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H Young & Co (E.A.) Limited v County Government of Kwale & another (Constitutional Petition E011 of 2022) [2022] KEHC 12952 (KLR) (21 September 2022) (Judgment)
Neutral citation:
[2022] KEHC 12952 (KLR)
Republic of Kenya
Constitutional Petition E011 of 2022
JM Mativo & OA Sewe, JJ
September 21, 2022
Between
H Young & Co (E.A.) Limited
Petitioner
and
County Government of Kwale
1st Respondent
Kwale County Assembly
2nd Respondent
Judgment
1.The Petitioner states that it had been engaged to undertake some road works from Mwache junction-tsunza Mteza Section in Kwale County using murram excavated from leased quarry sites within the said County. Its grievance as I glean it from the Petition is that the 1st Respondent demanded Kshs. 110,600/= being cess payment for the murram which it contested vide its letter dated 22nd February 2022 but the 1st Respondent through its officers clamped and impounded its trucks registration numbers KCR 175 P and KCM 336 A. The Petitioner paid the said sum under protest and it was issued with a receipt dated 2nd March 2022.
2.The Petitioner’s contestation is that Royalties, (if any) are levied on minerals which are governed by the Mining Act,1 a function it averred is regulated by the National Government. It avers that the owner of the property from where the murram is excavated is liable to pay taxes to the 1st Respondent, hence, imposing cess over the said product amounts to double taxation. It contends that the said payment has no legal foundation and it is contrary to the Constitution and the Mining Act. As a consequence of the foregoing, the Petitioner prays for: -
3.In opposition to the Petition, the 1st Respondent filed the Replying affidavit of a one Onduko Alex Thomas dated 5th April 2022. Its key highlights are :- (a) the Petition does not raise substantive constitutional issues; (b) Payment of the cess is in conformity with the Kwale County Finance Act, 2014 and the Kwale County Quarrying Act, 2016 (c) the imposition and collection of cess is founded on the Kwale County Legislation as required by Article 185(2) and 209(4) of the Constitution; (c) the constitutionality of the said legislations has not been challenged; (d) the cess charged under the Kwale County Quarrying Act, 2016 is on mineral transporters ferrying minerals specified in the schedule to the Kwale County Finance Act, 2014 which also provides the amount payable; (d) cess is a service charge on services provided by the 1st Respondent to the Petitioner and its is lawful; and (e) cess is imposed for using the roads but not on the mining activities.
4.The Petitioner filed the supplementary affidavit of Maurice Agola Kong’o dated 6th April 2022 essentially disputing the 1st Respondents reply and replicating his earlier averments.
5.The 2nd Respondent did not file any response to the Petition nor did he participate in these proceedings.
6.Both parties filed written submissions. The Petitioner’s counsel key highlights in his submissions are: - (a) that the schedule to the act makes no reference to murram as measured in tones but as mining levies which refers to mining activities; (b) that the schedule the Act contradicts the parent act because it refers to levies over the mining of murram; (c) section 8 of the Act does not make reference to any service but the goods/items. He cited the definition of tax at section 2 of the Act and in the Black’s Law Dictionary2 and argued that the 1st Respondent is charging a tax on the murram. Also, he cited Article 209 (3) of the Constitution and submitted that disputed tax is not a tax as contemplated under the said Article. Counsel submitted that no legislation empowers the 1st Respondent to charge tax on murram and relied on H. young & Co (EA) Ltd v The County Government of Meru & Another 3 which held that there was no Act of Parliament as contemplated under the said Article permitting imposition of cess because section 5 (2) (a) of the County Government Act4 only allows counties to legislate for matters within their domain as per the Fourth Schedule of the Constitution.
11.Other key highlights of his submissions are that even if the court were to find that the tax imposed is on a service by the 1st Respondent, then as was held by the Supreme Court in Base Titanium Limited v County Government of Mombasa & Another,5if a County Government can levy charges, it must do so in exchange for an amenity. Counsel submitted that there is no mention of murram in part 2 of the fourth Schedule and that the Mining Act does not donate powers to counties to collect any levies in so far as mining is concerned which is a preserve of the National Governments. He cited Raiply Woods (K) Ltd & Another v Baringo County & 3 Others6 in which the court held that a law enacted by the County Assembly must be in relation to the powers of County Government under the Fourth Schedule and where the County Government has no power or mandate over a matter under the Fourth Schedule, it has no power to make any law with regard to that matter.
11.Additionally, Counsel argued that since he has established that the 1st Respondent is not mandated by law to charge cess over murram the Petitioner is rightfully entitled to a refund of the Kshs.110,600/= it paid to the 1st Respondent. He Christine Mwigina Akonya v Samuel Kairu Chege7 which underscored the standard of prove for special damages.
11.Lastly, the Petitioner’s counsel cited Section 27 of the Civil Procedure Act8 and argued that this Petition is brought in public interest under Article 22(2) and 258 (2) (c) of the Constitution and urged the court not to impose costs. (Citing Dindi Oscar Okumu v Robert Pavel Oimeke & 5 others.9).
11.The 1st Respondents counsel submitted that the Petitioner has not provided the particulars of the alleged violation or infringement or the manner in which the 1st Respondent has purportedly infringed its rights. (Citing Anarita Karimi Njeru v Republic10). He also cited Mumo Matemo v Trusted Society of Human Rights Alliance & 5 Others11 which following Anarita Karimi Njeru underscored the importance of defining the dispute to be decided by the court. He submitted that the Petitioner is not challenging the constitutionality of the Kwale County Finance Act, 2014 and the Kwale County Quarrying Act, 2016 which confers power to the 1st Respondent to levy the cess fees.
11.He submitted that the 1st Respondent acted in accordance with the enabling law, that the power to charge tax or cess is derived from the legislations as read Article 209(3) and (4) of the Constitution. Citing the preamble to the Kwale County Finance Act No 1 of 2014 and The Kwale County Quarrying Act, 2016, he submitted that the two legislations were enacted to ensure the actualization of the 1st Respondent’s functions as stated in Part 2 of the Fourth Schedule to the Constitution. He submitted that the quarrying is done within the 1st Respondent’s jurisdiction and the roads used by the petitioner to transport the murram are also maintained by the 1st Respondent, and, the cess fees charged by the 1st Respondent is a service charge payable for these services that are offered by the 1st Respondent. He relied on Council of County Governors v Attorney General & 4 others12 which held that the County governments are in charge of Class D, E, F, G and unclassified roads (County Roads), whilst the National government is in charge of Class A, B and C (National Trunk Roads).
11.Additionally, the 1st Respondent’s counsel submitted that the Petitioner mines the murram at Lunguma area within Kwale County and transports it using the Lunguma-Mtedza Road to its work-site at the Mwache Junction, and the said road is an unclassified road within the 1st Respondent’s jurisdiction. He cited Base Titanium Limited v County Government of Mombasa & another13 in which the court held that “under Article 209, a county is empowered to raise revenue and levy taxes, rates, or other charges, and under sub article (4), the 1st Respondent is authorized to impose charges for services provided which may include County transport which entails County roads; street lighting; traffic and parking; public roads transport; and ferries and harbors.
11.In its supplementary submissions, the Petitioner’s counsel reiterated that this Petition meets the tests of a constitutional Petition and he essentially replicated his earlier submissions.
7.For starters, I will address the Petitioner’s argument that this Petition is brought in public interest under Articles 22(3) and 258 (2) of the Constitution and therefore the court should not impose costs. Public interest litigation is not defined in any statute or in any act. In simple words, it means, litigation filed in a court of law, for the protection of "Public Interest." According to Black's Law Dictionary14 "Public Interest Litigation means a legal action initiated in a court of law for the enforcement of public interest or general interest in which the public or class of the community have pecuniary interest or some interest by which their legal rights or liabilities are affected.
8.Undeniably, the Petitioner in its own words states that it was engaged to undertake road works which included upgrading a road within Kwale County. The work entailed using murram excavated from a leased quarry. It’s admitted that the Petitioner was charged cess which it paid, albeit under protest to the tune of Kshs. 110,600/=. The question is whether this Petition is brought by the Petitioner in its own capacity for its own benefit or whether the Petition has been brought for public interest. Again, was the Petitioner undertaking the said work for its own gain or profit, or, was it for public gain. Is there remuneration for the said work and if so, will the remuneration go to the public. But what is Public Interest Litigation?
9.Simply put, the question is whether this Petition is a bona fide public interest litigation or an aggrieved company pursuing its own commercial interests for its own benefit. While dealing with the question of “bona fides” of a Petitioner, especially in the case of a person approaching the court in the name of Public Interest Litigation, the Indian Supreme Court in Ashok Kumar Pandey v State of West Bengal15 stated: -
10.Following the above decision, the Supreme Court of India in Dr. Akhtar Hassan Khan v Federation of Pakistan16 held that the Court has to guard against frivolous petitions as it is a matter of common observation that in the garb of Public Interest Litigation, matters are brought before the Court which are neither of public importance nor relatable to enforcement of a Fundamental Right or public duty.
11.Here at home in Albert Ruturi, JK Wanywela & Kenya Bankers’ Association v The Minister of Finance & Attorney General and Central Bank of Kenya (the Ruturi case), a case which ushered in “a new dawn of Public Law,” Justices Mbaluto and Kuloba J stated: -
12.I had the benefit of addressing similar issues in several previous decisions among them Jennifer Shamalla v Law Society of Kenya Interested Party Independent Electoral & Boundaries Commission & 11 others.17 In the said cases I observed that public Interest Litigation was designed to serve the purpose of protecting rights of the public at large through vigilant action by public spirited persons and swift justice.18 But the profound need of this tool has been plagued with misuses by persons who file Public Interest Litigations just for the publicity and those with vested political (or personal) interests. 19The courts therefore, need to keep a check on the cases being filed and ensure the bona fide interest of the petitioner and the nature of the cause of action, in order to avoid unnecessary litigations. Vexatious and mischievous litigation must be identified and struck down so that the objectives of Public Interest Litigation aren’t violated. The constitution envisages the judiciary as “a bastion of rights and justice.
13.In the above decision I stated that public interest litigation is a highly effective weapon in the armory of law for reaching social justice to the common man. It is a unique phenomenon in the Constitutional Jurisprudence that has no parallel in the world and has acquired a big significance in the modern legal concerns. This technique is concerned with the protection of the interest of a class or group of persons who are either the victims of governmental lawlessness, or social oppression or denied their constitutional or legal rights and who are not in a position to approach the court for the redress of their grievances due to lack of resources or ignorance or their disadvantaged social and economic position.
14.Former Chief Justice of India A.S. Anand cautioned the over use of Public Interest Litigation and emphasized “Care has to be taken to see that Public Interest Litigation essentially remains public interest litigation and is not allowed to degenerate into becoming political interest litigation or private inquisitiveness litigation.20 It is the duty of the court to see whether the petitioner who approaches the court has a bona fide intention and not a motive for personal gain, private profit or political or other oblique considerations. Considering the facts of this case, it is manifest that the Petitioner had been engaged to do some works; it was charged cess for the material it was using (is murram), it paid but now it claims a refund. Three consequences flow for this scenario. One, it was undertaking private works for gain. This is apparent because from the Petition, there is nothing to suggest doing the work for free or pro bono to benefit the public. There is every indication that it was doing the work for private gain. Two, it is specifically seeking an order that the said sum be refunded. There is nothing to suggest that the refund will go to the public. Three, the road under construction is public road for use by the public. But that it how far it goes. The Petitioner was doing the work for its own profit. This takes out this Petition from the purview of public interest litigation. It’s a private enterprise. No wonder the Petitioner is seeking to recover the money it paid and to stop bring charged cess.
15.I now address the Petition on merit. At this point it is important to refer to the Supreme Court decision in Base Titanium v County Government of Mombasa & another21 cited by the Petitioner. In the said case, the Apex Court addressing the facts before it which are similar to the issue at hand aptly answered the question “What were the circumstances in which a county government could charge cess, levy or tax?” as follows: -
16.Importantly, the Supreme Court was emphatic that under Article 209 of the Constitution, a county is empowered to raise revenue and levy taxes, rates, or other charges, and also, the County Government under article 209(4) was authorized to impose charges for services provided. This statement od the law from the Apex court confirms that the 1st Respondent is legally ordained to levy the cess in question.
17.The Petition as drawn has manifest shortcomings. The Petitioner is essentially aggrieved by the provisions of County Legislation(s) which impose a levy. Its argument is that it creates what it calls double taxation. It is argued that the levy imposed violates Articles of the Constitution. The Petition argues that the levy charged is without legal foundation. It invites the court to find that cess charged under the Kwale County Finance Act, 2014 is unlawful. This invitation is an oxymoron. It’s a contradiction of terms. There is in place county legislations providing for taxation. Ironically, the Petitioner is not challenging the legality or constitutional validity of the said legislations. The power to impose the cess flows from the said legislation. The cess charged is expressly provided for under the county legislation(s). Ironically, the Petitioner now urges the court to find that the cess is unlawful. One wonders how a court of law properly directing its mind to the law can declare the cess illegal while the law creating it is unchallenged.
18.The Petitioner seeks a declaration that regulating mining activities is a function of the national government. Before this court is a narrow question of a county government charging cess for s service rendered, namely transport. Imposing cess for services rendered is a function of the County Government. (See the Supreme Court in Base Titanium v County Government of Mombasa & another22).
19.The Petitioner at prayer (c) of the Petition alludes to absence of legal framework and invites the court to so find. This is a truly misleading statement. The Petitioner has severally mentioned two key county legislations which govern the said charges. How can it turn around and suggest absence of legal framework. That alone extinguishes prayer (c) of the Petition.
20.Additionally, at prayer (e) prays for a writ of prohibition. The writ of Prohibition arrests the proceedings of any tribunal, corporation, board or person, when such proceedings are without or in excess of the jurisdiction of such tribunal, corporation, board or person. A prohibiting order is similar to a quashing order in that it prevents a tribunal or authority from acting beyond the scope of its powers. The key difference is that a prohibiting order acts prospectively by telling an authority not to do something in contemplation. However, as stated above, the illegality of the levying cess has not been established nor has it been established that the 1st Respondents acted illegally or in excess of their powers nor has the decision to impose cess been shown to be illegal, irrational or a nullity.
21.The Petitioner invites the court to order that the sum of Kshs 110,000/= it paid be refunded. However, the Petitioner having failed to establish the illegality of the cess paid, the plea for a refund is totally unmerited and far-fetched and unavailable.
22.In view of my analysis of the facts, the law and the conclusions arrived at herein above, it is my finding that this Petition fails. Accordingly, I hereby dismiss the Petitioner’s Petition dated 8th March 2022 with no orders as to costs.
SIGNED, DATED AT MOMBASA THIS 19TH DAY OF SEPTEMBER 2022JOHN M. MATIVOJUDGESIGNED, DATED AND DELIVERED VIRTUALLY AT MOMBASA THIS 21ST DAY OF SEPTEMBER 2022OLGA SEWEJUDGE
