A legal representative of a corporation in a criminal trial cannot appear and take plea on behalf of the corporation charged with a criminal offence
Republic v Henry Rotich & 2 others
ACEC Revision 32 of 2019
High Court at Nairobi
Anti-Corruption and Economic Crimes Division
M Ngugi, J
September 18, 2019
Reported by Ian Kiptoo
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Criminal Procedure – plea – plea taking – plea taking by a corporation – claim that plea taken by counsel for the respondent companies was irregular – where a corporation was charged with a criminal offence – where an advocate representing the corporation took plea on behalf of the corporation - whether a legal representative of a corporation in a trial could appear and take plea on behalf of the corporation charged with a criminal offence - who could properly represent a corporation charged with a criminal offence in Kenyan courts when taking plea – Criminal Procedure Code, section 207
The matter before the court was for the review of the ruling in ACEC No. 18, 19, 20 and 21 of 2019 where the plea court determined that it was in order for counsel for the respondents, an advocate of the High Court of Kenya instructed to represent two companies, CMC Di Ravenna Itinera JV and CMC Di Ravenna Itinera JV Kenya Branch which were charged alongside their co-accused with various offences under the Penal Code and the Anti-corruption and Economic Crimes Act to take plea on the companies’ behalf.
The Director of Public Prosecution argued that an advocate could not take the place of an accused person and take a plea on his behalf; that under article 50 (2) (f), of the Constitution of Kenya, 2010 (Constitution) an accused person had a right to be present when being tried; and that the only exception was when the conduct of the accused made it impossible for the trial to proceed.
On the other hand, the respondents contended that a corporation was required to appear in court and take part in the proceedings by a representative. Such representative could be a director or an employee of a representative appointed by the company.
- Whether a legal representative of a corporation in a trial could appear and take plea on behalf of the corporation charged with a criminal offence.
- Who could properly represent a corporation charged with a criminal offence in Kenyan courts when taking plea
Relevant Provisions of the Law
Criminal Procedure Code
207. Accused to be called upon to plead
(1) The substance of the charge shall be stated to the accused person by the court, and he shall be asked whether he pleads not guilty, guilty or guilty subject to a plea agreement.
(2) If the accused person admits the truth of the charge otherwise than by a plea agreement his admission shall be recorded as nearly as possible in the words used by him, and the court shall convict him and pass sentence upon or make an order against him, unless there appears to it sufficient cause to the contrary:
Provided that after conviction and before passing sentence or making any order the court may permit or require the complainant to outline to the court the facts upon which the charge is founded.
- With respect to the taking of a plea: the charge and all the essential ingredients of the offence should be explained to the accused in his language or in a language he understood; and the accused’s own words should be recorded and if they were an admission, a plea of guilty should be recorded.
- It was instructive that in its ruling on July 29, 2019, the plea court, on its own motion, referred the matter to the instant court to determine whether its decision to allow that manner of plea taking was proper. Thus, the document purported to show that the corporations had authorised Counsel for the respondents to take plea on their behalf was not before the plea court at the time of the plea. It was presented to the instant court at the hearing of the application for revision and so it could not have been before the plea court on July 29, 2019.
- Traditionally, the predominant thinking was that a corporation could not be indicted for a crime at all. That was partly attributable to the fact that it was necessary that the accused person made a personal appearance in the courts, and a corporation, not being a physical person could not appear. Personal appearance was no longer mandatory in all cases as an accused person, including a corporation, could appear and plead through a representative.
- In the United States, it appeared that a corporation could enter a plea through its legal representative. While Kenya did not have similar provisions in its law, the Judicial Criminal Procedure Bench Book provided at paragraph 66 that a corporate entity could be charged with a criminal offence and that in taking a plea, the court had to satisfy itself that the person taking the plea was authorised to do so by the corporate entity.
- The principles that could be garnered from the authorities were that the court could, if satisfied that the person before it was authorised to take plea on behalf of a corporate entity, allow him or her to do so. That required an inquiry by the court with respect to the position of the person, within the corporate entity, who presented himself as having the authority to take the plea. In the instant case, it appeared that the court did not make the inquiry before allowing the plea by Counsel for the respondents
- Secondly, the position seemed to be that a corporation could be represented by a legal representative, provided that such representative was duly authorised and the court considered and satisfied itself in that regard. However, the nature and seriousness of the offence should be taken into consideration in determining whether a corporation could plead through its legal representative. No situation or circumstances was found in which the same legal representative who was representing a corporation in defending a criminal charge also appeared and took a plea on behalf of the corporation, or, even with authorization.
- The person who could properly represent a corporation in Kenyan courts was an officer of the corporation properly authorised. Such person would ordinarily be a Director of the corporation. It could not be just anybody. To hold otherwise could well result in the rather unedifying spectacle of a parade of legal representatives from the Kenyan Bar engaging in the gymnastics of moving from the Counsel table to the dock while simultaneously standing in for and representing their corporate clients as the accused in the dock and also conducting their defence.
- Another reason related to public interest that would require that the particular and peculiar circumstances of the country should be taken into consideration in determining whether to permit an advocate, even where duly authorised, to take plea on behalf of a corporation. As observed, even in other jurisdictions, a corporation be permitted to take plea by its legal representative. In Kenya’s circumstances, particularly taking into account the need to effectively deal with corruption matters and hopefully deter corruption, it was necessary to have corporations appear and plead by their Directors. The commission of alleged economic crimes had impoverished the country and left many citizens in poverty. It could not be in the interests of fighting corruption that the alleged corporate accomplices of individual perpetrators of economic crimes remain in the shadows and hide behind legal representatives when such matters came to trial.
- The plea recorded by the subordinate court with respect to the respondents on the basis of a plea by their defence Counsel was irregular and improper.
Application allowed. Plea set aside and the respondents directed to appear before the court to take plea through a Director or Directors of the corporations.
Case Updates Issue 046/2019
|| The rules and conditions stipulated under Evidence Act when adducing electronic and digital materials also apply to constitutional petitions.
Hassan Ahmed Ibrahim v Kenya National Bureau of Statistcis & 2 others  eKLR
Petition 327 of 2019
High Court at Nairobi
P Nyamweya. J
September 6, 2019
Reported by Mathenge Mukundi
Constitutional Law – constitutional petitions - institution of constitutional petitions – institution on behalf of other people – where a petitioner instituted a petition on behalf of a community - whether a petitioner could institute a constitutional petition on behalf of a community -Constitution of Kenya 2010, articles 22 & 258.
Evidence Law - electronic and secondary evidence – admissibility - what were the requirements for admissibility of electronic and secondary evidence - Evidence Act, Cap 80, sections 35, 66, 68 ,78A, 106A&B & 107.
Evidence Law - electronic and secondary evidence – electronic and secondary evidence in constitutional petitions – statutory provisions applicable - statutory provisions on adducing both electronic and secondary evidence under the Evidence Act - whether the statutory provisions on adducing both electronic and secondary evidence under the Evidence Act were applicable in constitutional petitions - Evidence Act, Cap 80 Laws of Kenya, sections 35, 66, 68 ,78A, 106A&B & 107
The petitioner, a resident of Mandera County, brought the petition on his own behalf and on behalf of the general public of the people of Kenya. The crux of the petition was the sixth Kenya Population and Housing Census(census) that was scheduled to be carried out by the Government of Kenya on August 24-25, 2019, and the Enumerator’s Instruction Manual and Census CAPI User Guide (DataCollectionApp)(Manual) published by the 1st respondent in preparation for the same.
The petitioner averred that the Manual contained the instructions to be applied and used by the enumerators in carrying out the census exercise, including and not limited to the list of tribe codes contained at Appendix 2 of the Manual. At the heart of the petition was the petitioner’s concern and/or dissatisfaction with the way in which the Manual had assigned ethnic/tribal codes to the Kenyan Somali tribes.
- Whether a petitioner could institute a constitutional petition on behalf of a community.
- Whether the statutory provisions on adducing both electronic and secondary evidence under the Evidence Act were applicable in constitutional petitions.
- What were the requirements for admissibility of electronic and secondary evidence?
Relevant Provisions of the Law
Section 2 -Application
(1) This Act shall apply to all judicial proceedings in or before any court other than a Kadhi’s court, but not to proceedings before an arbitrator
- Article 22(1) and (2) of the Constitution had expanded the horizons of locus standi in matters of enforcement of fundamental rights and freedoms. A literal interpretation of articles 22 and 258 of the Constitution conferred upon any person the right to bring action in more than two instances: firstly, in the public interest, and secondly, where breach of the Constitution was threatened in relation to a right or fundamental freedom. The respondents did not dispute the petitioner’s averments that he was a member of the Somali community and was therefore affected by the names and coding given to the Somali sub-tribes during the scheduled census. The manner that data would be collected during the census was also a matter for public interest concern.
- Section 107(1) of the Evidence Act provided that whoever desired any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserted, had to prove that those facts existed. It was therefore the legal duty of the petitioner to prove by credible evidence the infringement of rights by the respondents, and in the manner he alleged. The required standard which applied in civil cases as the instant one in that regard was that of proof on a balance of probabilities.
- Electronic evidence and digital material was admissible as evidence under section 78A of the Evidence Act, including copies thereof. Section 106B of the Evidence Act provided detailed rules on how documents containing electronic evidence were to be produced for the same to be admissible, and stated that electronic evidence of a computer recording or output was admissible in evidence as an original document if the conditions mentioned section 106B (2) were satisfied. The said conditions were aimed at vouching for the authenticity and integrity of the electronic records sought to be produced. The petitioner did not bring any evidence to show compliance with the conditions which were couched in mandatory terms, and the evidence of the internet printouts annexed to his supporting affidavit was therefore inadmissible.
- The letter from the Senator of Mandera County addressed to the Director General of the 1st respondent (the letter) was inadmissible for reasons of non-compliance with the rules regarding production of documentary evidence set out in section 35 of the Evidence Act, which provided that for any statement made by a person in a document and tending to establish that fact should on production of the original document be admissible as evidence if the maker had personal knowledge of the matters or performed a duty of recording the information and would be called as a witness in the proceedings.
- The petitioner did not demonstrate or satisfy any of the rules on production of documentary evidence set out in section 35 of the Evidence Act, and therefore sought to rely on a statement of a person who was not a party to the suit without laying a basis for such production. The rules on hearing constitutional petitions in that respect allowed the petitioner to either file an affidavit sworn by the maker of the document, or call him to give oral evidence, which he failed to do.
- The letter was a copy made from the original letter, and therefore secondary evidence within the meaning of section 66 of the Evidence Act, the rules regarding proof of secondary evidence set out in section 68 of the Evidence Act were applicable. The petitioner did not demonstrate the existence of any of the conditions or circumstances set out in section 68, neither did he produce a certified copy of the letter. On the whole therefore, the letter could not be admitted to evidence.
- The petitioner did not provide any other evidence as to the existing Somali sub-tribes to support or prove his allegations as to duplicity and conflict in the Somali sub-tribes set out in the Manual, and did not show the expertise on the subject of Somali sub-tribes of the persons whose opinions he sought to rely on. The petitioner had not demonstrated to the required standard how his rights and fundamental freedoms had been violated, infringed or were threatened to come within the ambit of article 23(1) of the Constitution for redress. The petitioner had also not discharged the required evidentiary burden to be entitled to the declaratory relief sought.
Petition dismissed with no orders as to costs.
The Law Society of Kenya’s demand for fees before the issuance of practicing certificates to advocates, including newly admitted advocates, is constitutional.
Wambui Shadrack Kinyanjui v Law Society of Kenya & another; Kenya School of Law & another (Interested Parties)
Petition 50 of 2017
High Court at Nairobi
E C Mwita, J
September 13, 2019
Reported by Beryl Ikamari
Constitutional Law-fundamental rights and freedoms-rights to equality and freedom from discrimination, education and affirmative action for the youth-constitutionality of the Law Society of Kenya's demand for fees from newly admitted advocates before the issuance of practicing certificates-whether the demand for fees was a violation of rights to equality and freedom from discrimination, education and affirmative action for the youth-Constitution of Kenya 2010, articles 27, 43(1) and 55; Advocates Act (Cap 16), section 22(1)(b).
Statutes-interpretation of statutory provisions-interpretation of section 22(1)(b) of the Advocates Act-fees that could be levied by the Law Society of Kenya under section 22(1)(b) of the Advocates Act-whether it was constitutional for the Law Society of Kenya to demand for the East African Law Society levy, the Law Society of Kenya Building levy and charges for an Advocate’s Identity Card-Advocates Act (Cap 16), section 22(1)(b).
The petitioner challenged the constitutionality of the Law Society of Kenya's demand for Kshs. 21, 560/= for purposes of issuing practicing certificates to persons admitted in the year 2017. He stated that he had difficulty in raising that sum of money and that the demand for it was illegal, unreasonable and procedurally unfair and it went contrary to the provisions of articles 24, 43 and 55 of the Constitution. He argued that under section 22 of the Advocates Act, the only money that could be required before the issuance of a practicing certificate was the practicing certificate fee, the Law Society subscription fee and the fee for the Advocates Benevolent Association which could not exceed Kshs. 11, 000/=.
- Whether section 22(1)(b) of the Advocates Act, which made it mandatory for all advocates without exception to newly admitted advocates, to pay fees for practicing certificates to the Law Society of Kenya, as a condition for the issuance of the certificates, was unconstitutional.
- Whether the demand for fees by the Law Society of Kenya, relating to the East African Law Society levy, the Law Society of Kenya Building levy and charges for an Advocate’s Identity Card, from newly admitted advocates was illegal, unreasonable and unconstitutional.
- Whether the requirement that members of the Law Society of Kenya had to be members of the East African Law Society and the requirement for them to pay the requisite fees was unconstitutional.
- Whether a petition about the constitutionality of a demand notice, relating to advocates’ practicing certificate fees, could be brought by a party that was not an advocate. Read More...
Relevant provisions of the law.
Advocates Act (Cap 16)
1) Application for a practising certificate shall be made to the Registrar—
(a) by delivering to him an application in duplicate, signed by the applicant specifying his name and place of business, and the date of his admission as an advocate;
(b) by producing evidence satisfactory to the Registrar that the
applicant has paid to the Society the fee prescribed for a practicing certificate and the annual subscriptions payable for the time being to the Society and to the Advocates Benevolent Association; and
(c) by producing a written approval signed by the Chairman of the Society stating that there is no objection to the grant of the certificate.
- Section 21 of the Advocates Act provided for the issuance of practicing certificates to advocates by the Chief Registrar of the Judiciary. Advocates could not practice law without the certificates which could only be issued in accordance with the law and the applicable rules, as prescribed from time to time.
- Section 22 of the Advocates Act provided for how a practicing certificate would be issued. In particular, it provided that the applicant had to be on the Roll of Advocates, state the year of his admission and provide evidence of payment of subscriptions to the 1st respondent and the Advocates Benevolent Association.
- An interpretation of the requirements of section 22(1)(b) of the Advocates Act had to be holistic. The provision could not be read in isolation. That interpretation also had to consider the provisions of the Law Society of Kenya Act and the objects and functions of the 1st respondent.
- The import of section 23 of the Advocates Act was that a practicing certificate would entitle an advocate to be a member of the 1st respondent and to practice law. The certificate would subject the advocate to the control of the 1st respondent which would include imposition of sanctions where appropriate.
- Article 27 of the Constitution prohibited unfair discrimination. The demand notice issued to advocates who were admitted in 2017 but had not taken out practicing certificates was issued on the basis of a statutory requirement. It was not discriminatory. The petitioner did not show how the demand for fees was discriminatory.
- Article 43(1) of the Constitution provided for the right to education. The petitioner did not show how section 22(1)(b) of the Advocates Act violated the right to education. A litigant had to not only clearly plead violation of rights or constitutional provisions but also strive to establish how that was the case.
- Article 55 of the Constitution provided that the state would take affirmative action to enable the youth to access not only education and training but also opportunities, inter alia, to associate, be represented and to access employment. The petitioner did not show why article 55 of the Constitution had been violated.
- A statute would be declared unconstitutional if its purpose or effect in implementation were unconstitutional. The petitioner had not shown how section 22(1)(b) of the Advocates Act violated rights or constitutional provisions either in terms of its purpose or effect.
- With respect to the demand notice for fees, the petitioner disputed levies relating to the East African Law Society levy, the Law Society of Kenya Building levy and charges for an Advocate’s Identity Card. The Identity Card was for advocates who needed it for identification in the course of their duties and there was no reason to oppose it. The building levy was introduced with reasons and the 1st respondent's membership supported it. It was an internal matter that the Court would not interfere with. Since the 1st respondent was a corporate member of the East African Law Society, all its members were also members of the East African Law Society. The levy payable for the membership was charged with the approval of the 1st respondent's members.
- The demand notice was addressed to advocates that were admitted in the year 2017 but did not take out practicing certificates for that year. However, it did not mean that the notice could not be challenged by someone to whom it was not addressed. Article 258 of the Constitution allowed any person to institute proceedings where there was a likelihood of a violation of the Constitution. Without being an advocate, the petitioner could file the petition.
Petition dismissed. Each party was to bear its costs.
||Section 25 of the Wildlife Conservation and Management Act, 2013 does not oust the jurisdiction of courts to hear and determine wildlife related injury compensation claims
Pius Mwanzia Kioko (Suing as the legal representative of the estate of Brian Musyoki Mwanzia v Kenya Wildlife Services 
Civil Appeal 69 of 2016
High Court at Embu
F Muchemi, J
July, 23, 2019
Reported by KadzoJally
Jurisdiction –jurisdiction of courts–jurisdiction of the County Wildlife Conservation and Compensation Committee–jurisdiction of courts vis-à-vis the County Wildlife Conservation and Compensation Committee–where an appellant sought compensation on behalf of the estate of a deceased who died after sustaining injuries following a crocodile attack in civil court- whether courts had jurisdiction to hear a wildlife related injury compensation claim despite the existence of an avenue of redress at the County Wildlife Conservation and Compensation Committee- Wildlife Conservation and Management Act, section 25.
The appellant’s suit in the trial court was for compensation on behalf of the estate of the deceased who died after sustaining injuries following a crocodile attack. The respondent filed a preliminary objection under section 25 of the Wildlife Conservation and Management Act, which the trial court upheld.
Dissatisfied with the ruling of the trial court, the appellant filed the instant appeal on the ground that the trial court erred in law and in fact in upholding the preliminary objection and thus infringed on the appellant’s right to access justice.
Whether section 25 of the Wildlife Conservation and Management Act, which provided for redress in wildlife related injury compensation claims, ousted the jurisdiction of courts to hear and determine such matters Read More...
Relevant provisions of the law
Wildlife Conservation and Management Act, 2013
(1) Where any person suffers any bodily injury or is killed by any wildlife listed under the third schedule, the person injured, or in the case of a deceased person, the personal representative or successor or assign, may launch a claim to the county wildlife conservation and compensation committee within the jurisdiction established under this Act.
(2) The County Wildlife Conservation and Compensation Committee established under section 18 shall verify a claim made under subsection (1) and upon verification, submit the claim to the Cabinet Secretary together with its recommendations thereon.
(3) Any person who suffers loss and damage to crops, livestock or other property from wildlife specified in the Seventh Schedule hereof and subject to the rules made by the Cabinet Secretary, may submit a claim to the County Wildlife Conservation and Compensation Committee who shall verify the claim and make recommendations as appropriate and submit it to the Service for due consideration.
- Section 25 of the Wildlife Conservation and Management Act (the Act) provided an elaborate procedure for prescribing how claims for injuries caused by wildlife could be dealt with.
- Section 25 of the Act did not take away the jurisdiction of the court in hearing and determining wildlife compensation matters. However, the provision created a forum where the County Wildlife Conservation Committee was to hear all matters specified in that section in the first instance. That specific procedure had to be exhausted before a victim could approach the courts. The legislature aimed at decongesting courts by creating an alternative method of dispute resolution that was more informal and less expensive and served to provide access to justice to victims, some of whom could not afford court fees and legal representation charges.
Appeal allowed with no order as to costs.
- The ruling of the trial court that courts had no jurisdiction was set aside.
- The matter was to be remitted to the Chief Magistrate Court for hearing and determination.
||Circumstances in which the performance of an administrative function would not require a hearing on grounds of impracticality
Advanced Gaming Limited v Betting Control and Licensing Board & 2 others; Safaricom Limited (Interested Party)
Constitutional Petition 271 of 2019
High Court at Nairobi
J M Mativo, J
August 30, 2019
Reported by Beryl Ikamari
Constitutional Law-fundamental rights and freedoms-right to fair administrative action and right to property-giving of reasons for the making of decision to the affected party-whether an omission by the Betting Control and Licensing Board to give details relating to a refusal to renew a license on grounds of unspecified pending investigations, was a violation of the right to fair administrative action and the right to property-Constitution of Kenya 2010, articles 40 & 47; Fair Administrative Action Act, No 4 of 2015, sections 4(2); Betting, Lotteries and Gaming Act (Cap 131), sections 5A & 5(3).
Judicial Review-grounds for judicial review-ultra vires, irrelevant considerations, arbitrariness and unreasonableness-claim that a decision to reject a license renewal application was based on ill-motive, bias and was a premeditated decision-nature of considerations that would be relevant in the decisions made by the Betting Control and Licensing Board in relation to applications for license renewal-whether tax compliance was a relevant consideration in making the decisions and whether such considerations were within the exclusive mandate of the Kenya Revenue Authority-Betting, Lotteries and Gaming Act (Cap 131), sections 29A & 55A.
Judicial Review-grounds for judicial review-legitimate expectation-nature and purpose-whether the holder of a license under the Betting, Lotteries and Gaming Act had a legitimate expectation that the license would be renewed upon its expiry.
Judicial Review-grounds for judicial review-fair hearing-administrative functions that would not require a hearing-determining whether license renewal applications conformed with statutory requirements-whether for such administrative functions affording an affected party a hearing before a decision was made would be impractical-Constitution of Kenya 2010, article 47.
Constitutional Law-constitutionality of statutes-constitutionality of section 5(3) of the Betting, Lotteries and Gaming Act-constitutionality a provision which allowed the Betting Control and Licensing Board to reject applications without giving reasons-where it was alleged that a failure to give reasons was because there were pending security and intelligence investigations- whether failure to give reasons for a decision made under that provision was a violation of the right to fair administrative action-Constitution of Kenya 2010, article 47; Betting, Lotteries and Gaming Act (Cap 131), section 5(3).
Civil Practice and Procedure-suits-parties to a suit-ouster clauses relating to certain parties-where statute disallowed institution of suit against a Board and its employees over conduct which related to the official performance of their duties-whether an Acting Director and Chairman of the Betting Control and Licensing Board could be enjoined as parties to a suit relating to the rejection of a license renewal application-Lotteries and Gaming Act (Cap 131), section 3(12).
The petitioner had a license to undertake the business of entertainment facilities including the promotion of betting and gaming. The licence was to expire on June 30, 2019. Before the license expired the 1st respondent, the Betting Control and Licensing Board, wrote to the petitioner requiring it to renew its licence while complying with the conditions for renewal. The petitioner forwarded its application for a licence renewal together with annexed documents. When the 1st respondent asked for two other documents in order to process the application, the petitioner sent them. The petitioner's application was rejected on grounds of alleged unspecified pending investigations.
Concerning the rejection of its application, the petitioner alleged the existence of ill motive, bias and a premeditated decision. Generally, the petitioner alleged that the decision occasioned breaches of the rights to fair administrative action, property and fair hearing and its legitimate expectations that a renewal would be granted. Particularly, the petitioner stated that its application was rejected on the basis of investigations that it was unaware of, without notice and without it being accorded an opportunity to be heard. The petitioner complained of the suspension of its Pay Bill number by the 1st respondent, whose effect was to halt the petitioner's business and to withhold its clients’ money, and it allegedly violated the petitioner’s property rights. The petitioner added that the reasons for the rejection which included unspecified investigations and unspecified non-compliance with licence conditions entailed a violation of the right to information.
The petitioner challenged the constitutionality of section 5(3) of the Betting, Lotteries and Gaming Act, which allowed the 1st respondent to refuse a licence or permit or renewal or variation thereof without giving reasons, on grounds that it was a violation of the right to fair administrative action.
The 1st respondent explained that the renewal application was rejected due to various non-compliance issues. Inter alia, the petitioner was said to have failed to submit the weekly returns and to have failed to respond to show cause letters and warnings relating to the non-compliance. .
- Whether tax compliance was a relevant consideration in the decisions made by the Betting Control and Licensing Board in relation to applications for license renewals before the Board.
- Whether an omission by the Betting Control and Licensing Board to give details relating to a refusal to renew a license on grounds of unspecified pending investigations, was a violation of the right to be given reasons for a decision as part of the right to fair administrative action.
- Whether the Betting Control and Licensing Board acted ultra vires when it declined to grant a license renewal for reasons related to tax compliance which were within the mandate of the Kenya Revenue Authority.
- Whether the holder of a license under the Betting, Lotteries and Gaming Act had a legitimate expectation that the license would be renewed upon its expiry.
- Whether a decision to reject an application for a license renewal by the Betting Control and Licensing Board on grounds of unspecified pending investigations was arbitrary and unreasonable.
- When would an administrative decision not require a hearing on the ground that it would be impractical to have a hearing before the decision was made?
- When would information held by the Betting Control and Licensing Board not be disclosed on grounds that it related to intelligence and security investigations?
- Whether an Acting Director and Chairman of the Betting Control and Licensing Board could be enjoined as parties to a suit in relation to a decision not to renew a license made in the course of the performance of their official duties.
- Whether section 5(3) of the Betting, Lotteries and Gaming Act, which provided that the Betting Control and Licensing Board could reject an application for a license without giving reasons, breached the right to fair administrative action as recognized under the Constitution.
- Whether refusal to grant a license, which would allow a business to operate, on grounds of unspecified pending investigations was a violation of the right to property. Read More...
- An important issue was whether tax compliance was a relevant consideration in applications for license renewals made to the 1st respondent. In exercise of discretion, an authority would take into account various considerations and those consideration were of two kinds. The first were mandatory relevant considerations which would be expressly or impliedly identified by statute as considerations that had to be given regard and the second were discretionary relevant considerations which were considerations that the authority could take into account if it regarded them as relevant. Where a decision-maker determined that a particular consideration was relevant, it was entitled to attach whatever weight it deemed reasonable to that consideration and the Court would not interfere with that determination unless it was made in a Wednesbury-unreasonable manner. That was consistent with the principle that courts were generally concerned with the legality of decisions and not their merits.
- Whether a consideration was a relevant one was a matter of law and whether the correct weight was attached to a consideration, was a question of fact. Courts were reluctant to scrutinize the manner in which a decision-maker balanced relevant considerations. Weighing relevant considerations was a matter left to the decision-maker.
- In Kenya, a Certificate of Tax Compliance issued by the Kenya Revenue Authority was a common requirement demanded by decision-makers from a person aspiring to occupy a public office, a bidder seeking to participate in a public procurement process, an applicant for a business license, or a person seeking to incorporate a company or even to open a bank account.
- The preamble to the Betting, Lotteries and Gaming Act, read that it was an Act of Parliament which provided for the control and licensing of betting and gaming premises, for the imposition and recovery of a tax on betting and gaming, for the authorization of public lotteries and for connected purposes. It was therefore difficult to de-link the requirement for tax compliance from the license requirements under the Act. Proof of payment of taxes arising from gaming and betting businesses operated under the Betting, Lotteries and Gaming Act was a relevant consideration when determining whether or not to grant a license under the Act.
- Via a letter dated July 17, 2019, the petitioner was required to submit proof of withholding tax payment for January 2019 to May 2019. There was no evidence that the petitioner provided proof of payment of the withholding tax.
- The Betting, Lotteries and Gaming Act provided for gaming tax under section 55A and betting tax under section 29A, both of which were to be collected but the Commissioner-General appointed by the Kenya Revenue Authority. Given that the preamble also expressly stated that the Act would relate to inter alia the imposition and recovery of tax, an argument that proof of tax payment was not a legal requirement for the grant of a license was a legal frailty.
- Section 4(2) of the Fair Administrative Action Act provided that every person had the right to be given written reasons for any administrative action that was taken against him. The petitioner's application was rejected on grounds of pending investigations and under section 5A of the Betting, Lotteries and Gaming Act. The 1st respondent was allowed to undertake such investigations before granting a license. The letter of July 1, 2019 which rejected the application for a license renewal stated that the application lacked merit on account of pending investigations into the petitioner's compliance with set license conditions and regulatory requirements. Further, there were indications that the petitioner did not provide proof of the payment of withholding tax as required. The petitioner was aware of the reasons as to why the renewal application was dismissed.
- Section 5(3) of the Betting, Lotteries and Gaming Act permitted the 1st respondent to grant or refuse to grant a licence without giving reasons. Refusal to give reasons had a statutory backing and its legality was not in doubt.
- The task for the courts in evaluating whether a decision was illegal was essentially one of construing the content and scope of the instrument conferring the duty or power upon the decision-maker. The instrument would normally be a statute or regulations. Where the decision was discretionary, the courts would have to determine the scope of the discretion and to construe the applicable statute purposively.
- The Court's function was to police the boundaries related to the exercise of power conferred by Parliament. In two ways the ultra vires principles served the policing purpose. First, it required the relevant agency to have legal capacity to act in relation to the topic in question and secondly, it imposed a number of constraints on the way in which the power given to the agency would be exercised; compliance with rules of fair procedure, exercise of discretion to attain proper and not improper purposes and not acting unreasonably.
- The 1st respondent had the mandate to grant or refuse to grant licenses under the Betting, Lotteries and Gaming Act. In exercising that mandate the 1st respondent was required to conduct a complete evaluation of the application and to satisfy itself that it complied with the law and the set requirements. It would be unlawful for the 1st respondent to make a decision on a license application where there was no complete compliance. Due diligence was part of a complete evaluation.
- The decision to reject the petitioner's application was made in a manner that conformed to the enabling statute. The petitioner did not demonstrate that the 1st respondent acted ultra vires.
- In adjudicating legitimate expectation claims, the Court would follow a two-step approach. First, it would ask whether the administrator’s actions created a reasonable expectation in the mind of the aggrieved party. If the answer to that question was in the affirmative, the second question was whether that expectation was legitimate. Analysis of a legitimate expectation would be both objective and subjective. It would be necessary to first determine whether a reasonable expectation of a certain outcome was created. The representation would have to be precise, specific and lawful. It was only a lawful representation that could create a legitimate expectation.
- A decision maker could not be expected to act against clear provisions of statute in order to meet an expectation. Legality was a key principle in the rule of law and there could be no legitimate expectation against the clear provisions of a statute.
- The fact that the petitioner held a license could not confer a legitimate expectation that once the license expired, it would be renewed automatically. Section 5 of the Betting, Lotteries and Gaming Act prescribed legal requirements for the grant of a license which had to be met. Renewal of a license was subject to the fulfilment of certain conditions.
- JR No. 56 of 2019 was cited as an authority by the petitioner. However, the ratio of a decision should be understood in the background of the facts of that decision. A case would only be an authority for what it actually decided and not what logically flowed from it. A little difference in facts or additional facts could make a lot of difference in the precedential value of a decision. Close similarity in facts between one case and another was not enough because even a single significant detail could alter the entire aspect.
- The decision in JR No. 56 of 2019 related to the suspension of a license. The instant case related to an application for the renewal of license after its expiry.
- Under the arbitrary and capricious standard, an administrative decision would not be disturbed unless it had no reasonable basis. When an administrator made a decision without reasonable grounds or adequate consideration of the circumstances, it would be said to be arbitrary and capricious and could be invalidated by a court on that ground.
- The circumstances of the case and the evidence tendered did not disclose any element of arbitrariness, capriciousness, malice, bad faith or abuse of power. Therefore, the petitioner failed to demonstrate that the impugned decision was arrived at arbitrarily and in abuse of powers conferred by the enabling statute.
- The Constitution recognized a duty to accord a person procedural fairness when a decision that affected a person’s rights, interests or legitimate expectations was made. Procedural fairness contemplated by article 47 of the Constitution included a right to be heard before a decision affecting one’s rights was made.
- What fairness required depended on the context of the decision. The Court would look at all the circumstances of the case to determine how the demands of fairness should be met.
- The decision to refuse to renew a business license was an administrative function. After the submission of an application, the 1st respondent would review it to confirm conformity with the prescribed requirements and then communicate the decision to the applicant. Such an exercise would not require a hearing and in fact requiring a hearing would be impractical. The application would stand or fall on set statutory requirements.
- The test of Wednesbury unreasonableness was that the impugned decision had to be objectively so devoid of any plausible justification that no reasonable body of persons could have reached it and that the impugned decision had to be verging on absurdity in order for it to be vitiated. The decision would be one that no reasonable person could have reached at and the proof of that would have to be something overwhelming. It would have to be of a nature which no sensible authority acting with due appreciation of its responsibilities would have decided to adopt and it would have to lack a plausible justification.
- A consideration of the facts of the case and the mandatory statutory requirements did not show that a different body or tribunal properly addressing itself to the same facts and circumstances could have arrived at a different conclusion. The petitioner did not prove that the impugned decision was unreasonable.
- Section 6 of the Access to Information Act set out limitations to the right to access to information. The purpose of the said 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.
- The 1st respondent did not give the petitioner details of the pending investigations but it stated that the details related to intelligence and security investigations. Within the terms of section 6 of the Access to Information Act, the information was the type that the 1st respondent could not be compelled to disclose.
- Section 3(12) of the Betting, Lotteries and Gaming Act provided that no member of the Board or any officer or servant thereof, would be personally liable for any act or default done or omitted to be done in good faith in the course of their duties. It meant that it was a mandatory prescription that an officer or servant of the 1st respondent could not be sued for acting in good faith in the course of performing his or her duties. Therefore the suit against the 2nd and 3rd respondents, who were the Acting Director and Chairman of the 1st respondent, could not be sustained.
- Section 5(3) of the Betting, Lotteries and Gaming Act provided that the 1st respondent could reject an application for a license without giving reasons. It was alleged by the petitioner that the provision offended the requirement to give reasons for a decision to a party that was affected by the decision, as part of the right to fair administrative action under article 47 of the Constitution. Under the presumption of constitutionality, a statute would be presumed to be constitutional and the burden of proving otherwise would rest on the person alleging unconstitutionality of the statute.
- In determining questions related to the constitutional validity of a statute, where the statute entailed a limitation on the enjoyment of a constitutional right, it was necessary to determine whether the reason offered for the impugned provision was reasonably related to a legitimate purpose. Determining reasonableness included determining:-
- whether there was a "valid, rational connection" between the limitation and a legitimate public interest to justify it, which connection was not so remote as to render the decision arbitrary or irrational; and,
- whether there were alternative means of exercising the asserted right that remained open.
- Limitation of a constitutional right would be constitutionally permissible if;
- it was designated for a proper purpose;
- the measures undertaken to effectuate such a limitation were rationally connected to the fulfilment of that purpose; 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,
- 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.
- It was important to answer the question as to whether the objective of section 5(3) of the Betting, Lotteries and Gaming Act was necessary and that it minimally impaired the right to be given reasons, taking into account alternative means of achieving the same objective. The provision related to the processing of licenses. Some reasons related to the existence of the stated section 5(3) were within the exceptions to the right to information under section 6 of the Access to Information Act. In such situations, the benefits of limiting the right outweighed the negative effects of the limitation and promoted a fair balance between public interest and private rights.
- Section 5(3) of the Betting, Lotteries and Gaming Act was not unconstitutional for the following reasons;
- the objective it served was sufficiently important to warrant overriding a constitutionally protected right or freedom;
- it was designed to serve an objective and it was not arbitrary, unfair or based on irrational considerations;
- the 1st respondent was required to balance the interests of society with those of individuals and it was not in public interest to disclose intelligence and security investigations;
- it was a provision that was within the terms of section 6 of the Access to Information Act under which disclosure of information would be exempted.
- The 1st respondent could not be accused of violating the petitioner's right to property. Refusal to grant a license could not amount to an unfair interference with property rights and it could not constitute an unjustifiable interference with property rights.
- In order to grant declaratory relief, the Court had to be satisfied that the applicant was a person who was interested in an existing, future or contingent right or obligation and then decide on whether the case was a proper one for the exercise of its discretion. The circumstances of the case did not warrant the grant of declaratory reliefs.
- Certiorari 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.
- Certiorari was not the most efficacious remedy under the circumstances because even if the Court quashed the 1st respondent's decision, the petitioner would still have an expired licence and it could not operate on the basis of that license. However, the petitioners had the liberty to apply for a license afresh and it would be considered in accordance with the law.
- The respondents did not act illegally or in excess of their powers nor had the decision refusing to grant the license been shown to be illegal, irrational or a nullity. An order of prohibition could not therefore be issued against them.
- Possession of a valid license was a condition precedent to the grant of Pay Bill numbers by the interested party to the petitioner. The Court could not grant an order of prohibition to defeat or frustrate contractual terms voluntarily entered into by parties.
Long'et Terer - CEO and Editor
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