Case ID:203413

Patel & another v Victoria Commercial Bank Limited & 2 others (Environment & Land Case E392 of 2021) [2022] KEELC 12726 (KLR) (30 September 2022) (Ruling)

Case Metadata

Case Number:

Environment & Land Case E392 of 2021

Parties:

Patel & another v Victoria Commercial Bank Limited & 2 others

Date Delivered:

30 Sep 2022

Case Class:

Court:

Environment and Land Court at Nairobi

Case Action:

Ruling

Judge(s):

Edward Karoph Wabwoto

Citation:

Patel & another v Victoria Commercial Bank Limited & 2 others (Environment & Land Case E392 of 2021) [2022] KEELC 12726 (KLR) (30 September 2022) (Ruling)

Advocates:

Ms. Aisha for the Plaintiffs, Ms. Wangari for the 1st Defendant

Court Division:

Environment and Land

County:

Nairobi

Advocates:

Ms. Aisha for the Plaintiffs, Ms. Wangari for the 1st Defendant

Disclaimer:

The information contained in the above segment is not part of the judicial opinion delivered by the Court. The metadata has been prepared by Kenya Law as a guide in understanding the subject of the judicial opinion. Kenya Law makes no warranties as to the comprehensiveness or accuracy of the information

Patel & another v Victoria Commercial Bank Limited & 2 others (Environment & Land Case E392 of 2021) [2022] KEELC 12726 (KLR) (30 September 2022) (Ruling)

Neutral citation:

[2022] KEELC 12726 (KLR)

Republic of Kenya

In the Environment and Land Court at Nairobi

Environment & Land Case E392 of 2021

E K Wabwoto, J

September 30, 2022

Between

Narendra Kumar Ramanbhai Patel

1

st

Plaintiff

Geeta Narendra Kumar Patel

2

nd

Plaintiff

and

Victoria Commercial Bank Limited

1

st

Defendant

Ashwin Ramanbhai Patel

2

nd

Defendant

Registrar of Titles

3

rd

Defendant

Ruling

1.

This Ruling is in respect to the 1

st

Defendant’s Preliminary Objection dated April 19, 2022. The Preliminary Objection is raised on the following grounds:

i.

The Plaintiffs’ suit as against the 1

st

Defendant whose cause of action is founded on alleged breach of statutory duty of care and negligence is statute time barred by virtue of Section 4(2) of

Limitation of Actions Act

ii.

That the suit against the 1

st

Defendant is fatally incompetent, incurably bad in law and the same should be struck out or dismissed with costs to the 1

st

Defendant.

2.

Section 4(2) of the

Limitation of Action Act

Chapter 22 law of Kenya. Section 4(2) of the

Limitation of Actions Act

states that:

“

An action founded on tort may not be brought after the end of three years from the date on which the cause of action accrued:

Provided that an action for libel or slander may not be brought after the end of twelve months from such date.”

3.

The facts of the case are that on September 11, 1997, the Plaintiffs being the owners of the suit property- LR No 209/5227 charged the property to the Victoria Commercial Bank Limited (1

st

Defendant) for purchase of land for Kenya Shillings Two Million Five Hundred Thousand shillings only (Kshs. 2,500,000/-).

4.

Following the Plaintiffs relocation to the United States in 2001, they instructed the 2

nd

Defendant to collect rent from the suit property and pay the monthly loan instalments to the 1

st

Defendant. In 2001, the 1

st

Defendant released the security documents to the 2

nd

Defendant and proceeded to discharge the property.

5.

The 1

st

Defendant submitted that any claim founded on breach of fiduciary duty is tortious nature and ought to have been filed within 3 years of such discovery. They further reiterated that they acted rightfully based on instructions from the Plaintiffs to discharge the property following the remittances made by the 2

nd

Defendant.

6.

In submissions dated July 15, 2022, the Plaintiffs relied on Article 50 of

the Constitution

, Section 4(1) and Section 26 of the

Limitation of Actions Act

. They submitted that there was a duty of care based on contractual relationship between the Plaintiff and 1

st

Defendant and that the cause of action arose in 2016, when they discovered the fraud by the 2

nd

Defendant.

7.

Having perused the written submissions, it is evident that the issues for determination before this Court are;

i.

Whether the threshold to raise a Preliminary Objection has been met?

ii.

Whether the Preliminary Objection is merited?

8.

It is trite law that a Preliminary Objection must be raised on a point of law as reiterated in the case of

Mukhisa Biscuits Manufacturing Co. Ltd V. West-End Distributors Limited

(1969). E.A 696. Having raised the objection on a specific provision of the law, the preliminary objection would be alive and within the jurisdiction of this court.

9.

In the case of

Gathoni –vs- Kenya co-operative Cremires Ltd

(1982) KLR 104 Potter, JA stated the rationale of the Law of Limitation as follows: -

“

The law of limitation of actions is intended to protect defendants against unreasonable delay in bringing of suits against them. The statute expects the intending plaintiff to exercise reasonable diligence and to take reasonable steps in his own interest.”

10.

Section 26 of the

Limitation of Actions Act

provides:

“

Where, in the case of an action for which a period of limitation is prescribed, either:

(a)

) the action is based upon the fraud of the defendant or his agent, or of any person through whom he claims or his agent; or

(b)

the right of action is concealed by the fraud of any such person as aforesaid; or

(c)

the action is for relief from the consequences of a mistake, the period of limitation does not begin to run until the plaintiff has discovered the fraud or the mistake or could with reasonable diligence have discovered it.”[Emphasis Mine]

11.

With regard to whether the Preliminary objection is merited, the question before this Court is to determine when the cause of action accrued. In

B Mathayo Obonyo v South Nyanza Sugar Company Ltd

, ,Majanja J. was guided by the Black’s Law Dictionary (10th Edition) and stated as follows:

“

The word “accrue” means ‘to come into existence as an enforceable claim or right’...To hold that the cause of action accrues at the end of the contract period is inconsistent with the meaning of the legislative language and in particular the ordinary meaning of the term, “accrue…It is the breach that gives rise to the cause of action. …the right to sue for breach of contract arose when one of the parties failed to meet its obligations under the contract”

12.

It is an undisputed fact that a contractual relationship was formed between the Plaintiffs and the 1

st

Defendant in the year 1997. The release of the security documents is also not disputed to have taken place in 2001.In this instance, the cause of action would have accrued in 2001 upon the release of documents however the Plaintiffs posited the occurrence of a fraud which was discovered in 2016.

13.

The case is hinged upon performance of the contract. To my mind, all claims arising in the suit undoubtedly stem from the contract, therefore, the cause of action would arise from contract entered between the parties. On the aspect of fraud as pleaded by the Plaintiff, Section 26 of the Limitations of Actions Act would therefore act as a perpetual shield against it being time-barred. The Court is guided to uphold the spirit of law that protects its citizens in quagmires perpetuated by fraud.

14.

In the foregoing, I find the preliminary objection dated 19

th

April 2022 is unmerited and hereby do dismiss the same with costs.

15.

It is so ordered.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 30

TH

DAY OF SEPTEMBER 2022.

E. K. WABWOTO

JUDGE

In the presence of: -

Ms. Aisha for the Plaintiffs.

Ms. Wangari for the 1

st

Defendant.

N/A for the 2

nd

and 3

rd

Defendants.

Court Assistants; Caroline Nafuna and Philomena Mwangi.

E. K. WABWOTO

JUDGE