[2023] KEHC 25998 (KLR)

Lumumba v Rift Gas Limited (Civil Appeal E805 of 2022) [2023] KEHC 25998 (KLR) (Civ) (30 November 2023) (Judgment)

Neutral citation: [2023] KEHC 25998 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Civil

Civil Appeal E805 of 2022

DAS Majanja, J

November 30, 2023

Between

Shally Akinyi Lumumba

Appellant

and

Rift Gas Limited

Respondent

(Being an appeal from the Judgment and Decree of Hon. B. J. Ofisi, RM/Adjudicator dated 27th April 2022 at Small Claims Court at Nairobi, Milimani in SCC Claim No. E724 of 2022)

Jurisdiction of the Small Claims Court to determine a dispute past the statutory 60-day time limit.

The main issue was whether the failure of the Small Claims Court to render a decision within the 60-day timeline would render such a decision invalid. The High Court held that the phrase, ‘so far as is practicable in the circumstances’ as used in section 34(1) of the Small Claims Court Act meant that where the circumstances rendered it impossible to deliver judgment within the 60- day period, then the judgment of the Small Claims Court would still be valid.

Reported by John Ribia

Jurisdiction- jurisdiction of the Small Claims Court - jurisdiction to determine a matter after lapse of the statutory sixty (60) days’ time limit for the determination of a matter before it - 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 - whether the failure of the Small Claims Court to render a decision within the 60-day timeline would render such a decision invalid - what were the guidelines to give effect to the Small Claims Court and facilitate the disposal of the cases -Constitution of Kenya, 2010, article 159; Small Claims Court Act (cap 10A), sections 34(1) and 38(1).Civil Practice and Procedure– appeals – appeals on matters of law - what were the circumstances in which an appellate court that limited to determine matters of law could arrive at a different conclusion on matters of fact - Small Claims Court Act (cap 10A), sections 34(1) and 38(1).

Brief facts Before the Small Claims Court, the respondent averred that the appellant, in a Settlement Agreement admitted to misappropriating Kshs. 1,200,000. 00 in the course of her employment with the respondent which she undertook to pay the by way of 4 equal monthly instalments of Kshs. 300,000. 00 each payable at the end of the months of May, August and November of 2021 as well as at the end of the month of January, 2022. In breach of the Settlement Agreement, the appellant only remitted 2 instalments leaving a balance of Kshs. 600,000. 00 which the respondent claimed together with interest and costs of the suit.In response to the claim, the appellant claimed that she only owed the respondent Kshs. 689,000. 00 out of which she had already paid Kshs. 600,000. 00 and not Kshs. 1,200,000. 00 as claimed by the respondent. That the Kshs. 689,000. 00 was based on the respondent’s internal audit report. That she was arrested and taken to Karen Police Station and thus under duress, coercion and was unduly influenced to enter into the Settlement Agreement. The Small Claims Court held that the appellant failed to prove that the Settlement Agreement was procured by duress and coercion and held that the appellant owed the Respondent the Kshs. 600,000. 00 as pleaded.Aggrieved, the appellant filed the instant appeal where it claimed that the trial court’s conclusion was inconsistent with the evidence on record and thus the reason why her appeal ought to succeed. The appellant also faulted the Adjudicator’s conclusions on the ground that they were not anchored in evidence. She insisted that she proved duress, coercion, unconscionable bargain and undue influence exercised by the respondent in concert with the police which all vitiated the Settlement Agreement. The respondent contended that the appellant was inviting the court to deal with matters of fact rather than matters of law. It urged the court to dismiss the appeal.

Issues

Whether the failure of the Small Claims Court to render a decision within the 60-day timeline would render such a decision invalid.

What were the circumstances in which an appellate court that limited to determine matters of law could arrive at a different conclusion on matters of fact?

Relevant provisions of the Law Small Claims Court Act (Cap 10A), section 34(1)34. Expeditious disposal of cases(1) All proceedings before the Court on any particular day so far as is practicable shall be heard and determined on the same day or on a day to day basis until final determination of the matter which shall be within sixty days from the date of filing the claim

Held

While the intention of Parliament in codifying the 60-day timeline in the Small Claims Court Act (SCCA) was to ensure timely disposal of all proceedings before the Small Claims Court (SCC), the said 60-day timeline was not cast in stone and discretion of the court totally shut out as was with the Public Procurement and Asset Disposal Act (PPAD) which provided for the consequence of the failure of the High Court to make the decision within the prescribed timeline. The intent of the PPAD and the consequence for failure to comply with the timelines was set out bearing in mind the fact that procurement was a one-off process.

Whereas the timelines were valid, it should not be lost that the SCCA granted the court flexibility to do justice to the parties and the said court had the right to impose any terms and conditions to ensure that the hearing could proceed within the time limited. The 60-day timeline in the SCCA was directory and not mandatory as it was not the intention of the SCCA to invalidate any proceedings that violate the statutory timelines. To adopt such a position would undermine the statutory objects and cause injustice to the parties as the case would have to be reheard afresh with attend costs to the parties

The phrase, ‘so far as is practicable in the circumstances’ as used in section 34(1) of the Small Claims Court Act meant that where the circumstances rendered it impossible to deliver judgment within the 60- day period, then the judgment of the Small Claims Court would still be valid. It was not possible to deliver the judgment within the said 60 days from the date of filing the suit as the appellant herself did not file her response on time and the matter was adjourned at least once due to unavailability of the respondent’s witness. The appellant, having benefitted from the adjudicator’s discretion that allowed her to file her response to the claim late and the interlocutory judgment entered against her set aside, could not plead strict timelines when she was partly responsible for the delay in hearing the matter. The ground that the judgment delivered outside the 60-day period prescribed in section 34 of the SCCA was invalid was dismissed.

The court’s jurisdiction in dealing with appeals from the Small Claims Court was limited by section 38(1) of the Small Claims Court Act which limited appeals to matters of law. A court limited to matters of law was not permitted to substitute the subordinate court’s decision with its own conclusions based on its own analysis and appreciation of the facts unless the findings were so perverse that no reasonable tribunal would have arrived at them.

The record showed that it was the appellant that initiated negotiations for the settlement agreement that the appellant later signed. No issues were raised about coercion or undue influence or inflation. The appellant even gave corrections to the Agreement, meaning she had gone through and understood its contents. The trial court had no reason not to enforce the Settlement Agreement and order the Appellant to pay the balance due therein.

Appeal dismissed.

Citations Cases ADK Technologies Ltd in Consortium with Computer Technologies Ltd v Public Procurement Administrative Review Board & 4 others (Civil Appeal E598 of 2021; [2022] KECA 407 (KLR)) — Mentioned

Aprim Consultants v Parliamentary Service Commission & Anothe (Judicial Review Application 117 of 2020; [2021] KEHC 9385 (KLR)) — Mentioned

Consortium of TSK Electronica Y Electricdad S.A. & Ansaldoenergia v PPARB & 3 Others (CA. No. E012 of 2022. ) — Mentioned

Crown Beverages Limited v MFI Document Solutions Limited (Civil Appeal E833 of 2021; [2023] KEHC 58 (KLR)) — Mentioned

Energy Sector Contractors Association v Accounting Officer, Kenya Electricity Transmission Company Limited & another (Civil Application E333 of 2021; [2022] KECA 605 (KLR)) — Mentioned

Joint Venture of Lex Oilfield Solutions Ltd & CFAO Kenya Ltd v Public Procurement Administrative Review Board & 4 others (Civil Appeal 022 of 2022; [2022] KECA 424 (KLR)) — Mentioned

Mati, John Munuve v Returning Officer Mwingi North Constitutency, Independentelectoral & Boundaries Commission & Paul Musyimi Nzengu (Election Appeal 5 of 2018; [2018] KECA 700 (KLR)) — Mentioned

Risk Africa Innovatis Limited v Smartmatic International Holdings B.V.A & 3 others (Civil Appeal (Application) E008 of 2022; [2022] KECA 427 (KLR)) — Mentioned

Rutere v Muigai (Civil Appeal E176 of 2022; [2023] KEHC 17345 (KLR)) — Mentioned

Statutes Public Procurement And Asset Disposal Act (cap 412A) — section 175 — Cited

Small Claims Court Act (cap 10A) — section 34(1); 38(1) — Cited

AdvocatesMr Ochiel instructed by Ochiel Dudley Advocates for AppelantMr Lungwe instructed by Lihavi and Company Advocates for Respondent

Judgment

Introduction and Background 1. The Appellant is aggrieved by the judgment dated 27. 04. 2022, where the Subordinate Court allowed the Respondent’s claim for Kshs. 600,000. 00 against her (“the Judgment”). Her Memorandum of Appeal is dated October 10, 2022. The appeal was canvassed by way of written submissions.

2. Before delving into the appeal, I believe a brief highlight of the case as presented before the Subordinate Court is apposite. In its Statement of Claim, the Respondent averred that the Appellant, in a Settlement Agreement dated 03. 05. 2021 (“the Settlement Agreement”) admitted to misappropriating Kshs. 1,200,000. 00 in the course of her employment with the Respondent which she undertook to pay the by way of 4 equal monthly instalments of Kshs. 300,000. 00 each payable at the end of the months of May, August and November of 2021 as well as at the end of the month of January, 2022. In breach of the Settlement Agreement, the Appellant only remitted 2 instalments leaving a balance of Kshs. 600,000. 00 which the Respondent claimed together with interest and costs of the suit.

3. In response to the claim, the Appellant claimed that she only owed the Respondent Kshs. 689,000. 00 out of which she had already paid Kshs. 600,000. 00 and not Kshs. 1,200,000. 00 as claimed by the Respondent. That the Kshs. 689,000. 00 was based on the Respondent’s internal audit report. That she was arrested and taken to Karen Police Station on 26. 04. 2021 where her counsel suggested and the Respondent and the DCI acceded to an out of court settlement for Kshs 689,000. 00. That it was agreed the parties would meet with their advocates at the Respondent’s offices on 29. 04. 2022. However, the Appellant claimed that using the pressure of the criminal complaint at Karen police station, the Respondent, through their advocate directed the Appellant to go to the Respondent’s offices without her advocates where she was informed that the Respondent’s directors would not negotiate with her if she went with her advocates. Instead, the Respondent’s advocate one Javan Omondi imposed another advocate, one PS who was turned out be Omondi’s friend.

4. The Appellant claimed that she was coerced into signing the Settlement Agreement undertaking to pay Kshs. 1,200,000. 00 which she had not previously seen and whose terms she did not know and had not reviewed through her advocates of choice. That she only owed the Respondent Kshs 689,000. 00 as per the audit report and complaint made to Karen Police Station. In her letter to the DCI, the Appellant frankly confesses that the “decision was reached with coercion”. For these reasons, the Appellant stated that the Settlement Agreement was infected by vitiating factors rendering it liable to be set aside: duress, coercion, unconscionable bargain, and undue influence. She asserted that as her former employer, the Respondent could and did exert undue influence over her and struck an unconscionable bargain with her after directing her to keep her advocates away from the meeting or they would not negotiate with her.

5. Based on the factors vitiating the Settlement Agreement at its inception and at its performance, the Appellant urged that the court to discharge her from the Settlement Agreement and to dismiss the Respondent’s claim with costs to the Appellant.

6. The court set down the matter for hearing where the Respondent presented its Legal Officer, Javan Omondi Otwoma as its witness (CW 1). The Appellant testified on her own behalf. After considering the pleadings, evidence on record and the submissions, the Adjudicator rendered the Judgment. She was of the view that the only issue for determination was whether there was an agreement between the parties. The Adjudicator concluded that the Appellant failed to prove that the Settlement Agreement was procured by duress and coercion. Consequently, she found that the Appellant willingly executed the Settlement Agreement and that the discrepancy in dates notwithstanding, it was clear from the evidence adduced that the Appellant owed the Respondent the Kshs. 600,000. 00 as pleaded. It is this Judgment that forms the basis of this appeal to which I now turn.

Analysis and Determination 7. The Appellant appeals against the Judgment on technical and substantive grounds. I will deal with the technical grounds first. She states that the Judgment was delivered on 18. 05. 2022 which was outside the 60-day statutory period for determination of matters in the Small Claims Court provided by section 34(1) of the Small Claims Court Act (“the SCCA”). She submits that the claim, having been filed on 10. 02. 2022, the Judgment ought to have been rendered by 11. 04. 2022 latest and that the court lacked jurisdiction when it was delivered on 18. 05. 2022.

8. It is common ground that section 34(1) of theSCCA provides as follows:34(1)All proceedings before the Court on any particular day so far as is practicable shall be heard and determined on the same day or on a day to day basis until final determination of the matter which shall be within sixty days from the date of filing the claim. (Emphasis mine)

9. The Appellant relies on a number of Court of Appeal decisions to buttress her position including Aprim Consultants v Parliamentary Service Commission & Another, CA. No. E039 of 2021, Consortium of TSK Electronica Y Electricdad S.A. & Ansaldoenergia v PPARB & 3 Others, CA. No. E012 of 2022, ADK Technologies Ltd in Consortium with Computer Technologies Ltd v Public Procurement Administrative Review Board & 4 others [2022] KECA 407 (KLR), Risk Africa Innovatis Limited v Smartmatic International Holdings B.V.A & 3 others [2022] KECA 427 (KLR), Energy Sector Contractors’ Association v Accounting Officer, Kenya Electricity Transmission Company Limited & another [2022] KECA 976 (KLR) and Joint Venture of Lex Oilfield Solutions Ltd & CFAO Kenya Ltd v Public Procurement Administrative Review Board & 4 others [2022] KECA 424 (KLR). Based on these decisions she submits that the decision of the Small Claims Court must be made strictly within 60 days otherwise the said decision will be a nullity as the court is bereft of jurisdiction or any force or effect in law.

10. In the decisions cited, the Court of Appeal was dealing with the effect of section 175 of the Public Procurement and Asset Disposal Act, 2015 (“the PPAD”) which provides that the High Court shall determine judicial review applications from the Public Procurement Administrative Review Board (“the Review Board”) within 45 days after such application. In the event the court fails to make the decisions with the prescribed timeline, the decision of the Review Board takes effect. In Aprim Consultants v Parliamentary Service Commission & Another (supra), the Court of Appeal held that Parliament’s unmistakable intention to constrict the time taken for the filing, hearing and determination of public procurement disputes was in keeping with the said Act’s avowed intent and object of expeditious resolution of those disputes. That Parliament was thus fully engaged and intentional in setting the timelines but that, “In one of the rarer instances where all discretion is totally shut out, Parliament expressly enacted a consequence to follow default or failure to file or to decide within the prescribed times: the decision of the Board would crystallize and he invested with finality.” The Court of Appeal’s reading of the Act was that “the High Court was under an express duty to make its determination within the time prescribed. During such time did its jurisdiction exist, but it was a time-bound jurisdiction that ran out and ceased by effluxion of time. The moment the 45 days ended, the jurisdiction also ended. Thus, any judgment returned outside time would be without jurisdiction and therefore a nullity, bereft of any force or effect in law.” (Emphasis added).

11. While it is true that the intention of Parliament in codifying the 60-day timeline in the SCCAwas to ensure timely disposal of all proceedings before the said court, I find that the said 60-day timeline is not cast in stone and discretion of the court totally shut out as is with the PPAD which provides for the consequence of the failure of the High Court to make the decision within the prescribed timeline. The intent of the PPAD and the consequence for failure to comply with the timelines is set out bearing in mind the fact that procurement is a one-off process.

12. Whereas these timelines are valid, it should not be lost that the SCCA grants the court flexibility to do justice to the parties and the said court has the right to impose any terms and conditions to ensure that the hearing can proceed within the time limited (see Rutere v Muigai [2023] KEHC 17345 (KLR)). The 60-day timeline in the SCCA is directory and not mandatory as it is not the intention of the SCCA to invalidate any proceedings that violate the statutory timelines. To adopt such a position would undermine the statutory objects and cause injustice to the parties as the case would have to be reheard afresh with attend costs to the parties (see Crown Beverages Limited v MFI Document Solutions Limited [2023] KEHC 58 KLR)].

13. I agree with the Respondent that the phrase, ‘so far as is practicable in the circumstances’ means that where the circumstances render it impossible to deliver judgment within the 60- day period, then the judgment of the court will still be valid. In this regard, a perusal of the record indicates that it was not possible to deliver the judgment within the said 60 days from the date of filing the suit as the Appellant herself did not file her response on time and the matter was adjourned at least once due to unavailability of the Respondent’s witness. The Appellant, having benefitted from the Adjudicator’s discretion that allowed her to file her response to the claim late and the interlocutory judgment entered against her set aside, cannot now plead strict timelines when she was partly responsible for the delay in hearing the matter. I dismiss the ground that the judgment delivered outside the 60-day period prescribed in section 34 of the SCCA is invalid.

14. Turning to the substance of the appeal, the Appellant claims that the lower court’s conclusion was inconsistent with the evidence on record and thus the reason why her appeal ought to succeed. The Appellant also faults the Adjudicator’s conclusions on the ground that they were not anchored in evidence. She insists that she proved duress, coercion, unconscionable bargain and undue influence exercised by the Respondent in concert with the police which all vitiated the Settlement Agreement.

15. The Respondent submits that the Appellant is inviting the court to deal with matters of fact rather than matters of law. It urges the court to dismiss the appeal.

16. The court’s jurisdiction in dealing with appeals from the Small Claims Court is limited by section 38(1) of the Small Claims Court Act, 2016 which provides that ‘A person aggrieved by the decision or an order of the Court may appeal against that decision or order to the High Court on matters of law.’ A court limited to matters of law is not permitted to substitute the subordinate court’s decision with its own conclusions based on its own analysis and appreciation of the facts unless the findings are so perverse that no reasonable tribunal would have arrived at them (John Munuve Mati v Returning Officer Mwingi North Constituency & 2 others [2018] eKLR).

17. Going through the record, I cannot fault the Adjudicator’s conclusions. It is the Appellant and her advocate who initiated the negotiations for the Settlement Agreement that was signed by the Appellant on 30. 04. 2021 as per her email of the same date and testimony in court. In the said email, she did not raise any issue about coercion or undue influence or inflation of the claimed amount by the Respondent. Contrary to her averment that she did not know of the contents of the Settlement Agreement, the said email has her giving corrections to the Agreement, meaning she had gone through its contents.

18. The Appellant made payments totalling Kshs. 600,000. 00 between April 25, 2021 and 31. 08. 2021 in accordance with the Settlement Agreement leaving a balance of Kshs. 600,000. 00 which is what the Respondent claimed from the Appellant. Since the Appellant did not prove any coercion or undue influence, the trial court had no reason not to enforce the Settlement Agreement and order the Appellant to pay the balance due therein. This ground of appeal fails. The Adjudicator’s decision was not perverse as it was based on the material before the court. The Adjudicator considered all the relevant factors in arriving at her decision.

Disposition 19. The Appellant’s appeal fails and is dismissed. The Appellant shall pay the Respondent costs of Kshs. 30,000. 000.

DATED AND DELIVERED AT NAIROBI THIS 30TH DAY OF NOVEMBER 2023. D.S. MAJANJAJUDGEMr Ochiel instructed by Ochiel Dudley Advocates for the Appellant.Mr Lungwe instructed by Lihavi and Company Advocates for the Respondent.