Rose Detho v Ratilal Automobiles, Mahesh Tailor, Gemini Tailor, Pramukh Enterprises Limited, Charterhouse Bank Limited, Sanjay Shah & Attorney General [2018] KECA 50 (KLR)

IN THE COURT OF APPEALAT NAIROBI

(CORAM : GITHINJI, MUSINGA & KIAGE, JJ.A.)

CIVIL APPEAL NO. 311 OF 2006

BETWEEN

ROSE DETHO......................................................1STAPPELLANT

VERSUS

RATILAL AUTOMOBILES LIMITED.............1STRESPONDENT

MAHESH TAILOR.............................................2NDRESPONDENT

GEMINI TAILOR...............................................3RDRESPONDENT

PRAMUKH ENTERPRISES LIMITED..........4THRESPONDENT

CHARTERHOUSE BANK LIMITED.............5THRESPONDENT

SANJAY SHAH..................................................6THRESPONDENT

THE ATTORNEY GENERAL.........................7THRESPONDENT

(Appeal from the ruling and order of the High Court of Kenya at Eldoret

(Gacheche, J.) dated 24thNovember, 2006)

in

Misc. Civil Application No. 649 of 2006)

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JUDGMENT OF THE COURT

1. This is an appeal from the ruling and order of the High Court of Kenya at Eldoret (Gacheche J.) made on 24th November 2006. By the aforesaid ruling and order, the learned Judge allowed an application made by the 1stto 4threspondents hereinon 26th  September, 2006 in which they sought the following orders:

I. That the respondents jointly and/or severally be committed to civil jail for a term not exceeding six months for contempt of the orders of this Honourable Court issued on 15thSeptember

2006.

II. That the assets of the respondents jointly and/or severally be attached for contempt of court.

III. The respondents be condemned to the costs of this application.

The  persons  who  had  been  named  as  respondents  in  the  aforesaid application were the appellant herein, Rose Detho, the Governor of the Central Bank of Kenya, and one Momanyi Bundi.  The learned judge found that the Governor and Bundi had wrongly been named as respondents because the two were not parties to the application for leave to commence judicial review proceedings that gave rise to the application that was before her.

2. The  learned  judge  proceeded  to  find that  Ms.  Rose  Detho,  the appellant herein,acted in contempt of court and directed her to regularize her position within the next thirty six hours failing which she stood to suffer imprisonment for six months.

3. The brief background preceding the above direction is well captured on the face of the notice of motion as well as the affidavits sworn byRavinder Tailor(1st respondent’s Director) andMahesh Patel(2nd respondent   herein)   on   26th    September   2006,   summarily   stated   as hereunder.

4. On 15th September 2006, the learned judge at Eldoret granted the 1st to 4th  respondents leave to apply for judicial review by way of diverse orders of Certiorari, Prohibition and Mandamus. Together with the grant ofleave, the learned judge further directed as follows:

“a.That the leave granted herein do operate as a stay of the transfer of the funds from the 1stinterested party to the 1strespondent, the  withdrawal/suspension  of  the  1stinterested party from the clearing house  and/or any decision, action and report made pending and/or intended by any of the respondents herein, and/or their servants or agents which in anyway affect the rights, interests and or is adverse against the applicants,1stand 2ndinterested parties pending and until the determination of this suit/judicial review application.

b. That the leave granted do operate as a stay against any decision, action, investigation, demand, audit, reports, recommendations, whatsoever and/or refusal to renew the 1stinterested party’s banking licence by any of the respondents whatsoever until the determination of this application.”

5. The respondents averred that upon the grant of the aforesaid orders, they extracted the formal order of the court and duly served it upon the appellant.

6. On  20th   September  2006,  a  licensed  court  process  server,  oneStephen Maina Macharia,deposed that he served the aforesaid orderupon theCentral Bank of Kenya, (CBK)Eldoret branch. He averred that on 21st September 2006 at Nairobi he served the court order upon oneJimmy Muiwa, a representative ofMs. Rose Dethowho was not available. On that same day, the process server effected service of the order upon CBK, Nairobi.

7. It is alleged that despite service of the order, since 20th  September2006  the  appellant  and  the  other  named  respondents  jointly  and/or severally have repeatedly defied the orders of the court by refusing to hand over the operations ofCharterhouse Bank Limited,(the 5th respondent herein) to its directors and/or allow the applicants to transact their normal banking business in the Bank. It is also alleged that despite the service of the order the appellant had declined and continued refusing to honour the present respondents’ bills of exchange properly drawn on the Bank.

8. Moreover,  the  appellant  remained  adamant  and  even  beefed  up security on the Bank’s countrywide outlets thereby denying depositors access to the bank and scaring customers away.

9. The appellant filed a replying affidavit sworn on 6th  October 2006controverting the respondents’ claim. She categorically stated that the saidorder was never served upon her personally. She further stated that theClearing House is an organ ofKenya Bankers Association (KBA)and neither CBK nor herself had any control over its activities.

10. She averred that neither herself nor CBK had made any decision, taken  any  action,  made  any  reports,  investigation,  audit  or recommendation of or concerning the 5th respondent bank after the 15th September 2006 ruling. She particularly denied the allegation that she instructed  one  Momanyi  Bundinot  to  issue  any  banker’s  cheque  as alleged by the 2nd  respondent herein. Ms. Detho also stated that she had challenged the jurisdiction of the High Court in issuing the disputed orders she allegedly breached.

11. The application for contempt of court was subsequently heard by Gacheche, J.The court proceeded to issue the impugned orders, the subject matter of this appeal.

12. The appeal is based on 20 grounds. The appeal was canvassed by way of written submissions.

13. The  appellant,  represented  by  the  firm  of  Oraro  &  CompanyAdvocates,in her written submissions crystallized her grounds into four (4)main clusters.  First, it was submitted that the Judicature Act gives the HighCourt and this Court the power to punish for contempt of court as is for thetime being possessed by the High Court of Justice in England. Counsel placed reliance onWang’ondu v Nairobi City Commission, Civil Appeal No. 95 of 1988where this Court held that the procedure to be adopted in such cases is the procedure set out in the Supreme Court Rules, which provide that before a person can be committed for contempt of court, it must be shown that the order he is accused of breaching was personally served on him.

14. The appellant cited Order 45 rule 7of the Supreme Court Practicewhich sets out the procedure that must be complied with strictly. Further reliance was placed on Chiltern DC v Keane [1985] 2 All ER 118in which the Court of Appeal of England held that failure to strictly comply with the procedure is fatal to an application seeking to commit a person for contempt. The appellant complained that there was lack of personal service of the order upon her, hence she should not have been committed.

15. It was the appellant’s contention that it was incumbent upon the respondents to demonstrate to the degree required by law that the order was personally served upon her, a burden the respondents failed to discharge.

16. The  appellant  invited  us  to  examine  the  affidavit  sworn  by  the process server, Stephen Maina Macharia,on 26th  September 2006 where he deposed that he did not find the appellant at Charterhouse Bankpremises and that he was advised that she was premised at CBK. In her view, the process server made no attempt to go to where he was advised he could find the appellant but instead chose to leave the documents with her assistant, who had no authority to accept service on her behalf.

17. The appellant faulted the learned judge for finding, without any evidence or credible material, that the process server was threatened and further, that the appellant evaded service without any deposition by the process server that he made attempts to serve the appellant personally. The judge was also faulted for relying on the affidavit evidence of the process server and failing to consider the appellant’s evidence.

18. Secondly, the appellant submitted that evasion of service is a matter of fact that must be proved like any other fact.  In this case, there was no evidence or proof of evasion of service. According to the rules of the Supreme Court of England, personal service can only be dispensed with if the person has notice of the order and is evading service. The processserver made no statement that he had difficulty in locating the appellant, it was submitted.

19. Thirdly,  it  was  the  appellant’s  contention  that  the  High  Court exceeded its jurisdiction in issuing the order and hence the application for an order of stay could not properly be founded, which she said was like an ex-parte mandatory injunction, to which the court had no jurisdiction to grant under Order 53of Civil Procedure Rules. To buttress that submission, the appellant referred to Grain Bulk Handlers Limited v J.B. Maina & Company Ltd & others, Civil Application No. 295 of 2003where this Court had occasion to comment on the jurisdiction of the High Court under the provisions of Order 53of the Civil Procedure Rules.

20. The appellant emphasized that where an order is given without or in excess of jurisdiction, it is null and void ab initio and contempt of court proceedings cannot be founded on it. (See Macfoy v United Africa Company  Limited  [1961]  3  All  ER  1169,  and  Mucuha  Vs  Ripples Limited, Civil Appeal No. 19 of 1998. In her view, the order of stay was interpreted to mean that the appellant was required to hand over the management of the 5th respondent to its directors to allow them to resume their banking business or to perform any of the actions she was accused offailing to perform, in which case then the order was granted in excess of jurisdiction.

21. According to her, an order of stay cannot properly direct a party to take any action but it can only stop the party from taking some action. If the respondents’ desire was to compel the appellant to take some action then the appropriate order would have been a mandatory injunction and not a stay. Hence the court did not have the jurisdiction to grant such an order. She argued that a question of jurisdiction must be raised at the earliest time possible as a person who fails to do so will not be allowed to raise it after the matter has been heard and determined.

22. It was the appellant’s submission that the standard of proof in committal proceedings is the criminal standard and that any allegations against her ought to have been proved beyond reasonable doubt.

23. Lastly, the appellant maintained that the court was commanding her to carry out that which she was not mandated to do as per Sections34(2) (a), 34(5) and 34(6)of theBanking Act. She further stated that thecourt was directing her to carry out the acts contrary toSection 34(6) (a). UnderSection 36(8)the appellant was insulated from liability in respect ofany act or omission done in good faith in the exercise of her duties.  She urged us to allow the appeal and grant the prayers sought.

24. In opposing the appeal, the 1st  to 4th  respondents entirely relied on their written submissions filed in a related matter, Civil Appeal No. 279 of2006,the substantive appeal, which was also heard together with this appeal on the same day. They submitted that the judge was alive to the fact that the issue at hand related to the propriety of the procedure leading up to the appointment of the statutory manager and not the merits of the decision. They agreed with the judge’s holding that the issue raised in the application was in regard to the appointment of the statutory manager.

25. They maintained that the High Court had jurisdiction in the matter and there was no failure to apply the correct test in granting leave.They also cited Aga Khan Education Services Kenya v Republic & Others [2004] 1 EA 1in support of their argument.According to them,an order of mandamus is available when one has shown that there is a public duty owed which remains unperformed. Referring to Section 34 (2) aof the Banking Act,CBK has powers to appoint a statutory manager for a bank and if it chooses to appoint a statutory manager pursuant to Section 34(1) (d), a duty to act in the interest of, inter alia, its depositors and creditors is imported, as was the case in this instance.

26. They placed reliance on Mirugi Kariuki v Attorney General [1992] eKLRwhere this Court stated that a decision affecting the legal rights of an individual which is arrived at by a procedure that offends the principle of natural justice is outside the jurisdiction of the decision making authority.

27. The 1st  to 4th  respondents were never given an opportunity to be heard by CBK and therefore the principles of natural justice were breached, the court had the jurisdiction to grant leave to file for judicial review proceedings, they contended.

28. On the issue of whether the High Court ought to have considered and determined the veracity of each order sought before it, they submitted that at the leave stage the court is neither expected nor obliged to go into the details of the dispute.

29.    In their skeleton submissions, the 4th  respondent briefly reiterated that wherein the appellant avoided and evaded personal service of the court process, this Court unequivocally stated in Abu Chiaba Mohamed v Mohamed Bwana Bakari & 2 others [2005] eKLRthat  an  appellantcannot seek to benefit from his own misconduct and wrongdoing and invoke the court’s discretion in his favour. Furthermore, knowledge of a court order alone is sufficient, and the requirement of personal service may be dispensed with, hence a reason to be held in contempt of the said court order. (See also;ShimmersPlaza Ltd v NBK (CA) (2015) eKLR.

30. It was further submitted that the decision to be made in this appeal is whether the court will protect its process or whether contemnors will be allowed to flout the process of the court by disobeying court orders and evade service while knowing that court orders were in existence. It was pointed out that when the matter came up for mention days after the ruling was delivered, the appellant appeared to have gone to the UK and was on leave hence she could not be contacted.  The appellant’s counsel could have easily reached her on phone or email if indeed he was desirous of having her come and purge her contempt, which shows that she was not keen on availing herself and thus was not deserving of this Court’s leniency, they argued.

31. For the reasons stated above, the 1st  to 4th  respondents urged thisCourt to find the appeal devoid of merit, and dismiss it with costs to them.

32. On their part, Charterhouse Bank,the 5th  respondent, in opposing the appeal, referred to the process server’s affidavit and submitted that his attempts to personally serve the appellant with the orders were frustrated and the only logical inference to be drawn from the appellant’s conduct is that she was evading service and in the process rendering it impossible to effect personal service upon her. He countered that the burden of proof was  upon  the  appellant  to  demonstrate  that  there  was  no  evasion  of service since there already exists a presumption of service as stated in the process server’s affidavit.

33. Further, the Bank stated that the appellant ought to have made an application for the process server to be  cross examined as enunciated in the case of ShadrackArap Baiywo v Bodi,Civil Appeal No. 122 of 1986 and Kingsway Tyres & Automart Limited v Rafiki Enterprises Limited, Civil Appeal No. 220 of 1995.

34. It was its assertion that the appellant neither controverted nor denied the fact that the orders were left in the hands of her assistant and the legal manager of CBK. In that same regard, Jimmy Muiwadid not deny that he brought to the attention of the appellant the fact that he had been served with the order.

35. As regards the issue of the appellant denying knowledge of the order, the 5th  respondent argued that if indeed she was not aware of the order she would not have appointed an advocate on the 22nd of September

2006 and filed a notice of appeal.  The 5th respondent cited several cases inwhich the issues of sufficiency of knowledge of a court order to prove service for the purpose of contempt proceedings have been exhaustively considered by this Court.

36. On the issue of jurisdiction, the 5th respondent asserted that notwithstanding  the  appellant’s  unfounded  proposition  that  the  orders were made without jurisdiction, the law imposes a duty on everyone to respect, observe and comply with the orders made by courts of competent jurisdiction. This was reaffirmed by Romer, L.J. in the case of Hadkison v Hadkison [1952] ALL ER 567.

37. Relying on several cases in support of their proposition, the 5th respondent was of the view that the appellant was under an obligation to obey the order unless and until the same is vacated or otherwise set aside.

38. The 5th respondent concurred with the learned judge’s decision in granting the orders for leave to apply for judicial review orders, havingbeen satisfied that based on the material before it, without going into the depth of the matter, the respondents had established an arguable case.

39. As  regards  the  standard  of  proof  in  contempt  cases,  the  5th respondent  submitted  that  the  suggestion  by  the  appellant  that  the learned judge applied the wrong standard of proof or that she wrongly shifted the burden of proof to the appellant was unsubstantiated.

40. It is also argued by the appellant that the penal notice did not refer to her by name. According to Order 45 rule 7of the Supreme Court Rules, penal notice on an order should inform the contemnor of the consequences of the disobedience of the order. The 5th respondent argued that the issue of validity of the penal notice cannot be challenged on the mere ground that it lacked the contemnor’s name, further it was highly unlikely that where one is served with an order, it would be addressing any other person in its contents other than the person being served.  In its view, the mere failure to mention the contemnor by name is a technicality which cannot be relied upon by a contemnor in a bid to defeat justice.

41. In conclusion, the 5th  respondent called upon this Court to reclaim the dignity and authority which had been trampled upon by the appellantby reaffirming the holding of the learned judge adjudging the appellant to be in contempt of court.

42. The 6th respondent, who was also a customer of the 5th respondent, opposed the appeal on the same arguments as advanced by the 1st  to 4th respondents.

43. As correctly observed by the respective counsel, this is an appeal challenging the exercise of judicial discretion by a trial Judge.  It is trite law that the power of an appellate court to interfere with the exercise of discretion  by  a  trial  court  is  limited,  and  the  appellate  Court  will  not interfere unless it is satisfied that the judge in exercising his discretion has misdirected himself in some matter and as a result arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been miscarriage of justice. See Mbogov Shah [1968]E.A. 93.

44. In  our  view,  the  main  issues  for  our  determination  are  whether service of the order was effected upon the appellant; whether the appellant had knowledge of the order; and whether the order was disobeyed.  The Court shall also consider whether in  granting  the order of  stay  in themanner it did the High Court exceeded its jurisdiction.

45. The application  was  brought  underSection  5of  theJudicature ActandOrder  52, rule  3of theSupreme  Court  Practice  of  England. Section 5of theJudicature Actgave the High Court and Court of Appeal power to punish for contempt of court as is for the time being possessed by  the  High  Court  of  Justice  in  England.  That  section  has  now  been repealed  bySection 38of  theContempt  of  Court,  Act  No.  46  of2016which commenced on 13th January 2017.

46. Having noted that, first, we shall address the issue of personal service of the order. In the dispute, the learned judge relied on the affidavit of the process server to prove that there were deliberate attempts to serve the appellant with the order. She thus expressed herself as follows:

“I have perused the affidavit of service with a view to establishing whether it  can be said that Detho was served. Macharia deposed on 26/9/2006 that he has served the order of15/9/2006 together with related documents in the followingmanner…

“It is evident that he was threatened when he went to effect service. It is also evident from the pleadings that Detho was stationed within the very premises which he could not access. I form the opinion that Macharia did his best in the circumstances and that he effected service in an acceptable manner.”

47. Was the order dated 15/09/2006 served upon the appellant? Rule18. 6of theCivil Procedure (Amendment No. 2) Rules 2012of England provides that a copy of judgment or orders and any orders or agreements fixing or varying the time for doing an act should be served personally. The appellant contends that she was never personally  served with the said order.  From the record, there are three affidavits of service in relation to the said order. The first two affidavits were sworn by the process server,Stephen Maina Macharia, on 26/09/2006 and 04/10/2006 and the third one byAlfred King’oina Nyairo,Advocate, on 11/10 2006.

48. Mr. Macharia averred that on 21st  September 2006 he went to Charterhouse Bank Limited, the 1st  interested party, which is at Longonot place, 6th Floor along Kijabe Street, Nairobi, and served the order upon the Ms. Detho’s assistant, one Jimmy Muiwa, who acknowledged receipt butdeclined to sign, claiming he was not authorized to sign anything on her behalf.

49. The appellant contended that the learned judge only considered the affidavit of service sworn by the process server and failed to consider her evidence.  Order 5 rules 15of the Civil Procedure Rules, 2010provides that  where  the  process  server  deposes  that  personal  service  was  notpossible, it should be indicated in the affidavit of service the attempts made to effect personal service.

50. In  our  view,  a  clear  examination  of  the  affidavit  shows  that  Mr. Macharia made several attempts to serve the appellant personally before serving her assistant but was met with hostility.  We are persuaded that the affidavit sworn by Mr. Macharia complied with the said requirements in that he set out the unsuccessful efforts made to effect personal service before serving Ms. Detho’s assistant.

51. In the same breath, the affidavit of service sworn by Alfred NyairoKing’oina, Advocate,  deposes as follows:

“That upon an order issued by this Honourable court on4thday of October 2006 (a copy annexed hereto and marked “AKN 1”) for substituted service, I proceeded to advertise and/or publish in the Daily Nation Newspaper on the 6thday of October 2006. ”

52. In  similar  circumstances,  this  Court  in  Justus  Kariuki Mate  & another v Martin Nyaga Wambora & another [2014] eKLRheld  as follows:

“Both offices have staff and employees attached thereto who act and perform their duties on behalf of the County Assembly.

Drawing an analogy that a public institution is the same as a corporate entity, service of summons on an authorized officer or legal officer attached to the corporation is deemed as service on the institution and the holder of the office.  It, therefore, follows that service upon Boniface Ireri, the Legal Clerk or Officer attached to the County Assembly can be deemed as proper service upon the Speaker and the Clerk of the County Assembly of Embu.”

53. In this appeal, it has been demonstrated that the court order was served upon the appellant’s assistant, Jimmy Muiwa.  The reasons for such service were properly explained.

54. We agree with counsel for the respondents that the burden layupon the appellant to demonstrate that the service was not proper in law, but she did not discharge that burden.  The appellant’s ground that there was no personal service upon her therefore fails.

55. The second issue for our consideration is whether the appellant hadknowledge of service of the order.Black’s Law Dictionary, 9thEddefines notice as follows:“A person has notice of a fact or condition if that person (1) has actual knowledge of it; (2) has received information about it; (3) has reason to know about it; (4) knows about a related fact; or  (5) is  considered as  having been able to  ascertain it  bycheckingan official filing or recording.”

56. It is well settled today that knowledge of an order is sufficient for purposes of contempt proceedings. The appellant herein had notice of the said order through service upon Jimmy Muiwa and the same orders were advertised in the local daily newspaper on 6th October 2006 to notify all relevant parties. The newspaper adverts were means of substituted service.

57. In addition to that, by a letter dated 22nd September 2006 addressed to Ms. Detho from one Sanjay Shah, the Managing Director of the 5th respondent Bank, it is clear that the letter was received by both CBK andMs. Detho’s assistant as it bears stamps of acknowledgment of receipt. In the aforesaid letter, Sanjay was notifying Ms. Detho of the order and even went to the extent of attaching a copy of the said order. In the letter he complained of Ms. Detho’s disappearance. He expressed himself thus:

”Surprisinglysince Monday 18thJune 2006, I have not seen you nor do I have information of your whereabouts. Also the court’s process server has been unable to serve you with the court order, as you have not been within the bank. However, we notice a copy of the said court order was served to Jimmy Muiwa, your assistant, on behalf of the bank but he did not sign it, as he was not the statutory manager.”

58. It is therefore highly unlikely that the letter did not get to Ms. Detho.

In the circumstances, we agree with the learned judge when she observedthat “Detho does not deny that she was aware of the court order; it is on record, and I note that Detho has deposed and confirmed as follows……”

59. In   the   case   of   Justus  Kariuki  Mate   &   Another  v   Hon. Martin Wambora(Supra), this Court observed that for a person to be held guilty of contempt of an order of the court it had to be proved that he had knowledge of the order. It was further held that for a person to be found to be in contempt of an order of the court the court had to be satisfied beyond a shadow of doubt that the person alleged to be in contempt had full  knowledge  or  notice  of  the  existence  of  the  order  of  the  court forbidding it.

60. In WoburnEstate Limited v Margaret Bashforth [2016] eKLR, this Court  reaffirmed  the  position  in Refrigeration and  Kitchen Utensils Ltd v Gulabchand Popatlal Shah & Another, Civil Application No.39 of1990, where it was observed:

“A party who knows of an order, whether null or valid, regular or irregular, cannot be permitted to disobey it…. It would be most dangerous to hold that the suitors, or their solicitors, could themselves judge whether an order was null or valid-whether it was regular or irregular. Thatthey should come to the court and not take upon themselves to determine such a  question……he should apply to the court that it might be discharged. As long as it exists it must not be disobeyed.”

See also Chuckv Cremer (1) (1 Coop. Temp.Cott.342)cited with approvalin this Court’s judgment inShimmers Plaza LimitedvNational Bank ofKenya Limited, Civil Appeal No. 33 of 2012.

61. Lastly, was the appellant in contempt of court? The learned judge found that she acted in contempt of court and ordered that she regularizes her position within the next thirty six hours otherwise she stood to suffer imprisonment for six months.

62. In Econet Wireless Kenya Ltd  v.  Minister for  Information & Communication of Kenya &Another[2005] 1 KLR 828, Ibrahim , J . (as he then was) relied on this Court’s decision in GulabchandPopatlal Shah& Another(supra) where the Court of Appeal stated as follows:

“It is essential for the maintenance of the Rule of Law and order that the authority and the dignity of our Courts are upheld at all times. The Court will not condone deliberate disobedience of its orders and will not shy away from its responsibility to deal firmly with proved contemnors... In HADKINSON v. HADKINSON(1952) 2 All E.R. 567,it was held that:It is the plain and unqualified obligation of every person against or in respectof whom an order is made by a court of competent jurisdiction, to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it  to  be  irregular or  void.”[25]InAtt-Gen. v. Times Newspapers Ltd.[1974]A.C. 273,Lord Diplock stated:

“…..There is  an element of  public policy in punishing civil contempt, since the administration of justice would be undermined if the order of any court of law could be disregarded with impunity.”

63. The issues that we must now address ourselves to are whether the appellant deliberately disobeyed the court order; and whether the High Court, having ordered the applicant to regularize the position within thirty six hours she was capable of doing so but intentionally failed to comply.

64. The High Court having granted leave to the 1st, 2nd, 3rd and 4th respondents to apply for various orders of mandamus, certiorari and prohibition, further directed that the leave granted do operate as stay of various acts as stated under paragraph 4 of this judgment.  The order was directed against the five respondents to the application who were the Central Bank of Kenya; the appellant; the Minister for Finance; Kenya Bankers Association and the Kenya Revenue Authority.

65.  The actions that required to be stayed pending hearing and determination of the Judicial Review application included: transfer of funds from Charterhouse Bank to the Central Bank of Kenya, suspension of Charterhouse Bank from the Clearing House; any action, investigation, demand, audit, reports, recommendations and refusal to renew Charterhouse Bank’s licence by any of the named respondents.

66. In a related appeal that was heard by this Court together with this appeal, Civil Appeal No. 279 of 2006, Central Bank of Kenya & Anor v Ratilal Automobiles Limited & Others,the Court held that some of the acts that the High Court required the appellant to stay were not within her powers and the Court exceeded its jurisdiction in granting the same.  The Court held, inter alia:

“45.  We have looked at the certified copy of the orders that were extracted pursuant to delivery of the impugned ruling.  It is apparent that some of the orders appear to have been issued at the behest of CHB which was not one of the ex parte applicants but had merely been named as an interested party. For example, the effect of the stay order was to  prohibit: the appellants from interfering with the management or running of CHB; the 1stappellant from refusing to grant CHB a certificate confirming its operational status and its liquidity; KBA from refusingCHB to transact at the clearing house; the 2ndappellant from adversely exercising any functions of powers and/or interfering with the business and operations of CHB; Kenya Revenue Authority (KRA) from investigating, accessing, auditing, demanding or taking any action against CHB. The court also stayed any action or decision, investigation, reports or  recommendations whatsoever regarding refusal to renew the licence of CHB.  In other words, the order was interpreted to mean, inter alia, that the appellants were directed to return the control of CHB to its directors, which, in our view, could not have been the case.

46.   In Grain Bulk Handlers Limited v J.B. Maina & Company Limited and 2 others (supra) this Court noted that the order of stay that had been granted in that matter was so wide, imprecise and ambiguous that it was doubtful whether it was capable of implementation. The court also faulted the learned judge for failing to consider the full implications of the order of stay.”

67. Considering the nature of the orders of stay that were issued by the High Court, we do not think that the appellant can be said to have intentionally failed to comply with the same.  The grounds upon which the contempt application was made were that despite service of the orders of stay the respondents (the Governor of the Central Bank of Kenya, the appellant and Momanyi Bundi) jointly and severally had:

(i) declined and continue refusing to honour the 1stto 4threspondents’ bills of  exchange drawn in  the name of Charterhouse Bank.

(ii) refused to hand over the operations of Charterhouse Bank to  its  directors and/or allow the  said  respondents to transact their normal banking business

(iii) remained adamant and even beefed up security on theCharterhouse Bank’s countrywideoutlets.

68. In her replying affidavit, the appellant stated that the Clearing House is an organ of the Kenya Bankers Association and neither  she nor the Central Bank of Kenya had any control of its activities.  As such, she could not be accused of having refused to honour the 1st to 4th respondents’ bills of exchange (cheques).

69. The appellant further stated that neither herself nor the Governor of the Central Bank of Kenya had made any decision, taken any action, made any reports, investigation, audit or recommendation concerning Charterhouse Bank after the date of issuance of the orders of stay.

70. Considering  the fact  that  the learned  judge  dismissed the respondents’ application against the Governor of the Central Bank of Kenya as  well  as  Momanyi  Bundi;  the  appellant  could  not  be  said  to  havedisobeyed the court orders in the manner complained of.   The learned judge observed in her impugned ruling that it was clear that the ex parte applicants   had   abandoned   the   prayer   for   stay   of   the   placing   of Charterhouse Bank under statutory management and the appointment of the  appellant  as  a  statutory  manager;  and  that  the  appellant  as  the statutory manager would remain in office, save that she would be required to comply with the orders issued by the court.

71. The acts complained of that were said to have amounted to disobedience of the orders issued were either outside the scope of the appellant’s duty, or were such that a statutory manager could not perform the statutory functions of that office without being accused of breaching the orders.   For instance, the appellant, having lawfully declared a moratorium on the payment by Charterhouse Bank to its depositors and creditors, she could not authorize payment of any bill of exchange without breaching the law.  The appellant and the Governor of the Central Bank of Kenya had, in a different application, taken the necessary steps to challenge the ex parte orders that had been issued but the contempt application was decided before the other application could be disposed of.

72. In such circumstances, it is not conceivable how the appellant, having been lawfully appointed a statutory manager of Charterhouse Bank, could, in the circumstances aforesaid, be accused of having breached court orders in the performance of her statutory duties, as long as the performance was within the law.  It is trite law that before a person is cited for contempt, the Court must be satisfied that the impugned order is clear and unambiguous. See  this  Court’s  decision  in  Jihan Freighters Limited v Hardware & General Stores Limited [2015] eKLRwhere it was held:

“The rationale of the requirement that a  court order must be clear, precise and easy to understand is founded on the self-evident fact that breach of a court order may result in contempt of court proceedings as well as the severe sanctions, including loss of liberty or property, that are visited upon a contemnor.   Accordingly, the grave consequences that attend a violation of a court order ought not to be casually visited upon a person unless and until it is clear what the court order required him to do or to abstain from doing.”

We cannot say that the orders granted by the High Court were clear, precise, unambiguous and capable of execution or implementation by the appellant on her own.

73.  It is evident that Charterhouse Bank had interpreted the order of stay to mean, inter alia, that control of the bank’s operations was to revert to its directors, considering the averments by the 6th  respondent and his concerted  effort  to  remove  the  appellant  from  office  as  a  statutory manager, which we dare say was not the case.  As we stated in the related matter, Civil Appeal No. 279 of 2006, some of the ex parte orders wererather imprecise and ought not to have been issued at the leave stage.  We agree with the appellant’s counsel that the High Court did not have jurisdiction to grant some of the orders it issued at an exparte stage of the proceedings.   For example, the court had no jurisdiction to grant an interlocutory exparte mandatory order to compel CBK to renew the 5th respondent’s banking licence.  An exparte mandatory injunction cannot be issued in judicial review proceedings.  An order issued without jurisdiction is null and void and any purported breach thereof cannot attract criminal sanctions.

74. All in all, we are not satisfied that there was deliberate breach or willful disobedience of the ex parte orders by the appellant.  Consequently, we allow this appeal and set aside the ruling delivered on 24th November,2006.   We substitute therefor an order dismissing the Notice of Motion dated 26th September, 2006.

75. The costs of this appeal are awarded to the appellant.

Dated and delivered at Nairobi this 20thday of December, 2018.

E.M. GITHINJI

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JUDGE OF APPEAL

D.K. MUSINGA

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JUDGE OF APPEAL

P.O. KIAGE

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JUDGE OF APPEAL

I certify that this is a true copy of the original.

DEPUTYREGISTRAR