Weekly Newsletter 029/2018

Weekly Newsletter 029/2018



Kenya Law

Weekly Newsletter


Recognition of foreign judgments in Kenya regarding matrimonial proceedings is dependent on the domicile of the parties and jurisdiction of the foreign court.
P M v V M 
Misc Civil Application No. 152 Of 2016  
High Court at Nairobi
J.N. Onyiego, J
  May 14, 2018
Reported by Nasike Robai and Faith Jepchirchir Rutto
Download the Decision
 
Jurisdiction –jurisdiction of foreign courts-foreign court’s jurisdiction over divorce proceedings – recognition of foreign judgments in Kenya- where a foreign court has granted a decree in matrimonial proceedings arising out of a marriage celebrated in Kenya - whether a foreign court had jurisdiction to entertain a suit for dissolution of marriage contracted in Kenya   -   Civil Procedure Act, Section 9; Foreign Judgments (Reciprocal Enforcement) Act Cap 43, Sections 3 and 13
Civil Practice and Procedure-foreign judgments-application for enforcement and recognition of a foreign judgment- whether the instant suit that originated from Slovakia which had no reciprocal arrangement with Kenya could be registered and executed under Foreign Judgments (Reciprocal Enforcement) Act Cap 43
International Law treaties and conventions – nature and extent of application of treaties – supremacy of the Constitution and sovereignty of the people vis-à-vis the conventions ratified by Kenya- Sections 3(a) and (b), Convention of 1 June 1970 on the Recognition of Divorces and Legal Separations
Conflict of Laws – domicile – reciprocity in the recognition and registration of foreign judgments- where the parties were married in Kenya before moving to Slovakia - where a foreign court had granted a decree in matrimonial proceedings arising out of a marriage celebrated in Kenya- whether the instant suit that originated from Slovakia which had no reciprocal arrangement with Kenya could be registered and executed under Foreign Judgments (Reciprocal Enforcement) Act  - whether a foreign court had jurisdiction to entertain a suit for dissolution of marriage contracted in Kenya   - Marriage Act, No. 4 of 2014, section 67; Foreign judgments (Reciprocal Enforcement Act) 1984
 
Brief Facts:
The Applicant and Respondent celebrated their marriage in Nairobi, Kenya in 2006. Thereafter they moved and started cohabiting in the Republic of Slovakia till 2013 when they divorced. The couple was blessed with one living issue M J M born on October 19, 2006. Unfortunately, their marriage was dissolved on February 25, 2013 in the republic of Slovakia in the District Court of Zvolen. Custody of their son was subsequently awarded to the Respondent. The Applicant contended that their marriage having been dissolved in Slovakia which had largely been shaped by the reception and implementation of the European Union law did not fall under the bracket of the common wealth law doctrines which formed part of the Kenya Law as stipulated in the Constitution of Kenya, 2010.
 
Issues:
  1. Whether foreign judgments annulling marriages or generally dealing with matrimonial proceedings were recognized in Kenya.
  2. Whether Slovakia, which was not a common wealth country could receive extension of reciprocal powers beyond Common Wealth countries vide gazette notice under the Foreign Judgments (Reciprocal Enforcement), Extension Act order 1984 vide legal Notice No. 35/1984.
  3. Whether a foreign Court had jurisdiction to entertain a suit for dissolution of marriage contracted in Kenya.
  4. Whether the instant application which originated from Slovakia that had no reciprocal arrangement with Kenya could be registered and executed under Foreign Judgments (Reciprocal Enforcement) Act Cap 43.
Relevant provisions
Convention on the recognition of Divorces and Legal Separations entry force 24-VIII-1995, 1st June 1970
Article 1

“The present convention shall apply to the recognition in the contracting state of divorce and legal separations obtained in another contracting state which follow judicial or other proceedings officially effective there”.

Article 2
“Such divorces and legal separations shall be recognized in all other contracting states, subject to the remaining terms of this convention, if, at the date of institution of the proceedings in the state of the divorce or legal separation (hereinafter called in “the state origin”)-
(1)The respondent had his habitual residence there;
(2)The petitioner had his habitual residence there and one of the following further conditions was fulfilled-
a)Such habitual residence had continued for not less than one year immediately prior to the institution of proceedings;

b)The spouses last habitually resided there together……….”.

Marriage Act
Section 67

“where a foreign court has granted a decree in matrimonial proceedings whether arising out of a marriage celebrated in Kenya or elsewhere, that decree shall be recognized in Kenya if:
(a)Either party is domiciled in the country where that court has jurisdiction or had been ordinarily resident in Kenya for at least two years immediately preceding the date of institution of proceedings.

(b)Being a divorce of annulment, divorce or separation, it is effective in the country of domicile of the parties or either of them”.

Section 61
(1)– “where a marriage celebrated in Kenya is annulled or dissolved by a decree of a foreign court, any party to the annulled or dissolved marriage may apply to the registrar to register the decree”
 
Held:
  1. Recognition of foreign judgments was provided under section 9 of the Civil Procedure Act and sections 3 and 13 of the Foreign Judgments (Reciprocal Enforcement) Act Cap 43. Under section 3 of the Foreign Judgments and Reciprocal Act, divorce and separation proceedings were not listed as among those recognized for entry of such foreign judgments before any superior court in Kenya.
  2. Section 13 of the Foreign Judgments (Reciprocal Enforcement) Act  provided for extension of reciprocal powers by a minister in charge of court affairs beyond Common Wealth countries vide gazette notice under the Foreign Judgments (Reciprocal Enforcement), Extension Act order 1984 vide legal Notice No. 35/1984. Slovakia was not among the listed countries. There was no doubt that the republic of Slovakia was not a common wealth country so as to have an automatic recognition and entry of its foreign judgments. The fact that Slovakia was a member of European Union as contended by the Applicant did not make Slovakia a common wealth country. In the absence of extension authority by the minister, judgments from Slovakia would not qualify for recognition and registration in the Kenyan superior courts under the foreign judgments (Reciprocal Enforcement) Act.
  3. Article 2 of the June 1, 1970 Convention on the recognition of Divorces and Legal Separations entry force 24-VIII-1995, was only binding on contracting states. Among the listed countries, Kenya was not a signatory. For those reasons, the said convention although falling in the category of international law under article 2 (5) & (6) of Kenya Constitution could not apply.
  4. Section 67 of the Marriage Act envisaged recognition of all foreign judgments regarding matrimonial proceedings without the need to demonstrate reciprocity as long as there was proof that either party was domiciled in the foreign country where that decree or order was made and that that court had jurisdiction. Secondly, that the decree of annulment or divorce or separation, should be effective in the country of domicile. There was nothing on record to show that the Slovakia Court had no jurisdiction. The presumption was that, having made and pronounced the divorce or annulment orders it had jurisdiction to do so unless challenged in an appellate or higher court which was not the case.
  5. Having moved to Slovakia the year 2006 immediately after solemnizing their marriage, and the divorce proceedings having been instituted the year 2013, the parties were said to have been domiciled in the republic of Slovakia for a period exceeding one year thus rendering jurisdiction over the divorce proceedings before the court in Slovakia. To that extent, the divorce orders made in Slovakia could be recognized by Kenyan courts.
  6. Recognition of foreign judgments was not the same as registration. Whereas the provisions of Sovereign Judgments (Reciprocal Enforcement) Act only regulated registration of foreign judgments, it implied that judgments arising out of matrimonial cause were registrable not for enforcement purposes given that matrimonial causes were declaratory in nature but for dissolution of a marriage which was a personal right with no orders for enforcement unlike commercial transactions.
  7. Foreign annulment and dissolution of marriage were registrable under section 61 of the Marriage Act 2014 .However, unlike the provisions in the Foreign Judgments (Reciprocal Enforcement) Act, which envisaged adoption of such orders by the courts, the registration envisioned in section 61 of the Marriage Act 2014 was by the registrar of marriages. Registration of such orders was a preserve of the registrar of marriages and not the courts.
  8. Under the Marriage Act 2014, foreign judgments annulling marriages or generally dealing with matrimonial proceedings were recognized in Kenya. Application allowed.
 Orders
  1. The court recognized and adopted the dissolution of marriage decree given to the Applicant and the Respondent in the republic of Slovakia in the District of Zvolen before single Judge Mgr. Eva Jombikova on February 2, 2013.
  2. Costs would be in the cause.
Kenya Law
Case Updates Issue 029/2018
Case Summaries

CIVIL PRACTICE AND PROCEDURE There is no legal provision or contractual term that allows the IEBC to send the Chief Electoral Officer on compulsory leave.

Ezra Chiloba v Wafula Wanyonyi Chebukati & 7 others
Petition 29 of 2018
Employment and Labour Relations Court at Nairobi
Radido Stephen, J
June 14, 2018
Reported by Beryl A Ikamari

Download the Decision

Civil Practice and Procedure-constitutional petition-conservatory orders-legal requirements related to the grant of conservatory orders in a constitutional petition-where conservatory orders were sought against a decision, allegedly made unprocedurally, to send an employee on compulsory leave in order to conduct an audit-whether conservatory orders would be granted in those circumstances.
Statutes-interpretation of statutory provisions-interpretation of section 11A of the Independent Electoral & Boundaries Commission Act-the extent of the oversight mandate of the IEBC-whether the IEBC's oversight mandate would allow the IEBC to send an employee on compulsory leave-Independent Electoral & Boundaries Commission Act, No 9 of 2011, section 11A.

Brief Facts:
The Applicant was appointed Chief Electoral Officer by the Independent Electoral and Boundaries Commission (IEBC) on January 13, 2015 for a term of 5 years. Additionally, he was designated as an Accounting Officer under the requirements of the Public Finance Management Act, 2012 by the Cabinet Secretary, National Treasury on July 14, 2016. He played a pivotal role in the organization and preparation of the general elections held on August 8, 2017, in which the IEBC undertook massive procurement for electoral items.
The Applicant responded to various inquiries made to him about the affairs of the IEBC. On August 1, 2017, he was asked by the Chair of the IEBC why a supplier, Al-Ghurair had printed an excess of extra ballot papers- 1,200,000 extra ballots instead of 196,115 ballots and he responded on the same day. Further, on December 21, 2017 a Memo was written by the IEBC Chairperson, urgently asking for a performance report on ICT related contracts during the General Elections of 2017. The report was provided on January 9, 2018. Further clarifications on the tenders/ contracts were sought on January 6, 2018 and a response was required within 7 days but it was made on February 19, 2018. Furthermore, the Chairperson on February 6, 2018 made a request for a status report on election petitions arising out of the elections held on August 8, 2017 and October 26, 2017.
The IEBC undertook an internal audit on procurement related to the general elections and the Audit and Risk Committee was directed to make further inquiries. A report which noted non-adherence to procurement laws as well as the resolutions of the plenary of the IEBC was issued on April 5, 2018. Resolutions were made by the IEBC on April 6, 2018 and they included a decision to send the Applicant on compulsory leave for three months to facilitate the conduct of a wider audit. The audit was on major 2017 election related procurements.
The Applicant went to Court seeking orders against the decision to send him on compulsory leave. He said that the quorum required for the making of the decision by the IEBC was not met and that he was not given a hearing before the findings on compulsory leave were made. He also stated that there was no contractual foundation for the decision to send him on compulsory leave in the IEBC's Human Resources and Administration Policies and Procedures Manual.
The Applicant stated that the decision was contrary to the IEBC's Code of Conduct and violated the right to fair administrative action, the national values and principles of governance, the right to equality and freedom from discrimination, right to freedom and security of the person and right to fair labour practices.

Issues:

  1. What were the legal requirements to be met in order for the Court to grant conservatory orders in a constitutional petition?
  2. Whether there was a legal or contractual basis for the IEBC to send its Chief Electoral Officer on compulsory leave.
  3. Whether the oversight mandate of the IEBC under section 11A of the Independent Electoral & Boundaries Commission Act would allow the IEBC to send an employee on compulsory leave. Read More...

Relevant provisions of law
Independent Electoral & Boundaries Commission Act, No 9 of 2011, section 11A;
11A. Relationship between the Commissioners and Secretariat
For the effective performance of the functions of the Commission —

(a) the chairperson and members of the Commission shall perform their functions in accordance with the Constitution and in particular, shall be responsible for the formulation of policy and strategy of the Commission and oversight; and
(b) the secretariat shall perform the day-to-day administrative functions of the Commission and implement the policies and strategies formulated by the Commission.

Held:

  1. A party seeking conservatory orders should demonstrate, a prima facie case with a likelihood of success, prejudice likely to be suffered if the orders were not granted, that the grant of the orders would enhance constitutional values and objects and that the petition would be rendered nugatory if the orders were declined and that public interest favoured the grant of the orders.
  2. The Court would consider whether the Applicant met the threshold for the grant of conservatory orders. The petition was pending hearing on merits and the Court would avoid making definitive findings of fact or law before a full hearing unless it was absolutely necessary.
  3. The dispute revolved around the question as to how the Applicant was sent on compulsory leave and not why he was sent on compulsory leave. That was apparent from the material placed before the Court.
  4. An employment contract connoted both economic control and legal subordination. Economic control meant that the employee always did more than the consideration paid for the work and legal subordination meant that the employers not only had disciplinary powers over the employee but also had powers to demand how and whether the work ought to be performed.
  5. While the master of yore could do with the employee as he wanted, the modern employer’s hands were tied by the myriads of pieces of legislation which intervened in the contractual context arena (or agreements with a Union where one existed). The employee was no longer a chattel of the employer. The statutory and in some cases constitutional intervention assured employees of certain protections.
  6. General protective measures for employment contracts were provided primarily in the Constitution of Kenya 2010, the Employment Act 2007, the Labour Institutions Act and the Labour Relations Act. For those serving in public service additional measures were provided for in various statutes including the Public Service Commission Act, the County Governments Act and the Judicial Service Commission Act.
  7. The Constitution of Kenya, 2010, the Independent Electoral & Boundaries Commission Act, the Employment Act, 2007 and the Applicant’s contract and terms and conditions of service as set out in the Human Resources and Administration Policies Manual were the invaluable instruments in determining the legality of the decision to send the Applicant on compulsory leave.
  8. Courts had taken parallel decisions on the legality of compulsory leave. In the case of Elizabeth Cherono Kurgat v Kenya Literature Bureau (2014) eKLR, compulsory leave was equated to suspension or interdiction. In John Mwaniki v Joshua Irungu & another (2017) eKLR it was decided that compulsory leave must be anchored on a contractual or statutory foundation. In Thomson Kerongo & 2 others v James Omariba Nyaoga & 3 others (2017) eKLR the Court found that there was no law prohibiting an employer from sending an employee on compulsory leave where the circumstances warranted it and provided it was an interim measure. The Court further stated that compulsory leave would remove an employee from the workplace temporarily without interfering with his terms of service.
  9. Common sense would dictate that it may be necessary at times to remove an employee from the workplace pending the outcome of a personnel/human resource investigation. The objective would be to allow investigations to proceed without disruption of evidence, or to preserve a safe, orderly and professional work environment.
  10. While compulsory leave would be at the say so of the employer (unilateral decision), stepping aside suggested a voluntary or mutual concession on the part of the employee. Some organisations including those in the public sector expressly provided for compulsory leave in the contractual instruments.
  11. The IEBC's Human Resources and Administration Policies and Procedures Manual envisaged various types of leave but it did not contemplate compulsory leave. However, clause 10.2.5.1 and 10.2.5.2 of the Manual authorized the IEBC to interdict an employee in cases of minor offences and to suspend an employee in cases of gross misconduct, pending full investigations.
  12. There was no contractual basis for compulsory leave. There were other options available to the IEBC under the circumstances but the IEBC did not consider them.
  13. The Independent Electoral & Boundaries Commission Act did not expressly provide for compulsory leave as a sine qua non for investigations which may lead to the removal of the Chief Electoral Officer from office even for a temporary period. The Employment Act 2007 was also not instructive on the question of compulsory leave.
  14. Section 11A of the Independent Electoral & Boundaries Commission Act provided for the oversight mandate of the IEBC. The broad provision of oversight mandate could not triumph over the contractual and legal provisions applicable to cases where disciplinary action may be implicated. That was especially the case considering the constitutional, statutory and contractual protections assured to public office holders such as the Applicant.
  15. It was necessary to consider whether public interest and proportionality tilted in favour of granting conservatory orders. The position of Chief Electoral Officer was underpinned by specific statutory provisions. It was a high position of trust meant to advance electoral democracy. The holder of such office should be beyond reproach. The IEBC was a constitutional organ and it should uphold the highest standards in its operations. Those standards included fidelity to the Constitution, the law and mutually agreed contractual terms. It would not be proportionate or in public interest to uphold a decision taken without a legal or contractual foundation by an employer.

Application allowed..

JURISDICTION The legal provisions on locus standi (right to sue) do not allow personal disputes to be filed as public interest matters.

Ferdinand Ndung'u Waititu v Benson Ritho Mureithi (Suing on his behalf and on behalf of the general public) & 3 others
Civil Appeal No 176 of 2014
Court of Appeal at Nairobi
E M Githinji, H Okwenu & J Mohammed, JJ A
June 22, 2018
Reported by Beryl A Ikamari

Download the Decision

Jurisdiction-jurisdiction of the High Court-jurisdiction concerning an alleged contravention of chapter six of the Constitution on leadership and integrity-questions concerning whether an appointing authority made an inquiry into the integrity of an appointee before making an appointment to a public office-whether the High Court had jurisdiction to hear and determine such questions-Constitution of Kenya 2010, articles 165(3)(d) & 165(5); Leadership and Integrity Act, (Cap 182), section 4.
Constitutional Law-institution of constitutional petitions-locus standi-public interest litigation-where it was apparent that a constitutional petition brought by the Petitioner on his own behalf and on behalf of the general public, was filed to advance the Petitioner personal interest-whether there was locus standi under such circumstances-Constitution of Kenya 2010, articles 22 & 258.
Constitutional Law-constitutional petition-precision in drafting pleadings in a constitutional petition-particulars showing the grounds upon which the petition was anchored-where it was alleged that certain particulars were raised through submissions and not in the pleadings-whether the Court could hear and determine issues raised through submissions and not the pleadings.

Brief facts:
The Cabinet Secretary, Ministry of Environment, via Gazette Notice No. 115 dated January 10, 2014, appointed the Appellant as Chairman of the Athi Water Services Board for a term of three years. The 1st Respondent went to the High Court to challenge the constitutionality of the appointment on the basis that the Appellant was not a person of integrity and that the Cabinet Secretary who appointed him failed to comply with the provisions of article 73 of the Constitution on leadership and integrity.
The integrity issue complained of was that the Appellant was alleged to have dishonestly and fraudulently transferred land to himself and contravened court orders which restrained any development on the disputed land.
The High Court made a finding that there were unresolved integrity issues in the appointment and an inquiry, into the issues, was not done before the appointment. The High Court also found that the Cabinet Secretary did not exercise her mandate in accordance with the Constitution and that the appointment fell below the constitutional standards. The High Court declared the appointment a nullity and issued a quashing order. Against the High Court's decision, the Appellant filed an appeal at the Court of Appeal.
The grounds of appeal included an assertion that the High Court lacked jurisdiction to hear and determine the matter as it ought to have been determined under article 80 of the Constitution as read with section 4(5) of the Leadership and Integrity Act and the Ethics and Anti- Corruption Commission Act. The other grounds of appeal included failure by the High Court to properly weigh the evidence and taking into consideration extraneous matters.

Issues:

  1. Whether the High Court had jurisdiction over an issue concerning an alleged contravention of chapter six of the Constitution on leadership and integrity in the appointment of a public officer.
  2. Whether the 1st Respondent had locus standi to institute the petition at the High Court on his own behalf and in public interest.
  3. Whether the Court could hear and determine issues raised through submissions and not in the pleadings. Read More..

Held:

  1. Within the definition provided in article 260 of the Constitution for the term "public office," the position of the Chairman of the Board of Athi Water Services was a public office and the holder, a public officer. Therefore, chapter six of the Constitution on leadership and integrity which was applicable to public officers was applicable to the position.
  2. Paragraph 14 to 19 of the petition, disclosed the grounds upon which the petition was anchored. The 1st Respondent was aggrieved that the Appellant was not a person of integrity who had been appointed to a public office in contravention of constitutional requirements. The issue on integrity and the process and merits of the appointment decision were raised in the petition. The petition faulted the appointment on grounds that the Appellant was not a person of integrity and that no inquiry was made concerning the Appellant's integrity before his appointment.
  3. Chapter six of the Constitution placed an obligation on an appointing authority to take into account the integrity of the person being considered for appointment as a public officer. Article 73(2) of the Constitution, provided the guiding principles of leadership and integrity. They included selection on the basis of personal integrity, competence and suitability, or election in free and fair elections.
  4. With respect to the appointment of a State Officer, the appointing authority was required to inquire into the personal integrity, competence and suitability of the appointee. Therefore, the consideration of the integrity and competence of the Appellant was a crucial process in his appointment as Chairman of the Athi Water Services Board, and a matter of public interest.
  5. There was a shift in focus from the issues disclosed in the pleadings to the issues raised in the submissions. The pleadings focused on the complaint that the Appellant was not a person of integrity and was therefore unfit to hold office while the submissions focused on whether the appointment process was flawed because the issue of integrity and competence of the candidate was not inquired into during the selection process. The prayer in the petition for the appointment to be declared null and void would be logical if the petition was anchored on the appointment process. Such prayers were not consistent with the grounds upon which the petition was anchored.
  6. The pleadings did not sufficiently demonstrate with particularity the constitutional issues that were being posed. The High Court, finding that the 1st Respondent’s claim was against the Cabinet Secretary, and the propriety of the Appellant’s appointment, ignored the facts set out in the petition and the supporting affidavit and the original complaint which was against the Appellant. The 1st Respondent's petition did not set out in a consistent and precise manner his complaints and the alleged manner of infringement and the consequence was that the claim handled by the High Court was not the original complaint.
  7. Article 73 required the Cabinet Secretary to consider the Appellant’s personal integrity, competence and suitability for appointment as Chairman of Athi Water Services Board, as an integral part of the appointment process. Article 73 fell within chapter six of the Constitution that dealt with leadership and integrity. Article 79 empowered Parliament to establish an independent Ethics and Anti-Corruption Commission for purposes of ensuring compliance with the enforcement of provisions of chapter six. Article 80 also empowered Parliament to establish procedures and mechanisms for the effective administration of chapter six and for the application of chapter six with necessary modifications to public officers. It was on the foundation of articles 79 and 80 that Parliament enacted the Ethics and Anti-Corruption Commission Act and the Leadership and Integrity Act.
  8. A reading of article 165(3)(d) and 165(5) of the Constitution as compared to section 4(3) of the Leadership and Integrity Act, disclosed that the High Court had jurisdiction to conduct a review of an appointment to a state or public office to ascertain the procedural soundness as well as to examine the appointment decision itself to determine whether the constitutional threshold had been met.
  9. The High Court had jurisdiction to determine whether the constitutional threshold in the appointment of the Appellant had been met. In determining whether the constitutional threshold had been met, the issue before the Court was not a determination of the Appellant's personal integrity and competence but whether the appointing authority had addressed the issue of competence, integrity and suitability of the Appellant before the appointment was made.
  10. Section 4(5) of the Leadership and Integrity Act permitted the EACC to seek help from the Court for orders to ensure that public entities complied with the enforcement directions given by EACC. That was not a mandatory provision nor could it limit the constitutional mandate of the High Court or require the High Court to act only when they were moved by EACC.
  11. The 1st Respondent's complaint related to the Appellant's conduct before his appointment. Neither the Constitution nor the Leadership and Integrity Act gave jurisdiction to the Ethics and Anti-Corruption Commission to oversee compliance with the constitutional threshold for appointment with respect to conduct before appointment. Had the 1st Respondent's petition been pleaded properly, the High Court would have had jurisdiction to consider whether there was compliance with the constitutional threshold.
  12. Article 22 and 258 of the Constitution expressly provided that any person had the right to institute proceedings where there was contravention or threatened contravention of the Constitution, and that such a person could bring the proceedings in his own interest or in public interest. The question that the Court must address was whether in bringing the petition the 1st Respondent, who purported to be acting in public interest, was acting in good faith. It was true that the integrity issue on the fraudulent transfer of land affected the 1st Respondent directly and it was the subject of pending litigation. The 1st Respondent was motivated by his personal dispute with the Appellant over the land. His main concern was not the Appellant's appointment. He was trying to gain an unfair advantage in pending litigation, by urging the Court to give substance to his allegations on the Appellant’s want of integrity, while the matters were still pending before another court.
  13. As the 1st Respondent purported to bring his petition in public interest, and it was apparent that his action was not brought in a bona fide attempt to protect public interest, he lacked locus standi and therefore the High Court ought to have rejected the petition on that ground.

Appeal allowed.

CONSTITUTIONAL LAW Legal notices imposing the Excise Duty on bottled water, juices, Soda, other non-alcoholic beverages and cosmetics by Kenya Revenue Authority declared void for lack of public participation

Okiya Omtatah Okoiti v Commissioner General, Kenya Revenue Authority & 2 others [2018] eKLR
Petition 532 of 2017
High Court at Nairobi
J.M Mativo, J
March 12, 2018
Reported by Felix Okiri
Download the Decision

Constitutional Law – law making process – legal notice –where it was alleged that the impugned legal notices were not subjected to public participation nor were the legal notices presented to the National Assembly for scrutiny as required under section 11 (1)-(4) of the Statutory Instruments Act and the repealed section 34 of the Interpretation and General Provisions Act before enactment - whether the impugned legal instruments were null and void on grounds that they were enacted in a manner that violated the Constitution and/or the Statutory Instruments Act - the Statutory Instruments Act, section 11 (1)-(4); the Interpretation and General Provisions Act, section 34
Jurisdiction - jurisdiction of the High Court - jurisdiction of the High Court in judicial review - exhaustion doctrine and alternative statutory dispute settlement mechanisms - exceptions to the exhaustion doctrine - unavailability of a dispute settlement forum to a certain party and a claim which required constitutional interpretation and application - whether the High Court could exercise jurisdiction in the first instance over a matter which could fall within the competence of the Public Procurement Administrative Review Board - Public Procurement and Asset Disposal Act, No 33 of 2015, sections 165(1), 2 & 174
Civil Practice and Procedure – duty to disclose material evidence - non-disclosure - circumstances in which failure to disclose facts would not constitute failure to disclose material facts which were crucial to the determination of a dispute – whether the Petitioner was guilty of material non-disclosure.
Constitutional Law - national values and principles of governance - public participation - whether public participation was a requirement in procurement processes undertaken by public entities - Constitution of Kenya 2010, articles 10, 38, 81 & 227(1); Public Procurement and Asset Disposal Act, No 33 of 2015, sections 3, 5(1) & 67(1)

Brief facts:
The Petitioners contended that the 1st Respondent irregularly issued certain gazette notices which had the effect of inter alia expanding the scope of items to be covered under the Excisable Goods Management System (EGMS) and enhancing the price of excise stamps. The gazette notices required exercise duty stamps to be affixed on bottled water, juices, Soda, other non-alcoholic beverages and cosmetics, a decision impugned for allegedly being contrary to article 43(1) (a), (c) and (d) of the Constitution.
The Petitioner also stated that the 3rd Respondent, a foreign company was corruptly procured making the EGMS duplicate the work of other government agencies such as Kenya Bureau of (KEBS) and the Anti-Counterfeit Agency, hence, the decision to pursue counterfeits was ultra vires its mandate.
The Petitioner also alleged that contrary to section 5 of the Statutory Instruments Act, the 1st and 2nd Respondents did not conduct public participation involving stakeholders including manufacturers and importers prior to issuing the impugned legal notices nor were the legal notices presented to the National Assembly for scrutiny as required under section 11 (1)-(4) of the Statutory Instruments Act and the repealed section 34 of the Interpretation and General Provisions Act.

Issues:

  1. Whether the Court was divested of jurisdiction under the doctrine of exhaustion of remedies.
  2. Whether there was adequate public participation in the enactment of the impugned gazette notices and in the decision to acquire and implement the EGMS.
  3. Whether the 1st Respondent violated the law governing direct procurement in awarding the tender to the 3rd Respondent.
  4. Whether the impugned legal instruments were null and void on grounds that they were enacted in a manner that violated the Constitution and/or the Statutory Instruments Act.
  5. Whether the imposition of the tax created an unfair tax burden on the public and the manufacturers and or whether it offended article 43 (1) (a), (c), & (d) constitutional rights.
  6. Whether the EGMS system duplicated functions of KEBS and the Anti-Counterfeit Agency.
  7. Whether the Petitioner was guilty of material non-disclosure. Read More...

Relevant provisions of the law
Constitution of Kenya, 2010
Article 10
(1) The national values and principles of governance bind all State organs, State officers, public officers and all persons whenever any of them—

(a) applies or interprets this Constitution;
(b) enacts, applies or interprets any law; or
(c) makes or implements public policy decisions.

(2) The national values and principles of governance include—

(a) patriotism, national unity, sharing and devolution of power, the rule of
law, democracy and participation of the people;
(c) good governance, integrity, transparency and accountability.

Public Procurement and Asset Disposal (PPAD Act) No. 33 of 2015
Section 3
Public procurement and asset disposal by State organs and public entities shall be guided by the values and principles of the Constitution and relevant legislation and proceeds to expressly identify the national values and principles provided for under article 10.

Section 103 (2).
"A procuring entity may use direct procurement if any of the following are satisfied—
(a) the goods, works or services are available only from a particular supplier or contractor, or a particular supplier or contractor has exclusive rights in respect of the goods, works or services, and no reasonable alternative or substitute exists;
(b) due to war, invasion, disorder, natural disaster or there is an urgent need for the goods, works or services, and engaging in tendering proceedings or any other method of procurement would therefore be impractical, provided that the circumstances giving rise to the urgency were neither foreseeable by the procuring entity nor the result of dilatory conduct on its part;
(c) owing to a catastrophic event, there is an urgent need for the goods, works or services, making it impractical to use other methods of procurement because of the time involved in using those methods;
(d) the procuring entity, having procured goods, equipment, technology or services from a supplier or contractor, determines that additional supplies shall be procured from that supplier or contractor for reasons of standardization or because of the need for compatibility with existing goods, equipment, technology or services, taking into account the effectiveness of the original procurement in meeting the needs of the procuring entity, the limited size of the proposed procurement in relation to the original procurement, the reasonableness of the price and the unsuitability of alternatives to the goods or services in question;
(e) for the acquiring of goods, works or services provided by a public entity provided that the acquisition price is fair and reasonable and compares well with known prices of goods, works or services in the circumstances.

Statutory Instruments Act
Section 13 - Relevant considerations
The Committee shall, in carrying out its scrutiny of any statutory instrument or published Bill be guided by the principles of good governance, rule of law and shall in particular consider whether the statutory instrument—

(a) is in accord with the provisions of the Constitution, the Act pursuant to which it is made or other written law;
(b) infringes on fundamental rights and freedoms of the public;
(c) contains a matter which in the opinion of the Committee should more properly be dealt with in an Act of Parliament;
(d) contains imposition of taxation;
(e) directly or indirectly bars the jurisdiction of the Courts;
(f) gives retrospective effect to any of the provisions in respect of which the Constitution or the Act does not expressly give any such power;
(g) involves expenditure from the Consolidated Fund or other public revenues;
(h) is defective in its drafting or for any reason the form or purport of the statutory instrument calls for any elucidation;
(i) appears to make some unusual or unexpected use of the powers conferred by the Constitution or the Act pursuant to which it is made;
(j) appears to have had unjustifiable delay in its publication or laying before Parliament;
(k) makes rights liberties or obligations unduly dependent upon non-reviewable decisions;
(l) makes rights liberties or obligations unduly dependent insufficiently defined administrative powers;
(m) inappropriately delegates legislative powers;
(n) imposes a fine, imprisonment or other penalty without express authority having been provided for in the enabling legislation;
(o) appears for any reason to infringe on the rule of law;
(p) inadequately subjects the exercise of legislative power to parliamentary scrutiny; and
(q) accords to any other reason that the Committee considers fit to examine.

Constitution of Kenya, 2010 (the Constitution)
Article 24 (1)
A right or fundamental freedom in the Bill of Rights
shall not be limited except by law, and then only to the extent that the
limitation is reasonable and justifiable in an open and democratic society
based on human dignity, equality and freedom, taking into account all
relevant factors, including––

(a) the nature of the right or fundamental freedom;
(b) the importance of the purpose of the limitation;
(c) the nature and extent of the limitation;
(d) the need to ensure that the enjoyment of rights and
fundamental freedoms by any individual does not prejudice
the rights and fundamental freedoms of others; and
(e) the relation between the limitation and its purpose and
whether there are less restrictive means to achieve the purpose.

Held:

  1. The issue of exhaustion of administrative remedies arose when a litigant, aggrieved by an agency's action, sought judicial review of that action without pursuing available remedies before the agency itself. The Court had to decide whether to review the agency's action or to remit the case to the agency, permitting judicial review only when all available administrative proceedings failed to produce a satisfactory resolution.
  2. The doctrine of exhaustion of administrative remedies was now of esteemed juridical lineage in Kenya. Where there was a clear procedure for redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure was to be strictly followed. The special procedure provided by any law had to be strictly adhered to since there were good reasons for such special procedures.
  3. The rationale of the doctrine was based on the sound Constitutional policy of a matrix dispute resolution system embodied in article 159 of the Constitution of Kenya, 2010. The Constitution created a policy that required that courts respected the principle of fitting the fuss to the forum.
  4. While the Constitution created a preference for other mechanisms for dispute resolution including statutory regimes in certain cases, it did not create an imperial Judiciary zealously fuelled by tenets of legal-centrism and a need to legally cognize every social, economic or financial problem in spite of the availability of better-suited mechanisms for comprehending and dealing with the issues entailed.
  5. The Constitution expressly envisaged that while some of those dispute resolution regimes were to be mainstreamed and at certain prudential points, they were to intersect with the Judicial system, some were to remain parallel to the Judicial system. The dispute resolution mechanism provided under the Public Procurement and Disposal Act represented the first category of dispute resolution mechanism created under a statute envisaged by the Constitution while the procedures by the Commission on the Administration of Justice established under article 59(4) of the Constitution would represent the latter category.
  6. While exceptions to the exhaustion requirement were not clearly delineated, courts had to undertake an extensive analysis of the facts, regulatory scheme involved, the nature of the interests involved including level of public interest involved to determine whether an exception applied. The Court could, in exceptional circumstances, find that exhaustion requirement would not serve the values enshrined in the Constitution or law and permit the suit to proceed before it. The exception to the exhaustion requirement was particularly likely where a party pleaded issues that verged on Constitutional interpretation especially in virgin areas or where an important constitutional value was at stake.
  7. Where there was an alternative remedy and especially where Parliament had provided a statutory appeal process, it was only in exceptional circumstances that an order for judicial review was to be granted. In determining whether an exception was to be made and judicial review granted, it was necessary for the Court to look carefully at the suitability of the statutory appeal in the context of the particular case and ask itself what, in the context of the statutory powers, was the real issue to be determined and whether the statutory appeal procedure was suitable to determine it.
  8. A person who felt that a decision did not meet the constitutional threshold of fairness, equity, transparency, competitiveness and cost-effectiveness under article 227 of the Constitution, and who had no other recourse known to law, had to find recourse in the High Court which was the Court entrusted under article 165(2)(d) with the mandate of hearing any question respecting the interpretation of the Constitution including the determination of the question whether anything said to be done under the authority of the Constitution or of any law was inconsistent with, or in contravention of, the Constitution.
  9. To bar a person from carrying out his constitutional obligation and mandate of upholding and defending the Constitution would amount to abdication by the Court of one of its core mandate under article 165(2) (d) of the Constitution.
  10. A statutory provision providing an alternative forum for dispute resolution was to be carefully read so as not to oust the jurisdiction of the Court to consider valid grievances from parties who did not have audience before the forum created, or who did not have the quality of audience before the forum which was proportionate to the interests the party wished to advance in a suit. That situation arose where the right to approach the statutory forum created was limited to certain parties who were aggrieved in a particular manner defined by the statutory scheme and where the particular party who sought to bring the suit did not fit into any of the categories defined by the Statute.
  11. Where a remedy provided under the Act was made illusory with the result that it was practically a mirage, the Court was not to shirk from its Constitutional mandate to ensure that the provisions of article 50(1) of the Constitution were attained with respect to ensuring that a person’s right to have any dispute that was to be resolved by the application of law decided in a fair and public hearing before a court or, if appropriate, another independent and impartial tribunal or body was achieved.
  12. Public participation played a central role in legislative, policy as well as executive functions of the Government. Public participation ought to be real and not illusory and ought not to be treated as a mere formality for the purposes of fulfillment of the Constitutional dictates. Any decision to exclude or limit fundamental participatory rights was to be proportionate in order to be lawful.What mattered was that at the end of the day a reasonable opportunity was offered to members of the public and all interested parties to know about the issues and to have an adequate say. What amounted to a reasonable opportunity depended on the circumstances of each case.
  13. The Court and public agencies could utilize the following practical elements or principles to gauge whether the obligation to facilitate public participation had been reached in a given case:-
    1. It is incumbent upon the Government Agency or Public Official involved to fashion a programme of public participation that accords with the nature of the subject matter. In so doing, the Government Agency or Public Official has to take into account both the quantity and quality of the governed to participate in their own governance. The government agency enjoys some considerable measure of discretion in fashioning those modalities.
    2. Public participation calls for innovation and malleability depending on the nature of the subject matter, culture, logistical constraints, and so forth. No single regime or programme of public participation can be prescribed and the Courts are not to use any litmus test to determine if public participation has been achieved or not. The only test the Courts use is one of effectiveness. A variety of mechanisms can be used to achieve public participation.
    3. Whatever programme of public participation is fashioned, it has to include access to and dissemination of relevant information. Participation of the people necessarily requires that information has to be availed to the members of the public whenever public policy decisions are intended and the public is to be afforded a forum in which they can adequately ventilate them.
    4. Public participation does not dictate that everyone has to give their views on the issue at hand. To have such a standard is equivalent to giving a virtual veto power to each individual in the community to determine community collective affairs. A public participation programme has to, however, show intentional inclusivity and diversity. Any clear and intentional attempts to keep out bona fide stakeholders can render the public participation programme ineffective and illegal by definition.
    5. In determining inclusivity in the design of a public participation regime, the Government Agency or Public Official has to take into account the subsidiarity principle: those most affected by a policy, legislation or action should have a bigger say in that policy, legislation or action and their views have to be more deliberately sought and taken into account.
    6. The right of public participation does not guarantee that each individual’s views is to be taken as controlling; the right is one to represent one’s views – not a duty of the agency to accept the view given as dispositive. However, there is a duty for the Government Agency or Public Official involved to take into consideration, in good faith, all the views received as part of public participation programme. The Government Agency or Public Official cannot merely go through the motions or engage in democratic theatre so as to tick the Constitutional box.
    7. The right of public participation is not meant to usurp the technical or democratic role of the office holders but to cross-fertilize and enrich their views with the views of those who are to be most affected by the decision or policy at hand.
  14. There were at least two aspects of the duty to facilitate public involvement. The first was the duty to provide meaningful opportunities for public participation in the process. The second was the duty to take measures to ensure that people had the ability to take advantage of the opportunities provided. In determining whether there was public participation in any particular case, the Court was to consider whether what had been done in that case was reasonable in all the circumstances.
  15. When legislation enacted by Parliament or subsidiary legislation enacted pursuant to delegated powers was challenged on the grounds that it was not adopted in accordance with the provisions of the Constitution, courts had to consider whether in enacting the law in question Parliament or the person exercising delegated authority had given effect to their constitutional obligations.
  16. The primary duty of the courts was to uphold the Constitution and the law which they had to apply impartially and without fear, favour or prejudice. What courts were to strive to achieve was the appropriate balance between their role as the ultimate guardians of the Constitution and the rule of law including any obligation that Parliament or the person exercising delegated legislative powers was required to fulfill.
  17. Article 10 expressly provides that public participation was one of the national values and principles of governance that bound all State organs, State officers, public officers and all persons whenever any of them applied or interpreted the Constitution, enacted, applied or interpreted any law or made or implemented public policy decisions. In order to justify their exclusion in matters falling under article 10, the burden was heavy on the person desiring to do so considering that article 10 was one of the provisions protected under article 255 of the Constitution whose amendment could only be achieved by way of a referendum.
  18. The engagement with the public was essential. Public participation informed the public of what was to be expected. It allowed for the community to express concerns, fears and even to make demands. In any democratic state, participation was integral to its legitimacy. When a decision was made without consulting the public, the result could never be an informed decision.
  19. Public participation had to apply to enactment of all legislations and policy decisions though the degree and form of such participation was to depend on the peculiar circumstances of the case.
  20. There was no evidence that the impugned legal notices were subjected to public participation. The impugned legal notices were thus not enacted in a manner consistent with the Constitution and therefore could not be said to have been valid. Any decisions taken pursuant to the said legal notice and Gazette notice could not be said to be valid.
  21. When the constitutionality of legislation or process leading to enactment of legislation was challenged, a court was to first determine whether the impugned legislation or the enactment process was capable of being read in a manner that was constitutionally compliant.
  22. In crafting a meaningful public participation program, the decision made was to the greatest extent possible design the program to reach a reasonably wide population in the country. The nature and the degree of public participation that was reasonable in a given case depended on a number of factors including- the nature and the importance of the legislation and the intensity of its impact on the public. Taxation or any legislation or policy that created a financial burden upon citizens had to as of necessity be subjected to adequate public participation wide enough to cover a reasonably high percentage of population in the country. It was necessary to ensure that the potentially affected section of the population was given a reasonable opportunity to have a say. In the instant case, there was absolutely inadequate public participation prior to the promulgation of the impugned legal notices.
  23. Public participation was not a mere cosmetic venture or a public relations exercise. That was more so where what was sought to be undertaken was a direct procurement.
  24. Section 103(1) of the Public Procurement and Asset Disposal (PPAD Act) No. 33 of 2015 allowed direct procurement only where that method was not resorted to for the purpose of avoiding competition. The Respondents were under a duty to demonstrate to the Court that there were no other interested competitors and that the direct procurement was not resorted to avoid competition. That had to be so since article 227(1) of the Constitution required that when a State organ or any other public entity contracted for goods or services, it had to do so in accordance with a system that was fair, equitable, transparent, competitive and cost-effective. Transparency, competitiveness and cost effectiveness were at the core of a procurement process and had to be infused in any process of procurement with the degree depending on the nature of the procurement in question. Those principles could not be ignored as being inconsequential.
  25. Article 227 of the Constitution empowered Parliament to prescribe a framework within which policies relating to procurement and asset disposal were to be implemented. In the exercise of that power, Parliament enacted the PPAD Act under which section 3(a) mandatorily decreed that Public procurement and asset disposal by State organs and public entities was to be guided by inter alia the national values and principles provided for under article 10 of the Constitution. In its wisdom, Parliament imposed restrictions on circumstances under which direct procurement could be undertaken. The first caveat was found in section 103 (1) PPAD Act which provided that a procuring entity could use direct procurement as allowed under section 103 (2) PPAD Act as long as the purpose was not to avoid competition. It was therefore a legal imperative that the burden for the 1st Respondent to discharge in the instant case was to demonstrate to the Court that they were not avoiding competition or that there were no other interested bidders or candidates. That was a statutory dictate that had to be demonstrated.
  26. The second test to be satisfied was provided under section 103 (2) (d) of the PPAD Act. That section established key elements that had to be proved for a party to find refuge in the said provision.
  27. The direct procurement herein was an extension of the previous contract that was terminated. There was no evidence that the guidelines set out in section 102 (1) & (2) of PPAD Act were satisfied.
  28. Before direct procurement method was adopted, the procuring entity had to involve the public in its decision to opt for direct procurement. Direct procurement did not necessarily violate the constitutional requirement of competitiveness as long as the constitutional and statutory threshold was met in the process and proper procedures were followed.
  29. A proper analysis of applicable articles of the Constitution including articles 10, 201 and 227 as well as the provisions of the PPAD Act including sections 3 and 103 (1) & (2) thereof led to the conclusion that the 1st Respondent was obligated to craft and implement a meaningful programme of public participation and stakeholder engagement in the process of tendering the subject of the instant Petition. Further, the 1st Respondent was obliged to ensure that the direct procurement met the strict statutory requirements of any of the requirements of section 103 (2) (a) to (e) of the PPAD Act. Any decision to exclude or limit fundamental participatory rights had to be proportionate in order to be lawful. The omission to undertake public participation was not justifiable. The 1st Respondent had not demonstrated that the direct procurement and the resultant award of the tender to the 3rd Respondent satisfied the tests prescribed under section 102 (1) & (2) of the Act.
  30. There existed a presumption as regards constitutionality of a statute. However, the rule of presumption in favour of constitutionality only shifted the burden of proof and rested it on the shoulders of the person who attacked it. It was for that person to show that there had been a clear transgression of constitutional principles. That rule was subject to the limitation that it was operative only till the time it became clear and beyond reasonable doubt that the legislature had crossed its limits.
  31. Article 94 (5) of the Constitution precluded all other persons or bodies, other than Parliament from making provisions having the force of law in Kenya except under authority conferred by the Constitution or delegated by the legislature through a statute. The National Assembly could therefore delegate to any person or body the power to make subsidiary legislation, which required approval of the House before having the force of law. Subsidiary legislation made by persons or bodies other than Parliament was commonly known as Statutory Instruments.
  32. Section 2 of the Statutory Instruments Act and the Standing Orders of the respective Houses defined Statutory Instrument as any rule, order, regulation, direction, form, tariff of costs or fees, letters patent, commission, warrant, proclamation, by-law, resolution, guideline or other statutory instrument issued, made or established in the execution of a power conferred by or under an Act of Parliament under which that statutory instrument or subsidiary legislation was expressly authorized to be issued.
  33. Statutory Instruments were prepared by the Cabinet Secretary or a body with powers to make them, e.g. a Commission, authority or a Board. Statutory Instruments had to conform to the Constitution, Interpretation and General Provisions Act, the parent Act and the Statutory Instruments Act.
  34. Section 13 of the Statutory Instruments Act provided for guidelines for the Committee on Delegated Legislation in carrying out its scrutiny of any statutory instrument or published Bill. The committee was to be guided by the principles of good governance and rule of law. The criteria set out in section 13 Statutory Instruments Act was replicated in Standing Order number 210 (3) which stipulated the procedure for considering statutory instruments.
  35. Section 15 (2) of the Statutory Instruments Act provided that where the Committee of Delegated Legislation did not table its report within 28 days following the date of referral of the Statutory Instrument or such other period as the House could by a resolution approve, the statutory instrument was to be deemed to have fully met the relevant considerations referred to in section 13 of the Statutory Instruments Act.
  36. While the Court could not prescribe the methods to be adopted in public participation, all that it was required to do was to determine the reasonableness of the method adopted taking into account relevant factors. The forms of facilitating an appropriate degree of participation in the law-making process were capable of infinite variation. What mattered was that at the end of the day, a reasonable opportunity was offered to members of the public and all interested parties to know about the issues and to have an adequate say.
  37. The impact of the legal notices was that they imposed a tax burden upon the consumers of the products since the tax burden was to inevitably affect the prices. It was necessary to widen the public participation to include the public who were the consumers. Two meetings with a few people in Nairobi were not reasonable. Absence of minutes of the said meetings made it difficult for the Court to determine the extent and scope of the consultation. There was no evidence that any meeting took place in the remaining 46 counties in the Republic of Kenya, yet the impact of the legal notice was to affect all the citizens of Kenya.
  38. Legislation had to conform to the Constitution in terms of both its content and the manner in which it was adopted. Failure to comply with manner and form requirements in enacting legislation rendered the legislation invalid. The courts had the power to declare such legislation invalid. The Court not only had a right but also a duty to ensure that the law-making process prescribed by the Constitution was observed. Where the conditions for law-making processes had not been complied with, the Court had the duty to say so and declare the resulting statute invalid. The impugned legal notices were adopted in a manner inconsistent with the constitutional and statutory requirements that prescribed public participation.
  39. The argument that the Committee on Delegated Legislation never made a report within 28 days and therefore the instrument was to be deemed to have complied with the statutory provisions could only hold sway where all the statutory and constitutional provisions were adhered to. The moment violation of the Constitution or breach of the statutory requirements became evident as in the instant case, such a rebuttable presumption could not be held to stand, and the Court was constitutionally bound to find that the impugned legal notice was enacted in manner that violated the Constitution and the Statutory Instruments Act.
  40. Article 43 (1) of the Constitution guaranteed every person Economic and Social rights which included the right to clean and safe water in adequate quantities. Access to water implied that water was to be both economically and physically accessible. Physical accessibility meant that water was to be available within a distance accessible to everyone including vulnerable individuals such as children, elderly persons and persons with disabilities. Economic access referred to the financial costs associated with accessing water.
  41. General Comment No. 15 (2002) of the United Nations Committee on Economic, Social and Cultural Rights (General Comment No. 15) defined availability of water to mean that the water supply was not only to be sufficient for each person for personal and domestic use but was also to be continuous. Accessibility meant both physical and economic accessibility on a non-discriminatory basis. The effect was that the right to water had to be accessible equally to the rich as well as to the poor and to the most vulnerable members of the population.
  42. Paragraph 18 of General Comment No. 15 provided that States had a constant and continuing duty to the progressive realization of the right to water. Retrogressive measures taken by the State with regard to the right to water were prohibited. If such retrogressive measures were taken, the onus was on the State to prove that such retrogressive measures were justified with reference to the totality of the rights provided for in the Covenant. The State was obliged to respect, protect and fulfill the right to water.
  43. In General Comment No. 15 also noted that the right to water clearly fell within the category of guarantees essential for securing an adequate standard of living, particularly since it was core of the most fundamental conditions of survival. In General Comment No. 6 (1995), the right to water was also defined as inextricably related to the right to the highest attainable standard of health and the rights to adequate housing and adequate food. The right to water has been seen in conjunction with other rights enshrined in the International Bill of Human Rights, foremost amongst them the right to life and human dignity.
  44. The imposition of the excise duty was bound to have an impact on the rights under article 43 (1) of the Constitution. Tax inherently infringed the right to property, being an expropriation of one's hard-earned money. It followed that for the tax to be lawful, the law introducing it had to not only be lawful, but also had to meet the article 24 of the Constitution.
  45. The Constitution also enjoined Parliament to impose taxation only in accordance with the national values and principles of governance among them equity and fairness in the distribution of tax burden, equality and non-discrimination, equal protection before the law, sanctity of property, good governance, integrity, transparency, and accountability.
  46. The court was required to be guided by the principles of taxation, namely certainty, equality, equity, legality and the Constitutional imperative under article 201 (b) (i) that the burden of taxation had to be shared fairly.
  47. The 1st and 2nd Respondents did not demonstrate that the legal notices under challenge met the article 24 of the Constitution analysis test. Article 24 (3) of the Constitution placed the burden on the State or a person seeking to justify a particular limitation to demonstrate to the Court that the requirements of article 24 had been met. The legal notice under challenge was bound to impact on the constitutionally guaranteed rights under article 43 and also property rights. It was imperative for the Respondents to justify the limitation.
  48. The principle of all fiscal legislation denoted that the subject was not taxable by inference or by analogy, but only by the plain words of a statute applicable to the facts and circumstances of his case. Article 43 rights were not to be hindered by a tax burden created by a legal notice that had been promulgated without strict adherence to the constitutional and statutory principles and values. It was an unfair burden to impose the excise duty in the circumstances of the instant case.
  49. The functions of KRA, KEBS and the Anti-counterfeit Agency were stipulated in the founding statutes. If there was any interplay or overlap in the exercise of their statutory mandates, then so long as it was permitted by the founding statutes, it was permissible. No argument was advanced by the Petitioner to demonstrate that the alleged interplay, if any fell outside the statutory competencies of the three bodies, hence, the said argument failed.
  50. A person who approached the Court or a Tribunal for grant of a relief, equitable or otherwise, was under a solemn obligation to candidly disclose at the earliest opportunity possible all the material/important facts/documents which had a bearing on the adjudication of the issues raised in the case. Such a person owed a duty to the Court or the Tribunal to bring out all the facts and refrain from concealing or suppressing any material facts within his knowledge or which he could have known by exercising diligence expected of a person of ordinary prudence. If he was found guilty of concealment of material facts or making an attempt to pollute the pure stream of justice, the Court not only had the right but a duty to deny relief to such person.
  51. The duty of a litigant was to make a full and fair disclosure of the material facts. The material facts were those which were material for the Court or Tribunal to know in dealing with the issues before the Court or Tribunal. The duty of disclosure therefore applied not only to material facts known to the Petitioner, but also to any additional facts which it would have known if it had made inquiries. The facts disclosed in the instant case did not disclose willful non-disclosure to attract a sanction by the Court.
  52. The alleged offensive paragraphs in the Petitioner's affidavits were matters of fact averred by the Petitioner which the 3rd Respondent had occasion to refute and did refute in his Response to the Petition. Issues of credibility were relevant matters in cases such as the instant one because if proved, they could have an impact in the final determination. It was not for cosmetic purposes that the Constitution stipulated in article 10 (2) (c) that the national values and principles of government included integrity. Those principles bound all State organs, State officers, public officers and all persons whenever any of them inter alia made or implemented public policy decisions.
  53. Chapter six of the Constitution was dedicated on Leadership and Integrity while article 232 stipulated values and principles of public service. The Constitution gave prominence to national values and principles of governance, leadership and integrity, values and principles of public service. The philosophy, values and the structures of the previous Constitution had to give way to those of the new constitutional order.
  54. Section 3 of the PPAD Act provided that Public procurement and asset disposal by State organs and public entities was to be guided by certain values and principles of the Constitution and relevant legislation. Those guiding principles were not included in the legislation for cosmetic purposes. A close examination of all of them revealed that they all converged at the point of integrity. The averments complained of considered in the context of the instant case and the applicable constitutional and statutory provisions were relevant matters. There was no basis to strike off the said paragraphs from the pleadings.
  55. Appropriate relief was in essence relief that was required to protect and enforce the Constitution. Depending on the circumstances of each particular case, the relief could have been a declaration of rights, an interdict, a mandamus, or such other relief as could be required to ensure that the rights enshrined in the Constitution were protected and enforced. If it was necessary to do so, the Court could even have to fashion new remedies to secure the protection and enforcement of those all-important rights. The Courts had a particular responsibility in that regard and were obliged to forge new tools and shape innovative remedies, if need be to achieve that goal.

Petition allowed
Orders

  1. A declaration was issued that Public participation had to apply to enactment of all subsidiary legislations and policy decisions though the degree and form of such participation was to depend on the peculiar circumstances of the case.
  2. A declaration was issued that subsidiary legislation had to conform to the Constitution, the parent Act and the Statutory Instruments Act in terms of both its content and the manner in which it was adopted and failure to comply rendered the legislation invalid.
  3. A declaration was issued decreeing that the Repealed Legal Notice 110 of June 18, 2013 and Gazette Notice No.12856 of September 5, 2013 were enacted in a manner inconsistent with the provisions of the Constitution and the Statutory Instruments Act, hence they were null and void for all purposes.
  4. A declaration was issued decreeing that Legal Notice Number 53 of March 30, 2017 was enacted in a manner inconsistent with the Constitution and the Statutory Instruments Act in that there was no adequate public participation prior to its enactment, hence the same was null and void for all purposes.
  5. An order of certiorari was issued quashing Legal Notice Number 53 of March 30, 2017 to the extent that it sought to impose or introduce excise duty on bottled Water, Juices, Soda and other Non-Alcoholic Beverages and Cosmetics.
  6. A declaration was issued decreeing that the first Respondent was obligated to craft and implement a meaningful programme of public participation and stakeholder engagement in the process of the tendering Tender Number KRA/HQS/DP-423/2014-2015 and or to ensure that the direct procurement met the strict statutory requirements of any of the requirements of section 103 (2) (a) to (e).
  7. An order of certiorari was issued quashing the award of Tender Number KRA/HQS/DP-423/2014-2015 for the Excisable Goods Management System awarded by the first Respondent to the third Respondent.
  8. No orders as to costs.
CIVIL PRACTICE AND PROCEDURE Dismissal of a suit for non-attendance of the Plaintiff or for want of prosecution, amounts to a judgment in that suit.

Stephen Mwangi Kimote v Murata Sacco Society [2018] eKLR
Environment and Land Court at Murang’a
ELC No. 219 of 2017
J.G Kemei, J
May 31, 2018
Reported by Felix Okiri
Download the Decision

Civil Practice & Procedure - legal representation - change of advocates-where leave of the court was not sought in the change of Advocate after a dismissal of a suit- whether order 9 rule 9 of the Civil Procedure Rules was complied with before the change of Advocate – Civil Procedure Rules, 2010, order 9 rule 9.
Statutes – interpretation of statutes – interpretation of the Civil Procedure Rules - interpretation of order 9 rule 9 – what was the correct procedure to be followed in the change of an Advocate where a suit had been dismissed - Civil Procedure Rules, 2010, order 9 rule 9.
Words and phrases – judgment - interpretation of the wordjudgment - judgment is a judicial determination; the decision of a Court; the decision or sentence of a Court on the main question in a proceeding or/one of the questions, if there are several; Judgment means the statement given by the judge on the grounds of a decree or order. Judgment in England, was a word generally used in the same sense as decree - Jowitt’s Dictionary of English Law 2nd ed p 1025: Mulla’s Indian Civil Procedure Code, 13th Ed Vol 1 p 798

Brief Facts:
The instant ruling was in respect of the Preliminary Objection raised by the Respondent. The ground of the Application was that the Plaintiff’s Advocate on record had, following a matter that had been dismissed on a certain date, filed a change of Advocate without seeking leave of the Court. The Respondent alleged that the application and the notice of change of Advocate had not attained the mandatory requirement of order 9, rule 9(a-b) and rule 10 of the Civil Procedure Act cap 21 which required that where there was a change of Advocate after judgment had been passed, such change was not to be effected without an order of the Court.
The Respondent contended that the dismissal of the suit meant that it was a verdict of the Court that determined the rights of the parties. The Applicant was however of the view that order 9 rule 9 did not apply to the instant case as the suit had not been heard and determined.

Issues:

  1. Whether order 9 rule 9 of the Civil Procedure Rules was complied with before the change of Advocate.
  2. What was the correct procedure to be followed in the change of an Advocate where a suit had been dismissed?
  3. Whether a dismissal of a suit was a judgment.Read More...

Relevant provisions of the law
Civil Procedure Rules, 2010
Order 9, rule 9
“When there is a change of Advocate, or when a party decides to act in person having previously engaged an Advocate, after judgment has been passed, such change or intention to act in person shall not be effected without an order of the Court—

(a) upon an application with notice to all the parties; or
(b) upon a consent filed between the outgoing Advocate and the proposed incoming Advocate or party intending to act in person as the case may be.”

Order 9, rule 10
“An application under rule 9 may be combined with other prayers provided the question of change of Advocate or party intending to act in person shall be determined first.”

Order 9 Rule 5
“A Party suing or defending by an Advocate shall be at liberty to change his Advocate in any cause or matter, without an order for that purpose, but unless and until notice of any change of Advocate is filed in Court in which such cause or matter is proceedings and served in accordance with Rule 5, the former Advocate shall, subject to rules 12 and 13 be considered the Advocate of the party until the final conclusion of the cause or matter, including any review or appeal.”
Unless and until a notice of change of Advocate is filed and duly served an Advocate on record for a party remains the Advocate for that party subject to removal from record at the instance of another party under Rule 12 of the same Order or withdrawal of the Advocate under Rule 13 of the same Order.

Held:

  1. Dismissal of a suit for non-attendance of the Plaintiff or for want of prosecution amounted to a judgment in that suit.
  2. A judgment was a judicial determination or decision of a Court on the main question(s) in a proceeding and included a dismissal of the proceedings or a suit. A dismissal of a suit was a judgment for the Defendant against the Plaintiff.
  3. When neither party attended Court on the day fixed for hearing, after the suit had been called on for hearing outside the Court, the Court could dismiss the suit and in that event, either party could apply to have the dismissal set aside or the Plaintiff could bring a fresh suit subject to any law of limitation of actions.
  4. A dismissal of a case was similar to a judgment and therefore the instant application fell squarely under order 9 rule 9 (a). As per order 9 rule 9, the correct procedure to be followed in case of a dismissed suit was to seek leave to come on record, then file and serve the notice of change of Advocates and then file the application to set aside the orders of the Court.
  5. In the instant case, the Applicant filed a notice of change of Advocates together with an application without leave of the Court to set aside the dismissal orders of the Court. Later on, the Applicant filed an application to seek leave to come on record. That clearly offended the express provisions of order 9 rule 9.
  6. The application for leave to come on record having been filed much later than the one for seeking to set aside the orders could not be heard together as per order 9 rule 10. The procedure set out under order 9 rule 9 was mandatory and thus could not be termed as a mere technicality.
  7. Article 50 (2)(b) of the Constitution protected the rights of an accused person to choose and be represented by an Advocate. Order 9 did not impede the right of a party to be represented by an Advocate of his choice. It only provided rules to impose orderliness in civil proceedings. Any change of Advocate should comply with the rules. Chaos would reign if parties changed Advocates at will without notifying the Court and the other parties.
  8. A preliminary objection consisted of a point of law which had been pleaded, or which arose by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit.
  9. The Preliminary Objection raised a point of law that prescribed a mandatory procedure to be followed in matters where a judgment of the Court had since been delivered. The order of the Court dated February 28, 2018 was a determination of the Court. The submission of Counsel for the Applicant that the provisions of order 9 rule 9 were a mere technicality had to be rejected.

Application allowed
Orders
The Notice of Change of Advocate dated the April 4, 2018 together with the Notice of Motion of even date was struck out with costs to the Respondent.

EQUITY Article 10 of the Constitution of Kenya on national values and principles of governance elevates equity as a constitutional principle

Willy Kimutai Kitilit V Michael Kibet
Civil Appeal No. 51 Of 2015
Court of Appeal at Eldoret
E. M. Githinji, H.Okwengu J., Mohammed, JJ.A
May 17, 2018
Reported by Robai Nasike Sivikhe and Safiya Awil

Download the Decision

Equity-proprietary estoppel- doctrines proprietary estoppel -circumstances where the equitable doctrines of constructive trust and proprietary estoppel were applicable to and supersede the Land Control Act (cap 302) - Constitution of Kenya article 10(2) (b)
Land Laws- controlled transactions-land control board- circumstances when a transactions required lcb consent -whether the lack of obtaining Land Control Board consent would render an agreement null and void- Land Control Act (cap 302) Section 6
Trust Law-constructive trust-principle of constructive trust-instances when constructive trust can be created- whether the Appellant action of receiving the full purchase price and putting the Respondent in possession created a constructive trust in favour of the Respondent
Constitutional Law-interpretation of the Constitution-principles that applied in the interpretation of the Constitution- whether article 10(2) (b) elevated equity as a principle of justice to a constitutional principle-Constitution of Kenya article 10(2)

Brief Facts:
The instant appeal stemmed from the judgment of the Environment and Land Court where the Appellant/Plaintiff had claimed that he had sold two acres of land to the Respondent who took possession of the land. The Respondent failed to procure the consent of the Land Control Board therefore the agreement was null and void. The Appellant sought a declaration that the Respondent had no proprietary right over the land, however the trial Court dismissed the Appellant’s suit and allowed the Respondent’s counter-claim granting an order of specific performance requiring the Appellant to transfer two acres (2) out of land.

Issues:

  1. Whether equitable doctrines of constructive trust and proprietary estoppel were applicable to and supersede the Land Control Act where a transaction relating to an interest in land were void and enforceable for lack of consent of the Land Control Board.
  2. Whether article 10 of the Constitution of Kenya on national values and principles of governance elevated equity constitutional principle.
  3. Whether the Appellant action of receiving the full purchase price and putting the Respondent in possession created a constructive trust in favour of the respondent.
  4. Whether lack of obtaining Land Control Board consent would render an agreement null and void.
  5. Whether the Court should apply the doctrines of constructive and proprietary estoppel to a contract rendered void by lack of the consent of Land Control Board. Read More..

Relevant Provisions of the Law
Constitution of Kenya
Article 10 National values and principles of governance
(1) The national values and principles of governance in this Article bind all State organs, State officers, public officers and all persons whenever any of them—

(a) applies or interprets this Constitution;
(b) enacts, applies or interprets any law; or
(c) makes or implements public policy decisions.

(2) The national values and principles of governance include—

(a) patriotism, national unity, sharing and devolution of power, the rule of law, democracy and participation of the people;
(c) good governance, integrity, transparency and accountability; and
(d) sustainable development.

CONTROL ACT CHAPTER 302
6. Transactions affecting agricultural land
(1) Each of the following transactions that is to say—

(a) the sale, transfer, lease, mortgage, exchange, partition or other disposal of or dealing with any agricultural land which is situated within a land control area;
(b) the division of any such agricultural land into two or more parcels to be held under separate titles, other than the division of an area of less than twenty acres into plots in an area to which the Development and Use of Land (Planning) Regulations, 1961 (L.N. 516/1961) for the time being apply;

(c) the issue, sale, transfer, mortgage or any other disposal of or dealing with any share in a private company or co-operative society which for the time being owns agricultural land situated within a land control area, is void for all purposes unless the land control board for the land control area or division in which the land is situated has given its consent in respect of that transaction in accordance with this Act.

(2) For the avoidance of doubt it is declared that the declaration of a trust of agricultural land situated within a land control area is a dealing in that land for the purposes of subsection (1).
(3) This section does not apply to—

(a) the transmission of land by virtue of the will or intestacy of a deceased person, unless that transmission would result in the division of the land into two or more parcels to be held under separate titles; or
(b) a transaction to which the Government or the Settlement Fund Trustees or (in respect of Trust land) a county council is a party

Held:

  1. The Instant Court allowed the appeal from the decision of the High Court which had held that in the situation before the Court, the solution was to apply the principles of equity and natural justice to temper the harshness of law such as section 6 of the Land Control Act.
  2. The Land Control Act was not a modern legislation although it had not been repealed. Some of the principles for granting or refusing consent stipulated in section 9 may not pass muster under the current Constitution.
  3. The doctrines of equity are part of the Kenyan laws although section 3 of the Judicature Act subordinated common law and the doctrines of equity to the Constitution and written law in that order. Sections 3(3) of the Law of Contract Act and section 38 (2) of the Land Act as amended clearly stipulated that the requirement that contracted for disposition of an interest in land should be in writing did not affect the creation or operation of a resulting, implied or constructive trust. The Macharia Mwangi Maina & 87 Others vs Davidson Mwangi Kagiri [2014]eKLR held that the doctrine of constructive trust and proprietary estoppel overlaps and both are concerned with equity’s intervention to provide relief against unconscionable conduct.
  4. Equity is law and section 6 (2) the Act did not prohibit a Court in exercise of its equitable jurisdiction in the process of adjudicating a land dispute from declaring that a party held land in a fiduciary capacity.
  5. By section 22 of the Land Control Act, possession was only illegal if it was in furtherance of the avoided transaction or agreement. Since trusts were overriding interests to which land was subject and since by section 161 (2) of the Land Act, all laws have to be construed in conformity with the Land Act, a person put in possession by the proprietor and claiming an equitable interest could not be in occupation of land illegally pending the determination of the nature and extent of the equitable rights by a Court.
  6. A contract for the sale of land to which the Land Control Act applied was not void from inception nor was it an illegal contract. It became void when no application for consent of the Land Control Board was made or if made, it was refused and the appeal from the refusal, if any, had been dismissed. The Land Control Act prescribed the time within which the application for consent should be made to the Land Control Board but did not prescribe the time within which the Land Control Board should reach a decision or the time within which any appeal should be determined. The process from the time of the making the application to the time of the determination of the appeal, if any, might obviously take time. However, the requirement that an application for the consent should be made within six months of the making of the agreement and the provisions of section 7 of the Land Control Act for recovery of the consideration was an indication that Parliament intended that controlled land transactions should be concluded within a reasonable time.
  7. The Land Control Act did not, unlike section 3 (3) of the Law of Contract Act and section 38 (2) of the Land Act save the operation of the doctrines of constructive trust or proprietary estoppel nor expressly provided that they were not applicable to controlled land transactions. Although the purpose of the two statutes were apparently different, they both limited the freedom of contract by making the contract void and enforceable. Since the doctrines of constructive trust and proprietary estoppel apply to oral contracts which were void and enforceable, by analogy, they equally applied to contracts which were void and enforceable for lack of consent of the Land Control Board especially where the parties in breach of the Land Control Act had unreasonably delayed in performing the contract. However, whether the court will apply the doctrines of constructive and proprietary estoppel to a contract rendered void by lack of the consent of Land Control Board will largely depend on the circumstances of each particular case.
  8. There was another stronger reason for applying the doctrines of constructive trust and proprietary estoppel to the Land Control Act. By article 10(2) (b) of the Constitution of Kenya, equity was one of the national values which bound the Courts in interpreting any law. Further, by article 159(2) (e), the Courts in exercising judicial authority were required to protect and promote the purpose and principles of the Constitution. Moreover, as stated before, by virtue of clause 7 of the Transitional and Consequential Provisions in the Sixth Schedule to the Constitution, the Land Control Act should be construed with the alterations, adaptations, and exceptions necessary to bring it into conformity with the Constitution.
  9. The Constitution had by virtue of article 10(2) (b) elevated equity as a principle of justice to a constitutional principle and required the Courts in exercising judicial authority to protect and promote that principle, amongst others. It followed that the equitable doctrines of constructive trust and proprietary estoppel were applicable to and supersede the Land Control Act where a transaction relating to an interest in land was void and enforceable for lack of consent of the Land Control Board.
  10. The equitable doctrines of constructive trust and proprietary estoppel were applicable and enforceable to land subject to the Land Control Act, though that was subject to the circumstances of the particular case. Upon the application of the equitable doctrines, the Court in its discretion should award damages and where damages were inadequate remedy it should grant the equitable remedy of specific performance.
  11. The Appellant created a constructive trust in favour of the Respondent. It was not in dispute that the Appellant sold a 2 acre portion of his land comprising of 2.440 Hectares to the Respondent in 2008. He gave possession of the land to the Respondent who fenced the land and developed a portion of half an acre by planting trees. The Respondent paid the last installment of the purchase price in 2010. However, the Appellant did not transfer the 2 acres to the Respondent and instead caused the whole land to be registered in his name on December 4, 2012, and filed a suit for the eviction of the Respondent thereafter.
  12. By the time the Appellant caused himself to be registered as the proprietor of the whole piece of land he was a constructive trustee for the Respondent and it would be unjust and inequitable to allow the Appellant to retain the 2 acres that he had sold to the Respondent.
  13. The lack of the consent of Land Control Board did not preclude the Court from giving effect to equitable principles, in particular the doctrine of constructive trust. The trial Court reached the correct decision and therefore the appeal had no merit.

Appeal dismissed

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