Stephen Jennings & 4 others v Tatu City Limited & 5 others [2018] KECA 730 (KLR)
The bottom line
#Kenya's Court of Appeal quashed contempt convictions against Tatu City directors, ruling courts must prove disobedience beyond near-criminal certainty before jailing anyone for defying orders.
What this practically means
#Executive summary
#Key legal issues
#Whether the evidence established wilful disobedience of the audit order
The evidence did not reach the required threshold; the parties had not reached consensus on terms of reference and there was no proof the appellants deliberately disobeyed the order of 12th June 2015
The Court reviewed the sequence of events and found the parties and PwC were still negotiating the terms of reference after the order was made; the board had authorised Nyagah and Reid to agree terms with PwC before commencement. The Judge mistook protracted negotiation for stonewalling. The order of 12th June 2015 directed PwC to conduct the audit and imposed no obligation on the appellants or Reid to do or abstain from any act, so contempt could not lie.
Whether leave was required to commence contempt proceedings
No leave or permission was required for committal proceedings for breach of a judgment, order or undertaking under Rule 81.4 of the English Civil Procedure (Amendment No. 2) Rules 2012
Relying on Christine Wangari Gachege, the Court distinguished Rules 81.12 and 81.17 (interference with administration of justice; false statements), which require permission, from Rule 81.4 breach-of-order applications, which do not. However, the application here failed to set out fully the grounds and did not identify separately and numerically each alleged act of contempt, contrary to the procedural requirements.
Personal service and penal notice requirements
Personal service is required unless dispensed with where the person had notice; the extracted order of 24th June 2015 contained a penal notice, albeit on the last page
Under Rule 81.5 personal service may be dispensed with where the person was present when the order was made or was notified of its terms by telephone, email or otherwise. Rule 81.9 requires a prominently displayed penal notice; the Court found the order extracted on 24th June 2015 did carry a penal notice on the last page.
Whether the Judge could order parties to address him on appointing a replacement audit firm
The Judge erred; appointment of auditors is an internal affair of the company exercisable only through its organs, and the available contempt punishments are sequestration, imprisonment or a fine
Having found contempt, the Judge should have imposed one of the known penalties rather than invite submissions on appointing a replacement firm. Such an appointment was not before the court and the parties had not been heard on it; it was beyond the coercive powers of contempt, which extend only to sequestration, imprisonment or fine.
Legal principles established
#- The standard of proof in contempt proceedings is higher than the balance of probabilities, almost but not exactly beyond reasonable doubt
- Before a person can be found guilty of contempt, the orders allegedly violated must be clear, precise and capable of enforcement by contempt proceedings
- No leave or permission is required to commence contempt proceedings for breach of a judgment, order or undertaking, and the application must set out fully, separately and numerically each alleged act of contempt, supported by affidavit, and served personally unless service is dispensed with
- A court order enforced by committal must prominently display a penal notice warning that disobedience is punishable by imprisonment, fine or sequestration
- The only punishments for disobedience of a court order are a writ of sequestration, imprisonment or a fine; a court cannot purport to impose as punishment the appointment of another audit firm, which is an internal affair of the company exercisable only through its organs
Court orders
#- 1.Allow the appeal with costs
- On appeal from
- High Court of Kenya at Nairobi
- HCCC No. 46 of 2015
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal over appeals from the High Court (statutory first appeal)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Stephen Jennings & 4 others v Tatu City Limited & 5 others [2018] KECA 730 (KLR)", Case Analysis (2018). Civil Appeal No. 198 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/730/eng@2018-02-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.