Commissioner of Income Tax v Kencell Communications Limited [2013] KECA 352 (KLR)
The bottom line
#Kenya's Court of Appeal ruled a taxpayer's appeal, dismissed after its lawyer arrived 23 minutes late, must be heard on its merits.
What this practically means
#Executive summary
#Key legal issues
#Whether an appeal lay to the Court of Appeal without leave
The appeal lay as of right. Section 91A of the Income Tax Act applies to appeals from the High Court to the Court of Appeal; Section 75(1) of the Civil Procedure Act provides that an appeal lies as of right from any order, and Order 43 Rule (1) of the Civil Procedure Rules permits appeals as of right from decisions under Order 12 Rule 7.
Section 20 of the Income Tax Act incorporates the Civil Procedure Rules into income tax matters. The order appealed against was the one refusing to set aside the dismissal order and reinstate the appeal, a decision under the provisions governing non-attendance. Such an order is appealable as of right without leave, notwithstanding that it was not a determination on the merit.
Whether counsel's lateness constituted sufficient cause under Rule 12
Yes. Counsel did not fail to attend court altogether; he arrived about 23 minutes late and promptly applied for reinstatement. The lateness was a pardonable mistake of time management, and the inconvenience could be compensated with costs.
Applying Shah v Mbogo, the discretion to set aside exists to avoid injustice from accident, inadvertence or excusable mistake, not to reward deliberate obstruction. Madan JA's observations in Belinda Murai and Apalo JA's in Phillip Chemwolo show that a mistake by counsel should not deprive a party of a hearing on the merit; unless there is fraud or intention to overreach, defaults can be cured by costs.
Distinction between in-house and private practice counsel
The learned Judge misdirected himself in drawing that distinction. Counsel, whether in-house or in private practice, are entitled to equal treatment, and their mistakes impact their clients the same way.
The court held that all parties who come to courts of law are entitled to equal treatment. The denial of a hearing on account of counsel's mistake amounted to an injustice, particularly where written submissions were on record and the inconvenience could be compensated by costs.
Right to be heard and proportionality in dismissal for non-attendance
Refusal to hear a party on account of counsel's mistake amounts to an injustice; the right of hearing is constitutionally protected and dismissals should be exercised with proportionality.
The Court emphasised that although courts have inherent jurisdiction to dismiss suits to protect the process from abuse, dismissals must be proportionate. The dispute involved a colossal sum of money and shutting the doors of justice to the appellant would deny it the fundamental right of being heard.
Legal principles established
#- An appeal lies to the Court of Appeal against an order or decision of the High Court notwithstanding the matter was not heard and determined on merit; an order dismissing an application to set aside dismissal of an income tax appeal for non-attendance is appealable as of right.
- A mistake by counsel, whether an in-house lawyer or one in private practice, impacts on the client in the same way and should not ordinarily be visited upon the client where it is pardonable and compensable by costs.
- The discretion to set aside an ex parte judgment or order is intended to avoid injustice or hardship resulting from accident, inadvertence or excusable mistake, not to assist a party who deliberately sought to obstruct or delay justice; courts should favour substantive justice over technicality.
Court orders
#- 1.Appeal allowed
- 2.Ruling dated 23rd January 2007 set aside
- 3.Income Tax Appeal No. 283 of 2005 to be heard on merit
- 4.Costs of the application dated 7th April 2006 awarded to the respondent
- 5.Costs of this appeal to abide the outcome of the appeal
- On appeal from
- High Court of Kenya at Nairobi
- H.C. Income Tax Appeal No. 283 of 2005 (ruling dated 23rd January 2007)
- Jurisdiction invoked
- Section 91 and Section 91A of the Income Tax Act (Cap. 470); Section 75(1) of the Civil Procedure Act; Order 43 Rule (1) of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Commissioner of Income Tax v Kencell Communications Limited [2013] KECA 352 (KLR)", Case Analysis (2013). Civil Appeal 84 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/352/eng@2013-03-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.