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Court of AppealDismissedCivil Appeal E365 of 2018· [2022] KECA 881 (KLR)

TNT Express Worldwide (Kenya) Limited v Timothy Graeme Steel

Court of Appeal
10 June 2022
AMA.K. MurgorJMJ. MohammedKLK.I. Laibuta
5,970 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 confirmed that employment courts can order companies to deposit security when a worker's claim risks becoming worthless.

What this practically means

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Executive summary

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The appellant, TNT Express Worldwide (Kenya) Limited, appealed against a ruling of the Employment and Labour Relations Court (Wasilwa, J.) ordering it to deposit USD 100,000 as security for costs into a joint interest-bearing account within 30 days, in a claim by its former General Manager, Timothy Graeme Steel, alleging constructive dismissal, unlawful redundancy and unfair labour practices following the FedEx acquisition of TNT Express N.V. The appellant raised nine grounds, principally that the ELRC lacked jurisdiction to order security before judgment under section 12 of the ELRC Act and rule 17 of the ELRC (Procedure) Rules, 2016; that the judge granted relief not prayed for; and that the respondent proved no intent to abscond or dissipate assets. The Court of Appeal (Murgor, Mohammed and Laibuta, JJA) held that where the ELRC Act and Rules are silent, the ELRC may borrow relevant Civil Procedure provisions to fill the gaps, in line with section 12(3)(iii) of the Employment Act and its duty to serve the ends of justice. Following the Supreme Court in Hermanus Phillipus Steyn, it held that citing the wrong provision is a curable technicality under Article 159. It further held that the order 39 requirements are disjunctive, and that the evidence of the acquisition, transfer of operations to Pan Africa Express and staff redundancies established a real possibility that the respondent would be unable to execute any decree. The appeal was dismissed with costs to the respondent.

Key legal issues

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01

Jurisdiction of the ELRC to grant security for costs where its own rules are silent

Holding

The ELRC had jurisdiction; it may apply relevant Civil Procedure provisions where its rules are inadequate, coupled with section 12(3)(iii) of the Employment Act and rule 17 of the ELRC (Procedure) Rules.

Reasoning

The court surveyed divergent ELRC authorities on borrowing from the Civil Procedure Act and Rules. It noted this Court had adopted section 7 of the Civil Procedure Act in the Dock Workers Union case where ELRC rules were silent. It concluded that nothing precludes the ELRC from relying on Civil Procedure provisions to fill gaps, in line with the duty to serve the ends of justice and prevent orders in vain.

p. 8
02

Effect of citing the wrong procedural provision

Holding

Citing the wrong provision is a procedural technicality, not fatal to the application.

Reasoning

Relying on the Supreme Court's guidance in Hermanus Phillipus Steyn v Giovanni Gnecchi-Ruscone, that procedural provisions should not be interpreted as cast in stone in the interest of justice, the Court held the mis-citation was a technicality envisioned by Article 159 of the Constitution and did not warrant dismissal of the application.

p. 8
03

Whether the threshold for security/attachment before judgment was met

Holding

The requirements are disjunctive; the respondent demonstrated a real likelihood of being unable to execute a decree due to the appellant's impending disposal of its business.

Reasoning

The Court re-evaluated the material before the trial court: the FedEx acquisition of TNT Express N.V, transfer of pickup and delivery operations to Pan Africa Express, staff redundancies, and the absence of any assurance that any part of the appellant's business would be retained. It was satisfied the respondent might be unable to execute against a decree, and declined to interfere with the discretionary order.

04

Whether final orders were issued at an interlocutory stage

Holding

The order was not final; the security was to be deposited in a joint interest-bearing account and was refundable if the defence succeeded.

Reasoning

The respondent argued, without contradiction in the judgment's reasoning, that the monies were to be held in a joint fixed account, not paid to the respondent, and were capable of refund if the appellant's defence was upheld; the Court did not disturb the trial court's order on this basis.

Legal principles established

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  • Where the ELRC Act and Rules are silent, the ELRC may borrow relevant provisions of the Civil Procedure Act and Rules to fill procedural gaps in the interest of justice.
  • Failure to cite, or citing the wrong, procedural provision is a curable technicality under Article 159 of the Constitution and is not fatal to an application.
  • The requirements for attachment before judgment/security under order 39 are disjunctive; an applicant need demonstrate only one of the specified factors.
  • The power to order attachment before judgment must not be exercised lightly and requires clear proof of the mischief aimed at by the provision.

Court orders

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  1. 1.Appeal dismissed
  2. 2.Costs of the appeal awarded to the respondent

Authorities

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Legislation

  • Employment and Labour Relations Court Actsection 12
  • Employment and Labour Relations Court Actsection 12(3)(iii)
  • Employment and Labour Relations (Procedure) Rules, 2016rule 17
  • Employment and Labour Relations (Procedure) Rules, 2016rule 32(2)
  • Employment Actsection 12(3)(iii)
  • Civil Procedure Actsection 7
  • Civil Procedure Rulesorder 36
  • Civil Procedure Rulesorder 39 rules 1, 5(1)
  • Civil Procedure Rulesorder 38 rule 5
  • Constitution of KenyaArticle 159
  • Constitution of KenyaArticle 259
  • Companies ActCap 486

Cases cited (22)

  • Kemboi vs Lavington Security Guards
    [1998] eKLR

    Factors to be proved before an order for security before judgment can be granted

  • Olive Mwihaki Mugenda & another vs Okiya Omtata Okoiti & Others
    [2016] eKLR

    Final orders at interlocutory stage granted only in exceptional circumstances

  • Magothe Joseph Kiarie vs Eco Bank Kenya
    [2015] eKLR

    ELRC may rely on other written law including Civil Procedure Code where its rules are inadequate

  • Catherine Raini vs CMC Holdings Ltd
    [2014] eKLR

    ELRC may rely on Civil Procedure Code where its rules of procedure are inadequate

  • Mbogo vs Shah
    [1968] EA 93

    Appellate reluctance to interfere with exercise of judicial discretion

  • Vincent Mwatsuma Nguma & 5 others vs Kilifi Mariakani Water & Sewerage Co Ltd (KIMAWASCO)
    [2021] eKLR

    Divergent judicial views on falling back to Civil Procedure Act to fill ELRC procedural gaps

  • Benedict Ojou Juma & 10 others vs A. J. Pereira & Sons Limited
    [2016] eKLR

    Civil Procedure Rules apply to ELRC only where ELRC Rules permit

  • Prisca Jepngétich vs Generation Career Readiness Social Initiative Limited
    [2021] eKLR

    Civil Procedure Act applies to ELRC only as specifically allowed under ELRC Rules

  • Republic v. Karisa Chengo & 2 Others
    [2017] eKLR

    ELRC and High Court are different jurisdictions

  • Lily Andayi Amakobe vs Sheria Co-operative Savings & Credit Society Limited
    [2018] eKLR

    Rule 17 of ELRC Rules confers jurisdiction to issue interlocutory orders

  • Francis Kimutai Bii v Kaisugu (K) Ltd
    [2016] eKLR

    ELRC lacunas can be resolved by borrowing from Civil Procedure Act and Rules

  • Alex Musyoka Kimanzi vs Alidi Kenya Limited
    [2017] eKLR

    Security application allowed under order 39 of Civil Procedure Rules

  • Joel Nduruhu Kinuthia vs Barefoot Power Africa Limited
    [2019] eKLR

    Security application allowed under order 39 of Civil Procedure Rules

  • Robert Khamala Situma vs Afrikon Limited
    [2022] eKLR

    Reliance on order 39 of Civil Procedure Rules in allowing security application

  • Julius Waweru vs Engen Kenya Limited
    [2019] eKLR

    Application of Civil Procedure Rules to security applications

  • Anthony Ndung'u Gakuo vs Baker Hughes Eho Limited (Kenya Branch)
    [2015] eKLR

    Application of Civil Procedure Rules to security applications

  • Dock Workers Union Kenya vs Kenya Ports Authority
    (Civil Appeal No. 112 of 2019) [2021] KECA 87 (KLR)

    Court of Appeal adopted section 7 of Civil Procedure Act where ELRC rules silent on res judicata

  • Hermanus Phillipus Steyn vs Giovanni Gnecchi-Ruscone
    [2013] eKLR

    Failure to cite the relevant provision is not fatal; procedural provisions not cast in stone

  • Kuria Kanyoro T/A Amigos Bar & Restaurant vs Francis Kinuthia Nderu & Others
    [1985] 2 K.L.R. 126

    Power to attach before judgment must not be exercised lightly; requires clear proof

  • John Kipkemboi Sum vs Lavington Security Guards Limited

    Factors required before attachment before judgment (cited in Kuria Kanyoro)

  • Bayusuf Grain Millers vs Bread Kenya Limited
    (2005) eKLR

    What a plaintiff must establish under order XXXVIII for attachment before judgment

  • Savings & Loan Kenya Ltd versus Eustace Mwangi Mungai
    Nairobi HCCC No.75 of 2001 (Milimani) unreported

    Without evidence of intent to dispose of assets, court cannot grant pretrial attachment or security

On appeal from
Employment and Labour Relations Court of Kenya at Nairobi
ELRC Civil Cause No. 562 of 2017
Jurisdiction invoked
Appellate jurisdiction of the Court of Appeal over a ruling of the Employment and Labour Relations Court; security for costs sought under section 12 of the Employment and Labour Relations Court Act and rule 17 of the Employment and Labour Relations (Procedure) Rules, 2016

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (11)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "TNT Express Worldwide (Kenya) Limited v Timothy Graeme Steel", Case Analysis (2022). Civil Appeal E365 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/881/eng@2022-06-10

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