In re Application for Extension of time for Registration of a Charge by Silverspead Hardwares Limited in Favour of Bank of Baroda (Kenya) Limited [2021] KEELC 2015 (KLR)
The bottom line
#Kenya's Environment and Land Court let a bank register a late charge, holding a lawyer's honest mistake shouldn't cost a lender its security.
What this practically means
#Executive summary
#Key legal issues
#Whether the court should extend time to register a charge with the Registrar of Companies beyond the statutory 30-day period
The court extended the deadline, holding the failure was due to counsel's inadvertence and the chargee should not lose the benefit of its security.
The charge was duly registered at the lands registry on 12th July 2021; the omission was only registration at the companies registry, attributable to the applicant's lawyers' inadvertent mistake. The court adopted four parameters: inadvertence or reasonable cause, absence of prejudice to creditors or members, whether the extension is just, equitable, fair and reasonable, and rectifiability. Registration of the charge protects the chargee and the general body of creditors, and denial of extension would deprive the chargee of recourse against the charged property. The court invoked its wide discretion as recognised in Re Shreeji Apartments Ltd and Re Ashpurton Estates Ltd to do substantive justice.
Whether mistake of counsel constitutes inadvertence justifying relief
Yes - blunders of counsel do not warrant denying a party substantive relief where some activity was done.
Relying on Philip Chemwolo & another v Augustine Kubede, the court held that mistakes are made from time to time and a party should not suffer the penalty of losing the benefit of its case or security merely because a mistake occurred; in the present matter counsel had done some activity (registration at the lands registry) and could not be said to have been indolent.
Legal principles established
#- The court has discretion under section 888 of the Companies Act to extend the 30-day deadline for registering a charge with the Registrar of Companies where the default was due to inadvertence, the application is just and equitable, and the omission is rectifiable.
- Mistakes of counsel should not deprive a chargee of the benefit of its charge for non-registration.
Court orders
#- 1.The deadline for registration of the charge with the Registrar of Companies is extended for 120 days from 10.6.2021
- 2.No orders as to costs
- 3.The file is marked as closed
- Jurisdiction invoked
- Sections 885, 887 and 888 of the Companies Act 2015; Section 1A, 1B and 3A of the Civil Procedure Act; Article 159 of the Constitution
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "In re Application for Extension of time for Registration of a Charge by Silverspead Hardwares Limited in Favour of Bank of Baroda (Kenya) Limited [2021] KEELC 2015 (KLR)", Case Analysis (2021). Not stated in the judgment (ex parte application dated 14th September 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/2015/eng@2021-09-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.