Court of Appeal sets aside judgment of the Employment and Labour Relations Court awarding 50 – 60% salary increment to teachers
Teachers Service Commission v Kenya National Union of Teachers & 3 Others
Court of Appeal at Nairobi
Civil Appeal No. 196 of 2015
E M Githinji, M K Koome, P M Mwilu, F Azangalala & J Otieno – Odek, JJA
November 6, 2015
Reported by Teddy Musiga

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Issues:
  1. Whether a party who has not satisfied a judgment/ decree is in contempt of court and should not be given audience by a court until he satisfies the judgment/ decree.
  2. Whether public officers should be cited for contempt of court for failure to honour money decrees payable by a government ministry or body.
  3. Whether the advice of the Salaries and Remuneration Commission (SRC) under article 230(4) (b) on remuneration and benefits of all public officers was binding on national and county governments.
  4. Whether the Salaries and Remuneration Commission (SRC) has a role to play in the collective bargaining process between employers (TSC) and the unions and in job evaluation.
  5. Whether the Employment and Labour Relations Court has the jurisdiction to conduct both conciliation and adjudication proceedings under section 15 of the Employment and Labour Relations Court Act that provides for alternative dispute resolution.
  6. What is the procedure of making a consent order?
Constitutional Law constitutional commissions – relationship between Salaries and Remuneration Commission (SRC) and the Teachers Service Commission (TSC) – role of the SRC in advising TSC regarding salaries and benefits of teachers – Procedure for granting advice regarding salaries and benefits for teachers - whether SRC’s advice is binding – Constitution of Kenya, 2010, article 230(4); article 259(11); Teachers Service Commission Act, section 37(3)
Labour Law Employment relationships – Collective Bargaining agreements (CBA) - whether Salaries and Remuneration Commission has role to play in CBA process between employers and trade unions - Labour Relations Act, section 57(1)
Labour Law jurisdiction of the Employment and Labour Relations Court in conducting alternative dispute resolution – whether the Employment and Labour Relations Court can conduct both conciliation and adjudication – role of the judge in conciliation proceedings – whether a judge of the Employment and Labour Relations Court can conduct both conciliation and adjudication – Employment and Labour Relations Court Act, section 15, 66, 76; Constitution of Kenya, 2010, article 159(2)(d)
Contract Law elements of a contract – offer and acceptance – counter offer – whether a counter offer can be deemed to be an acceptance – legal validity of an existing offer once a counter offer is made - claim where applicant made offer of salary increment of 50 – 60% and the respondent made counter offer of 100 -150%
Civil Practice and Procedure contempt of court – jurisdiction of the court to punish for contempt of court - whether a party who has not satisfied a judgment/ decree is in contempt of court and should not be given audience by a court until he satisfies the judgment/ decree – exceptions to the general rule of denying audience in court to party who has not satisfied a judgment/ decree - Judicature Act, section 5(1); Appellate Jurisdiction Act, section 3(1)

Held:
Per E M Githinji, JA
  1. The right of appeal from decisions of the Labour Court to the Court of Appeal was conferred by section 17(1) of the Employment and Labour Relations Court Act. The Court of Appeal could entertain appeals from the Labour Court on both matters of fact and law. The jurisdiction of the Court of Appeal to hear appeals from the High Court also stemmed from article 164(3) of the Constitution of Kenya, 2010 and section 3(1) of the Appellate Jurisdiction Act. Therefore, there was no provision in the Constitution or statute which debarred a party who had filed a competent appeal to the Court of Appeal from being heard on the merits.
  2. The jurisdiction given to courts by section 5(1) of the Judicature Act to punish for contempt of court, left open the punishment that the court could give. The punishment for contempt by denying a party a right to be heard until he had purged the contempt was a rule of common law and, as section 3(1) of the Judicature Act provided, its application was subject to the Constitution and the written laws.
  3. There was no rigid rule that a party in contempt could not be given audience by a court. The rule was hedged with exceptions and was subject to the discretion of the court. Such exceptions included cases where a party was challenging the jurisdiction of the Court to make the impugned order.
  4. The Labour Court was correct in describing the order as a consent order and that the parties indeed entered into the consent order allowing the court to adjudicate on the economic dispute. Therefore, that consent compromised petition No. 3 of 2015.
  5. There was no express statutory provision of the law which gave jurisdiction to the Labour Court in the absence of a collective bargaining agreement to set the basic salary and allowances to public officers. To the contrary, section 61 of the Labour Relations Act expressly took away the jurisdiction from the court in the absence of the collective bargaining agreement. Conciliation or mediation was a compulsory condition precedent before the Labour Court could assume jurisdiction.
  6. TSC as an employer of teachers who were public officers was subject to the advice of the Salaries and Remuneration Commission (SRC) under article 230 (4) (b) on the remuneration and benefits of teachers. Indeed section 37(3) of the TSC Act stated that the registered teachers served under the terms and conditions as the committee established under section 13(5) in consultation with the Salaries and Remuneration Commission. However, the phrase “in consultation” with SRC was a drafting error as it did not conform to the provisions of article 230(4) (b) of the Constitution which used the word, “advise”.
  7. The very composition of SRC indicated that its advice had to be given great weight. Article 259(11) showed that the advice was a mandatory condition precedent for a valid exercise of power or function. If the word, “advice” in article 230(4) (b) was construed to be not binding, the country could be returned to the pre 2010 era which would defeat the purposes, values and principles of the constitution and of institutionalization of SRC under the Constitution. Therefore, the advice of SRC under article 230(4) (b) on remuneration and benefits of all public officers was binding on national and county governments and any power or function exercised without that advice was invalid.
  8. Disputes relating to revenue allocation and public wage setting were complex, intricate and of a technical nature and were best handled by the institutions with the institutional competence. The constitution conferred such jurisdiction to TSC as employer for the decision and preparation of the budget, SRC for advice on the fiscal sustainability of the claim, National Treasury for preparation of the National budget, National Parliament for approval of the budget and the Appropriation and Controller of Budget for implementation of the budget by authorizing withdrawals from public funds.
  9. Those institutions had made a decision in accordance with their constitutional power, which decision was not favorable to the unions. Although the doctrine of separation of powers could not be invoked to undermine the operation of a specific provision of the Constitution, it nevertheless required that constitutional actors had to respect the role and mandate of other constitutional actors by refraining from usurping their functions. The only lawful remedy to challenge the decision already made by constitutional bodies was a constitutional remedy in the nature of a constitutional petition in the court invested with jurisdiction seeking appropriate orders or declarations or alternatively, a remedy under the Fair Administrative Act where applicable. That remedy did not lie in the institution of private law or statutory proceedings for the same relief that the constitutional institutions failed to give.
  10. It was trite law that a consent order, such as the one relied on in the instant case could not confer jurisdiction on a tribunal or a court which it did not have.
  11. If a constitutional remedy was sought in an appropriate court to challenge the decision, then different principles applied to the lawfulness of the decision including the conformity of the decision with constitutional principles, principles of reasonableness, proportionality of the impugned decision and the doctrine of deference – that was, the level of deference to be given to the decision maker in relation to the decision.
  12. It was only the relevant constitutional institutions particularly SRC which had the exclusive jurisdiction to deal with increment of basic salary and allowances for public officers. The Labour Court in awarding teachers a basic salary increase of 50 – 60% and allowances, a task for which it had no institutional competence to handle, made a jurisdictional error by usurping the role of SRC and other actors, and the award having been made without jurisdiction, was a nullity and liable to be set aside on that ground alone.
  13. The Labour Court had no jurisdiction to award teachers a basic salary increment and allowances as it could not derive such jurisdiction from the consent order or from the Labour Relations Act or from the Constitution. Therefore, a judge of the Employment and Labour Relations Court had no jurisdiction to conduct conciliation or mediation proceedings under section 15 of the Employment and Labour Relations Court Act as read with article 159(2) of the Constitution.
  14. Regarding costs of the appeal, there was no party to blame, for it was the erroneous assumption of jurisdiction by the court which led the parties to participate in the proceedings.
The unanimous findings of the Court:
Appeal allowed. No orders as to costs.
  1. With regard to the application to deny TSC a right of audience for contempt of court, TSC, SRC and the Attorney General had a right to be heard in those appeals.
  2. That the advice by SRC under article 230(4) (b) of the Constitution was binding and that SRC had a role to play in collective bargaining agreement on matters relating to remuneration and benefits of public officers, including teachers.
  3. There was unanimity that the order of 14th January, 2014 did not confer jurisdiction to the trial court.
  4. As a general principle, a judge of the Employment and Labour Relations Court had no jurisdiction to conduct conciliation under section 15 of the Employment and Labour Relations Court Act as read with article 159 of the Constitution, 2010.
  5. Other findings;
    1. The SRC had a role to play in job evaluation of public officers including teachers
    2. The judge erred in backdating the award
    3. The trial judge erred in not taking into consideration the expert evidence of Dr. Godfrey Mwau (RW 3)
    4. That the Petition No. 3 of 2015 was not compromised.

Per M K Koome, JA
  1. For unknown reasons, the Unions did not file an application for contempt as prescribed by law. The decree was directed against TSC and it was subject of the instant appeal. TSC was given a conditional order staying execution of the order which must have lapsed on or about September 2015, when they did not pay the salaries. That meant there was no order staying execution that was in place and the unions were at liberty to pursue execution.
  2. There were various exceptions that would be considered before a party who was in contempt of a court order could be denied audience. One of those exceptions was the challenge of jurisdiction of the court that made the orders being appealed against. Also a defense by the alleged contemnor that his actions did not constitute a breach of the order. Therefore, even if the unions had exhausted the execution proceedings, the instant appeal had elements that would bring it within the exception rule.
  3. The Government Proceedings Act, Cap 40 prescribed an elaborate procedure dealing with execution and satisfaction of orders by against government. TSC was a constitutional commission within the Government. The Unions had to follow execution procedures as set by law; the instant decree being a money decree. There was an elaborate process involved in the allocation of resources through budgeting, approvals by the National Assembly and amendment of the relevant laws.
  4. Nonpayment of the decretal sum was not out of willful disobedience of a court order but required an elaborate legal process that involved other state organs not just TSC. Further, the Unions had neither exhausted nor completed the process of execution of their decree. Therefore the TSC or the Attorney General could not be denied audience in pursuit of their appeals.
  5. The trial court failed to follow the correct procedure when he conducted the conciliation proceedings. That was because, a conciliator was supposed to issue a certificate in the event that party failed to reach a settlement. Although section 15 of the Employment and Labour Relations Act was silent on how a dispute could be referred to conciliation, mediation or ADR, if that section was read together with section 66 of the Labour Relations Act, it specifically provided for who could be a conciliator and also the job description of the conciliator was provided.
  6. The plain meaning of ADR denoted a process that was alternative or outside the court; or if a judge took up the role of a conciliator or mediator, then he or she had to relinquish the role of an adjudicator. Thus if there was no agreement on conciliation or as the case could be, then the matter was referred to another judge for adjudication. It was thus untidy for a judge to switch from one role to the other. That notwithstanding, the proceedings could not be declared a nullity because no prejudice was suffered by the appellant because the judge played both roles.
  7. The common practice regarding consents usually was; parties ordinarily agreed on matters and they filed in court a written consent that was signed by all the parties consenting for adoption as a court order. Alternatively, if parties arrived at consent, while the matter was before a judge as parties often did, the orders were dictated to the judge who adopted the consent as the order of the court and requested all the consenting parties to append their signatures. That common practice was not followed. Had the trial court followed the above procedure, it would not have been faced with an application to set aside the said consent orders as it happened a few days later when TSC filed a motion to set aside those consent orders.
  8. The procedure of declaring a dispute to the Minister was one of the best practices that was acknowledged because it gave room for conciliation and for parties to arrive at their own settlement. However, section 76 of the Labour Relations Act provided that the Unions had an option to call a strike where it was not disputed (as it was not) that there was an old dispute over the terms and conditions of teachers’ employment.
  9. The Unions had an option to refer the matter to the Minister for conciliation. Both processes were within the law, and due to the importance of the role played by conciliators or mediators in industrial disputes, it was manifest that the trial court appreciated that and thus ordered the matter to proceed for conciliation (which it erroneously conducted) before proceeding with adjudication. Thus even if a party called for a strike under section 76 of the Labour Relations Act, the court could refer the matter to conciliation.
  10. The extra ordinary circumstances that surrounded the instant matter therefore made the trial court to have the jurisdiction to determine the dispute that was before it even though the trial court conducted the conciliation as parties failed to reach a settlement and the court was already seized with the dispute.
  11. The Constitution provided that SRC’s role was to advice the National government on the remuneration of all public officers. In that case, there was room for Unions to negotiate with their employer. The terms and conditions of teachers that were negotiated with Unions and TSC could only be completed after consultation with SRC as provided for by law. TSC was supposed to seek advice of SRC before tabling proposals to the Unions. SRC’s advice was fundamental in the conclusion of a CBA which dealt with the terms and conditions of public officers.
  12. A reading of article 259(11) of the Constitution of Kenya, 2010 as read with articles 230(4) (b), section 11 of SRC Act and section 37(3) of the TSC Act meant that the advice envisaged of SRC to TSC was binding to TSC. By advising TSC on the remuneration of teachers, SRC did not interfere with the functional and operational independence of TSC. Therefore the trial court erred in holding that the advice by SRC to TSC was not binding as well as performing the functions of SRC on its own motion without any prompting by TSC. A court could not usurp the functions of another constitutional body unless that body had been found to have failed to carry out its functions.
  13. Situations could arise when SRC could give irrational or incompetent advice or even fail to give advice at all. In such circumstances, TSC or any other body would be entitled to challenge the impugned advice in court by way of judicial review. TSC could not merely ignore the advice of SRC without giving valid and cogent reasons and thereafter seeking an interpretation by court or an order setting aside an impugned advice. That was what was intended by framers of the Constitution, 2010 when they created the mandate of SRC which meant that not a single organ of national or county government would have an upper hand in setting their own remuneration and benefits. By giving each commission specific mandates, the framers of the constitution envisaged a situation where there would be mutual cooperation, consultation, complimentarily as well as checks and balances of each organ of the government.
  14. If parties failed to settle a dispute as they did in the instant case, it was the business of the court to settle it. In doing so, the court was supposed to be guided by the evidence adduced before the court and the law.
  15. The award of 50-60% had no legal basis as the trial court had a duty of justifying the award while taking into account the laid down principles and aspects that guides SRC in arriving at an advice that ought to have been given to TSC regarding the determination of remuneration and benefits of teachers. Therefore the trial court erred by finding that the advice by SRC was not binding; for failing to evaluate the evidence and for taking over the role and mandate of SRC to determine the remuneration and benefits of teachers without due consideration to the provisions of the Constitution and statute law.
Orders
  1. SRC was ordered to table before the employment and Labour Relations Court its report to TSC on job evaluation of teachers within 90 days
  2. SRC was to provide written advice to TSC on remuneration and benefits that were to be awarded to teachers within 90 days.
  3. Thereafter, parties were to resume negotiations with a view to finalizing the CBA which was to be registered within 30 days.
  4. The remuneration and benefits agreed upon had to accord with the provisions of the constitution and the relevant statutes.
  5. The three appeals were allowed with no orders as to costs.
Per P M Mwilu, JA
  1. TSC had an unfettered right of appeal which could not be denied on account of allegations of contempt which still pended determination in the trial court. Contempt had not been proved.
  2. The jurisdiction of the court under section 12 of the Employment and Labour Relations Court included the hearing and determination of disputes referred to it in accordance with article 162(2) of the Constitution of Kenya, 2010. The disputes included those between the employer and trade unions and disputes relating to the registration and enforcement of collective agreements.
  3. The trial court invoked section 15(1) of the Employment and Labour Relations Court Act to determine the instant dispute which was an appropriate means of resolving the dispute by encouraging the participation of the parties. Therefore the trial court had the general jurisdiction as matter of law, the dispute falling under section 12 of the Employment and Labour Relations Court Act. The trial court could have as well referred the dispute to alternative dispute resolution mechanisms under article 159 (2) (c) of the Constitution of Kenya, 2010 and Rule 3 of the (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules (Mutunga Rules) but it appeared that the trial court considered that time was of the essence and a resolution had to be found. The procedural technicalities had to be disregarded and in any event no party was prejudiced in the manner in which the trial court proceeded.
  4. Despite the best intentions of the trial court concerning the strike and getting children going back to school, the trial court did not have jurisdiction to undertake the conciliation as an alternative dispute resolution mechanism. Conciliation was a task reserved for persons defined in section 66 of the Labour Relations Act. A judge could not act as both a judge and a conciliator simultaneously.
  5. No valid salary and or benefit of a state or public officer could ensue from a process that ignored the roles of SRC as provided for by the Constitution and the statute. The role of SRC was mandatory. Their advice was to be sought and obtained prior to taking any action that required that advice. That advice was binding as per the requirements of article 259(11) of the Constitution.
  6. The trial court’s finding that SRC’s advice did not bind TSC in matters salary and CBA cast out SRC’s constitutional duty to manage the country’s compensation bill to keep it fiscally sustainable which was a constitutional requirement under article 230(5) of the Constitution. To the extent that the trial court relegated it to a place far below the TSC Act, the trial court erred irredeemably.
  7. The consultative committee established under section 13(3) of the TSC Act had to consult with SRC on matters of salaries and benefits of teachers. That committee had representation from SRC and the National Treasury but it remained the committee of TSC and it did not become by that representation, part of the SRC and the National Treasury so as to obviate the need for TSC to seek and obtain prior advice of SRC before settling salaries and benefits for teachers. The requirement for consultation set out in article 259(11) of the Constitution was repeated under section 37(5) of the TSC Act, just to emphasize the need for advice/ consultation before setting salaries and benefits.
  8. The carrying out by SRC of its constitutional mandate of advising on salary, benefits and national compensation bill sustainability was not and could not be construed to be exercising superiority over a fellow constitutional commission. Rather it was that each commission had to carry its constitutional mandate and if that exercise touched on the mandate of another Commission, then the roles could only be complementary at best and not otherwise.
  9. SRC had to be involved in its advisory role in the negotiations on the conclusion of CBA involving public officers. The manner and style of how that was to be done was not primary. What was of paramount importance was that SRC’s advice had to be sought, and once obtained, it was binding. Therefore, prior advice of SRC had to be sought before TSC could make an offer on basic salary to Unions. That advice from SRC bound TSC.
Per F Azangalala, JA
  1. The special circumstances of the instant case required that TSC ought not to be treated as being in contempt as its inability to pay could not be equated to deliberate refusal to comply with the judgment of the trial court. There was also no evidence that the conduct of the appellants (TSC) impeded the course of justice.
  2. It was not open for the trial court to convert TSC’s petition into an economic dispute and in doing so, the trial court assumed jurisdiction which it did not have.
  3. Whereas a judge of the Employment and Labour Relations Court, like the trial judge had jurisdiction under article 162(2)(a) of the Constitution, section 12 of the Employment and Labour Relations Court Act and sections 10 (b) and 73(1) of the Labour Relations Act, to entertain disputes between employers and employees, the trial court in the instant dispute, in so far as it believed the parties had empowered it to proceed in the manner it did when no such power had been given, it lost jurisdiction to proceed with the dispute as it purported to do.
  4. The Constitution envisaged alternative dispute resolution as an external process outside the normal court forum process. The language of the Constitution was plain and unambiguous. It left no room for a contrary interpretation. Yet the trial court invoked article 159 of the Constitution to preside over what it itself knew were conciliation proceedings. The Constitution did not empower a judge to preside over conciliation proceedings.
  5. Section 15 of the Employment and Labour Relations Act was self-limiting as it expressly stated that the alternative dispute resolution had to be in accordance with article 159(2) (c) of the Constitution. Nothing in that section suggested that a judge of the Employment and Labour Relations Court whilst seized of a dispute between an employer and an employee could metamorphose into an alternative dispute resolution facilitator. A judge had to remain a judge at whatever level he was seized of a dispute between parties before him.
  6. It would have been to expand the scope of section 15 of the Employment and Labour Relations Court Act, to suggest that the section empowered a judge to preside over a dispute as a judge at one stage and as a conciliator or other alternative dispute resolution facilitator at another stage within the same proceeding. To do so, would have been a violation of article 159(2) (c) which was the source of authority of section 15 of the Employment and Labour Relations Court Act.
  7. All that section 15 of the Employment and Labour Relations Court Act suggested was that a judge of the Employment and Labour Relations Court instead of hearing a dispute himself had the liberty to let another qualified person to determine the dispute which determination the judge could adopt or implement on his own motion or at the request of the parties. The internal methods envisaged in the sub section were not synonymous with methods within the court system. They merely referred to internal methods within the parties’ own organizations. That subsection could not expand the jurisdiction beyond what the Constitution provided.
  8. Section 58 of the Labour Relations Act also provided for alternative dispute resolution. Under sub sections 1(a) and (b) thereof, a conciliator or an arbitrator had to be independent. With respect to conciliators, their appointment was made under section 65 by the relevant Minister who did so from among persons set out in section 66. A reading of that section showed that of the persons who could be appointed as conciliators, a judge was not one of them.
  9. Section 66(1) of the Labour Relations Act suggested that conciliation proceedings were inferior to proceedings before a judge of the Employment and Labour Relations Court because under section 73(1) of the Labour Relations Act, where a dispute was not resolved by a conciliator, any party thereto had the liberty to refer it to the Employment and Labour Relations Court. Section 73(1) thereof, also implied that a conciliator could not at the same time be a judge to whom reference could be made.
  10. SRC’s advice to TSC was binding. SRC was expected to have specifically qualified staff in economic, financial, statistical, commercial and banking fields in addition to other functionaries. TSC was not expected to have among its personell such highly qualified staff since its mandate was solely limited to matters involving teachers and the education sector. It therefore had no capacity to determine the overall financial and economic status of the nation. In the premises, it could not seek advice for the sake of it. It was expected to use the advice.
  11. SRC’s advice to TSC was pursuant to constitutional provisions and had to be binding to achieve not only SRC’s objectives but also those of the constitution.
  12. It was not open for the trial court to ignore the evidence of the expert witness on economics or to fail to rely upon the same as there was no basis for not doing so. Therefore, the award of salary increment to teachers of between 50% and 60% had no basis or justification.
  13. Job evaluation connotes determining job worth in order to ascertain appropriate remuneration. SRC was the only body mandatorily required to carry out the exercise.
  14. SRC could influence CBA negotiations through its mandatory advice to TSC on remuneration and benefits payable to teachers. In practical terms it meant that before making any offer to the unions with respect to remuneration and benefits payable to teachers, TSC had to seek SRC’s advice on the same.
Orders:
  1. Consolidated appeal allowed.
  2. Judgment dated 30th June 2015 and all consequential orders were set aside.
  3. Cross appeal by KNUT and KUPPET failed.
  4. Each party were to bear their own costs.
Per Otieno – Odek, JA
  1. It was not in dispute that the judgment of the trial court remained unsatisfied. However, the instant proceedings were not contempt of court proceedings and therefore the court could not make a determination as to whether the appellant was or was not guilty of contempt.
  2. The general rule was that a party in contempt could not be heard, or allowed to take part in proceedings in the same cause until he had purged his contempt. However, there were exceptions that allowed such a person to be heard;
    1. That a person alleged in contempt could be heard and be allowed to apply for purposes of purging his contempt;
    2. That such a person could be heard in an appeal with a view to setting aside the order on which his alleged contempt was founded;
    3. The person could be heard in support of a submission that having regard to the true meaning and intendment of that order which he was said to have disobeyed, his actions did not constitute a breach of it, or that having regard to all the circumstances, he ought not to be treated as being in contempt;
    4. That the alleged contemnor could be heard to enable him defend himself when some application was made against him.
  3. The decision to hear or not to hear an alleged contemnor was at the discretion of the court. A contemnor could not be heard unless there was a grave justification based on considerations of public policy and the court had to stop the alleged contemnor from being heard when the contempt itself impeded the course of justice.
  4. There was no general rule that a party who had filed an appeal could not be heard merely because he/she had not satisfied a judgment/ decree. There was no rule of law that a right of appeal had to be taken away because an appellant had not satisfied a judgment or decree. It was not good practice for a party to litigate before two different levels of courts concurrently on the same issue. Since the applicant had filed against the contempt proceedings that were now pending before the trial court. It would have been preemptive and pre-judging the outcome of the contempt proceedings before the trial court if the instant court were to make a finding of contempt against the appellant.
  5. A binding contract came into existence when there was an offer and an acceptance. The offer had to be unconditionally accepted. If the working document containing the proposal for 50 – 60% basic salary increment was to be considered an offer; the said offer was not unconditionally accepted by the Unions since they made a counter offer of 100% to 150% basic salary increment. A counter offer is not acceptance of an offer. Therefore, the offer made by TSC ceased to exist in Contract Law when the counter offer was made by the Unions.
  6. Article 230(4) (b) of the Constitution and section 37(3) of the TSC Act required TSC to seek advice from and have consultation with SRC in the determination of remuneration and benefits to teachers. The advice from SRC was a constitutional procedural requirement under article 230(4) (b) of the Constitution. The Constitutional and statutory validity of the offer by TSC to pay 50 – 60% basic salary increment was dependent on whether the offer was made prior to TSC seeking advice from SRC or if SRC’s advice was sought after TSC had made the offer.
  7. When TSC made the offer of 50 – 60% at the consultative meeting, it had neither sought nor obtained mandatory constitutional SRC’s advice as required by the Constitution and statute. TSC sought the advice from SRC after it made the offer and not before. The prior seeking of SRC’s advice was a pre-condition for the constitutional and statutory validity of the offer by TSC. It was therefore unconstitutional to make an offer then seek SRC’s advice.
  8. The offer was ultra vires article 230(4) (b) of the Constitution and ultra vires section 37(3) of the TSC Act. No enforceable right arises and accrues from an ultra vires action. The TSC offer was a constitutional and statutory nullity and nullity begets nullity. The trial court thus erred in not evaluating the offer by TSC to determine if it was intra vires the Constitution or intra vires the TSC Act. The trial court erred in finding there was a valid offer made by TSC to pay a 50 – 60% basic increment.
  9. Consent or no consent, parties could not confer jurisdiction to any court of law as jurisdiction was a question of law. The extent of the jurisdiction of the trial court was determined by article 162(2) (a) and (3) of the Constitution as read with sections 12 and 15 of the Employment and Labour Relations Court Act. The Constitutional and juridical competence of the nature the proceedings conducted by the trial court was dependent on the interpretation of article 162(2) (a) of the Constitution and sections 12 and 15 of the Employment and Labour Relations Court Act.
  10. The nature of the proceedings in the trial court was pursuant to section 15 of the Employment and Labour Relations Act as Alternative Dispute Resolution and was not adjudicatory proceedings. Whether one called the proceedings facilitation or conciliation, the proceedings were not adjudicatory. The parties understood those proceedings to be conciliation proceedings.
  11. A judge of the Employment and Labour Relations Court had no jurisdiction to sit as a conciliator with or without the consent of the parties. Pursuant to section 15(1) of the Employment and Labour Relations Court Act, the trial court had no jurisdiction to conduct conciliation proceedings. Therefore the orders made on the 14th of January 2015 were null and void. All subsequent proceedings founded on a null order were also null and void.
  12. Whereas article 249(2) (b) of the Constitution of Kenya, 2010 conferred independence upon independent Commissions, the independence conferred was functional, operational and jurisdictional in nature. That article was not a supremacy or hierarchical article. Each of the Independent commissions was functionally and operationally autonomous. The article promoted separation of functions with constitutional limitations making provision for interdependence among constitutional organs. The Independence of constitutional commissions under article 249(2) (b) could not be interpreted to render any constitutional article or state organ otiose, superfluous, ineffective or impotent.
  13. The seeking of advice from SRC did not infringe on the status of TSC as an independent commission. The seeking of advice was a constitutional limitation on the independence of TSC in so far as remuneration and benefits of public officers was concerned.
  14. SRC had a constitutional mandate to conduct job evaluation in the entire public service (which included teachers) and SRC job evaluation on matters relating to remuneration and benefits overrode and superseded any other job evaluation exercise conducted by TSC or any person, state organ or independent commission.
  15. SRC had a constitutional role to play in CBA negotiations involving public officers and that role was limited to giving advice on fiscal sustainability of the remuneration and benefits payable to public officers. Within that context, SRC had a role to play in collective bargaining negotiations between TSC and the Unions. SRC was not to negotiate directly with the Unions but its role was to give advice as required under article 230(4) (b) of the Constitution.
  16. Collective bargaining was neither compulsory nor automatic. It was the source of voluntary negotiated terms and conditions of service for employees. Collective bargaining was a platform upon which trade unions could build to provide more advantageous terms and conditions of service to their members.
  17. Article 41 of the Constitution recognized the right to engage in collective bargaining. The right was founded on the concept of social dialogue, freedom of contract and autonomy of the parties in collective bargaining. Article 41(5) recognized that collective bargaining was the preferred method of determining terms and conditions of employment. It emphasized the ability of the employer and trade unions to operate as partners rather than adversaries. The constitutional recognition of the right to collective bargaining was not a right to blackmail a party into collective bargaining.
  18. Whereas section 57(1) of the Labour Relations Act mandated TSC as an employer to conclude a collective bargaining agreement (CBA), terms of such an agreement could not be sought through blackmail and coercion, the terms had to be voluntarily negotiated. If a dispute as to the terms of the CBA arises, the provisions of the Labour Relations Act inter alia section 57(1) and (5) and sections 58, 62 to 74 were applicable.
  19. There was a clear distinction between the right to collective bargaining which was voluntary and lawful; and blackmail, undue influence, coercion and compulsion which were unlawful. Constitutional recognition of collective bargaining was premised on voluntariness and negotiation and it was not recognition of collective bargaining as a tool for blackmail duress or compulsion. Therefore the trial court did not err in finding that TSC had a duty to conclude a CBA with the Unions.
  20. The trial court erred by disregarding the role of the National Treasury, Parliament and controller of budget in budgeting for, appropriating and authorizing public funds to be expended out of monies appropriated by Parliament to TSC.
  21. The constitutional criteria for determination of remuneration and benefits in the public service was found in articles 230(5)(a) and (c); 230(4)(b); 10(2)(d); 201(c) and (d); 225(1) and 224(4) and (5). By taking into account the “Cockar criteria” and ignoring the constitutional criteria, the trial court subordinated the constitutional criteria to the “Cockar criteria”.
  22. A judgment of a court cannot and should not direct any person to commit an offence. In the instant case, to the extent that the judgment by the trial court directed TSC to effect payment without following constitutional procedures and to the extent that the judgment required TSC and or its officers to commit an offence under section 196 of the Public Finance Management Act; the trial court ‘s judgment was unconstitutional, null and void. A court order that directed violation of the constitution or statute was null and void.
Appeal allowed

Kenya Law
Case Updates Issue 037/2015
Case Summaries

COMPANY LAW Legal threshold which must be met in order to obtain leave of the court to sue on behalf of the company

Amin Akberali Manji & 2 others vs. Altaf Abdulrasul Dadani & another
Civil Appeal No. 101 of 2014
Court of Appeal at Nairobi
Waki, GBM Kariuki & Ouko JJA
September 25, 2015
Reported by Kipkemoi Sang

Download the Decision

Brief Facts:
The appellant and the respondent formed the company (ML) together in 1993, with the main object of importing and selling musical instruments. Each of them had 50% share and directorship in the company. The respondent controlled the day today operation of the company while the appellant took charge of financial matters. All was well with the company until 1999 when the appellant chose to resign from office of directorship and nominated another (Kamur), who continued his role of financial controller and another nominee (Madhani) to whom he transferred all his shares to hold in trust. He nevertheless continued to participate actively in the management of the company’s affairs.
In May 2000 the appellant allegedly refused to release money for purposes of replenishing stock and payment of creditors thereby paralyzing the company’s business. The respondent felt frustrated and the operations of the company ground to a halt. The respondent claimed that the appellant had incorporated another company (MML) which had a deceptively similar name as ML, expropriated the stock and assets of ML, and started operations of similar business in the premises of ML in conjunction with Kumar (his nominee) hence breaching fiduciary duty towards ML and that in cahoots with his nominee they intended to defraud not only ML but also the creditors of ML and the respondent. The respondent moved to court seeking leave to prosecute the suit of derivative action on behalf of ML and its creditors and indemnity by ML for all the cost and expenses reasonably incurred in prosecution. The appellant reacted to the allegation and appealed against the decision of the High court which had inter alia declared that the closure of ML was unlawful and wrongful, it had temporary injunction restraining MML from carrying on business in ML’s premises and compelled the appellant to furnish ML with audited reports. The orders of the High court to which the appellant objected included the question of leave before instituting a derivative.

Issues:

  1. Whether the instant case met the legal threshold of a derivative action at the trial stage and if so, whether the High Court erred in granting order to allow the plaintiff to be indemnified for all the expenses incurred in respect of the suit
  2. Whether the commencement of the case prior to obtaining leave of the court was fatal to the case
  3. Whether the High Court acted judiciously in the exercise of its discretion to issue the orders it did at an interlocutory stage

Company Law-derivative claims and or action-legal threshold for derivative action - derivative claims in the absence of minority shareholders- circumstances for necessary derivative actions in the absence of minority shareholders-Whether the instant case met the legal threshold of a derivative action at the trial stage and if so, whether the High Court erred in granting order to allow the plaintiff to be indemnified for all the expenses incurred in respect of the suit-Companies Act (cap 486)

Civil Practice & Procedure- leave of court-procedure for filling leave of court to sue the company- effect of clear procedure for filing leave of court to sue the company and or delivery claims-Whether the commencement of the case prior to obtaining leave of the court was fatal to the case- Whether the High Court acted judiciously in the exercise of its discretion to issue the orders it did at an interlocutory stage-In the matter of CMC Holdings Limited [2012]eKLR Civil Procedure Act (cap 21), section 3A Read More...

Held:

  1. The legal threshold which must be met in order to obtain leave of the court to sue on behalf of the company are:
    1. The aggrieved company has a cause of action, which means a “legal right that has been violated”
    2. That it is impossible for the company to sue on its own to redress the wrong or breach. Especially if the wrongdoers themselves are the directors or majority shareholders in the company and will not allow it to file suit against themselves or where there was no majority shareholding which could overrule the directors, it would be impossible to institute the suit in the name of the company, if the director fail to do so.
    3. The representative has locus standi or legal standing as a major shareholder, to commence the suit.
  2. A majority shareholder is one who “owns less than half the total shares.” The respondent who held half or 50% of the shares of ML was not a minority shareholder; he in fact had equal voting right with the appellant. It was not open for the respondent to institute a derivative suit citing the appellant (Manji or Kamur) as director, if they were in control of the company. The respondent simply had no locus standi in the instant matter.
  3. A derivative action was an American term amounting to one more than a ‘representative suit’ filed on behalf of a plaintiff (in other instances) under disability, like a minor or person or unsound mind. In the instant context, it was a suit instituted by shareholder on behalf of the company as its representative when the company itself could not sue. In the alternative if the suit was a derivative one, it required leave but none was sought or granted before the suit was filed as spelt out in the Companies Act.
  4. There was no express provision in Kenyan company laws to govern the procedure for granting leave to mount a derivative action. The procedure that was available was the English Common Law. Leave of the court should be obtained before filling a derivative suit, but could also be obtained to continue with the suit once filed. The crucial requirement was for the applicant to establish a prima facie case demonstrating that he had locus standi to institute an action, the company was entitled to the intended relief and that the action fell within any of the exceptions to the rule in Foss vs Habottle
  5. The rule in Foss vs Harbottle (the rule) established two principles. That of “proper plaintiff” and that of “the majority” where the first rule required that a wrong done to the company may be vindicated by the company alone and the second principle required that if the alleged wrong could be confirmed or ratified by a simple majority then a shareholder was barred from bringing actions. The principle effect in the rule is to bar action by minority shareholders. However, the exception to the rule in Habottle included: firstly, where what had been done amounts to fraud and the wrongdoers were themselves in control of the company, secondly; where it was alleged that personal rights of the plaintiff shareholder had been or were about to be infringed and thirdly, any other case where the interest of justice required that the general rule required suits by company to be disregarded.
  6. Where no application for leave was filed or where one was filled long after the suit was filed, different considerations would apply. The application for leave to continue with the suit filed in the instant matter was not made long after the suit was filed. Both were filed contemporaneously and were placed before a judge on the same day under the certificate of urgency and as such was heard ex parte. Owing to the need for the trial court to exercise discretion, equitable principles were applicable and ought to be exercised judiciously which the trial court observed on the basis of the prima facie case. The trial court was right in exercising the discretion to maintain the leave granted and to give the parties the opportunity to contest the real issues in controversy in the main suit.
  7. A derivative claim was necessary to rescue the company if it was truly in distress. In the instant case, there was apparent threat and mischief. Equally, there was nothing that could prevent any party from making an application to have the ex parte orders. The company was in a peculiar and unique position of having only two members who were equal in power and glory in relation to the company. There was no majority or minority shareholder. The two shareholders/directors had reached a stalemate. The property of the company was disappearing or being taken over by a third party but the company was doing nothing about it.
  1. Orders made by the High Court on the application dated 26th November, 2002 seeking to have the defence filed stack out and judgement on the prayers made by the appellant set aside.
  2. The Ruling and other orders of the High Court made on 5th April 2004 were otherwise upheld
  3. Each party to bear its own costs of the appeal and of the motions before the High Court
LAND LAW Applicability of the doctrine of lis pendens to the grant of injunctions in land disputes

Naftali Ruthi Kinyua v Patrick Thuita Gachure & another
Civil Appeal Number 44 of 2014
Court of Appeal at Nairobi
R N Nambuye, D K Musinga & A K Murgor, JJA
March 6, 2015
Reported by Beryl A. Ikamari and Robai Nasike Sivikhe

Download the Decision

Brief facts:
The appellant sued the 1st and 2nd respondent at the high court as proprietors of a parcel of Land known as Land Reference No. 8285/1522 also known as Plot No. 133 Kariobangi Light Industries, Nairobi. The appellant had purchased the suit property from Peter Muthaura on July 5th 1979 and subsequently notified the 2nd respondent about the purchase. He paid stand premiums, survey and conveyancing fees as demanded by the respondent in order to secure the title documents. The appellant was issued with a deed plan in respect of the suit property on August 9th 2011.
While waiting for issuance of the title documents, he discovered that the 1st respondent had entered the suit property and was commencing developments in the property. The 1st respondent had also acquired the relevant documents in relation to the land from the 2nd Respondent and was in the process of acquiring title documents.
In the course of proceedings, the appellant sought an injunction pending hearing and determination of the suit. The appellant argued that he had a prima facie case. His case was based on documentation which showed that he had purchased the property from Peter Muthaura and paid the relevant fee to the 2nd Respondent. Furthermore, as the lawful allottee of the suit property since 1980, he alleged that he would suffer irreparable harm and the balance of convenience tilted in his favor.
Additionally, the appellant contended that the principle of first in time was applicable since his claim dated back to 1980 while the 2nd respondent’s claim arose in 2011. Further, the appellant cited the doctrine of lis pendens under section 52 of the Transfer of Properties Act, 1882, of India (ITPA) as relevant for purposes of preservation of the suit property pending hearing and determination of the suit. However, the high court declined to issue an injunction.
The appellant appealed against the ruling on grounds that both the appellant and respondent did not have a perfected title and therefore an injunction should have been issued to preserve the suit property. It was further contended that injunctive orders restraining further dealings with the suit property should have been issued on the basis of the doctrine of lis pendens.

Issues:

  1. Whether the application met the legal threshold required for the grant of an injunction.
  2. Whether the doctrine of lis pendens was applicable to land disputes and the grant of an injunction given that the Indian Transfer of Property Act had been repealed.

Land Law-lis pendens- application of the doctrine of lis pendens - whether the doctrine of lis pendens still applied despite repeal of ITPA- whether the doctrine of lis pendens could be applied by court for preservation of property pending hearing and determination of a suit- whether the trial court had misdirected itself when it failed to consider and apply the doctrine of lis pendens- Transfer of Property Act, 1882, of India, section 52; Land Registration Act, No of 2012, section 107 (1).

Common Law- lis pendens- doctrine of lis pendens as a common law doctrine- relevance of common law to the application of doctrine of lis pendens - whether the doctrine of lis pendens, as a common law doctrine, could be applied to the preservation of property pending hearing and determination of a suit concerning the property- whether the trial court had misdirected itself when it failed to consider and apply the doctrine of lis pendens- Judicature Act, (Cap 8), section 3(1).

Civil Practice and Procedure- injunctions- interlocutory injunctions- principles applicable to the grant of an injunction - whether the appellant had met the stipulated conditions for the grant of an injunction- whether the trial court had misdirected itself when it declined to grant the appellant an injunction on grounds that he failed to establish a prima facie case with chances of success. Read More...

The Transfer of Property Act, 1882, of India
Section 52

52. Transfer of property pending suit relating thereto
During the active prosecution in any Court having authority in British India, or established beyond the limits of British India by the Governor-General in Council, of a contentious suit or proceeding in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.

Land Registration Act, No. of 2012, Laws of Kenya
Section 107 (1)

107. Savings and transitional provisions with respect to rights, actions, dispositions
(1) Unless the contrary is specifically provided for in this Act, any right, interest, title, power, or obligation acquired, accrued, established, coming into force or exercisable before the commencement of this Act shall continue to be governed by the law applicable to it immediately prior to the commencement of this Act.

Judicature Act, Cap 8, Laws of Kenya
Section 3 (1)

3. Mode of exercise of jurisdiction
(1) The jurisdiction of the High Court, the Court of Appeal and of all subordinate courts shall be exercised in conformity with—
(a) the Constitution;
(b) subject thereto, all other written laws, including the Acts of Parliament of the United Kingdom cited in Part I of the Schedule to this Act, modified in accordance with Part II of that Schedule;
(c) subject thereto and so far as those written laws do not extend or apply, the substance of the common law, the doctrines of equity and the statutes of general application in force in England on the 12th August, 1897, and the procedure and practice observed in courts of justice in England at that date:
Provided that the said common law, doctrines of equity and statutes of general application shall apply so far only as the circumstances of Kenya and its inhabitants permit and subject to such qualifications as those circumstances may render necessary.

Held:

  1. For an injunction to be granted, an applicant had to satisfy the court that he had established the existence of a prima facie case with chances of success and that he would to suffer irreparable loss which would not be compensated by an award of damages but in case the court was in doubt, the application was to be determined on a balance of convenience.
  2. The appellant had to establish that he had a prima facie case with chances of success. Therefore, the appellant had to show that he owned the suit property, or had a valid claim that was capable of defeating a claim by a third party in respect of the property in dispute.
  3. It was clear that both the appellant and 1st respondent were not in possession of title documents over the property, hence the dispute between the parties was a contest over who had a superior claim over the other. In light of those factors, it was incumbent upon the parties to produce relevant documents to support their claim over the suit property to the exclusion of the other.
  4. The appellant’s documents showed that he attempted to register his interest before the 1st respondent sought to register his. There was sufficient documentation that indicated that the appellant maintained a claim in respect of the suit property which was valid and continued to subsist. Hence, it was evident that the appellant had established a prima facie case with chances of success.
  5. The appellant was the lawful allottee to the suit property from 1980. He stood to suffer irreparable harm if the defendant was not restrained from taking over the suit property pending the hearing and determination of the suit.
  6. In case there was doubt that the appellant established a prima facie case and stood to suffer irreparable loss, the application ought to have been determined on a balance of convenience. The balance of convenience tilted towards the preservation of the property pending hearing and determination of the suit. That could only be accomplished by granting the orders of injunction.
  7. The doctrine of lis pendens was applicable to the circumstances as the case concerned a property dispute in which rights to the suit property were in contention. The doctrine was therefore of relevance to the application for an injunction.
  8. With the repeal of the ITPA by the Land Registration Act (LRA), which provided for the doctrine of lis pendens, the question of applicability of the doctrine of lis pendens arose. However, the applicability of the doctrine had to be considered in light of section 107 (1) of the Land Registration Act which provided for transitional provisions.
  9. Section 107 (1) of the Land Registration Act allowed for the continued applicability of rights and interests as provided for in legislation that governed titles and rights to property acquired prior to the repeal of such legislation. Hence, rights that flowed from section 52 of the ITPA, including the doctrine of lis pendens were to be recognized by virtue of section 107 (1) of the Land Registration Act.
  10. The doctrine of lis pendens was also a common law principle. Common law was applicable in Kenya by virtue of section 3 (1) of the Judicature Act. Therefore, the doctrine of lis pendens was part of the Kenyan law under section 3(1) of the Judicature Act.
  11. The trial court should not have disregarded the adjudicative support of the doctrine of lis pendens for purposes of preservation of the suit property until the suit was heard and determined. The trial court had erred when it failed to consider and apply the doctrine of lis pendens for purposes of the injunctive relief sought.
  12. The high court misdirected itself when it declined to grant an injunction and concluded that a prima facie case had not been established. The dispute involved competing interests between the appellant and respondent and on the basis of existing documentation, the appellant had established the existence a prima facie case.
  13. The high court misdirected itself when it failed to consider the doctrine of lis pendens for purposes of preserving the suit property pending hearing and determination of the suit.

Appeal allowed.
Ruling delivered by the high court on May 17th 2013 set aside.

JURISDICTION

The Wildlife Conservation and Management Act 2013 is the guide in determining awards for damages for death, or injuries caused by wildlife.

Joseph Munyoki Kalonzo v Kenya Wildlife Services
High Court of Kenya at Garissa
Civil case 5 of 2014
October 12, 2015
G. Dulu J
Reported by Njeri Githang’a and John Ribia

Download the Decision

Brief facts:
The plaintiff was the father of the deceased who was alleged to have been fatally injured by a crocodile while she fetched water at Tana River in Tseikuru District. The plaintiff sued the defendant as the legal representative of the estate of M M. The plaintiff sought compensation in the sum of Kshs. 5,000,000/= as provided under section 25 of the Wildlife Conservation & Management Act 2013. The plaintiff also sought special damages, costs and interest.
The defendant relied upon the doctrine of volenti non fit injuria and stated that the accident, if it occurred, was caused by the negligence of the deceased and the plaintiff. The defendants also pleaded that the suit was bad in law and did not disclose any cause of action. Through a preliminary objection, the defendant moved the court to have the suit struck out with costs and interest.
The plaintiff admitted partial liability and subsequently the parties counsel filed a written consent. The consent distributed liability at the ratio of 80:20 in favour of the plaintiff.

Issues:

  1. Whether the court had the jurisdiction to determine a claim for compensation for injuries or death caused by wildlife when section 25(1) of the Wildlife Conservation and Management Act 2013 had established a commission to deal with the same.
  2. Whether the Fatal Accidents Act and the Law Reform Act could be used to determine an award for damages for deaths and injuries caused by wildlife.
  3. Whether the Wildlife Conservation and Management Act 2013 was the guide in determining awards for damages for death, or injuries caused by wildlife.

Jurisdiction – the jurisdiction to determine a claim for compensation for injuries or death caused by wildlife- jurisdiction of the High Court vis a vis jurisdiction of the County Wildlife Conservation and Compensation Committee - whether the court had the jurisdiction to determine a claim for compensation for injuries or death caused by wildlife when section 25 (1) of the Wildlife Conservation and Management Act 2013 established a commission to deal with the same - Wildlife Conservation and Management Act 2013, section 25 (1).

Tort Law– damages- award of damages for loss of life- compensation-award for damages for deathor injuries caused by wildlife- whether the Fatal Accidents Act and the Law Reform Act could be used to determine an award for damages for deaths and injuries caused by wildlife - whether the Wildlife Conservation and Management Act 2013 was the guide in determining awards for damages for death, or injuries caused by wildlife- wildlife Conservation and Management Act 2013 section 25 (1) Read More...

Wildlife Conservation and Management Act 2013, section 25 (1)

(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.

Held:

  1. A suit that disclosed no cause of action was not similar to a suit that claimed a court did not have jurisdiction. Jurisdiction is the legal power of the court to hear and determine a matter. Cause of action dealt with whether the plaintiff or litigant had a legal claim which he could pursue in court. The defence did not challenge the power of the court to adjudicate over the matter, but challenged the ability of the plaintiff to sustain the claim. The defence did not raise an issue of jurisdiction.
  2. Section 25 (1) of the Wildlife Conservation and Management Act 2013 that stated that persons injured or the personal representatives of persons killed by wildlife could launch compensation claims to the County Wildlife Conservation and Compensation Committee was permissive. It used the word may, it did not specifically claim that the ordinary courts had no jurisdiction in such claims. The court had jurisdiction to determine the matter.
  3. The preliminary objection raised by the defense could not satisfy requirements for a preliminary objection. The preliminary objection was filed late on the hearing date without prior notice and it did not specify the sections or section of the Wildlife Conservation and Management Act 2013 that were violated by the proceedings, nor did it indicate the nature of the alleged violation which could amount to an abuse of court process.
  4. The consent entered into by the parties counsel with regard to liability was a proper recorded consent and as such it was contractual and binding on all parties and their counsel. The defendant took up 80% liability and the plaintiff took up 20% liability.
  5. The plaintiff was entitled to compensation under the Wildlife Conservation and Management Act 2013, which was the specific Act that dealt with accidents and fatalities associated with wildlife conservation. Since the Act was also a more recent law and since Parliament had in its wisdom decided to treat damage, injuries and deaths caused by wildlife differently, the act was the guide in determining awards for damages for death, or injuries caused by wildlife. The general law under the Fatal Accidents Act and Law Reform Act could not be used to determine damages as Parliament had made specific provision for the same under the Wildlife Conservation and Management Act of 2013.
  6. It was proved that the deceased died due to a crocodile attack, as such Kshs. 5,000,000/= was awardable to her estate as damages as compensation, as provided under section 25 of the Wildlife Conservation and Management Act 2013. The plaintiff also proved special damages of Kshs. 40,000/= for costs of litigation to obtain letters of administration. Subject to calculations varied by the consent entered into by the parties counsel, the plaintiff was entitled to Kshs. 4,032,000/= as compensation to the estate of the deceased.

Costs, interest and damages awarded to the plaintiff in the sum of Kshs. 4,032,000/=

LAND LAW Presumption of tenancy in common where the land register does not indicate whether the land is held jointly or in common

Moses Bii v Kericho District Land Registrar and 2 others
Civil suit No.8 of 2014
High Court at Kericho
October 2, 2015
Munyao Sila, J
Report by Teddy Musiga and Daniel Hadoto

Download the Decision

Brief facts:
The suit land was first registered in 1970 under the names of four persons, namely, Kiprono Bii, Moses Bii (the plaintiff), John Bii, and Cheriro Tuimising. As at the time of the hearing, the title deed had never been issued to them. In the course of time, John Bii and Kiprono Bii died. The plaintiff contended that despite their death, the Kericho District Land Registrar had failed to register their death certificates and refused to delete their names from the register, although he had been duly notified. The plaintiff prayed that the names of Kiprono Bii and John Bii to be deleted from the register and a title deed be issued in the names of himself and Cheriro Tuimising as joint proprietors of the suit property.

Issue:

  1. What happens where a property was registered in the name of several proprietors but there was no indication as to whether they held the property jointly or in common?

Land Law - Tenancy - Proprietorship of land - joint proprietorship and proprietorship in common – registration of more than one name but not indicating the nature of proprietorship – rule in determining form of proprietorship where more than one name is registered but there is no indication of the nature of proprietorship – The Land Registration Act, Act No. 3 of 2012 Section 91 (8); Registered Land Act, section 101 (1); 102, 103(repealed) Read More...

Section 101 (1) of Registered Land Act, Cap 300, (Repealed)

An instrument made in favor of two or more persons, and the registration giving effect to it, shall show-

(a) Whether those persons are joint proprietors or proprietors in common; and
(b) Where they are proprietors in common, the share of each proprietor.

Section 102 of the Registered Land Act (Repealed)
(1) Where the land, lease or charge is owned jointly, no proprietor is entitled to any separate share in the land, and consequently –

(a) dispositions may be made only by all the joint proprietors; and
(b) on the death of a joint proprietor, his interest shall vest in the surviving proprietor or the surviving proprietors jointly.

(2) For avoidance of doubt, it is hereby declared that -

(a) the sole proprietor of any land, lease or charge may transfer the same to himself and another person jointly; and
(b) a joint proprietor of any land, lease or charge may transfer his interest therein to all the other proprietors.

(3) Joint proprietors, not being trustees, may execute an instrument in the prescribed form signifying that they agree to sever the joint proprietorship, and the severance shall be completed by registration of the joint proprietors as proprietors in common and by filing the instrument.

Section 103 of the Registered Land Act (Repealed)

(1) Where any land, lease or charge is owned in common, each proprietor shall be entitled to an undivided share in the whole, and on the death of a proprietor his share shall be administered as part of his estate.
(2) No proprietor in common shall deal with his undivided share in favour of any person other than another proprietor in common of the same land, except with the consent in writing of the remaining proprietor or proprietors of the land, but such consent shall not be unreasonably withheld.

Section 91 (8) of the Land Registration Act, Act No. 3 of 2012

On and after the effective date, except with leave of a court, the only joint tenancy that shall be capable of being created shall be between spouses, and any joint tenancy other than that between spouses that is purported to be created without the leave of a court shall take effect as a tenancy in common.

Held:

  1. Section 101(1) of the Registered Land Act, Cap 300, (repealed) provided that in every situation where the proprietors were more than one, the register had to reflect whether their registration was joint or in common. The RLA did not envisage a situation where there were several proprietors, without it being disclosed in the register, whether they are joint proprietors or proprietors in common. Section 102 and 103 of the Registered Land Act (repealed) gave the characteristics of the two kinds of proprietorship (joint properties or proprietors in common).
  2. Where proprietorship was joint, the persons did not have any separate shares in the land, and therefore if one proprietor died, his interest automatically vested upon the surviving proprietor. Thus if land was owned jointly by A and B, and A dies, B now becomes the sole proprietor of the land and did not hold it in trust for the estate of A. There were no separate shares for the proprietors.
  3. Where land was owned in common, each proprietor had a separate share, only that the same was undivided and held together with the other proprietor/s as one whole. Thus if one proprietor died, his share did not vest in the surviving proprietor, but vests in his estate.
  4. In the instant case, the register did not show whether the proprietorship was joint or in common. The RLA did not contemplate a scenario where the register did not indicate whether land was held jointly or in common, and did not provide for the course to follow where there were several proprietors but no indication as to whether they held the land jointly or in common. If the register did not reflect whether land was held jointly or in common, the fallback position would be to presume that the land was held in common. Joint proprietorship, where the same had not been explicitly indicated, would only be presumed in the clearest of circumstances, where there could be no shred of doubt that the contemplation of the parties was to have the property held jointly.
  5. The current law, which was contained in the Land Registration Act, Act No. 3 of 2012 (which repealed the RLA and which came into effect on 2 May 2012) in fact frowned deeply on joint proprietorship. It effectively banned them unless the proprietors were spouses or unless by order of court. The operative section was Section 91 (8).
  6. In the instant case, the proprietors were four brothers. They became registered as proprietors on 16th February, 1970. The register did not show whether they were proprietors in common or whether they are joint proprietors. The courts presumption was that they were registered as proprietors in common. In fact, the nature of their holding fortified that position. The four persons were first registered proprietors. This view, pointed at a holding, which tended to be a holding in common, rather than one which was joint
  7. The Land Registrar could not be faulted for failing to presume that the proprietorship was joint, and for failing to issue a title deed only bearing the names of the surviving proprietors. It could be said that the Land Registrar was correct in registering a restriction, barring any dealings, until the interest of the survivors of one of the deceased proprietors is catered for.
  8. The suit was filed on 22nd February 2014, at a time when the Registered Land Act had been repealed at a time when Section 91 (8) of the Land Registration Act, was effective. In essence, if the new law was applied, the plaintiff automatically failed. But it didn’t matter, for even on application of the old law, the plaintiff would still fail.

Proprietorship was deemed to be a proprietorship in common.

Suit dismissed with costs
JURISDICTION Jurisdiction of the Supreme Court to review Court of Appeal decisions on certification that an intended appeal involved matters of general public importance

P M Wamae & Co Advocates v Hon Ntoitha M'mithiaru
Civil Application No 48 of 2014
Supreme Court of Kenya at Nairobi
K H Rawal DCJ & VP, P K Tunoi, J B Ojwang, S C Wanjala & S N Ndungu, SC JJ
October 19, 2015
Reported by Beryl A Ikamari

Download the Decision

Brief facts:
The Applicant represented the Respondent in Ntoitha M’mithiaru v Maoka Maore & 2 others, Election Petition No. 1 of 2003, High Court at Meru. When the case was concluded the Applicant presented a fee note for taxation to the Deputy Registrar, as the Taxing Master. The Bill was taxed at Ksh. 3, 236,343.68/=
The Respondent challenged the taxation at the High Court. The grounds on which the taxation was challenged included an allegation that the Applicant was a NARC Party volunteer who via a letter dated March 20, 2003, agreed to take Ksh. 400,000, for conducting the hearing on condition that if the Petition was successful, the Applicant would be entitled to receive the balance of their fees from the costs to be recovered. It was also the Respondent's contention that the Applicant was estopped from filing a Bill of Costs against him. The High Court dismissed the reference while stating that the letter did not meet the provisions of Section 45 (1)(b) of the Advocates Act (Cap 16.)
On a further appeal to the Court of Appeal, the High Court decision was overturned and the Court of Appeal held that the Applicant was bound by the representations made in the letter dated March 20, 2003. For purposes of lodging a further appeal at the Supreme Court, the Applicant sought certification that the matter was of general public importance. The Court of Appeal declined to grant the certification and elaborated that the dispute between the parties was a private one. At the Supreme Court, the Applicant sought a review of the Court of Appeal decision on certification.

Issues:

  1. Whether the Supreme Court had jurisdiction to entertain the review application.
  2. Whether the intended appeal involved matters of general public importance.

Jurisdiction-jurisdiction of the Supreme Court-certification that an intended appeal involved matters of general public importance-whether the Supreme Court had jurisdiction to review a Court of Appeal decision which entailed a denial of the requisite certification.

Jurisdiction-jurisdiction of the Supreme Court-certification that an intended appeal involved matters of general public importance-circumstances in which a matter would be found to transcend the circumstances of the case and to have a bearing on public interest-whether a dispute between an advocate and client over fees owed and representations made by the advocate on fees due, was a dispute involving matters of general public importance-Constitution of Kenya, 2010, article 163(5). Read More...

Held:

  1. The jurisdiction of the Supreme Court to review applications for certification under article 163(5) of the Constitution was to be harmonized with the Constitution. Access to justice was one of the fundamental rights recognized in the Constitution and all litigants were to be accorded an equal right to access the Court. Therefore a party could approach the Supreme Court for a review of a decision granting leave (certification) or denying leave (certification.)
  2. Whether a matter was one that involved issues of general public importance was a question to be determined on a case by case basis. Among the principles applicable to such a question was that the matter needed to be one that transcended the circumstances of the particular case and had a significant bearing on public interest.
  3. The matter in issue was a dispute between an advocate and a client over the fees owed to the advocate, wherein an advocate made representations in a letter and sought to rely on legal provisions in order to avoid the representations. It was not a general question on whether advocates fees could be based on unexecuted agreements. It was therefore not a matter that transcended the circumstances of the case.
  4. The Applicant framed the issues arising from the matter as issues relating to whether the common law doctrine of estoppel could be applied retrospectively, the circumstances in which common law principles may take precedence over written law and whether the Court of Appeal was a Court of record, in light of the provisions of Articles 162(1) and 163(7) of the Constitution. However, the record did not indicate that the issue on the common law doctrine of estoppel was determined by the Court of Appeal. A finding was not made as that was not one of the issues brought before the Court for determination. The Supreme Court as an appellate Court could not exercise jurisdiction over such an issue.

Application dismissed. (Court of Appeal ruling affirmed.)