Musiara Limited Ltd v William Ole Ntimama [2004] KECA 169 (KLR)

IN THE COURT OF APPEAL

AT NAIROBI

CORAM: TUNOI, O’KUBASU, JJ.A & ONYANGO OTIENO, AG.J.A

CIVIL APPLICATION NO. 271 OF 2003

BETWEEN

MUSIARA LIMITED…………...…………………….APPLICANT

AND

WILLIAM OLE NTIMAMA……………………….RESPONDENT

(Application for recall and cancellation or alternativelyrescission of the Ruling and Order made in the Civil Application No. 228 of 2003 (U.R.112/03) dated 3 rd October, 2003)

RULING OF THE COURT

By this motion expressed to be brought under rules 1(2), 56( 2) and 42(1) of the Rules of this Court (the Rules), the applicant MUSIARA LIMITEDprays for orders for:-

1. Declaration that the Ruling or Order made by this Honourable Court on 3 rd October, 2003 in Civil Application No. NAI. 228 of 2003 (U.R 112/03) is null and void and/or invalid.

2. That the said invalid Ruling or Order be recalled and cancelled.

3. Alternatively that the said Ruling and Order in Civil Application No. NAI. 228 of 2003 (U.R 112/03) made on 3 rd October, 2003 be rescinded .

The basis upon which the application is brought is; firstly, that the ruling complained of was made without jurisdiction as this Court has no power under rule 5(2) of the Rules to reverse or vary a decision of the superior court in an interlocutory application for orders to stay before the intended appeal is lodged let alone heard; secondly, that the power to reverse or vary a decision of the superior court can only be exercised on the determination of an appeal under Rule 31 of the Rules and in the present case the Appeal has yet to be filed; thirdly, that the said Ruling and Order was made in excess of jurisdiction as this Honourable Court granted the respondent herein reliefs or orders which had not been applied for in the said application or in the superior court and which orders could not be granted under the provisions of Rule 5(2)(b) of the Rules; fourthly and finally, that this Court failed to observe the rules of natural justice in making the said decision in that the Presiding Judge, Hon. Mr. Justice A.B. Shah, J.A ., was disqualified by law from adjudicating on the said application by reason of his intimate relationship with the respondent herein, having previously acted as the Advocate for the Respondent including personally representing the Respondent in the Election Pe tition Number 33 Of 1993 : HARON OLE LEMPAKA v. WILLIAM OLE NTIMAMA & ANOTHERand that due to the said bias there was miscarriage of justice which resulted in the respondent being granted orders or reliefs that are invalid or a nullity, and consequently, the said decision effectively reversed or varied the superior court’s Ruling and to compound matters further the decision awarded the respondent judgment in the main suit before trial.

The applicant further complains that Hon. Ole Ntimama and the Presiding Judge, Hon. Mr. Justice A.B. Shah, J.A perverted or obstructed the course of justice by failing to disclose their relationship and conflict of interest to the Court so as to gain and/or give undue advantage to the respondent in the determination of the application.

The applicant avers that the decision is otherwise a total perversion or miscarriage of justice as it renders it completely unnecessary for the respondent to lodge the intended appeal or prosecute the counter-claim, -

i) Since the decision has already awarded judgment to the Respondent on his counterclaim long before the trial takes place.

ii) The decision being a Court of Appeal decision obstructs or bars the High Court from determining the said relief in the counterclaim and in particular whether the respondent is still a director or chairman of the company.

iii) The decision gives the respondent reliefs that he did not ask for in his application and cannot possibly get even if the Appeal succeeds.

iv) The decision is a gross abuse of the appellate process and jurisdiction as an application for a temporary order in an intended appeal has been used to defeat the ends of justice by awarding the respondent judgment in the suit and thereby obstructing the proper determination of issues pleaded in the suit.

When the application came up for hearing, it was preceded by a preliminary objection by Mr. Oraro , counsel for the respondent, notice whereof had been duly given, asking that the application be struck out as the court has no jurisdiction to entertain it. Mr. Oraro submitted, in the main, that the only jurisdiction the Court of Appeal has is to hear appeals from the High Court and the powers conferred upon it are clearly set out in the Appellate Jurisdiction Act and that by dint of Section 3(2) thereof it is clear that this Court does not have original jurisdiction. Mr. Oraro contended, therefore, that in the circumstances decisions made by a bench of this Court cannot be reconsidered by another bench of the same court. Relying on the decision of RAFIKI ENTERPRISES L IMITED v. KINGSWAY TYRES & AUTOMART LIMITED Nai. No. 375 of 1996 (unreported) Mr. Oraro argued that similarly, the inherent powers conferred by rule 1(3) of the Rules can only be exercised within and in the course of hearing an appeal. He submitted that rules 35 and 56 of the Rules did not help the applicant at all since there was admittedly no accidental slip or omission on the part of the bench which made the decision complained of. He referred us to the decisions of this Court and of its predecessors – STANLEY MUNGA GITHUNGURI v. JIMBA CREDIT CORPORATION LTD Civil Application No. Nai. 161 of 1988 (Unreported), RITHIBO v. NYINGI(1984) KLR 505 and LAKHAMSHI BROTHERS LTD. v. RAJA & SONS [1966] EA 313.

The question of the disqualification of Shah JA, presiding in the application seems to have been raised before the matter was heard. It is stated by Mr. Oraro and deponed to in his affidavit made on 14th October, 2003, and that of the respondent himself that Shah, JA informed counsel that he had in the past had professional relationship with the respondent and asked whether either party had any objection to his presiding over the case. Mr. Oyatsi, counsel for the applicant, stated that he had no objection but the court directed him to consult the applicant and was granted 30 minutes to do so. When the court resumed he returned and confirmed that the applicant had no objection to Shah, JA presiding and being a member of the bench. Mr. Oraro underpinning his submissions on LOCABAIL LTD v. BAYFIELD PROPERTIES LTD & ANOTHER [2002] I ALL ER 63contended that as there was appropriate disclosure by the judge and as the applicant raised no objection to the judge hearing the case, the applicant cannot subsequently complain that the matter disclosed or gave rise to a real danger of bias.

Mr. Gautama, for the applicant, in resisting the preliminary objection, submitted that one of the first and highest duties of all courts, from the lowest court which entertains jurisdiction over the matters up to the highest court which finally disposes of the case, is to take care that the act of the Court does not occasion injury to any of the litigants. He referred to Mulla’s Commentary on the Civil Procedure Code, 12 th Ed. Vol. II P 456. He argued that since injustice had been occasioned to the applicant, this Court has residual jurisdiction to correct what is wrong.

Mr. Gautama further argued that because of the past relationship between Shah, JA and the respondent, the judge was automatically disqualified from hearing or continuing to hear the application and any decision he reached would be set aside. He thought that the applicant had no right to waive the right of the judge to disqualify himself.

In H.C.C.C. NO. 171 of 2003 , the applicant sought, inter alia, injunctions to restrain the respondent from interfering with the applicant’s business premises in Maasai Mara Game Reserve or Nairobi or elsewhere save by invitation of the applicant to attend the meetings of the members of the applicant company. The applicant also sought a mandatory injunction to compel the respondent to return to the applicant its shops, and; also a declaration to the effect that the respondent had renounced or repudiated his contract of membership in the applicant company by his acts.

Simultaneously with the filing of the plaint the applicant sought temporary injunctions and a mandatory injunction more or less in terms of the prayers in the plaint. At first the applicant obtained such reliefs on an ex-parte basis. Eventually, on 31st July, 2003, Mwera, J granted the prayers sought whose effects were virtually to shut out the respondent from participating in the running and management of the applicant. The respondent being dissatisfied with the orders made applied to this Court under rule 5(2)(b) of the Rules for stay orders pending the hearing and determination of his intended appeal.

In its ruling dated 3rd October, 2003, this Court differently constituted stated:-

“We are not called upon at this stage, and indeed it would be wrong if we decided the issues now. We have to decide if the intended appeal is an arguable one. It is arguable at least to the extent that the removal of the applicant from the two positions he held could have been in contravention of the provisions of The Companies Act Cap. 4 86, Laws of Kenya (the Act). Were the provisions of Section 140 of the Act complied with? Was the notice of the proposed resolution given by the correct entity and was the applicant removed after due timeous notice? We are unable to say that these issue s are not arguable.”

As regards the shops the Court held:-

“We have considerable anxiety as regards the shops. We cannot say for certain who was the owner/occupant of the shops. For the last seven months the shops are run by the company of which the a pplicant is a non -executive chairman and director and 40% shareholder. We would not at this stage wish to disturb the status quo now existing. We order however that the accounts in relation to shops business to be supplied to the applicant’s advocates qu arterly beginning 1 st December, 2003. We take this particular attitude in regard to shops as matter of abundant caution knowing that the applicant as an individual is the largest shareholder in the company.”

The Court then reinstated the respondent as non-executive Chairman and director of the applicant company.

It is manifestly clear from the above ruling that the decision of the court was based on the principles applicable to Motions or applications under rule 5(2)(b) of the Rules which empowers the court in the exercise of its original jurisdiction pending appeal to order a stay of execution, an injunction or a stay of any further proceedings. It must follow, therefore, that any decision of the court in that respect is interlocutory and does not necessarily bind the court hearing the appeal in its determination, or, the superior court when exercising its jurisdiction on hearing the suit. Moreover, the court stated clearly in the ruling that it was only concerned with whether there was an arguable appeal and if it would be rendered nugatory in the event of success. With respect, we think that the suggestion by Mr. Gautama that this Court in its ruling gave “judgment” which binds the superior court is erroneous and without any basis in law.

Mr. Gautam a further submitted that a ruling could be recalled, varied and rescinded provided that the orders have not been perfected. He urged, therefore, that we had jurisdiction to entertain the application which the applicant had lodged. We reiterate that this Court has always refused invitations to review, vary or rescind its own decisions except so as to give effect to its intention at the time the decision was made for to depart from this rule would be a most dangerous course in that it would open the doors to all and sundry to challenge the correctness of the decisions of this court on the basis of arguments thought of long after the judgment or decision was delivered or made. It matters not whether the judgment or ruling has been perfected or not. SeeLAKHAMSHI BROS. LTD v. RAJAH & SONS [1966] E.A. 313 and SOMANI’S v. SHIRINKHANU (NO.2) [1971] E.A. 79. The only exception, of course, is where the applicant has been wrongly deprived of the opportunity of presenting his argument on any particular point, which might lead to the proceedings being held to be null and void, a consideration which, as presented itself in the latter authority, but, is absent in the matter now before us.

Is rule 35(1) of the Rules of any assistance to the applicant? We do not think so because, with respect, no clerical or arithmetical mistake in the decision or any error arising therein from accidental slip or omission has been shown to us to justify correction of the ruling.

Though we agree with Mr. Gautama that it is the duty of the Court to see that no injustice is occasioned to a litigant, at the same time we reiterate that it is to be remembered that a court has no inherent power to do that which is prohibited by law. Thus, a court has no power after the judgment or the ruling is signed to alter or add to it, as to do so would be in direct contravention of the provisions of Order 20 rule 3 of the Civil Procedure Rules.

At the moment this Court is the final court on the land. Where an issue has been determined by a decision of the court, that decision should definitively determine the issue as between those who were party to the litigation. The reason for this general approach is that public policy demands that the outcome of litigation should be final and that litigation should not unnecessarily be prolonged. This is the reason why limits have been placed on the rights of citizens to open or to reopen disputes. The law also recognizes that any determination of disputable fact may be imperfect well knowing that humans err. In LADD v. MARSHAL [1954] 3 ALL ER 745, Lord Wilberforce said:

“But there are cases where the certainty of justice prevails over the possibility of truth (I do not say that this is such a case), and these are cases where the law insists on finality. For a policy of closure to be compatible with justice, it must be attended with safeguards: so the law allows appeals, so the law, exceptionally, allows appeals out of time: so the law still more exceptionally allows judgments to be attacked on the ground of fra ud: so limitation periods may, exceptionally be extended. But these are exceptions to a general rule of high public importance and as all the cases show, they are reserved for rare and limited cases, where the facts justifying them can be strictly proved”

At the trial of a boundary dispute in TAYLOR & ANOTHER v. LAWRENCE & ANOTHER [2002] 2 ALL ER 353 the Judge informed the parties that he had been a client of the claimants’ solicitors but that it had been many years since he had instructed them. Nobody objected to his continuing to hear the trial. After judgment was given for the claimants, the defendants appealed on the ground, inter alia , that there was an appearance of bias because of the judge’s relationship with the claimants’ solicitors. Before the hearing of the appeal, it was disclosed to the defendants that the judge and his wife had used the services of the solicitors to amend their wills the night before he had delivered judgment. The appeal was dismissed in January, 2001. Subsequently, the defendants learned that the judge had not paid for the services of the solicitors. The defendants applied to reopen the appeal on the basis that the judge had received a financial benefit from the solicitors which he had failed to disclose, and that the earlier appeal had been dismissed in ignorance of that fact. On the application, the Court of Appeal considered (i) whether it had power to reopen an appeal after it had given a final judgment and that judgment had been drawn up, and (ii) the circumstances that were capable of giving rise to the possibility of bias on the part of a judge.

The Court of Appeal held that it had a residual jurisdiction to reopen an appeal which it had already determined in order to avoid real injustice in exceptional circumstances. The court had implicit powers to do that which was necessary to achieve the dual objectives of an appellate court, namely to correct wrong decisions so as to ensure justice between the litigants involved, and to ensure public confidence in the administration of justice, not only by remedying wrong decisions, but also by clarifying and developing the law and setting precedents. A court had to have such powers in order to enforce its rules of practice, suppress any abuses of its process and defeat any attempted thwarting of its processes. The residual jurisdiction to reopen appeals was linked to a discretion which enabled the Court of Appeal to confine its use to the cases in which it was appropriate for the jurisdiction to be exercised. There was a tension between a court having such a residual jurisdiction and the need to have finality in litigation, such that it was necessary to have a procedure which would ensure that proceedings would only be reopened when there was a real requirement for that to happen. The need to maintain confidence in the administration of justice made it imperative that there should be a remedy in a case where bias had been established and that might justify the Court of Appeal in taking the exceptional course of reopening proceedings which it had already heard and determined. It should, however, be clearly established that a significant injustice had probably occurred and that there was no alternative effective remedy. The effect of reopening the appeal on others and the extent to which the complaining party was the author of his own misfortune would also be relevant considerations.

In our view, this is the correct approach for this Court to take into consideration whether it should recall, review or rescind its decision once judgment or ruling had been given. However, in the matter now before us, the applicant has not satisfied us that this is an appropriate case for such a residual jurisdiction to be exercised or that the ruling complained of was obtained by fraud or that there was no other remedy available to it. We hold, therefore, that the applicant has failed to meet the test laid down in the TAYLOR case (supra).

The present application raises the question of whether the Court of Appeal has jurisdiction to reopen an appeal (or indeed an application) if an appearance of bias can be demonstrated on the part of one of the members of the Bench that had determined the appeal. We think it does. The House of Lords held so in R v. BOW STREET METROPOLITAN STIPENDIARY MAGISTRATE , Ex P Pinochet Ugate (No.2) [1999] I ALL ER 577.

Under Section 77 of the Constitution, persons are accorded the right to a fair trial by an independent and impartial court established by law. If bias is indeed established, there has been breach of natural justice. The need to maintain confidence in the administration of justice makes it imperative that there should be a remedy. The need for an effective remedy in such a case may justify this court in taking the exceptional course of reopening proceedings which it had already heard and determined. Of course we hasten to add that this jurisdiction should be exercised with utmost care knowing that this is the final Court in Kenya at the moment. The Court should do so only after it has first ascertained all the circumstances which have a bearing on the suggestion that the judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, (the two being the same), that the court was biased. See the speech of Lord Hope of Craighead in PORTER v. MAGIL [2002] 1 ALL E.R. 465.

In our view, the past relationship between Shah, J.A. and the respondent cannot be regarded by a fair-minded and informed observer as raising a possibility of bias nor was it capable of affecting the approach and the decision of the learned Judge. Moreover, full disclosure was made before the motion was called to hearing and the applicant unequivocally stated that it had no objection to the learned Judge presiding over the proceedings. It is instructive to note that the complaint was only resurrected after the applicant lost.

In the result, we sustain the preliminary objection. The application lodged in this Court on 6th October, 2003 is hereby ordered struck out with costs.

DATED and DELIVERED at NAIROBI this 18 th day of November,2004.

P.K TUNOI

...............................................

JUDGE OF APPEAL

E.O. O’KUBASU

...............................................

JUDGE OF APPEAL

J.W. ONYANGO OTIENO

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AG. JUDGE OF APPEAL

I certify that this is a

true copy of the original.

DEPUTY REGISTRAR.