Jades Collections Limited v Kenya Union of Commercial Food and Allied Workers Union Limited [2020] KECA 564 (KLR)
The bottom line
#Kenya's Court of Appeal set aside a default judgment against an employer whose lawyers missed the hearing, ordering the case to be heard afresh.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned Judge of the ELRC erred in the exercise of his discretion in dismissing the application for review of the default judgment dated 23rd November 2015
- 2.Whether the respondent union had locus standi to institute the suit absent a recognition agreement
- 3.Whether the failure to file a defence or attend the hearing was attributable to the appellant's former advocates and should not be visited upon the appellant
- 4.Whether the draft defence raised triable issues warranting review and setting aside of the default judgment
- 5.Whether a party that has pursued review may still appeal against the ruling on the review application
Key legal issues
#Interference with discretionary decisions on appeal
The ELRC Judge raised the standard for review beyond what the law requires by demanding that the grounds of review be 'reasonably proved' rather than merely raising triable issues, and misdirected himself by ignoring the draft defence; his decision was therefore wrong in principle and liable to be set aside.
The Court restated the Mbogo v Shah and United India Insurance principles on appellate interference with discretion, found the Judge took into account an erroneous standard of 'reasonably proved' grounds, failed to consider the draft defence which raised substantive triable issues (due process in termination, union membership), and that justice required the appellant be heard. The discretion was thus exercised on wrong principles.
Locus standi of a trade union without a recognition agreement
A trade union need not have a recognition agreement to invoke the dispute resolution mechanisms under the Labour Relations Act; a recognition agreement is only required for collective bargaining under Section 54(1) LRA, and this dispute concerned victimization of employees, not collective bargaining.
The Court endorsed the ELRC's finding that the purpose of a recognition agreement is to facilitate collective bargaining, whereas the dispute here concerned victimization of employees on account of union membership. The requirement of a recognition agreement was therefore a technical objection that did not defeat the union's capacity to prosecute the dispute, and the ground of appeal on locus standi failed.
Blame attributable to a former advocate as a ground to set aside a default judgment
Where a litigant diligently follows up its matter and is misled by its former advocates who never ceased acting, the advocates' failure to file a defence or attend the hearing should not be visited upon the litigant; the reason advanced was excusable.
The Court examined the correspondence showing the advocates repeatedly demanded fees, represented that they were acting, and never communicated the hearing date. The appellant did not slumber but enquired on the status of the suit. Giving the appellant the benefit of doubt, the Court held the default was attributable to the former advocate and that the review application filed on 22nd December 2015, shortly after discovery on 1st December 2015, was without unreasonable delay.
Review as an alternative remedy to appeal
A review application is an alternative remedy to an appeal against a decision and a litigant cannot pursue both; however, where the appeal is against the ruling declining review, the appeal is properly before the Court.
Relying on Nguruman Limited and Mulla on the Code of Civil Procedure, the Court noted that review and appeal are alternative remedies, but that the appeal's subject was the ruling of 23rd June 2017 declining review, not the default judgment of 23rd November 2015. The review jurisdiction of the Industrial Court under section 16 and Rule 32 is broader than the High Court's under Order 45.
Legal principles established
#- An appellate court will not interfere with the exercise of discretion by a trial court unless the judge misdirected himself, acted on wrong matters, failed to consider relevant matters, or arrived at a plainly wrong decision.
- A draft defence tendered with an application to set aside a default judgment must be considered; if it raises a reasonable defence, leave to defend should be granted.
- The discretion to set aside an ex parte judgment exists to ensure a litigant does not suffer injustice from an excusable mistake, and a defence need only raise triable issues, not be proved in advance.
Court orders
#- 1.Appeal allowed
- 2.Ruling of the ELRC dated 23rd June 2017 set aside
- 3.Substituted with an order allowing the appellant's application dated 22nd December 2015
- 4.Judgment of the Employment and Labour Relations Court dated 23rd November 2015 reviewed and set aside
- 5.Respondent's claim to be heard de novo with the appellant afforded an opportunity to file its defence and be heard before any judge of the ELRC other than Nzioki wa Makau, J. and Abuodha, J.
- 6.Each party to bear its own costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Concurring judgment: concurred entirely with the leading judgment of J. Mohammed, JA and confirmed the final orders as proposed by her.
I entirely concur with her findings and I have nothing useful to add. As the Hon. Mr. Justice Kiage, J.A. agrees, the final orders of the Court shall be as proposed by the Hon. Lady Justice Jamila Mohammed, J.A.p. 7
Concurring judgment: concurred entirely with the leading judgment of J. Mohammed, JA.
I entirely concur with her findings and I have nothing useful to add.p. 7
- On appeal from
- Employment and Labour Relations Court of Kenya at Nairobi
- ELRC Cause No. 1342 of 2013 (ruling on review of judgment dated 23rd November 2015)
- Jurisdiction invoked
- First appeal / appellate review of the ELRC ruling; no specific constitutional provision invoked in the judgment
Relief refused
#Respondent's contention that the appellant could not file an appeal after pursuing review
The subject of the appeal was the ruling on the review application, not the default judgment itself
Costs
Each party to bear its own costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In the result, I find that the appeal has merit and is hereby allowed. I hereby set aside the ruling dated 23rd June 2017 and substitute therefor an order allowing the appellant's application dated 22nd December 2015.
The effect of the order is that the judgment of the Employment and Labour Relations Court dated 23rd November 2015 is reviewed and set aside. The respondent's claim shall be heard de novo with the appellant being afforded an opportunity to file its defence and be heard before any judge of the Employment and Labour Relations Court other than Nzioki wa Makau, J. and Abuodha, J.
In the circumstances of this appeal, I order each party to bear its own costs. It is so ordered.
The overriding consideration in an application to set aside a default judgment where the intended defence raises triable issues and, absent evidence of intention or deliberate action by the appellant to overreach, obstruct or delay the cause of justice, is to do justice to both parties.
A triable issue is said to exist if there is a dispute in the facts, which dispute can only be resolved after ventilation in a full hearing.
A bona fide triable issue needs not to be one that must succeed.
Issues in the judgment
#The judgment alternates between first-person singular and plural in the same opinion ('I, like the ELRC' and 'we hold'), suggesting drafting from a single-judge draft adopted by the court.
Internal date discrepancy: the judgment elsewhere records the hearing date as 13th October 2015, but paragraph 40 refers to a hearing notice of '13th October 2014'.
The quoted letter from the appellant's former advocates, dated 15th December 2014, internally references a future date '5.12.2015' and a letter of '25.11.2014' inconsistent with the stated date.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Jades Collections Limited v Kenya Union of Commercial Food and Allied Workers Union Limited [2020] KECA 564 (KLR)", Case Analysis (2020). Civil Appeal No. 308 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/564/eng@2020-06-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.