhered as the present application was lodged on 29/9/2021.

12. The plaintiff argued that the amendments were necessary to effectively bring out the issues in dispute and that the defendant will suffer no prejudice from the intended amendment. The defendant opposed the same on the grounds that it was time barred.

13. The court notes that the plaintiff intends to introduce a claim for fraud against the defendant. The particulars of the alleged fraud by the defendant is based on the ground that the defendant released a sum of Us $ 1,353,369. 11 on 13/4/2018. The plaintiff intends to seek special damages due to the alleged fraud by the defendant.

14. It is common knowledge that a claim of fraud ought to be lodged not later than 3 years from the occurrence of the fraudulent activity. See section 4(2) of the Limitations of Actions Act.

15. In this case the alleged fraudulent activity took place on 13/4/2018, that is two days before the plaintiff lodged this suit in this Court. It was fact that was within its knowledge. The application for amendment was made on 29/9/2021 when the plaintiff sought to introduce the fraudulent claim. More than 3 years have elapsed.

16. In Coffee Board of Kenya v Thika Coffee Mills Limited & 2 others[2014] eKLR, the Court of Appeal quoted with approval, Mulla, The Code of Civil Procedure, 18th Ed, Vol.2 at pages 1751-1752 wherein it is stated: -“On the basis of the different judgments, it is settled that the following principles should be kept in mind in dealing with the applications for amendment of the pleadings-…(iv)Proposed amendment should not cause prejudice to the other side which cannot be compensated by means of costs;(v)Amendment of a claim or relief barred by time should not be allowed;(vi)No amendment should be allowed which amounts to or results in defeating a legal right to the opposite party on account of lapse of time; …”

17. In the present case, if the amendment is allowed at this stage, the defendant’s right to plead limitation will be prejudiced. Further, the defendant contended that due to the delay, its employee who would have testified in its defence has since left its employment. Obviously, that is a prejudice that cannot be compensated by an award of costs. It is within the plaintiff’s knowledge why it delayed to introduce the fraud claim against the defendant. The court cannot act against the law.

18. Accordingly, the court finds no merit in the application dated 29/9/2021 and dismisses the same with costs.It is so ordered.

DATED AND DELIVERED AT NAIROBI THIS 3RD DAY OF JUNE, 2022. A. MABEYA, FCIArbJUDGE