Republic v Capital Markets Authority, Attorney General & Central Bank of Kenya ex-parte Fredrick Tsofa Mweni [2017] KEHC 6160 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW NO.  1 OF 2013

IN THE MATTER OF AN APPLICATION BY FREDRICK TSOFA MWENI FOR LEAVE TO APPLY FOR JUDICIAL REVIEW.

AND

IN THE MATTER OF DISQUALIFICATION OF THE APPLICANT  FROM BEING  THE MANAGING DIRECTOR OF TSAVO SECURITIES LIMITED FROM APPOINTMENT  AND SERVICE  AS A  DIRECTOR OF  ANY  LISTED COMPANY  OR LICENSED OR  APPROVED  PERSON IN THE CAPITAL  MARKETS IN  KENYA.

AND

IN THE MATTER OF CAPITAL MARKETS ACT CAP 485   LAWS OF KENYA

REPUBLIC…………………………………………………….....APPLICANT

VERSUS

CAPITAL MARKETS AUTHORITY………………..…….1ST RESPONDENT

THE HONOURABLE ATTORNEY GENERAL……..........2ND RESPONDENT

AND

CENTRAL BANK OF KENYA …………………..……INTERESTED PARTY

FREDRICK TSOFA MWENI……………………………………….EX-PARTE

RULING

1. On 1st July 2016, Honourable Justice W.Korir delivered judgment in this matter and concluded as follows:

“45. Considering what I have stated above, it follows that the applicant’s case should fail save for the  reason that the  decision of the respondent  on the length of  his  suspensions  did not  comply  with Section   26(2)  of the Capital Markets Act Cap  485 A.  For that reason alone the applicant’s   disqualification   is quashed.  The matter is  remitted to the  respondent  to  impose  a  disqualification  that  meets the  requirements  of the law.”

2. On 16th August,2016, the  1st respondent  filed  a notice  of motion  dated  15th  August  2016  under the provisions  of Section 80 of  the  Civil  Procedure  Act,  Order 45  Rule 1 of the  Civil  Procedure  Rules and  the  inherent   power  of  the  court  seeking  that:

1. The  portion  of the  judgment  dated  1st July 2016 by which  the court  held  that  the  length of the suspension  of the   exparte applicant   did not comply with Section  26(2) of the Capital Markets Act be reviewed  and   set  aside.

2. The costs of this application are provided for.

3. This application  is  predicated on the  grounds on  the face of the  application  and  supported  by  an  affidavit sworn  by   Timothy  Githendu  wherein  it  is  largely   deposed  that there is an  apparent   error on the  face of the  judgment  of  1st July  2016  in  that the  court incorrectly  used the  terms  “suspension  of the  applicant” as opposed  to his disqualification  under  Section 25A (1)(c ) (i)  which  empowers the  first  respondent  to  disqualify  an employee  of  a person licensed under   the  Act.

4. That  in view  of the  error   above, the order  that the matter  be remitted to the   1st respondent  to  impose a  disqualification that  meet   the  requirements   of the law   cannot  be  complied  with.

5. That  the  judgment  should  be corrected  to read “the exparte  applicant   was disqualified   under  Section  25 A(1) ( c ) (1)  of the  Act  and  not suspended   under Section  26  of  the Act.

6. The  application for review was opposed by the exparte applicant who filed grounds of opposition  contending  that the application  is defective; has no merits and  is  based on  the  misconception  of the  law; vexatious  and  an  abuse of the  court process; that the matter  offends   the provisions   of Order   53   of the  Civil  Procedure  Rules and  Section  7  and   9  of the Law  Reform Act  as  they  are  the  only  provisions  that  apply  to Judicial Review; that  the  application  is not within the  purview  of Judicial Review  Court  neither  does it meet  the  basic tenets  of Judicial Review  application.

7. It was further contended by the exparte applicant that the 1st Respondent’s application for review seeks a  substantive  review of the   court’s judgment  which  is not possible within these  Judicial Review  proceedings;   and  that this court  has  no power to  review its decision  in a Judicial Review application  under  Order 53 of the Civil  Procedure  Rules.

8. Further, it was contended that the  provisions   of Section  80   of the Civil  Procedure Rules invoked and   Order 45 Rule 1 of the Civil  Procedure  Rules  do not confer  jurisdiction  on  the court  to grant   the  said orders  neither  do they  apply  to Judicial  Review.

9. That  to grant  the  order for review would fundamentally and   radically  change  the decision to be reviewed and  would open  a new  front  of litigation thus  amounting  to  an abuse  of court  process; and  that the application for review  is entirely  without merit  by  virtue  of the matters  on record, or  not  at  all  and  ought  to be dismissed with costs.

10. Parties’ advocates filed  authorities  which they  relied on  and  argued the  application  orally  on 6th March  2017  before  me,  Honourable Korir J having  left the  Nairobi   station on  transfer  to Busia  and  now he is  the  Resident/Presiding  Judge  of Malindi  High Court.

11. Mr Ochieng  counsel for  the applicant/1st respondent  argued  that  in the  judgment,  the learned  judge  held  that the  length  of  suspension  was not in  accordance  with the  Act yet  there was no suspension  and  that  instead, the exparte applicant  was  disqualified from holding office but the court erroneously  stated that he was suspended hence the need to correct the  terminology  to allow implementation  of the judgment.

12. It was argued that the review will not change the outcome of the judgment but to set the record straight   and clarify   the judgment.

13. On  the contention  by the exparte applicant  that this  court has no jurisdiction to  review  the  judgment, the  1st  respondent’s counsel relied on the case of Nakumatt Holdings Ltd V Commissioner of VAT[2011]eKLR where the Court of Appeal held  that  the  court  has  residual power to correct its own  mistakes and therefore  to review its own  decision.

14. It  was  also submitted that  this  court has  inherent   power to review  its own  orders  where there  is  no  specific   provision in the  Law  Reform Act providing  for  review.

15. Further reliance  was placed HC  JR  11/2012  Republic vs Anti counterfeit  Agency  & 2 Others  exparte  Surgipharm  Limited [2014]e KLRandHC  JR  7/2008  Republic vs  Chairman  Provincial Land  Disputes Appeal Tribunal Rift Valley  Province  & 2  Others exparte Christopher  Chebii and  Bernard Osewe Odongo(F/P) wherein  the court  held that  the court has jurisdiction   to  review  or  set  aside its orders made  in  Judicial Review proceedings  hence the  mere  fact that  the  instant  application   is  expressed  to be brought under Order 45 of the Civil procedure Rules does not render the application  fatally  defective or incompetent.

16. The  1st respondent’s counsel  also relied  on Article 159   of the  Constitution  which mandates the court   to conduct   its business  in the interest   of justice  and that the court  cannot fold its hands where it is  called upon  to  foster  the interests  of  justice.  Mr Ochieng  urged  the court  to exercise  its inherent power  and  review the  decision  of  Korir  J.

17. In  opposition  to the motion for  review,  Mr  Musiega Counsel for the  exparte  applicant  reiterated the grounds  of opposition  as filed and  maintained  that  review   does not fall  within  the  purview  of Judicial Review   and  that   Section 80 of the Civil procedure Act and  Order 45 Rule 1   of the Civil  Procedure Rules are  inapplicable in the circumstances.  Mr Musiega relied on B.A. Shah & Another  V  Republic  [2013] e KLR  where the  Court  of  Appeal held that  there is no provision for review by the superior  court  of its own  decisions  in Judicial Review,  once rendered  and that  under Section 8(5) of the Law Reform Act,  any person  aggrieved by an order made in  the  exercise of  the  Judicial Review may appeal to the  Court  of Appeal.  That decision   was made on 20th September 2013. Mr Musiega  also  submitted  that the decision  in Nakumatt Holdings (supra) case is  different  from the instant  case, but left it to court to distinguish.

18. In a rejoinder, Mr Ochieng counsel for the 1st respondent/applicant  submitted that   bringing  the application  under the  provisions of Section  80 of the Civil Procedure  Act and Order 45 of the Civil Procedure  Rules does not bind  the court   as  the court has  residual power.  Further,  that  the B.A.   Shah & Another (supra) case relied on by the  exparte applicant  is  different   in  that  the  grounds  for  review sought therein were to introduce  new  evidence   which   was  not in their possession   before, which  if allowed  would change  the scope of the case  and  reopen  the  matter;  unlike  in  this case where the  applicant  complains  of  an  error on  the  face   of  the  record to clarify  the  judgment  and  not reopening   of the  case.

19. Mr  Ochieng   maintained  that  the  court  can  review  its own  decision  to  correct  mistakes   made by the  court,  in the interest  of justice  and to  avoid hardship to the  parties, which  matter  the  Biren Amrital Shah case(supra)  did  not consider.

DETERMINATION.

20. I have  considered the  foregoing  in  line  with  the  established  statutory  and  case law.

21. In my view, the main  issues  for determination  are whether  this court   has  jurisdiction  to review  the  judgment  delivered  on  1st  July  2017   by  Honourable W. Korir  J and  if  so, whether  the  1st respondent has made  out  a  case  for review   of the  said  judgment  in the manner  proposed and finally, what orders should this court make.

22. As earlier  indicated,  the  Honourable Justice  W. Korir  did  deliver his  judgment  in this matter  on  1st July  2016 to the effect that  the  exparte applicant’s   substantive motion  fails save for the reason that  the  decision of  the   respondent  on the length  of the  exparte applicant’s  suspension  did  not comply  with Section  26(2)  of the Capital  Markets  Act,  Cap 485A.  The  learned  judge  further  directed that  the  exparte applicant’s  disqualification is  quashed  on that  account  and  the  matter   was remitted   to the  respondent   to impose a  disqualification that  meets the  requirements  of the law.

23. According  to the  1st  respondent Capital Markets Authority,  it is not  possible to implement the  judgment  of Hon Korir J because  it talks  of suspension of the  exparte applicant,  which suspension  does not exist  under  the law, but that a  disqualification  does, under  Section 25A (1)  (c ) (1) of the Act.

24. It is worth noting that the exparte applicant’s   motion dated   11th January 2013  which Hon Korir J considered and rendered a decision on its merits  sought for the following orders:

That the applicant  be  granted an order   of  certiorari  to bring  the  decision  of the 1st  respondent made  on  21st December 2012   disqualifying  the  applicant  as  the  Managing  Director of Tsavo  Securities Limited, from  appointment  and  service  as  a Director of any listed company  or licensed  or  approved person in the  Capital  Markets  in Kenya    with effect  from 21st   December  2012  to this Honourable court  for purposes of being  quashed.

25.  From the above main prayer, no doubt, the exparte applicant did not complain about  suspension  but  disqualification as  the Managing Director of Tsavo  Securities Limited, which is a listed company with Capital Markets Authority, the first respondent herein, from appointment  and  service  as  a Director of a company listed or approved in the Capital Markets  Authority  in Kenya.

26. The Section which provides for suspension is Section 26 of the Capital Markets Act.  It  allows  for  suspension of a  license issued to the Company which is listed with the 1st respondent for a  period  not exceeding  three months  provided  that the Authority   may if   it considers  it  necessary  extend   the suspension  for  a  further  period  not  exceeding   three months.

27. Suspension under Section 26 of the Act relates to license of the company listed the Capital Markets Act and not its directors.  Directors can only   be disqualified.

28.  From  that part  of the judgment, indeed,  I find  that the  learned   judge  Korir  J  mixed  up the terms  “suspension “and  “ disqualification.

29. According  to the  exparte applicant,  this court   has no jurisdiction  to review  the judgment  in  judicial  review   proceedings  and  that  to review  the  judgment  will open  up a  new  cause   of action.  Reliance was placed on the B.A.   Shah (supra) case.  I have  compared the  two decisions  of  Nakumatt Holdings  Ltd (supra) which  was   delivered  on  8th  April 2011  and  the case B.A.   Shah & Another (supra) delivered on 20th September,2013.  Whereas  in the latter  case which is the latter of the two decisions, the Court  of Appeal held that the High Court  could  not  review its judgment  in  Judicial Review proceedings,  in the former case of Nakumatt  Holdings  Ltd,   the same Court of  Appeal  constituted differently was  emphatic  that  whether  or not the then Order 44 of the Civil Procedure  Rules applied  in a  matter under  Judicial Review,  what  is important  is that  the  superior  court in the matter before  the  court had  the  residual  power to correct  its own  mistake and that it may be that the appellant   cited wrong provision of the law in its application for review which,  perse would not deprive the court the power   of correcting   its own   mistake   which that court itself acknowledged it made.

30. The court Odunga J further stated in Republic vs Anti counterfeit Agency 2 Others (supra):

“  30  However, in the light  of  the  provisions s of  Article  159(d)   of the Constitution  the  mere  fact that  a party  cites  the  wrong  provisions of the law  ought  not to deprive the  court  of a  jurisdiction where such  jurisdiction  exists.  As I have  demonstrated  the  above  jurisdiction to review or  set aside  orders made in  judicial review  proceedings   exist  hence the  mere fact that the instant  application is  expressed to  be   brought  under  Order  45  in my view  does not render  the   application  fatally defective or  incompetent.”

31. This court  notes  that   the Nakumatt  Holdings  (supra) case had   a  different constitution of  S.E. Bosire , E.M. Githinji  & Alnashir  Visram  JJA  whereas in the  B.A.   Shah & Another   case (supra) the composition   was S. Gatembu Kairu; D.K. Maraga and  Agnes  (K) Murgor JJA.  However, the court  notes that in the B.A.   Shah case, the court did not refer to its earlier decision  in the Nakumatt  Holdings  Ltd   and  moreso, the court    was concerned  with the prayer  for review   where  the High Court  Judge  had declined  to issue  the orders of  certiorari  and  prohibition as prayed and  instead granted  mandamus   directing  the  2nd  and  3rd respondents to cancel  the registration  of the appellants as owners  of the suit land and  restore the 4th respondent   as its owner.

32. In that B.A.   Shah case,  the appellants  were  dissatisfied with the above   decision of the High Court  and  instead  of filing  an appeal under Section 8(5)  of the Law  Reform Act,  filed an application  for  review of the judgment.  The High Court  judge dismissed  the  application for  review holding  that he  had  no  jurisdiction  to review  his earlier decision of  7th December 2002  and  cited   Section 8(5)  of the Law  Reform Act.

33. In my  humble  view, and  while  agreeing   with both  the  learned  High Court Judge  in the B.A.   Shah case as well as the Appellate  Court’s decision  on the jurisdiction  to  review  own judgment,  I find  that  the  above  B.A.   Shah case  can  be distinguished  from this case  and  that  of Nakumatt  Holdings  Ltdin that in the B.A.   Shah case,  the appellant   was  seeking to upset the  decision  of the learned judge by way of review  as opposed to filing  of  an appeal.  He  was   seeking  to have the court  sit on its  own appeal because  the judge  had granted  orders which had not been sought or prayed for in the Notice of Motion  which is my view, hinges on errors of law and or misapprehension  of the law  and  therefore  that  could not in my  humble  view be resolved by way  of a  review but an appeal.

34. In the present  case, however, there is a clear  error apparent on the  face of the  record  which  a court  looking  as  that  error  can tell  without  delving  into the merits or demerits of the motion, that  the  learned Korir J used  the  term  ‘suspension’  as  opposed to ’disqualification’  of the  exparte applicant.

35. Further,  I am  in agreement   with the  1st  respondent that  the  court has  the  residual  and  inherent   power  to correct  its own  mistakes  which are apparent  on the face of the record in  order to do justice  to the  parties  and  to  avoid  rendering   the  judgment  incapable of  implementation. Court decisions are meant to be implemented and the court is expected to facilitate smooth implementation of its orders. It is for that reason that parties usually return to court after decisions, seeking for clarifications thereto to enable enforcement of the orders or decisions of the court and so as not to render a court decision a paper judgment

36. In this case,  what the  1st  respondent  is seeking  from the court  is not  a  reopening  of the case or new  evidence  but to correct a mistake where the court used the term ‘suspension’  instead of  “ disqualification” as stipulated  in the law.  That being  the case,  I have no doubt in finding that the decision  in Nakumatt Holdings  Ltd is  relevant to this case  and that  this court has the inherent and residual power to correct its own  mistakes which are  apparent   on the face of the record  to facilitate the enforcement  of its  own  judgment, as courts  of law  do not issue orders  in vain.

37. In addition, it is  for the  benefit  of both the  exparte  applicant  and the 1st respondent that  the  judgment  is corrected or rectified as sought  by the  1st  respondent  otherwise    the  judgment  of 1st  July  2016   will remain  a  paper judgment   since the Act  does not provide  for suspension of the  exparte  applicant  but his  disqualification which are  two  different  words with  different  meanings.

38. The  exparte applicant  will thus suffer  no prejudice  if the  correction  of the judgment in the manner proposed by the  1st  respondent is  done  as  it  will clarify  the judgment  for  implementation.

39. Accordingly,  I find  and  hold that the   application by the  1st respondent is merited and  I proceed  to grant it and  order  that the  portion of the  judgment  of  Honourable Korir J  dated 1st  July  2016  which reads  that “ the length of the suspension of the exparte applicant  did not comply with  Section  26(2)  of the Capital Markets Act” is hereby  reviewed  and  set aside   and  in its  place, the judgment  shall  read  that “the  disqualifications  of the exparte  applicant  did not comply  with Section  25A  (1)  (c )(1)  of the Capital Markets Act.

40. As the review   was necessitated  by an inadvertent error on the part of the  court  in pronouncing  the  judgment  by  inter changing  the  term disqualification with  suspension, I order that the parties bear  their  own costs of this application  for review.

Dated, signed and delivered in open court at Nairobi this 3rd day of May, 2017.

R.E.ABURILI

JUDGE

In the presence of:

Jmaes Tugei for the 1st respondent/applicant

Miss Ngonde h/b for Kithi for  the exparte applicant

C.A.  Mohammed.