Geoloy Investments Ltd v Behal t/a Krishan Behal & Sons[2002] eKLR

Key Facts

Transaction Type

Issues

• The court analyzed whether a 'without prejudice' letter from the defendant could be admitted as evidence of debt. It referenced cases like Oliver v Nautilus and the Cooperative Bank case, concluding that the letter was admissible because it was not part of negotiations but an admission of debt. The court rejected the argument that the 'without prejudice' marking automatically excludes it from evidence.
• The court evaluated the defendant's application to set aside an ex parte judgment entered on 17.4.2002. The defendant argued that he had sufficient reasons for not appearing and not opposing the plaintiff's application, citing Order 9B rule 8 and other legal provisions. The court examined the failure to file a replying affidavit under Order 50 rule 16 and concluded that the application was unopposed, thus the judgment could not be set aside.

Holdings

• The court ruled that the plaintiff's 'without prejudice' letter of 25.1.2002 was admissible as evidence of the defendant's debt admission. It rejected the defendant's argument that such letters are inadmissible, citing cases like Cooperative Bank of Kenya Ltd v Shiraz Sayani and National Industrial Credit Bank Ltd v Yandal Enterprises Ltd, which clarified that 'without prejudice' communications are not protected if they constitute admissions of liability.
• The court dismissed the defendant's claim that parts of the plaintiff's supporting affidavit should be struck out, finding no basis for such a challenge. It concluded the affidavit's content was valid and relevant to the proceedings.
• The court dismissed the application to set aside the ex parte judgment of 17.4.2002, finding that the defendant (Mr. Kariuki) did not oppose the plaintiff's application as required by Order 50 rule 16 of the Civil Procedure Rules. The defendant's failure to file a replying affidavit or attend court left the application unopposed, rendering the ex parte judgment valid.
• The court found no merit in the defendant's argument that introducing two 'RD' cheques at the stage of the setting aside application was irregular. It concluded the cheques added nothing material to the case, as the debt had already been admitted in the 'without prejudice' letter.

Remedies

Contract Value

Monetary Damages

Legal Principles

• The court determined that a 'without prejudice' letter can be admissible as evidence of debt admission if it constitutes an unequivocal acknowledgment of liability, not part of settlement negotiations. This aligns with the principle that such communications are protected only when they form part of genuine settlement discussions, as clarified in cases like Cooperative Bank of Kenya Ltd v Shiraz Sayani.
• The court emphasized procedural compliance with Order 50 rule 16 of the Civil Procedure Rules, which requires a respondent to file a reply affidavit or opposition statement three days before a hearing. The defendant's failure to do so rendered the application unopposed, justifying the ex parte judgment.

Precedent Name

• National Industrial Credit Bank Ltd v Yandal Enterprises Ltd & 2 others
• Kurtz & Co v Spence & Sons
• Walker v Wilsher
• Oliver v Nautilus Steam Shipping Co Ltd
• Rabin v Mendoza & Co
• La Roche v Armstrong

Cited Statute

• Evidence Act
• Civil Procedure Rules
• Civil Procedure Act

Judge Name

Passage Text

• In sum the application is dismissed with costs.
• In this matter the applicant did not file a replying affidavit or grounds of opposition to the plaintiff's application dated 4.3.2002 three clear days before its hearing on 17.4.2002. So in the terms of Order 50 rule 16 (1) Civil Procedure Rules he did not wish to oppose that application.
• The court may add an extract from HCCC (MIL) No 213/99 National Industrial Credit Bank Ltd v Yandal Enterprises Ltd & 2 others where again 'without prejudice' documents were being regarded by Ransley C.A. He quoted from Sakar: On Evidence, 14th Edn page 359 under the scope 'Exceptions': 'The rule, however, is strictly confined to cases where there is a dispute or negotiation, and suggestions are made for settlement thereof. Where this is not the case .... the sender of a letter cannot impose on the recipient any condition as to the mode in which it may be used by marking it 'without prejudice.'

Damages / Relief Type