Introduction and Background
1. This ruling determines the 1st and 2nd defendant’s application dated 12th July 2024. The application is brought under the provisions of Order 2 rules 15(1)(b), (c) and (d), Order 2 rule 4(1) of the Civil Procedure Rules and section 4(1)(a) of the Limitation of Actions Act Cap 22 Laws of Kenya. The applicants seek an order striking out the plaintiff’s suit on grounds that it is statute-barred.
2. The applicants argue that the plaintiff’s claim arises from a contract and is based on a continuous cause of action, premised on architect’s certificates issued between 7th February 2009 and 13th December 2011. They contend that the debt became due on 13th December 2011, when the final interim certificate was issued, thereby rendering the suit time-barred. According to them, a cause of action in a contractual claim accrues when the debt becomes due, which is when the right to sue arises.
3. The respondent, a contracting company, opposes the application. Their position is that after completing the construction project for which they were awarded the contract by the applicants, the project architect issued the final account and certificates for Kshs. 116,261,185.94 on 20th April 2015. Of this amount, the respondent is owed Kshs. 73,668,495.04. To partially settle this debt, an agreement was reached to transfer ownership of certain houses within the development, but the applicants failed to deliver the title documents leading to the filing of this suit on 19th February 2019. The respondent seeks specific performance of the breached contracts and compensation.
Analysis and Determination
4. I have carefully considered the pleadings, responses submissions and authorities cited by the parties. The main issue before the court is as to when the cause of action arose; was it 13th December 2011 when the last of the interim certificates was issued or was it 20th April 2015 when the final accounts were rendered by the architect? The applicants invoke section 4(1)(a) of the Limitations of Actions Act which states as follows:
“The following actions may not be brought after the end of six years from the date on which the cause of action accrued:
actions founded on contract.”
5. The present claim is based on a contractual agreement, making the limitation period six years from the date of accrual of the cause of action. To determine when the cause of action accrued, I refer to the case of South Nyanza Sugar Company Limited V Dickson Aoro Owuor, [2017] eKLR where the Court held as follows:
“There is no doubt in this matter that the parties entered into a contract and which contract was allegedly breached. What is for determination is when exactly the cause of action accrued since from that time the limitation period of 6 years starts running? I do not find that issue difficult to decide on. I say so because when a party enters into a contract for a specific period of time, it does so in the understanding and belief that each of the parties to the contract will observe its part thereof until full execution of the contract. It is only when one of the parties happens to be in breach of the contract that a possible cause of action arises as at that date of the alleged breach and not at the end of the contract period.”
6. It is undisputed that the respondent issued multiple interim certificates, numbers 1 to 20, between 7th September 2009 and 13th December 2011. Each certificate created a new payment obligation for the applicants, despite all arising from the same contract. Since these certificates were issued progressively as the project advanced, they served only as interim payment demands until the final certificate was issued. Therefore, even if the respondent had filed suit to claim payment for each interim certificate, such claims would not have been final, as the final certificate ultimately consolidates all previous interim payments.
7. I find that the full enforceable debt became due only upon the issuance of the final architect’s certificate, amounting to Kshs. 116,261,185.94, on 20th April 2015 (pages 236–239 of the plaintiff’s documents).
8. This position is supported by prayer (a) in the plaint dated 14th February 2019, which clearly seeks Kshs. 73,668,495.04 from the total amount in the final certificate, with interest accruing from its issuance date. The claim is not based on the interim certificates.
9. Besides this, the other prayers in the plaint stem from separate contractual agreements between the parties, as evidenced by the sale agreements found on pages 83-95, 100-112, 119-131, 138-150, 154-166, 171-183, 188-200, 205-217 and 222-234 of the plaintiff’s documents. The contracts, all dated 31st October 2013, established new obligations, which the plaintiff claims were subsequently breached. The prayers sought in the plaint are therefore within time as relates to these contracts.
Disposition
10. Accordingly, the application dated 12th July 2024 seeking to strike out this suit is devoid of merit. It is hereby dismissed with costs.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 21ST DAY OF FEBRUARY 2025.
F. MUGAMBI
JUDGE