× Digital News Videos Africa Health & Science Opinion Columnists Education Lifestyle Cartoons Moi Cabinets Arts & Culture Gender Planet Action Podcasts E-Paper Tributes Lifestyle & Entertainment Nairobian Entertainment Eve Woman TV Stations KTN Home KTN News BTV KTN Farmers TV Radio Stations Radio Maisha Spice FM Vybez Radio Enterprise VAS E-Learning Digger Classified Jobs Games Crosswords Sudoku The Standard Group Corporate Contact Us Rate Card Vacancies DCX O.M Portal Corporate Email RMS


How the ‘overriding objective’ affects a matter before court

By | Jun 7th 2010 | 4 min read

By Wahome Thuku

Salmon Ndalo Obede had a promising career as the Nakuru branch manager for the National Bank of Kenya (NBK).

But things fell apart and he was dismissed.

Consequently, on February 2005, Mr Ndalo sued the bank in Nakuru for wrongful dismissal through lawyer G A Ndeda. He also claimed Sh4,784,411 as compensation, against the bank.

On February 9, 2005, the bank, through lawyer Christopher Kenyariri filed a defence and a counterclaim of Sh23,618,415 against Ndalo.

The bank argued Ndalo was dismissed due to poor management and mismanagement of the advances department at the branch.

NBK also claimed he granted unsecured loans to individuals contrary to the bank’s guidelines.

At the time, the bank did not have documentary evidence of the advances it claimed he gave out.

Two days later, NBK applied to the court for leave to amend the counterclaim and include a detailed list of the advances. They said they had failed to get the list due to change of management.

On February 27, last year, Lady Justice Martha Koome dismissed that application, saying the names of borrowers were not necessary in the matter.

On June 12, last year, the bank filed an appeal at the Court of Appeal in Nairobi.

Meanwhile, NBK went before another High Court judge Justice William Ouko seeking orders to have the proceedings before Koome suspended pending hearing and determination of the appeal.

On January 22, Justice Ouko delivered his ruling and declined to suspend the proceedings.

Lawyer Kenyariri went back to the Court of Appeal and filed an application for orders to suspend the proceedings before Lady Justice Koome. He said his appeal raised 12 grounds and he set them out submitting that he had an arguable appeal.

NBK Legal Services Manager Damaris Gitonga said by the time they made the application before Justice Ouko, they had lodged the appeal against Lady Justice Koome’s ruling.

Mr Kenyariri said if the case in Nakuru was allowed to proceed, it would be concluded and the appeal would be rendered useless.

The bank would have been denied a chance to ventilate its defence and counterclaim for the Sh23.6 million, yet Ndalo’s claim against the NBK was only Sh4.7 million.

Ndalo’s lawyer, Mrs Ndeda submitted that the bank had not demonstrated any of their grounds of appeal was arguable. The bank had not demonstrated how the intended list of borrowers would assist the court in determining the matter.

She said the fact the counterclaim was time barred was beyond contest as clearly reasoned by Justice Koome.

The issue of irregular advances should have been raised six years earlier, when the bank was sacking Ndalo, she argued.

She said the bank was only trying to buy time against the determination of her client’s main case.

She said the appeal would not be rendered useless because if the bank succeeded, Ndalo was not a poor man and would refund the Sh4.7 million. The bank could still proceed with the counterclaim since the names of those granted the alleged irregular advances were in the list.

Rule 5(2)(b) of the Court of Appeal Rules sets out two requirement for the judges to consider in determining whether to grant a stay (suspend) the proceedings.

Arguable appeal

One, they must satisfy themselves that the intended appeal is arguable and not frivolous. Two, they must satisfy themselves that unless the stay is granted, the intended appeal would be rendered nugatory even if it succeeds.

The three judges were satisfied that NBK had an arguable appeal and grounds were not frivolous.

They also concurred if the proceedings in Nakuru were not suspended, the case would be determined and the appeal would be rendered useless.

Having dealt with the two principles, the judges considered a third requirement known as the "overriding objective" (double O) principle. It is now commonly regarded as O2 or Oxygen principle.

The principle requires judges to take a broader view of justice in cases before them.

"Perhaps we can now safely observe that while the two requirements under rule 5(2)(b) have in the past served the cause of justice very well and will continue to do so after the enactment of the overriding objective as stipulated in section 3A and 3B of the Appellate Jurisdiction Act…they can no longer be regarded as exhaustive," they stated and explained in details the position and application of the O2 principle law.

They held that both Ndalo’s claim and the counterclaim filed by the bank had to be treated equally until the appeal was heard on merit. Besides, no party had obtained a final judgment.

All factors

Putting them both at equal footing was the just thing in the circumstances.

The two figures in the claim and the counterclaim required the court to treat them proportionately to enable the High Court make a decision that would take all the factors into account.

Also to enable the High Court determine who pays the cost should the appeal succeed.

"One of the aims of the O2 principle is to deal with the cases or appeals with a sense of balance and proportionality," they ruled.

They added: "We think a stay order at this stage would be the most effective way of achieving all these aims."

With that the proceedings pending in Nakuru were suspended, pending determination of the appeal when costs would also be determined.

— The writer is a court reporter with The Standard

[email protected]

Share this story
Silent disaster 05/06/10
When Njonjo almost resigned over coffee smugglers
Known as the era of black gold, it began in 1976 when Ugandan farmers decided to sell their coffee in the private market.