Weekly Newsletter 041/2019



Kenya Law

Weekly Newsletter


Proof of payment of gaming and betting tax is a relevant consideration in determining whether to grant a bookmakers license despite pending tax disputes in court.
Pevans East Africa Limited v Betting Control And Licensing Board & 2 others; Safaricom Limited (1st Interested Party) & another [2019] eKLR
Constitutional Petition 252 of 2019
High Court at Nairobi
J M Mativo, J
August 30, 2019
Reported by Kakai Toili
Download the Decision

Statutesinterpretation of statutes – interpretation of section 29A and 55A of the Betting, Lotteries and Gaming Act -   whether proof of payment of gaming and betting tax was a relevant consideration in determining a prayer for grant of a bookmakers license - what was the effect of pending tax disputes in court on an application for a bookmakers license - what was the process of obtaining a bookmakers license - Betting, Lotteries and Gaming Act, Cap 131 Laws of Kenya, section 5, 29A and 55A

Administrative Law – administrative bodies – decisions of administrative bodies – factors to be considered in making of decisions - relevant matters -         what were the factors to be considered in determining whether an administrative body had considered relevant matters in making a decision - what were the guiding principles in determining whether there was an unfair discrimination

Statutes interpretation of statutory provisions – purposive interpretation - what was the proper way of giving effect to the purposive interpretation of a statutory provision

Judicial Reviewjudicial review applications – determination of judicial review applications - role of a judicial review court in determining judicial review applications - what were the factors to be considered by a court in reviewing the reasonableness of decisions made by another repository of power and what were the elements of legal unreasonableness

Constitutional Law – fundamental rights and freedoms - right to fair administrative action vis a vis right to fair hearing - what was the distinction between the right to fair administrative action and the right to fair hearing – Constitution of Kenya 2010, article 47 and 50

Constitutional Law– fundamental rights and freedoms – limitation of fundamental rights and freedoms - circumstances in which the limitation of constitutional rights could be permissible - what were the factors to consider in determining whether a law limiting rights was justified - what were the standards of review when determining constitutionality of a decision or a statute -  Constitution of Kenya 2010, article 24

Constitutional Law – fundamental rights and freedoms – enforcement of fundamental rights and freedoms - right to property and right to equality and freedom from discrimination - factors to consider in determining whether there had been a violation of the right to property - guiding principles in determining whether there was unfair discrimination - what was the distinction between formal equality and substantive equality - Constitution of Kenya 2010, article 27 and 40

Judicial Revieworders - mandamus – what were the factors to be considered before issuing an order of mandamus

Judicial Review - reliefs – declaratory reliefs – what were the factors to consider in granting declaratory reliefs

Constitutional Law -doctrine of legitimate expectation – claims on legitimate expectation- determination of - steps to be followed - what was the procedure in adjudicating legitimate expectation claims

Words and Phrasesshall – definition of - used to express a command or exhortation or what is legally mandatory - Longman Dictionary of the English Language
 

Brief Facts:

The petitioner claimed that upon a request by the 1st respondent, it furnished the respondents with substantial information on how it ensured seamless online gaming. The petitioner averred that the 1st respondent asked it to submit a duly endorsed bank slip evidence of tax payment for the period up to April 2019. The petitioner alleged that it submitted the requested information relating to withholding tax for the period in question but the 1st respondent informed it that it had not yet fulfilled the requirements because it had not provided evidence of payment of withholding tax and that its application would only be considered upon fulfilment of the said condition.
The petitioner claimed that the respondent unreasonably and inexplicably refused to process the application for renewal of the license for undisclosed reasons. The petitioner further claimed that the respondents directed the 1st interested party to suspend the pay-bills and short codes used by the petitioner’s customers. Aggrieved by the 1st respondent’s actions, the petitioner filed the instant petition on the grounds that the respondents had infringed and threatened to continue infringing constitutional provisions and the petitioner’s fundamental rights and freedoms. The petitioner prayed for among other orders a mandatory injunction to compel the respondents to process and grant the petitioner’s application for renewal of its bookmakers license(license).

 

Issues:

  1. What were the factors to be considered in determining whether an administrative body had considered relevant matters in making a decision?
  2. What was the proper way of giving effect to the purposive interpretation of a statutory provision?
  3. Whether proof of payment of gaming and betting tax was a relevant consideration in determining a prayer for grant of a bookmakers license.
  4. What was the effect of pending tax disputes in court on an application for a betting license?
  5. What were the grounds for intervening and rendering an administrative decision or action ultra vires?
  6. What was the role of a judicial review court in determining judicial review applications?
  7. What was the procedure in adjudicating legitimate expectation claims?
  8. What was the distinction between the right to fair administrative action and the right to fair hearing?
  9. What were the factors to be considered by a court in reviewing the reasonableness of decision made by another repository of power and what were the elements of legal unreasonableness?
  10. What were the standards of review when the determining constitutionality of a decision or a statute?
  11. What were the circumstances in which the limitation of constitutional rights could be permissible and what were the factors to consider in determining whether a law limiting rights was justified?
  12. What were the factors to consider in determining whether there had been a violation of the right to property?
  13. What were the guiding principles in determining whether there was unfair discrimination?
  14. What was the distinction between formal equality and substantive equality?
  15. What were the factors to consider in granting declaratory reliefs and factors to be considered before issuing an order of mandamus?

Relevant Provisions of the Law
Betting, Lotteries and Gaming Act, Cap 131 Laws of Kenya
Preamble

An Act of Parliament to provide for the control and licensing of betting and gaming premises; for the imposition and recovery of a tax on betting and gaming; for the authorizing of public lotteries; and for connected purposes.
 

Section 5

(1) …
(2) On receipt of an application under subsection (1), the Board may make such investigations or require the submission of such declaration or further information as it may deem necessary in order to enable it to examine the application.
(3) After making investigations and considering any information or declaration as may have been required in terms of subsection (2), the Board may either grant, renew or vary a licence or permit or refuse a licence or permit or renewal or variation thereof without reason given: Provided that—

(i) no licence or permit shall be issued under this Act unless and until the Board has satisfied itself that the applicant is a fit and proper person to hold the licence or permit and that the premises, if any, in respect of which the application is made are suitable for the purpose;
(ii)
no licence shall be issued under this Act unless the Board has sent a copy of the application for the licence to the local authority within whose area of jurisdiction the applicant proposes to conduct his business and has given the local authority reasonable opportunity to object to, or make recommendations with respect to, the application.

Held:
  1. If in the exercise of its discretion, an authority took into account considerations which the courts considered not to be proper, then in the eyes of the law it had not exercised its discretion legally. On the other hand, considerations that were relevant to a public authority’s decision were of two kinds. Those were mandatory relevant considerations, considerations that the statute empowering the authority expressly or impliedly identified as those that had to be taken into account, and discretionary relevant considerations, those which the authority could take into account if it regarded them as appropriate. If a decision-maker had determined that a particular consideration was relevant to its decision, it was entitled to attribute to it whatever weight it thought fit, and the courts would not interfere unless it had acted in a Wednesbury-unreasonable manner. That was consistent with the principle that the courts were generally only concerned with the legality of decisions and not their merits.
  2. The duty of the court was to determine whether it had been established that in reaching its decision, an administrative body directed itself properly in law and had in consequence taken into consideration the matters which upon the true construction of the Act it ought to have considered and excluded from its consideration matters that were irrelevant to what he had to consider. When determining if a decision-maker had failed to take into account mandatory relevant considerations, the courts tended to inquire into the manner in which the decision-maker balanced the considerations. Once the decision-maker had taken into account the relevant considerations, the courts were reluctant to scrutinize the manner in which the decision-maker balanced the considerations.
  3. In practice, public procuring entities and public bodies regulating various activities usually included a condition in their application documents that applicants had to submit tax clearance certificates issued by the Kenya Revenue Authority (KRA) among other requirements. Tax clearance certificates played an important role in Kenya’s economy and were, almost without exception, a requirement when a person submitted a tender or bid for doing business with Government or applied for a business licence.
  4.  The Constitution required a purposive approach to statutory interpretation. The purpose of a statute played an important role in establishing a context that clarified the scope and intended effect of a law. A contextual or purposive reading of a statute had to remain faithful to the actual wording of the statute. A contextual interpretation of a statute, therefore, had to be sufficiently clear to accord with the rule of law. In giving effect to the purposive interpretation of a statutory provision, one should, at least;
    1. look at the preamble of the Act or at the other express indications in the Act as to the object that had to be achieved;
    2. study the various sections wherein the purpose could be found;
    3. look at what led to the enactment, not to show the meaning, but also to show the mischief the enactment was intended to deal with); and
    4. draw logical inferences from the context of the enactment.
  5. From the wording of the preamble to the Betting, Lotteries and Gaming Act (Act), it was not possible to de-link the requirement for tax compliance from the license requirements under the Act. Thus, a purposive, contextual and faithful reading of the Act would inevitably conclude that proof of payment of taxes arising from gaming and betting business operated under the Act was a material and relevant consideration while determining whether to grant or refuse to grant a license under the Act. To conclude otherwise was not only to be an unfaithful construction of the statute but would amount to treason to the enabling statute.
  6. When an application of a license under the Act was declined, the reasons for declining the license had to be defendable in a court. The scope of section 5 of the Act had not been challenged. There was no serious argument to suggest that proof of tax payment was not a relevant consideration within the ambit of section 5 and bearing in mind the preamble statement.
  7. An assessment of the fairness and lawfulness of the decision making process had to be independent of the outcome of the process. In other words, what was important was not whether the application for the license was successful. What was relevant was the materiality of compliance with the application requirements. The proper approach was to establish, factually, whether an irregularity occurred in processing the application and arriving at the impugned decision. Then the irregularity, if established, had to be evaluated to determine whether it amounted to a ground for the court to annul the decision. That legal evaluation had to, where appropriate; take into account the materiality of any deviance from the legal requirements, by linking the question of compliance to the purpose of the legal requirements, before concluding that a ground to annul the decision had been established.
  8. A reading of sections 55A and 29A of the Act left no doubt that proof of payment of gaming and betting tax was a relevant consideration while considering whether to grant the license in question. Any argument suggesting that proof of tax payment was not a legal requirement for the grant of the licence was legally frail. Such an argument flew on the face of the preamble to the Act and the purposive interpretation of the enabling statute. In addition, from the annexures to the petitioner’s affidavit, it was evident that from the outset, the petitioner was fully aware that proof of tax payment was among the requirements.The petitioner could have provided a tax compliance certificate. However, proof that it had paid gaming and betting tax was not provided.
  9. The petitioner had tax disputes with the KRA pending in courts. That cast doubts on the petitioner’s tax compliance status. It also complicated the petitioner’s alleged compliance status considering the provisions of sections 29A and 55A of the Act and the preamble to the Act. Put differently, the pendency of the said cases were clear indications that its tax compliance was questionable until and unless the cases were resolved in its favour. The existence of the said dispute was a confirmation that all was not well for the petitioner. It could not use disputes pending in court to obtain a license nor could it obtain a license on the strength of some interlocutory orders obtained in the cases in which the respondents were not parties. Its obligations under the Act could not be suspended by the mere existence of a dispute with the KRA. The multiplicity of the disputes presented a disturbing trend and bordered on abuse of court process.
  10. The respondent was not a party to the petitioner’s tax dispute cases, hence, the orders did not affect its operations nor could they be used to permit the petitioner to be shielded from complying with its statutory obligations. Court orders were binding on the parties to the suit. So long as the petitioner was unable to present proof from the KRA confirming that it had paid taxes as required, at the rate provided under the law, it would remain ineligible to qualify for the license. That was because under the Act, right from the preamble to sections 29A and 55A of the Act, payment of gaming and betting tax and withholding tax was a mandatory requirement, hence, a relevant consideration while considering the license.
  11. Section 4(2) of the Fair Administrative Actions Act (FAA Act) provided that every person had the right to be given written reasons for any administrative action that was taken against him. However, cases were context sensitive. There was evidence of correspondence between the parties after the petition was filed. Ideally, a person affected by an administrative decision was entitled to reasons in order to challenge the decision in court. The petitioner was already in court. It moved to court three days before the decision was made. It had not demonstrated that absence of reasons prejudiced its right to exercise its right to file the instant petition.
  12. For a court to up hold a plea for refusal to be provided with reasons, the nature of the impugned decision and the peculiar circumstances of the case were relevant. In any event, section 5(3) of the Act permitted the 1st respondent to decline granting a license without giving reasons for the refusal. Section 5(3) extinguished the argument that the 1st respondent violated article 47 of the Constitution by failing to provide it with reasons for its decision.
  13. Public bodies, no matter how well intentioned, could only do what the law empowered them to do. That was the essence of the principle of legality, the bedrock of Kenya’s constitutional dispensation, which was enshrined in the Constitution. For the impugned decisions to be allowed to stand, it had to be demonstrated that the decision was grounded on law. As such, the respondents’ actions had to conform to the doctrine of legality. Put differently, a failure to exercise that power where the exigencies of a particular case required it, would amount to undermining the legality principle, which was inextricably linked to the rule of law.
  14. The respondent had not only a statutory duty but also a moral duty to uphold the law and to see to due compliance with the law governing grant of the licenses under the Act. It would in general be wrong to whittle away the obligation of the 1st respondent as a public body to uphold the law. A lenient approach could be an open invitation to the first respondent to act against its legal mandate and pose a real danger of compromising both the process of issuance of the licenses and its mandate of regulating the betting and gaming industry.
  15. Where discretion was conferred on the decision-maker, the courts had to determine the scope of that discretion and therefore needed to construe the statute purposefully. One could confidently assume that Parliament intended its legislation to be interpreted in a meaningful and purposive way giving effect to the basic objectives of the legislation.
  16. A threefold classification of grounds for the court to intervene, any one of which would render an administrative decision and/or action ultra viresre; and . A fourth ground incorporated was as a ground of judicial review was that the decision-maker had to understand correctly the law that regulated his decision-making and had to give effect to it. was referred to as in the Wednesbury case. included those heads of judicial review, which upheld procedural standards to which administrative decision-makers had to, in certain circumstances, adhere.
  17. Once a judicial review court failed to sniff any or , it should down its tools forthwith. Judicial intervention was posited on the idea that the objective was to ensure that the agency remained within the area assigned to it by Parliament. If the agency was within its assigned area then it was prima facie performing the tasks entrusted to it by the Legislature, hence not contravening the will of Parliament. In such a case, a court would not interfere with the decision. A decision which fell outside that area could therefore be described, interchangeably as: a decision to which no reasonable decision-maker could have come or a decision which was not reasonably open in the circumstances.
  18. The constitutional and legislative licensing framework entailed prescripts that were legally binding. The fairness and lawfulness of the licensing process and the ensuing decision had to be assessed in terms of the provisions of the enabling statute and the FAA Act. The proper approach for the Court in reviewing the impugned decision was to establish, factually, whether an irregularity occurred. The irregularity then had to be legally evaluated to determine whether it amounted to a ground for the Court to intervene. That legal evaluation had to, where appropriate, take into account the materiality of any deviance from legal requirements, by linking the question of compliance to the purpose of the provision, before concluding that a ground for the court to intervene had been established.
  19. The enabling statute conferred mandate upon the 1st respondent to grant or refuse to grant licenses under the Act.It was required to conduct a full and complete evaluation of the application and satisfy itself that it complied with the law and the set requirements. It would be unlawful for the 1st respondent to pass a decision awarding a license in circumstances where there had not been a full and complete compliance. Complete evaluation included due diligence. To do otherwise was to engage in an illegality and such a decision would be tainted by an error of the law.
  20. There was a need to appreciate the difference between formal shortcomings, which went to the heart of the process, and the elevation of matters of subsidiary importance to a level, which determined the fate of the application for a license. A public body had a duty to act fairly. However, fairness had to be decided on the circumstances of each case.
  21. A licensing body could condone some deficiencies, for example, a bona fide mistake should not in and of itself disqualify an applicant provided it was addressed. Substance should prevail over form. A distinction should be drawn between a material factor and the evidence needed to prove that factor. Regard had to be had to the facts as a whole in the context of the applicable legislation and the principles involved; and compliance with legal requirements which involved a consideration of the degree of compliance with the law. Essentially, a failure to comply with prescribed conditions would result in an application for a license being disqualified unless those conditions were immaterial, unreasonable or unconstitutional. In the circumstances of the instant case, there was no convincing argument that the requirements were immaterial, unreasonable or unconstitutional. On the contrary, they were material and lawful considerations.
  22. As a general principle, an administrative authority had no inherent power to condone failure to comply with a peremptory requirement. It only had such power if it had been afforded the discretion to do so. The Act did not grant the 1st respondent any discretion when evaluating compliance with the law unless the requirements imposed were immaterial, unreasonable or unconstitutional. The requirements of the Act were in conformity with the obligation imposed by articles209 and 210 of the Constitution which required taxes to be enforced by legislation. Therefore, the licensing process in the statute had to be construed within the context of the entire article 209 and 210 while striving for an interpretation, which promoted the spirit, purport and objects of the articles.Therefore, the impugned decision was made in a manner that was in conformity with the enabling statute. Put differently, the petitioner had demonstrated that the 1st acted ultra vires.
  23. A procedural legitimate expectation rested on the presumption that a public authority would follow a certain procedure in advance of a decision being taken. In adjudicating legitimate expectation claims, the court followed a two-step approach;
    1. First, it asked whether the administrator’s actions created a reasonable expectation in the mind of the aggrieved party.
    2. Second, if the answer to the question was in the affirmative, the second question was whether that expectation was legitimate. If the answer to the second question was equally affirmative, then the court would hold the administrator to the representation, and enforce the legitimate expectation.
  24. The basic premise underlying the protection of legitimate expectations seemed to be the promotion of legal certainty. Individuals should be able to rely on Government actions and policies and shape their lives and planning on such representations. The trust engendered by such reliance was said to be central to the concept of the rule of law. Legal certainty was not, however the only principle at play in legitimate expectation doctrine. The counter value of legality was especially important in the context of the substantive protection of legitimate expectations.
  25. The fear in protecting legitimate expectations substantively was that administrators could be forced to act ultra vires. That would be the case where an administrator had created an expectation of some conduct, which was beyond his authority or had become beyond his authority due to a change of law or policy. If the administrator were consequently held to that representation, he would be forced to act contra legem. Such representations would not be upheld by the court. The value of legality in law had led to the requirement that the expectation had to be one of lawful administrative actions before it could be either reasonable or legitimate. Legality therefore seemed to take precedence over legal certainty in law.
  26. Statutory words overrode an expectation howsoever founded. Thus, a decision maker could not be required to act against clear provisions of a statute just to meet ones expectations otherwise his decision would be out rightly illegal and a violation of the principle of legality, a key principle in the rule of law. There could not be legitimate expectation against the clear provisions of a statute. The doctrine of legitimate expectation could not apply in the circumstances of the instant case because the petitioner had not demonstrated that it met all the requirements for the renewal or grant of the license. A case in point was absence of evidence that it paid taxes.
  27. Fundamental to the legitimacy of public decision-making was the principle that official decisions should not be infected with improper motives such as fraud or dishonesty, malice or personal self-interest. Those motives, which had the effect of distorting or unfairly biasing the decision-maker’s approach to the subject of the decision, automatically caused the decision to be taken for an improper purpose and thus took it outside the permissible parameters of the power.
  28. A power was exercised fraudulently if its repository intended it for an improper purpose, for example dishonestly, to achieve an object other than that which he claimed to be seeking. The intention could be to promote another public interest or private interests. A power was exercised maliciously if its repository was motivated by personal animosity towards those who were directly affected by its exercise. A decision based on malice was usually one that was directed to the person. The malice could arise out of personal animosity built up over a series of past dealings. There was no element of arbitrariness, capriciousness, malice, bad faith or abuse of power in the instant case. The petitioner had failed to demonstrate that the impugned decision was arrived at arbitrarily and in abuse of powers conferred by the enabling statute.
  29. The right to a fair administrative action under article 47 of the Constitution was a distinct right from the right to a fair hearing under article 50(1) (2) of the Constitution. Fair administrative action broadly referred to administrative justice in public administration. It was concerned mainly with control of the exercise of administrative powers by State organs and statutory bodies in the execution of constitutional and statutory duties. Such bodies exercised their functions guided by constitutional principles and policy considerations. In addition, the right to a fair administrative action, though a fundamental right was contextual and flexible in its application and could be limited by law.On the other hand, fair hearing under article 50 (1) applied in proceedings before a court or independent and impartial tribunals or bodies.
  30. The requirements for the license in question were specified in the Act. An applicant submitted his/her application and all the required documents. The 1st respondent reviewed the application to confirm conformity with the prescribed requirements and communicated the decision to the applicant. Such an exercise did not require a hearing. In fact, to require the 1st respondent to hear each applicant just to confirm conformity with the set requirements would not be reasonable and would unnecessarily place a heavy burden on the 1st respondent. The enabling statute should be construed as granting discretion to the decision maker to satisfy himself that the requirements of the license had been met.
  31. A court or tribunal had the power to review an administrative action if the exercise of the power or the performance of the function authorised by the empowering provision, in pursuance of which the administrative action was purportedly taken, was so unreasonable that no reasonable person could have so exercised the power or performed the function. The simple test used throughout was whether the decision in question was one, which a reasonable authority could reach. The converse was conduct which no sensible authority acting with due appreciation of its responsibilities would have decided to adopt. Whatever the rubric under which the case was placed, the question reduced to whether the decision maker had struck a balance fairly and reasonably open to him.
  32. Given the facts of the instant case and the mandatory requirements in the enabling statute, a different person or tribunal properly addressing itself to the same facts and circumstances could not have arrived at a different conclusion.
  33. Review by a court of the reasonableness of decision made by another repository of power was concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process but also with whether the decision fell within a range of possible, acceptable outcomes, which were defensible with respect to the facts and law. Put differently, whether the decision fell outside the range of possible acceptable outcomes applying the same set of facts and the law.
  34. In the Wednesbury case, unreasonableness was the reflex of the implied legislative intention that statutory powers be exercised reasonably. That ground of review would be made out when the court concluded that the decision fell outside the area of decisional freedom, which that legislative assumption authorized, that was outside the range within which reasonable minds could differ. The test of unreasonableness was whether the decision was reasonably open to the decision-maker in the circumstances of the case. To say that the decision was not reasonably open was the same as saying that no reasonable decision maker could have made it.
  35. If a statute which conferred a decision-making power was silent on the topic of reasonableness, that statute should be construed so that it was an essential condition of the exercise of the powers that it be exercised reasonably. The legal standard of reasonableness had to be the standard indicated by the true construction of the statute. It was necessary to construe the statute because the question to which the standard of reasonableness was addressed was whether the statutory power had been abused.
  36. Legal unreasonableness comprised of any or all of the following, namely;
    1. specific errors of relevancy or purpose;
    2. reasoning illogically or irrationally;
    3. reaching a decision which lacked an evident and intelligible justification such that an inference of unreasonableness could be drawn, even where a particular error in reasoning could not be identified; or
    4. giving disproportionate or excessive weight, in the sense of more than was reasonably necessary, to some factors and insufficient weight to others.
  37. In circumstances where reasonable minds could differ about the outcome of, or justification for the exercise of power or where the outcome fell within the range of legally and factually justifiable outcomes, the exercise of power was not legally unreasonable simply because the court disagreed, even emphatically with the outcome or justification. If there was an evident, transparent and intelligible justification for the decision or if the decision was within the area of decisional freedom of the decision-maker, it would be an error for the court to overturn the decision simply on the basis that it would have decided the matter differently. The petitioner had not demonstrated that a reasonable person properly directing his mind to the facts, circumstances and the law could have arrived at a different conclusion.Put differently, the petitioner had failed to demonstrate the decision was unreasonable.
  38. Access to Information Act was enacted to give effect to the constitutional right of access to any information held by the State. The formulation of the provisions of the Act cast the exercise of that right in peremptory terms; the person who requested had to be given access to the information so long as the request did not fall within the exceptions in section 6 of the Act. Under Kenya’s law, therefore, the disclosure of information was the rule and exemption from disclosure was the exception.
  39. Under section 6 of the Act there were reasonable and justifiable limitations on the right of access to information. The purpose of section 6 was to protect from disclosure certain information that, if disclosed, could cause material harm to, amongst other things: the defence, security and international relations of the Republic; the economic interests and financial welfare of the Republic and commercial activities of public bodies; and the formulation of policy and taking of decisions by public bodies in the exercise of powers or performance of duties conferred or imposed by law.
  40. The burden of establishing that the refusal of access to information was justified rests on the State or any other party refusing access. Ultimately, the question whether the information put forward was sufficient to place the record within the ambit of the exemption claimed would be determined by the nature of the exemption and whether the reasons cited fell within the ambit of section 6 of the Act. The reasons cited were intelligence reports and security investigations. A reading of section 6 left no doubt that the information in question fell within the permitted exceptions.
  41. Section 5 (3) of the Act permitted the 1st respondent to decline the license without giving reasons for the refusal. That provision extinguished the argument that the respondents acted illegally by failing to disclose details of the investigations.
  42. Statutory provisions ousting the Court’s jurisdiction had to be read restrictively. That was because the right to access the courts was constitutionally guaranteed. However, a clear reading of section 3 of the Act showed that any officer or servant of the 1st respondent could not be liable for any act or default done or omitted to be done in good faith in the course of their duties under the Act.
  43. The classification of statutes as mandatory and directory was useful in analyzing and solving the problem of what effect should be given to their directions. There was a well-known distinction between a case where the directions of the Legislature were imperative and a case where they were directory. The real question in all such cases was whether a thing had been ordered by the Legislature to be done and what was the consequence if it was not done. The general rule was that an absolute enactment had to be obeyed or fulfilled substantially. Some rules were vital and went to the root of the matter, they could not be broken; others were only directory and a breach of them could be overlooked provided there was substantial compliance.
  44. It was the duty of courts to try to get at the real intention of the Constitution or legislation by carefully attending to the whole scope of the Constitution or a statute to be considered. The word shall when used in a statutory provision imported a form of command or mandate. It was not permissive, it was mandatory. The word shall in its ordinary meaning was a word of command which was normally given a compulsory meaning as it was intended to denote obligation. A proper construction of section 3 (12) of the Act led to the conclusion that it was couched in mandatory terms.It followed that by dint of the said provisions, the suit against the 2nd and 3rd respondents was unsustainable.
  45. Constitutional analysis under the Bill of Rights took place in two stages;
    1. First, the applicant was required to demonstrate that his/ her ability to exercise a fundamental right had been infringed. If the court found that the law, measure, conduct or omission in question infringed the exercise of the fundamental right or a right guaranteed in the Bill of Rights, the analysis could move to its second stage.
    2. In the second stage, the party looking to uphold the restriction or conduct would be required to demonstrate that the infringement or conduct was justifiable in a modern democratic State and satisfied the article 24 of the Constitution analysis test.
  46. The standards of review laid down by courts when determining constitutionality of a decision or a statute included two main standards:-
    1. The rationality test. That was the standard that applied to all legislation under the rule of law;
    2. reasonableness or proportionality, which applied when legislation limited a fundamental right in the Bill of Rights. Article 24 (1) of the Constitution provided that such a limitation was valid only if it was reasonable and justifiable in an open and democratic society.
  47. In determining reasonableness, relevant factors included:
    1. Whether there was a valid, rational connection between the limitation and a legitimate public interest to justify it, which connection could not be so remote as to render the decision arbitrary or irrational.
    2. Whether there were alternative means of exercising the asserted right that remained open to the first respondent.
  48. A common way of determining whether a law that limited rights was justified was by asking whether the law or decision was proportionate. Established jurisprudence on proportionality had settled on the following tests: -
    1. Whether the legislation (or other Government action) establishing the right’s limitation pursued a legitimate objective of sufficient importance to warrant limiting a right.
    2. Whether the means in service of the objective rationally connected (suitable) to the objective.
    3. Whether the means in service of the objective necessary, that was, minimally impairing of the limited right, took into account alternative means of achieving the same objective.
    4. Whether the beneficial effects of the limitation on the right outweighed the deleterious effects of the limitation; in short, whether there was a fair balance between the public interest and the private right.
  49. Limitation of a constitutional right would be constitutionally permissible if;
    1. it was designated for a proper purpose;
    2. the measures undertaken to effectuate such a limitation were rationally connected to the fulfilment of that purpose;
    3. the measures undertaken were necessary in that there were no alternative measures that could similarly achieve that same purpose with a lesser degree of limitation; and
    4. there needed to be a proper relation (proportionality stricto sensu or balancing) between the importance of achieving the proper purpose and the special importance of preventing the limitation on the constitutional right.
  50. In the circumstances, the beneficial effects of the limitation of the petitioner’s right outweighed the deleterious effects of the limitation. In short, there was a fair balance between the public interest and the private right:
    1. The objective which the measures responsible for the said limitation was designed to serve was of sufficient importance to warrant overriding a constitutionally protected right or freedom. The said section met the test.
    2. The impugned section was carefully designed to achieve the objective in question. It was not arbitrary, unfair or based on irrational considerations.
    3. The 1st respondent was required to balance the interests of society with those of individuals. It was not in public interest to disclose intelligence and security investigations. In any event those were exempted from disclosure by section 6 of the Access to Information Act. Further, there was a public interest and benefit in regulating the business in question. Further, it was a constitutional imperative that all persons including companies to pay taxes.
    4. Access to Information Act flowed from article 35 of the Constitution, thus it had a constitutional under pinning. Hence, information excepted under section 6 of the Act could not be said to be unconstitutional.
    5. Denial of a license for failure to meet the statutory requirements could not amount to violation of constitutional rights.
  51. A violation of the right to property occurred when there was an unjustifiable interference with property rights. The relevant questions to be asked when considering whether there had been a violation of the right to property guaranteed by article 40 of the Constitution were:
    1. Whether there was a property right, or possession, within the scope of article 40.
    2. Whether there had been an interference with that possession.
    3. Whether the interference served a legitimate objective in the public or general interest.
    4. Whether the interference was proportionate. That was, whether it struck a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights.
    5. Whether the interference complied with the principle of legal certainty or legality.
    Refusal to grant a license could not amount to unfair interference with property rights.
  52. The claim of direct or indirect unfair discrimination implicated the right to equality in the Constitution. That was a fundamental right entrenched in the Bill of Rights and therefore the claim intrepidly raised a constitutional issue. The guiding principles in a case of that nature were clear:
    1. The first step was to establish whether the refusal to grant the license differentiated between different applicants.
    2. The second step entailed establishing whether that differentiation amounted to discrimination.
    3. The third step involved determining whether the discrimination was unfair.
  53. If the discrimination was based on any of the listed grounds in article 27 (4) of the Constitution, it was presumed to be unfair. However, once an allegation of unfair discrimination based on any of the listed grounds in article 27 (4) was made and established, the burden lay on the respondent to prove that such discrimination did not take place or that it was justified. On the other hand, where discrimination was alleged on an arbitrary ground, the burden was on the complainant to prove that the conduct complained of was not rational, that it amounted to discrimination and that the discrimination was unfair.
  54. The Constitution forbade unfair discrimination regardless of the context in which it occurred and irrespective of whether the perpetrator was the State or a private person. Article 27(1) of the Constitution provided that a person should not discriminate directly or indirectly against another person on any of the grounds specified or contemplated in clause (4). The right to equality and freedom from discrimination was protected by International and legal frameworks that Kenya was a signatory. Article 2(5) and (6) of the Constitution provided that general rules of international law, treaties and conventions ratified by Kenya should form part of the laws of Kenya.
  55. Formal equality simply meant sameness of treatment. It asserted that the law or conduct had to treat individuals in like circumstances alike. Substantive equality on the other hand required the law or conduct to ensure equality of outcome and was prepared to tolerate disparity of treatment to achieve that goal. Simply put, formal equality required that all persons were equal bearers of rights. Formal equality did not take actual social and economic disparities between groups and individuals into account.
  56. Unfair discrimination was differential treatment that was demeaning. That happened when law or conduct, for no good reason, treated some people as inferior or less deserving of respect than others. It also occurred when law or conduct perpetuated or did nothing to remedy existing disadvantages and marginalization. The principle of equality attempted to make sure that no member of society should be made to feel that they were not deserving of equal concern, respect and consideration and that the law or conduct complained of was likely to be used against them more harshly than others who belonged to other groups.
  57. The questions as to whether a certain act could properly be said to violate the Constitution was a value judgment which required objectively to be articulated and identified, regard being had to the contemporary norms, aspirations, expectations and sensitivities of the people as expressed in its national institutions and its Constitution and further having regard to the emerging consensus of values in the civilized international community which Kenyans shared.
  58. Mere discrimination, in the sense of unequal treatment or protection by the law in the absence of a legitimate reason was a most reprehensible phenomenon.But where there was a legitimate reason, then the conduct complained of could not amount to discrimination. Law or conduct which promoted differentiation had to have a legitimate purpose and should bear a rational connection between the differentiation and the purpose. The rationality requirement was intended to prevent arbitrary differentiation. The right to equality did not prohibit discrimination but unfair discrimination. Unfair discrimination principally meant treating people differently in a way which impaired their fundamental dignity as human beings.
  59. The petitioner’s application was considered against the criteria laid down under the law. Refusal could not amount to discrimination as contemplated under article 47 of the Constitution or any of the cited constitutional provisions.
  60. In granting declaratory reliefs, the court had to first be satisfied that the applicant was a person interested in an existing, future or contingent right or obligation; and if so, the court had to decide whether the case was a proper one for the exercise of its discretion. The first leg of the enquiry involved establishing the existence of the necessary condition precedent for the exercise of the court’s discretion. An applicant for the declaratory relief satisfied that requirement if he succeeded in establishing that he had an interest in an existing, future or contingent right or obligation. Only if the court was satisfied, did it proceed to the second leg of the enquiry. The other stage of the enquiry related to whether the public officer was authorized or obliged by law to render the impugned decision. The first answer to that question lay in the constitutional principle of legality.
  61. Organs of State and public officials were creatures of statute. Unlike natural persons who could commit any act, the only requirement being that the act ought to be legal, organs and officials of State were only empowered to act to the extent that their powers were defined and conferred by the Constitution and/ or by statute. Any conduct by an organ or official of State beyond their constitutional and/ or statutory powers violated the principle of legality. The answer to that test lay in the 1st respondent’s statutory powers. Sections 4, 5 and 5A of the Act granted powers to the 1st respondent to grant or refuse to grant a license under the Act. The petitioner had not established grounds for the court to grant the declaratory reliefs sought.
  62. An order of certiorari issued to review a decision and proceedings in a lower court or a public body and determine whether there were any irregularities. It was a discretionary remedy, which a court could refuse to grant even when the requisite grounds for it existed. The court had to weigh one thing against another to see whether or not the remedy was the most efficacious in the circumstances obtaining. The discretion of the court being a judicial one had to be exercised on the basis of evidence and sound legal principles.
  63. The circumstances of the instant case were that the petitioner’s license had expired.Even if the court quashed the decision, which had no basis, the petitioner could not operate on an expired license. It would remain unable to operate for want of a license. The relationship between the petitioner and the 1st interested party was contractual. It was a term of the contract that the petitioner would hold a valid license to maintain the pay bill numbers and short codes. The Court could not rewrite a contract willfully entered by the parties nor could it quash the letter to open the door to the petitioner to operate without a license. In any event, the respondents were on record stating that the petitioner could apply for the licenses afresh once they met the set conditions and the same would be considered in accordance with the law.
  64. was an equitable remedy that served to compel a public authority to perform its public legal duty and it was a remedy that controlled procedural delays. The eight factors that had to be present for the writ to issue were;
    1. there had to be a public legal duty to act;
    2. the duty had to be owed to the applicants;
    3. there had to be a clear right to the performance of that duty, meaning that:
      1. The applicants had satisfied all conditions precedent; and
      2. there must have been:
        • A prior demand for performance;
        • a reasonable time to comply with the demand, unless there was outright refusal; and
        • an express refusal, or an implied refusal through unreasonable delay;
    4. no other adequate remedy was available to the applicants;
    5. the order sought had to be of some practical value or effect;
    6. there was no equitable bar to the relief sought;
    7. on a balance of convenience, mandamus should lie.

    In the instant case, no material placed before the Court to demonstrate that the tests had been satisfied. The 1st respondent in exercise of its statutory duty insisted that the petitioner comply with all the statutory requirements. In addition, there was nothing to demonstrate that there had been an express refusal, or an implied refusal through unreasonable delay to grant the license. Mandamus could only issue where it was clear that there was willful refusal or implied and or unreasonable delay. The applicant had not satisfied the conditions for grant of order of mandamus.

  65. A mandatory injunction could be granted on an interlocutory application as well as at hearing, but in the absence of special circumstances, it would not normally be granted. However, if the case was clear and one which the court thought ought to be decided on once or if the act done was a simple and summary one which could be easily remedied, or if the defendant attempted to steal a match on the plaintiffs,a mandatory injunction would be granted on an interlocutory application. An injunction could not be issued contrary to express provisions of a statute.
  66. The petitioner had failed to demonstrate that the respondents violated its constitutional rights. There would be no basis to award damages. The claim for damages for alleged loss of business was legally frail. There was no attempt at all to place material before the Court to make such a determination. Damages had to be pleaded and proved. The petitioner never pleaded with specificity the alleged loss or details to form a basis for the claim. A claim for loss of business by its nature required oral evidence which was not offered in the instant case.
Petition dismissed with no orders as to costs.
Kenya Law
Case Updates Issue 041/2019
Case Summaries

TORT LAW The guiding principles a court uses when awarding damages for lost years

Twokay Chemicals Limited v Patrick Makau Mutisya & Jonathan Kioko Mumama (Suing as the legal representatives of the Estate of Mueni Makau (Deceased)) [2019] eKLR
Civil Appeal No. 132 of 2016
High Court at Machakos
Odunga, J,
 July, 26, 2019
Reported by Kadzo Jally

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Tort Law- Damages- award of damages- lost years - quantum of damages- - principles a trial court uses when deciding an award of damages for a young girl of 16 years- whether there were errors made by trial court in assessing the quantum of damages for loss of dependency of a 16 year old girl-where an award of Kshs. 1,500,000/- for loss of dependency was pleaded to be excessive

Brief Facts:
The respondents herein instituted a suit on behalf of the estate of Mueni Makau (deceased) against the appellant claiming special damages in the sum of Kshs 37,700/- as general damages, costs and interests.
The respondent’s suit was premised on the fact that the deceased was lawfully and carefully walking off the road along Machakos-Wote Road when she was violently hit by the appellant’s motor vehicle thereby occasioning fatal injuries.
The learned trial magistrate took into account the fact that the deceased was only 16 years and though bright in school, it was not possible to ascertain what his life could have been. Accordingly, she awarded a global figure under lost years of Kshs 1,500,000.00; Kshs 100,000.00 under loss of expectation of life, Kshs 30,000.00 for pain and suffering and special damages in the sum of Kshs 33,000.00 and discounted the same as per the consent on liability hence the total award was Kshs 1,330.400.00 with costs and interests.
Aggrieved by the said award, the Appellant lodged this appeal on the ground that the trial magistrate erred in law and fact when she awarded the plaintiff’s the sum of Ksh. 1,500,000/= as general damages for loss of dependency which award was manifestly excessive in the circumstances of the case.

Issue:

  1. What were the principles that guided a court in awarding damages for lost years? Read More..

Held:

  1. An appellate court could only interfere with an award of damages only if it was satisfied that the trial court applied the wrong principles or misapprehended the evidence and so arrived at a figure so inordinately high or low as to represent an entirely erroneous estimate.
  2. The principles which ought to guide a court in awarding damages were:
    1. Parents cannot insure the life of their children;
    2. the death of a victim of negligence does not increase or reduce the award for lost years;
    3. the sum to be awarded is never a conventional one but compensation for pecuniary loss;
    4. it must be assessed justly with moderation;
    5. complaints of insurance companies at the awards should be ignored;
    6. disregard remote inscrutable speculative claims;
    7. deduct the victim’s living expenses during the “lost years” for that would not be part of the estate;
    8. a young child’s present or future earnings would be nil;
    9. an adolescent’s would real, assessable and small;
    10. the amount would vary from case to case as it depends on the facts of each case including the victim’s station in life;
    11. calculate the annual gross loss;
    12. apply the multiplier (the estimate number of the lost years accepted as reasonable in each case);
    13. deduct the victim’s probable living expenses of reasonably satisfying enjoyable life for him or her; and
    14. living expenses reasonable costs of housing, heating, food, clothing, insurance, travelling, holiday, social and so forth.
  3. The trial court was entitled to choose which decision to rely on and could not be faulted for relying on an award issued in one case and not the other.
  4. The court was not convinced that an award of Kshs 1,500,000.00 for a bright girl of 16 years was manifestly excessive.

Appeal dismissed

TORT LAW A pharmacist who took it upon himself to diagnose, prescribe and administer drugs to a patient was liable in negligence for injury suffered by that patient

LWW (Suing as the Administrator of the estate of BMN) deceased v Charles Githinji [2019] eKLR
Civil Case 34 of 2012
High Court at Nairobi
A M Mbogholi, J
May 29, 2019
Reported by Moses Rotich

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Tort law-negligence-medical negligence-awards in medical negligence-where a pharmacist prescribed and administered drugs to a patient who subsequently died as a result-whether a pharmacist who took it upon himself to diagnose, prescribe and administer drugs to a patient was liable in negligence for injury suffered by that patient
Tort Law-damages-pain and suffering damages-assessment of liability for and award of-proof of pain and suffering -whether a parent whose child died as a result of a pharmacist’s negligent conduct was entitled to be awarded pain and suffering damages for physical and mental distress caused
Words and Phrases–medical negligence-definition of-in relation to professional negligence, gross negligence marking a departure from the normal standard of conduct of a professional man as to infer a lack of that ordinary care which a man of ordinary skill would display-a doctor was not guilty of negligence if he had acted in accordance with a practice accepted by a responsible body of medical men skilled in that particular form of treatment-Halsbury’s Laws of England, 4th Edition, Vol. 12 (1), paragraph 883, page 348

Brief facts:
The plaintiff’s daughter, aged seventeen years, got sick and she took her to the defendant’s pharmacy whereupon the defendant prescribed and administered halfan drugs. Thereafter, the plaintiff took her daughter home. The plaintiff’s daughter went to sleep after preparing supper and performing some other domestic chores. She failed to wake up the following day and the plaintiff rushed her to the hospital where she was pronounced dead.
The plaintiff blamed the defendant for her daughter’s death and lodged a complaint against him at the Medical Practitioners and Dentists Board (the Board). The Board found merit in the complaint and condemned the defendant to pay Kshs. 27,000.00 in costs. Aggrieved by the findings, the defendant moved to the High Court to have the decision of the Board struck out. The High Court agreed with the Board that the defendant was not diligent and professional in treating the defendant’s daughter. The High Court, however, quashed the order requiring the defendant to pay Kshs 27,000.00.
The plaintiff then filed the instant suit on her own behalf and as the administrator of her daughter’s estate. She averred that the defendant was guilty of medical negligence in that he failed or neglected to use his reasonable care, skill and diligence in the manner in which he handled the deceased resulting in her death. She stated that following the death of her daughter she suffered physical and emotional injury resulting in depression leading to mental anguish and stress.

Issues:

  1. Whether a pharmacist who took it upon himself to diagnose, prescribe and administer drugs to a patient was liable in negligence for injury suffered by that patient.
  2. Whether a parent whose child died as a result of a pharmacist’s negligent conduct was entitled to be awarded pain and suffering damages for physical and mental distress caused. . Read More...

Held:

  1. Although the cause of death was not ascertained, the evidence of the pathologist who performed the post mortem on the deceased body identified a reaction to halfan as a suspected cause of death. The defendant was a pharmacist and not a medical doctor. He depended on information/diagnosis of another medical doctor to be able to guide him on what medicine he should dispense. In the event he took it upon himself to conduct a diagnosis and dispense medicine, then he would be taking a very serious risk which might point to negligence on his side. The death of a patient did not generally imply negligence on the part of the doctor. That was because it was expected that anyone who possessed the required qualifications used the same to the best of his or her knowledge for the benefit of those who consulted them.
  2. The proceedings and findings of the Board were instructive. The Board concluded that the complaint had merit; that the defendant failed to take proper history of the patient leading to improper diagnosis and inappropriate prescription of halfan. The Board also found that the defendant held himself out as a medical practitioner engaged in diagnostic and curative services. The observation that he was less than candid with the committee had a very negative impression about him. Proof in any civil proceedings was on a balance of probability. Weighing the evidence submitted by both parties in the instant matter, it pointed to the irresistible conclusion that the defendant was liable in negligence for the death of the plaintiff’s daughter.
  3. With respect to quantum of damages, it was not very clear how long it took for the daughter to pass on after retiring to sleep. What was clear was that no symptoms of pain were exhibited because there was evidence that she performed the household chores, prepared supper and watched television. In the absence of any evidence that she underwent excruciating pain before her death, but which could not be ruled out, an award of Kshs. 50,000.00 for pain and suffering was made.
  4. There was evidence that the deceased was a bright child with a promising future going by the academic reports filed. Accordingly, a sum of Kshs. 500,000.00 was awarded for loss of expectation of life.
  5. Whereas any parent would have a legitimate expectation of dependence from their children on being employed, that futuristic expectation might not be easy to justify although each case ought to be considered on its own facts and circumstances. In the instant case, the Court was being invited to speculate what the deceased would have achieved had she successfully managed to go through her education. If the Court were to accede to such a proposition, it would be condemning the defendant based on speculation which might result to injustice in view of unavailability of cogent evidence. Out of abundant caution, no award was made on that head.
  6. With regard to damages in respect of the plaintiff herself, she gave evidence and produced a medical report showing that she underwent extreme depression and emotional distress, following the death of her daughter. Pain and suffering damages were awarded for physical and mental distress caused to the plaintiff, both pre-trial and in the future as a result of the injury. Those included the pain caused by the injury itself, the treatment intended to alleviate it, the awareness of, and the embarrassment at the disability or disfigurement or suffering caused by anxiety that the plaintiff’s condition might deteriorate. It followed, therefore, that the award for pain and suffering was intended to compensate the plaintiff for the anguish he or she had endured because of the accident whether physical or mental.
  7. In the instant matter, the plaintiff had established to the satisfaction of the Court, by her testimony and the medical report which she had tendered about her condition following the death of her daughter, that she sustained extreme psychological and mental injury as a result. The plaintiff’s failed marriage that followed had a negative effect on her condition. There were no decided cases on damages payable for emotional injury that could guide the Court in making a determination as to damages payable to the instant plaintiff. Weighing the evidence presented, an award of Kshs. 500,000.00 was reasonable for mental and emotional distress on the part of the plaintiff.

Suit allowed; judgment entered for the plaintiff against the defendant in total sum of KShs. 1,050,000.00 plus costs and interests at court rates.

EMPLOYMENT LAW The effect of destruction of work premises on an employment contract

Omwenga Joseph Chanai & 26 others v Jack & Jill Supermarket Ltd & Another
Cause 925A of 2014
Employment and Labour Relations Court at Nairobi
M. Onyango, J.
August 2, 2019
Reported by Chelimo Eunice

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Employment Law – employment contracts – frustration of employment contracts - termination and loss of employment – whether destruction of work premises terminated and/or frustrated an employment contract –   an employment contract would be frustrated by acts of a third party - whether an employer was responsible for employees whose employment came to an end as a result of illegal demolition of work premises.
Employment Law – redundancy – meaning of redundancy – aspects of redundancy – whether loss of employment due to illegal destruction of work premises amounted to redundancy.
Words & Phrases – redundancy – definition of redundancy - the loss of employment, occupation, job or career by involuntary means through no fault of an employee, involving termination of employment at the initiative of the employer, where the services of an employee are superfluous and the practices commonly known as abolition of office, job or occupation and loss of employment - Employment Act, section 2.
Words & Phrases – redundancy – definition of redundancy - a situation in which an employee is laid off from work because the employer no longer needs the employee - Black’s Law Dictionary, 10th edition.

Brief Facts:
The premises in which the respondent operated was demolished by the landlord. The claimants averred that as a result of the said demolition of the respondent’s premises, they lost employment and were declared redundant and that they were consequently wrongfully and unlawfully terminated. They, thus, sought various reliefs, including, a declaration that their purported laying as redundant amounted to unfair termination. The respondent admitted that its premises were illegally demolished by hired thugs on May 23, 2013, but denied having declared any of its employees redundant or having terminated their employment.

Issues:

  1. What was the meaning and aspects of redundancy?
  2. Whether destruction of work premises terminated and/or frustrated an employment contract.
  3. Whether loss of employment due to destruction of work premises amounted to redundancy.
  4. Whether an employer was responsible for employees whose employment came to an end as a result of illegal demolition of work premises. Read More...

Held:

  1. Redundancy entailed loss of employment at the initiation of the employer. In the instant scenario, though perhaps not anticipated by the employer (the respondent), redundancy occurred when the landlord, a third party, demolished the premises where the respondent was operating the business. Despite the legal battle between the landlord and the respondent, the respondent could not deny having anticipated the demolition of the premises at the time it was done and the resultant loss of property.  Further, the employment of the claimants could not be termed as being superfluous in strict sense, had the premises not have been destroyed, the employees would have continued to work.
  2. There were two broad aspects of definition of redundancy. The first one was that the loss of employment in redundancy cases had to be by involuntary means and at the initiative of the employer. It ought not be a contrived situation. It had to be non-volitional. The second aspect was that the loss of employment in redundancy had to be at no fault of the employee and the termination of employment arose where the services of an employee were superfluous through the practices commonly known as abolition of office, job or occupation and loss of employment. Thus, it had to be involuntary, that was, not initiated by or due to the fault of the employee, and also be due to factors beyond the employer.
  3. The circumstances of the instant case were unique.  The respondent had received notice to vacate the premises.  He had gone to court way back in 2009 and obtained orders staying the demolition both in the High Court and the Business Premises Tribunal.  The demolition was carried out in defiance of court orders and the landlord was subsequently found guilty of contempt. That, however, did not mean that the respondent was not responsible for his employees whose employment came to an end as a result of the illegal demolition.
  4. The eviction was not an excuse to terminate the employment of the workers in the manner that it was done.  The respondent had a responsibility to notify the employees of the likelihood of termination of their employment should the demolition occur, or to make alternative arrangements for premises to carry on the businesses.  He was aware that the landlord had been sued by the City Council, Department of Public Health over the poor state of repairs and renovations of the premises which would eventually have to be demolished or vacated by the tenants for the renovations and repairs.  It was only a matter of time. He had been given adequate notice and valid reason for vacating the premises, which a prudent person would have heeded to either wind up or relocate the business. The respondent however did nothing up to the date of the demolition of the premises.  His reaction to the demolition was also to do nothing, he did not bother about the plight of his employees and he did not care what happened to their jobs after the demolition.
  5. The employment of an employee did not come to an end merely because the premises where the employee was working had been destroyed.  The respondent had a duty to either relocate to alternative premises or formally bring the employment of the claimants to an end on the grounds of the demolition.  The respondent however did neither.
  6. An employment contract would not be said to have been frustrated by acts of a third party.  The acts of the third party did not make it impossible for the respondent to formally terminate the employment relationship or relocate the employment premises.
  7. The circumstances of the loss of employment by the claimants amounted to a redundancy.  The demolition of the premises where the respondent operated and the claimants worked caused the loss of employment by the claimants.  That was a factor that was (immediately) beyond the control of the employer. Thus, the loss of employment by the claimants arose through redundancy.
  8. Since the termination of the claimants was as a result of redundancy, the claimants were entitled to severance pay at the rate of 15 days’ pay for each completed year of service and to salary in lieu of notice. However, the claim for leave pay was dismissed as the claimants did not individually prove the period for which the leave pay was sought.
  9. Since the matter was due to redundancy and considering the circumstances under which it occurred, the claimants were not entitled to compensation for unfair termination. The respondent was not also penalized for failure to notify the employees and the Labour Office about impending redundancy at least one month prior to the event as that was not possible in the circumstances of the case.

Claim partly allowed with costs to the claimants.
Orders:

  1. Claimants were entitled to severance pay at the rate of 15 days’ pay for each completed year of service and to salary in lieu of notice.
  2. Claim for leave pay dismissed.
  3. Claim for unfair termination dismissed.
CIVIL PRACTICE AND PROCEDURE Issues of controversy that emerge from transitional political-economic-social cum-legal factors, with impacts on current rights and entitlements of suitors, or on public access to common utilities and services are matters of general public importance

Pati Limited v Funzi Island Development Limited and 4 others
Civil Application No 4 of 2015
Supreme Court of Kenya
P M Mwilu; DCJ & VP, M K Ibrahim, S C Wanjala, N Njoki & I Lenaola, SCJJ
August 6, 2019
Reported by Ian Kiptoo

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Civil Practice and Procedure – appeals – appeals to the Supreme Court – certification by the Court of Appeal – review by the Supreme Court – claim that matters were of general public importance – where matter involved balancing between private interests vis-à-vis public interest - whether issues that were sought to be certified to be of general public importance ought to have arisen through the normal judicial hierarchy - whether a matter touching on the determination if suit land was trust land, and if so, whether it was regularly and legally allocated to private persons was a matter of general public importance

Brief Facts:
The applicant sought a review of the Court of Appeal ruling which declined to certify its intended appeal to the Supreme Court as one involving a matter of general public importance. The application also sought a stay of execution of the judgment of the Court of Appeal delivered in Mombasa C. A. No. 252 of 2005, pending its hearing and determination.
The applicant submitted that the issue whether a title to land could be revoked and the process to be followed when a title was challenged in public interest were matters of general public importance.

Issues:

  1. Whether issues that were sought to be certified to be of general public importance ought to have arisen through the normal judicial hierarchy.
  2. Whether a matter touching on the determination if suit land was trust land, and if so, whether it was regularly and legally allocated to private persons was a matter of general public importance? Read More...

Held:

  1. An applicant seeking certification should out rightly, in its application, set out with precision the issues it considered to be of general public importance. Parties had been cautioned against engaging in rhetoric and second guessing where they convoluted their pleadings and grounds on the pretext that the Court would filter out what it thought amounted to matters of general public importance and leave out what was not.
  2. Issues that came to the Court on appeal were those that had risen through the judicial hierarchy. When a party sought certification and leave to appeal to the Supreme Court, the questions he/she sought to bring to the Supreme Court must have been subject of consideration/litigation in the High Court and then the Court of Appeal. One could not frame novel matters as forming matters of general public importance when making an application for leave either in the Court of Appeal or the Supreme Court. The majority of the issues that the applicant had framed as matters of general public importance did not make sense considering the context of the Court of Appeal’s decision and framing of only three issues. 
  3. The appellate court should have taken a broader perspective on the issue before them; the Hermanus principles were not exclusive. Issues of controversy that emerged from transitional political-economic-social-cum-legal factors, with impacts on current rights and entitlements of suitors, or on public access to common utilities and services, would merit a place in the category of matters of general public importance.  The certification principle was applicable in the matter as was set in the case of Town Council of Awendo v Nelson Oduor Onyango & 13 others [2015] eKLR rendered just over one month after the ruling of the Court of Appeal under challenge.
  4. It was in the public interest that the Supreme Court settled with finality the question whether the land subject of the matter belonged to the applicant or whether it fraudulently acquired its title. At play also was the balancing between private interests vis-a-vis public interest. The balancing and determination was a matter of general public interests. The crux of the matter was whether the title of the applicant to the suit land was fraudulently acquired or not, which land had to be determined whether it was public land or not, and whether it was available for allocation or not, the matter raised questions of general public importance.
  5. Not all the seventeen questions framed by the applicant for determination merited appeal to the Supreme Court. Duly guided by the issues that the Court of Appeal considered and for pragmatism, the issue certified to be of general public importance which the Supreme Court should consider in the intended appeal was: whether the land subject matter of the suit was initially trust land, a public beach or a mangrove forest protected under the Forest Act; and if it was Trust Land and or public land, it was properly, regularly and legally allocated to Hon. Mwamzandi who later re-allocated it to Pati Limited, the applicant.

Application allowed, costs of the application would be in the cause.

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