Springbox Kenya Ltd v Daniel Kulanga Nthusa [2015] KEHC 7695 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

MILIMANI LAW COURTS

CIVIL   APPEAL NO.  97 OF 2010

SPRINGBOX KENYA LTD…………………………..APPELLANT

VERSUS

DANIEL KULANGA NTHUSA ……………………RESPONDENT

JUDGMENT

This appeal arises from the ruling of and Order of the Honourable Principal Magistrate Mr Okato, In Nairobi Milimani CM C.C. NO.  1434 OF 2009 (Daniel K. Nthusa vs Springbox Kenya Ltd) delivered on 22nd February 2009.

The background  to the matter is that  vide an application dated 20th January  2010 the defendant  in the lower court  who is the appellant  herein  Springbox  Kenya Ltd sought leave  of court to  amend its defence  to include  an averment  that it paid  the plaintiff/respondent herein a sum of kshs 319,827 under the Workmen’s Compensation Act, a  payment that would have a bearing in the final award, in the event that  the plaintiff’s claim for  compensation succeeded.  The application by the appellant/defendant for leave to amend the defence was dismissed   with costs, and that is the order that provoked this appeal.

The appellant’s Memorandum of Appeal as amended on 31st May 2010 sets out 6 grounds of appeal namely:

That  the  Learned  magistrate erred  in law and in fact in denying  the appellant  an opportunity  to amend  its defence to reflect the true  state of affairs.

That the Learned magistrate misdirected himself in suggesting that the appellant was required to adduce evidence in an application to amend the defence.

That the learned magistrate misdirected himself in imposing upon the appellant, a burden of proof at a premature stage in proceedings.

That  the Learned magistrate erred in law  and in fact in rejecting  the appellant’s  application to amend  its defence  despite  extensive  jurisprudence  on the freedom  so to do at any stage  in the proceedings .

That the Learned magistrate misdirected himself in awarding costs to the respondent.

That the decision was arrived at on consideration, to the extent that this was done, of wrong principles of law.

The appellant therefore urged this court to allow this appeal by setting aside the ruling in the lower court and order the respondent to pay costs of this appeal.

The primary suit  in the lower  court was instituted on 12th March 2009  by the respondent herein claiming for general  and special damages  arising from an industrial accident  wherein the respondent  was  allegedly operating  a machine when he was injured which injury involved   amputation of the left hand.

On 22nd April 2009  the defendant /appellant  herein filed a defence denying the plaintiff’s  claim and contending in the alternative  that if at all the  respondent was employed  by the appellant and or  injured  while engaged upon his  duties  in the appellant’s employment  and in the course of  his duties then  the accident  and  injury complained   of was due to  the respondent’s  own negligence as particularized  in paragraph 8 of the  defence dated 22nd April 2009.

On 4th May 2009 the respondent’s counsels filed reply to defence joining issues with the appellant’s defence and reiterating contents of plaint, while denying any contributory negligence to the alleged accident.

On 22nd January 2014 vide an application  brought  under the old Order 6A Rule 3  of the Civil Procedure Rules, the  appellant sought  leave of court to amend  its defence to include  an averment  in paragraph 9A that  should the court find  it liable to  the plaintiff in negligence  then the  amount payable to the plaintiff  should be  reduced by the sum of Kshs 319,827 paid as Workmen’s Compensation on or about 30th January 2008.

The respondent  filed a replying affidavit on 4th February 2010 opposing the appellant’s application for leave to amend the defence and vehemently denying that he or at  all  was paid any money  under the Workmen’s Compensation  Act  and contending that  the appellant had  perjured itself  by making false allegations of payment to the plaintiff under the Workmen’s  Compensation Act.

In a brief  ruling delivered on 22nd February 2010 the learned  trial magistrate  having considered the application and objection  thereto, and the  decision in Macharia v Guardian  Bank Ltd (2003) KLR 271 cited  by the appellant’s  counsel held that:

“It is trite law that he who asserts proves.  The defendant asserted that the plaintiff was paid kshs 319,827/- but there is no evidence to support the said assertion.  The amendment sought in my considered view is not necessary and I therefore find the application lacks merit and I dismiss it with costs to the plaintiff/respondent.”

The appeal herein was admitted to hearing on 29th May 2014 and directions were given on 31st November 2014.  Parties for the parties agreed to have the appeal herein disposed of by way of written submissions despite the initial directions that the matter be canvassed orally.  The appellant’s counsel filed their  submission on 27th March 2015 whereas the respondent’s counsel  filed his submissions on 17th April 2015  and this court is now called upon to determine this appeal on the  basis of those submissions  and  decided  cases annexed  on the respective party’s submissions.

In their submissions, the appellant’s  counsel reiterated  the ground of appeal and maintained that the Civil procedure Act and Rules especially  Section 100  and Order 6A Rule  3 (now  Order 8 Rule 3 ) of the cited law settles  the position in legal  jurisprudence  concerning  applications to amend  pleadings that  amendments  sought before trial should  be freely granted  if  they are necessary to  put the facts in dispute between the parties  before  the court  for a proper adjudication of the issues.

In their view, the amendment  sought  was necessary and material to the fair adjudication of the dispute  and therefore the same should have  been freely  allowed  as there was no  evidence that such amendment  would in any way cause  any prejudice  to the  respondent  herein.  The appellant relied on the case of Manjat Singh Sethi &  2 Others  vs Paramount Universal  Bank Ltd  & 2 Others (2013) where the  court, citing with approval  the principles  enunciated  in Eastern Bakery vs  Costelino (1958) EA 46  stated:

“

Amendments sought  before   hearing should be freely  allowed if  they can be  made without  any  injustice  to the other side;

There can be no injustice   to other side  if it can be compensated  with costs;

The courts  will not refuse an amendment  simply because it introduces  a new case;

There is no power  to enable  one distinct  cause of  action to be substituted  for another or to change, by means of amendment, the subject of the suit;

The court will refuse leave  to amend where the  amendment  would change  the cause of  action into one substantially different character  or where the amendment  would  prejudice  the right of  the opposite  party existing at the date of the proposed  amendment e.g by deputing   him  of a defence of limitation.

The principles applicable to amendments of plaints are equally applicable to amendments of written statements of defence.

A judge has discretion to allow amendments to the statement of defence to introduce a counterclaim provided that such an amendment does not transgress any of the aforesaid principles.”

The appellant also relied on  the  case of Equip Agencies  Ltd vs Muhoroni Sugar Co. Ltd ( in receivership) (2015)  e KLR  where the court  heavily relied  on the case  of Central Bank of Kenya vs Trust Bank Ltd  (2000) EA 365and stated that  a party should be  allowed to make such  amendments  of pleadings  as  were  necessary  for determining  the real  issue in controversy.

In  the appellant’s view, the trial  magistrate in dismissing the appellant’s  application for leave to amend its defence  did not consider  the applicable  principles  in the cases  cited herein  and in the case of Macharia  v  Guardian Bank Ltd(2003) KLR  271.  The appellant  further submitted that  the trial magistrate  misapprehended  the purpose  of pleadings by stating  that the appellant  in seeking to amend  the defence did not  adduce  any evidence to support its assertion that it  had paid the respondent Kshs 319,827 under the Workmen’s  Compensation Act  and in doing so  denied the appellant an opportunity  to present  its evidence. It was therefore submitted on behalf of the appellant that this appeal should succeed if a miscarriage of justice is to be averted.

The respondent  on the other  hand filed his written submissions  dated 17th April  2015 instant opposing  the appeal and  supporting the ruling  and order  of the learned trial magistrate, urging this court to dismiss  the appeal herein with costs.

The respondent  contended that indeed  the appellant sought  leave to amend  the defence to implead  payments allegedly  made to the respondent  under  the Workmen’s Compensation Act, but that they did not annex any  evidence to the affidavit  to demonstrate  that they  had paid  any money  to the respondent.  In the respondent’s view, the appellant did not discharge the burden of proving that they were entitled to the orders sought as required under Section 107 to 109 of the Evidence Act.

The respondent also contended that no document was annexed to the submissions or to this appeal to demonstrate that any money was paid to the respondent hence it would be a waste of court’s precious time.  He relied  on Section112  of the Evidence Act  that “ In Civil proceedings  when fact is  especially within  the knowledge  of any party  to those  proceedings, the burden of proving or  disproving  that fact is  upon him.” The respondent also relied on Eldoret  HCCA 85/2002  Eastern produce (K) Ltd v James Kipketer  Ngetich (2205) e KLR and Nairobi Industrial cause No. 2012/2012-  Gerald Owino Oyubo v Vision Africa – Give a Child a Future  where it  was held that  he who  alleges must  prove.

In the respondent’s view, this appeal is a sham calculated to prejudice, embarrass or delay the fair trial of the original suit and is otherwise an abuse of the court process hence it should be dismissed with costs as to allow the appeal without proof of documentary evidence that the respondent was paid any money would be to issue orders in vain

I have carefully considered the record before me, and considered the   grounds of appeal and submissions made by counsels for the parties, the applicable law and the decided cases.

I am mindful of the fact that this  is a first appeal  and my duty is  grounded on Section 78 of the Civil  Procedure  Act to evaluate  an consider the evidence and the law and exercise  as nearly as possible  the  powers and duties of the court of original jurisdiction and come to  my own  independent conclusion.  This is a principle espoused    in the Selle v Associated Motor Boat Co. Ltd (1968) EA 123) KPS vs Kuston (K) Ltd (2009) 2 EA .212.

I am however  cautious that in so doing, I should  be slow in  interfering with the lower court’s decision in a matter where it exercised its discretion unless such discretion was founded on wrong principles  of fact and  or law  as was held by the Court of Appeal in the case  of Nkube  v Nyamuro(1983)KLR 403that:

“A Court of appeal will not   normally interfere   with the finding of the fact by a trial court unless it is based on no evidence, or on a misapprehension of the evidence, or the judge is shown demonstrably to have acted on wrong principles   in reaching his conclusion.”

Similarly, In Ndiritu v Ropkoi & Another  the Court of Appeal  held that  the appellate court should  be slow  to differ  with the trial court and should only  do so  with caution and only  in cases where  the findings  of fact  are based on no  evidence, or a misapprehension of evidence, or where it is shown that  the trial court  acted on wrong  principles  of law in arriving at the  findings he did.  See also in Shah vs Mbogo (1968) EA 93 where it was held that:

“ The Court of Appeal should not  interfere  with the exercise of the discretion of a judge unless it is satisfied that the judge  in exercising  his discretion has misdirected himself  in some manner and as a result  has arrived at a wrong decision , or unless  it is manifest  from the case  as a whole  that the judge has been  clearly wrong on the exercise  of this  discretion and that as a result  there has been misjustice.”

In Smith v Middleton (1972) SC 30 it was held that:

“A discretionary power should be exercised judicially and not in a selective and discriminatory manner, not arbitrarily and idiosyncratically.”

The power to order for an amendment to any pleadings is a discretionary power which must be exercised judiciously. In my view, the issues for determination in this appeal are:

Whether the trial magistrate erred in law and fact and or applied wrong principles in refusing to allow the proposes amendment to the defence.

Whether the respondent would in any way be prejudiced by the proposed amendments to the appellant’s defence.

The substantive provisions for amendments to pleadings are Section 100 of the Civil Procedure Act and the old Order 6A Rule 3 of the Civil Procedure Rules, now Order 8 Rule 3 of the same Rules.

The above provision of the law and Rules provide a broad criteria or framework which should guide the court in the exercise of the discretion that:the amendment to pleadings should be necessary for purposes of determining the real issues or question which has   been raised by the parties; and that it is just to do so.

Case law has then interpreted the above provisions and defined the principles of law which circumscribe the exercise of judicial discretion in an application for amendment of pleadings.  The principles which are binding  on this court, depending  on the circumstances  of each case  were set out in the  Court of Appeal decision of         CENTRAL KENYA LTD  V TRUST BANK LTD  CA 22/1998 (2000) 2 EA 365that:

The amendment must be necessary for determining the real question in controversy.

To avoid multiplicity of suits provided there has been no undue delay.

Only where no new or inconsistent cause of action is introduced i.e. if the new cause of action does not arise out of the same facts or substantially the same facts as a cause of action.

That no vested interest  or accrued legal rights is affected; and

So  long as  it  does not occasion prejudice  or injustice to the other side  which cannot  be properly compensated  in costs.

From the decided  cases relied  on by the appellant, it is clear that the discretion of a trial court  to allow  amendments of a defence  or plaint  is wide and unfettered  except  that it should be exercised judiciously upon the foregoing  defined  principles.  It is  for that  reason that the court has power  to allow amendments  to  pleadings  or a defence that discloses  no reasonable  defence or  a plaint that  discloses  no reasonable cause of action and to inject  such an otherwise sham pleading with a new lease of  life.

Applying the above  clear principles to the  present case, the appellant /defendant  sought to amend  the defence to  plead that should the court  find that  the respondent /plaintiff  was the appellant’s employee and or that he  was injured  while engaged  upon  his employment  with the appellant  thereby sustaining  amputation of the  left hand, and that  the appellant is  liable to pay him damages, then  out of such damages  should  be deducted the amount already  paid out  to the respondent under the Workmen’s Compensation Act.

The appellant nonetheless did not annex any payment voucher to the affidavit in support of an application for amendment and that ‘failure to adduce evidence’ and prove payment is what informed the decision of the trial magistrate to dismiss the application for leave to amend the defence.

The law is clear that a plaint or defence should not contain evidence but should plead only facts.  Under Order (old 6 Rule 3 of the Civil Procedure Rules which were applicable to this matter then:

“ subject to the provisions of this Rule  and Rules  6,7 and 8 every pleading  shall contain and contain only, statement in a summary form of the material facts  on which the  party  pleading  relies for his claim  or defence, but not  the evidence by which  those facts  are to be proved, and the statement shall  be as brief as the  nature  of the case  admits.”

Albeit  the respondent contends that  in the absence of the evidence of any payment  to him under the Workmen’s Compensation Act, the amendments sought are  a sham, it was  nonetheless not demonstrated  that the  amendment  sought  was immaterial  or useless or merely technical.

It  is not  in dispute that the plaintiff/respondent in his plaint  sought for  general damages both  under the statute-factories Act for  breach of duty of care  of the employer to its employee while  engaged  upon the work and under  common law.  It is also not in  dispute that where there  is an  award  made under  the statute, any  amounts paid under  the Workmen’s Compensation Act  would  be deductible and unless it is  pleaded by the defendant/appellant, it may not be allowed to adduce  evidence to prove an unpleaded fact since it is  trite law  that  parties are bound by their pleadings.  In  addition, the Civil Procedure  Rules have since  2010  changed in the sense that whether  a matter before the subordinate court or  in the superior court , at the  trial court, Order 11 of the Civil Procedure Rules  which require full  discovery  and exchange  of all the documents  that parties  intend  to rely on at the hearing  of a suit must be complied with fully before a certificate can issue for the hearing of a suit can commence.

It therefore  follows that whether  or not  the appellant  annexed  a  copy of  payment  voucher  to the affidavit  in support of its  application for  amendment of  the defence, it would nonetheless  be required  to file  and serve  upon the respondent  such documents  that it would wish to rely on in defence  as part of the pre-trial requirements.

The suit in my view would be caught up by the 2010 amendments to the Civil Procedure Rules that introduced Order 11 which mandate that pretrial directions must be given after the court is satisfied that all the pretrial requirements are complied with.

The appellant would still be required at the trial, whether   or not the trial extended into the new 2010 Civil Procedure Rules, to adduce evidence to prove their allegations.  They did not have to adduce evidence at the time of seeking for leave to amend the defence and such failure cannot be interpreted to mean that they had no evidence to prove the allegation.

In my view, the trial magistrate therefore acted on wrong principles  when  he exercised  the discretion to deny the appellant the proposed  amendment  since at that stage, the appellant was not necessarily required  to adduce evidence to satisfy  the court that it had paid  to  the respondent any compensation pursuant to the Workmen’s  Compensation Act.

In my view, to require evidence  at that stage would be  engaging  in a mini-trial  without  according  parties  an opportunity  to gather sufficient  evidence  to support  their respective  positions, and  thereby  exercising  discretion  to oust  the  appellant  from the judgment seat.

This appeal landed in the new constitutional dispensation where Access to justice is now a fundamental right guaranteed under the Constitution and espoused in Article 48 of the constitution of Kenya, 2010.  This  right ties  up with the  right to a hearing  and fair trial under  Article 50(1)  of the Constitution, which  right cannot be limited as contemplated  in Article  25 of  the  Constitution.

It is for the above reasons that I hold, just like courts have  held over time and  repeatedly that the power to  amend  pleadings  can be exercised  by the court at any stage  of the proceedings (including appeal stages); and that as a general  rule, however late, the amendment   if sought should be allowed if made in good faith  provided costs can compensate  the other side; that the proposed  amendments  must not  be immaterial  or useless or merely technical; that if the  proposed  amendments  introduce  a new cause of action or new ground  of defence it can be allowed unless  it would  change  the action into one of a substantially different  character  which could more  conveniently  be made the  subject  of a fresh  action (see Court of Appeal decision  in Elijah Kipngeno Arap Bill  v KCB  Ltd (2013) e LKR in which  the Court of Appeal upheld its  earlier  decision Joseph Ochieng & 2 Others v First National Bank of Chicago, Civil appeal 149/1991, citing  with approval Bullen & Leaks & Jacobs precedents  of pleading, 12th  Edition ).

As to whether  the application was  belatedly  brought, I note that the defence was filed on  22nd April 2009 and a reply to defence  filed on  4th April 2009  and on 22nd January 2010 the application  for leave to amend filed by which time the pleadings  had closed up but the respondent  had not  taken any steps to  set down the suit  for hearing.  It cannot, in my view, therefore be correct for the respondent to contend that the application and hence this appeal is intended to delay the just and expeditious disposal of the suit in the court below.  In my view, had that application to amend the defence been allowed, with an order for costs to compensate the respondent, the suit would have been determined by now.  The respondent has had to wait for over 5 years while this appeal was pending.

This court has also not seen any prejudice or injustice  that would have been occasioned to the respondent had the proposed amendments been allowed as it has not been shown that there would have been any such prejudice.

I am enjoined by the Court of appeal decision in Eastern Bakery v Castellino (1958) EA 461where Sir Kenneth O’connor President of the Court of Appeal stated:

“ It will be sufficient  to say  that amendments  to  pleadings  sought before  the hearing should  be freely allowed, if they  can be made  without  injustice  to  the other side  and that there  is no injustice if the other side can be compensated  by costs.”

In the instant case, it is my  view that if leave is granted to the appellant  to amend  their defence, the respondent  would  also be entitled  to file  an amended  plaint  or further  reply to the amended defence.  The cases  of Eastern Produce  (K) Ltd (supra) and Gerlad  Owino Ojubo (supra) relied on by the respondent are irrelevant  to the circumstances  of this case  as the main issue  is whether  or not to  exercise  the discretion to allow an amendment  to pleadings (defence ) and not  on proof which will come much  later at the time of  a full trial.

The circumstances  of this case are  such that  if the amendment  sought is disallowed, then the appellant can only cross examine  the respondent   on the issue of  payments under Workmen’s Compensation and not adduce evidence of any such payments since parties are  bound by their pleadings and answers  in cross examination  cannot form a basis for one’s defence or case.

In addition the appellant would be estopped by the doctrine of res judicata, from bringing a new separate cause of action to claim for reimbursement of any monies that may have been paid to the respondent under the Workmen’s Compensation Act.

I also find that the amendment sought is necessary and not immaterial or useless or merely technical.

There has been no undue  delay in making the application as the  suit  had been dormant  for over  7  months   when that application for leave to amend the defence resuscitated the suit.

The amendment  sought, in my view, does not introduce  a new or inconsistent  cause  of action which  would  change the action into one  of a substantially character  which can only be more conveniently  made the subject  of a fresh action;  I do not see any vested interest  or accrued  legal rights which  will be affected; and  the amendment  does not occasion prejudice  or injustice to the respondent  which cannot  be properly  compensated  in costs.

It is for those  reasons that  I  allow this appeal, set aside the order dismissing the appellant’s application for leave to amend the defence in the court below made  on 22nd February 2010  and substitute it with an order allowing the amendment  sought vide the application dated 20th January  2010 for purposes of determining the real question or  issue in controversy; which is what adjudication of cases and effective  dispensation of substantive justice  to parties  under Sections 1A and 1B  and Article  159  of the Constitution is all  about.

I award costs of that application in the court below to the respondent.

The costs of this appeal shall abide by the outcome of the main suit in any event, to the successful party.

Dated, signed and delivered in open court at Nairobi this 15th day of July 2015.

R.E. ABURILI

JUDGE

15/7/2015

Coram: R.E Aburili J

C.A:      Samuel

Mr Wageri holding brief for Ms Kagucia for the appellant

Mr Cohen holding brief for Nzavi for the respondent

COURT - Judgment read and delivered in open court as scheduled.

R.E. ABURILI

JUDGE

15/7/2015