Nkugwe Investments Limited v Mayabi & another [2023] KEHC 26054 (KLR)

Nkugwe Investments Limited v Mayabi & another (Commercial Appeal E138 of 2022) [2023] KEHC 26054 (KLR) (Commercial and Tax) (30 November 2023) (Judgment)

Neutral citation: [2023] KEHC 26054 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts)

Commercial and Tax

Commercial Appeal E138 of 2022

DAS Majanja, J

November 30, 2023

Between

Nkugwe Investments Limited

Appellant

and

Derek Xavier Mayabi

1st Respondent

Villa Care Limited

2nd Respondent

(Being an appeal from the Ruling and Order of Hon. J. W. Munene, Adjudicator/RM dated 8th September 2022 at the Milimani, Small Claims Court at Nairobi SCC Claim No. E4305 of 2022))

Judgment

Introduction and Background 1. By the judgment dated 31. 05. 2023, this court (Gichohi J.) rendered a judgment holding the that the Small Claims Court did not have jurisdiction over the subject matter of the suit and that the suit was res judicata. The court therefore allowed the appeal with costs. The 1st Respondent has evinced his intention to appeal against this judgment to the Court of Appeal and now comes before the court through his Notice of Motion dated 13. 06. 2023 seeking leave of this court to do so. The application is supported by the grounds on its face and the 1st Respondent’s supporting affidavit sworn on 13. 06. 2023. It is opposed by the Appellant through the Grounds of Opposition dated 30. 06. 2023 and by the 2nd Respondent through the replying affidavit of its Managing Director, Daniel Ojijo, sworn on 26. 06. 2023. The court also heard oral submissions from the parties’ counsel.

2. The 1st Respondent submits that there is no right of appeal from the High Court to the Court of Appeal on matters arising from the Small Claims Court and hence leave is mandatory before the appeal is filed. The 1st Respondent states that he intends to appeal as the Judgment of this court holding that the Small Claims Court lacks jurisdiction to hear and determine matters pertaining to property when in fact the matter was commercial in nature. He argues that this decision would gravely affect the jurisdiction of the Small Claims Court in relation to commercial suits.

3. The 1st Respondent contends that in the event leave to appeal is granted and the material issue in dispute is decided differently, the said decision would greatly affect the outcome of the case and prevent all possibility of unfairness and miscarriage of justice. Further, that the salient issues in dispute are points of law of general importance that would substantially affect the rights of litigants before the Small Claims Court and it is imperative that such leave to appeal be granted in order to protect the integrity of the judicial process. The 1st Respondent adds that in the event the leave to appeal is granted, it would restore confidence and repute in the process of administration of justice.

4. The 1st Respondent avers that it is also imperative that the Court of Appeal brings clarity to section 13(5) of the Small Claims Court Act, 2016 (“the SCCA”) which excludes the court’s jurisdiction over certain causes of action founded upon defamation, libel, slander, malicious prosecution or is upon a dispute over a title to or possession of land, or employment and labour relations. That if the impugned decision is left to stand, a large number of litigants will be left in limbo and locked out of the justice system thus infringing on their right to access to justice. The 1st Respondent states his intended appeal has a high probability of success as demonstrated by his Draft Memorandum of Appeal and that it is in the interest of justice he be granted leave to appeal to the Court of Appeal.

5. The Appellant opposes the application and urges the court to dismiss the application. It submits that all appeals to the Small Claims Court are governed by the SCCA and not the Civil Procedure Act (Chapter 21 of the Laws of Kenya). That the SCCA provides that an appeal from the Small Claims Court shall lie to the High Court on matters of law and that such an appeal will be final. The Appellant avers this court is now functus officio by dint of, firstly, having been the Court of last resort in an appeal originating from the Small Claims Court and secondly, having delivered its Judgment on the said appeal on 31. 05. 2023. That no appeal lies to the Court of Appeal from matters originating from the Small Claims Court under any law and that under the Appellate Jurisdiction Act (Chapter 7 of the Laws of Kenya), the Court of Appeal only has jurisdiction to hear and determine appeals from the High Court and any other Court or Tribunal prescribed by an Act of Parliament in cases in which an appeal lies to the Court of Appeal under any law. In this instance, the Appellant asserts that no appeal lies to the Court of Appeal under the SCCA.

6. According to the Appellant, jurisdiction is vested by either a statute or the Constitution and a Court may not arrogate to itself jurisdiction through craft of interpretation or by way of endeavors to discern or interpret the intentions of Parliament, where the legislation is clear and devoid of ambiguity. That this Court lacks the power to confer upon the Court of Appeal jurisdiction to hear an appeal arising out of a Small Claims Court through granting “leave to appeal” or any other clever scheme attempted by the 1st Respondent. The Appellant asserts that there is no reason to depart from the well-established principle that there is no right of appeal apart from that granted by statute and accordingly, there exists no right of appeal by mere implication or by inference. It adds that Article 164(3) of the Constitution does not provide a right of appeal to the 1st Respondent but merely confers jurisdiction on the Court of Appeal to hear appeals from the High Court; hence there is no right of appeal subsumed in Article 164(3) of the Constitution.

7. The Appellant submits that there must be an end to litigation as judicial determinations must be final, binding and conclusive, unless such a determination is set aside or quashed in a manner provided for by the law. That one of the objectives of the SCCA is to see that small claims are disposed of using the least expensive method. Accordingly, the Appellant states that the cost of appeal to the High Court then to the Court of Appeal would be much higher than the small claim hence defeating the purpose and objects of the SCCA.

8. The 2nd Respondent also opposes the application on the ground that the 1st Respondent has not provided cogent and satisfying reasons backed by the law to enable the court exercise its judicial discretion in his favour. It submits that section 38 of the SCCA which provides that an appeal from the Small Claims Court to the High Court shall be final is couched on mandatory terms by the use of the word ‘shall’ and therefore the Court cannot be called upon to exercise jurisdiction that it does not have.

9. The 2nd Respondent points out that the 1st Respondent has acknowledged that there is no right of appeal from the High Court to the Court of Appeal on matters arising from the Small Claims Court therefore this Court cannot issue orders that are untenable. Further, that Rule 30 of the Small Claims Rules is clear on this issue of appeals and provides that a person aggrieved by the Judgment or Order of the Court may, pursuant to section 38 of the Act, appeal to the High Court in accordance with Order 42 of the Civil Procedure Rules.

10. The 2nd Respondent, like the Appellant, submits that Article 164(3) of the Constitution does not provide a right of appeal to the 1st Respondent but merely confers jurisdiction on the Court of Appeal to hear appeals from the High Court. That there is no right of appeal save for that which is conferred by statute; hence there is no right of appeal subsumed in Article 164(3) of the Constitution. The 2nd Respondent further claims that this matter was initially filed at the Chief Magistrate's Court and a decision rendered and the 1st Respondent had extracted a decree to that effect which decree, to the 2nd Respondent’s knowledge has never been set aside therefore this matter, as initially declared, is res judicata.

Analysis and Determination 11. The question for determination is whether this court should grant the 1st Respondent leave to appeal to the Court of Appeal from the judgment of the High Court arising from a decision of the Small Claims Court.

12. From the parties’ pleadings and oral submissions, the parties are in agreement that under section 38 of the SCCA, there is no right of appeal from a decision of the High Court to the Court of Appeal. The said provision states as follows:38. Appeals

(1)A person aggrieved by the decision or an order of the Court may appeal against that decision or order to the High Court on matters of law.(2)An appeal from any decision or order referred to in subsection (1) shall be final.[Emphasis mine]

13. Despite the finality clause in the SCCA, the 1st Respondent has argued that the High Court has jurisdiction to grant it leave to file an appeal to the Court of Appeal. He urges the court to take a purposive and generous interpretation of section 38(2) in order to avoid a miscarriage of justice in this case. He invites the court to adopt the Supreme Court’s reasoning in Synergy Industrial Credit Limited v Cape Holdings Limited [2019] eKLR and Nyutu Agrovet Limited v Airtel Networks Kenya Limited; Chartered Institute of Arbitrators-Kenya Branch (Interested Party) [2019] eKLR to find that an appeal to the Court of Appeal is permitted.

14. The orthodox position regarding the right of appeal is that such a right is expressly granted by statute. Thus in Sydney Grant Ralph v R [1960] 1EA 310, it was held that, “Before there can be any question of or considering the merit of the appeal we must be satisfied that we have jurisdiction to entertain it and for that purpose it is necessary to examine the relevant sections of the Criminal Procedure Code. This court has no inherent power to exercise jurisdiction where no right of appeal is provided and the right of appeal in criminal matters in Kenya is governed by the Criminal Procedure Code.” (see also Munene v Republic (No. 2) [1978] KLR 105).

15. This position appears to have changed following the promulgation of the Constitution. Under Article 164(3)(a) of the Constitution, the Court of Appeal has jurisdiction to hear appeals from the High Court. Whether the jurisdiction to entertain an appeal from the High Court to the Court of Appeal of itself creates a right of appeal was discussed Judicial Service Commission and Another v Hon. (Lady) Justice Kalpana Rawal CA Civil Appl. No. NAI No. 308 of 2015 (UR). In the Synergy Case (Supra), the Supreme Court stated that, “[88] ……… [W]e are affirming the position taken by some benches of the Court of Appeal that Article 164(3) is a jurisdiction that is tied to a party’s right to appeal to that Court and to completely deny that right would be inimical to the spirit and tenor of the Constitution, 2010. ” Although the Court in that case was dealing with an appeal under section 35 of the Arbitration Act, the Supreme Court warned that, “[87] …… it would be expected that the Court of Appeal would jealously guard the purpose and essence of arbitration under Article 159(3)(d) so that floodgates are not opened for all and sundry to access the appellate mechanism.” This was the position taken by the Court of Appeal in Equity Bank Limited v West Link MBO Ltd [2013] eKLR where it held that although there was a right of appeal from a decision of the High Court, such a right was not unlimited.

16. How does this reasoning of the Court of Appeal relate to the present case? Unlike section 35 of the Arbitration Act which is silent on appeals to the Court of Appeal, section 38(2) of the SCCA is emphatic on the finality of the decision of the High Court. The reason why the Supreme Court in Nyutu Case (Supra) and Synergy Case(supra) held that the Court of Appeal had residual appellate jurisdiction in matters arising out of section 35 of the Arbitration Act is that there is no express bar to appeals under the said section. However, with section 38(2) of the SCCA expressly stating, in mandatory terms, that an appeal to this court is final, there can be no doubt that this is a bar against any further appeals.

17. The jurisdiction to regulate the right of appeal to the Court of Appeal where such a right is not provided for or otherwise expressly excluded by statute vests in the Court of Appeal. It is the Court of Appeal that must exercise the residual jurisdiction and hence determine whether a matter warrants a hearing in that court. This is why the Supreme Court exhorted the Court of Appeal to jealously guard its jurisdiction. It is for this reason that I hold that this court lacks jurisdiction to grant leave to appeal to the Court of Appeal in view of the express bar to appeal in section 38 of the SCCA.

Disposition 18. The 1st Respondent’s application dated 13. 06. 2023 is struck out with no order as to costs.

SIGNED AT NAIROBIDATED AND DELIVERED AT NAIROBI THIS 30TH DAY OF NOVEMBER 2023. D. S. MAJANJAJUDGEA. MABEYAJUDGE