Letangule & another v Chief Executive Officer – National Heath Insurance Fund & 2 others [2023] KEELRC 2292 (KLR)

Letangule & another v Chief Executive Officer – National Heath Insurance Fund & 2 others (Cause E330 of 2023) [2023] KEELRC 2292 (KLR) (2 October 2023) (Ruling)

Neutral citation: [2023] KEELRC 2292 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Cause E330 of 2023

JK Gakeri, J

October 2, 2023

Between

James Leiro Letangule

1st Claimant

Douglas Odhiambo Owino

2nd Claimant

and

Chief Executive Officer – National Heath Insurance Fund

1st Respondent

The National Health Insurance Fund Board of Management

2nd Respondent

Dr. Samson Kuhora Kairang’a (Acting Chief Executive Officer – National Health Insurance Fund)

3rd Respondent

Ruling

1. Before the court for determination is the Respondent’s Notice of Motion dated 19th June, 2023 seeking ORDERS THAT:-1. Spent.2. The Honourable Court Orders issued on 4th May, 2023 and extended on 22nd May, 2023 be discharged and/or set aside forthwith.3. The Preliminary Objection dated 8th May, 2023 to be heard as a matter of priority.4. There is no substratum claim and/or cause of action filed before the Honourable Court thus rendering the orders issued on 4th May, 2023 and extended on 22nd May, 2023 nugatory, null and void.5. The costs of this application be paid by the Respondents.

2. The Notice of Motion is expressed under Order 4 Rule 1(f), Order 40 Rule 7 of the Civil Procedure Rules and Section 1A, 1B, 3, 3A and 63(e) of the Civil Procedure Rules Act and is based on the grounds set out on its face and the Supporting Affidavit sworn by Oscar Amwoga on 19th June, 2023.

3. The affiant deposes that the Claimants/Respondents application dated 19th April, 2023 sought interlocutory orders on the basis of lack of material disclosures and misleading details.

4. The affiant depones that during the inter partes hearing on 4th May, 2023, the court granted Prayer No. 3;“THAT pending the hearing and determination of this application inter partes, this Honourable Court be pleased to make a temporary order staying the intended transfer/posting order contained in the letter dated 3rd April, 2023 transferring the 1st Claimant to Kangemi Branch and the 2nd Claimant to Southern Region.”

5. The gist of the Applicants/Respondents case is that the court granted the order on account that the Respondents/Applicants had not filed their responses as at 4th May, 2023 when the matter came up for hearing and was thus unaware that the transfer had taken effect and crystallized by 4th May, 2023.

6. That Chrisostin Nyongesa had taken over Mr. James Leiro Letangule’s duties on 5th April, 2023 and Mr. Douglas Odhiambo Owino’s duties had already been taken over by Wesley Bill on 12th April, 2023.

7. That on 24th April, 2023, the 2nd Claimant handed over and taking over report as per the internal memo of even date and the Respondents/Applicants Replying Affidavits dated 11th May, 2023 attests to these facts.

8. The affiant deposes that other officers affected by the transfers are being affected by the court order and are not parties to the suit herein and the order was causing confusion in execution of duties by several officers of the 2nd Respondent.

9. That although the Claimants/Respondents had filed an alleged contempt application dated 10th May, 2023, the annextures confirm that their duties had already taken up by Chrisostin Nyongesa Wafula and Wesley Bii on 5th April, 2023 and 12th April, 2023 respectively.

10. The affiant argues that the orders were granted by the court without hearing those who had already taken over the Claimants positions. That those affected by the order ought to be heard.

11. The affiant further states that the court had not determined whether it has jurisdiction to hear and determine the suit on account of the Preliminary Objection dated 8th May, 2023.

12. That the proceedings have no basis and are an abuse of the court process made in bad faith and are vexatious, frivolous and raise no sustainable cause of action in line with Section 9(2) and (3) of the Fair Administrative Action Act, 2015.

13. The affiant further states that the court has no jurisdiction to adjudicate the main suit and the Claimants application dated 19th April, 2023 as the provisions of Section 9(2) and (3) of the Fair Administrative Action Act were not complied with.

14. That the Claimants were likely to use the order to try to reverse transfers already sanctioned by their acts.

15. That the Claimants/Respondents were pushing their interests at the expense of Kenyans who cannot obtain services on account of the continued confusion.

16. Finally, the affiant states that the Claimants/Respondents had by their pleadings confirmed initiating an appeal process and they had not exhausted internal dispute resolution mechanisms before approaching the court as ordained by the Human Resource Manual.

Response 17. The 1st Claimant, James Leiro Letangule deposes that Prayer 3 was an appeal through the back door.

18. That if Order No. 2 was given, it would amount to a miscarriage of justice as it would deny the Claimants the opportunity to prosecute their case as the substance of the case will be lost and could lead to dismissal of the Claimants and result in multiplicity of suits and condemn the Claimants unheard and suffer substantial loss.

19. The 1st Claimant deposes that the Applicants application dated 19th June, 2023 was cooked and it took 2 months to do so.

20. The affiant dismisses the contents of paragraph 4 – 10 of the Applicants Supporting Affidavit as irrelevant and others as untruths. That neither of the Claimants reported to the new stations after the unlawful transfer. That the 3rd Respondent attempted to forge his signature.

21. The affiant states that he remained in the position of Manager, Claims Management at the 2nd Respondent’s Headquarters, Nairobi and had not reported to the Kangemi Branch.

22. That Mr. Oscar Amwoga was subject of the impugned transfers.

23. Paragraphs 25 to 29 of the 1st Claimant’s Replying Affidavit address legal issues and are thus irrelevant.

24. The affiant states that he was accorded 24 hours by email sent at 10. 00 pm contrary to the 2nd Respondent’s Human Resource Procedures Manual which provides for 21 days.

25. Similarly, the 2nd Claimant/Respondent, Mr. Douglas Odhiambo Owino deposes that the application dated 19th June, 2023 was an abuse of the court process and the orders sought are not merited and analogous the 1st Claimant depones that Prayer No. 3 was an appeal through the backdoor.

26. The affiant deposes that none of the Claimants reported to the new station. That the 3rd Respondent forged the 2nd Claimant’s signature on page 24 as at the time, he was hospitalized in Nairobi and was not in Mombasa and proceeded on leave by the time it was alleged that he signed the handing over report and did not sign the handing over report as alleged and remains the Manager Quality Assurance and Contracting at Nairobi Headquarters of the 2nd Respondent. That Mr. Oscar Amwoga was conflicted.

27. In their Further Affidavit sworn by Mr. Osca Amwoga, the Respondents depone that the Claimants/Respondents had not controverted the fact that;1. That their duties had been taken over by Chrisostin Nyongesa Wafula and Wesley Bii on 5th April, 2023 and 12th April, 2023 respectively.2. That their replacements were not parties to the suit but were being affected by the court orders.3. The 2nd Respondent handed over on 24th April, 2023. 4.The 2nd Claimant had reported to the new work station and moved his household goods and requested for transfer allowance and transport reimbursement.

28. The affiant further discounts the Claimants argument that if the orders are set aside they would suffer substantial loss or be condemned unheard.

Applicant/Respondents’ submissions 29. Counsel maintained that the Claimants failed to disclose to the court critical information about the transfers, including that their duties had indeed been taken over following the transfer and the 2nd Claimant had reported to the new station, which information the court would have considered in determining whether or not to issue the orders.

30. On the essence of disclosure in ex parte applications, counsel relied on the sentiments of the court in Halima Haji Shah V Multiple Hauliers (EA) Ltd & another (2022) eKLR where the court cited Bahadurali Ebrahim Shamji V Al Noor Jamal & 2 others (1998) eKLR where the court underscored the essence and extent of disclosure by the applicant. Counsel urged that orders obtained by non-disclosure were not deserved.

31. Reliance was also made on the decision in Ruaha Concrete Co. Ltd et al V Paramount universal Bank Ltd (2009) eKLR to urge that the Claimants deliberately withheld information from the court so as to influence the outcome and cause confusion within the institution.

32. On the alleged forged signatures, counsel submitted that the Claimants adduced no evidence to substantiate the allegation as he who alleges must prove as encapsulated by the provisions of Section 107 and 109 of the Evidence Act. Equally, the Claimants tendered no evidence that they reported the alleged forgery to anyone including the police for necessary action.

33. Moreover, the 2nd Claimant had already moved his household items to Mombasa.

1st and 2nd Claimants submissions 34. Counsel submitted that if the court granted Prayer No. 2 of the Notice of Motion dated 19th June, 2023, the same would amount to a miscarriage of justice as it would deny the Claimants the chance to be heard and prosecute their case as the substance of the case will be lost and would lead to the dismissal of the Claimants who would sue.

35. That they would suffer substantial loss.

36. Counsel submitted that the Claimants disclosed all the material information to the court and the 2nd Claimant did not handover and had been discharging his duties after reporting back from leave and medical attention.

37. Counsel submitted on the Preliminary Objection as well.

Determination 38. The issues for determination are;i.Whether setting aside of the orders granted on 4th May, 2023 would deny the Claimants/Respondents the right to be heard or the case would be rendered an academic exercise.ii.Whether the Claimants/Respondents failed to disclose material information at their disposal.

39. As regards the consequences of setting aside the orders in force, the Claimants urge that it would occasion miscarriage of justice as they would be denied the right to be heard. The Respondents contend otherwise.

40. It is common ground that the right to be heard in any proceedings be they judicial or not is a constitutional imperative over and above its being part of natural justice encapsulated by the maxim audi alteram partem.

41. The right not to be condemned unheard is an indispensable component in the administration of justice and is jealously guarded by courts of law.

42. When the Notice of Motion dated 19th April, 2023 was received by the court on 25th May, 2023, the court certified it urgent and directed service and response within 10 days with an inter partes hearing slated for 4th May, 2023.

43. Documents on record show that the application was served on the Respondents’ on 25th April, 2023 as affirmed by the Claimants.

44. On 4th May, 2023, Mr. Odhiambo, holding brief for Mr. Riechi was present as was Mr. Jaoko, the Applicant’s counsel. Mr. Odhiambo informed the court that he had filed the day before but Mr. Jaoko stated there was nothing on record including notice of appointment.

45. The application was thus unopposed.

46. Mr. Odhiambo sought 14 days to respond and file a Preliminary Objection and was granted 7 days to do so.

47. In the meantime, the court granted Prayer No. 3;“That pending the hearing and determination of the Application, inter partes this Honourable Court be pleased to make a temporary order staying the intended transfer/posting order contained in the letter dated 3rd April, 2023 transferring the 1st Claimant to Kangemi Branch and the 2nd Claimant to Southern Region.”.

48. The court granted the prayer after consideration of the information provided by the Claimants and in particular the Supporting Affidavits and the fact that the Notice of Motion was unopposed, service on 25th April, 2023 notwithstanding. This is the order the Respondents seek to have discharged.

49. Both the Replying Affidavits of the Claimants and their submissions are consistent that setting aside the orders would lead to miscarriage of justice, denial of right to be heard and render the suit would be an academic exercise.

50. Regrettably, the Claimants have not placed before the court any material or judicial authority to demonstrate the consequences of setting aside the orders granted on 4th May, 2023 consistent with the mantra that he who alleges must prove as ordained by the provisions of Section 107 and 109 of the Evidence Act.

51. The court is alive to the fact that the order was framed so as to prevent albeit temporarily on intended transfer.

52. Section 107 of the Evidence Act provides;1. Whoever desires any court to give judgement as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.

53. Section 109 embellishes Section 107 as follows;The burden of proof as to any particular fact lies on the person who wishes the court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.

54. The Claimants have not placed any material before the court to demonstrate that they will suffer substantial loss or will be incapable of prosecuting the application or suit before the court. What for instance is the nature or extent of the alleged substantial loss? How will right to be heard be tampered or interfered with?

55. Relatedly, the allegation that setting aside the order would lead to multiplicity of suits is in the court’s view conjectural.

56. Surprisingly, both Claimants made a serious allegation that signatures were forged. The 1st Claimant deponed that the 2nd Claimant had informed him that the 3rd Respondent attempted to forge his signature on the hand-over report. The 2nd Claimant on the other hand deponed that Mr. Oscar Amwoga “decided” to forge the 2nd Claimant’s signature.

57. Needless to belabour, this is a very serious allegation. Forgery is an offence and it behoved the Claimants to attach credible evidence of the forgery. None of them provided evidence as to where the attempts or the “decision” by Amwoga to forge the 2nd Claimant’s signature.

58. The court is in agreement with the Respondent’s contention that the offence should have been reported to the police or any other governmental organ for necessary action to be taken.

59. Whereas parties to a suit have the right to make averments, they have no right to make averments that they cannot substantiate by credible and convincing evidence. Such allegations do not advance their cause no matter how passionate they are in pursuing the same. It is reprehensible.

60. In a similar vein, the fact that the 2nd Claimant was seen at the Nairobi Hospital on 24th April, 2023 is not sufficient proof that he did not sign the handover report with Mr. Oscar Amwoga on even date.

61. In the circumstances, it is the finding of the court that the Claimants have failed to show that setting aside of the orders dated 4th May, 2023 would subject them to substantial loss, deny them the right to be heard or occasion miscarriage of justice.

62. As regards disclosure or material non-disclosure, parties have adopted contrasting positions. While the Respondents/Applicants allege that there was material non-disclosure, the Claimants maintain that they disclosed all material circumstances.

63. To their credit, the Claimants attached copies of appointment letters, letters of re-designation and transfer and the appeal by the 1st Claimant.

64. Similarly, both Claimants admitted that they appealed to the Board of Management on 6th April, 2023 and no decision had been made and the duration to render the decision had lapsed as per the 2nd Respondent’s Human Resource Policy and Procedures Manual.

65. Puzzlingly, although the transfer and re-designation letters are dated 3rd April, 2023, none of the Claimants volunteered information as to what had transpired from 6th April, 2023 when they appealed the transfer to the date of filing of the suit.

66. Significantly, the Re-designation and transfer letters dated 3rd April, 2023 notified the Claimants of their re-designation and transfer to a specific location and information to persons to whom they would report for a job description and allocation of duties and were additionally directed to hand over to designated officers.

67. The letters had no reporting date but provided that the persons to whom they were to report;“to inform this office (Chief Executive Officers Office) of the dates of your release and reporting respectively.”

68. Evidently, the Claimants had time to prepare handover reports, handover and be released for purposes of reporting to the new stations.

69. This would appear to contradict the Claimant’s submission and affirmation that they were given 24 hours. The date of 5th April, 2023 was to report to the designated offices for purposes of a job description which they had to internalise as they prepared to handover “formally” before proceeding to the new post.

70. The letter had no timelines on when to handover and/or report to the new office.

71. On their part, the Respondents availed copies of appointment and transfer letters addressed to Mr. Chrisostin Nyongesa Wafula and Wesley Bill dated 3rd April, 2023 to the positions previously occupied by the Claimants, a fact the Claimants did not controvert.

72. Evidence on record reveal that Mr. Chrisostin Nyongesa Wafula reported on 5th April, 2023 while Mr. Wesley Bii reported on 12th April, 2023.

73. The Claimants did not contest this evidence or explain how the transfers did not occur.

74. Relatedly, the Internal Memo dated 24th April, 2023 from the 2nd Claimant to Oscar K. Amwoga show that the 2nd Claimant handed over on even date. The alleged forged signature on page 24 was unproven.

75. There is sufficient evidence on record to show that the 2nd Claimant handed over and took over as the Branch Manager Southern Region. The letter from one Jane Kosgei to the Acting Chief Executive Officer (CEO) dated 19th June, 2023 attests to the foregoing fact as is the Claimant’s request for transfer reimbursement to the Acting Head of Human Resource dated 30th June, 2023.

76. Evidently, alot transpired between 3rd April, 2023 and 19th April, 2023 and subsequently.

77. On their part, the Claimants only disclosed that they had appealed against the transfer and re-designation but approached the court less than 16 days later.

78. The gravamen of this issue is whether the Claimants disclosed what they ought to have disclosed or are guilty of material non-disclosure.

79. In determining this issue, the court is guided by the sentiments of the Court of Appeal in Bahadurali Ebrahim Shamji V Al Noor Jamal & 2 others (Supra) cited by the Respondent’s counsel where the court stated inter alia;“It is perfectly well-settled that a person who makes an ex parte application to the court – that is to say, in the absence of the person who will be affected by that which the court is asked to do – is under an obligation to the court to make the fullest possible disclosure of all material facts within his knowledge, and if he does not make the fullest possible disclosure then he cannot obtain any advantage from the proceedings and will be deprived of any advantage he may have already obtained. It has been for many years the rule of the court, and one which it is of the greatest importance to maintain, that when an application comes to the court to obtain relief on an ex parte statement he should make a full and fair disclosure of all the material facts – facts, not law. He must not mistake the law if he can help it – the court is supposed to know the law. But it knows nothing about the facts, and the applicant must state fully and fairly the facts, and the penalty by which the court enforces that obligation is that if it finds out that facts have not been fully and fairly stated to it, the court will set aside any action which it has taken on the faith of the imperfect statement . . .In considering whether or not there has been relevant non-disclosure and what consequence the court should attach to any failure to comply with the duty to make full and frank disclosure, the principles relevant to the issues in these appeals appear to include(i)The duty of the applicant is to make full and fair disclosure of the material facts(ii)The material facts are those which it is material for the judge to know in dealing with the application made; materiality is to be decided by the court and not the assessment of the applicant or his legal advisers(iii)The applicant must make proper inquiries before making the application. The duty of disclosure therefore applies not only to material facts known to the application but also to any additional facts which he would have known if he had made sufficient inquiries(iv)The extent of the inquiries which will be held to be proper and therefore necessary, must depend on all the circumstances of the case including(a)the nature of the case which the applicant is making when he makes the application(b)the order for which the application is made and the probable effect of the order on the defendant, and(c)the degree of legitimate urgency and the time available for the making of the inquiries(v)If material non-disclosure is established the court will be astute to ensure that a plaintiff who obtains an ex parte injunction without full disclosure is deprived of any advantage by that breach of duty(vi)Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the facts to issues which were to be decided by the judge in the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was not perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to consider the case being presented.(vii)Finally, it is not every omission that the injunction will be automatically discharged. A locus poenitentiae (Chance of repentance) may sometimes be afforded. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order . . .It is accepted that in cases of ex parte proceedings, there must be full and frank disclosure to the court of all material facts known to the applicant . . .”

80. The court expressed similar sentiments in Ruaha Concrete Co. Ltd & 2 others V Paramount Universal Bank Ltd & 2 others (Supra).

81. The court is guided accordingly.

82. Having been aware that other persons had also been transferred at the same time, other than Mr. Oscar Amwoga, that the persons transferred to take over their positions at the Headquarters had actually reported by 12th April, 2023 and the 2nd Claimant had commended the handover process, among others and did not inquire about the status of their appeal, the court is satisfied and finds that the Claimants did not make a full and fair disclosure of material facts which would have guided the court in determining whether or not to grant the temporary orders sought by the Claimants and are thus guilty of material non-disclosure and as they have not pleaded innocence, the penalty is as prescribed by the Court of Appeal in Bahadurali Ebrahim Shamji V Al Noor Jamal & 2 others (Supra), namely discharge of the orders granted.

83. For the avoidance of doubt, the orders granted on 4th May, 2023 temporary staying the transfer and/or posting of the Claimants by letters dated 3rd April, 2023 is hereby discharged as it was unmerited.

84. Parties shall bear own costs.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI ON THIS 2ND DAY OF OCTOBER 2023DR. JACOB GAKERIJUDGEORDERIn view of the declaration of measures restricting court operations due to the COVID-19 pandemic and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020 and subsequent directions of 21st April 2020 that judgments and rulings shall be delivered through video conferencing or via email. They have waived compliance with Order 21 Rule 1 of the Civil Procedure Rules, which requires that all judgments and rulings be pronounced in open court. In permitting this course, this court has been guided by Article 159(2)(d) of the Constitution which requires the court to eschew undue technicalities in delivering justice, the right of access to justice guaranteed to every person under Article 48 of the Constitution and the provisions of Section 1B of the Civil Procedure Act (Chapter 21 of the Laws of Kenya) which impose on this court the duty of the court, inter alia, to use suitable technology to enhance the overriding objective which is to facilitate just, expeditious, proportionate and affordable resolution of civil disputes.DR. JACOB GAKERIJUDGE