- This is an appeal from the Judgment and decision of the Honourable Obura given on 13/6/2016 in Milimani CMC 2716 of 2016.The Appellant raised the following grounds:
- THE Learned Magistrate erred in law and fact in not appreciating that the role of the stakeholder in conveyancing contract.
- THE Learned Magistrate erred in law and fact in ruling that the dispute between the Appellant the Respondent was in the realm of the advocates Disciplinary Tribunal.
- The Learned Magistrate erred in law and fact in deciding that she had no jurisdiction to entertain the plaintiff’s application dated 3/5/2016.
- The Learned Magistrate erred in law and fact in mixing a disciplinary process with an accounting one.
- The plaintiff filed suit on 5/5/2016 claiming the following: -
- Ksh 9,000,000/=
- A declaration that the sale agreement dated 27/4/2016 is void.
- The money claimed was put in the Respondent’s account no 0970295728782, on 28/4/2016. The respondent was to be a stakeholder. The Appellant discovered that the Respondent did not have a practicing certificate. He therefore field suit 7 days later claiming the money.
- The Respondent raised a preliminary objection on points of law as follows: -
- The agreement from which the suit arises is a sale agreement under paragraph 10 of the agreement, it states that all matters arising should be determined by arbitrator. This court is not arbitrating but adjudicating the matter. The court cannot proceed with it.
- This is an advocate – client issue. The Respondent was an advocate acting on behalf of his client. He cannot be sued in this application or the suit
- The suit and the application are an abuse of the court process.
- The court heard both parties and upheld the preliminary objection on 30/6/2016. This matter has been dancing in court since then. After the Appeal was filed this court ordered that the said amount remains in the account till hearing and determination of the Appeal.
- The matter came for hearing before me today and upon the parties highlighting their submissions I directed the parties to appear before me today in the afternoon for judgment. I noted the age of the matter and expedited the judgment.
- Parties filed submissions but most of the submissions are on points of fact.
- The applicant filed brief submissions stating that the court erred in allowing the preliminary objection in any case section 60 (9) of the advocates act applies only where suit has not been field against the Advocate.it provides as doth: -
“(9) In any case where the complainant has not filed a civil suit against the advocate in respect of the sum in dispute, the Tribunal may order the advocate to pay to the complainant such sum as it finds to be due from the advocate.”
- The Respondent stated in their submission that there was an arbitration clause in the agreement. The court did not have jurisdiction. They relied on the case of Owners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Ltd [1989] eKLR, where Justice Nyarangi JA, as he then was stated as doth;
“With that I return to the issue of jurisdiction and to the words of Section 20 (2) (m) of the 1981 Act. I think that it is reasonably plain that a question of jurisdiction ought to be raised at the earliest opportunity and the court seized of the matter is then obliged to decide the issue right away on the material before it. Jurisdiction is everything. Without it, a court has no power to make one more step. Where a court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A court of law down tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction. Before I part with this aspect of the appeal, I refer to the following passage which will show that what
I have already said is consistent with authority: “By jurisdiction is meant the authority which a court as to decide matters that are litigated before it or to take cognisance of matters presented in a formal way for its decision. The limits of this authority are imposed by the statute, charter, or commission under which the court is constituted, and may be extended or restricted by the like means. If no restriction or limit is imposed the jurisdiction is said to be unlimited. A limitation may be either as to the kind and nature of the actions and matters of which the particular court has cognisance, or as to the area over which the jurisdiction shall extend, or it may partake of both these characteristics. If the jurisdiction of an inferior court or tribunal (including an arbitrator) depends on the existence of a particular state of facts, the court or tribunal must inquire into the existence of the facts in order t
- I shall dismiss this argument pronto. The court below dismissed the argument and there was no appeal from the same. They also relied on the case of Samuel Kamau Macharia & another v Kenya Commercial Bank Limited & 2 others [2012] eKLR, THE supreme court stated as doth: -
“This Court dealt with the question of jurisdiction extensively in, In the Matter of Interim Independent Electoral Commission (Applicant), Constitutional Application Number 2 of 2011. Where the Constitution exhaustively provides for the jurisdiction of a Court of law, the Court must operate within the constitutional limits. It cannot expand its jurisdiction through judicial craft or innovation. Nor can Parliament confer jurisdiction upon a Court of law beyond the scope defined by the Constitution. Where the Constitution confers power upon Parliament to set the jurisdiction of a Court of law or tribunal, the legislature would be within its authority to prescribe the jurisdiction of such a court or tribunal by statute law.”
- They also relied on the case of Geoffrey Muthinja & another v Samuel Muguna Henry & 1756 others (2015) eKLR, where it was observed that: -
“It is imperative that where a dispute resolution mechanism exists outside courts, the same be exhausted before the jurisdiction of the courts is invoked. Courts ought to be the fora of last resort and not the first port of call the moment a storm brews within churches, as is bound to happen. The exhaustion doctrine is a sound one and serves the purpose of ensuring that there is a postponement of judicial consideration of matters to ensure that a party is first of all diligent in the protection of his own interest within the mechanisms in place for resolution outside of courts. This accords with Article 159 of the Constitution which commands Courts to encourage alternative means of dispute resolution.”
- They prayed that the Appeal be dismissed.
- It is an appeal from the decision of the lower court declining jurisdiction. The preliminary objection was raised orally. The same referred to documents. In even included an issue over arbitration. I have said many times before, there is nothing like a preliminary objection related to arbitration. A party who seeks to have a matter proceed for arbitration needs t comply with section 6(1) of the Arbitration Act, which provides as doth: -
(1) A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than the time when that party enters appearance or otherwise acknowledges the claim against which the stay of proceedings is sought, stay the proceedings and refer the parties to arbitration unless it finds—
(a) that the arbitration agreement is null and void, inoperative or incapable of being performed; or (b) that there is not in fact any dispute between the parties with regard to the matters agreed to be referred to arbitration.
(2) Proceedings before the court shall not be continued after an application under subsection (1) has been made and the matter remains undetermined.
(3) If the court declines to stay legal proceedings, any provision of the arbitration agreement to the effect that an award is a condition precedent to the bringing of legal proceedings in respect of any matter is of no effect in relation to those proceedings. [
- The second issue was a question of fact. The capacity of parties is not a point of law. It goes to merit of the case. The third issue is not a point at all. Therefore, there was no point of law raised.
- The duty of the court in an appeal of this nature is immense given that there was no evidence taken. In an ordinary Appeal the duty of the first Appellate court is re-evaluate and assess the evidence and make its own conclusions. It must, however, keep at the back of its mind that a trial court, unlike the appellate court, had the advantage of observing the demeanour of the witnesses and hearing their evidence first hand. In the case of Selle & Another vs. Associated Motor Boat Co. Ltd & Others [1968] EA 123, this court is dealing with the understanding on the points of law involved. In that case the court of Appeal stated as doth: -
“This court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court ... is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect..."
- THE Court is not involved in the finding of fact as the suit was heard on a preliminary objection. In hearing a preliminary objection, this court and the court below have the same jurisdiction. They proceed on an understanding that what is pleaded in the plaint is true. It is what the English common law used to call a demurrer. The locus classicus case of Mukisa Biscuit Manufacturing Co. Ltd V. West End Distributors Ltd [1969] E.A. 696, made this pertinent observation. It said: -
"The first matter relates to the increasing practice of raising points, which should be argued in the normal manner, quite improperly by way preliminary objection. The improper raising of points of preliminary objection does nothing but unnecessarily increases costs and, on occasion, confuses issues. This improper practice should stop".
- In a Tanzanian case of Hammers Incorporation Co. Ltd Versus The Board Of Trustees Of The Cashewnut Industry Development Trust Fund, where the Court of Appeal, (Rutakangwa, N. P. Kimaro and S. S. Kadage JJA), sitting in Dar Es Salaam in their decision given on 17/9/2015 regretted that the practice of raising preliminary objection that was frowned upon by the court of appeal in kampala in the Mukisa biscuit case(Supra) still persists. They stated as doth: -
“It was hoping against hope. We believe that had that Court survived to this day it would have issued a sterner warning. This is because the "improper practice" never stopped. Neither did it ebb away. On the contrary, it is on the increase. This forced the Full Bench of this Court in Karata Ernest & Others V The Attorney General, Civil Revision No. 10 of 2010 (unreported) to mildly urge all parties in judicial proceedings to pay heed to what was aptly pronounced in the MUKISA BISCUIT case (supra). The late call appears to be falling on deaf ears as this ruling will demonstrate.”
- In the case of Martha Akinyi Migwambo v Susan Ongoro Ogenda [2022] eKLR, justice Kiarie Waweru Kiarie, summarized the preliminary objection nicely as seen from two of the judges in Mukisa Biscuit Manufacturing Co. Ltd(supra): -
“A preliminary objection must be on a point of law. The Court of Appeal in the case of Mukisa Biscuit Manufacturing Co. Ltd vs West End Distributors Ltd [1969) EA 696 at page 700 paragraphs D-F Law JA as he then was had this to say:
....A Preliminary Objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the Jurisdiction of the court or a plea of limitation, or a submission that the parties are bound by the contract giving rise to the suit to refer the dispute to arbitration.
At page701 paragraph B-C Sir Charles Newbold, P. added the following:
A Preliminary Objection is in the nature of what used to be a demurrer. It raises a pure point of law which is usually on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion....”
- A Tanzania Court of Appeal sitting in Dar es Salaam, in Karata Ernest & Others vs Attorney General (Civil Revision No. 10 of 2020) [2010] TZCA 30 (29 December 2010), (Luanda, J.A. , Ramadhani, C.J. , Rutakangwa, JJA), put the issue of preliminary objections in a more succinct manner: -
“At the outset we showed that it is trite law that a point of preliminary objection cannot be raised if any fact has to be ascertained in the course of deciding it. It only "consists o f a point of law which has been pleaded, or which arises by dear implication out of the pleading obvious examples include: objection to the jurisdiction of the court; a plea of limitation; when the court has been wrongly moved either by non-citation or wrong citation of the enabling provisions of the law; where an appeal is lodged when there is no right of appeal; where an appeal is instituted without a valid notice of appeal or without leave or a certificate where one is statutorily required; where the appeal is supported by a patently incurably defective copy of the decree appealed from; etc. All these are clear pure points of law. All the same, where a taken point of objection is premised on issues of mixed facts and law that point does not deserve consideration at all as a preliminary point of objection. It ought to be argued in the "normal manner" when deliberating on the merits or otherwise of the concerned legal proceedings.
- Justice prof J.B. Ojwang J (as he then was) succinctly addressed the issue of preliminary objection in the case of Oraro vs Mbaja [2005] eKLR:
“I think the principle is abundantly clear. A preliminary objection as correctly understood is now well settled. It is identified as, and declared to be the point of law which must not be blurred with factual details liable to be contested and in any event, to be proved through the processes of evidence. Any assertion which claims to be a preliminary objection, and yet it bears factual aspects calling for proof, or seeks to adduce evidence for its authentication, is not, as a matter of legal principle, a true preliminary objection which the court should allow to proceed. I am in agreement that where a court needs to investigate facts, a matter cannot be raised as a preliminary point.
- It is therefore my view that a preliminary objection must be based on current law, and be factual in its constitution. It cannot be based on disputed facts or facts requiring further enquiry.
- In determining a preliminary objection therefore only the impugned law, the plaint and preliminary objection are looked at. If you have to refer to the defence, then the preliminary objection is untenable. If the court has to look at documents, then there is no preliminary objection.
- The so called preliminary objection is not a point of law. The court had jurisdiction as the matter released to competence of an advocate to act and a refund of money had and received. Whether he should or should not refund is a question of fact. Whether he acted for the other party or not is not a question of law but fact.
- Prayers in the plaint were predicted on the competence of the advocate not breach of the sale agreement. Consequently, the court fell into seal error. The court struck out the suit on basis of conjecture, hyperbole and disputed facts.
- The respondent cannot choose the place to sue for the Appellant. The allegation that there was no valid practicing certificate basically means the advocates disciplinary tribunal could not deal. in any case, the Appellant was not praying for punishment of an advocate
- In the circumstances, the Appeal is wholly merited and I allow the same with costs. I set aside the finding on the preliminary objection. In lieu thereof, I substitute with an order dismissing the preliminary objection.
- I note that the Dispute revolves around Kshs 9,000,000 which the respondent was given as a stakeholder for a deal which is now 8 years old. This court, justice B Thuranira Jaden in 19/1/2017 made orders for preservation of the funds. I direct that the said amount shall continue in the said account no. 0970295728782 till hearing and determination of the case in the court below.
- There is need to have the orders that had hitherto been issued maintained pending the suit in the lower court.
Determination
- The upshot of the foregoing is that I make the following orders: -
- The appeal is allowed. The preliminary objection on jurisdiction is dismissed.
- The matter is remitted back to the lower court for hearing before a court other than Hon. Obura.
- This court, justice B Thuranira Jaden in 19/1/2017 made orders for preservation of the funds. I direct that the said amount shall continue to remain account no. 0970295728782 till hearing and determination of the case in the court below.
- The Appellant to have costs of Kshs 195,000/= for the Appeal.
- The lower court file be returned for hearing. The suit shall be mentioned in the lower court on 14/5/2024.
- This file is closed
DELIVERED, DATED and SIGNED at Nairobi, Virtually on this 12th day of April, 2024. Judgment delivered through Microsoft Teams Online Platform.
In the presence of: -
Mr. Irungu for the Appellant
Ms Katana for the Respondent
Court Assistant – Michael