Kenya Law Weekly Issue 044/22-23

Publication did not mean that the notice be published in the Gazette of the partner state where the goods landed and or where the Commissioner’s office was based

Headnote: The main argument that arose was that the auction sale notices must be issued in the Gazettes of the Partner State or newspaper of wide circulation in such state. According to the appellant, the phrase Partner State referred to the state where the commissioner was giving the notice. The court held that the gazettement in the Kenyan Gazette was not sufficient, and it could not serve the intended purpose. The publication was not required to be carried in all the partner states to be valid. Apart from the requirement to publish the notice in the Official Gazette of the EAC, the second notice should have been published where the owner of the goods was domiciled. Publication did not mean that the notice be published in the Gazette of the partner state where the goods landed and or where the Commissioner’s office was based . That was a skewed interpretation, as it would not serve the purpose of the notice, which was precisely the mischief the amendment to section 42 (1) was carried.

Commissioner of Customs & Excise v Kaaya Enterprises Limited & 3 others (Civil Appeal 204 of 2020) [2024] KECA 502 (KLR) (26 April 2024) (Judgment)
Neutral citation: [2024] KECA 502 (KLR)
The Court of Appeal at Malindi
SG Kairu, JW Lessit & GV Odunga, JJA
April 26, 2024
Reported by Robai Nasike Sivikhe
Download the Decision

Tax Law – Commissioner of Customs and Excise – imports – sale of goods deposited in customs warehouse – publication of gazette notice before the sale of goods deposited in customs warehouse – where goods are owned by persons domiciled in a partner state other than where the goods landed – whether the publication of a gazette notice for the auction of goods to be delivered to its owner domiciled in Uganda, by the Commissioner of Customs and Excise, was proper upon publication at the state where the Commissioner was stationed – whether the publication of a gazette notice regarding the auction of goods at the partner state where the goods landed could be considered sufficient notice – East African Community Customs Management Act, section 42

Brief Facts
The 1^st respondent, a Ugandan company, challenged the wrongful sale by the appellant of container EMCU 3672428 Serial No. EMCAL59711, as abandoned cargo because of failure to clear the consignment in accordance with the applicable law. The 1^st respondent claimed to have suffered severe loss and damage and held the appellant, 2^nd, 3^rd and 4^th respondents jointly and severally liable. It lodged a complaint with the appellant, then filed suit against the appellant, the 2^nd, 3^rd and 4^th respondents. The 1^st respondent blamed the 3^rd respondent for failing to relay in a timely manner the details of the 1^st respondent’s container to the 2^nd respondent thus causing delay that resulted in the eventual auction of the container. The appellant and the 2^nd respondent were held liable for the illegal sale of the container; for hurriedly selling it at a gross undervalue to the 4^th respondent without the due process of the law. The 1^st respondent sought judgment against the appellant and the 2^nd, 3^rd and 4^th respondent jointly and severally, seeking: permanent injunction restraining the 4^th respondent by themselves, servants and/or agents or through any person whatsoever or acting on their behalf or behest from using, selling or wasting away the goods; the immediate restitution of the goods and/or in the alternative the appellant and the 2^nd, 3^rd and 4^th respondents jointly and or severally be ordered to purchase the goods.
The appellant in its defence admitted that the container in issue was put under customs control in terms of section 16 of the East African Community Customs Management Act (the Act), where it was to be cleared within 21 days. However, no such clearance occured resulting in the 2^nd respondent transferring the container to the appellant’s warehouse at Kilindini on condition that it be cleared within 30 days. It was pleaded that the 1^st respondent failed to clear the said container. Therefore, the appellant vide gazette notice gazetted the goods in the container for auction. The appellant argued that the auction sale notices must be issued in the Gazettes of the Partner State or newspaper of wide circulation in such state. According to the appellant, the phrase Partner State referred to the state where the commissioner was giving the notice.

Issues

Whether the publication of a gazette notice for the auction of goods to be delivered to its owner domiciled in Uganda, by the Commissioner of Customs and Excise, was proper upon publication at the state where the Commissioner was stationed.
Whether the publication of a gazette notice regarding the auction of goods at the partner state where the goods landed could be considered sufficient notice.

Held

Interpretation was the process of attributing meaning to the words used in a document, be it legislation, statutory instrument, or contract having regard to the context provided by reading the particular provision or provisions in light of the document as a whole and the circumstances attendant upon its coming into existence. In searching for the purpose of the act, it was legitimate to seek to identify the mischief sought to be remedied by the legislation. Although the text was often the starting point of any statutory construction, the meaning it bore must pay due regard to context. That was so even when the ordinary meaning of the provision to be construed was unambiguous.
Section 42(1) of the East African Community Customs and Management Act was amended by the East African Community Customs Management (Amendment) Act, of 2009 by providing that section 42(I) of the principal Act was amended “by inserting immediately after the word 'gazette, appearing in the third line, the words "and Gazettes of the partner State or a newspaper of wide circulation in the partner State.” That Act was assented into law on October 27, 2010. That was the applicable provision to the instant case.
Under section 2 of the East African Community Interpretation Act, 2004, the word Gazette meant the Official Gazette of the East African Community and any supplement to the Official Gazette or any Gazette Extraordinary. The provision that ‘the Commissioner shall give notice by publication in the Gazette and Gazettes of the partner State or a newspaper of wide circulation in the partner State’ suggested that there had to be more than one publication of the notice. The first one must be the Official Gazette of the East African Community Gazette.
For the second one, the legislation gave the Commissioner discretion to choose to publish the notice either in the Gazette of the partner state or in a newspaper of wide circulation in the partner states. That option was not in lieu or substitution of the publication in the Official Gazette but was in addition to it. The word ‘and’ after ‘Gazette’ meant that the words that followed those two words were to be considered as additional to the preceding word. That meant that the Commissioner would not stop at giving notice by publication in the Official Gazette of the East African Community, but in addition, must publish the notice either in a gazette of a member state or in a newspaper of wide circulation in the partner state.
The amendment must have been intended to cure instances where the notice was carried in publications that were out of reach of the party intended to receive the notification, in terms of circulation of the notice in their state of residence or domicile. Hence, in addition to the EAC Gazette, the notice must be carried in the partner state where the party intended to be served with the notice resides.
In the instant case, the publication was carried only in the Kenya Gazette. The 1^st respondent, who was the target of the notice, was domiciled in Uganda. The bill of lading and other documents that accompanied the goods indicated that fact. The gazettement in the Kenyan Gazette was not sufficient, and it could not serve the intended purpose. The publication was not required to be carried in all the partner states to be valid.
Apart from the requirement to publish the notice in the Official Gazette of the EAC, the second notice should have been published where the owner of the goods was domiciled. Publication did not mean that the notice be published in the Gazette of the partner state where the goods landed and or where the Commissioner’s office was based. That was a skewed interpretation, as it would not serve the purpose of the notice, which was precisely the mischief the amendment to section 42 (1) was carried.
Section 42 (1) of the Act gave the responsibility to publish the notice in the prescribed manner to the Commissioner of Customs. That duty could not be delegated or waived. It could not absolve the appellant from issuing notice as prescribed under the Act. The Commissioner did not comply with section 42 (1) of the Act on publication of the notice.
The claim for USD 40, 000 was a special damage claim. It had not been contested that the same was proved in evidence. The appellant claimed that the 1^st respondent had to be made to pay taxes and other charges for the sold consignment. There was no counterclaim in the appellant’s defence claiming for the same. The issue was also not raised at the trial. That was a new ground introduced in the final submissions of the party on appeal. The legal position was that a party could not introduce a new ground of appeal at the appeal. Not only because the appellate court lacked jurisdiction to consider it as there was no notice of appeal in its regard. Most importantly, an appellate Court could not consider a ground which was not considered by the Superior Court. The issue of restitution was a legal ground also not raised at the trial, even though the term was used liberally by the parties.
The appellant failed to follow due process in two stages. The first was failing to issue valid notice as prescribed under section 42(1) of the Act, to warn the 1^st respondent that its goods had landed and the need to clear them within the prescribed period to avoid auction. The second was having failed to give proper notice. The other processes it took culminating in the sale of the 1^st respondent’s goods were all invalid and deprived the 1^st respondent of its property unlawfully. Lack of proper notice to the owner of the goods as prescribed under section 42(1) of the Act was un-procedural and had the effect of vitiating the entire process undertaken by the appellant, and smirked of impropriety.
The 2^ndrespondent challenged the competence of the appeal on grounds of procedural laws and based on an incomplete record of appeal. Such a challenge cannot be raised at the submission stage of appeal for the first time. That was an ambush and could not be countenanced. Furthermore, the alleged missing record was one the 2^nd respondent could have taken the liberty to include in the record by way of a supplementary record of appeal, pursuant to Rule 94 of the Court of Appeal Rules.

Appeal dismissed.

Kenya Law Case Updates Issue 044/23-24
Case Summaries


CIVIL PRACTICE AND PROCEDURE	An interlocutory application shall not be originated before a petition of appeal was filed with the Court Headnote: The main issue that arose was whether the Supreme Court had jurisdiction to determine an appeal despite the alleged absence of a petition of appeal within a litigant’s record of appeal. The court found that there being an application pending certification before the Court of Appeal, it was not for the Supreme Court to, at that juncture, express itself on a jurisdiction that had not been invoked. Since there was no appeal on record, it would become an exercise in futility and an unnecessary waste of scarce judicial time and resources to interrogate and determine whether the Court has jurisdiction to determine the appeal. National Land Commission v Tom Ojienda & Associates & 2 others (Application E051 of 2023) [2024] KESC 16 (KLR) (26 April 2024) (Ruling) Neutral citation: [2024] KESC 16 (KLR) Supreme Court of Kenya MK Koome, CJ & P, PM Mwilu, DCJ & V-P, SC Wanjala, I Lenaola & W Ouko, SCJJ Reported by Robai Nasike Sivikhe Download the Decision *Civil practice and procedure* – appeals – appeals to the Supreme Court – proper procedure for filing of appeals – where a petition of appeal was not attached – whether the Supreme Court could determine a matter where the litigant failed to include a petition of appeal in its pleadings – whether the Supreme Court had jurisdiction to determine an appeal despite the alleged absence of a petition of appeal within a litigant’s record of appeal. Brief Facts The applicant instructed the 1st respondent to represent it in a suit wherein the petitioners therein sought compensation for alleged loss of their land and mesne profits. Upon conclusion of the matter, the applicant declined to pay the 1st respondent’s legal fees prompting the filing of the Bill of Costs which was subsequently taxed and a Certificate of Costs. Upon delivery of the Ruling on the Bill of Costs, the applicant neither filed a Notice of Objection nor a Reference against the Ruling on Taxation. In a Ruling dated June 21, 2017, the application to enter judgment based on the Certificate of Taxation was allowed and the 1st respondent extracted the decree accordingly. The applicant failed to take any step to pay the decretal amount, necessitating the institution of garnishee proceedings by the 1st respondent. The High Court rendered a Ruling on the 1st respondent’s application issuing a garnishee order absolute against the applicant’s bank accounts held by the 2nd respondent (1st Garnishee) and the 3rd respondent (2nd Garnishee) as enough to satisfy the decretal amount as per a Certificate of Order Against the National Land Commission. The applicant was granted a stay for 7 days upon an oral application, and subsequently filed a Notice of Appeal, however, that was done before obtaining leave to appeal to the Court of Appeal as was the procedure under Order 43 of the Civil Procedure Rules, 2020 as read with Rule 11 of the Advocates Remuneration Order. Pursuant to a Ruling, the Court of Appeal ordered the applicant to pay the 1st respondent the sum of Kshs.100,000,000.00 in default of which the order for stay would lapse. Contemporaneously, the applicant filed an application for stay of the orders in High Court and sought leave to appeal to the Court of Appeal, which application was granted. The applicant’s Record of Appeal was however filed at the Court of Appeal before leave to appeal was obtained from the trial court. Subsequently, the 1st respondent filed an application seeking to strike out the Record of Appeal on the grounds, inter alia, that it was filed without leave of the trial court contrary to Order 43 of the Civil Procedure Rules 2020 and Rule 11 of the Advocates Remuneration Order. Thus, the Court of Appeal struck out the entire Record of Appeal for want of jurisdiction for having been filed without obtaining leave in violation of the provisions of the law. That was the decision that had prompted the applicant to approach the Supreme Court. The applicant (National Land Commission) sought a stay of execution of the order made by the High Court. The 1st respondent filled a preliminary objection challenging the Supreme Court’s jurisdiction to hear and determine the applicant’s application. Similarly, the 1st respondent filed an application to strike out the Petition of Appeal. Issue: Whether the Supreme Court had jurisdiction to determine an appeal despite the absence of a petition of appeal within a litigant’s record of appeal. Held: The Supreme Court Act and Rules provide for the filing of appeals and applications for conservatory orders. Section 23A of the Supreme Court Act mandated the court to only entertain an application for conservatory orders, such as the instant one, after the filing of a petition of appeal before court. That position was reinforced by Rule 31(2) of the Supreme Court Rules, 2020 which provided that an interlocutory application shall not be originated before a petition of appeal was filed with the Court. Thus, a petition of appeal was filed in the context of an appeal. Rule 39 set out the requirements for instituting an appeal to include a petition of appeal, a record of appeal and the prescribed fee. There were statutory timelines that had to be adhered to including the filing and transmission of the Notice of Appeal as a condition precedent to the filing of the appeal. Accordingly, in practice, litigants filed the appeal on the court’s online portal from which a number was allocated upon payment of the requisite fees or waiver in the case of public institutions such as the applicant. It was within that appeal that an application for conservatory relief was filed and not the other way round. The applicant deployed quite an unusual approach. The impugned ruling having been delivered on December 8, 2023, the applicant was expected to file, transmit and serve a Notice of Appeal as soon as possible thereafter to signal its intention to appeal. While parties transmit the Notice of Appeal manually, the applicant lodged the same at the Court of Appeal and served it upon parties before uploading the same on the Court’s portal. On the same day of the uploading, the applicant filed, as an application, the instant Motion for conservatory orders and among the documents uploaded was the petition of appeal which was filed as a “Notice of Motion within the Petition”. It was therefore unsurprising that no payment of fees could be made on it nor a petition number generated. When that discrepancy was brought to the attention of the applicant’s representative, he, instead of regularizing the position, resorted to invoking non-existent “administrative” powers of the Registrar, through correspondence, seeking an allocation of a case reference number, itself obviously an exercise in futility. That was a grave inadvertence on the part of the applicant that could not be condoned. It was incumbent upon any litigant, prior to approaching the Court, to familiarize themselves with requisite procedural requirements to assuage any likely confusion that may arise out of the interpretation of the provisions of the Supreme Court Act and the Supreme Court Rules. There was no petition of appeal on record before the Supreme Court. The Supreme Court’s appellate jurisdiction was circumscribed in article 163(4) of the Constitution of Kenya. The jurisdiction was as of right in any case involving the interpretation or application of the Constitution; and in any other case in which the Supreme Court, or Court of Appeal, certified that a matter of general public importance was involved. Article 163(5) of the Constitution of Kenya empowered the Court to review and either affirm, vary or overturn a certification decision by the Court of Appeal. That jurisdiction was transcribed in sections 15A and 15B of the Supreme Court Act, setting out the appellate jurisdiction of the Court as of right and upon certification, respectively. In relation to the appeal upon certification, section 15B (2) of the Supreme Court Rules required that an application for certification shall be filed before, and determined by the Court of Appeal in the first instance. The applicant had filed an application for certification before the Court of Appeal at Kisumu. That application was annexed to the 1st respondent’s replying affidavit in response to the applicant’s Notice of Motion. An application for leave, as a matter of good practice, should originate in the Court of Appeal, which would be better placed to certify whether a matter of general public importance was involved. If the applicant was dissatisfied with the decision in that regard, the party would be at liberty to seek a review under article 163 (5) of the Constitution. That requirement was further encapsulated in section 15B (2) of the Supreme Court Act. There being an application pending certification before the Court of Appeal, it was not for the Supreme Court to, at that juncture, express itself on a jurisdiction that had not been invoked. Since there was no appeal on record, it would become an exercise in futility and an unnecessary waste of scarce judicial time and resources to interrogate and determine whether the Court has jurisdiction to determine the appeal. Preliminary objection allowed and the petition of appeal was dismissed..
CIVIL PRACTICE AND PROCEDURE	Grant of leave to adduce additional evidence had not been satisfied Headnote:The suit involved an application for leave to adduce additional leave and an application to strike out a response for being filed outside the stipulated statutory timelines. The court held that It was apparent that the petitioners, dissatisfied with the Supreme Court’s ruling that declined to strike out the respondent’s replying affidavit, sought, rather ingeniously, a second bite of the cherry through the instant application. The further witness statement that they sought to introduce was intended to counter the averments made in that affidavit. Grant of leave to adduce additional evidence had not been satisfied. The court found that it was not appropriate to strike out the respondent’s response for being filed 4 hours and 40 minutes after the Court’s stipulated time of 9.00am. Dari Limited & 5 others v East African Development Bank (Petition (Application) E012 of 2023) [2024] KESC 18 (KLR) (Civ) (26 April 2024) (Ruling) Neutral citation: [2024] KESC 18 (KLR) Supreme Court of Kenya PM Mwilu, DCJ & V-P, MK Ibrahim, SC Wanjala, NS Ndungu & W Ouko, SCJJ Download the Decision *Civil practice and procedure* – pleadings – filing of additional evidence – seeking leave to adduce additional evidence before the Supreme Courts – guidelines to be considered before an application to adduce additional evidence is allowed – whether the application to adduce additional evidence met the legal threshold set by the Supreme Court, hence it ought to be allowed – Supreme Court Act, section 20 (2) *Civil practice and procedure* – limitation of time – time within which to file a response to an interlocutory application – where the response to an interlocutory application was filed 4 hours after the stipulated time – whether a response to an interlocutory application filed outside time, by a margin difference of approximately 4 hours, ought to be struck out – Supreme Court Rules, rule 31 (4) Brief facts: Before the Supreme Court were two notices of motion applications filed by the petitioners. The first application sought leave to adduce additional evidence while the second one sought to strike out the respondent’s replying affidavit sworn by Carol Luwaga on January 31, 2024 in response to the petitioners’ first application. On the first application, the petitioners affirm that the further witness statement adduced by the respondents was not within their knowledge and allowing additional evidence from the petitioner would remove the vagueness of the slanted historical narrative contained in the respondent’s response. On the second application, the petitioners contended that they effected service of their application to adduce additional evidence upon counsel on record for the respondent on January 30, 2024 at 8. 30AM in compliance with the Court’s directions issued on January 29, 2024. That the respondent without any justifiable cause and in total disregard of the Court’s directions purported to effect service of its unfiled response upon the petitioners electronically on February 1, 2024 at 11. 43AM; then proceeded to attempt to serve their duly filed response together with their submissions upon the petitioners on the same day at 1:40PM, which was 4 hours and 40 minutes after the Court’s stipulated time of compliance, that was 9.00AM on even date. Pursuant to rule 12 as read with rule 16 of the Supreme Court Rules, filing was only deemed to be completed upon the actual filing of documents and / or pleadings both physically and electronically. The respondent neither provided viable reasons as to the non – compliance nor was leave sought to file its response out of time; therefore, the only redress to maintain the sanctity of the Supreme Courts’ records was striking out the response. Issues: Whether the application to adduce additional evidence met the legal threshold set by the Supreme Court, hence it ought to be allowed. Whether a response to an interlocutory application filed outside time, by a margin difference of approximately 4 hours, ought to be struck out. Held: Whereas rule 31 (4) of the Supreme Court Rules stipulated that a response to the interlocutory application together with written submissions shall be filed and served within seven days, Rule 3 (5) affirmed the unlimited inherent power of the Court to make such orders or give directions as may be necessary for the ends of justice or to prevent abuse of the process of the Court. The first application dated January 26, 2024, for adducing additional evidence, was filed under certificate of urgency and certified as such by the duty judge necessitated the Deputy Registrar to issue the directions of January 29, 2024 to facilitate its expeditious disposal in line with rule 3(5) thereby varying the time provided under rule 31 (4). The Court may vary that time frame as provided under rule 3(5) to succor the furtherance of expeditious administration of justice. It was not appropriate to strike out the respondent’s response for being filed 4 hours and 40 minutes after the Court’s stipulated time of 9.00am. The respondent used best efforts under the circumstances with part of the delay being attributable to the Judiciary e -filing system, a fact which was uncontroverted. Conversely, the petitioners alleged that there was no evidence that the deponent of the respondent’s response, who was a resident of Uganda, was in Nairobi at the time neither was the signature witnessed by a Ugandan Notary Public. It was trite law that whoever alleged must prove. In the instant, case the petitioners who had alleged had not validated their averments with any proof to justify their allegations. Therefore, those were bare allegations that were unsubstantiated. The governing principles on the Supreme Court’s jurisdiction to grant leave to adduce additional evidence was laid down in case law and later incorporated under section 20 (2) of the Supreme Court Act. The Court, in admitting additional evidence, shall consider whether the additional evidence – was directly relevant to the matter before the Court; was capable of influencing or impacting on the decision of the Court; could not have been obtained with reasonable diligence for use at the trial; was not within the knowledge of the party seeking to adduce the additional evidence; removed any vagueness or doubt over the case; was credible and bore merit; would not make it difficult or impossible for the other party to respond effectively; and disclosed a case of wilful deception to the Court. It was not in dispute that the further witness statement that sought to be adduced propounded the history of engagements between those parties and the nature of the Facility Agreement. The petitioners alleged that the further witness statement would clear the conflicting factual contestations between the parties. As a matter of course, the petitioners had not explained the relevance of the further witness statement in relation to their appeal. It was apparent that the petitioners, dissatisfied with the Supreme Court’s ruling that declined to strike out the respondent’s replying affidavit, sought, rather ingeniously, a second bite of the cherry through the instant application. The further witness statement that they sought to introduce was intended to counter the averments made in that affidavit. Grant of leave to adduce additional evidence had not been satisfied. Costs follow the event. The party in default in instituting the appeal shall be liable to pay the costs arising. Since the substantive dispute was still pending, it was only proper that the costs abide the outcome of the appeal. Orders The notice of motion dated and filed on January 26, 2024 was dismissed. The notice of motion dated and filed on February 2, 2024 was dismissed. Costs of the applications shall abide the outcome of the appeal.

Kenya Law Weekly Issue 044/22-23

KenyaLawBlog

Recent news

Categories