Weekly Newsletter 003/2019

Weekly Newsletter 003/2019



Kenya Law

Weekly Newsletter


Housekeeper awarded Kshs. 2.7 million for unlawful termination of an employment contract.
Elizabeth Kioko v Beyene Haire Warde & another
Cause No 290 of 2014
Employment and Labour Relations Court at Nairobi
D K N Marete, J
December 3, 2018
Reported by Beryl A Ikamari
http://kenyalaw.org/caselaw/cases/view/164120/
Employment Law-employment contract-existence of an employment contract-proof of the existence an employment contract-where the respondents denied that they had employed the claimant-whether oral testimony was sufficient to show that the employment contract existed.
Employment Law-employment contract-unlawful termination of an employment contract-claim that an employment contract was terminated without the issuance of a notice or pay of outstanding dues and without reasons being offered-whether the termination was lawful-Employment Act, 2007, sections 43(1) & 45.
Employment Law- unlawful termination of an employment contract-remedies for unlawful termination of an employment contract-claim for monetary compensation for a period of 14 years for pending leave, travelling allowance, Sunday work, work for 140 public holidays and overtime-whether the Court would allow the claim for monetary compensation.

Brief facts:
The claimant was employed by the 2nd respondent on February 2, 1998 to work as a housekeeper. On November 9, 2012, her employment contract was terminated without a reason being offered or pay. The termination came after she requested to be given non-full time duties so that she could be married and tend to a family. She sought monetary compensation amounting to a total of Kshs. 2,789,184.88/= and it included 14 years of pay for pending leave, travelling allowance, Sunday work, work for 140 public holidays and overtime.
The respondents denied that the claimant was their employee and stated that the claim was not supported by evidence. They also stated that the statement of claim was ambiguous and it did not disclose a cause of action against them.


Issues:
  1. Whether there was evidence that the claimant was employed by the respondents.
  2. Whether there was evidence of unlawful termination of an employment contract.
  3. What nature of reliefs, if any, was the claimant entitled to?

Held :
  1. The most probable situation was that the 1st respondent employed the claimant and she worked for his family, including his separated wife, and the company. It could not be said that she only worked for the 1st respondent's wife who was now separated from him. It was the 1st respondent's wife that employed, deployed, paid and ultimately dismissed her.
  2. The claimant had demonstrated that there was a case of unlawful termination of employment. Evidence showed that in the year 2012 she requested for a pay increment due to an increased workload and she requested to work during the day only as she had a marriage to tend to but the respondent did not agree to that and instead got angry and threw her out.
  3. The claimant was not given notice detailing the termination and neither was she given reasons for the termination. The termination was oral and she was not paid.
Claim allowed.
Orders:-
  1. One (1) months salary in lieu of notice - Kshs.10,000.00
  2. Fourteen (14) years pending and untaken leave - Kshs.140,000.00
  3. Twelve (12) months salary for unfair termination of employment Kshs. 10,000.00 x 12 = Kshs.120,000.00
  4. 672 Sundays at double time 672 x 46.29 x 2 x 17 = Kshs.1,057,633.00
  5. 140 public holidays at double time 140 x 46.29 x 2 x 17 = Kshs.220,340.40
  6. 14 years overtime worked not paid 46.29/2 x 27 x 12 x 9 x14 = Kshs.944,871.48
  7. 14 years overtime worked but not paid 12 x 14 x 2 x 83.50 = Kshs.220,340.00
    Total costs of Claim = Kshs.2,713,184.88/=
  8. The respondent was ordered to issue a certificate of service to the claimant within fourteen (14) days of the judgment.
The costs of the claim had to be borne by the respondent.
Kenya Law
Case Updates Issue 003/2019
Case Summaries

CIVIL PRACTICE AND PROCEDURE Whether garnishee proceedings would be sustained in the absence of a court decree stating the amount claimed

Mengich t/a Mengich & Co. Advocates & ano. v Joseph Mabwai & 11 others Judicial Review Case No. 463 of 2017
High Court at Nairobi
J M Mativo, J
November 26, 2018
Reported by Chelimo Eunice

Download the Decision

Civil practice and procedure - garnishee proceedings- garnishee order-what was the primary object of a garnishee order-circumstances when courts would refuse to pass a garnishee order-where there was no court decree for the amount claimed -whether under the circumstances, the court would pass a garnishee order - Civil Procedure Rules, 2010, order 23, rule1
Civil practice and procedure – joinder of parties-parties to garnishee proceedings-improper joinder of parties in garnishee proceedings – whether parties who were not holding any money capable of being garnisheed would be enjoined to garnishee proceedings- Civil Procedure Rules, 2010, order 23, rule1
Civil practice and procedure - garnishee proceedings-what were garnishee proceedings-what were the stages to be followed in garnishee proceedings
Evidence law -standard of proof – standard of proof in contempt of court proceedings- whether proof required beyondreasonable doubt – how jurisdiction to commit a person for contempt shouldbe exercised
Contempt of Courtcivil contempt of court – meaning and import of contempt of court- types of contempt of court-essential elements that ought to be proved to make a case for civil contempt-principles emerging from contempt of court proceedings- Contempt of Court Act, section 4(1)(a)
Words and phrases-definition-definition of civil contempt-willful disobedience of any judgment, decree, direction, order, or other process of a court or willful breach of an undertaking given to a court- Contempt of Court Act, section 4(1)(a)
Words and phrases-definition-definition of contempt-disregard of, disobedience to, the rules, or orders of a legislative or judicial body, or an interruption of its proceedings by disorderly behavior or insolent language, in its presence or so near thereto as to disturb the proceedings or to impair the respect due to such a body; Black's Law Dictionary, 9th edn

Brief facts:
The applicants in their first application sought to have credit in a deposit account held and operated at Equity Bank Kenya (the Bank) in the name of the 11th respondent to be utilized to pay their costs and legal fees. The applicants argued that they agreed to have all the matters adversely affecting the operations of 11th respondent (the Society) withdrawn/settled out of court with costs to be paid by the Society and agreed on the amounts payable. That upon receipt of the funds from the government, the officials of the 11th respondent, opened a new account at the Bank with a view to diverting the money from the accounts known to their advocates so as to deprive them. The application was opposed on various grounds, including that there were no court orders to be enforced by way of garnishee proceedings and that the procedure adopted was irregular.
In their second application, the applicants sought to have the 1st to 10th respondents be committed to civil jail for contempt of court and to be granted leave to pursue criminal contempt proceedings against them.

Issues:

  1. What were garnishee proceedings?
  2. What stages were to be followed in garnishee proceeding?
  3. Whether garnishee proceedings would be sustained in the absence of a court decree stating the amount claimed.
  4. What was the meaning and the primary object of a garnishee order?
  5. What were the circumstances when courts would refuse to pass a garnishee order?
  6. What was the meaning, import, types of standard of proof in contempt of court? Read More..

Relevant Provisions of the Law
Civil Procedure Rules, 2010;
Order 23, rule 1;
(1) A court may, upon the ex parte application of a decree- holder, and either before or after an oral examination of the judgment- debtor, and upon affidavit by the decree holder or his advocate, stating that a decree has been issued and that it is still unsatisfied and to what amount, and that another person is indebted to the judgment-debtor and is within the jurisdiction, order that all debts (other than the salary or allowance coming within the provisions of Order 22, rule 42 owing from such third person (hereinafter called the “garnishee”) to the judgment-debtor shall be attached to answer the decree together with the costs of the garnishee proceedings; and by the same or any subsequent order it may be ordered that the garnishee shall appear before the court to show cause why he should not pay to the decree- holder the debt due from him to the judgment debtor or so much thereof as may be sufficient to satisfy the decree together with the costs aforesaid.

Held :

  1. The respondents in the application were not parties to the main suit, yet they were named as respondents in the instant application. Court orders only bound parties before it. That was a fatal defect which rendered the application incompetent.
  2. Being a garnishee application, the only proper party to be garnisheed was the Bank. The rest of the respondents were improperly enjoined in the application since they were not holding any money capable of being garnisheed nor had it been alleged they held any funds either individually or jointly. There was nothing to show that they were indebted to a judgment debtor as the law required. That wasfortified byorder 23, rule 1 of the Civil Procedure Rules, 2010 (the Rules) on attachment of debts. The said rule 1 contemplated the existence of a decree for the amount claimed. There was no decree before the Court, but rather the applicants based their application on a consent.
  3. Applicants did not file their bill of costs in court for taxation as the law demanded. The costs were not agreed upon and they were disputed before the Court. The applicants could not sustain a garnishee application in absence of a court decree.
  4. Applicants based their application on a document which was not signed by any of the respondents in the application or the respondents in the main suit, thus it could not be said to be binding on the respondents. Further, the document was not a court decree to satisfy the requirements of the rule 1 of the Rules. The applicants never filed their Bills of Costs in court for taxation. There was no judgment-debtor before the Court as the law required. It followed that the application lacked both substance and legal basis to stand on. The applicant's application was fatally and incurably defective.
  5. The procedure adopted by the applicants was totally wrong and went against the rule 1 of the Rules. Garnishee proceeding otherwise known as garnishment was a judicial process of execution or enforcement of monetary judgment where money belonging to a judgment debtor, in the hands or possession of a third party known as the garnishee was attached or seized by a judgment creditor, the garnisher or garnishor, in satisfaction of a judgment sum or debt. By its nature, garnishee proceeding was sui generis and different from other court proceedings, although it flowed from the judgment that pronounced the debt.
  6. Generally, garnishee proceeding was done in two different stages. The first stage was for the garnishee order nisi, while the second stage was for the garnishee order absolute.
  7. At the first stage, the judgment creditor ought to make an application ex parte to court that the judgment debt in the hands of the garnishee, be paid directly to the judgment creditor unless there was an explanation from the garnishee why the order nisi would not be made absolute. If the judgment creditor satisfied the court on the existence of the garnishee who was holding money due to the judgment debtor, such garnishee will be called upon to show cause why the judgment debtor's money in its hands should not be paid over to the judgment creditor, and if the court was satisfied that the judgment creditor was entitled to attach the debt, the court would make a garnishee order nisi attaching the debt.
  8. The essence of the order nisi was to direct the garnishee to appear in court on a specified date to show cause why an order should not be made upon him for the payment to the judgment creditor of the amount of debt owed to the judgment debtor. It was a requirement that a copy of the order nisi ought to be served on the garnishee and judgment debtor at least 7 days before the adjourned date for hearing.
  9. The second stage was for the garnishee order absolute, where on the adjourned date, the garnishee failed to attend court or show good cause why the order nisi attaching the debt should not be made absolute, the court would, subject to certain limitations make the garnishee order absolute. The garnishee, where necessary also had an option of disputing liability to pay the debt. The applicants ignored those procedures.
  10. The primary object of a garnishee order was to make the debt due by the debtor of the judgment debtor available to the decree holder in execution without driving him to the suit. The court would, in the case of debt (other than a debt secured by a mortgage or charge), upon the application of the attaching creditor, issue a notice to garnishee liable to pay such debt, calling upon him either to pay into court the debt due from him to the judgment debtor or so much as would be sufficient to satisfy the decree and costs of execution, or to appear and show cause why he should not do so.
  11. The order contemplated by order 23 of the Rules was discretionary and the court would refuse to pass such order if it was inequitable. The discretion, however, ought to be exercised judicially. Where the court found that there was bona fide dispute against the claim and the dispute was not false or frivolous, it ought not take action. In the instant application, the respondents disputed the amounts and further, the funds had since been transferred from the accounts. Due to the said transfer of funds, even if the proper procedure had been followed and all the other requirements satisfied, the Court would be inclined to decline to exercise its discretion in favour of the applicants.
  12. The first application failed. The application was totally misconceived, bad in law and in substance and the same was incurably defective.
  13. Contempt of court was a willful disregard or disobedience of a public authority. In its broad sense, contempt was a disregard of, or disobedience to, the rules or orders of a legislative or judicial body or an interruption of its proceedings by disorderly behavior or insolent language in its presence or so near as to disturb its proceedings or to impair the respect due to such a body. In its restricted and more usual sense, contempt comprehended a despising of the authority, justice, or dignity of a court. The phrase contempt of court was generic, embracing within its legal signification a variety of different acts.
  14. The power to punish for contempt was inherent in all courts and needed not be specifically granted by statute. It lay at the core of the administration of a judicial system. The power to punish for contempt existed for the preservation of order in judicial proceedings and for the enforcement of court decisions and, consequently, for the due administration of justice. The reason behind the power to punish for contempt was that respect of the courts guaranteed the stability of their institution, without such guarantee, the institution of the courts would be resting on a very shaky foundation.
  15. Contempt of court was of two kinds, namely: direct contempt, which was committed in the presence of or so near the judge as to obstruct him/her in the administration of justice; and constructive or indirect contempt, which consisted of willful disobedience of the lawful process or order of the court.
  16. Contempt proceedings were quasi-criminal in nature and since the liberty of a person was at stake, the standard of proof was higher than proof on a balance of probabilities, almost, but not exactly, beyond reasonable doubt. The facts and the evidence adduced ought to demonstrate clear, willful, flagrant or reckless disobedience of the court order. The breach for which the alleged contemnor was cited ought to be precisely defined and satisfactorily proved.
  17. In order to succeed in civil contempt proceedings, the applicant had to prove the terms of the order, knowledge of the terms by the respondent and failure by the respondent to comply with the terms of the order. Upon proof of the requirements, the presence of willfulness and bad faith on the part of the respondent would normally be inferred, but the respondent could rebut that inference by contrary proof on a balance of probabilities.
  18. There were essentially four elements that ought to be proved to make a case for civil contempt, that:-

    (a) the terms of the order (or injunction or undertaking) were clear and unambiguous and were binding on the defendant;
    (b) the defendant had knowledge of or proper notice of the terms of the order;
    (c) the defendant had acted in breach of the terms of the order; and
    (d) the defendant's conduct was deliberate.

  19. The power to commit for contempt was one to be exercised with great care. An order committing a person to prison for contempt was to be adopted only as a last resort. A high standard of proof applied whenever committal to prison for contempt was sought because contempt of court was quasi-criminal in nature and the orders sought had the potential of taking away the liberty of a citizen.
  20. Two principals emerged from orders for committal for contempt. The first was liberty. It was basic to the Kenyan Constitution, 2010 that a person would not be deprived of liberty, albeit only to constrain compliance with a court order, if reasonable doubt existed about the essentials. The essentials in the instant matter included prove that a person had committed contempt and that the applicant had complied with all the statutory requirements governing the application.
  21. The secondreason was coherence. It was practically difficult to disentangle the reasons why orders for committal for contempt were sought and why they were granted. In the end, whatever the applicant’s motive, the court will commit a contempt respondent to jail for rule of law reasons; and that high public purpose ought to be pursued only in the absence of reasonable doubt.
  22. It was impermissible to commit an alleged contemnor to jail in the absence of conclusive proof of the essential elements. The requisite elements had to be established beyond reasonable doubt. In such a prosecution the alleged contemnor was plainly an accused person and was entitled to due process and protection of the law.
  23. The jurisdiction of the superior courts to commit recalcitrant litigants for contempt of court when they fail or refuse to obey court orders had at its heart the very effectiveness and legitimacy of the judicial system. That, in turn, meant that the court called upon to commit such a litigant for his or her contempt was not only dealing with the individual interest of the frustrated successful litigant, but also, was importantly acting as a guardian of the public interest. Contempt of court was not merely a mechanism for the enforcement of court orders.
  24. In the instant matter, costs were to be agreed. That was not done. Further, the applicants never lodged their bill of costs in court for taxation. There was no certificate of costs or decree to be disobeyed. There was no order to be disobeyed also.
  25. The test for when disobedience of a civil order constituted contempt was whether the breach was committed deliberately and mala fide. A deliberate disregard was not enough, since the non-complier would genuinely, albeit mistakenly, believe him or herself entitled to act in the way claimed to constitute the contempt. In such a case, good faith avoided the infraction. Even refusal to comply that was objectively unreasonable may be bona fide. The applicants failed to prove the established elements.

Both applications dismissed with costs to the respondents.

CIVIL PRACTICE AND PROCEDURE In election disputes at the Supreme Court, the Court would not allow applications for the taking of additional evidence at the Trial Court.

Mohamed Abdi Mahamud v Ahmed Abdullahi Mohamad & 3 others
Petition 7 of 2018
Consolidated with Petition 9 of 2018
Supreme Court of Kenya at Nairobi
D K Maraga, CJ & P, M K Ibrahim, J B Ojwang, S C Wanjala, Njoki Ndungu & I Lenaola, SCJJ
November 12, 2018
Reported by Beryl A Ikamari

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Civil Practice and Procedure-application for the taking of additional evidence-application for the taking of additional evidence at the Supreme Court-whether, in an election dispute, the Supreme Court would allow an application for the taking of additional evidence viva voce and by affidavit before the Trial Court, in accordance with rules 18(4) & 18(5) of the Supreme Court Rules, 2012-Constitution of Kenya 2010, article 105 (2); Election Act, No 24 of 2011, section 75 (2); Supreme Court Rules 2012, rules 18(4) & 18(5).
Civil Practice and Procedure-review-review at the Supreme Court-conditions precedent to the grant of a review application at the Supreme Court-whether the Supreme Court would allow an application whose effect was to review the orders of the Supreme Court, where the application did not expressly state that it was an application for review.

Brief Facts:
The petitioner made an application for the taking of additional evidence viva voce and by affidavit before the Trial Court, in accordance with rules 18(4) & 18(5) of the Supreme Court Rules 2012. In a ruling dated September 28, 2018, the Supreme Court granted the petitioner leave to adduce additional evidence by way of affidavit and the respondents were allowed to respond via affidavit. The applicant stated that the ruling of September 28, 2018 did not provide for the manner that the evidence would be taken. According to the applicant, the Trial Court, which heard the matter and other witness testimony, was best placed to take additional evidence and gauge the demeanour of witnesses.
In opposing the application, the appellant stated that the application was an attempt to review the ruling of the Supreme Court of September 28, 2018 without meeting the requisite conditions for that review. The appellant added that the application was also an attempt to reopen the hearing of the motion at the Trial Court.

Issues:

  1. Whether, in an election dispute, the Supreme Court would allow an application for the taking of additional evidence viva voce and by affidavit before the Trial Court, in accordance with rules 18(4) & 18(5) of the Supreme Court Rules 2012.
  2. What were the conditions to be met by an applicant who sought a review of an order at the Supreme Court? Read More...

Relevant provisions of the law
Supreme Court Rules 2012, rule 18;
18. Evidence before the Court
(1) The Court may in any proceedings, call for additional evidence.
(2) A party seeking adduce additional evidence under this rule shall make a formal application before the Court.
(3) On any appeal from a decision of the Court of appeal, or any other court or tribunal acting in the exercise of its original jurisdiction, the Court shall have power—

(a) to call for or receive any record on any matter connected with the proceedings before it;
(b) to re-appraise the evidence and to draw inferences of fact; and
(c) in its discretion, for sufficient reason, to take additional evidence or to direct that additional evidence be taken by the trial court or by the Registrar.

(4) Where additional evidence is taken by the Court, it may be oral or by affidavit, and the Court may allow cross-examination of any witness.
(5) Where additional evidence is taken by the trial court, the trial court shall certify such evidence to the Court, with a statement of its opinion on the credibility of the witness giving the additional evidence.
(6) Where evidence is taken by the Registrar, the Registrar shall give statements of opinion on the credibility of the witness.
(7) The parties to an appeal shall be entitled to be present when such additional evidence is taken.

Held:

  1. The Supreme Court allowed the petitioner to adduce additional evidence by way of affidavit evidence and the respondents were to respond to the additional evidence by way of affidavit as well.
  2. By filing an application which sought orders for the Supreme Court to direct the Trial Court to take additional evidence viva voce and by affidavit, the applicant was asking the Supreme Court to review or vary the orders issued on September 28, 2018.
  3. On mandatory terms, article 105 (2) of the Constitution and section 75 (2) of the Election Act required election disputes to be heard within 6 months. After the hearing and determination of such disputes, the Election Court would become functus officio. Therefore, rule 18(5) of the Supreme Court Rules 2012 was inapplicable to election disputes emanating from the High Court due to the strict timelines set by the Constitution and statute. The Trial Court could not be directed to take additional evidence in the manner suggested by the applicant.
  4. There was no need for cross-examination to be undertaken and no party would be prejudiced as all the material necessary for the hearing and determination of the appeal was already on record. As stated in the ruling of September 28, 2018, the Supreme Court would only allow additional evidence on a case by case basis and only sparingly with abundant caution. In view of that holding, allowing cross-examination would be an unreasonable stretch of what was decided.
  5. What the applicants were seeking was a review. They had not met the conditions precedent for purposes of the grant of review. A review was available in exceptional circumstances and those circumstances were limited to situations where:-
    1. the judgment, ruling, or order, was obtained, by fraud or deceit;the judgment, ruling, or order, was a nullity, such as, when the Court itself was not competent;the Court was misled into giving a judgment, ruling or order, under a mistaken belief that the parties had consented thereto; or,
    2. the judgment or ruling, was rendered, on the basis of a repealed law, or as a result of, a deliberately concealed statutory provision.

Application dismissed.

JUDICIAL REVIEW The High Court has power to enlarge time for the filing of judicial review applications

Republic v Kenya Revenue Authority Ex parte Stanley Mombo Amuti
Judicial Review Application No 102 of 2018
High Court at Nairobi
John M Mativo, J
November 16, 2018
Reported by Beryl A Ikamari

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Judicial Review-institution of judicial review proceedings-time for filing judicial review applications-effect of delay in filing judicial review applications-whether the High Court had power to extend time for purposes of filing judicial review applications-Law Reform Act, sections 8 & 9; Civil Procedure Rules, 2010, order 53.
Precedent-principle of stare decisis-extent to which a decision would be an authority-effect of a slight difference in facts between an authoritative decision and the circumstances of a case.
Constitutional Law-fundamental rights and freedoms-right to fair administrative action and right of access to justice-principle that courts would develop the law to the extent that it did not give effect to a right and would interpret the law in a manner that most favoured the enforcement of a right-whether, in light of constitutional principles, the High Court had power to enlarge time for the filing of judicial review applications-Constitution of Kenya 2010, articles 20(3) (a), 47 & 48.

Brief facts:
The ex parte applicant sought leave to institute judicial review proceedings to apply for certiorari and prohibition. The orders were sought against the respondents' decision to close and freeze his bank accounts at Barclays Bank and Standard chartered Bank Ltd. The High Court made orders stating that before it could consider the question of leave, the ex parte applicant would have to make full disclosure of the anti-corruption case known as Misc No. 5 of 2016 and to file a further affidavit to that effect. The applicant filed the further affidavit. Thereafter leave to institute judicial review proceedings, was granted and the Court directed the ex parte applicant to file the substantive application within 10 days of the ruling. The ex parte applicant filed the substantive application after the lapse of 42 days.
The reason offered for the delay was that the applicant faced serious financial difficulties and could not raise court filing fees. The ex parte applicant urged the Court to extend time for the filing of the judicial review application. The respondents opposed the application and stated that time for the filing of judicial review proceedings could not be extended by the Court. The ex parte applicant and the respondents cited conflicting decision on whether the Court had power to enlarge time for the filing of judicial review proceedings.

Issues:

  1. Whether the High Court had power to extend time for purposes of the filing of judicial review applications.
  2. What was the effect of a slight difference in facts between an authoritative decision and the circumstances of a case?
  3. Whether the provisions of the Constitution of Kenya 2010, including the right to fair administrative action and the right of access to justice, would allow the High Court to extend time for the filing of judicial review proceedings. Read More..

Held:

  1. A case would only be an authority for what it decided not for what logically flowed from it. The ratio of a decision had to be understood in the background of the facts of the case. Each case depended on its own facts and a close similarity between one case and another was not enough because even a single significant detail could alter the entire aspect. A little difference in facts or additional facts could make a lot of difference in the precedential value of a decision.
  2. The two conflicting decisions of the High Court which were cited on the question as to whether the Court could extend time for the filing of a judicial review application had facts and circumstances that were totally different. In the case cited by the respondent, Republic v Commission for University Education & another ex parte Genco University, [2017] eKLR, the judicial review application was filed out of time without leave or an application for extension of time. The case cited by the ex parte applicant, Republic v Public Procurement Administrative Review Board ex parte Syner-Chemie, [2016] eKLR, had circumstances that were similar to those in the instant application, where an application for extension of time was made and the question was whether or not the Court could grant extension of time in judicial review proceedings.
  3. On the question as to whether the Court could enlarge time for the filing of judicial review proceedings, there were two schools of thought. One stated that order 53 of the Civil Procedure Rules did not envisage enlargement of time for such proceedings and that in judicial review proceedings there was a special procedure applicable and that apart from invoking order 53, a party could not invoke other provisions in the Civil Procedure Rules or the Civil Procedure Act. The second school of thought recognized that although the Law Reform Act did not allow for the extension of time within which to seek leave to institute judicial review proceedings or to file judicial review applications, the new constitutional dispensation and the enactment of the Fair Administrative Actions Act introduced flexibility in the application of the law to a particular case for purposes of achieving substantive justice. Article 47 elevated fair administrative action to the stature of a constitutional right and article 20(3)(a) of the Constitution allowed the Court to develop the law to the extent that it did not give effect to a constitutional right and to adopt an interpretation that most favoured the enforcement of the right. According to that school of thought the strict interpretation of the Law Reform Act and order 53 of the Civil Procedure Rules to exclude room for enlargement of time, would hamper the enforcement of the right to fair administrative action.
  4. Sections 8 and 9 of the Law Reform Act and order 53 of the Civil Procedure Rules, which provided for judicial review proceedings and prohibited the enlargement of time for purposes of filing judicial review proceedings, were based on traditional common law judicial review principles. However, the existing constitutional dispensation changed the legal landscape and the Court could not shut its eyes on express constitutional dictates and determine a matter purely on the basis of common law principles.
  5. Section 7 (1) of part two of the sixth schedule to the Constitution, was to the effect that all law had to conform to the Constitution. Therefore, sections 8 and 9 of the Law Reform Act and order 53 of the Civil Procedure Rules had to conform to the Constitution or be construed with such adaptations, alterations, modifications so as to conform with the Constitution. Additionally, all statutes had to be interpreted in light of the bill of rights.
  6. The entrenchment of judicial review as a constitutional principle should of necessity expand the scope of the remedy and discretion of the Court as guided by the purposes, values and principles of the Constitution and the constitutional dictate to develop the law on that front and the following were of relevance in that regard:-
    1. Parties who would have been denied judicial review on the basis of public-private power dichotomy, would access judicial review if the person, body or authority against whom it was sought exercised a quasi-judicial function or a function that was likely to affect the parties' rights. The right to access court was constitutionally guaranteed. A compelling reason would be required in order to deny a litigant access to court while passing the article 24 analysis on limitation of rights. Judicial review orders were part of the reliefs available for violation of fundamental rights and freedoms under article 23(3)(f). Under section 7 of the Fair Administrative Action Act a person aggrieved by an administrative action or decision could apply for a review of the administrative action or decision in accordance with section 8 of the Act. Such a person could also apply to a tribunal exercising jurisdiction in that regard under any written law.
    2. Article 159 of the Constitution commanded courts to administer justice without undue regard to technicalities.
  7. In an application for extension of time as related to the filing of judicial review proceedings, the applicant was required to demonstrate that there were good reasons for failing to file the application within the allowed period or to sufficiently account for the delay.
  8. Discretion conferred by statute had to be exercised judiciously and not in an arbitrary and capricious manner. Discretion depended on the various circumstances including the need to do real and substantial justice to the parties to the suit. Administration of justice without undue regard to technicalities was one of the principles of the Constitution. Additionally, the discretion of the Court would be constrained by constitutional objectives to grant access to justice.
  9. The ex parte applicant explained that the delay in filing the judicial review application was caused by financial difficulties which made him unable to raise court fees. The delay was not inordinate. The ex parte applicant sufficiently explained the delay and established sufficient cause for the Court to grant the extension of time sought.

Application allowed.

STATUTES The extent to which section 46(1) of the Kenya Deposit Insurance Act is an ouster clause

Shiva Carriers Ltd v Imperial Bank Ltd & another
Civil Suit No 112 of 2016
High Court at Mombasa
P J O Otieno, J
November 2, 2018
Reported by Beryl A Ikamari

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Statutes-interpretation of statutory provisions-interpretation of section 46(1) of the Kenya Deposit Insurance Act-ouster clauses-the extent to which section 46(1) of the Kenya Deposit Insurance Act was an ouster clause-the extent to which section 46(1) of the Kenya Deposit Insurance Act disallowed the grant of an injunction, where there had been an assumption of control of an institution within the terms of the Act-Kenya Deposit Insurance Act, No 10 of 2012, section 46(1).
Civil Practice and Procedure-injunctions-conditions governing the grant of an injunction-extent to which a party applying for an injunction would have to establish a prima facie case and whether it was always necessary to assess whether the threatened harm or injury could be compensated adequately by an award of damages.

Brief facts:
The plaintiff purchased motor vehicles under a hire purchase agreement wherein the total facility was Kshs. 58,007,250/= for a period of 36 months on agreed interest rates and instalments. The plaintiff strived to meet the terms of the agreement and repaid 67% of the sum. In October 2015 the plaintiff faced financial difficulties and the defendant was placed under receivership. The Kenya Deposit Insurance Act was applicable to the defendant’s placement under receivership. To meet the defendant's demands for repayment, the plaintiff proposed to settle the sum through financial assistance from Diamond Trust bank on condition that the logbooks would be released unconditionally. Before the final position on the proposal was communicated to the plaintiff, the 2nd defendant was instructed to repossessed 30 vehicles belonging to the plaintiff in order to recover a disputed balance of Kshs. 41,810,384.71/=
According to the plaintiff, the decision to repossess 30 vehicles was unjustified because 20 out of the 30 vehicles proclaimed had been paid for in full but the 1st defendant retained the logbooks. The plaintiff said that it was willing to pay the sum due after reconciliation of the books and to surrender the 10 vehicles that had not been paid for in full. The plaintiff made an application for an injunction to stop the repossession and sale and for orders to compel the defendant to furnish the plaintiff with audited statement of accounts of the arrears and valuation of reports and release of all logbooks that were not part of the finance fleet.
The defendant opposed the application and stated that pursuant to section 46(1) of the Kenya Deposit Insurance Act, the Court did not have jurisdiction over the matter and that the plaintiff had not demonstrated sufficient grounds for the grant of an injunction.

Issues:

  1. Whether section 46(1) of the Kenya Deposit Insurance Act was an ouster clause which barred the Court from granting injunctions, in situations where the dispute did not relate to assumption of control of an institution under the provisions of the Act.
  2. What were the conditions to be met in order for the Court to grant an injunction? Read More..

Relevant provisions of the law
Kenya Deposit Insurance Act, No 10 of 2012, section 46(1)(a);
Actions against the Corporation.
46. (1) Where the Corporation or the appointed person, as the case may be, has assumed control of an institution under section 44(2)(b)—
(a) no injunction may be brought or any other action or civil proceeding commenced against the Corporation or the appointed person in respect of the assumption of control;

Held:

  1. Section 46(1) of the Kenya Deposit Insurance Act did not oust the Court's jurisdiction to entertain and determine any suit against a corporation. It only barred the Court from entertaining a suit and issuing orders of injunction to interfere with the assumption of control of the affected institution. That provision allowed for institution of suits by any person for recovery of damages occasioned by the actions of the corporation or the appointed person.
  2. The suit did not relate to resistance to the taking over of control by the corporation or the appointed person. The suit related to a determination of the question as to whether the sum claimed by the institution that was under receivership was accurately due. Such an issue was not ousted under the provisions of section 46(1) of the Kenya Deposit Insurance Act.
  3. Section 46(1) of the Kenya Deposit Insurance Act, had no clear, firm and unequivocal provision that ousted the Court's jurisdiction to hear the matter. For a statutory provision to oust the jurisdiction of the High Court, the intention to oust had to be clear and to merit no elaborate arguments. Additionally, ouster clauses had to be interpreted and construed strictly because they had the effect of curtailing the jurisdiction of the Court and rendering a matter non-justiciable before the courts.
  4. The test set in Giella v Casman Brown [1973] EA 358 was the yardstick for considerations related to the grant of an injunction. The question to be asked was whether the plaintiff had demonstrated that the defendant had threatened to violate or had actually violated a legal right and intended to perpetuate the violation. The Court would determine whether unless the injunction was granted, such a right was open to violation.
  5. The plaintiff demonstrated that the defendant intended to repossess 30 motor vehicles and yet the contract between the parties related to the financing and purchase of 10 motor vehicles. The defendant did not attempt to show that more than 10 motor vehicles were financed or otherwise pledged to the defendant. The plaintiff also alleged that the defendant had failed to meet its disclosure obligations under the Consumer Protection Act. There was no need to isolate more issues to demonstrate the existence of a prima facie case. Even one issue was enough for a tribunal or judicial mind properly directing itself to conclude that there was a right which had had apparently been infringed.
  6. The isolated issues sufficiently demonstrated the existence of a prima facie case that the defendant at the trial would need a chance to explain. That need was sufficient for the Court to order for status quo to be maintained by way of a temporary injunction pending the giving of the explanation and at the hearing and the determination after the explanation.
  7. After the plaintiff demonstrated that there was a prima facie case, an inquiry on whether damages were an adequate remedy was not necessary in all cases. The defendant financed the plaintiff's purchase of 10 motor vehicles but upon a failure to meet payment obligations by the plaintiff, the defendant sought to repossess more than 10 vehicles. Repossession as opposed to attachment was the regaining of what lawfully belonged to the person seeking to regain. Where there was no legal title, a creditor had to sue for recovery and not just take away the debtor's property at will.
  8. The defendant should not be allowed to employ the law of the jungle merely because it could pay damages. That would fly in the face of the law guaranteeing equal treatment before the law because parties that were able to pay damages could infringe on others' rights and proclaim financial ability to pay.
  9. The defendant was under receivership by the Kenya Deposit Insurance Corporation due to financial difficulties. There was no certainty that the defendant was solid and able to pay any damages that arose in the event that the plaintiff's suit succeeded.

Application partly allowed. (An injunction to prevent the repossession and sale of the suit's subject matter was granted.)

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