Commissioner of Domestic Taxes v Mayfair Insurance Company Ltd [2017] KEHC 2516 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL & TAX  DIVISION

INCOME TAX APPEAL NO. 31 OF 2017

COMMISSIONER OF DOMESTIC TAXES....................................APPELLANT

VERSUS

MAYFAIR INSURANCE COMPANY LTD....................................RESPONDENT

(Being an appeal from the Ruling of the Tax Appeals Tribunal given at Nairobi on the 2nd May 2017 in TAT No. 47 of 2016)

BETWEEN

MAYFAIR INSURANCE COMPANY LIMITED..............................APPELLANT

VERSUS

THE COMMISSIONER OF DOMESTIC TAXES......................RESPONDENT

RULING

I have heard counsel and also read both the application dated 10 August 2017 (filed in court on 17 August 2017) as well as two affidavits filed in support thereof. I have also read the replication.

The application seeks condonation by this court of the delay in filing the Appeal. It seeks extensions of time for filing of the Memorandum of Appeal as well as an order that the record of Appeal which was filed on 17 August 2017 be deemed as having been duly filed in time.

The Appeal has been preferred against a decision of the Tax Appeals Tribunal rendered on 2 May 2017. The said judgment being Tax Appeal No. 47 of 2016 was read on 2 May 2017 in the presence of both counsel for the Appellant and for the Respondent. It is thus common cause that the judgment was delivered on 2 May 2017. It is also common cause that the Appeal ought to have been filed on (by the latest) 2 June 2017 given that 1 June 2017 was a public holiday.

The Appeal was however not filed. A certified copy of the judgment was only availed to the parties on 3 July 2017, hence and it must be agreed that the Appellant could not have done much with regard to the Appeal.

Thereafter, however, there appeared no spirited effort to file the Appeal. The reasons advanced for the inaction after 3 July 2017 run as follows: The previous counsel had left the employ of the Appellant. Due to administrative lapses, the file was not assigned to another counsel until towards the end of July and even then the counsel assigned the file was on leave. When he returned to work he moved with expedition and prepared the intended Appeal/ record of Appeal for filing but the Appellant did not avail funds for filing until the middle of August 2017; to be more precise on 17 August 2017. This is when the application for extension of time as well as the Appeal/Record were filed.

Mr. Nyaga for the Appellant whilst appreciating the courts discretion in matters for extension of time, urged the court to exercise its discretion in favour of the Appellant, stating that Counsel’s mistake should not be visited on the client or the Appellant. Counsel also urged the court to take notice of the fact that in the vicissitude of life, there will always be delays which should be excused. Counsel urged the court to also note that the delay herein was for a short period of time.

Ms. Mwango opposed the application. Urging the Respondent’s case, Ms. Mwango was of the view that the Appellant had failed to explain the delay and that the Appellant had also failed to avail any evidence of the previous counsel moving from the Appellant’s employ. Counsel submitted that the court has to exercise its jurisdiction and discretion judiciously and that in the instant case the Appellant had not brought itself within the provisions of Rule 3 of the Tax Appeal Rules.

I have considered the arguments as advanced by counsel.

Foremost it is important to state that the court has powers generally to extend time where there is a specific timeline given for the doing of anything or filing of any documents. Whether the time-limit is statutory or by an order of the court, the court always retains a hermetical jurisdiction to extend the time where appropriate. In the instant case, Rule 3 of the Tax Appeal Rules expressly confers that jurisdiction upon this court. Time may be extended where the stated threshold is met under the rule.

One of the reasons stated under the Rule is that the court may extend time where there is reasonable cause for the delay.

Effectively, the court’s powers and discretion to extend time is unlimited. It is however not to be capriciously exercised. Time, in other words, is not to be extended as a matter of right. Each case is to be viewed sui generisand on its own circumstances and facts. The starting point is that the Applicant ought to advance sufficient and reasonable grounds for any delay on its part. If the failure to comply with any time line is self-enforced then the court ought not extend the time, notwithstanding the fact that since the advent of ss. 1A, 1B & 3A of the Civil Procedure Act, the approach has been to sustain cases and causes rather than dismiss them or strike them out. I agree time-lines ought not bind the court too much but timelines are there for a purpose and there is need for compliance. Where there is non- compliance then there is need to explain away the delay leading to the default.

The requirement that appeals originating from the Tax Appeals Tribunal be filed within 30 days has the basic rationale that a losing party timeously appeals or does not appeal at all. Within that period thus a determination has to be made by the losing party and due notification through the filing of the Appeal also made to the Respondent. This time line ought to be observed but where not observed for good reason or cause shown the court will not deny the Appellant the right to have its appeal adjudicated merely due to the default.

The parties in the instant case were under the wrong impression that the time herein lapsed on 3 August 2017. That certainly is not so. The Appeal was to be or ought to have been lodged on or before 2 June 2017, given that the judgment by the Tax Appeals Tribunal was rendered on 2 May 2017. There was thus a delay of nearly 2 ½ months. The appeal was only filed on 17 August 2017. This too is the same date the motion seeking condonation was filed. I deem it that there was inordinate delay in filing the motion for condonation. The Appellant should have moved faster than it did to file the motion earlier and seek extension of time.

Besides, the Appellant has also copiously referred to the alleged fact of counsel’s mistake.

No specific mistake by counsel was however identified. All the court was told was that one counsel left the employ of the Appellant and another one was on leave, so the file including the Appeal could not be worked on.

My view is that there was apparent tardiness on the part of the Appellant, in the instant case. The Appellant simply failed to act with the requisite alacrity. Even after both the application and the record of Appeal were ready for filing, the appellant still delayed some odd seven days. I am consequently not satisfied with the explanation advanced for the delay and default in filing the appeal on time, especially the period after the Appellant received the certified copy of the judgment of the Tax Appeals Tribunal.

Mr. Nyaga pointed out that the appeal is a novel one and raises points of law yet to be considered. I must point out that it is not always the interest of the Appellant to be considered. The Respondent also has a right to feel secure and further feel that in the administration of justice, its interests are also covered. The novel point raised as pointed out by Mr. Nyaga, is still faced by other litigants before the Tax Appeals Tribunal. I guess in the circumstances, it would not be unfair to invoke the proverbial saying that the Appellant will have a second bite of the cherry, if the tribunal rules against it in any other pending matters raising the same point.

In sum, novelty alone in the absence of an adequate and reasonable explanation for any delay leading to expiry of time should not be reason for the court to grant condonation.

I have found that the failure to file the appeal on time or to file the application for condonation without delay was not of counsel’s making. It was of the Appellant’s own making. It appeared almost intentional, especially when it is admitted that the Appellant assigned a file to counsel who was on leave and also took time to avail the filing fees even after it was notified that time was up.

I consequently have to dismiss the application for condonation and extension of time. The application dated 10 August 2017 is dismissed with the consequent result that the Appeal record filed on 17 August 2017 is also struck out. I make no order as to costs on both the application and the record of appeal.

Dated, signed and delivered at Nairobi this   2nd day of October, 2017.

J.L.ONGUTO

JUDGE