Maitha v National Bank of Kenya Ltd [2024] KEELRC 2187 (KLR)

Maitha v National Bank of Kenya Ltd (Appeal E113 of 2023) [2024] KEELRC 2187 (KLR) (6 September 2024) (Judgment)

Neutral citation: [2024] KEELRC 2187 (KLR)

Republic of Kenya

In the Employment and Labour Relations Court at Nairobi

Appeal E113 of 2023

NJ Abuodha, J

September 6, 2024

Between

David Kimanthi Maitha

Appellant

and

National Bank of Kenya Ltd

Respondent

(Being an appeal from the Ruling of the Honourable Wendy K.Micheni, C.M delivered on 9th June 2023 in Milimani commercial courts CMEL No. 1555 of 2019 between David Kimanthi Maitha vs National Bank of Kenya Ltd)

Judgment

1. Through the Memorandum of Appeal dated 27th June, 2023, the Appellant appealed against the ruling of Honourable Wendy K Micheni (CM) delivered on 9th June, in Milimani Chief Magistrates Court Employment Cause No. 1555 of 2019 between David Kimanthi Maitha vs National Bank of Kenya Ltd.

2. The Appeal was based on the grounds that:i.The Learned Magistrate erred in law by upholding the Respondent’s preliminary Objection dated 12th April,2022. ii.The Learned Magistrate erred in law by failing to consider the Appellant’s submissions.iii.The Learned Magistrate erred in law by upholding the Respondent’s Preliminary Objection despite initially directing parties to place the matter before a court of competent jurisdiction for hearing and determination.iv.The Learned Magistrate erred in law by allowing the Respondent’s Preliminary Objection and thus dealing a blow to the Appellant’s right to access to justice.

3. The Appellant prayed that the appeal be allowed with costs and the Ruling of the Honourable court dated 9th June,2023 be set aside and substituted with an order dismissing the Respondent’s Notice of Preliminary Objection dated 12th April,2022. That the Appellant’s suit against the Respondent be reinstated with an order to the Appellant to beseech the Honourable Court to transfer Nairobi MC. ELRC NO.1555 of 2019- David Kimanthi Maitha v National Bank of Kenya Ltd to the Employment and Labour Relations Court for hearing and determination. That in the alternative this Honourable court be pleased to transfer Nairobi ELRC NO. 1555 of 2019- David Kimanthi Maitha v National Bank of Kenya Ltd therefrom to the Employment and Labour Relations court for hearing and determination.

4. The Appeal was disposed of by written submissions.

Appellants’ Submissions 5. The Appellant filed written submissions dated 15th March, 2024 and on the issue of whether the Learned Magistrate erred in law by dismissing the suit herein on the ground of lack of pecuniary jurisdiction counsel submitted that the suit at lower court filed in 2019 resulted from the Respondent’s variation of the interest rate chargeable on the Appellant’s loan facilities from staff rate of 4. 5% to commercial rate of 13% per Annum contrary to the Respondent’s loan policy on exiting members of staff.

6. The Appellant submitted that it was not in dispute that at the time the Appellant was exiting the Respondent’s employment in February,2018 he was earning a gross salary of Kshs. 318,083. 00 which was above the limit for trial court of Kshs. 80,000/=. That the filing of the suit at the trial court was an innocent mistake on the part of the Appellant’s counsel who erroneously believed that in a suit with multiple distinct claims as this one with commercial and employment dispute the determinant for jurisdiction to adjudicate suit of such nature was the applicability of the pre-dominance purpose test while relying on the case of Elias Maundu Makau v I & M Bank Limited(2021) eKLR.

7. Counsel submitted that it believed that the employment dispute was secondary and auxiliary to the loan interest issue which would be determined in the cause. That mistakes of an advocate are excusable and the court may invoke its inherent jurisdiction to ensure a party is not locked out of seat of justice. Counsel relied on the case of Murai v Wainina (No 4) 1982 KLR 38.

8. Counsel submitted that on 12th April,2022 when the matter came up for taking directions for the hearing of the suit the trial court certified the matter ready for hearing and directed parties to fix the matter for hearing within 14 days from the date thereof before a court with competent jurisdiction. That the Respondent responded instantly and within hours of the court’s directives by filing and serving the Preliminary Objection alleging the court lacked pecuniary jurisdiction to entertain the matter.

9. Counsel further submitted that the Respondent’s swift action was misconceived and meant to deny the Appellant chance to place the suit at the right court as directed by the trial court. That the trial court erred by entertaining the Preliminary Objection on jurisdiction when it had already pronounced itself on the matter directing the parties to place the matter before a competent forum for determination and without inquiring whether the directions had been complied with.

10. Counsel submitted that the trial court did not also consider the Appellant’s submissions on exercising its inherent jurisdiction to allow the Appellant to move the relevant court to transfer the claim in the event it lacked jurisdiction. That the trial court should have in the interest of justice allowed the parties to move the relevant court for transfer of the claim.

11. Counsel relied on the case of Kenya Plantation and Agricultural Workers Union v Cargill Kenya Limited & Another (2020) eKLR where the chief magistrate declined to entertain a claim because of pecuniary jurisdiction and the Claimant sought to transfer the suit to the right forum. The Respondent filed a preliminary Objection. The Chief Magistrate dismissed the Preliminary objection and allowed the Claimant to transfer the claim to ELRC.

12. Counsel submitted that the Appellant should be allowed to transfer the suit to ELRC or in the alternative this court while exercising its discretion should transfer the suit to ELRC.

13. On the issue of whether this court can vacate the orders of the trial court and transfer the Claim to ELRC counsel submitted that in the spirit of oxygen principles under section 3 of the Employment and Labour Relations Act, the power bestowed upon the court under section 12(3)(viii) of the said act this court can set aside the orders of the trial court dismissing the suit herein and transfer therefrom to ELRC.

14. Counsel relied on the cases of Harun Kiptarus Tanui v East African Portland Cement Plc (2022) eKLR and Ndung’u v Fapcl Group (Miscellaneous Application E111 of 2022) (2023) KEELRC 634(KLR) (17 March 2023) Ruling. Counsel submitted that this court should not allow the Appellant to be condemned unheard. That the Appellant filed his suit although in the wrong forum within the stipulated period under section 90 of the Employment Act which was within 3 years. That he has all along acted in good faith and the Respondent at some point had offered to settle the matter out of court even though nothing came out of it.

15. Counsel while relying in the above case of Harun Kiptarus supra submitted that there was no useful purpose served by striking out a case filed in wrong jurisdiction other than punishing a party that acted in good faith. That the Appellant all along acted in good faith and this court should be persuaded to vacate the trial court orders.

Respondent’s Submisssions 16. The Respondent filed its submissions dated 9th May, 2024 and on the issue of whether the Appellant was entitled to the reliefs sought most specifically the claim to be transferred to ELRC for hearing and determination the Respondent submitted that the Appellant was not entitled to the reliefs sought. That the Appellant filed his case in the lower in full disregard of the pecuniary limits of Kshs 80,000/= and upon being stopped by the court by its ruling he now seeks to set aside the ruling and transfer the suit to ELRC.

17. Counsel relied on the case of The Owners of the Motor Vesssel “Lillian S” Vs Caltex Oil (Kenya) (1989) EKLR on jurisdiction. Counsel also relied on the case of Equity Bank Limited vs Bruce Mutie Mutuku t/a Diani Tour Travel (2016) eKLR on jurisdiction of the Court in transferring incompetent suits to the right forum. That the suit herein in the trial court was incompetent from inception and the court ought not to sanctify it.

18. Counsel submitted that there was no competent suit capable of being transferred at this stage to the ELRC for hearing and determination. Counsel relied on the case of Albert Chaurembo Mumba & 7 Others vs Maurice Munyao &148 Others (2019) eKLR while affirming the finding in the case of Kageni vs Musiramo & Another(1968) EALR 43 on courts not transferring suits where the matter was brought to a court without jurisdiction in the first place.

19. Counsel submitted that the orders sought by the Appellant were therefore dead on arrival and incurably defective from inception because the transfer of the file from the lower court is a court of first instance that lacked jurisdiction to one that has competent jurisdiction. That allowing the orders would be tantamount to breathing life in to an incompetent suit.

Analysis & determination 20. This court has considered the pleadings by both parties and the submissions by the parties and this being a first Appeal the court will proceed to reanalyze the evidence before it as was held in the case of Selle vs Associated Motor Boat Company Limited [1968] E.A 123 thus:-An appeal to this court from a trial by the High Court is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities……..or if the impression based on the demeanour of a witness is inconsistent with the evidence in the case generally.”

21. In this case, the Ruling of the trial court was that the PO is upheld and the suit be and is dismissed with costs of the Application to the Respondent. The Appellant was therefore aggrieved by this ruling hence this Appeal. The court has therefore from the pleadings and proceedings herein come up this with one main issue;a)Whether the reliefs sought by the Appellant can issue.

Whether the reliefs sought by the Appellant can issue. 22. It is not in dispute that the Appellant filed his suit at the lower court which has pecuniary jurisdiction of monthly salary not exceeding Kshs 80,000/= The Appellant last salary was Kshs 318,083. 00. Counsel for the Appellant explained that this was a mistake on his part where they thought the employment dispute was secondary to the issue of interest on loan determination and that mistake of counsel should not be meted on an innocent party who acts in good faith.

23. The Respondent on other hand has submitted that the lower court did not have jurisdiction in the first instance and allowing the orders would be giving life to an incompetent suit by transferring the suit to the competent court. That jurisdictional issue is not one that can be cured by article 159 of the Constitution.

24. The court notes that on 12th April,2022 the trial court certified the matter ready for hearing and directed parties to fix hearing date within 14 days before the Court with competent jurisdiction. This means that the court upon realizing that it did not have the pecuniary jurisdiction it downed its tools as per the case of The Owners of the Motor Vesssel “Lillian S” Vs Caltex Oil (Kenya) (1989) EKLR where the court’s hands are tied once it has no jurisdiction. The Respondent upon the said directives rushed to court through its PO on jurisdiction dated the same date.

25. This court notes that this move was not done in good faith by the Respondent who barred the Appellant from making the necessary steps to have the matter transferred to the ELRC as directed by the trial court. This court asks itself if the matter was filed in 2019 why did the Respondent not raise the PO at the earliest opportunity but only raised this after the court gave the directions that it did not the pecuniary jurisdiction? Why did the Respondent wait for the limitation period of 3 years to end in order to raise this issue unless it had some malice?

26. This court notes that the trial court ought not to have entertained the Respondent’s PO after it gave its directions unless it confirmed that its directions of 12th April,2022 were not followed by the Appellant.

27. The court appreciates that mistakes of advocates should not be meted on innocent clients and that the courts should lean more towards doing justice in any case provided no prejudice would be occasioned to the other party. The right and the just thing the trial court would have done was to insist on its directives of 12th April,2022 for the Appellant to initiate the process of transfer the suit to the right forum instead of dismissing the same. The trial court ought to have been awake to the fact that employment matters under section 90 of the Employment Act are only instituted within 3 years and there is no provision for extending such timelines. By the time the trial court dismissed the Appellant’s suit in 2022, three years had lapsed meaning it would have not been possible to file a fresh suit.

28. In dismissing the suit, the trial court placed. The appellant in undue hardship and was counter to the Oxygen principles under section 3 of the Employment and Labour Relations Act. In Harun Kiptarus Tanui v East African Portland Cement Plc [2022] eKLR Lady Justice Maureen Onyango observed as follows: -In the decision I observed that in Ruth Muthoni Mwangi v Kenya Meat Commission and Prisca Jepng’etich v Generation Career Rabidness Social Initiative Limited [2021] eKLR the court dismissed a similar application while in Kenya Plantation and Agricultural Union v Cargill Kenya Limited & Another [2020] eKLR and Ali Jarso Wako & another v Ministry of Interior & Coordination of National Government & 5 others; Public Service Commission & 5 others (Interested Parties) [2020] eKLR, the courts held that a suit filed in a court without jurisdiction can be transferred to a court with jurisdiction… In the said suit, I held that this court can transfer such a suit by virtue of Article 159 of the Constitution, and Section 3 and 12(3)(vii) of the Employment and Labour Relations Court Act…. I have again considered the conflicting decisions. In my view none of the decisions of the higher courts, that is the Court of Appeal and the Supreme Court, have dealt with the specific issue whether a suit filed in the Magistrates Court without pecuniary jurisdiction would be incapable of being transferred by this Court to itself for hearing and determination.

29. In Kenya Plantation & Agricultural Workers Union v Eastern Produce (K) Limited (Miscellaneous Application E004 of 2023) [2023] KEELRC 2444 (KLR) (12 October 2023) (Ruling) Lady Justice Wasilwa faced with a similar situation had this to say: -“Where such matters should be filed is informed by legal Notice No 6024 of 2018 which states that matters to be handled by the subordinate courts are matters where the employees’ salaries fall below 80,000/= save for those under the Labour Relations Act…This matter is such as one that falls within the labour relations for which the court with jurisdiction is the ELRC. I therefore agree with the applicants herein and allow the application seeking to transfer this matter to the ELRC.

30. From the above cases it appears that there is no clear decision of a superior court prohibiting the transfer of a suit filed in wrong court to a court of competent jurisdiction. The matter is therefore left to doing justice to the situation which leans more on preserving the suit than dismissal on a ground that would not occasion prejudice to the respondent not compensable by costs. In conclusion the Appeal herein succeeds with no orders as follows:a.The Orders of the trial court of June 9, 2023 are hereby set aside.b.The suit filed by the Appellant against the Respondent being Milimani CMEL No. 1555/2019; David Kimanthi Maitha V National Bank of Kenya Ltd be and is hereby transferred to the Employment and Labour Relations Court in Nairobi for hearing and determination.c.The appellant shall pay the respondent the costs of the Preliminary Objection in the Court below to be agreed upon or assessed at Lower Court rates

31. It is so ordered.

DATED AT NAIROBI THIS 6TH DAY OF SEPTEMBER, 2024DELIVERED VIRTUALLY THIS 6TH DAY OF SEPTEMBER, 2024Abuodha Nelson JorumJudge