- By a Judgment dated 24/2/2023, the trial court dismissed the Appellant’s suit against the Respondent on the basis that while the debt was admitted by the Respondent to be due and payable, when the Appellant made a demand to the Respondent, a third party wrote back and undertook to pay the said sum on behalf of the Respondent. The court viewed and determined the letter of 10/12/2018 a promissory note and which absolved the Respondent from liability by obligating the third party to meet the duty to settle the debt. Even at this very early stage the court notes that no third party directions were issued by the court.
- In order to contextualize that decision and in terms of the court duty on first appeal, the court must analyze and examine the entire corpus of the material presented at trial with a view to coming at its own conclusion as to whether the claim presented to court was properly determined based on the evidence availed and the law applicable. In so proceeding, the court appreciates the law that both the parties and the court are bound by the pleadings filed and a court of law has no mandate to determine an issue not pleaded unless the same was left for determination of the court by the parties[1].
- The Appellant, as Plaintiff at trial, specifically and without equivocation pleaded that it did advance the sum pleaded to the Respondent and that the Respondent issued own cheques as a security for payment of the same.
- The Appellant exhibited his own cheques and those issued in his favor by the Respondent all dated 29/8/2018. From those documents and in the absence of others to the contrary, the court takes the view that there was a valid contract by which the Respondent undertook to pay to the Appellant a sum of Kshs. 3,000,000/= on the 29/8/2018. That fact was found by the trial court not to have been denied by the Respondent.
- While the statement of defense filed was a bare denial, from paragraph 3 to paragraph 11, there was an alternative and without prejudice pleading that one Vijay Pindora took over the respondent’s obligations to pay by a letter dated 10/12/2018, undertaking to pay the debt.
- That document was equally produced at trial as an exhibit and the trial court was persuaded that the letter was indeed a promissory note by which the third party had absolved the Respondent from liability to the Appellant.
- In coming to its determination, the court followed the law enunciated and reiterated by the Court of Appeal. In National Bank of Kenya Ltd –vs- Pipe Plastics Samkolit Ltd [2011] KLR to the effect of that a court of law cannot re-write a contract for the parties.
- To this court, the law that all else, including the court, are obligated to respect parties negotiated agreement is beyond debate. It is not only the court that is prohibited from tinkering with the parties bargain and terms of the contract but all else are. Even either party is equally obligated to respect the agreement and lack capacity to unilaterally alter the terms.
- For this case, the contract between the Appellant and the Respondent is not disputed to be that the Appellant having advanced the Respondent the sum of Kshs. 3,000,000/=, the Respondent on his part covenanted to refund the sum on a due date and issued cheques for the due date.
- The first part of the contract of advance to the Respondent was duly performed and not in dispute. The dispute concerns the second part of the contract and regarding the Respondent’s covenant to the Appellant.
- Being a contract, it remained to be performed in full unless re-written by the parties or adjudged vitiated by the court or a tribunal mutually chosen by the parties. At trial no evidence was led that the two agreed to re-write their contract and shift the obligation from the Respondent to the third party.
- There was equally no evidence that when the letter dated 10/12/2020 was written and received by the Appellant’s advocates its terms were accepted in whole or as an addendum to the agreement between the parties.
- To the court, that letter was almost a novation or an offer by the third party to the Appellant. For the letter to have amounted to a novation of the contract, its terms had to be accepted by the Appellant. As said before there was no such acceptance and no novation arose. Even at the level of an offer, it demanded an acceptance which was also not demonstrated by evidence to the court.
- This court thus finds that there was no proof that the contract and covenant by the Respondent to pay to the Appellant the suit sum had been varied or novated to shift obligation to pay from the Defendant to the third party. For that reason, the trial court was plainly wrong in determining that the third party was liable in contract for the Appellant in place of the Respondent. For that reason, the judgment is set aside and in its place substituted with an order that judgment be entered for the Plaintiff against the Defendant in the sum of Kshs. 3,000,000/= with costs and interest calculated from the 29/8/2018 being the day the sum was agreed to be due to the Appellant.
- The court would stop at this juncture but the court notes that how to handle third party proceedings became a challenge to the trial court.
- As designed, third party proceedings are claims by a Defendant against a third party to the suit and limited to claim for contribution, indemnity, or any relief or remedy, connected and substantially the same as the claim by the Plaintiff, which becomes necessary for determination between the three parties.
- The law obligates the Defendant to apply, within 14 days after close of pleading, for leave to issue a third Party Notice. In this matter the last pleadings filed was the Reply to Defense filed on 8/8/2019 yet the application for leave and directions was filed on 9/10/2019. It cannot be confirmed that the application was filed within the legal timelines set by the law. When the application came up for hearing, it was allowed by consent as the Appellant’s counsel did not oppose it. What is curious is that it was allowed as prayed in prayers 1 and 2 only.
- It is curious because prayer 2 sought directions from the court but none was given. It would have been different had prayer 3 been allowed. To add to the lack of clarity on the part to be played by the third party, there is no evidence that the Third Party Notice was ever taken out nor served so that the court would proceed under Order 1 Rule 22, Civil Procedure Rules, had the third party contested the claim against him.
- It is a third party notice, which defines the nature of the claim which joins the third party to the proceedings. Without it being issued and served the third party is not a party to the proceedings.
- A reading and perusal of the record reveals that neither an affidavit of service upon the third party nor an appearance/defense by third party exist. No wonder no directions were even sought nor given by the court.
- It is thus obvious that the same party was not a party to the proceedings against whom a claim had been made to respond thereto. He was thus not a party to be burdened by a judgment issued in a suit he was a stranger to. The judgment against the third party was thus no judgment at all having been issued in furtherance to any pleadings.
- Flowing from the principles that both the parties and the court are bound by the pleadings filed, the judgment against the third party must be set aside as of right and the dictate of the law that none shall be condemned unheard. This comment is necessary so that a court faced with third party proceeds observe the need to comply with the law on trial of a third party claims before the matter proceeds to hearing by ensuring that the cited third party is properly joined and appropriate directions given to guide the filing of pleadings by the parties so that the judgment of the court flows from the pleadings filed and from participation by parties who wish to participate after due service.
- The upshot is that the appeal is allowed, the judgment of the trial court against the third party is set aside and in its place substituted a judgment against the Respondent with costs and interests.
Dated signed and delivered at Nairobi this 22nd day of March 2024
Galaxy Paints Co. Limited v Falcon Guards Limited [2000] 2EA 385 ↑