The 60 days required for the Small Claims Court to determine a dispute were aspirational as the Small Claims Court Act did not provide any penal consequences for the breach of the 60 days

Brief facts

The instant application dated July 6, 2023 sought the transfer of Mombasa SCCC No E195 of 2023 Biosystems Consultants v Nyali Links Arcade Limited to the Chief Magistrates Court for hearing and disposal. The applicant submitted that the jurisdiction of the Small Claims Court ended after 60 days. That was due to a decision of the High Court in Kartar Singh Dhupar & Company Limited v ARM Cement PLC (In Liquidation) (Civil Appeal 129 of 2022) [2023] KEHC 2417 (KLR) (Commercial and Tax) (23 March 2023) (Judgment)(Kartar Singh Dhupar & Company Limited v ARM Cement PLC (In Liquidation)). The High Court in that matter stated that the judgment delivered by Small Claims Court in that matter was done outside the statutory timelines set under section 34 of the Small Claims Court Act and hence made without jurisdiction. That court therefore held that the judgment was a nullity, bereft of any force or effect in law.

The applicant argued that since the small claims case was filed on April 14, 2023 and as such 60 days had lapsed. The applicant was apprehensive that any judgment would be rendered nugatory, if delivered in such circumstances. The respondent was of the view that the court did not have jurisdiction and therefore the matter could not be transferred. They relied on the decision of the High Court in Kartar Singh Dhupar & Company Limited v ARM Cement PLC (In Liquidation) and stated that the matter stood dismissed beyond 60 days. There was a mention granted and the respondent had filed an application dated July 7, 2023 to strike out the suit.

Issues

1. Whether the Small Claims Court had the jurisdiction to determine a matter before it after lapse of the statutory sixty (60) days for the determination of a matter before it. 
2. What were the guidelines to give effect to the Small Claims Court and facilitate the disposal of the cases? 
3. What was the nature of a preliminary objection and whether both the High Court and the Small Claims Court had the same jurisdiction in determining a preliminary objection. 

Relevant provisions of the law

Small Claims Court Act, No 2 of 2016

Section 3 - Guiding principles

(1) In exercise of its jurisdiction under this Act, the Court shall be guided by the principles of judicial authority prescribed under Article 159(2) of the Constitution.

(2) The parties and their duly authorized representatives, as the case may be, shall assist the Court to facilitate the observance of the guiding principles set out in this section, to that effect, to participate in the proceedings of the Court and to comply with directions and orders of that Court.

(3) Without prejudice to the generality of subsection (1) the Court shall adopt such procedures as the Court deems appropriate to ensure

(a) the timely disposal of all proceedings before the Court using the least expensive method;

(b) equal opportunity to access judicial services under this Act;

(c) fairness of process; and

(d) simplicity of procedure.

Held

1. The claim was not a tax issue. It was for damages caused by the respondents alleged fraud. Tax matters had the respondent as the Kenya Revenue Authority. That was governed under the Tax Procedures Act, No 29 of 2015. The court would not delve into the same as it was much ado about nothing. That was also because the court below was also actively proceeding with the matter.
2. The so-called preliminary objection was not an objection but a response disguised as a preliminary point. The court was not involved in the finding of fact as the suit was heard on a preliminary objection. In hearing a preliminary objection, the court and the court below had the same jurisdiction. They proceeded on an understanding that what was pleaded in the plaint was true. It was what the English common law used to call a demurrer.
3. A preliminary objection must be based on current law, and be factual in its constitution. It could not be based on disputed facts or facts requiring further enquiry. When determining a preliminary objection only 3 documents were required in addition to the Constitution; the impugned law, the plaint and preliminary objection. If one had to refer to the defence, then the preliminary objection was untenable. The court below had jurisdiction to deal with the wrongful payments. The case in the court was not about taxable services rendered.
4. The guiding principles objective of the Small Claims Court Act was as set out in section 3 of the Act. The jurisdiction of the Small Claims Court was set out in section 12 of the Act. Under section 13 of the Act, there were certain exclusions to the jurisdiction of the Small Claims Court. It also provided for transfer of claims by a higher court to the Small Claims Court subject to section 12(3), that was the limit of pecuniary jurisdiction for not more than Kshs 1,000,000. The procedure for the court was also exclusive. In section 17 of the Act, the law required that the court exercised its own procedure, having regard to principles of natural justice. The Civil Procedure Act and Rules did not apply to the Small Claims Court. Indeed, even the application of the Evidence Act was severely restricted by section 32 of the Act .
5. An application had been filed in the Small Claims Court. The instant court had called for and perused the file. The proceedings had not been to the best of the requirements of the Small Claims Court. The respondent had placed road blocks everywhere. It was never envisaged that the Small Claims Court could be inundated with applications. That was because the time lines in the Small Claims Court were punishing.
6. The court was unable to agree with the conclusion of the court in Kartar Singh Dhupar & Company Limited v ARM Cement PLC (In Liquidation). The matters that were relied on turned on their own facts. That court relied on the decision of the Court of Appeal which overturned the judgement of the High Court in Parliamentary Service Commission v Public Procurement Administrative Review Board; Arprim Consultants (Interested Party) [2021] eKLR. Section 175 of the Public Procurement and Asset Disposal Act was self-executing and set forth consequences for noncompliance. The Act imposed the deadline of 45 days on the court and not the parties. 
7. The court in Kartar Singh Dhupar & Company Limited v ARM Cement PLC (In Liquidation) reviewed Martha Wangari Karua v Independent Electoral and Boundaries Commission & 3 others [2019] eKLR. In that decision, the Supreme Court reviewed the petition rules pursuant to the Constitution. The same gave a constitutional imperative. Those were election related matters where the time was cast in stone. There were other matters where time was cast in stone. Those were for example limitation of action in contract and recovery of land. In tort, though cast in stone, there was room for extension within strict strictures of the Limitation of Actions Act.
8. The case turned on its own facts. There were several Court of Appeal decisions binding on the court that could be seen in three aspects: -
   1. Timelines relating to the procedural aspects.
   2. Timelines touching on the substance
   3. Constitutional timelines
9. The constitutional timelines were cast in stone. The decisions over time had crystalized that. The matter was mainly in election matters. The Supreme Court and Court of Appeal had dealt with various constitutional timelines and for good measure found their inflexibility. In effect, due to the special nature of election disputes, they were removed from the system within 6 months. Those timelines were strict.
10. Given the fused nature of the Constitution, it provided both for strict timelines and protection under article 159. Under the substantive law, timelines went into the merit as they created rights. Under article 40 of the Constitution, rights including prescriptive rights were protected. Therefore, time bound limitations of such timelines entailed creation of a right. That was why adverse possession in the realm of land law was not anathema to property rights. The rights related to limitations were strict. The same applied to the procurement law. That was because at the end of the period, a tender would have property or not.
11. Procedural timelines were borne by their mother, article 159 and fathered by article 50 of the Constitution. Article 159(2)(a), (b) and (d) appeared to be antagonistic. Sometimes, when delaying justice occurred, it was in order to do justice to all. Other times was to avoid procedure inadequacies that may result in having justice administered with undue regard to procedural technicalities. The Court of Appeal had settled the aspect of whether it was fatal to have a decision beyond 60 days required under the Civil Procedure Rules. In two occasions the court had found in undue delay including up to 5 years to be proper judgement in the circumstances. The provisions should be looked at purposively. The timelines did not create proprietary rights.
12. The legislative intent of section 34 of the Small Claims Court Act was not to impose unnecessary bottlenecks. Even tax statutes had timelines for paying or declaring taxes. It was never that non-payment made those taxes void. There should be consequences. In the Income Tax Act, the non-compliance with deadlines did not vitiate the taxes. It attracted known penalties. What were the consequences under section 34 of the small claims court?
13. A court was not entitled to impose a penalty that was not hitherto anticipated. The parties must know, a priori, the consequences of their actions. Any act, especially one promoting certain aspects of the Constitution could not be read mechanically. A purposive interpretation should be given to statutes so as to reveal the intention of the statute. The purpose of the Small Claims Court Act was to facilitate expeditious disposal of the disputes while at the same time respecting the right to be heard. The net result was that balancing the two may result at times to overshooting the 60 days. The 60 days did not have penal consequences for good reason. They were aspirational. That was part of having access to justice over amounts that needed not be in the normal system. Allowing the application would open floodgates that would eventually defeat the purpose of the Act.
14. The non- compliance went to the courts performance and was answerable internally. It could not affect parties who were in court and ready to be heard. Defendants used various gimmicks to have matters adjourned and thereafter turned around to say, 60 days were over. The parties had wasted a full month arguing in the court and with preliminary objections that were much ado about nothing.
15. In order to give effect to the Small Claims Court and facilitate the disposal of the cases, the instant court gave guidelines as formal practice directions were awaited.

1. Before filing a small claim suit, the parties should ensure that they have all requisite details for service and effect service forthwith.
2. The court shall proceed forthwith to hear the matter.
3. The Civil Procedure Rules did not apply to the Small Claims Court. Consequently, there would only be one mention, the first mention. If service was done, the parties shall proceed forthwith.
4. Given the facts that rules of evidence were relaxed, the court could have parties who were ready to testify instead of waiting for an absent claimant.
5. There shall be no mention to file submissions. The court tested that aspect in the instant matter. On July 25, 2023, the court gave the date for ruling for July 31, 2023. Parties wished to file submissions and the court directed that they could file the same if they so wished. Two days later the court had comprehensive submissions.
6. The Small Claims Court did not need to type its ruling before delivery.
7. Parties who wished to file submissions may file them together with their pleadings but it was enough that the court acknowledged them.
8. Whichever the case, submissions in the Small Claims Court should never exceed 3 pages of font 12 size 1.5.
9. The court was encouraged to use provisions of section 30 of the Small Claims Court Act for matters that were past 40 days.
10. For matters where the court had no jurisdiction strictly by dint of section 12 of the Small Claims Court Act, the court ought to strike out not dismiss the claim.
11. In respect to objections, there were no obligations to have a reasoned ruling. It was enough to have an ex tempore written ruling decide the application.

16. There was no basis to transfer the suit to the Chief Magistrates Court. The case was properly before the Small Claims Court. Preliminary objection and the Application dated July 7, 2023 filed in the Small Claims Court had been the impediment to the disposal of the primary matter. The court below had jurisdiction to hear the matter therein.