How a failure between the Senate and the National Assembly to agree on a Division of Revenue Bill would be resolved.
Council of Governors & 47 others v Attorney General & 3 others (Interested Parties); Katiba Institute & 2 others (Amicus Curiae)
Reference No 3 of 2019
Supreme Court of Kenya
DK Maraga (CJ & P), MK Ibrahim, SC Wanjala, NS Ndungu & I Lenaola, SCJJ
May 15, 2020
Reported by Beryl Ikamari
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Constitutional Law - public finance – revenue allocation - role of the Commission on Revenue Allocation (CRA) - nature of the recommendations of the CRA in the legislative process relating to the annual Division of Revenue Bill and the Appropriation Bill - whether the recommendations of the CRA in the legislative process were binding on both the National Assembly and Senate - Constitution of Kenya 2010, articles 203(1), 204(4), 205, 216(1) and 218.
Constitutional Law - legislature - role of the Senate in the passage of a Division of Revenue Bill - where the National Assembly and the Senate failed to agree on a Division of Revenue Bill - whether the High Court could be asked to give orders whose basis was the recommendations of the Commission on Revenue Allocation on the proposed legislation and whether Parliament would be dissolved - Constitution of Kenya 2010, articles 222 and 261(7).
Constitutional Law - interpretation of the Constitution – transfer of equitable shares of revenue to county governments - time within which money should be released from the National Treasury to the county governments for each financial year - meaning of the constitutional requirement that the money should be released without undue delay - whether the court could set a precise timeline within which the money should be released - Constitution of Kenya 2010, article 219.
Constitutional Law - public finance - division and allocation of revenue Bills - whether the National Assembly could enact an Appropriation Act before enacting a Division of Revenue Act - Constitution of Kenya 2010, articles 218(1) and 221; Public Finance Management Act, No 18 of 2012, section 39.
The applicants were the Council of County Governors and all the 47 County Governments of Kenya. They sought an advisory opinion pursuant to article 163(6) of the Constitution from the Supreme Court with respect to four main issues. All the issues revolved around division of revenue.
- Whether the recommendations of the Commission on Revenue Allocation were binding on both Senate and the National Assembly when they deliberated on the Division of Revenue Bill and the Appropriation Bill.
- What was the effect of a failure between the Senate and the National Assembly to agree on a Division of Revenue Bill?
- Whether there ought to be precise timelines within which the National Government should release equitable shares of revenue to county governments.
- Whether the National Assembly could enact an Appropriation Act before enacting a Division of Revenue Act.
- The Commission on Revenue Allocation (CRA) was established under article 215 (1) of the Constitution. Under article 216(1) of the Constitution, its principal function was to make recommendations for the equitable sharing of revenue raised by the National Government between the national and county governments and among the county governments.
- The term recommendation as used in article 216 of the Constitution should first and foremost be given its literal and natural meaning. A recommendation was a suggestion or proposal for a certain cause of action. Such a proposal would not ordinarily bind the person or entity that it addressed. However, categories of recommendation differ in their meaning, nature and effect, depending on the context in which they were deployed.
- It would be inappropriate to categorize the recommendations of the CRA on the sharing of national revenue as mere suggestions or proposals. The recommendations had to be accorded serious consideration by both Houses while debating the Division of Revenue Bill.
- A reading of articles 205, 204(4) and 218 of the Constitution left no doubt that the Constitution placed a very high premium on the recommendations of the CRA. Once those recommendations were tabled in Parliament, they had to be accorded due consideration before voting took place in either of the Houses, on the Division of Revenue Bill and the County Allocation of Revenue Bill. Therefore, if either of the two Houses passed a Bill envisaged under article 205 of the Constitution without considering the recommendations of the CRA, the resultant legislation would be unconstitutional.
- Article 218(2) of the Constitution provided that both the Division of Revenue Bill and the County Allocation of Revenue Bill, had to be accompanied by a memorandum setting out, inter alia, a summary of any significant deviation from the Commission on Revenue Allocation’s recommendations, with an explanation for each such deviation. Therefore, there was no doubt that Parliament could deviate from the recommendations of the CRA while debating any of the two revenue sharing Bills. Not every deviation from those recommendations had to be explained; only the significant deviations had to be explained.
- The recommendations of the CRA were not binding on the National Assembly or the Senate. However, the two Houses could not ignore or casually deal with the recommendations.
- The Constitution ensured that Parliament would benefit from the technical insights of the CRA when debating revenue sharing and allocation Bills by requiring Parliament to consider the CRA's recommendations without being bound. That ensured that the entities involved in the budget making process were able to critically apply their collective mind to the process. Parliament and the CRA could fail to agree on revenue allocation but they had to be guided by the objective criteria set in article 203(1) of the Constitution.
- In the Matter of the Speaker of Senate & Another v the Attorney General & Another & 4 Others; Ref. No 2 of 2013, the Supreme Court opined that the Senate had a clear role to play, in the processing of the Division of Revenue Bill. The Speaker of the National Assembly invited the court to depart from that decision in order to clear an impasse between Senate and the National Assembly on a Division of Revenue Bill by excluding Senate from the process of passing the Bill into law. For the Supreme Court to depart from a prior decision, there had to be a clear and well-reasoned justification.
- A party that wanted the Supreme Court to depart from a previous decision ought to ideally make a formal application in which he stated the reasons in justification for such a motion. The application would have to be served on all respondents who would then respond to it. None of the parties were given an opportunity to respond to the invitation by the Speaker of the National Assembly for the court to depart from its previous decision and an application was not made. The court was moved in a perfunctory manner and it was unable to consider the merits of the Speaker's invitation in circumstances where the other parties were not heard on the same.
- The preposition that in order to resolve the impasse, an application be made to the High Court under article 165 (3) (d), for orders compelling the National Assembly to provide for the equitable share of revenue due to the counties on the basis of the recommendations by the Commission on Revenue Allocation, was untenable for two reasons:-
- adopting such a course of action would defeat the finding that the recommendations of the CRA were not binding; and,
- it would fundamentally shift the revenue allocation function from the legislature to the judiciary, thus radically upsetting the doctrine of separation of powers.
- The preposition of using the Revenue Allocation Act of the previous Financial Year as a fallback position to solve the impasse appeared practical and logical but it did not have its basis on any principle or provision of the Constitution.
- The Constitution contemplated a scenario where the National Government would be unable to access funding due to the absence of enabling legislation. Article 222 of the Constitution provided that the National Assembly had power to authorise the withdrawal of money from the Consolidated Fund. It would be for purposes of meeting expenditure necessary to carry on the services of the National Government during that year until such time as the Appropriation Act was assented to. The withdrawal would not exceed one-half of the amount included in the estimates as expenditure for that year that had been tabled in the National Assembly and be included under separate votes for the several services in respect of which they were withdrawn, in the Appropriation Act.
- While the withdrawal of money for the purpose of the National Government expenditure under article 222 of the Constitution was based on a percentage of the estimates of expenditure for that year, the same method could not apply to the County Government, since the estimates did not include the equitable revenue share due to counties. Logic would require that the percentage of the money to be withdrawn would be based on the Division of Revenue Bill; yet this would be legally untenable, given the fact that the Bill, was not only the subject matter of controversy, but was also yet to pass into law. In the circumstances, in the event of an impasse, the percentage of the money to be withdrawn would be based on the equitable allocation to counties in the Division of Revenue Act of the preceding financial year. The legislature should pass legislation to give normative form to that arrangement.
- Legislation for the implementation of the national budget and allocation of revenue to both the National Government and county governments had specific and rigid timelines within which they should be enacted because they operationalized the financial existence of the country. Failure by Parliament to discharge such a critical legislative function, in the absence of an emergency, or any other disaster that disrupted parliamentary business, would not only violate the Constitution, but also expose the country to existential danger. Such a Parliament had to be considered to have run its course and be dissolved.
- Under article 261(7) of the Constitution, Parliament could be dissolved for failure to enact certain legislation within a specific period of time. That provision would not only apply to legislation listed in the Fifth Schedule to the Constitution but also to other legislation such as the Division of Revenue Act. Failure to enact such legislation by Parliament, in the absence of an emergency or other disaster, would invite the enforcement of sanctions envisaged under article 261 of the Constitution. Therefore, if Parliament failed to agree on division of revenue during a second mediation under article 113 of the Constitution, any person could petition the High Court for a declaration to the effect that Parliament had violated the Constitution.
- Under article 219 of the Constitution, a county’s share of revenue raised by the National Government had to be transferred to the county without undue delay and without deduction, except when the transfer had been stopped under article 225 of the Constitution. Unless there were timelines set by the Constitution or the law, a court had to consider each case on its own merits to determine whether there had been undue delay in the performance of an act by the concerned entity.
- By not prescribing a specific time limit, article 219 of the Constitution allowed for a degree of flexibility on the part of the National Treasury in effecting monetary transfers to counties. The court was not the appropriate forum for a determination on precisely when monies due to counties should actually be transferred to the counties. However, the fact that the Constitution had not prescribed a specific timeline did not give the National Treasury the latitude to capriciously decide when to disburse funds to the counties.
- Counties operated within rigid budgetary cycles and any delay in releasing funds to counties had to be justifiable and explained in good time. Releasing funds at a time when they could not be realistically utilized in the implementation of county projects in accordance with their budgets constituted a violation of the Constitution.
- A reading of article 218(1) and 221 of the Constitution did not provide for which of the two bills, namely the Division of Revenue Bill and the Appropriation Bill, should be enacted before the other. It was clear that once enacted the Division of Revenue Act divided the revenue raised nationally between the two levels of Government while the Appropriation Act authorized the withdrawal and application of monies from the Consolidated Fund by the National Government.
- Both the Division of Revenue Bill and the County Allocation of Revenue Bill were to be introduced in Parliament at least two months before the end of each financial year. The estimates of revenue and expenditure of the National Government were also to be submitted to the National Assembly, at least two months before the end of each financial year. That sequence of events would lead to the following conclusions:-
- The Appropriation Bill was incapable of being introduced unless the estimates of revenue and expenditure had been approved and passed by the House.
- The Appropriation Bill came into life after the Division of Revenue Bill since the latter would already have been introduced into Parliament at least two months before the end of the financial year.
- The estimates of revenue and expenditure had to logically be based on or at the very least be in tandem with, the equitable share of revenue due to the National Government as provided for in the Division of Revenue Bill.
- The Appropriation Act had to be based on the equitable share of revenue due to the National Government as provided in the Division of Revenue Act.
- In an ideal situation, the enactment of an Appropriation Act could not precede the enactment of a Division of Revenue Act. The Cabinet Secretary responsible for finance would submit the estimates of revenue and expenditure to the National Assembly, in his capacity as the Chief Budget Officer of the Executive. In that capacity, the Cabinet Secretary had to base his/her estimates on the National Government’s share as provided for in the Division of Revenue Bill. Additionally, section 39 of the Public Finance Management Act left no doubt that the National Assembly, could not enact an Appropriations Act before enacting the Division of Revenue Act.
Per DK Maraga CJ [concurring]
- Under article 259(1) of the Constitution, the Constitution was to be interpreted in a manner that promoted its purposes, values and principles, advanced the rule of law, human rights and fundamental freedoms in the Bill of Rights, permitted the development of the law and contributed to good governance. Under article 259(3) of the Constitution, the Constitution would also be interpreted in accordance to the doctrine that the law was always speaking.
- A holistic interpretation of the Constitution meant that the entire Constitution had to be read as an integrated whole with no one particular provision destroying the other but each sustaining the other.
- Under article 93(1) of the Constitution Parliament consisted of the National Assembly and the Senate. The discharge of legislative functions was shared by the two Houses. Under article 95(1) and 95(2) the members of the National Assembly represented the people of the constituencies and special interests and deliberated in the National Assembly and resolved issues of concern to the people. Under article 96(1) of the Constitution, the Senate represented the counties and served to protect the interests of the counties and their government. Article 96(2) of the Constitution clearly stated that Senate would participate in the law-making function of Parliament by considering, debating and approving Bills concerning counties as provided in articles 109 to 113 of the Constitution.
- Under article 217 of the Constitution the passing of legislation on division of revenue was a shared mandate between the National Assembly and the Senate. Further, the principles of public finance set out in article 201 of the Constitution included the equitable sharing of national revenue and consultation on financial legislation and they related to both Houses of Parliament. Therefore, there was a joint role shared between the National Assembly and the Senate in the annual division and allocation of revenue Bills.
- The Division of Revenue Bill and the County Allocation of Revenue Bill were not money Bills within the definition of article 114(3) of the Constitution. They were therefore not within the exclusive competence of the National Assembly.
- A purposive interpretation of articles 95(4)(a) & 95(4)(b), 96(2), 110(1)(c), 114(3), 205 and 218(1)(a) of the Constitution read together with sections 38 to 41 of the Public Finance Management Act, made it quite clear that both the National Assembly and the Senate played a role in the division of revenue between the two levels of Government.
Per NS Ndungu [dissenting]
- A formal application for the court to depart from a previous decision was not a requirement where the matter at hand was an advisory opinion. In advisory opinions there were no interests at stake as would normally be the case in adversarial proceedings. Advisory opinions did not arise from any contests of rights or claims disposed of by regular process. In exercising advisory opinion jurisdiction, the court should not be constrained by procedures required in ordinary proceedings.
- The Constitution under article 167(3) anticipated that there would be occasional need for the Supreme Court to depart from its previous decisions. The Supreme Court was not bound by its decision in the Senate Matter 2013.
- While rendering an advisory opinion, under article 163(6) of the Constitution, the Supreme Court could undertake any necessary interpretation of the Constitution. The court's revision of its prior decision relating to a similar matter to the one under consideration, would not occasion prejudice to any party. It would clarify and outline a harmonious and comprehensive picture of the requirements for the legislative process and roles for the two Houses as provided under the Constitution.
- The request to depart from the decision in Senate Matter 2013 was not casually made. A lot of thought, real interest and effort went into making that proposition.
- The decision of the Majority in the Senate Matter 2013 ought to be reviewed especially because it did not take into account the architectural design of the Constitution and the legislative processes that arose from that design, with regard to the roles of the two Houses of Parliament as set out in articles 95 and 96 and part 4 of Chapter 12 of the Constitution. That design was intended to avoid situations where disputes between the two Houses of Parliament defeated or delayed important aspects of public finance and potentially threw the country into chaos by rendering operations by either level of government impossible or impractical.
- The design as drawn by the drafters of the Constitution, established which House would originate the Division of Revenue (DOR) Bill, as a money bill and what was to happen when there was an impasse over a money bill. In most jurisdictions, where there was a deadlock between two Houses, the resolution was to allow the final determination to be made by the house with veto powers, which was the house that originated the Division of Revenue Bill. Further, in other democratic and bicameral jurisdictions, the Division of Revenue Bill was considered to be a money bill and therefore legislative processes that applied to money bills applied to it.
- The Division of Revenue Bill was a money bill that could only be introduced by the National Assembly in accord to article 109 (5) of the Constitution. Article 95(4)(a) of the Constitution reinforced that position. It stated that the National Assembly determined the allocation of national revenue between levels of Government as provided in part 4 Chapter 12.
- The National Assembly as the people's representative budgeted, collected, shared between the levels of government and audited revenue and it was knowledgeable on the finances of the country. The National Assembly was best placed to originate the Division of Revenue Bill as it financed the revenue share and proposed revenue collection forecasts in the requisite division. In the event of a deadlock between the Senate and National Assembly, then the National Assembly as the originating house should have final say or even veto powers.
- Article 203(2) of the Constitution guaranteed county governments an equitable allocation of a minimum of fifteen percent of all national revenue collected by the National Government. That amount ought to be readily available to county governments as it was already allocated under the Constitution. Obtaining those funds ought not to be a bicameral legislative process. All that was required, pursuant to article 206(4) of the Constitution was to seek the approval of the Controller of Budget to authorize the withdrawal of that amount from the Consolidated Fund. Hence, in the event of a delay in the passage of the Division of Revenue Bill, article 206(4) of the Constitution provided a tidy and efficient solution.
- The proposal of the majority with respect to how to deal with the impasse on revenue allocation was untenable as it constituted a major breach of the doctrine of separation of powers. Allocation of revenue was a task that fell squarely on the Executive and the Legislature. Any proposal from the court, directing or recommending action to be taken by Parliament and what percentage should be allocated to the counties, was not only an attempt to amend the Constitution but was tantamount to supervising the work of parliament and endangering the institutional comity between the three arms of government. The core function of the Judiciary was to interpret and apply laws and not to make them.
- Although the majority were of the view that they were protecting the Constitution, they were in fact re-writing the Constitution or meddling with a political and budgetary process in which they had no expertise. The simple solution for the issue was to point out to Parliament that they needed to solve it with finality by enacting relevant legislation including amending the Constitution if necessary.
- Under the circumstances Parliament had the option of making necessary constitutional and legislative amendments to clarify whether the Division of Revenue Bill was a money bill and what legislative processes should apply to its passage including the resolution of disagreements between the two Houses.
- Under section 191(1) of the Public Finance Management Act, each year when the Budget Policy Statement was introduced, the Cabinet Secretary had to submit to Parliament a Division of Revenue Bill and County Allocation of Revenue Bill prepared by the National Treasury. The Budget Policy Statement, under section 25 of the Public Finance Management Act would be introduced to Parliament by February 15. Under article 218 of the Constitution, a Division of Revenue Bill and a County Allocation of Revenue Bill, had to be introduced in Parliament at least two months before the end of each financial year. Effectively, there was a conflict between the Public Finance Management Act and the Constitution in that the statute altered constitutional timelines set for the introduction of Division of Revenue Bill and a County Revenue Allocation Bill in Parliament.
- In an ideal situation where the two Houses agreed on a Division of Revenue Bill and a County Allocation of Revenue Bill, the process ought to end by June 30. Where the two Houses of Parliament failed to agree on an ordinary Bill, the Bill would be referred to a Mediation Committee under article 113 of the Constitution. The Committee would be comprised of an equal number of members form each House and it would create a version of the Bill that was acceptable to both Houses. If the Committee failed to agree on the Bill then that Bill would be defeated. That also meant that even after a single mediation process, Parliament would not meet the constitutional timelines of passing the two Bills.
- There were a number of conflicting timelines that existed within the legal framework that needed to be brought to the attention of Parliament for corrective action. There was need to clarify on the exact timelines within which the Division of Revenue Bill and the County Allocation of Revenue Bill could be introduced to Parliament. That would call for amendments to articles 218 and 221 of the Constitution, and section 190 and 191(1) of the Public Finance Management Act.
Case Updates Issue 028/2020
|| Grounds which a court could order for rectification of land register
Estate Sonrisa Ltd & another v Samuel Kamau Macharia & 2 others  eKLR
Civil Appeal No. 14 and 32 of 2016
Court of Appeal at Mombasa
W Ouko, W Karanja and S Kantai, JJA
April 24, 2020
Reported by Chelimo Eunice
Land Law – ownership of land - transfer of land ownership – proof of transfer of land ownership - documents required for transfer of land ownership – requirement for a person executing an instrument of disposition of land to appear before the Land Registrar for the purpose of verification of his identity – where it was claimed that the vendor was non-existent and the transfer documents presented in court were forgeries – whether evidence of fraud being a common phenomenon at a land registry before introduction of land reforms would be used as evidence to prove fraud.
Land Law – land ownership – proof of land ownership – whether the existence of a title deed was conclusive proof of ownership of land - where there were two documents of title vesting the ownership of one property to two different people - who between the first and subsequent registered land owner was vested with absolute ownership of the land – where it was alleged that the vendor had no title that he could lawfully pass.
Land Law – land register – rectification of land register – grounds which a court could order for rectification of land register – where it was claimed that land title was obtained through fraud – whether a person named as proprietor of the land in a deed or certificate would not be protected by the law if the deed or certificate was obtained through fraud or misrepresentation – Registered Land Act, section 143; Land Registration Act, section 26.
Land Law – land registrar – powers of the land registrar – whether in carrying out his functions, the land registrar was only limited to the contents of the title deed or would rely on any other relevant documents in order to resolve any dispute between landowners – whether a court would order for demolision of structures alleged to have enchroached before the registrar would conclude his proceedings to determine the precise position of the boundaries of the landowners - Land Registration Act, sections 79 (3A), 80, 86 and 91(9).
The consolidated appeals arose from the decision of the trial court where the main issues concerned the legal ownership of the suit land and alleged enchroachment of the suit land by the adjacent land. The 1st respondent claimed that the 2nd appellant fraudulently obtained registration as a proprietor of the suit land while he still held the original title to it. He claimed that he was registered as the proprietor of the suit land and issued with the land certificate under the Registered Land Act (RLA) on May 21, 1981 and on February 6, 1996, he charged it to Daima Bank. After settling the loan, his efforts to register a discharge of charge was frustrated by the unavailability of the parcel file in respect of the suit land. On the suit land, he discovered that, not only was there encroachment by the 1st appellant but that the 2nd appellant had also occupied the entire parcel save for the portion encroached by the 1st appellant.
The 2nd appellant opposed the claim arguing that he legally purchased the suit land from another person (alleged vendor), that he had paid the alleged vendor on April 18, 2007 for that very property. The 1st appellant on the other hand maintained that the boundary of the adjacent land did not encroach on the suit land and that the boundary wall between the two properties was erected along the correct beacons.
The trial court upheld the 1st respondent’s title and found that the 2nd appellant’s title to the suit land was a fraud, a fraud he was either privy to or one he ought to have detected and avoided. On the claims of encroachment by the adjacent land upon the suit land, the trial court found that the suit land comprised of 1.7 hectares, whereas, the adjacent land was 0.9 hectares and that beacons between the two parcels be fixed by a surveyor as per the Land Act taking into account the area shown on the respective title deeds and that the survey fees be paid by the owners of the said properties equally. The appellants were aggrieved by that determination and sought to reverse it.
- Whether the existence of a title deed was conclusive proof of ownership of land.
- Whether evidence of fraud being a common phenomenon at a land registry before introduction of land reforms would be used as evidence to prove fraud.
- What were the grounds which a court could order for rectification of land register ?
- Whether in carrying out his functions, the land registrar was only limited to the contents of the title deed. Read More..
- According to the provisions of rule 29(1) of the Court of Appeal Rules (the Rules), and from a long line of judicial decisions, a first appellate court was enjoined to re-assess the entire evidence brought at the trial and make its own independent findings. If the finding of the trial court was supported by evidence and the law, then the appellate court could not interfere with it. However, if the conclusion was erroneous, and was not supported by the evidence and the law, the appellate court was entitled to interfere with and reverse the determination. That was so because an appeal from the High Court to the Court of Appeal was always by way of a retrial, hence the appellate court was not bound necessarily to follow the findings of the trial court.
- Up to the point the suit land was being registered in 1st respondent’s name, there was distinctive history tracing the original ownership to May 20, 1981 when it was transferred to the 1st respondent at a consideration. All the transfers since 1975 to the one of 1981 to the 1st respondent were done procedurally and in accordance with the law. In each instance, the requisite land control board consent was obtained, stamp duty and purchase price also paid.
- It was incorrect that the trial court attached undue weight on the parcel file which was neither in the list of documents of any of the parties nor supplied to them in advance to peruse and preview its contents. That was because the trial court had ordered the Land Registrar to avail the parcel file of the suit land and after the file was presented, all counsel cross-examined the Land Registrar on its contents. The contents of the parcel file merely buttressed the earlier testimony of the Land Registrar. Further, the 1st respondent had prayed in his plaint that the Land Registrar to produce the parcel file and all records pertaining to the suit land. Therefore, the production of the parcel file before the trial court was not an ambush.
- The second title held by the 2nd appellant came on the scene nearly 26 years after the 1st respondent’s title had been issued. After paying Kshs. 9,000,000 as consideration for the suit property, the title deed was then issued in favour of the 2nd appellant on April 23, 2007. From a copy of the title deed presented in evidence, it was claimed that before that transfer, the title deed had been issued to the alleged vendor on August 9, 1996. That transaction was reflected as the entry No. 10. The court did not get the benefit of discerning the trail of transactions prior to entry No. 10. The 2nd appellant produced copies of a transfer, letter of consent of the Land Control Board and search certificate as confirmation that he followed the due process. However, the Land Registrar contradicted his evidence contending that although the 2nd appellant’s title was registered, he believed the signature of the Registrar on it was forged.
- Subjecting that testimony along with the other relevant evidence to the standard of proof in a civil case, the court was persuaded that the witness was able to distinguish the signatures of his colleagues from imitations of those signatures.
- Further, the 2nd appellant’s documents did not include essential documents like a transfer, application for Land Board Control consent, letter of consent and valuation requisition form. The coloured photographs of the parties to the sale, their PIN and identity card details were also not provided. Under section 110 of the repealed Registered Land Act, it was mandatory for a person executing an instrument of disposition of land, a lease or a charge to appear before the Registrar for the purpose of establishing or verification of his identity. For that reason, form R.L.1 in the Third Schedule to the Act required, not only the coloured photographs and PIN details of the transacting parties, but also that the person attesting the signatures, that was, the Registrar, to authenticate the coloured passport size photographs, National ID Numbers and Tax PIN Numbers. It was a term of the agreement for sale that the vendor would deliver those documents to the purchaser ten days after the execution of the agreement. From the evidence, they were not delivered.
- In the history of the suit land between 1974 to 1981 and beyond, the alleged vendor did not feature at all in the Registrar’s records. On August 9, 1996 when the alleged vendor was alleged to have been issued with a title deed, the suit land was already vested in the 1st appellant, who had charged it to Daima Bank Limited. That was noted in the encumbrance section of the register and land certificate reflected the transaction.
- According to the records held in Kwale land registry, at no point did alleged vendor own the suit land. The documents presented by the 2nd appellant at the trial suggesting that the alleged vendor had transferred the suit land to him were forgeries. Despite the fact that the alleged vendor was the most critical link in unraveling the confusion arising from the existence of two titles over the same land, the 2nd appellant found it superfluous and categorically stated that he did not wish to call him as a witness, yet his case depended entirely on the alleged vendor.
- Another significant aspect of the dispute was the identity of the said alleged vendor. It was the evidence of the 2nd appellant that the alleged vendor provided his national identity card whose number was 6545273 at the stage of execution of the agreement. The trial court, upon considering the notice to produce filed by the 1st respondent, gave leave to the 2nd appellant to bring the particulars of the vendor, being the alleged vendor identity 6545273 of P.O Box 3421 Nairobi.
- Pursuant to the trial court’s order, the 1st respondent presented a report from the Registrar of Persons which showed that identity card No. 6545273 belonged to another person and not the alleged vendor. In overruling the objection by the 2nd appellant’s counsel regarding that revelation, the trial court stated that he had given opportunity to the parties to bring relevant information on the holder of identity card No. 6545273; that that evidence was open to challenge by the other parties who had not given evidence. That the door was not closed on them to say whether or not the alleged vendor was the holder of identity card No. 6545273. That information was crucial to the case.
- The 2nd appellant admitted that although he had been shown the report from the Registrar of Persons, he had not taken steps to authenticate or controvert the information on the report. He also conceded that he did not do a search on the person who sold the land to him.
- The speed at which the transaction was concluded smacked of corruption and suspicion. The agreement for sale was executed on April 18, 2007, the full purchase price and stamp duty paid on the same day, transfer signed and lodged the following day and on April 23, 2007, five days from the date of execution of the agreement, the title deed was issued.
- There was evidence that fraud was a common phenomenon at the land registry at Kwale until the reforms introduced by the former Cabinet Secretary for Lands. For instance, the 1st respondent recounted the difficulty he encountered in tracing the parcel file and other records in respect of the suit land to register the discharge of charge. It was that difficulty that led to his discovery of the existence of a second title deed. The green card for the suit land had been plucked out and, in his testimony, the Land Registrar told the court that plucking out green cards from the parcel files was rife; and that at one point in the course of the aforementioned land registry reforms they came across 1574 green cards hidden in various places.
- The court took cognizance of the Land Registrar’s testimony that before those reforms, there was a lot of fraud in Kwale. That fraudsters colluded with land registrars and clerks. They used to pluck out green cards and Galu Kinondu was leading for fraud in South Coast. There was massive fraud in Kwale and that some titles had over 3 titles.
- Further, the Land Registrar had no records showing that the alleged vendor owned the suit land. Thus, from those facts, the transaction involving the sale of the suit land to the 2nd appellant was one such fraudulent affair.
- There were two documents of title vesting the ownership of one property, the suit land, to two different people. In determining who between the 2nd appellant and the 1st respondent was entitled to the suit land, the court considered the fact that the two documents of title held by the 1st respondent and the 2nd appellant were issued respectively in 1981 and 2007 before the repeal in 2012 of the Registered Land Act (RLA) by the Land Registration Act (LRA). By section 27 of the RLA, the registration of the 1st respondent as the proprietor of the suit land on May 20, 1981, way before the purported second registration of the 2nd appellant on April 16, 2007, vested in the former the absolute ownership of that land and his rights over it could not be challenged except on the grounds specifically provided for in the aforesaid Act.
- The 1st respondent held a land certificate issued under the RLA, while the 2nd appellant held a title deed, also said to be issued under that Act. Both documents were recognised under section 32(1) of the RLA, which together with section 31of the RLA were instructive. In the former, the Registrar could only issue a title deed or certificate of lease where none subsisted. The title deed or certificate of lease had to be in the prescribed form showing all subsisting entries in the register affecting that land or lease.
- The existence of a title deed per se only raised a rebuttable presumption of ownership of land. The existence of two documents of title in respect of one parcel of land was not only highly irregular and anomalous but was also forbidden by law.
- The fact that the 1st respondent’s title was first in time, the burden was upon the 2nd appellant to demonstrate that before he committed himself, he was satisfied from the register that the alleged vendor, who was in the process of selling the suit land to him, had the capacity as the registered proprietor at the time to transact and therefore capable of passing interest in the land to him. As per section 42 (1) of the RLA, interests appearing in the register rank in priority according to the order in which the instruments which led to their registration were presented to the registry. Section 31 of the RLA on the other hand was emphatic that the register was the first reference point for a party wishing to purchase a registrable interest from a vendor because it would mirror all currently active registrable interests that affected a particular parcel of land.
- The certificate of official search purportedly issued to the 2nd appellant to the effect that the alleged vendor was the registered owner of the suit land on April 16, 2007 was suspect in the face of the clear evidence by the Land Registrar, the custodian of the register in that registration district, to the effect that the alleged vendor had no title that he could lawfully pass to the 2nd appellant. By the provisions of section 143 of RLA, the court was permitted to order rectification of the register by directing that any registration be cancelled or amended where it was satisfied that any registration had been obtained, made or omitted by fraud or mistake. However, the register could not be rectified so as to affect the title of a proprietor who was in possession and acquired the land, lease or charge for valuable consideration, unless such proprietor had knowledge of the omission, fraud or mistake in consequence of which the rectification was sought, or caused such omission, fraud or mistake or substantially contributed to it by his act, neglect or default.
- A similar provision was introduced in section 26 of the LRA in substantially the same language, except that it added that the person named as proprietor of the land in a deed or certificate would not be protected by the law if the deed or certificate was obtained through fraud or misrepresentation to which he was proved to be a party or where the certificate or deed was acquired illegally, unprocedurally or through a corrupt scheme.
- The alleged vendor had no land or title to transfer to the 2nd appellant. His registration in the first place was obtained by fraud. The 2nd appellant substantially contributed to the irregular and unlawful registration through his act, neglect or default. Had the 2nd appellant exercised due diligence, he would have discovered that the alleged vendor was a fraudster, that the particulars in the register did not relate to him and that when he obtained the title deed, the 1st respondent was still in possession of the original document of title.
- The gusto and dispatch with which the 2nd appellant went about this transaction pointed to an amalgam of adventurism, greed, and recklessness. For those reasons, all the grounds proffered in the 2nd appellant’s appeal failed.
- The title deed and all other documents relating to ownership of the adjacent land were in complete agreement that it measured 0.9 hectares. Starting with the original title deed issued in favour of the 1st appellant on February 11, 1991 and a subsequent certificate of lease of April 24, 2012 were both explicit on the size as 0.9 hectares. The planning brief prepared for the 1st appellant by a physical planner for the purpose of proposed change of user similarly confirmed 0.9 hectares as the size. The certificate of official search dated April 19, 2014 likewise was to the same effect. Those documents sufficed as an illustration of the common position as to the size of the adjacent land.
- By section 32 (2) of the RLA, a title deed was only prima facie evidence of the matters shown therein, and the land or lease was subject to all entries in the register. The area shown in the title deed was the same one extracted from the register, the details of which were contained in the certificate of official search.
- On the survey whose outcome contradicted the size established by the title deed, it was noted that none of those landowners whose parcels neighbour the adjacent land was invited, given notice of or involved in the survey. That was against the letter and spirit of division 3 of the RLA on maps, parcels and boundaries that required that any alteration of the boundary could only be done with the agreement of every person shown in the register to be affected by such alteration, that where it was intended to ascertain or fix a boundary, a notice had to be issued to the owners and occupiers of the land adjoining the boundary in question of the intention to ascertain and fix the boundaries. The alleged fixing of the boundary of the adjacent land, done in violation of the law had no effect on the original boundary of the suit land. In the same breath and by the same provisions of the law, the letters written by the District Surveyor, Kwale to the Land Registrar, Kwale, purporting to change acreage of the adjacent land, the suit land and a host of other parcels, were without effect.
- It was not apparent from the evidence whether the owners of the affected parcels of land were involved, but, at least the 1st respondent did not attend the exercise. Those letters were not copied to the other land owners. It was, however, acknowledged by the District Surveyor, Kwale, that if there was any error on the boundary, as suggested in the letters in question, then it was only the surveyor who could rectify it. He was nonetheless emphatic that, from his records, the area occupied by the adjacent land was 0.9 hectares. Some of the letters were not signed and were not also produced. They were simply marked for identification (MFI). There was an order that they be produced by the makers. That did not happen, with the result that the contents of those letters had no bearing. Even the District Surveyor in his oral testimony confirmed that he was not in a position to authenticate the letters purporting to change acreage of the property; and that he did not have a report of his own. Hence, the adjacent land was 0.9 hectares.
- The trial court did not exceed his jurisdiction by directing that the beacons between the suit land and the adjacent land be fixed by a surveyor as per the Land Act, taking into account the area shown on the respective title deeds. Under the LRA, just like was the case with RLA, the Registrar had wide powers, some quasi judicial. Though the trial court made reference to title deeds, he did not intend to limit the Registrar to consider only the contents of the title deeds. That was why there was the overarching ride as per the Land Act, which was meant to be a reference to the LRA. Under the LRA, the Registrar carried out his functions without any restrictions and would rely on any other relevant document and existing records in order to resolve any dispute between landowners. Because a title deed was only prima facie evidence of the matters shown therein, the Registrar’s investigations, of necessity had to encompass all entries in the register, rely on any other relevant document and existing records, conduct proceedings in accordance with section 14(1) of the LRA and cause a survey to be carried out and determine the dispute. The trial court did not restrict the Registrar’s discretion in the conduct of an inquiry into the dispute.
- The only part of the trial court’s order that was faulty was the direction that any party found to have encroached on the other parties’ land had sixty days to demolish all structures that had been erected and move and vacate therefrom. By that order, the trial court jumped the gun because the Registrar had, first to conduct the proceedings to determine the extent of the parties’ respective parcels, and cause to be defined by survey, the precise position of the boundaries in question. By sections 79(3A), 80, 86 and 91(9) of the LRA, that decision could be challenged in court. It was only after determining the dispute, could parties move to court to challenge it. The order for demolition was, in the result, premature.
- Regarding the cost of survey, there were discrepancies on the sizes of the plots in the area, which could only be attributed to the state of the register. The 1st appellant and the 1st respondent had not contributed to that situation and therefore could not have been asked to meet the cost of survey. That order was set aside and instead the Land Registrar, Kwale, together with the Government Surveyor, Kwale County were directed to determine whether the adjacent land had encroached upon the suit land.
Consolidated appeals dismissed, save for orders on cost of the survey, with parties bearing their own costs.
A criminal conviction is not a precondition for an application for forfeiture of property to the State under the Proceeds of Crime and Anti-Money Laundering Act.
Assets Recovery Agency v Lilian Wanja Muthoni t/a Sahara Consultants & 5 others
Application No 58 of 2018
High Court at Nairobi
M Ngugi, J
April 15, 2020
Reported by Beryl Ikamari
Statutes - interpretation of statutory provisions - proceeds of crime - where the holder of property was unable to show that there was a legitimate source for it - circumstances under which property would be deemed to be the proceeds of crime - Proceeds of Crime and Anti-Money Laundering Act (cap. 59B), sections 2 and 92.
Constitutional Law - fundamental rights and freedoms - right to property and right to a fair hearing - where an application for civil forfeiture of property, on grounds that the property was allegedly the proceeds of a crime, was made before a conviction for the offence relating to the property had been meted out - whether under the circumstances, the civil forfeiture application was a violation of the right to a fair hearing and the right to property - Constitution of Kenya 2010, articles 40 and 50; Proceeds of Crime and Anti-Money Laundering Act (cap. 59B), section 92.
Statutes - interpretation of statutory provisions - preconditions relating to the grant of an application for civil forfeiture of property to the state - whether a criminal conviction was a precondition for an application for forfeiture to be made - Proceeds of Crime and Anti-Money Laundering Act (cap. 59B), section 92(4).
The applicant made an application with respect to certain property, which was money held in bank accounts, that it believed to be the proceeds of crime. The applicant wanted the court to grant orders of forfeiture of those funds to the State. The 1st respondent had been the Principal Secretary in the Ministry of Public Service, Youth and Gender Affairs. The National Youth Service (NYS) fell under that ministry. She had been arrested and charged with various offences including abuse of office and conspiracy to commit a felony. The charges were about millions of public funds lost from the NYS.
After the 1st respondent's arrest, the applicant, Assets Recovery Agency, began investigations to recover assets that were allegedly the proceeds of crime. The investigations by the DCI revealed massive schemes of embezzlements of public funds, fraud and money laundering rendering such funds proceeds of crime liable to forfeiture under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA). Investigations also revealed that the 1st respondent opened and operated bank accounts in her name, her companies and business entities in her name and on behalf of her children. Those accounts had received suspiciously large cash deposits in US dollars and Kenya shillings, and there were reasonable grounds to believe that the funds in question were part of the funds stolen from the NYS.
- When would property held by a person be said to constitute the proceeds of a crime?
- Whether an application for civil forfeiture of property suspected to be the proceeds of crime was a violation of rights to property and the right to a fair hearing.
- Whether a criminal conviction was a precondition for an application for forfeiture to be made under Part VIII of POCAMLA . Read More...
- The making of an order of forfeiture under section 92 of POCAMLA was not dependent on the outcome of criminal proceedings or of an investigation done with a view to instituting such proceedings. What was required was proof that a party had fund or assets which, on a balance of probabilities, were proceeds of crime. Once the applicant established that, the onus was on the respondents to show that the funds or assets had a legitimate source.
- As the Principal Secretary, State Department of Public Service and Youth, in the Ministry of Public Service, Youth and Gender Affairs, the 1st respondent fitted the definition of a politically exposed person under regulation 22 of the Proceeds of Crime and Anti-Money Laundering Regulations, 2013. Under that provision, a politically exposed person was a person who had been entrusted with a prominent public function in a country or jurisdiction including, inter alia, a senior state officer and a senior public officer. The definition of ‘politically exposed persons’ included children and close relatives of persons in the position of the 1st respondent. The Central Bank of Kenya Guidance Note: Conducting Money Laundering/ Terrorism Financing Risk Assessment (December 2017) echoed that definition of a politically exposed person. The rationale behind the provision was to ensure that banks were on the lookout for persons holding public or state offices who could misuse their positions to acquire public funds corruptly or to engage in conduct that POCAMLA and similar legislation such as the Anti-corruption and Economic Crimes Act (ACECA) sought to curtail.
- The National Youth Service (NYS) was within the Ministry in which the 1st respondent was the Principal Secretary. Allegedly, the NYS lost millions of funds and the 1st respondent was among the persons charged with various offences relating to the loss of the funds. Further, pursuant to section 60 of the Evidence Act, the court took judicial notice of the Press Release of the Central bank of Kenya dated September 12, 2018 which entailed investigations into bank transactions that concerned the NYS that showed that the banks failed to comply with reporting obligations under POCAMLA. The Central Bank of Kenya penalized those banks.
- Section 92(4) of POCAMLA made it clear that the validity of a forfeiture order was not affected by the outcome of criminal proceedings or of an investigation with a view to institute such proceedings, in respect of an offence with which the property concerned was in some way associated. Therefore, the applicant was not required to show on prima facie basis that an offence had been committed.
- The applicant had shown that investigations were undertaken with respect to loss of public funds from the NYS and criminal proceedings were on-going against the 1st respondent and others. The applicant also demonstrated that the respondents' bank accounts received funds during the period to which the investigations and criminal proceedings related and that the respondents were unable to show that the funds had a legitimate source. On a balance of probabilities, they had established that the respondents had funds which were suspected to be proceeds of crime.
- The respondents were accorded an opportunity to explain the source of their funds. They explained that they ran a farm in Uyoma Siaya and that the 1st respondent's husband also offered consultancy services for which he had been paid. However, no documents were produced to show ownership of the Uyoma farm or that the funds in question were from produce from the farm. They did not explain the fact that bank account deposits were made in Nairobi and the farm's produce was sold in Siaya. Nothing in the documents tendered explained the large deposits made into the respondents' accounts.
- It was difficult to accept that the large sums of money deposited into the bank accounts were payments for farm produce. It was not too much to expect a person operating a legitimate business in agricultural or horticultural produce to have records of sales and payments as well as income tax returns that showed the amount of produce, to whom the sales were made, the profits, if any, and tax paid thereon.
- With respect to the consultancy business ran by the 1st respondent's husband, an affidavit by Micah Kigen showed that he had paid Kshs. 40, 000, 000 for the services. The evidential value of the affidavit as evidence of the consultancy business was doubtful. Further evidence showed that the bank account for the consultancy business received Kshs. 22, 000, 000 which was later withdrawn from the account. Additionally, that account did not receive any deposit during the period under investigation; 2015 to 2019.
- The allegations that the 1st respondent also had business ventures, properties and loans from which she obtained the funds deposited in the subject accounts, were not supported by documentation. The handwritten statement of the 1st respondent on the ventures was of no evidential value.
- There was no evidence tendered to show that part of the sums of money in the account were from the 1st respondent's former employers- NEPAD and the relevant Ministry.
- The respondents were unable to show a legitimate source for the funds deposited in the ten accounts that were the subject of the forfeiture application. The respondents’ accounts received substantial deposits within a very short time, between 2016 and 2018, in some cases a matter of days or weeks. There were some withdrawals but they did not detract from the fact that the respondents had not shown a legitimate source of the sizeable deposits into their accounts.
- Once the applicant established on a balance of probabilities that the respondents had funds in their accounts for which they not been able to show a legitimate source, the onus was on the respondents to satisfy the court that the assets and funds held in their accounts were not the proceeds of crime.
- The respondents had large sums of money in their bank accounts for which they were unable to show a legitimate source. The only conclusion that could be made under the circumstances was that the funds were proceeds of crime as defined in POCAMLA.
- POCAMLA and the entire legal regime related to recovery of proceeds of crime and unexplained assets had the underlying premise that crime and corruption were undertaken in a labyrinthine, secretive manner, that it was possible that the funds would not be directly traced to the crime, that while investigations could be carried out and some alleged perpetrators charged and subjected to trial, a conviction was not always result. Yet, the respondents could have in their possession substantial funds and assets for which they were not able to show a legitimate source.
- Money and assets were capable of being traced to specific sources including salaries and businesses. There had to be books of account in relation to the businesses. For hundreds of thousand of shillings to be deposited into bank accounts, there had to be a clear source for the funds. Under the circumstances, the 1st respondent was a senior state official facing charges relating to loss of millions of public funds and she needed to have a clear explanation for the large sums of money in her bank accounts.
- The applicant had established that the funds in contention were the proceeds of crime and they should be forfeited to the state.
- Article 40 of the Constitution guaranteed the right to property. The making of a forfeiture order where the respondents had money for which they were unable to show a legitimate source and was therefore the proceeds of crime, did not violate the respondents' right to property.
- The respondents' argument that only a criminal court could determine whether they committed a crime and that they could not be punished as the crime relating to the funds in question had not been proven, would not defeat the application for forfeiture. The forfeiture application was a process provided for in part VIII of POCAMLA and it was not dependent on the outcome of a criminal prosecution or investigation. There was therefore no violation of the right to a fair hearing or the right of access to justice.
- A conviction was not a precondition for civil proceedings under Part VIII of POCAMLA, or for the making of a forfeiture order. Section 92(4) of POCAMLA clearly stated that the validity of such an order was not affected by the outcome of criminal proceedings or investigations about the offence relating to the property in question.
Application allowed. Costs to be borne by the respondents.
|| AMK (Suing as the mother & next friend of JMK – Minor) v Kenya Power & Lighting Company Limited
Civil Suit No 28 of 2019
High Court at Meru
A Mabeya, J
April 14, 2020
Reported by Beryl Ikamari
Tort Law - negligence - breach of statutory duty - where a defendant had a statutory duty to supervise, inspect and maintain its electric installations - whether the defendant was liable when a minor was electrocuted by live cables lying in a thicket while collecting firewood.
Tort Law - negligence - contributory negligence - extent of liability for injuries suffered - whether a minor who was electrocuted by live cables lying in a thicket while collecting firewood contributed to the occurrence of the accident.
Tort Law - negligence - remedies - damages - scope of remedies available to a minor who suffered injuries arising from electrocution that caused the amputation of her two forearms - considerations of the court in awarding general damages, special damages, loss of future earning capacity and future medical expenses.
On August 28, 2017, the plaintiff was collecting firewood for dinner preparation, when she held an electric cable belonging to the defendant and got electrocuted. She was hospitalised for 8 months and her two forearms were amputated. The live cable lay amongst wood in a thicket. She sued the defendant seeking general damages, special damages of Kshs.589,160/-, loss of earning capacity, future medical expenses and costs of the suit as well as interest.
The defendant denied the plaintiff's allegations and said that she was wholly to blame or substantially contributed to the accident.
- Who was liable for injuries suffered by a minor who was electrocuted, by live cables that were lying in a thicket, while collecting firewood?
- Whether a minor who was electrocuted by live cables lying in a thicket while collecting firewood contributed to the occurrence of the accident.
- Whether a minor, who was electrocuted by live cables lying in a thicket while collecting firewood, was entitled to damages. Read More..
- The evidence of the plaintiff, to the effect that she held a power cable that was lying on a thicket while collecting wood, was not denied or challenged by the defendant. It was also not denied that the defendant was the sole entity that erected electric poles, maintained them and distributed power through cables mounted on the power lines.
- Where a party failed to call evidence in support of its pleading (be it a plaint or defence), the evidence of the opposing party would not be rebutted, unless it was effectively displaced in cross-examination. The plaintiff's evidence was not displaced in cross-examination. Accordingly, the evidence of the plaintiff was uncontroverted.
- The defendant had a statutory duty of supervising, inspecting and maintaining its electric installations under section 52 of the Energy Act. It required a high degree of vigilance on its part in order to avert accidents.
- The defendant should have ensured that the cables run overhead and not on the ground where they would come into contact with the plaintiff. The defendant was negligent and was to blame for the accident and the minor was at no fault. The defendant was 100% liable for negligence.
- Special damages had to be specifically pleaded and proved. The plaintiff pleaded special damages amounting to Kshs. 589, 160 for which she produced receipts in support thereof totaling Kshs. 556, 160.
- Under section 19 of the Stamp Duty Act, receipts produced in evidence had to have a revenue stamp in order for them to be admissible. All three receipts produced by the plaintiff bore a revenue stamp.
- The plaintiff sustained grave injuries which resulted in hospitalization for eight months as well as an extensive period of convalescence outside the hospital. The degree of injury was assessed as grievous harm with 100% disability.
- Money was incapable or renewing the plaintiff's physical frame. However, the damages had to be reasonable in the circumstances. In awarding damages, the court would also consider the fact that the plaintiff claimed loss of future earnings and future medical expenses.
- Considering the injuries suffered by the plaintiff; loss of two fore limbs, which chained her in hospital for eight months, the trauma and the nature and extent of the injuries, an award of Kshs. 4, 000, 000 as general damages would be an adequate award.
- The plaintiff was described as a bright and obedient pupil that dropped out of school in class 6 due to the accident. As concerned loss of earning capacity, a global award of Kshs. 1, 000, 000 would be adequate, considering that in the event that the plaintiff succeeded in her claim for future medical expenses, she could be restored to some degree of normalcy.
- There were reports from two doctors who opined that if the plaintiff was fitted with functional myoelectric prosthesis, she would be able to perform her normal duties as nearly as she used to before the accident. That included her attending studies and thereby enabling her pursue her dreams. The prosthesis would require maintenance at an annual expense of Kshs. 100, 000. The total award for future medical expenses was Kshs. 16, 500, 000.
Judgment entered for the plaintiff against the defendant in the following terms:-
- General damages - Kshs.4,000,000
- Special damages - Kshs. 556,160
- Loss of earning capacity - Kshs.1,000,000
- Future medical expenses- Kshs.16,500,000
|CIVIL PRACTICE AND PROCEDURE
Requirements for one to an appeal to the Supreme Court as of right in a case involving interpretation or application of the Constitution.
Stanley Mombo Amuti v Kenya Anti-Corruption Commission  eKLR
Petition No. 21 of 2019
Supreme Court of Kenya
DK Maraga, CJ & P; PM Mwilu, DCJ & V-P; MK Ibrahim, SC Wanjala and I Lenaola, SCJJ
April 30, 2020.
Reported by Kakai Toili
Civil Practice and Procedure – appeals – appeals to the Supreme Court – requirements – specifying the appellate jurisdiction - where it was alleged that the appeal involved the interpretation and application of the Constitution - whether reference to constitutional principles was sufficient to invoke the jurisdiction of the Supreme Court as of right involving the interpretation or application of the Constitution- Constitution of Kenya, 2010, article 163.
The respondent pursuant to section 55 of the Anti-Corruption and Economic Crimes Act, 2003 (ACECA) filed a suit at the High Court and sought the determination of certain questions regarding the manner of acquisition of the appellant’s wealth. The High Court answered the questions in favour of the respondent and issued a decree that the appellant was liable to pay Kshs. 41,208,000 to the Government. Aggrieved by the decision, the appellant filed an appeal at the Court of Appeal which dismissed the appeal. Aggrieved by the Court of Appeal’s decision, the appellant filed the instant appeal. The respondent then filed a preliminary objection seeking an order that the appeal be dismissed with costs arguing that the court lacked the requisite jurisdiction to determine it on merit.
- What were the requirements for one to appeal to the Supreme Court as of right in a case involving interpretation or application of the Constitution?
- Whether reference to constitutional principles was sufficient to invoke the jurisdiction of the Supreme Court as of right involving the interpretation or application of the Constitution. Read More...
- The appeal had to originate from a Court of Appeal case where issues of contestation revolved around the interpretation or application of the Constitution. In other words, an appellant had to be challenging the interpretation or application of the Constitution which the Court of Appeal used to dispose of the matter in that forum. Such a party had to be faulting the Court of Appeal on the basis of such interpretation. Where the case to be appealed from had nothing or little to do with the interpretation or application of the Constitution, it could not support a further appeal to the court under the provisions of article 163(4)(a) of the Constitution.
- The question whether sections 26 and 55 of ACECA violated the right to property under article 40 of the Constitution was addressed at paragraphs 74 and 79 of the impugned Court of Appeal judgment. Whereas, in the originating summons filed by the respondent at the High Court, no specific reference was made to the need to interpret and apply the Constitution, The Court of Appeal dismissed the constitutional question regarding sections 26 and 55 of ACECA and dismissed the originating summons without taking any evidence and addressing the factual issues raised therein.
- In the entire analysis of the evidence before the High Court and in applying the law to that evidence, it did not make any reference to the Constitution nor did it even attempt to interpret or apply sections 26 and 55 of ACECA in the context of their constitutionality or otherwise. The High Court did not make any orders regarding the constitutionality or otherwise of the exercise of forfeiture of unexplained assets under those Sections.
- The appellant, in crafting the issue of whether the High Court misdirected itself as to the law provided under articles 40 and 50 of the Constitution and section 55 of the ACECA as to the threshold on forfeiture of property, was focused more on the threshold of forfeiture of property than on the specific constitutional questions revolving around interpretation or application of articles 40 and 50.
- Where the interpretation or application of the Constitution had only but a limited bearing on the merits of the main cause, then the jurisdiction of the court could not be properly invoked. The mere reference to the rich generality of constitutional principle as the Court of Appeal did in the instant case, was not a sufficient ground to invoke article 163(4)(a) of the Constitution.
- Reference to articles 40 and 50 of the Constitution were introduced by the appellant at the Court of Appeal and even then, peripherally so. The Court of Appeal thereafter rendered itself in passing only and the bulk of its judgment was saved to an evaluation of the evidence on record in the context of sections 26 and 55 of ACECA and not the Constitution per se.
Preliminary objection allowed; appeal struck out for want of jurisdiction under article 163(4)(a) of the Constitution; the respondent to have the costs.
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The Kenya Law Team
Where Legal Information is Public Knowledge.
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