EQUITY BANK (K) LIMITED VS PHILIP OKELO ORWA T/A ESQUIRE DIVERSITY AND NYALUOYO AUCTIONEERS

1. This is an interlocutory appeal against the decision of the Senior Resident Magistrate Hon. K.I. Orenge (Mr.) dated 18^th February 2020 in the Nairobi Chief Magistrate's Court Civil Suit No. 5096 of 2016. The suit was instituted by the Respondent through a Plaint dated 3^rd August 2016 seeking an order of permanent injunction barring the Appellant from selling, advertising for sale and/or unconditional release of the motor vehicle KCD 379A, the settlement of account and ascertainment of balances.
2. The Appellant (Defendant in the lower court) filed a Notice of Motion dated 30^th January 2019 seeking enlargement of time to file its statement of defence and counterclaim out of time.
3. Through the impugned ruling, the learned magistrate dismissed the Appellant’s application with costs as he was not persuaded by the explanation for the delay.
4. Aggrieved, the appellant instituted this appeal through a memorandum of appeal dated 16^th March 2020, on the following grounds:-
5. THAT the Learned trial Magistrate misdirected himself and erred both in law and in fact by holding and exercising discretion in favour of the 1st Respondent whereas on a balance of probability, the Appellant had depicted triable issues in its draft Defence and Counterclaim;
6. THAT the Learned trial Magistrate misdirected himself and erred both in law and in fact by failing to consider that there being no interlocutory Judgment entered in this matter, the issue of whether the Appellant's draft Defence and Counterclaim raising triable issues or not does not arise;
7. THAT in the alternative, the Learned Magistrate failed to consider that the 1^st Respondent would not be prejudiced in any way as the 1^st Respondent has not taken steps to request for an interlocutory judgement as against the Appellant;
8. THAT the Learned trial Magistrate misdirected himself and erred in law and in fact by failing to consider the nature of the contractual relationship between the 1^st Respondent and the Appellant herein, and the obligations arising therefrom and the reasons advanced for the failure by the Appellant's advocate to file the Defence and Counterclaim in good time;
9. THAT the Learned trial Magistrate erred both in law and in fact by not properly considering the evidence on record and holding that the 1^st Respondent will be unfairly prejudiced with the filing of the Defence and Counterclaim out of time; the Learned trial Magistrate ought to have exercised his discretion in favour of the Appellant and strive to do substantive justice by allowing the Application dated 30^th January 2019;
10. THAT that the Learned trial Magistrate misdirected himself and erred in law and in fact by failing to properly consider the Appellant's submissions on record thus arrived at an erroneous finding;
11. THAT the Learned trial Magistrate erred in law and in fact by failing to uphold precedent and the doctrine of stare decisis.
12. THAT that the Learned trial Magistrate misdirected himself and erred in law and in fact by failing to properly consider that the Appellant has a constitutional right to be heard, and that parties should not be deterred from approaching the seat of justice and that by dismissing the Appellant's Application renders the whole suit un-rebutted.
13. The appellant prays that its appeal be allowed; that the Ruling delivered on 18^th February 2020 be set aside; that it be allowed to file its Defence and Counterclaim out of time; that without prejudice to the foregoing, the Appellant be condemned to pay the 1^st Respondent costs for the delay occasioned in filing its Defence and Counterclaim; that the order made for dismissal of the application be reviewed and/or set aside and vacated and that the costs of this appeal be awarded to the Appellant in any event.
14. The Appeal was canvassed through written submissions. The appellant and the respondent filed written submissions dated 11^th September 2023 and 8^th May 2024 respectively.

Analysis and Determination

1. I have considered the memorandum of appeal, the record of appeal, the supplementary record of appeal, and the parties’ respective submissions. This appeal is against the exercise of the learned magistrate’s discretion to disallow the Appellant’s application for enlargement of time to file its defence out of time.
2. In Mbogo & Another v Shah [1968] EA 96 the Court stated as follows:

“I think it is well settled that this court will not interfere with the exercise of discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matters on which it should not have acted or because it failed to take into consideration matters which it should have taken into consideration and in doing so arrived at a wrong conclusion…”

1. The Appellant applied enlargement of time to file its defence out of time under Order 50 Rules 6 and 7, Section 95 of the Civil Procedure Act and Article 159(2) of the Constitution. I will restate the law as hereinbelow.
2. Order 50 Rules 6 and 7 of the Civil Procedure Rules provide as follows:

“6. Where a limited time has been fixed for doing any act or taking any proceedings under these Rules, or by summary notice or by order of the court, the court shall have power to enlarge such time upon such terms (if any) as the justice of the case may require, and such enlargement may be ordered although the application for the same is not made until after the expiration of the time appointed or allowed:

Provided that the costs of any application to extend such time and of any order made thereon shall be borne by the parties making such application, unless the court orders otherwise.

7. The time for delivering, amending, or filing any pleading, answer or other document of any kind whatsoever may be enlarged by consent in writing of the parties or their advocates without application to the court.”

1. Section 95 of the Civil Procedure Act, provides:

“Where any period is fixed or granted by the court for the doing of any act prescribed or allowed by this Act, the court may, in its discretion, from time to time, enlarge such period, even though the period originally fixed or granted may have expired.”

1. Article 159(2) (d) of the Constitution provides that in exercising judicial authority, the courts shall be guided by the principle that justice shall be administered without undue regard to procedural technicalities.
2. Order 7 Rule 1 of the Civil Procedure Rules provides as follows:

“Where a defendant has been served with a summons to appear he shall, unless some other or further order be made by the court, file his defence within fourteen days after he has entered an appearance in the suit and serve it on the plaintiff within fourteen days from the date of filing the defence and file an affidavit of service.”

1. The Court’s power to enlarge time is discretionary and must be exercised judiciously. The Supreme Court in the case of Salat v IEBC and 7 others (Application No. 16 of 2014) [2014] KESC 12 (KLR) laid out the principles for consideration in determining whether to extend time for a matter, as follows:

“Extension of time is not a right of a party. It is an equitable remedy that is only available to a deserving party at the discretion of the Court; A party who seeks for extension of time has the burden of laying a basis to the satisfaction of the court. Whether the court should exercise the discretion to extend time, is a consideration to be made on a case to case basis; Whether there is a reasonable reason for the delay. The delay should be explained to the satisfaction of the Court; Whether there will be any prejudice suffered by the respondents if the extension is granted; Whether the application has been brought without undue delay; and Whether in certain cases, like election petitions, public interest should be a consideration for extending time.”

1. The circumstances of this case are that the suit was instituted by the Respondent through a Plaint dated 3^rd August 2016 seeking an order of permanent injunction barring the Appellant from selling, advertising for sale and/or unconditional release of the motor vehicle KCD 379A, the settlement of account and ascertainment of balances. Alongside the Plaint, the Respondent filed a notice of motion seeking a temporary injunction. That application was dismissed through a Ruling dated 20^th March 2017. The Respondent thereafter filed a second application dated 24^th October 2016 seeking that the suit motor vehicle be released to it. That application was also dismissed through a Ruling dated 20^th March 2017.
2. The Respondent appealed the Ruling and the High Court dismissed the appeal through a Judgment dated 22^nd November 2017. Thereafter, the Appellant filed its application for enlargement of time dated 30^th January 2019 seeking enlargement of time to allow its statement of defence and counterclaim out of time.
3. The Appellant’s explanation for the delay in filing its defence and counterclaim was that its advocate inadvertently failed to file the statement of defence while concentrating on defending the applications filed by the Respondent.
4. In his analysis, the learned magistrate observed  that ‘…being a matter of discretion for the court, in granting such enlargement of time, the court will consider the circumstances of each case, which varies from case to case.’ He went ahead to narrate the factors to consider on whether or not to enlarge time, including: indolence or unexplained delay, abuse of court process, prejudice to the defendant or the applicant.
5. He then observed thus: ‘The court should ensure that the respondent is not unfairly prejudiced by such enlargement. I have not been persuaded by the explanation for the delay and will not exercise discretion in favour of the applicant the application is dismissed with costs to the plaintiff.’ 
6. From the above, I note that the learned magistrate considered the established guiding principles. I also note that the learned magistrate considered the appellant’s explanation for delay but was not satisfied.
7. In the upshot, I find no reason to upset the lower court finding. The appeal is dismissed with costs to the Respondent.

JUDGMENT delivered virtually, dated and signed at NAIROBI

This 7^th day of November 2024.

…………………..………………

P. MULWA

JUDGE

In the presence of:

Mr. Omalla h/b for Ms. Rweya for appellant

N/A for respondents

Court Assistant: Carlos