Nature of the slip rule in the review of decisions by the Supreme Court
Headnote: The application sought the review of the Supreme Court’s decision. The applicant premised her application on the fact that despite being the successful party in the appeal, she was not awarded the costs of the appeal. She classified that failure as an oversight, clerical error or an error, as costs followed the event. The court highlighted thenature of the slip rule in the review of decisions by the Supreme Court.

Trattoria Limited v Maina & 3 others (Petition (Application) 26 (E029) of 2022) [2024] KESC 54 (KLR) (30 August 2024) (Ruling)
Neutral citation: [2024] KESC 54 (KLR)
Supreme Court of Kenya
MK Koome, CJ, MK Ibrahim, SC Wanjala, NS Ndungu & W Ouko, SCJJ
August 30, 2024
Reported by Kakai Toili
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Civil Practice and Procedure – review – review of decisions by the Supreme Court - what was the nature of the slip rule in the review of decisions by the Supreme Court – Supreme Court Act, Cap 9B, section21(4) and 21A; Supreme Court Rules, rule 28(5).

Brief facts
By a ruling dated November 25, 2022, the court dismissed the applicant’s appeal since it did not disclose a question touching on the interpretation and application of the Constitution; that contemporaneously, the court found that it lacked jurisdiction to entertain the application and the appeal. Ultimately, the court made the following orders; the notice of motion dated September 9, 2022 was dismissed; the petition of appeal dated September 5, 2022 was struck out for want of jurisdiction; and the applicant shall bear the costs of the application.
The instant application sought for the court to review its ruling. The applicant contended that it was condemned it to bear the costs of the application but the court inadvertently failed to make orders as to the costs of the substantive appeal. The applicant stated that costs followed the event and being the successful party, that the application met the test set out in the case of Fredrick Otieno Outa v Okello & 3 Others, SC Petition No. 6 of 2014; [2017] KESC 25 (KLR) (Fredrick Outa case). The applicant argued that the error in question was clerical arising from an omission which deviated from the full meaning or intention of the court’s decision.

Issue
What was the nature of the slip rule in the review of decisions by the Supreme Court?

Relevant provisions of the law
Supreme Court Act, Cap 9B
Section 21 - General powers
(4) The Court may, on its own motion or on application by any party with notice to the other or others, correct any oversight or clerical error of computation or other error apparent on such judgement, ruling or order and such correction shall constitute part of the judgement, ruling or order of the Court.

Section 21A - Review of own decision
The Supreme Court may review its own decision, either on its own motion, or upon application by a party in any of the following circumstances—
(a) where the judgement, ruling or order was obtained through fraud, deceit or misrepresentation of facts;
(b) where the judgement, ruling or order is a nullity by virtue of being made by a court which was not competent;
(c) where the court was misled into giving a judgement, ruling or order under the belief that the parties have consented; or
(d) where the judgement, ruling or order was rendered on the basis of repealed law, or as a result of a deliberate concealment of a statutory provision.

Held
  1. The court could only review its decision(s) in the manner prescribed in the Fredrick Otieno Outa v Okello & 3 Others, SC Petition No. 6 of 2014; [2017] KESC 25 (KLR) (Fredrick Outa Case) and section 21A of the Supreme Court Act. The applicant had not demonstrated that the subject ruling was obtained through fraud, deceit, or misrepresentation of facts; neither had she claimed nor established that the court was not competent to render the ruling. She had also not claimed nor established that the court was beguiled into believing that there existed a consent between the parties; and she had not claimed or established that the ruling was rendered on the basis of repealed law or on account of a deliberate concealment of a statutory provision. The application did not fall within the parameters enunciated in the Fredrick Outa case and section 21A of the Supreme Court Act.
  2. Sections 21(4) and 21A of the Supreme Court Act spoke to two very different jurisdictions. The former was what was commonly referred to as the slip rule, where the court could correct errors apparent on the face of the judgment, ruling or order of the court and where such correction was obvious and did not generate any controversy on the decision of the Court. The slip rule did not confer upon a court, any jurisdiction or powers to sit on appeal over its own judgment, or, to extensively review such judgment as to substantially alter it. Under the slip rule, the correction should be seen to steer a judgment, decision or order of the court towards a logical, or clerical perfection. It, however, should not change the substance of the judgment or alter the clear intention of the Court.
  3. A clerical error was an issue that fell squarely under the slip rule. Looking at the applicant’s application, despite citing section 21A of the Supreme Court Act, the grounds thereof aligned with section 21(4) of the Act. The court invoked its jurisdiction under section 21(4) as read with rule 28(5) of the Supreme Court Rules.
  4. The court maintained an open-ended mandate in the invocation of discretion to ensure that the ends of justice were met, much like section 27(1) of the Civil Procedure Act, Cap 21 of the Laws of Kenya which provided, inter alia, that the award of costs shall remain at the discretion of the court or judge. The court retained the discretion to award costs and in that context, the court dismissed the respondent’s appeal because it did not raise any questions that involved the interpretation and application of the Constitution and had improperly invoked the court’s jurisdiction under article 163(4)(a) of the Constitution. Although the matter had not progressed to an oral hearing of the appeal, costs were still expended by parties in preparing for the hearing and therefore the successful party must be entitled to costs.
Application allowed; costs of the appeal dated September 5, 2022 shall be borne by the respondent.

 

 

 

Kenya Law
Case Updates Issue 016/24-25
Case Summaries  
   
INSOLVENCY LAW Requirement of statutory demand in liquidation petitions based on court decrees

Headnote: The petitioner sought liquidation of the respondent, Xplico Insurance Company Limited, due to its failure to honor a court decree for Kshs. 2,906,182. The respondent challenged the petition on grounds that the petitioner failed to serve a statutory demand. The court held that no statutory demand was necessary in the case, as the petition was based on a court decree rather than general indebtedness. The respondent's application to strike out the petition was dismissed, and the petitioner was awarded costs.

Kinuthia v Xplico Insurance Company Limited (Insolvency Petition E051 of 2022) [2023] KEHC 23704 (KLR) (Commercial and Tax) (19 October 2023) (Ruling)
Neutral Citation: [2023] KEHC 23704

High Court at Nairobi
DAS Majanja, J

Reported by John Ribia

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Insolvency Law – – petition for liquidation of a company for failure to pay its debts – petition for the liquidation of an insurance company – procedural requirements - whether service of a statutory demand was a pre-requisite for filing a liquidation petition - whether a petition for liquidation based on a company's inability to pay debts under section 384 of the Insolvency Act required service of a statutory demand for all forms of debt - whether a statutory demand was required in all liquidation petitions filed under the Insolvency Act - whether the failure to serve a statutory demand rendered a liquidation petition fatally defective when based on a court decree or unsatisfied judgment - whether a petition for the liquidation of an insurance company required prior notification to the Commissioner of Insurance under the Insurance Act - whether a petition for liquidation based on a company's inability to pay debts under section 384 of the Insolvency Act required service of a statutory demand for all forms of debt - Insolvency Act (cap 53) sections 3(1)(a), (b) and (c); 121, 384(1), and 427(1)(a); Insolvency Regulations (cap 53 Sub Leg) regulation 77B; Insurance Act (Cap 487) section 121, 122

Brief Facts
The petitioner obtained a court decree against the respondent, Xplico Insurance Company Limited, for the sum of Kshs. 2,906,182. The respondent failed to satisfy the decree, prompting the petitioner to file for liquidation of the respondent, claiming the company was unable to pay its debts. The respondent, however, sought to strike out the petition on the basis that it was not served with a statutory demand, as required under section 384(1)(a) of the Insolvency Act. The petitioner averred and submitted that a statutory demand was only mandatory if the reason for the petition was indebtedness under section 384(1)(a) of the Insolvency Act where a creditor was seeking the payment of a debt and not under section 384(1)(b) of the Insolvency Act where the petition was for a satisfaction of a decree as in the case.
The respondent had insisted that the statutory demand was mandatory regardless.

Issues:

  1. Whether service of a statutory demand was a pre-requisite for filing a liquidation petition
  2. Whether a statutory demand was required in all liquidation petitions filed under the Insolvency Act.
  3. Whether the failure to serve a statutory demand rendered a liquidation petition fatally defective when based on a court decree or unsatisfied judgment.
  4. Whether a petition for the liquidation of an insurance company required prior notification to the Commissioner of Insurance under the Insurance Act.
  5. Whether a petition for liquidation based on a company's inability to pay debts under section 384 of the Insolvency Act required service of a statutory demand for all forms of debt.

Held:

  1. Under section 384(1) of the Insolvency Act, a company was unable to pay its debts if a creditor (by assignment or otherwise) to whom the company was indebted for hundred thousand shillings or more had served on the company, by leaving it at the company's registered office, a written demand requiring the company to pay the debt and the company had for twenty—one days afterwards failed to pay the debt or to secure or compound for it to the reasonable satisfaction of the creditor; if execution or other process issued on a judgment, decree or order of any court in favour of a creditor of the company was returned unsatisfied in whole or in part; or if it was proved to the satisfaction of the court that the company was unable to pay its debts as they fell due.
  2. Section 384(1) of the Insolvency Act and Regulation 77B of the Insolvency Regulations (Regulations) were coached in mandatory terms by the use of the word “shall”. Therefore, the requirement of a statutory demand was mandatory.
  3. Before a petitioner could rely on the ground of the debtor’s inability to pay, to petition for liquidation of a company, the petitioner had to prove that a statutory demand was served and the debtor failed to comply accordingly and therefore the debt was not disputed.
  4. Section 384(1) of the Insolvency Act set out three distinct grounds upon which a company may be deemed unable to pay its debts. Each ground was independent and had to be read disjunctively as was evidenced by use of the word “or” in section 384(1)(b). The use of the word “or” clearly made the two limbs disjunctive under law. Thus, where a petitioner relied on section 384(1)(a) of the Insurance Act, a written demand, commonly referred to the statutory demand, was a pre-requisite for the lodging the petition. Subsection (1)(b) and (c) did not require service of a statutory demand before filing the liquidation petition and the language of those provisions cannot be construed to require a notice.
  5. Under regulation 77B of the Regulations, subsidiary legislation such as the Regulations could not contradict or otherwise vary the principal statute. The regulations could not impose a requirement for service of a statutory demand where in the circumstances, the Act did not require one. Regulation 77B was ultra vires in so far as it required the petitioner to serve the statutory demand and file one to accompany the liquidation petition where a petitioner relied on section 384(1)(b) and (c) of the Insurance Act.
  6. The service of the statutory demand and filing the same with the liquidation petition was not a mandatory required in all cases where the liquidation petition was grounded on inability to pay debts. The petitioner’s case fell within section 384(1)(b) of the Insolvency Act as it was based on the failure by the respondent to settle a decree issued by the court against the petitioner hence it was not necessary to issue a statutory demand. The rationale for the absence of a requirement for a written demand in section 384(1)(b) of the Insurance Act was not difficult to see. A decree was an unconditional demand to the judgment debtor by the court to pay an adjudged debt hence it was unnecessary to issue a written demand when it remained unsatisfied after unsuccessful attempted have been made to execute it.
  7. Under section 121 of the Insurance Act, the petitioner’s only obligation was to serve the Commissioner. Once the Commissioner was served, it became a party to the proceedings. Further, the section did not state when the petitioner was to effect service but since the Commissioner must be heard on a petition for liquidation of an insurance company, service must be effected at any time before hearing of the petition hence failure to serve the Commissioner was not fatal as the court may direct that the Commissioner be served prior to the hearing as it was entitled to be heard on any petition concerning liquidation of an insurance company. The issue of service of the petition on the Commissioner of Insurance shall therefore be addressed at the appropriate stage.

Petition dismissed with costs.

CRIMINAL PROCEDURE

An appeal that sought to challenge a sentence on account that the sentencing court did not consider the time spent in remand raised issues of law to warrant a second appeal on issues of law.

Headnote:The application sought leave to appeal out of time and to appeal as a pauper against a sentence of fifteen years for manslaughter. The court considered the applicant's reasons for the delay in filing the appeal and granted the application, permitting the appeal to be filed within 30 days. The court found that the appeal raised a legitimate legal issue regarding the sentencing court’s failure to account for time spent in remand.

Ndirangu v Republic (Miscellaneous Criminal Application E040 of 2023) [2023] KEHC 24960 (KLR) (8 November 2023) (Ruling)
Neutral Citation: [2023] KEHC 24960 (KLR)
High Court at Nanyuki
AK Ndung'u, J

Reported by John Ribia

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Criminal Procedure – appeals – appeals filed out of time – inordinate delay - jurisdiction to allow an appeal filed out of time – second appeal on issues of law - whether the High Court had the jurisdiction to grant an extension of time for filing an appeal against sentencing out of time - whether a delay of over two years in filing a second appeal against sentencing on account that the appellant could not afford an advocate was justified - whether an appeal that sought to challenge a sentence on account that the sentencing court did not consider the time spent in remand raised issues of law to warrant a second appeal on issues of law - Appellate Jurisdiction Act (cap 9) section 7; Criminal Procedure Code (cap 75) sections 333(2), 349, and 361(1); Penal Code (cap 63) sections 202, and 203; Court of Appeal Rules (cap 9 Sub Leg) rules 4, 44, 45, 74, and 81

Issues:

  1. Whether the High Court had the jurisdiction to grant an extension of time for filing an appeal against sentencing out of time.
  2. Whether a delay of over two years in filing a second appeal against sentencing on account that the appellant could not afford an advocate was justified.
  3. Whether an appeal that sought to challenge a sentence on account that the sentencing court did not consider the time spent in remand raised issues of law to warrant a second appeal on issues of law.

Held:

  1. Rules 44 and 45 of the Court of Appeal Rules did not apply to the instant application. Rule 44 referred to an application for leave to amend any document whereas rule 45 talked about lodging of the applications at the appropriate registry. The provision that provided for extension of time was rule 4.
  2. The power donated to the court under section 7 of the Appellate Jurisdiction Act was only available to a litigant at the first instance. The court was however, deprived of such power once an applicant had made a similar application before the Court of Appeal as was the case in this matter. Once an applicant had moved the Court of Appeal in respect to an application to appeal out of time, the jurisdiction of the court to hear and determine a similar application cease to exist.
  3. The High Court had the jurisdiction to extend time for giving notice of intention to appeal from its Judgment or for making leave to appeal notwithstanding that the time for giving such notice or making such appeal may have expired.
  4. A delay of 2 years and 5 months seemed unreasonable. The applicant had a right to an advocate and perhaps he harboured the honest belief that he could only succeed with the help of an advocate. While that may be a valid reason for the attendant delay, the delay was, on the face of it, inordinate. The court reluctantly excused the delay for reason that the applicant was a lay person acting in person and the dictates of justice would, in the circumstances of this case, demand that the applicant be given his day in court.
  5. Section 361(1) of the Criminal Procedure Code barred appeals against the sentence to the Court of Appeal. The applicant sought to challenge the sentence on account that the sentencing court did not consider the time he spent in remand while awaiting trial in accordance with section 333(2) of the Criminal Procedure Code. The based on a point of law. It was one that was permissible within the confines of section 361(1) of the Criminal Procedure Code.

Application allowed.