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Court of AppealAllowedCivil Appeal No. 78 of 2014

Mek Sacco Ltd v Kenya Union of Commercial Food & Allied Workers [2016] KECA 701 (KLR)

Court of Appeal of Kenya
4 March 2016
2,014 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal set aside ex parte employment orders against a Sacco because it was never properly served and interim orders gave the union everything it sought in the main case.

What this practically means

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Executive summary

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The Court of Appeal at Kisumu (Maraga, Musinga & Gatembu, JJ.A) allowed the appellant Sacco's appeal against a ruling of Wasilwa, J. of the Industrial Court dismissing its application to set aside ex parte conservatory and interim orders granted on 30th July 2014 in favour of the respondent union on behalf of eight grievants. Those orders included payment of salary arrears of Kshs. 490,992 and unconditional reinstatement pending determination of the dispute. The appellant contended it was never properly served with the notice of motion, only a bare court order which was served on a student on attachment and misplaced. The Court held the matter was governed by the discretionary standard in Mbogo v Shah: interference is warranted where the lower court misdirected itself. The Judge had made no reference to the appellant's two uncontested affidavits explaining the defective service, had not considered that service on a limited liability company must comply with the prescribed corporate mode of service, and had overlooked that the interim prayers, being identical to the substantive prayers in the memorandum of claim, would effectively dispose of the claim without a full hearing. The Court allowed the appeal, set aside both the ruling of 3rd December 2014 and the orders of 30th July 2014, and directed each party to bear its own costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the learned Judge erred in concluding that the appellant had been duly served with the application and summons
  2. 2.Whether the Industrial Court's refusal to set aside the ex parte orders of 30th July 2014 was a proper exercise of discretion

Key legal issues

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01

Proper service on a corporate body

Holding

Service on a limited liability company must accord with the rules prescribing mode of service for corporations; an affidavit of service that does not disclose compliance with that mode is defective.

Reasoning

The appellant is a limited liability company. The process server's affidavit referred only to serving 'the secretary of Mek Sacco' and did not disclose that the mode of service prescribed by the rules for a corporation had been complied with. The Judge did not consider this defect when finding service proper, amounting to a misdirection.

p. 4
02

Setting aside ex parte orders - exercise of discretion

Holding

A decision refusing to set aside ex parte orders is discretionary; it will be disturbed on appeal where the judge failed to take into account relevant matters, such as uncontested affidavit evidence explaining defective service.

Reasoning

Guided by Mbogo v Shah, the court found the Judge failed to consider the uncontested affidavits of Margaret Awour Odhiambo and Dorcas Nuna Mwangi, which showed only an order, not the application, was served on a student on attachment. Ignoring uncontroverted evidence to which there was no reply was a misdirection warranting appellate interference.

p. 4
03

Interim orders that effectively dispose of the main claim

Holding

Interlocutory prayers pending determination of the dispute should not be granted in terms that substantively dispose of the claim in the memorandum of claim without full hearing.

Reasoning

The respondent's interim prayers were identical to the substantive remedies sought in the memorandum of claim, including payment of arrears and reinstatement. Allowing them as couched meant the dispute was substantively determined interlocutorily without canvassing the main claim, which was an error the Judge failed to appreciate.

p. 4

Legal principles established

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  • An appellate court will not interfere with the exercise of discretion by an inferior court unless satisfied the decision is clearly wrong because of misdirection, failure to consider relevant matters, or acting on irrelevant matters.
  • A judge declining to set aside an ex parte order must consider and address uncontested affidavit evidence before the court; failure to do so is a misdirection warranting interference.
  • Service on a limited liability company must comply with the mode of service prescribed by the rules for a corporation.

Court orders

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  1. 1.Appeal allowed
  2. 2.Ruling and orders of the Industrial Court given on 3rd December 2014 set aside
  3. 3.Ruling and orders of the Industrial Court given on 30th July 2014 set aside
  4. 4.Each party to bear its own costs of the application dated 11th August 2014 in the lower court and of the appeal

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
majority
On appeal from
Industrial Court (High Court) at Kisumu
Industrial Case No. 156 of 2014
Jurisdiction invoked
First appeal / appeal from the Industrial Court to the Court of Appeal under the applicable labour dispute appellate framework (provision not stated in the judgment)

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

this Court will not interfere with the exercise of…discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself
p. 3Appellate interference with discretionary decisions
the learned Judge made absolutely no reference to the uncontested facts deposed to in those two affidavits to which there was no reply by the respondent
p. 4Duty to consider uncontested affidavit evidence
the affidavit of service did not disclose that the mode of service prescribed by the rules for a corporation was complied with
p. 4Service on a corporation
allowing the prayers as couched in the application would substantively dispose of the respondent's claims without having to canvass the memorandum of claim
p. 4Interim orders not to dispose of the main claim
we are compelled to interfere with the Judge's exercise of discretion. We do so by allowing the appeal and setting aside the ruling and orders of the court given on 3rd December 2014
p. 4Final orders - disposition

Issues in the judgment

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minor

The judgment refers to the process server inconsistently, as 'Yournitter O. Pacho' when recounting the ruling below and as 'Yournitter O. Opondo' when describing the affidavit itself.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Mek Sacco Ltd v Kenya Union of Commercial Food & Allied Workers [2016] KECA 701 (KLR)", Case Analysis (2016). Civil Appeal No. 78 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2016/701/eng@2016-03-04

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.