1. This ruling determines the notice of preliminary objection dated and the application both dated 23rd October 2023, which I have carefully considered alongside the responses, written and oral submissions of the parties.
2. The respondent contends that the petition breaches Section 121 of the Insurance which requires the joinder of the Commissioner of Insurance to these proceedings. My finding on this is that while Section 121 is couched in mandatory terms, it does not require joinder of the Commissioner. The only obligation placed on a petitioner is to serve the Commissioner with the petition whereupon the Commissioner becomes a party. The petitioner has not confirmed whether or notice service was effected and instead claims that it is up to the Commissioner to deny such service.
3. I take a contrary view which is that it is up to the petitioner to prove such service if they intend to rely on the fact. There being no such proof on record, I take it that the petition has not been served on the Commissioner. As to whether this renders the process defective, I note that there are no timelines prescribed for service on the Commissioner under the Act. I can only presume that if the Commissioner must be heard on the petition, service ought to be at any time before the hearing of the petition. Since this petition has not yet been set down for hearing, failure to serve the Commissioner is not a fatal defect as this court can order such service.
4. The respondents have also taken issue with the form of the statutory demand on which the petition is premised. Regulation 77 B (2)(a) require that a liquidation petition be accompanied by a statutory demand similar to that in Form 32E. The respondents claim that the statutory demand herein differs from that in Form 32 E, it is signed by counsel for the petitioner and has not been endorsed by the Deputy Registrar.
5. There is an abundance of case law supporting the fact that a statutory demand ought not to be set aside on the basis of mere technicality but by looking at the totality of the circumstances and the injustice that would be occasioned if the statutory demand were to be set aside. This is so especially if the debt is owed.
6. I have reviewed the statutory demand dated 30th June 2023. It substantially conforms to the designated Form 32E, as prescribed under Regulation 77B. The demand clearly sets out the substance of the debt owed to the petitioners, which is its primary purpose. Therefore, I do not find that any prejudice has resulted from any failure to strictly adhere to the prescribed form, if such a failure exists. Consequently, I would overlook any technicalities in form and focus on the substance of the matter.
Disposition and Final Orders
7. Accordingly, the notice of preliminary objection and the application dated 23rd October 2023 are dismissed with costs awarded to the petitioner. Given the necessity of the Commissioner of Insurance’s involvement in these proceedings, the pleadings shall be served upon the Commissioner forthwith, so as to 30 days for the Commissioner’s input to the proceedings.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 18TH DAY OF FEBRUARY 2025.
F. MUGAMBI
JUDGE
2. The respondent contends that the petition breaches Section 121 of the Insurance which requires the joinder of the Commissioner of Insurance to these proceedings. My finding on this is that while Section 121 is couched in mandatory terms, it does not require joinder of the Commissioner. The only obligation placed on a petitioner is to serve the Commissioner with the petition whereupon the Commissioner becomes a party. The petitioner has not confirmed whether or notice service was effected and instead claims that it is up to the Commissioner to deny such service.
3. I take a contrary view which is that it is up to the petitioner to prove such service if they intend to rely on the fact. There being no such proof on record, I take it that the petition has not been served on the Commissioner. As to whether this renders the process defective, I note that there are no timelines prescribed for service on the Commissioner under the Act. I can only presume that if the Commissioner must be heard on the petition, service ought to be at any time before the hearing of the petition. Since this petition has not yet been set down for hearing, failure to serve the Commissioner is not a fatal defect as this court can order such service.
4. The respondents have also taken issue with the form of the statutory demand on which the petition is premised. Regulation 77 B (2)(a) require that a liquidation petition be accompanied by a statutory demand similar to that in Form 32E. The respondents claim that the statutory demand herein differs from that in Form 32 E, it is signed by counsel for the petitioner and has not been endorsed by the Deputy Registrar.
5. There is an abundance of case law supporting the fact that a statutory demand ought not to be set aside on the basis of mere technicality but by looking at the totality of the circumstances and the injustice that would be occasioned if the statutory demand were to be set aside. This is so especially if the debt is owed.
6. I have reviewed the statutory demand dated 30th June 2023. It substantially conforms to the designated Form 32E, as prescribed under Regulation 77B. The demand clearly sets out the substance of the debt owed to the petitioners, which is its primary purpose. Therefore, I do not find that any prejudice has resulted from any failure to strictly adhere to the prescribed form, if such a failure exists. Consequently, I would overlook any technicalities in form and focus on the substance of the matter.
Disposition and Final Orders
7. Accordingly, the notice of preliminary objection and the application dated 23rd October 2023 are dismissed with costs awarded to the petitioner. Given the necessity of the Commissioner of Insurance’s involvement in these proceedings, the pleadings shall be served upon the Commissioner forthwith, so as to 30 days for the Commissioner’s input to the proceedings.
DATED, SIGNED AND DELIVERED IN NAIROBI
THIS 18TH DAY OF FEBRUARY 2025.
F. MUGAMBI
JUDGE