Automated Summary
Key Facts
The case involves a Preliminary Objection (PO) by SBM Bank (Kenya) Limited challenging the jurisdiction of the court under Section 8 of the Transfer of Businesses Act (TBA) in Civil Case E498 of 2022. The court ruled that the PO, which asserts the suit is time-barred, does not meet the threshold for a preliminary objection as it requires factual determination and must be addressed during trial. The plaintiff, Shem Eric Ariwi Arungu, did not submit written arguments despite court directions, and the defendant admitted jurisdiction in their Statement of Defence but later raised the limitation defense in a subsequent PO.
Tax Type
Not specified in the document; the dispute centers on procedural issues under the Transfer of Businesses Act rather than a specific tax category.
Issues
- The court also had to assess whether the plaintiff's suit constituted an abuse of the court process as part of the preliminary objection.
- The court was required to determine if it had jurisdiction to hear the case under Section 8 of the Transfer of Businesses Act (TBA), which the defendant argued rendered the suit time-barred and should be struck out.
Holdings
The court determined that the Defendant's Preliminary Objection, which raised the issue of limitation of actions under Section 8 of the Transfer of Businesses Act as a jurisdictional matter, must be tried during the trial rather than being resolved summarily. The court emphasized that the defendant had not amended their Statement of Defence to include the limitation of actions defence, and such a claim requires evidence and is not suitable for preliminary objection. The case was set down for hearing with these issues given due prominence during the trial.
Tax Issue Category
Other
Legal Principles
The court determined that the preliminary objection raised under Section 8 of the Transfer of Businesses Act (TBA) was not a pure point of law capable of being decided in limine. It emphasized that limitation of actions must be specifically pleaded under Order 2 rule 4 of the Civil Procedure Rules, requiring trial rather than summary dismissal. The ruling also referenced the Mukisa Biscuits case, noting that preliminary objections must arise by clear implication from pleadings and be capable of decimating the suit.
Precedent Name
Mukisa Biscuits Manufacturing Co. Limited v West End Distributors Ltd.
Cited Statute
- Transfer of Businesses Act
- Civil Procedure Rules
Judge Name
F. Gikonyo
Passage Text
- Although it may be argued that, a challenge to the jurisdiction of the court may be raised at any time, in this case, however, application of the TBA to this suit has been denied by the defendant and there is a joinder of issues thereto. These legal imperatives make application of the TBA to this suit a matter for trial.
- Thus, matters constituting the PO are for trial rather than a summary procedure attending the practice of a Preliminary Objection. Accordingly, the PO will be tried in the trial.
- Limitation of actions as a defence must be specifically pleaded. Order 2 rule 4 of the Civil Procedure Rules.