Weekly Newsletter 011/2019

Weekly Newsletter 011/2019



Kenya Law

Weekly Newsletter


Section 33B (1) and (2) of the Banking Act on capping of interest rates declared imprecise, vague and ambiguous and thus unconstitutional
Boniface Oduor v Attorney General and 4 others
Petition 413 of 2016
High Court at Nairobi
Commercial and Admiralty Division
F Tuiyott, J Kamau, R B Ngetich, JJ
March 14, 2019
Reported by Ian Kiptoo
Download the Decision
 
Constitutional Law-Central Bank of Kenya-functions and operations of Central Bank of Kenya-formulation of monetary policy-where a statute was enacted by the legislature in regards to capping of interest rates-claim that the legislature had no power in regards monetary policy formulation-whether section 33B of the Banking Act was unconstitutional for intruding on Central Bank of Kenya’s mandate under article 231 of formulating and implementing monetary policy- what amounts to a monetary policy-whether the monetary policy, in respect to interest rates, ended with the Central Bank Rate or extended to its transmission-Constitution of Kenya, 2010, article 231; Banking Act, sections 33B and 44; Central Bank of Kenya Act, section 36
Statutes-enactment of statutes-bills-Banking Act-where a bill did not fall within function of the County Government-where the memorandum containing objects and reasons stated a bill was a bill concerning county governments-whether the Banking (Amendment) Act no. 25 of 2016 was a bill concerning Counties and ought to have been tabled before the Senate-Constitution of Kenya, 2010, articles, 110 (1) and 111; Fourth Schedule of the Constitution, Part I
Constitutional Law-fundamental rights and freedoms-freedom from discrimination-enforcement of-where other institutions were exempted from the Banking Act-institutions not granted consent of CBK to act as banks-whether section 54 of the Banking Act was discriminatory and unconstitutional for exempting institutions that were not to be regulated by section 33B-Constitution of Kenya, 2010, article 27; Banking Act, sections, 2, 33B (1) and 54
Constitutional Law-fundamental rights and freedoms-right to property-limitation of the right to property-claim that the capping of interest rates was a violation of the right to property of banks and financial institutions-whether the Banking Act violated banks and financial institutions right to property by capping the rate on interest on borrowing-Constitution of Kenya, 2010, articles 24, 40 and 259; Banking Act, section 33B
Statutes-interpretation of statutes-interpretation of section 33B of the Banking Act-claim that section 33B was ambiguous, vague and imprecise-whether section 33B of the Banking Act was imprecise, vague and ambiguous
Constitutional Law-constitutionality of statutes-constitutionality of section 33B of the Banking Act-principle of presumed constitutionality of statutes-claim that section 33B of the Banking Act was unconstitutional-whether the Penal Provisions under section 33B (3) on the Banking Act were unconstitutional for being discriminatory against banks and CEOs of banks by providing for criminal sanctions and exempting customers from the sanctions-Constitution of Kenya, 2010, articles 1 (3), 27, 50, and 165(3) (d) (i); Banking Act, section 33B (3) & 49
Words and Phrases-monetary policy-definition of-action that a country's central bank or government can take to influence how much money is in the economy and how much it costs to borrow. As the UK’s central bank, we use two main monetary policy tools. First, we set the interest rate that we charge banks to borrow money from us–this is Bank Rate-Second, we can create money digitally to buy corporate and government bonds – this is known as asset purchase or quantitative easing (QE)-Bank of England
Words and Phrases-discrimination-definition of-Differential treatment; a failure to treat all persons equally when no reasonable distinction between those favoured and those not favoured-Black’s Law Dictionary, Ninth Edition
Words and Phrases-credit facility-definition of-an arrangement between a bank and a business that allows the business to borrow a particular amount of money for a particular period of time-Cambridge dictionary
 
Brief Facts:
The petition related to the constitutionality of the interest rate capping and auxiliary provisions of section 33B of the Banking Act which were enacted through the Banking (Amendment) Act no 25 of 2016. A month prior to the hearing of the petition, there was an amendment to sections 31A and 33B of the Act. Those changes were through section 64 of the Finance Act No 10 of 2018 which commenced on 1st October 2018.
The petitioner’s case was that, in so far as the object and effect of the impugned provisions was to cap the interest rate charged by banks and financial institutions for loans, they deprived Central Bank of Kenya (CBK) of its exclusive constitutional mandate to solely formulate and implement monetary policy. The petitioner contended that the impugned provisions discriminated against banks and financial institutions as no similar restriction on interest rates was placed on mortgage finance institutions, micro finance banks, insurance companies and those dealing with Islamic banking.

 
Issues:
  1. Whether section 33B of the Banking Act was unconstitutional for intruding on Central Bank of Kenya’s mandate under article 231 of formulating and implementing monetary policy.
  2. What amounts to a monetary policy?
  3. Whether the monetary policy, in respect to interest rates, ended with the Central Bank Rate (CBR) or extended to its transmission.
  4. Whether failure by a party to raise a question of constitutionality of a matter before a House Committee of the National Assembly was a bar from making representations that the impugned provision was unconstitutional.
  5. Whether the Banking Act no 25 of 2016 was a bill concerning county governments and ought to have been tabled before the Senate.
  6. Whether section 54 of the Banking Act was discriminatory and unconstitutional for exempting institutions that were not to be regulated by section 33B.
  7. Whether the Banking Act violated banks and financial institutions’ right to property by capping the rate of interest on borrowing.
  8. Whether section 33B of the Banking Act was imprecise, vague and ambiguous for:
    1. failing to provide a definition of the word ‘credit facility’ under section 33B (1);
    2. failing to provide that the Central Bank Rate (CBR) was the CBR contemplated under section 36 (4) of the Central Bank Act;
    3. failing to provide a clear meaning of the words ‘at not more than four percent, the base rate; and
    4. lacking the degree of certainty of legislation that created an offence.
  9. Whether the penal provisions under section 33B (3) of the Banking Act were unconstitutional for being discriminatory against banks and CEOs of banks by providing for criminal sanctions and exempting customers from the sanctions.

Relevant Provisions of the Law
Banking Act
Section 33B

 “(1) A bank or a financial institution shall set the maximum interest rate chargeable for a credit facility in Kenya at no more than four per cent, the Central Bank Rate set and published by the Central Bank of Kenya.
 
(2) A person shall not enter into an agreement or arrangement to borrow or lend directly or indirectly at an interest rate in excess of that prescribed by law.”
 

Section 44
“No institution shall increase its rate of banking or other charges except with the prior approval of the Minister.”
 

Penalties for offences
Section 49

 “Where any institution or other person contravenes any of the provisions of this Act—

 (a) if it is a body corporate, it shall be guilty of an offence and liable to a fine not exceeding one hundred thousand shillings; and
 (b) every officer of that institution or person shall be guilty of an offence and liable to a fine not exceeding fifty thousand shillings or to imprisonment for a term not exceeding two years or to both unless he proves that, through no act or omission on his part, he was not aware that the contravention was taking place or was intended or about to take place, or that he took all reasonable steps to prevent it taking place.”

Section 54
 “(1) This Act does not apply to—

 (a) the Kenya Post Office Savings Bank established under the Kenya Post Office Savings Bank Act (Cap. 493B);
 (b) the Agricultural Finance Corporation established under the Agricultural Finance Corporation Act (Cap. 323);
 (c) a society registered as a co-operative society under the Co-operative Societies Act (Cap. 490);
 (d) a microfinance bank licensed under the Microfinance Act, 2006.`

 (2) Notwithstanding the provisions of subsection (1), where any of the bodies referred to in that subsection is contracted by an institution as an agent to provide banking services on behalf of the institution, this Act shall apply to such body to the extent of the services contracted.”
 

Central Bank of Kenya Act
Section 57

 “The Bank may make regulations, issue guidelines, circulars and directives for the purpose of giving effect to the provisions of this Act and generally for the better carrying out of the objects of the Bank under this Act,”

 
Held:

  1. There were both first world and developing countries which regulated interest rates. The overarching reason for interest rate capping was to protect consumers from exploitative rates, to increase access to finance and make credit affordable. In the debate that preceded the enactment of the impugned statute, some concerns were raised about unregulated interest rates. It was noted, for example, that:-
    1. high interest rates had resulted in an increase in the costs of doing business in Kenya; and
    2. while World Bank recommended that market forces should determine interest rates, banks in Kenya seemingly had formed cartels in order to manipulate the rates and further, that CBK had been unable to effectively control the alleged cartels.

    Those were matters that motivated the National Assembly to legislate section 33B of the Banking Act (the Act).

  2. Article 94(2), 95(2) and 186(4) of the Constitution of Kenya, 2010 (Constitution) were an illustration of the special connection between the people of Kenya and their representatives. It was not the Court’s place to second guess the wisdom of the National Assembly in reaching a policy decision that interest rates needed to be regulated. Whatever the Court’s views of the impact of interest rate regulation, the Court had to recognize that the law was reached by the Country’s democratically elected representatives and what was decided had to be taken to reflect the conscience of a majority of Kenyans. The Court had to show a degree of respect to the decision of the National Assembly and had to approach the matter by assuming that the Statute was constitutionally sound.
  3. The presumption of constitutionality of a statute was rebuttable and the onus of proof was on the petitioner to cogently demonstrate that indeed the Statute violated the Constitution. Once the Court was satisfied that a statutory provision infringed or violated the Constitution then it had to declare it so because of the unequivocal provisions of article 2(4) of the Constitution.
  4. The jurisdiction of the High Court to determine whether or not any law was inconsistent with or in contravention with the Constitution was expressly provided in articles 1(3), 159(2) (e) and 165(3) (d)(i) of the Constitution. Further article 10 (1) (a), (b) and (c) of the Constitution provided that whenever all State organs, State officers, public officers and all persons were applying or interpreting the Constitution, enacting, applying or interpreting any law or making or implementing public policy decisions, they would be bound by national values and principles of governance as set out in article 10(2) of the Constitution.
  5. The objective of monetary policy was to maintain price stability in the economy. Price stability on the other hand was said to refer to maintenance of a low and stable inflation. That seemed to be consistent with the meaning given to monetary policy worldwide. Neither the Central Bank Act (CBK Act) nor the Act gave a definition of monetary policy.
  6. Section 36(4) of the CBK Act provided a clear role of CBK in respect to setting of interest rates. The Central Bank Rate (CBR) was reviewed and announced by the Monetary Policy Advisory Committee (MPAC) every two months. That influenced the interest rate that was charged by banks and financial institutions in so far as the impugned section 33B of the Act pegged the maximum and minimum rates on the CBR. There was an interplay between how banks and financial institutions charged their customers interest on the one hand and other macroeconomic factors on the other hand. What was less clear was whether the function of fixing interest rates chargeable to customers by the banks and financial institutions was a monetary policy issue.
  7. Kenya Banks’ Reference Rate (KBRR) primary purpose was to ensure that banks were transparent with respect to the cost and pricing of their products. Under the KBRR regime banks were required to disclose and explain to their customers the effective base rate (KBRR) and any additional premium (K) above the base rate. The regime of KBRR was rendered moot with the enactment of disputed section 33B of the Act yet it helped the Court understand the relationship between the monetary policy and the interest rates imposed by banks and financial institutions on their customers.
  8. The interest rate regime contemplated by KBRR was one computed as an average of:
    1. CBR and;
    2. the two month weighted moving average of the 91 day Treasury Bill Rate.

    The articles on the KBRR seemed to suggest that monetary policy could be transmitted when one component of the lending rate was the CBR. In addition, the Press Release of July 8, 2014 and the Circular of February 2015 also posited that it was CBR which reflected the monetary policy stance, affected inflation profile and economic activity.

  9. The Court was not told that the provisions of section 44 of the Act were a usurpation of CBK’s mandate of regulating banks and financial institutions. In much the same way, it could be argued that statute which placed a ceiling on the interest rates charged by banks to their customers did not infringe on the constitutional mandate of CBK set out under article 231 of the Constitution. While it could be argued that two wrongs could not make a right, CBK approbated and reprobated. CBK was happy to argue that the Minister had a role in regulating banking rates and charges imposed by banks under section 44 of the Banking Act but frowned upon Parliament legislating on a framework that regulated interest rates charged by banks. That did not help the petitioner to demonstrate the alleged violation of article 231 of the Constitution.
  10. During the legislative process, stakeholders including CBK and Kenya Banker’s Association (KBA) were invited to present their views in regard to the Bill by the Departmental Committee on Finance, Planning and Trade. Through a careful reading of the reports of the House Committee, it was noted that while raising other concerns in respect to the Bill, KBA and CBK did not question its constitutionality. That did not aid the petitioner’s case that CBK and KBA did not explicitly raise what was controversial. However, that was not to suggest the failure by CBK and KBA to raise the issue before the House barred any party from making representations that the impugned provision was unconstitutional.
  11. In respect to interest rates, the setting of Central Bank Rates (CBR) under the provisions of section 36 of the Central Bank Act, was undoubtedly a function in formulation of monetary and therefore in the exclusive sphere of CBK. The petitioner had not clearly demonstrated that the provisions of section 33B of the Act violate CBK’s constitutional mandate of formulating monetary policy. For that reason some latitude had to be given to the National Assembly that in enacting the challenged provisions, they did not act outside the Constitution.
  12. There was no dispute between the National Assembly and Senate in respect of the enactment of the Banking (Amendment) Act, 2016. the petitioner did not demonstrate that the Banking (Amendment) Act no. 25 of 2016 was:-
    1. a Bill concerning county government or;
    2. a Special Bill in line with article 111 (1) of the Constitution of Kenya.

    The bill having failed to meet the two criteria, it did not therefore require the passing by Senate. What constituted a bill concerning County Government was well set out in article 110 (1) of the Constitution which provided that a bill that affected the functions and powers of the County Governments set out in the Fourth Schedule of the Constitution had to pass through Senate.

  13. It was indisputable that matters of and relating to monetary policy fell under Part 1 of the Fourth Schedule of the Constitution which allocated that responsibility to the national government. That was not a function of County Governments. The Bill was on regulation of banking and fell under Part 1 of the Fourth Schedule. Therefore the Banking (Amendment) Bill, 2015 did not require Senate’s approval.
  14. It was immaterial that the sponsor of the Bill had in the memorandum of object and reason stipulated that it was a Bill concerning County Governments. It did not change the nature and character of the Bill as the same did not touch on a matter falling within the function of the County Governments. The erroneous and/or faulty characterization of the Bill as a bill concerning County Governments could not override the provisions of the Constitution. Indeed, a procedural technicality in a memorandum of objects and reasons could not override the substantive nature or the spirit of the object of the law to be enacted.
  15. In regards to the discriminatory nature of section 33B of the Act, section 2 of the Banking Act defined what a banking business; financial business and financial institution were. Section 33B of the Act talked of a section 54 of the Act exempted the application of the Act on certain institutions. So as to examine whether the differentiation was one that was constitutionally acceptable, one had to look at the object for enacting section 33B of the Act and the nature of institutions that were not covered by the regulation. The object enacting of section 33B of the Act was to curb the runaway high interest rates by the banks. That was evident from the reports by the National Assembly Departmental Committee on Finance, Planning and Trade and the debates in Parliament annexed to the affidavit by the National Assembly.
  16. The institutions in section 54 of the Banking Act were exempted by virtue of the fact that they had been established to meet specific needs or for a particular group of people. The institutions had not been granted consent of CBK to act as banks, but if they were to provide banking services then by virtue of section 54 (2) of the Banking Act, they would bound by the provisions of section 33B (1) of the Banking Act.
  17. The right to property was protected under article 40 of the Constitution. Under the provisions of article 259 on the interpretation and construction of the Constitution, property was defined to include any vested or contingent right to, or interest in or arising from money, choses in action or negotiable interest. Choses in action included rights under a contract. Money, a loan or credit facility of any type was without doubt a property. Although a right to property could be limited, article 24 delineated the permissible limitation. 
  18. The provisions did not appear to prevent banks and financial institutions from lending or borrowers from accessing credit. What it did was to cap the rate of interest on borrowing. It set interest rate parameters within which parties could interact. Given that the overall objective of the Statute was to protect consumers, by regulating interest rates the Statute did not impose an impermissible limitation on lending or borrowing. Lenders and borrowers were free to deal with their property within the parameters that parliament had set.
  19. The Petition was filed on October 10, 2016. Subsequently, the National Assembly through the Finance Act No 10 of 2018 made amendments to the Banking Act which affected sections 31A and 33B. The amendments had provided clarity on some of the concerns that the petitioner had raised. Although the Court noted the arguments in respect of the ambiguity of the clause of , it did not find it necessary to analyse the same for the reason that the 2018 Amendment deleted the clause of by removing section 33B (1) (b) of the Banking Act.
  20. The term appeared in various sections of the Banking Act. On occasion it appeared alongside the word However, neither had been defined in the interpretation provision of section 2 of the Banking Act. Further, the two terms were not defined in the Interpretation and General Provisions Act (Cap 2 Laws of Kenya), which was a statute inter aliain regard to the construction, application and interpretation of written law. Nevertheless, reference of the two (2) terms had been made in section 44A (5) (b) of the Act. To be noted, was that the meaning assigned to the word under section 44A (5) (b) was specific for that section. Therefore, for purposes of section 33B (1), the phrase had no statutory definition.
  21. Ordinarily, where there was no statutory definition of a word, then it ought to be construed in its plain and simple meaning. The term was open to different subjective interpretations. One could construe the term in its ordinary meaning while another could choose to give it a meaning similar to that assigned in section 44A(5)(b). If the former, a loan was a type of credit facility, and if the latter, a credit facility was a type of loan. That interpretation was conflicting.
  22. To remove the possibility of conflicting construction of the phrases, it was necessary that the term “credit facility” for purposes of section 33B (1) be explicitly defined. In the alternative, the terms “credit facility”, “loan”, “advance” and “financial guarantee” could be defined in the interpretation provisions of the Act. Arguments such as whether the section as worded covered loans such as mobile loans and hire purchase facilities would be avoided.
  23. One spill-over effect of the ambiguity in the meaning of could be seen on the reading of section 33B (2). What was to be borrowed or lent was not clear in so far as the words “credit facility” used in section 33(B) (1) were not defined.
  24. The 2018 Amendment had provided some clarity on the base rate referred to in section 33B (1)(a) of the Banking (Amendment) Act, 2016. The amendment clarified that the base rate was the CBR that was set and published by CBK. But that clarification could not be sufficient. The reference of the role by CBK to set and publish CBR appeared only in section 33B in the entire Banking Act. So as to establish the CBR referred to in section 33 B (1), it was necessary to read that section with section 36(4) of the Central Bank Act.
  25. Failure by section 33B (1) of the Banking Act to make specific reference to the provisions of the CBK Act in respect to the setting and publication of the CBR could open the provisions of section 33B (1) to various interpretations. If left as worded, one could argue that the CBR referred to in section 33B need not necessarily be that contemplated under the CBK Act. Clarity could be given to those provisions if they specified that the CBR in section 33B was the CBR contemplated under section 36(4) of the Central Bank Act.
  26. Given that the contravention of section 33B of the Act attracted penal consequences, the Statute should be unequivocal that the CBR referred to was that contemplated in the CBK Act. That would be in consonance with good legislative practice that definitions appearing in one statute ought to appear in related statutes for clarity and to avoid inconsistencies and ambiguity when dealing with a related issue. All laws relating to the same issue had to bear the same meaning as they would have the potential of the same words being assigned different meanings and interpreted differently depending on the statute under consideration. Each statute had to be interpreted in line with all the provisions contained.
  27. The use of the words “four percent, the CBR set and published” in section 33(B)(1)(a) of the Act were imprecise, uncertain and fell short of what would be termed a good piece of legislation that was easily understood by “Wanjiku.” In an attempt to clarify that ambiguity, CBK in its Banking Circular No 4 of 2016 gave the following guideline, “For purposes of section 33B (1) (a) which set the maximum interest rate chargeable for a credit facility “at no more than four percent, the base rate set and published by the CBK”, the cap would be set at four percentage points above the CBR.”
  28. Section 33(B) (1) (a) of the Act was not clear whether the word was intentionally left out by the drafters of the legislation. The words could mean four percent above the CBR set and published by CBK. There could also be a mischievous interpretation of the words to mean below the CBR. Unfortunately, the ambiguity persisted even after the 2018 Amendment. There was need for clarity on the issue because left as it was; it was open to different interpretations.
  29. Section 33(B) (1) (a) of the Act was also vague as to the period the four (4%) per cent interest was applicable. It did not specify whether it was to be charged per day, per month or per annum. That ambiguity was apparent as CBK felt it necessary to provide a guideline in Banking Circular No. 4 of 2016, that “the interest rates indicated in the Banking (Amendment) Act 2016, would apply on an annual basis.” The attempt to clarify the meaning through circulars/guidelines was not sufficient because it had to be remembered that non-compliance with the section 33B came with penalties and criminal proceedings. In any event, any valid law had to be self-explanatory. It had to and should not be qualified by explanations to be found outside of the statute.
  30. Section 57 of the CBK Act empowered CBK to make regulation, circulars and directives for the purpose of giving effect to the Act. In giving effect to the Act, CBK issued Circular No 4 of 2016 on September 13, 2016. CBK issued guidance in an attempt to clarify and harmonise the interpretation of the sections. The fact that CBK issued the Circular to clarify several issues was evidence of the ambiguity of the impugned section. In the absence of that guidance, there would have been anarchy in the banking industry.
  31. Any words that had the potential of causing confusion had to be clearly defined. The Legislature should not assume that the meaning of material words could be inferred. It had to make it easy for everyone, including a lay person to understand the meaning of a provision. Section 33B lacked the minimum degree of certainty that was required of legislation that created criminal offences. There was no option but for the provision to be struck out for being vague, ambiguous and being in contravention to article 29 of the Constitution.
  32. No person should be punished for disobeying a law that was uncertain. He had to understand in clear terms the law he was required to obey. As drafted, sections 33B(1) and (2) of the Act were open to different interpretations which could lead to some offending CEOs suffering prejudice while others would go scot free depending on the interpretation that different courts would make. Therefore, section 33(B) (1) and (2) of the Act violated the Constitution in so far as any person contravening the same risked facing criminal liability without the benefit of understanding what s[he] was supposed to comply with. The penalties for contravention of section 33 B (2) were fairly severe and banks, financial institutions and their respective CEOs risked suffering severe penalties for failure to comply with unclear laws.
  33. In respect to sentencing, the Judiciary had published Sentencing Policy Guidelines to equip Courts and bring consistency, accountability, equity and transparency in sentencing. The principles underpinning sentencing were: proportionality; equality; uniformity; parity; consistency and impartiality; accountability and transparency; Inclusiveness; respect for Human rights and fundamental freedoms; and adhere to domestic and international law with due regard to recognised international and regional standards on sentencing.
  34. From the wording of section 33B (2), the offender could either be the bank or the customer. However, section 33B (3) provided a penalty for the bank and the CEOs only. The customer had been left out. It was not clear why only the bank and not the customer should be punished yet they would both be contravening the provisions of the law. That anomaly was evident when one compared the provision with the provisions of section 49 of the Act which was the general penalty section. Section 49 covered all offenders and was not discriminatory. Anyone who did not comply with should be subjected to the same treatment in regards to penalty. By failing to do so, section 33B of the Act was discriminatory and therefore unconstitutional.
  35. Section 33B (3) being challenged provided for a minimum fine of Kenya Shillings one million with a default penalty of a minimum imprisonment for a year. It could not be said that the discretion of a judicial officer was completely impaired or that mitigation was worthless because under the provisions of section 33B the Court could impose a higher penalty than the minimum prescribed. The Court had opportunity to consider mitigating factors and impose an appropriate sentence as per the Sentencing Guidelines.
  36. It was expected that in sentencing, a judicial officer would act responsibly and exercise discretion judiciously. One of the objects of the Sentencing Guidelines was to assist a judicial officer in identifying relevant factors so as to arrive at an appropriate and judicious sentence. It could not therefore be correct to say that the imposition of a severe sentence including life imprisonment was unconstitutional if the same was proportionate and reasonable and circumstances of the case. If, however, a party was aggrieved by a sentence, then s[he] retained the right to challenge it by way of appeal.
  37. The only unconstitutional aspect of the penal section of section 33B was that it discriminated against the banks and its CEOs. If eventually the Court was to declare as invalid section 33B, there would be no lacuna in the law as section 49 of the Act provided for general penalties for offences under the Act.
  38. A lesson to be drawn from the provisions of sections 4B, 4C and 4D of the Central Bank Act was that an integral feature of formulating monetary policy; it was a consultative process between CBK and the Executive (through the Cabinet Secretary, Treasury). It was also a process in which the National Assembly had an input when the monetary policy statements were placed before its appropriate committee for deliberation. Although CBK had the ultimate constitutional authority to formulate monetary policy, the collaborative involvement of the other two organs was testimony of the importance of matters of the nature and therefore the need to have the input of not only the Executive but Parliament, the peoples’ representative. One organ could not act in isolation.
  39. Although the provisions of section 33B were of matters that could be outside monetary policy, a framework that regulated interest rate charged by banks and financial Institutions had far reaching consequences. For that reason, the setting of an interest rate cap or any other regulations on interest rates could be enriched by a consultative and/or collaborative framework that drew input from stakeholders not in the least CBK. There was merit in the argument by CBK that the fixing of interest rates caps and the entire regulatory framework should not be arbitrary. But of course those were matters within the remit of the National Assembly and the Court could only make observations.
  40. The Court was aware that thousands of contracts had been entered by borrowers and lenders on the basis of the impugned provisions of section 33B. Although the provisions generally had constitutional underpinning, some aspects were unconstitutional. Therefore, the remedies granted would take into account the possible disruption that invalidating everything done under the unconstitutional aspects of the provisions could have on existing contracts. The possible harm should not be disproportionate to the harm that could result if the law was to be given a temporary respite.
  41. The approach would be taken for the provisions that were found to be vague, imprecise and ambiguous. Indeed, if the striking out of the provision was not temporarily suspended, there was the risk of throwing the entire banking industry in turmoil. The Circular no 4 of 2016 by CBK had brought some measure of certainty amongst stakeholders. That had to subsist before a new provision could be enacted.
Petition partly allowed
Orders:
  1. The provisions of section 33B of the Banking Act did not infringe on CBK’s constitutional mandate of formulating monetary policy stipulated under article 231 of the Constitution.
  2. sections 33B(1) and 33B(2) of the Banking Act were declared unconstitutional, null and void for being vague, ambiguous, imprecise and indefinite.
  3. In view of the consequences of Declaration 2 above, Declaration 2 was suspended for a period of twelve (12) months from the date of delivery of the judgment for the National Assembly to consider making appropriate amendments to the impugned sections.
  4. In default of order 3 above, the declaration of invalidity in Declaration 2 above would take effect.
  5. Section 33B (3) of the Banking Act was declared unconstitutional, null and void for being discriminatory contrary to articles 27 and 29 of the Constitution and infringement of fair hearing under Article 50 of the Constitution.
  6. As the case was a public interest matter, each party would bear its own costs.
Kenya Law
Case Updates Issue 011/2019
Case Summaries

JURISDICTION Regulation 87(2)(b)(iii) of the Elections (General) Regulations which required transposition of results on Form 37C declared null and void for contradicting section 39 of the Elections Act

Alfred Nganga Mutua & 2 others V Wavinya Ndeti & another
Petition Appeal 11 of 2018
(as consolidated with Petition 14 of 2018)
Supreme Court of Kenya at Nairobi
D K Maraga, CJ & P, M K Ibrahim, J B Ojwang, S N Ndungu, I Lenaola, SCJJ
December 21, 2018
Reported by Chelimo Eunice

Download the Decision

Jurisdiction- appellate jurisdiction-jurisdiction of the Court of Appeal-election petition appeals-appeals relating to matters of law-the meaning given to a matter of law in an election petition-claim that the Court of Appeal considered matters of fact contrary to section 85A of the Elections Act- where it was alleged that non conformity of the impugned Form 37C had not been pleaded before the Trial Court and was a factual issue-Elections Act, section 85A.
Statutes-interpretation of statutes-Elections Act-interpretation of section 39 of the Elections Act vis-a-vis regulation 87(2)(b)(iii) of the Elections (General) Regulations – whether the provisions of section 39 of the Elections Act with regard to the handling of the results in the presidential election apply mutatis mutandis to other elections- whether regulation 87(2)(b)(iii) of the Elections (General) Regulations which required the Constituency Returning Officer (CRO) to transpose results of each polling station on Form 37C in contradistinction to section 39 of the Elections Act was ultra vires- whether the CRO was required to transpose the results for the election of the county governor, senator and county women representative under section 39(1B) of the Elections Act into the results on the A forms from polling stations- Elections Act, section 39; Elections (General) Regulations, regulation 87(2)(b)(iii).
Electoral Law-election offences-participation in elections by public officers -County Government officer serving as an agent of a gubernatorial candidate-where it was alleged that a County Government Chief Officer acted as an agent of a gubernatorial candidate-nature of evidence necessary to prove the offence-what was the burden and standard of proof in such a case -Election Offences Act, section 15; Political Parties Act, section 45.
Electoral Law-statutory forms-forms used to declare the result of an election-the validity of Form 37C-legal requirements as to the form and content of Form 37C-effect of failure to state in Form 37C the results from all polling stations for each candidate in the election -Constitution of Kenya 2010, article 86; Elections Act, section 39(1)(B); Elections (General) Regulations, regulation 87(2); Interpretation and General Provisions Act (Cap 2), section 72; Statutory Instruments Act, section 26.

Brief facts:
The consolidated appeals by the appellants faulted the Court of Appeal for nullifying the 1st appellant’s election and directing the 2nd appellant (the Independent Electoral and Boundaries Commission (IEBC) to conduct a fresh election, arguing among others that the Court of Appeal paid undue regard to procedural technicalities contrary to article 159(2)(d) of the Constitution and that it misapprehended the burden and standard of proof in electoral disputes. The 1st respondent opposed the appeal arguing that it was fatally defective and therefore incompetent for failure to specify the constitutional provisions that the Court of Appeal misinterpreted or misapplied and founding the appeal upon various issues outside the Court’s jurisdiction under article 163(4)(a) of the Constitution.

Issues:

  1. Whether an appeal on verifiability of the election results under article 86(a) of the Constitution was competent.
  2. Whether the Court of Appeal considered matters of fact that it had no jurisdiction to entertain.
  3. Whether the Court of Appeal misapprehended the issues of burden and standard of proof in electoral disputes.
  4. Whether regulation 87(2)(b)(iii) of the Elections (General) Regulations which required the County Returning Officer to transpose results of each polling station on Form 37C in contradistinction to section 39 of the Elections Act was ultra vires, and therefore null and void.
  5. What was the effect of failure by the County Returning Officer to state the results for each candidate in the election from all polling stations in Form 37C?
  6. Whether the Court of Appeal paid undue regard to procedural technicalities and nullified the election which had been conducted in substantial compliance with the law on elections on minor and immaterial irregularities which did not affect the election result. Read More..

Relevant provisions of the Law
Elections Act;
Section 85A;
An appeal from the High Court in an election petition concerning membership of the National Assembly, Senate or the office of county governor shall lie to the Court of Appeal on matters of law only.

Section 39 (1B);
The commission shall appoint county returning officers to be responsible for tallying, announcement and declaration, in the prescribed form, of final results from constituencies in the county for purposes of the election of the county governor, senator and county women representative to the national assembly.

Elections (General) Regulations;
Regulation 87(2)(b)(iii);
(2) The county returning officer shall upon receipt of the results from the constituency returning officers as contemplated under regulation (1)—

(a) tally and announce the results for the county governor, senator and county woman representative to the National assembly;
(b) complete Forms 37C, 38C and 39C set out in the Schedule in which the county returning officer shall declare, as the case may be, the—

(i) name of the respective electoral area;
(ii) total number of registered voters;
(iii) votes cast for each candidate … in each polling station;
(iv) number of rejected votes for each constituency;
(v) aggregate number of votes cast in the respective electoral area; and aggregate number of rejected votes….”

Held :

  1. Verifiability of the election results under article 86(a) of the Constitution was the fulcrum of the appeal. Hence, the appeal, brought as of right under article 163(4)(a) of the Constitution was competent.
  2. On the format and the piecemeal filing of the record of appeal, the case of Yusuf Gitau Abdallah v. Building Centre (K) Ltd & 4 Others [2014] eKLR was distinguishable from the instant matter. In the Yusuf Gitau Abdallah case, the petitioner purported to appeal a High Court decision directly to the Supreme Court without any other proceedings, filed or anticipated. In the instant case, the 1st appellant’s application for stay of execution of the Court of Appeal judgement was filed pending the filing of an appeal. Even though the Court frown at the irregularity in the form of the petition and the piecemeal filing of the record of appeal, nevertheless the same was filed within the prescribed time of thirty (30) days. That, as well as the 1st appellant’s written submissions exceeding the length set out in the practice directions were irregularities curable by article 159(2)(b) of the Constitution. Hence the appeal was competently before the Court.
  3. Section 85A of the Elections Act limited the Court of Appeal’s jurisdiction in electoral disputes to only matters of law. The phrase matters of law meant a question or an issue involving:-
    1. the interpretation, or construction of a provision of the Constitution, an Act of Parliament, subsidiary legislation, or any legal doctrine, in an election petition in the High Court, concerning membership of the National Assembly, the Senate, or the office of County Governor;
    2. the application of a provision of the Constitution, an Act of Parliament, Subsidiary Legislation, or any legal doctrine, to a set of facts or evidence on record, by the trial judge in an election petition in the High Court concerning membership of the National Assembly, the Senate, or the office of County Governor;
    3. the conclusions arrived at by the trial judge in an election petition in the High Court concerning membership of the National Assembly, the Senate, or office of County Governor, where the appellant claimed that such conclusions were based on no evidence, or that the conclusions were not supported by the established facts or evidence on record, or that the conclusions were so perverse, or so illegal, that no reasonable tribunal would arrive at the same; it was not enough for the appellant to contend that the trial judge would probably have arrived at a different conclusion on the basis of the evidence.
  4. Pursuant to section 85A of the Elections Act, in an election appeal, an appellate court should not be drawn into considerations of the credibility of witnesses. Its engagement with the facts should be limited to satisfying itself whether the conclusions of the trial court were based on the evidence on record or whether they were so perverse that no reasonable tribunal would have arrived on them.
  5. Bearing in mind that the line between points of law and fact was opaque, an appellate court had to undertake a delicate examination to ensure that appeals were not out rightly and without proper investigation rejected on ground that they raised matters of fact if there were points of law also involved. Section 85A of the Elections Act should not be invoked to strike out appeals on account of inelegance in the drafting of the memorandum of appeal.
  6. The Court of Appeal did not veer into the credibility of witnesses or the calibration of evidence and reached its own conclusions. It did not exceed its jurisdiction under section 85A of the Elections Act.
  7. In the absence of any law prohibiting public officers from being engaged as election officials and more particularly in the absence of evidence of anything the employees of the Machakos County Government engaged in the election did or omitted to do that compromised their impartiality, IEBC’s conduct of the election was not compromised.
  8. Under section 45 of the Political Parties Act and section 15(1)(a) of the Elections Offences Act, it was an offence for any public officer to engage in any partisan political activity. Under section 15(2) of the Election Offences Act, it was equally an offence for any candidate to engage such an officer as her or his party’s agent. The allegation that 1st appellant’s party’s agent in the election was one and the same person as the Chief Officer of the Machakos County Government was therefore an allegation of commission of an election offence.
  9. The burden of proof lay upon the party alleging a fact to prove it to the required standard. The standard of proof of any election offence or quasi criminal conduct was that of beyond reasonable doubt. The allegation that Maendeleo Chap Chap Party’s (MCCP) agent was one and the same person as the Chief Officer of the Machakos County Government amounted to commission of an election offence, proof of which the law required to be beyond reasonable doubt. Other than making that allegation in their petition and in the evidence of the 1st respondent, the respondents never provided any proof of the allegation. A mere allegation could not be proof, leave alone proof to the required standard of beyond reasonable doubt. The respondents needed to do more than that. To discharge their burden of proof on that allegation, the respondents should have invoked article 35 of the Constitution and obtained records from the Machakos County Government to verify that allegation. Thus the Court of Appeal erred in basing its nullification of the 1st appellant’s election partly on that ground.
  10. The issue of non-compliance of the impugned Form 37C was pleaded in the petition before the Trial Court, since the respondents had pleaded that the votes garnered by each candidate had wrongly been captured on impugned Form 37C and that IEBC failed to use standardized statutory forms to declare the results of the elections. Consequently, the ground of appeal based on failure to plead the illegality of Form 37C was dismissed.
  11. Electoral law was a special jurisdiction whose interpretation was strictly confined within the parameters of the Constitution and relevant electoral statutes. In electoral disputes, save where the contrary so demands, the words of a statutory provision should be given their ordinary meaning and strictly interpreted in defining the rights of the parties to the dispute.
  12. The words of section 39(1B) of the Elections Act required the County Returning Officer to announce and declare the election of the county governor, county senator and county women representative in the prescribed form, of final results from constituencies in the county. Regulation 87(1)(b)(iii) of the Elections (General) Regulations, 2012, on the other hand went further to require Forms 37C, 38C and 39C used for the declaration of the election results of the county governor, senator and county women representative respectively to have a column for the votes cast for each candidate in each polling station. And the format of those forms, contained in the schedule to those Regulations, had such a column.
  13. The impugned Form 37C that was used in the declaration of the Machakos gubernatorial election results omitted a column for votes cast for each candidate in each polling station and was therefore not in the prescribed form. It fouled regulation 87(2)(b)(iii) of the Regulations and was thus non-compliant.
  14. The provisions of section 39 of the Elections Act could not be said to apply mutatis mutandis to other elections with regard to the handling of the results in the presidential election. Read as a whole, that section made a clear distinction between the handling of results in the presidential election and other elections.
  15. It was clear from section 39 (1) of the Elections Act that at the constituency level, the constituency returning officers (CROs) were required to tally and collate the final results from each polling station and announce the results for the election of a member of the national assembly and members of the county assembly and for the election of the President, county governor, senator and county women representative to the national assembly. The results from the polling stations were on the A forms which were the primary documents. CROs were required to submit, in the prescribed form, the collated results for the election of the President to the national tallying centre and the collated results for the election of the county governor, senator and county women representative to the respective county returning officer.
  16. Section 39 (1C) of the Elections Act dealt with the tally, collation and announcement of the presidential results at the county level. There was a clear distinction between that subsection and subsection (1B). Unlike subsection (1B), subsection (1C) required under clause (a) the electronic transmission and physical delivery of the tabulated results of an election for the President from a polling station to the constituency tallying centre and to the national tallying centre.
  17. Section 39 (1B) of the Elections Act dealt with tallying, collation and announcement or declaration of election results at the county level. The section made no mention of results from polling stations. It only talked of final results from constituencies in the county. The section required the county returning officers, for purposes of the election of the county governor, senator and county women representative, to tally only final results from constituencies in the county. The final results from the constituencies were on the B forms. It followed that in the tallying and announcement of the results for the election of the county governor, senator and county women representative, although they would have been delivered to the CRO and they would therefore be in his possession at the time of declaring the results, the CRO did not go into the figures in the A forms. He would only tally and collate into the C forms the results on the B forms from the constituencies in the county. The Court of Appeal erred in holding that the CRO was concerned and had to be concerned with the Forms 37A’s being the primary documents that capture the results at the polling stations.
  18. The position of the President was different from those of other elective posts. Because of the importance of the office of the President, section 39 of the Elections Act demanded for a more rigorous process in the tally, collation and verification of the presidential election results than those of the other elections. That was why clause (b) of subsection (1C) demanded not only for the tally but also for the verification of the results received at the constituency tallying centre and the national tallying centre. Hence, there was a clear distinction between the handling of the presidential election results and those of other elections.
  19. The tallying and announcement of the results for the election of the county governor, senator and county women representative, under section 39(1B) of the Elections Act, the CRO was not required to go into the results on the A forms from polling stations. But in contradistinction, regulation 87(2)(b)(iii) of the Regulations which was supposed to give effect to that section, required the CRO to transpose results of each polling station on Form 37C. For that purpose, the prescribed template of that form contained in the schedule to the Regulations had a column for results cast for each candidate at each polling station. That was an additional requirement that was not in the section which incidentally formed the turning point of the Court of Appeal decision giving rise to the instant appeal.
  20. A provision of any subsidiary legislation that conflicted with that of the parent Act was ultra vires. Thus regulation 87(2)(b)(iii) of the Elections (General) Regulations, 2012, was ultra vires section 39(1B) of the Elections Act and was null and void ab initio. The Court assumed it never existed and concluded that the 3rd appellant was right in ignoring it and omitting from the impugned Form 37C used in the declaration of the Machakos County gubernatorial election results a column with results from the polling stations.
  21. In the light of the provisions of section 72 of Interpretation and General Provisions Act and section 26 of the Statutory Instruments Act, and in the absence of any challenge to the results posited on it, even if regulation 87(2)(b)(iii) of the Regulations were not ultra vires, the variation on Form 37C was minor and inconsequential.
  22. Section 72 of the Interpretation and General Provisions Act and section 26(2) of the Statutory Instruments Act, 2013, made it clear that an instrument or document should not be void by reason of a deviation from the prescribed form if the deviation did not affect the substance of the instrument or document or was not calculated to mislead. The most crucial item on the said form that required verifiability was the data of the election results. Even if regulation 87(2)(b)(iii) of the Regulations was not ultra vires, the transposition of the results on to Form 37C would not be the only way of verifying the results of the election. The deviation on the impugned Form 37C was immaterial.
  23. The distinction between the handling of presidential election results and those of others did not in any way affect the verification demanded by article 86(a) of the Constitution. According to regulation 76 of the Regulations, after voting closes, the ballot papers were to be held up and openly displayed for all the candidates or their agents to verify that they were valid votes and ascertain for who they were cast. The counting was opened and any dissatisfied candidate was entitled to demand for a recount up to two times. The countersigning of the result forms by the candidates and/or their agents was a declaration that they had verified and were satisfied that the data was correct. The candidates and/or their agents were involved and they countersign the forms used in the declaration of results at the subsequent tallying and collations of the results at the constituency, county and the national tallying centres.
  24. The impugned Form 37C was signed not only by the CRO but also by the candidates’ agents, including the 1st respondent’s agent. The data on that Form left the 1st appellant ahead of the 1st respondent with a margin of over 40,000 votes. The deviation on the impugned Form 37C that the 3rd appellant used to declare the results would not have affected the verifiability of those results. Unverifiability could not be pegged only on failure to transpose the polling station results on Form 37C.
  25. The Court of Appeal erred in holding that the Machakos County gubernatorial election was not conducted in accordance with constitutional principles thus rendering it null and void. To the contrary, the 1st appellant was duly elected governor of Machakos County in a fair and free election.

As per S.N. Ndungu, SCJ, concurring.

  1. The finding on the anomalies in Form 37C not being in the prescribed form, metamorphosised into the central issue in the appeal leading to the conclusion by the Court of Appeal that the results as declared were not done with reference to Form 37As and were therefore not verifiable and were unconstitutional.
  2. Forms 37C were in fact un-pleaded. There was no specific mention of the format of Form 37 C (that it was in excel) other than what was mentioned at paragraph 76 of the petition at the High Court. Further, the evidence did not allude to non-use of standardized forms but at paragraph 46, the petitioner mentioned anomalies in the form which were stated to be; 3 different Form 37C’s; non signing of the Forms by agents and or different orders of the purported agents in the different forms and missing security features on Forms.
  3. The pleadings as to Form 37C were vague, without a reasonable degree of precision as it was not immediately clear that they were alluding to the improper format of the said Form. Parties were bound by their pleadings. Pleadings were the bedrock upon which all the proceedings derive from and it followed that any evidence adduced in a matter had to be in consonance with the pleadings.
  4. Issues to be considered had to be pleaded, and those pleadings had to be set out in a clear and precise manner. Un-pleaded issues were not an anomaly that could be cured by article 159 of the Constitution since that article wasnot a panacea for all procedural shortfalls. Moreover, with the stringent nature of election petitions, courts act only within the terms of the statute, as guided by the Constitution.
  5. The pleadings were binding not just on the parties to the suit, but on the Court as well. A court could not delve into matters not specifically pleaded and a vague claim could not sustain a cause of action. The matter was not properly before the Court of Appeal and it ought not to have been considered.

Appeal allowed.
Orders:

  1. The judgment of the Court of Appeal dated June 8, 2018 was set aside and that of the High Court was reinstated.
  2. The declaration of the election results by the Independent Electoral and Boundaries Commission in respect of the Governor of Machakos County was affirmed.
  3. The appellants were to have the costs of the appeal as well as those of the courts below.
JURISDICTION Evidence relating to unpleaded facts arising from a scrutiny report cannot be relied on by a party to an election petition.

Walter Enock Nyambati Osebe v Independent Electoral & Boundaries Commission & 2 others
Petition 28 of 2018
Supreme Court of Kenya at Nairobi
M K Ibrahim, J B Ojwang, S C Wanjala, Njoki Ndungu & I Lenaola, SCJJ
January 30, 2019
Reported by Beryl A Ikamari

Download the Decision

Jurisdiction-jurisdiction of the Supreme Court-appellate jurisdiction of the Supreme Court-matters of constitutional interpretation and application-claim that a petition of appeal before the Supreme Court, which was filed without leave/certification, was not one that raised matters of constitutional interpretation or application-whether the fact that electoral laws had a constitutional underpinning meant that election petition appeals were generally appellable as of right at the Supreme Court-Constitution of Kenya 2010, articles 81, 86 & 163(4)(a).
Electoral Laws-scrutiny-grant of orders of scrutiny-probative value of evidence revealed during scrutiny-where a scrutiny report provided evidence relating to electoral irregularities entailed details that were not part of the pleadings-whether a party could rely on evidence from a scrutiny report in support of his or her case, where the evidence did not relate to matters revealed in the pleadings.

Brief Facts:
The petitioner appealed against the decision of the Court of Appeal which upheld the High Court's decision. The High Court delivered a judgment to the effect that the 3rd respondent was validly elected as the governor for Nyamira County on August 8, 2017.
At the High Court the petitioner cited various electoral irregularities and malpractices and sought various orders including orders for scrutiny and recount and also nullification of the result of the election. The High Court dismissed the petition and found that the petitioner had not discharged the burden of proof and also that he could not rely on the scrutiny report to introduce new grounds that had not been pleaded in the petition. On appeal at the Court of Appeal, the Court upheld the High Court's decision and observed that the petitioner had shifted his focus from the allegations made in the petition to discrepancies and irregularities revealed in the scrutiny report but not pleaded in the petition.
The petitioner lodged a further appeal at the Supreme Court. Amongst the grounds of the appeal was the contention that the Court of Appeal erred in disregarding the scrutiny report and concluding that the petition sought nullification on the basis of unpleaded grounds and that the Court of Appeal affirmed the findings of the High Court which were not supported by evidence. At the Supreme Court, the 3rd respondent filed an application seeking orders to strike out the petition on the ground that it was filed in violation of rules 31(1) and 33 of the Supreme Court Rules. The 3rd respondent stated that the petition was filed by strangers (a firm of advocates that was not on record), there was no valid notice of appeal, the petition sought to adduce new evidence through affidavits and that the petition did not adhere to Court Practice Directions.

Issues:

  1. Whether the appeal could be heard and determined by the Supreme Court as an appeal that raised questions of constitutional interpretation or application.
  2. Whether a petitioner could rely on evidence emerging out of a scrutiny exercise, which was not based on the petitioner's pleadings, in support of his case. Read More...

Held:

  1. Article 163 (4) (a) of the Constitution provided for the lodging of an appeal to the Supreme Court, as of right, in any case involving the interpretation or application of the Constitution. That right to appeal as of right was not applicable to every election petition appeal. It was necessary for an election petition to involve a question on the interpretation or application of the Constitution.
  2. The petition of appeal and the memorandum of appeal did not raise any issue of constitutional interpretation or application. The issues identified by the petitioner did not bring the petition within the ambit of article 163(4)(a).
  3. The High Court and the Court of Appeal found that the irregularities revealed in the scrutiny report were not of such a degree as to affect the election result. There was no reason to fault the assessment of the two superior courts in that regard.
  4. Scrutiny was not meant to aid a petitioner to find evidence in support of a case. A basis had to be laid in order for orders of scrutiny to be made. That basis was to be laid in the pleadings and affidavit evidence. Where a court ordered for scrutiny suo moto, it had to give reasons for the order. Parties were bound by their pleadings and they were not allowed to latch onto any evidence in order to make a case that they had not made in their initial pleadings. The Court of Appeal rightfully made the finding that the petitioner had moved out of his original petition at the High Court and was urging a different case based on unpleaded claims.
  5. The petitioner did not properly invoke the Supreme Court's jurisdiction. The petition of appeal did not raise any issue involving the interpretation or application of the Constitution.

Petition dismissed.

CONSTITUTIONAL LAW The mandate of the National Land Commission with respect to historical land injustices is not exclusive.

Chief Land Registrar & 4 others v Nathan Tirop Koech & 4 others
Civil Appeal 51 & 58 of 2016
Court of Appeal at Eldoret
E M Githinji, J Mohammed & J Otieno-Odek, JJA
December 6, 2018
Reported by Beryl A Ikamari

Download the Decision

Constitutional Law-institution of a constitutional petition-locus standi-non-joinder of petitioners-whether, in a situation where there were other co-owners or potential petitioners, the petitioner would lack the locus standi to institute a petition for the enforcement of property rights.
Constitutional Law-constitutional petition-drafting of a constitutional petition-precision in drafting a constitutional petition-whether a constitutional petition for the enforcement of property rights was drafted in a manner that disclosed the articles of the Constitution that had been violated and the manner in which they had been violated.
Constitutional Law-institution of a constitutional petition-time within which to file a constitutional petition-effect of an alleged 35 year delay in filing a constitutional petition-whether the cause of action would be said to have been defeated by the delay or the delay would be seen as a form of waiver or acquiescence.
Jurisdiction-jurisdiction of the Environment and Land Court-jurisdiction relating to historical land injustices-whether the National Land Commission had the exclusive jurisdiction to handle historical land injustices in the first instance.
Constitutional Law-interpretation of constitutional provisions-interpretation of article 67(2)(e) of the Constitution-mandate of the National Land Commission with respect to historical land injustices-whether the mandate of the National Commission with respect to historical land injustices was exclusive-Constitution of Kenya 2010, article 67(2)(e).
Constitutional Law-fundamental rights and freedoms-right to property-claim that land was illegally and irregularly compulsorily acquired-whether the right to property was violated-Constitution of Kenya 2010, article 40.
Constitutional Law-enforcement of fundamental rights and freedoms-remedies for violation of fundamental rights and freedoms-damages-considerations of the Court in setting aside an award of damages-whether the quantum of damages assessed by the Trial Court was assessed properly.
Land Law-damages-special damages-mesne profits-setting aside an award of mesne profits by the Trial Court-where a nominal amount was awarded as mesne profits without that amount having been specifically pleaded and proved-whether that award would be set aside.

Brief facts:
On June 28, 1965, 5 individuals, purchased the suit property being IR No. 17542 – LR No. 10492 measuring 3,236 acres (less 26 acres road reserve) as purchasers in common with equal shares at a consideration of Ksh.360,000/=. The purchase was done using their savings and a loan from Land and Agricultural Bank. When they failed to pay the loan as agreed, a decision was made to sell a portion of the property measuring 51.49 hectares (126 acres) to Huruma Farmers Company Limited. The entire debt owed to Land and Agricultural Bank was paid using the proceeds of the sale.
On August 7, 1976, the joint owners successfully applied to the Turbo-Soy Land Control Board for consent to sub-divide the suit land into six (6) portions to be registered in the individual names of the joint owners and the 6th portion measuring 51.49 ha was to be transferred to Huruma Farmers Company Limited. Later, on January 24, 1980, the 1st to 4th respondents forwarded the title grant to the suit premises to the 1st appellant (Chief Land Registrar) for purposes of surrender and issuance of separate title deeds as per the approved subdivisions.
The 1st to 4th respondents complained that the Chief Land Registrar failed to divide the suit property and to issue title deeds to the five original joint owners who were each entitled to 614 acres of land.
In January 1996, the estate of one of the original proprietors was registered as owner of land parcel Eldoret Municipality (King’ong’o) Block 21/306 measuring only 21.239 Ha. The deceased had sold 15 acres of land to third parties and therefore there was 546 acres which remained unaccounted for by the appellants. Later the 1st to 4th respondents learnt that there had been illegal and unlawful acquisition and sub-division of the suit property as follows:-

  1. In April 1979, 666.41 Ha of the suit land was excised without the consent of the joint owners and renamed Eldoret Municipality Block 15/1 and registered in the name of the original five joint owners although the lease title was never issued to them.
  2. In September 1983, the said parcel of Eldoret Municipality Block 15/1 was apparently surrendered to the Government of Kenya.
  3. In November 1992, the remaining portion of LR No. 10492 (about 641 ha) was amalgamated and renamed Eldoret Municipality (King’ong’o) Block 23/1-355.
  4. Both Block 15/1 and Block 23/1-355 were later sub-divided and hundreds of title deeds were issued.

The 1st to 4th respondents filed a petition premised on breaches of the right to property and sought various reliefs including monetary compensation and declaratory relief. The High Court allowed the petition and granted the reliefs sought. Against the High Court decision, the appellants lodged an appeal on various grounds. The grounds included an assertion that the 1st to 4th respondents had no locus to institute the High Court petition, that there was delay in filing the petition, that the petition was not drafted with precision and that the deceased joint owners had slept on their rights and acquiesced to the alleged violations. It was also alleged that the 1st to 4th respondents had no rights over the suit premises and there was no evidence that their rights had been infringed and that the claim was an alleged historical injustice over which the National Land Commission (NLC) had exclusive jurisdiction.

Issues:

  1. Whether, in light of the existence of other co-owners of the suit property who were not co-petitioners, the 1st to 4th respondents had the locus standi necessary to institute the petition claiming a violation of their rights to property.
  2. Whether the drafting of the petition met requirements on precision in drafting constitutional petitions for the enforcement of fundamental rights and freedoms.
  3. Whether the 1st to 4th respondents' delay in filing the petition meant that they had acquiesced to the violation of their proprietary rights and were estopped from filing the petition.
  4. Whether the cause of action entailed a historical injustice which should have been handled in the first instance by the National Land Commission.
  5. Whether the National Land Commission had exclusive jurisdiction in matters relating to historical land injustices.
  6. Whether the 1st to 4th respondents proved that their right to property had been violated through illegal and irregular acquisition of their land.
  7. When would an appellate court interfere with an award of damages by the Trial Court?
  8. Whether a nominal sum of money could be awarded as mesne profits without that sum having been specifically pleaded for and proved. Read More...

Held:

  1. The appellants did not deny that the original five owners of the suit land had an interest in the property but they contended that other people also had a beneficial interest in the property. The fact that there were other people with an interest in the property, did not deny the 1st to 4th respondents locus standi. The fact that other co-owners or beneficiaries were not co-petitioners did not disentitle them from filing the suit. In principle, a suit should not be struck out or defeated for joinder or non-joinder of a party, except where the non-joinder was a bar to the manageability of a suit or where a decree that could be passed might become infructuous or in-executable.
  2. The 1st to 4th respondents claimed proprietary interest in the suit property and their claim conferred upon them locus standi to institute proceedings alleging violation of their proprietary rights in the property. It did not matter how small their interest was or how small the portion of land that they claimed was.
  3. The amended petition clearly identified the suit land and in paragraph 24 it set out the particulars of breach of the petitioner's constitutional rights. The appellant's replying affidavits showed that they understood the grievance of the 1st to 4th respondents in relation to the suit property. Such a response to the amended petition showed that the 1st to 4th respondents set out their claim against the appellants with a reasonable degree of precision.
  4. Laches meant the failure or neglect, for an unreasonable length of time, to do that which by exercising due diligence could or should have been done earlier; it was negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it had either abandoned it or declined to assert it. Laches entailed an equitable defence based upon grounds of public policy which required the discouragement of stale claims for the peace of society.
  5. The petition was essentially a petition to enforce the constitutional right to property. There was no time limit for filing a constitutional petition. The law on limitation of actions could not be used to shield the state or any person from claims of enforcement of fundamental rights and freedoms.
  6. There could be no estoppel against the Constitution which was the paramount law of the land. A person could not acquiesce or waive fundamental rights and freedoms protected in the Constitution. Fundamental rights and freedoms were guaranteed as a matter of public policy and therefore, the doctrine of inordinate delay, estoppel, acquiescence or waiver could not unequivocally be applied as a bar to the enforcement of fundamental rights.
  7. Laches was a principle of general application that could apply in constitutional petitions pertaining to alleged breaches of fundamental rights. However, delay in enforcing a claim for fundamental rights could be permitted or denied depending on the circumstances of each case.
  8. Pursuant to article 67(2)(e) of the Constitution, one of the mandates of the National Land Commission (NLC) was to initiate investigation, on its own initiative or on a complaint into present or historical land injustices and recommend appropriate redress. An amendment to section 15(3) (e) of the National Land Commission Act introduced a limitation period of 5 years for claims relating to historical land injustices. A claim on historical land injustices would not be entertained after a period of five years from the date of commencement of the Land Laws (Amendment) Act.
  9. Section 15 (3) (d) of the National Land Commission Act provided that a historical injustice claim was not admissible where an action or omission by a claimant amounted to surrender or renouncement of the right to the land in question. There was an entry in the register which was a surrender of the grant and title to the suit property. The claim was therefore outside the mandate of the National Land Commission.
  10. The Court had jurisdiction to hear and determine any claim relating to historical injustice regardless of whether the NLC was seized of the matter. The NLC had the mandate to investigate present or historical land injustices and if the NLC were to have an initial and exclusive mandate, it would mean that all cases on land injustices could only be handled by the NLC and not courts. That would prima facie render the Environment and Land Courts redundant. Furthermore, section 15 (3) (b) of the National Land Commission Act permitted the Environment and Land Court to deal with historical injustice claims capable of being addressed through the ordinary court system.
  11. Neither the Constitution nor the National Land Commission Act ousted the jurisdiction of the High Court to hear and determine a claim founded on an historical injustice. The petition did not refer to the cause of action as a historical injustice. A party could not compel the other to frame a cause of action in a certain way.
  12. A letter dated November 25, 1981 indicated that there were purchasers of the sub-divisions of the suit property and there was a proposal to issue titles directly to those purchasers. Apart from the five original owners there were other persons with interests in the suit premises.
  13. Evidence on record revealed that on September 21, 1983, a Surrender of Lease to the government of Kenya of Eldoret Municipality Block 15/1 measuring 666.41 Ha was registered. That surrender ipso jure extinguished all rights and interests of the then registered proprietors over the suit property. There was a presumption that acts done by a public official were lawfully done and all procedures were duly followed. It was for the 1st to 4th respondents to prove that the surrender was unlawful. The 1st to 4th respondents had the option of making an application to compel the Commissioner of Lands to produce the original instrument of surrender, the memorial and endorsement thereon but they failed to do so.
  14. The High Court made the finding that the act of the Commissioner for Lands in surrendering back to the government a portion of the suit premises, was an act of compulsory acquisition of the suit premises. For the following reasons that was an erroneous finding:-
    1. a surrender of grant or instrument of title was not compulsory acquisition-surrender of title to land was governed by a different legal regime compared to the Land Acquisition Act which governed compulsory acquisition;
    2. registration of surrender was evidence of surrender and under sections 97(1) and 100 of the Evidence Act, no oral evidence was admissible to contradict or vary the contents of the documentary evidence indicating surrender; and,
    3. it was the registered proprietors and not the Commissioner of Lands that surrendered the land- there was evidence that the registered proprietors returned the original title and grant relating to the suit property.
  15. Section 97(1) of the Evidence Act inter alia stipulated that when the terms of a grant or any other disposition of property had been reduced to the form of a document, and in all cases in which any matter was required by law to be reduced to the form of a document, no evidence would be given in proof of such grant or other disposition except the document itself or secondary evidence of its contents in cases in which secondary evidence was admissible. Therefore, there was need for documentary evidence relating to the surrender.
  16. By Gazette Notice No. 5948 dated December 7, 1987 and published on December 24, 1987, the government compulsorily acquired part of Block 15/237, Block 15/238 and Block 15/12. By Gazette Notice No. 1372 dated May 3, 1976 and Gazette Notice No. 1373 dated May 3, 1976, the government compulsorily acquired part of LR No. 10492. Compulsory acquisition of parcels of the suit premises was done by the government.
  17. The letters on record indicated that the original five owners had knowledge of the subdivisions and actively participated in sub-division and re-subdivision of the suit property and the subsequent sale of portions of the sub-divided plots to third parties.
  18. Two letters dated February 23, 1980 and November 25, 1981 from the Commissioner of Lands to the advocate for the original five registered proprietors, indicated that there were sub-divisions on the suit premises and that there were third party purchasers of the sub-divided plots. Through the letters written to their advocate, the original five proprietors were made aware of that.
  19. The High Court erred in evaluating the evidence as it did not consider the content and proprietary impact of the letters and correspondence. If it had considered those letters, the High Court would not have made the finding that sub-divisions in the suit property amounted to compulsory acquisition as opposed to efforts to sub-divide the property and issue titles to third party purchasers, as instructed by the five original proprietors through their advocate or persons with whom they entered into agreements to purchase the sub-divided portions of the land.
  20. On record there were letters from the Commissioner of Lands to the advocate for the five original proprietors. However, the replies of that advocate to the letters were missing from the record. The 1st to 4th respondents did not tender that evidence. The High Court did not have all the relevant documentations when it concluded that, on a balance of probabilities, the process of surrender of the suit land to the Government of Kenya and conversion of the land regime from RTA to RLA was characterized by procedural impropriety and illegality.
  21. The High Court failed to consider the fact that under section 70(1) of the Registration of Titles Act, the Commissioner of Lands had power to combine and amalgamate plots. Additionally, under sections 65(1)(a) and 5 of the Registration of Titles Act, the Commissioner of Lands had power to call for a document. The High Court did not consider those powers and did not consider whether the Commissioner unlawfully exercised power when asking the original proprietor's advocate to surrender the grant for purposes of issuance of individual titles of the sub-divided suit property.
  22. On a balance of probabilities, the petitioners did not prove and establish that the suit property was illegally, un-procedurally and unlawfully seized by the appellants. Also, the 1st to 4th respondents did not prove on balance of probabilities that the suit property was illegally sub-divided and re-subdivided. There was ample evidence on record showing active participation by the original registered proprietors in sub-division and re-subdivision of the suit property and negotiating the purchase transactions for the ensuing sub-plots with third parties.
  23. There were principles related to the setting aside of an award of damages. In interfering with an award of damages, the Court would consider whether in awarding the damages the Trial Court took into account an irrelevant factor, or left out of account a relevant one, or that, short of that, the amount was so inordinately low or so inordinately high that it was a wholly erroneous estimate of the damage.
  24. Valuation was a question of fact and the value of property should be determined fairly and reasonably. The correct principle of valuation applicable to a given case was a question of law. A valuer's report should indicate the estimated value of the property and the estimation should be done carefully. Unless the Court was satisfied about the adequacy of the price, adoption and confirmation of value as per the valuation report would not be a proper exercise of judicial discretion.
  25. It was not clear how the High Court arrived at the determination that the sums in the valuation report were reasonable. The fact that a valuation report was not controverted, did not make the report reasonable. The Court had to undertake an analysis and determine the accuracy, quality and appropriateness of the report, and ascertain the relevance of data used, enquiries made and suitability of methods and techniques employed, and finally, the Court was to determine whether the analysis, opinions and conclusions in the valuation report were reasonable.
  26. The valuation report stated that the property was valued free from encumbrances and for purposes of the petition. It was not clear whether the value would have been different if it was not done for purposes of the petition and it was unclear why the valuer assessed the property as one that was free from encumbrances yet the record showed that third parties were in possession of portions of the property.
  27. The valuation report was silent on the compensation paid by the government upon compulsory acquisition of portions of the property, it did not comprehensively state that the value given was a fair market value at the material time, it did not succinctly specify the dependent factual circumstances such as zoning and the unique characteristics of the property and it did not indicate whether the assigned value was based on comparable market, income and cost valuation approach.
  28. The High Court did not analyse the valuation report tendered in evidence or explain why it deemed the valuation report to be reasonable. Discretion should be exercised on the basis of sound judicial principles and not capriciously or whimsically. Without reasons as to why the High Court found the valuation report reasonable, its determination of the compensation awardable took into account irrelevant considerations and or failed to take into account relevant considerations.
  29. Mesne profits were special damages which had to be pleaded and proved. Adjudication on mesne profits was a pure question of fact. The 1st to 4th respondents did not plead the sum of Ksh. 500,000,000/= awarded by the High Court as mesne profits. They also did not satisfy the High Court that they ought to be awarded the sum of Ksh. 2,690,603,339/= pleaded in the amended petition as mesne profit.
  30. Having made a finding that the 1st to 4th respondents were not entitled to Kshs. 2,690,603,339/= as mesne profits, it was not open to the High Court to substitute its own figure of Kshs. 500,000,000/= and make an award of the same as mesne profits. The High Court did not explain how it arrived at the sum of Kshs. 500,000,000/=.

Appeal allowed.
Orders:-

  1. The Judgment of the Environment and Land Court dated April 15, 2016 and the declaratory orders and decree arising therefrom were set aside.
  2. The Petitions filed before the High Court were dismissed.
  3. The 1st to 4th Respondents were to bear the cost of the petition before the High Court and costs in the appeal.
JURISDICTION Supreme Court affirms the declared results for the senatorial elections for Lamu County held on August 8, 2017.

Anuar Loitiptip v Independent Electoral & Boundaries Commission & 2 others
Petition 18 & 20 of 2018
Supreme Court of Kenya at Nairobi
D K Maraga, CJ & P, M K Ibrahim, J B Ojwang, S C Wanjala, Njoki Ndungu & I Lenaola, SCJJ
January 18, 2019
Reported by Beryl A Ikamari

Download the Decision

Jurisdiction-jurisdiction of the Supreme Court-appellate jurisdiction of the Supreme Court-matters that were appellable as of right-matters of constitutional interpretation and application-whether a Supreme Court appeal raised matters of constitutional interpretation and application which were canvassed in the Superior Courts-Constitution of Kenya 2010, article 163(4)(a).
Electoral Law-election petition appeal-filing of a notice of appeal-time for filing a notice of appeal in an election petition appeal against a ruling on an interlocutory application-effect of failure to file a notice of appeal-Court of Appeal (Election Petition) Rules, 2017, rule 6; Court of Appeal Rules 2010, rule 75.
Electoral Law-appellate jurisdiction-jurisdiction of the Court of Appeal in election petition appeals-matters that would constitute matters of law-whether in an election petition appeal, the Court of Appeal could consider evidence and rely on findings of fact which were not made at the trial Court, in making its determinations-Elections Act, No 24 of 2011, section 85A.
Evidence Law-burden of proof-burden of proof and standard of proof in election petitions-discharge of the burden of proof by a petitioner and the shifting of the burden of proof to the respondent-where evidence of non-conformities with electoral laws arising in the conduct of an election was expunged from the Court's record-whether the burden of proof shifted to the respondents-Evidence Act (Cap 80) sections 108 & 109.
Civil Practice and Procedure-pleadings-nature of documents that would constitute pleadings-annexures to an affidavit-whether annexures to an affidavit were part of pleadings.

Brief facts:
There were two petitions before the Court. Both petitions sought to reverse the Court of Appeal's decision to nullify the election of the appellant as the Senator of Lamu County. The appellant was declared the winner of the senatorial elections for Lamu County, held on August 8, 2017. The 3rd respondent came in second in the elections.
At the High Court, the 3rd respondent filed a petition in which he faulted the conduct of the elections. He cited various electoral irregularities and malpractices including allegations that he was not given an opportunity to appoint agents, some ballot papers were tampered with, some forms were not signed and stamped by the presiding officers and some presiding officers were not gazetted. In the course of the High Court proceedings, the 3rd respondent made various applications which included two applications for scrutiny and recount but they were dismissed.
Ultimately, the High Court held that the Lamu senatorial elections were free and fair and the petition was dismissed. The High Court found that it lacked jurisdiction to adjudicate on the question concerning the appointment of party agents as it was a question within the jurisdiction of the Political Parties Disputes Tribunal (PPDT). The High Court also found that there was no evidence to support allegations on the question as to whether the election was free, fair and credible. Particularly, the High Court found that the allegations, that the declared results found in Form 38C for Kiangwe Primary School Polling Station exceeded the number of voters, were not raised in the pleadings or in the evidence and were only raised during submissions.
Against the High Court decision, the 3rd respondent filed an appeal at the Court of Appeal. In its findings the Court of Appeal held that the High Court was right in making the determination that the dispute on appointment of party agents ought to have been referred to the PPDT. It however, faulted the High Court's decision to disallow the application for scrutiny and found that there was sufficient material placed before the High Court to support the conclusion that there was need to conduct a scrutiny with regard to 9 polling stations. Those 9 polling stations had Forms 38A that had not been signed by the presiding officers or their deputies. On the issue of the votes cast exceeding the number of registered voters at Kiangwe Primary School Polling Station, the Court of Appeal found that any party could rely on the issue as it had been pleaded by the 1st and 2nd respondents in their reply to the petition. The Court of Appeal found that the slim winning margin in the elections would not stand when Kiangwe Primary School Polling Station was considered and hence the petitioner could not have been validly elected. The Court of Appeal made orders for the conduct of fresh senatorial elections for Lamu County.
Two petitions were filed at the Supreme Court against the Court of Appeal decision. At the Supreme Court, the appellants contended that no party could rely on averments made by any other party which were at variance with their own pleadings. The appellants stated that the allegations on votes cast exceeding the number of registered voters at Kiangwe Primary School Polling Station was properly explained as a transposition error but the Court of Appeal ignored the explanation. They also argued that the Court of Appeal lacked jurisdiction to consider issues arising from the interlocutory applications made at the High Court as no notice of appeal was lodged with respect to those applications. The appellants added that there was no evidence tendered to show that Forms 38A were not signed and that therefore the situation warranted the issuance of orders of scrutiny.

Issues:

  1. Whether the Supreme Court had jurisdiction to hear and determine the matter as one involving questions of constitutional interpretation and application.
  2. In an election petition, when should an appeal against the High Court's decision on an interlocutory application be made?
  3. Whether the Court of Appeal had jurisdiction to consider an appeal relating to a ruling on an interlocutory application, where a notice of appeal had not be filed as concerned the ruling.
  4. In an election petition appeal to the Court of Appeal, what matters would constitute matters of law?
  5. When would the Court of Appeal be said to have exceeded its jurisdiction by delving into matters of fact contrary to section 85A of the Elections Act?
  6. Whether the petitioner laid sufficient basis for the burden of proof, in an election petition, to shift to the respondents.
  7. Whether annexures to an affidavit, in an election petition, were part of pleadings.
  8. Read More..

Held:

  1. The Supreme Court's appellate jurisdiction was provided for in article 163(4) of the Constitution. Under section 15 of the Supreme Court Act, leave of court was required for purposes of appealing to the Supreme Court except where the appeal related to matters of constitutional interpretation or application. An appeal relating to matters of constitutional interpretation or application had to originate from the Court of Appeal where issues of contestation revolved around the interpretation or application of the Constitution. It was necessary for the appellant to challenge the Court of Appeal's interpretation or application of the Constitution in the suit.
  2. The High Court petition was anchored on articles 81(e), 86, 85 (5)(h) of the Constitution as well as section 30 of the Elections Act. The memorandum of appeal filed at the Court of Appeal challenged the High Court's interpretation and application of articles 38, 81, 86 and 88 of the Constitution and section 30, 39 and 74 of the Elections Act 2011. Therefore, the appeal was within the realm of article 163(4)(a) of the Constitution.
  3. A litigant's expectation was that where they sought justice, it would be dispensed timeously. The enactment of legislation for the timely settlement of electoral disputes was provided for in article 87(1) of the Constitution. Electoral disputes were time-bound and they called for strict adherence to set timelines.
  4. A stay of proceedings in election disputes would put the Court at risk of failing to comply with set timelines. That meant that the right to appeal against an interlocutory decision was delayed for good order and in keeping with timelines of election petition matters.
  5. An appellate court's jurisdiction would be invoked by the filing of a notice of appeal. A notice of appeal was a jurisdictional pre-requisite. Without a notice of appeal, there would be no expressed intention to appeal.
  6. Under rule 6 of the Court of Appeal (Election Petition) Rules 2017 a notice of appeal relating to a final determination of the High Court, would have to be filed within 7 days of the decision in accordance with rule 6(2) of the Court of Appeal (Election Petition) Rules, 2017. Additionally, under rule 75 of the Court of Appeal Rules 2010, a litigant that sought to appeal against an interlocutory decision at the Court of Appeal had to file their notice of appeal within 14 days of the decision.
  7. In election petitions, the hearing of an appeal against an interlocutory decision would have to await the final determination of the matter. For purposes of election petitions only, where one was aggrieved by a decision in an interlocutory application, such a party had to file a notice of appeal against the interlocutory decision consecutively with the notice of appeal against the final judgement.
  8. No notice of appeal was filed with respect to the two applications made for scrutiny and recount which were dismissed by the High Court in its rulings of November 3, 2017 and November 27, 2017. The timely filing of a notice of appeal was an absolute requirement that invoked a court's jurisdiction. Failure to lodge an appeal against a particular decision meant that the right to challenge the decision had been waived.
  9. Fair hearing was a tenet of international law that was a fundamental safeguard that ensured that individuals were protected from unlawful or arbitrary deprivation of their human rights and freedoms. It was an inalienable right recognized in article 10 of the Universal Declaration on Human Rights, article 6 and article 14(1) of the International Covenant on Civil and Political Rights, article 6(1) of the European Convention on Human Rights, article 8(1) of the American Convention on Human Rights and article 60 of the Charter on the African Commission on Human and Peoples’ Rights. Article 50(1) of the Constitution guaranteed the right to a fair hearing and under the terms of article 25(c) of the Constitution, it was a non-derogable right.
  10. The Court of Appeal erred in law by determining questions pertaining to rulings related to applications for scrutiny without proper notices of appeal relating to those rulings. In doing so, the Court of Appeal exceeded its jurisdiction and jeopardized the appellant's right to a fair trial.
  11. Section 85A of the Elections Act was to the effect that appeals to the Court of Appeal would be based on matters of law only. Matters of law in election petitions were the following:
    1. the interpretation, or construction of a provision of the Constitution, an Act of Parliament, Subsidiary Legislation, or any legal doctrine, in an election petition in the High Court, concerning membership of the National Assembly, the Senate, or office of county governor;
    2. the application of a provision of the Constitution, an Act of Parliament, Subsidiary Legislation, or any legal doctrine, to a set of facts or evidence on record, by the Court in an election petition in the High Court concerning membership of the National Assembly, the Senate, or office of county governor;
    3. the conclusions arrived at by the Court in an election petition in the High Court concerning membership of the National Assembly, the Senate, or office of county governor, where the appellant claimed that such conclusions were based on “no evidence”, or that the conclusions were not supported by the established facts or evidence on record, or that the conclusions were “so perverse”, or so illegal, that no reasonable tribunal would arrive at the same; it was not enough for the appellant to contend that the Court would probably have arrived at a different conclusion on the basis of the evidence.
  12. The High Court declined to make a determination on the issue of overvoting at Kiangwe Primary School Polling Station on two grounds first, that the question of overvoting was not pleaded by the 3rd respondent and secondly, that the issue was raised by the 3rd respondent at the submissions stage thereby denying the appellants an opportunity to respond to the issue because the 3rd respondent’s submissions were filed outside the timelines. The Court of Appeal found that the question of overvoting at the polling station was generally pleaded in the 1st and 2nd respondent's reply to the petition and by the appellant via annexures.
  13. Annexures to an affidavit were not part of the pleadings. The High Court rightfully made the conclusion that it should not have considered the issue of overvoting at Kiangwe Primary School Polling Station as it was raised in the submissions stage, and the appellant was not accorded the opportunity to respond it. The 3rd respondent's submissions were filed out of time, after the filing of submissions by the appellant.
  14. The Court of Appeal wrongfully considered the probative value of the evidence of Form 38C when making the conclusion, that when the entire results of Kiangwe Primary School Polling Station were omitted, the difference of 58 votes would disappear and it would mean that the 3rd respondent was not validly elected. The High Court did not make factual determinations in relation to Kiangwe Primary School Polling Station and such factual issues remained outside the Court of Appeal's jurisdiction.
  15. In making inquiries as to whether or not the issue relating to Form 38C was pleaded and whether or not the winning margin would have been slim and relying on expunged affidavits, the Court of Appeal exceeded its power to review matters of law under section 85A of the Elections Act.
  16. Section 108 of the Evidence Act stated that the burden of proof in a suit or procedure lay on the person who would fail if no evidence were adduced by either side. Additionally, section 109 of the Evidence Act stated that the burden of proof of a particular fact lay on the person who wished the Court to believe in its existence, unless it was provided by any law that the proof of that fact had to lie on any particular person. In an election petition, a petitioner was under an obligation to discharge the initial burden of proof before the respondents were invited to bear the evidential burden. The threshold of proof should be above the balance of probabilities though not as high as beyond reasonable doubt.
  17. The 3rd respondent had the burden of proving allegations that the conduct of the election did not conform with the electoral laws and that the non-conformity affected the result of the election. The evidence that the 3rd respondent sought to rely on in order to prove the allegations was expunged from the record for failure to comply with section 106B (4) of the Evidence Act. The burden of proving the non-conformities, on the basis of which the Court of Appeal nullified the election's results, remained on the 3rd respondent and did not shift to the petitioners.
  18. Section 84 of the Elections Act stated that an election court would award costs of and incidental to a petition and such costs would follow the cause. Costs followed the event and a court had discretion in awarding costs. The parties did not challenge the manner in which the Court of Appeal awarded costs. There was no reason to depart from established legal provisions on costs.

Petition of appeal allowed. The 3rd Respondent was to bear the costs of the appeal.

Long'et Terer - CEO and Editor

e: editor@kenyalaw.org

t: @LongetTerer

The Kenya Law Team

Where Legal Information is Public Knowledge.

The National Council for Law Reporting | P.O Box 10443 - 00100, Nairobi Kenya. | www.kenyalaw.org