[2024] KETAT 497 (KLR)

Engie Mobisol Kenya Limited v Commissioner of Customs & Border Control (Tax Appeal 511 of 2021) [2024] KETAT 497 (KLR) (22 March 2024) (Ruling)

Neutral citation: [2024] KETAT 497 (KLR)

Republic of Kenya

In the Tax Appeal Tribunal

Tax Appeal 511 of 2021

E.N Wafula, Chair, EN Njeru, M Makau, E Ng'ang'a & AK Kiprotich, Members

March 22, 2024

Between

Engie Mobisol Kenya Limited

Appellant

and

Commissioner of Customs & Border Control

Respondent

Ruling

1. The application, which was by way of a Notice of Motion dated and filed under a certificate of urgency on 23rd October 2023, is supported by an Affidavit sworn by the Applicant’s Advocate, Lilian Renee Omondi, on even date sought for the following Orders:-a.Spentb.Spentc.This Honourable Tribunal be pleased to strike out and expunge from the record the Respondent’s written submissions dated 29th September 2023, filed and served on 13th October 2023. d.The costs of and incidentals to this application be in the cause.

2. The application is premised on the following grounds, that:-a.The Respondent’s written submissions dated 29th September 2023, filed and served on 13th October 2023, have been filed in blatant disregard of this Honourable Tribunal’s Orders issued on 28th June 2023, 9th August 2023, 7th September 2023 and 27th September, respectively.b.The submissions have been filed contrary to this Honourable Tribunal’s orders of 7th September 2023 and 27th September 2023 without the Respondent making an application to review and/or set aside the said orders.c.The Respondent has willfully and unduly delayed the filing and service of the submissions upon the Honourable Tribunal and the Appellant for over two and a half months without any reasonable justification.d.The Honourable Tribunal on 27th September 2023 scheduled the Appeal for hearing on 28th November 2023 and directed that the Appeal proceeds for hearing on the said date by adoption of the Appellant’s written submissions and the Respondent to rely on the Statement of Facts filed already on the record.e.Notwithstanding the clear orders of this Honourable Tribunal, the Respondent on 13th October 2023 in blatant disregard and in contravention of the Tribunal’s orders barring it from filing its written submissions filed the same and served it upon the Appellant’s Advocate vide its email of 13th October 2023. f.This Honourable Tribunal's orders of 7th September 2023 and 27th September 2023 are binding to both parties and unless set aside or reviewed, the Respondent cannot choose to treat such with contempt.g.It is only fair, just, and in the interest of justice that the prayers sought herein are granted.

3. The Appellant in its written submissions dated 7th November, 2023averred as hereunder.

4. The Appellant reiterated that this Honourable Tribunal’s orders are recognized court orders under Article 169(1)(d) of the Constitution of Kenya 2010 and therefore, any order issued by this Honourable Tribunal is binding to the respective parties and the same should be obeyed.

5. The Appellant relied on Section 29(7) of the Tax Appeals Tribunal Act and contended that the Respondent has exhibited unprecedented vigor in treating the orders from this Tribunal as mere suggestions that are not binding and can be ignored without repercussions.

6. The Appellant also relied on the case of Trusted Society of Human Rights Alliance v Cabinet Secretary for Devolution and Planning & 3 Others [2017] eKLR and asserted that the inactions of the Respondent in complying with the Tribunal’s Orders and the subsequent filing of the Respondent’s written submissions are by all possible definitions a defiance of this Tribunal’s orders and the same should not be condoned but dealt with firmly.

7. The Appellant cited the case of Sad V Eoo [2021] eKLR and submitted that the Tribunal should not entertain the Respondent’s lethargy and disdain to the Tribunal’s orders thus the Respondent’s submissions dated 29th September 2023 could not be on record without Tribunal reviewing, setting aside, or discharging its orders of 7th and 27th September 2023.

8. The Applicant averred that the only available recourse to the Respondent’s counsel was to file a formal application to set aside the Honourable Tribunal’s orders before filing its submissions and not to belatedly allege that he was assigned or allocated the case file late. It added that the record confirms that the Respondent’s counsel never raised such an issue when applying for additional time to file submissions having failed to comply with the Tribunal’s directions.

9. The Appellant submitted that in the event the Tribunal finds that the Respondent’s submissions filed and served on the Applicant on 2nd November 2023 were properly filed pursuant to the Tribunal’s directions on 24th October 2023, the issues raised by the Respondent’s counsel are an afterthought intended to mislead this Honourable Tribunal to admit pleadings that have been filed contrary to the Tribunal’s orders.

10. It was submitted that by the Respondent’s arguing that the counsel’s omission and mistake ought not to be visited upon the Respondent, the same counsel, Mr. Philip Wairire, whom this Honourable Tribunal has in many instances cited for indolence purports to give an excuse that the Appeal was complex, and he needed more than two months to prepare written submissions of which he eventually filed the submissions of eight pages.

11. It reiterated that the Tribunal has been lenient enough and repeatedly indulged the Respondent for over three months waiting for the Respondent’s written submissions and no difficulties in preparing, filing, and serving the same were cited by the counsel even though counsel was granted an extension of time and served the said written submissions.

12. It argued that the Respondent’s counsel should therefore not misguide the Tribunal to believe that disrespect of court orders and his inaction are mistakes of counsel that should not be visited upon the Respondent thus the inactions are not mistakes and as such are inexcusable in the absence of logical justifications.

13. The Appellant relied on the case of Diplack Kenya Limited v William Muthama Kitonyi [2018] eKLR where the court approvingly cited the cases of Daphne Parry v Murray Alexander Carson [1963] EA and the case Berber Alibhai Mawji v Sultan Hasham Lalji & 2 Others [1990-1994] EA 337 to buttress its position that the failure to file its written submissions in the stipulated time and the subsequent defiance of the Tribunal’s orders are not mistakes by the Respondent’s counsel but an indication and refusal to act which do not amount to a mistake to be visited on the client.

14. It was the Appellant’s argument that the defense of mistake of counsel is not to be considered because the parties relying on the defense must know that the case before the court is theirs and not the Advocate’s case and therefore must show that they have done all the steps possible to remain vigilant in prosecuting their case.

15. The Appellant further cited the case of Multiple Hauliers v Enock Bilindi Musundi & 2 Others [2021] eKLR and asserted that the Respondent has not shown any steps to ensure that the submissions in question were filed and served in time and therefore cannot enjoy the latitude of blaming the counsel as if the case was solely for the counsel to pursue.

Response to the Application 16. The Respondent replied to the application vide a Replying Affidavit Sworn by Philip Wairire, the Respondent’s Advocate on record, on the 2nd February 2023 in which it was deponed as follows:-a.That the Respondent was previously represented in this matter by counsel who left the Division whilst the matter was pending issuance of directions by the Honourable Tribunal.b.That subsequently, there was a hiatus in the intervening period when the matter was yet to be allocated to the deponent on the Respondent’s case management system.c.That the deponent only came to learn that the same had been reallocated to him in late July 2023 when he formally took up the matter and began to acquaint himself with the issues therein.d.That due to the complexities of the issues in dispute, it took the deponent a longer than usual time to come up to speed with the issues with the issues in dispute.e.That in the intervening period, the Honourable Tribunal had issued directions on the filing of written submissions by both parties, wherein, the counsel/deponent inadvertently missed the timeline set by the Tribunal for that purpose.f.That nonetheless, the counsel/deponent filed the Respondent’s submissions as soon as he possibly could, having first had occasion to apprise himself of the issues in dispute and having obtained the requisite instructions from the Respondent on the same.g.That in the meantime, the Honourable Tribunal had issued directions precluding the Respondent from filing Written Submissions.h.That the failure to file the Respondent’s Written Submissions was an omission on counsel’s part and ought not be visited upon the Respondent.i.That the interest of justice will be served if the Respondent’s Written Submissions are adopted as part of the Tribunal’s record as this will allow the Honourable Tribunal to have the benefit of both parties’ arguments on the issues in dispute.j.That the Appellant will not suffer any prejudice if the Respondent’s Written Submissions are on record, but this notwithstanding, the Appellant may exercise its right to file a response to the Respondent’s Written Submissions before the date fixed for hearing of the Appeal.

17. Seeing as the Respondent did not file submissions to the application, the Tribunal will lend itself to the contents of the Respondent’s Replying Affidavit dated 2nd November 2023 to discern the Respondent’s entire case.

Analysis and Findings 18. The Appellant brought the instant application praying for the Respondent’s Submissions filed on 2nd November 2023 to be struck off for having been filed out of time and against the Tribunal’s orders for directions made on 7th and 27th September 2023.

19. The Respondent contended that its failure to file its written submissions on time should not be visited upon it as the same is as a result of its Advocate’s mistake since the previous counsel allocated the instant file was deployed to a different Division therefore the current counsel for the Respondent took time to apprise himself of the complexities of the issues in the matter and to file the response accordingly.

20. The Respondent added that after the first counsel who had the conduct of the instant matter was moved to a different Division, there was a brief hiatus in the intervening period then later, due to delays in the Respondent’s file management system, the current counsel for the Respondent found out later that he was the one assigned to deal with the matter.

21. It further averred that due to the complexities of the issues at hand, it took time for the new counsel to apprise himself of the matter and respond accordingly.

22. In Itute Ingu & another v Isumael Mwakavi Mwendwa [1994] eKLR, the court held that:“... the discretion of the Court … is wholly unfettered and I agree with the applicants that a mistake by counsel, particularly where such a mistake is bona fide, can entitle an applicant to the exercise of the court’s discretion in his favour. But before doing so, the Court must, of necessity, examine the nature or quality of the mistake or mistakes. What is the mistake alleged here? … If … the applicants were let down by their advocates, then they, ie applicants, cannot now seek to saddle the respondent with that mistake… in my view to allow the present application would amount to saying that so long as a mistake, of whatever nature, is shown to have been made by an advocate and not the client, then the client is entitled to a favourable consideration from the Courts. I would myself reject that kind of contention and hold that while a mistake by counsel is not necessarily a legal bar to the Court exercising its discretion in favour of the victim of the mistake, the Court is nevertheless entitled to examine the nature and quality of the mistake before deciding in which direction the discretion should go…”

23. In the instant case, the Respondent contended that its counsel was assigned the instant case after the previous counsel in charge of the matter was transferred to a different division, and after a brief hiatus, it took time before the counsel noticed in the Respondent’s case management system that he was assigned the case.

24. From the Respondent’s position, it is observed by the Tribunal that the Respondent suggests that it failed to properly update its case management system thus occasioning the delay witnessed by the new counsel to act on the instant matter on time.

25. The Respondent’s counsel equally argued that it took him time to be able to apprise himself of the conduct of the instant case which in turn added to further delays.

26. It is the Tribunal’s position that the Respondent’s failure to put its affairs in order and appropriately organise its internal affairs properly does not constitute a mistake on the counsel’s part and should not be a cause to saddle the Appellant with the mistakes of the Respondent and by extension its counsel.

27. What bemuses the Tribunal is why, when the Respondent’s counsel found out that he was assigned the conduct of the matter and that he needed time to apprise himself of the issues therein and adhere to the timelines for filing submissions as directed by the Tribunal, the Respondent’s counsel never applied to the Tribunal requesting for more time to adhere to the Tribunal’s directions and timelines.

28. Consequently, the Tribunal finds that the Respondent’s reasons proffered for allowing the written submissions to be filed despite the Tribunal’s orders fell short of any exercise of due diligence expected of a party in such a dispute. In any event the Respondent even in the face of the present application was never bothered to seek the discretion of the Tribunal to be allowed an opportunity to file any submissions in the matter.

Disposition 29. The Tribunal in the circumstances finds the application to be merited and accordingly proceeds to make the following Orders:-a.The application is hereby allowed.b.The Respondent’s Written Submissions dated 29th of September 2023 and filed on the 13th October,2023 be and are hereby struck off and expunged from the record of the Tribunal.c.The Respondent to proceed on the basis of its Statement of Facts during the hearing scheduled on the 27th day of March, 2024. d.No orders as to costs.

DATED AND DELIVERED AT NAIROBI THIS 22ND DAY OF MARCH, 2024ERIC NYONGESA WAFUL - CHAIRMANELISHAH N. NJERU - MEMBERMUTISO MAKAU - MEMBEREUNICE N. NG’ANG’A - MEMBERABRAHAM K. KIPTROTICH - MEMBER