Court quashes the National Construction Authority (Defects Liability) Regulations, 2020.

Brief facts

The crux of the applicants case was that by the Kenya Gazette Supplement No. 51 of April 20, 2020, the Cabinet Secretary for Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works (the Cabinet Secretary) gazetted the National Construction Authority (Defects Liability) Regulations (the Regulations) without stakeholder consultations. It was also contended that the process leading to the gazettement of the Regulations was contrary to Sections 5, 6, 7, 8 and 11 of the Statutory Instruments Act No. 23 of 2013.

The respondents contended that the Regulations were gazetted in line with the requirements of the Statutory Instruments Act and it would be against public interest to grant the orders sought. They further contended that the applicant sought to challenge the substance of the impugned Regulations as that was tantamount to challenging their merits which was beyond the scope of a judicial review court. They however did not avail any evidence in support of their averments.

Issues

Whether the National Construction Authority (Defects Liability) Regulations (the Regulations) contravened the Constitution for being gazetted without being tabled in parliament and without stakeholder consultation.

Relevant provisions of the law

Fair Administrative Action Act, Act No. 4 of 2015

Section 5

(1)       In any case where any proposed administrative action is likely to materially and adversely affect the legal rights or interests of a group of persons or the general public, an administrator shall-

(a)      issue a public notice of the proposed administrative action inviting public views in that regard;

(b)      consider all views submitted in relation to the matter before taking the administrative action;

(c)       consider all relevant and materials facts; and

(d)      where the administrator proceeds to take the administrative action proposed in the notice-

(i)        give reasons for the decision of administrative action as taken;

(ii)       issue a public notice specifying the internal mechanism available to the persons directly or indirectly affected by his or her action to appeal; and

(iii)      specify the manner and period within the which such appeal shall be lodged.

Section 7(2)(k) 

7.         Institution of proceedings

(2)       A court or tribunal under subsection (1) may review an administrative action or decision, if

(k)       the administrative action or decision is unreasonable

Statutory Instruments Act, Act no 23 of 2013.

Sections 5, 6, 7, 8 and 11

5.        Consultation before making statutory instruments

(1)       Before a regulation-making authority makes a statutory instrument, and in particular where the proposed statutory instrument is likely to

(a)      have a direct, or a substantial indirect effect on business; or

(b)      restrict competition; The regulation-making authority shall make appropriate consultations with persons who are likely to be affected by the proposed instrument.

(2)       In determining whether any consultation that was undertaken is appropriate, the regulation making authority shall have regard to any relevant matter, including the extent to which the consultation

(a)      drew on the knowledge of persons having expertise in fields relevant to the proposed statutory instrument; and

(b)      ensured that persons likely to be affected by the proposed statutory instrument had an adequate opportunity to comment on its proposed content.

(3)       Without limiting by implication the form that consultation referred to in subsection (1) might take, the consultation shall

(a)      involve notification, either directly or by advertisement, of bodies that, or of organizations representative of persons who, are likely to be affected by the proposed instrument; or

(b)      invite submissions to be made by a specified date or might invite participation in public hearings to be held concerning the proposed instrument.

5A.     Explanatory memorandum

(1)       Every statutory instrument shall be accompanied by an explanatory memorandum which shall contain

(a)      a statement on the proof and demonstration that sufficient public consultation was conducted as required under Articles 10 and 118 of the Constitution;

(b)      a brief statement of all the consultations undertaken before the statutory instrument was made;

(c)       a brief statement of the way the consultation was carried consultation;

(d)      an outline of the results of the consultation;

(e)       a brief explanation of any changes made to the legislation as a result of the consultation.

(2)       Where no such consultations are undertaken as contemplated in subsection (1), the regulation-making authority shall explain why no such consultation was undertaken.

(3)       The explanatory memorandum shall contain such other information in the manner specified in the Schedule and may be accompanied by the regulatory impact statement prepared for the statutory instrument.

6.        Regulatory impact statements

If a proposed statutory instrument is likely to impose significant costs on the community or a part of the community, the regulation making authority shall, prior to making the statutory instrument, prepare a regulatory impact statement about the instrument.

7.        Contents of regulatory impact statements

(1)       A regulatory impact statement shall include the following information about the proposed statutory instrument in clear and precise language

(a)      a statement of the objectives of the proposed legislation and the reasons for them;

(b)      a statement explaining the effect of the proposed legislation, including in the case of a proposed legislation which is to amend an existing statutory instrument the effect on the operation of the existing statutory instrument;

(c)       a statement of other practicable means of achieving those objectives, including other regulatory as well as non-regulatory options;

(d)      an assessment of the costs and benefits of the proposed statutory rule and of any other practicable means of achieving the same objectives;

(e)       the reasons why the other means are not appropriate;

(f)        any other matters specified by the guidelines;

(g)      a draft copy of the proposed statutory rule.

(2)       The assessment of the costs and benefits shall include an assessment of the economic, environmental and social impact and the likely administration and compliance costs including resource allocation costs.

(3)       The responsible Cabinet Secretary shall ensure that independent advice as to the adequacy of the regulatory impact statement and of the assessment included in the regulatory impact statement is obtained and considered in accordance with the guidelines.

(4)       The responsible Cabinet Secretary shall before a statutory rule in respect of which a regulatory impact statement is required is made, give a certificate in writing specifying that

(a)      the requirements relating to regulatory impact statements in this Act and the guidelines have been complied with; and

(b)      in the Cabinet Secretarys opinion, the regulatory impact statement adequately assesses the likely impact of the proposed statutory rule.

(5)       The responsible Cabinet Secretary shall ensure that a copy of the regulatory impact statement and the compliance certificate is tabled in Parliament with the statutory instrument as provided under section 11.

8. Notification of regulatory impact statements

(1)       Preparation of a regulatory impact statement for proposed statutory instrument shall be notified in the Gazette and in a newspaper likely to be read by people particularly affected by the proposed legislation.

(2)       If the proposed statutory instrument is likely to have a significant impact on a particular group of people, the notice shall be published in a way likely to ensure members of the group understand the purpose and content of the notice.

(3)       The notice shall

(a)      include a brief statement of the policy objectives sought to be achieved by the proposed legislation; and

(b)      state where copies of the regulatory impact statement may be obtained or inspected;

(c)       if a draft of the proposed legislation may be obtained or inspected, state that the draft may be obtained or inspected and where;

(d)      state that anyone may comment on the proposed legislation;

(e)       state how and when comments may be made; and

(f)        state how consultation about the proposed legislation will take place.

(4)       The notice shall allow at least fourteen days from publication of the notice for the making of comments.

(5)       A copy of the regulatory impact statement may be available free, or on payment of a reasonable price, at the place, or each of the places, stated in the notice.

(6)       The responsible Cabinet Secretary shall ensure that

(a)      all comments and submissions are considered before the statutory rule is made; and

(b)      a copy of all comments and submissions is given to the Committee as soon as practicable after the statutory rule is tabled in the House or when requested by the Committee.

11.      Laying of statutory instruments before Parliament

(1)       Every Cabinet Secretary responsible for a regulation-making authority shall within seven (7) sitting days after the publication of a statutory instrument, ensure that a copy of the statutory instrument is transmitted to the responsible Clerk for tabling before the relevant House of Parliament.

(2)       Notwithstanding subsection (1) and pursuant to the legislative powers conferred on the National Assembly under Article 109 of the Constitution, all regulation-making authorities shall submit copies of all statutory instruments for tabling before the National Assembly.

(3)       The responsible Clerk shall register or cause to be registered every statutory instrument transmitted to the respective House for tabling or laying under this Part.

(4)       If a copy of a statutory instrument that is required to be laid before the relevant House of Parliament is not so laid in accordance with this section, the statutory instrument shall cease to have effect immediately after the last day for it to be so laid but without prejudice to any act done under the statutory instrument before it became void.

National Constructions Authority Act, Act No. 41 of 2011

Section 42

42.      Power to make Regulations.

(1)       The Minister may in consultation with the Board, make regulations generally for the better carrying out of the purposes of this Act.

(2)       Without prejudice to the generality of the foregoing, regulation made under this section may provide for

(a)      the manner of payment of the levy imposed under section 31;

(aa)    the Building Code in the construction industry;

(ab)    the manner of conducting mandatory inspections by the Authority;

(b)      the manner of service of any notice required under Act;

(c)       the fees and charges to be paid in respect of any matter required for purposes of this Act;

(d)      the manner and forms of accreditation and certification of contractors, skilled construction workers and construction site supervisors;

(e)       the responsibilities and control of the officers and servants of the Authority;

(f)        the performance of the functions, the exercise of the powers and discharge of the duties of the Authority under this Act, and

(g)      any other matter to give effect to the provisions of this Act.

(3)       Regulations made under this section shall be tabled in Parliament for approval before taking effect.

Held

1. Judicial review was a special supervisory jurisdiction concerned with the legality, rationality and procedural propriety of the exercise of administrative actions whereby a recognizable public law wrong has been committed. 
2. The Fair Administrative Action Act operationalized the right to fair administrative action enshrined in article 47 of the Constitution of Kenya (2010). The enactment of statutory regulations by a cabinet secretary was an administrative act that could not escape the supervision of the High Court under judicial review and the process and the outcome had to be within the four corners of legality, rationality and propriety.
3. Section 107(1) and (2) of the Evidence Act provided that the burden of proof lay with the person that alleged. While the applicant had availed evidence to show the sections 5, 6, 7, 8, 9 and 11 of the Statutory Amendment Act were not complied with, the 2^nd respondent had merely made assertions with no iota of evidence to support their claim. The applicants assertions remained uncontroverted and therefore proved. Had the contrary been true, nothing would have been easier than for the respondent to table evidence of compliance with the clear provisions of the law as the records of such compliance would be readily available. The process in the making of the impugned Regulations was tainted with procedural impropriety.
4. The cabinet secretary fell short of the lawful exercise of the cabinet secretarys mandate set out in section 42 of the National Constructions Authority Act. The cabinet secretary derived power to make regulations under section 42 of the National Construction Authority Act in consultation with the Board and the regulations made therein must be tabled in Parliament before taking effect. There was nothing to show that there was consultation with the Board or that the 2^nd respondent considered all views submitted, if at all, in relation to the impugned Regulations and that in making the impugned Regulations, all relevant and material facts were considered. There was no evidence at all to show that the Regulations were tabled in Parliament. The enactment of the Regulations fell the test of legality, rationality and propriety.