[2017] KEHC 2796 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

JUDICIAL REVIEW NO. 118 OF 2017

IN THE MATTER OF ORDER 53 RULE 1 OF THE CIVIL PROCEDURE ACT, CAP 21

AND

IN THE MATTER OF THE VALUATION FOR RATING ACT, CAP 266 LAWS OF KENYA

AND

IN THE MATTER OF AN APPLICATION FOR JUDICIAL REVIEW BY THE APPLICANT

BISHOP ZAKARIA KAHUTHU

HANNELORE MAILLU

(SUING AS THE REGISTERED TRUSTEES

FOR THE GERMAN SPEAKING EVANGELICAL

LUTHERAN CONGREGATION IN KENYA ……..........…APPLICANT

VERSUS

THE COUNTY GOVERNMENT OF NAIROBI…1ST RESPONDENT

THE COUNTY SECRETARY

NAIROBI CITY COUNTY………………………...2ND RESPONDENT

JUDGMENT

1. On 13th March 2017, this court granted to the exparte applicants Bishop Zakaria Kahuthu & Hannelore Maillu suing as registered Trustees for the German Speaking Evangelical Lutheran Congregation in Kenya, leave to institute Judicial Review proceedings against the County Government and County Secretary of Nairobi seeking the following orders:-

a. Certiorari to remove into the High Court for the purpose of quashing the decision by the County Secretary, Nairobi City County, the respondent herein, to demand a sum of kshs 59,566,462 on account of rates and interest on plot LR NO. 991/3 contained in the letter dared 23rd February 2017;

b. Prohibition issued to the respondent, or any of their employees, agents and/or servants from demanding land rates and interest on plot No. LR No. 991/3;

c. Costs.

2. The application which was brought under the provisions of Order 53 Rules 3(1) of the Civil Procedure Rules and all other enabling provisions of the law is supported by the grounds and matters set out in the Statutory Statement and the Verifying Affidavit of Bishop Zacharia Kahuthu, the Trustee of the applicant, and annextures thereto. The substantive notice of motion which is dated 17th March, 2017 was filed on the same day.

3. The exparte applicant’s case is that it is a Church and the registered owner of property along Riverside Drive in Nairobi County being LR No. 991/3. That in the year 2000, it applied for and was granted exemption from rates payment effective the year 2000 by the respondent, on the sole condition that the applicant was to pay all the arrears of rates before the year 2000 which the applicant did.

4. It is averred that the said exemption has never been revoked. It is also alleged that on 23rd February 2017, the applicant received from the respondent’s a demand for rates and interest in the sum of kshs 59,566,462 and that all attempts to have the respondent reconsider the same have been unsuccessful hence this case. It is therefore feared that unless the orders herein sought are granted, the exparte applicant risks being charged in court for failure to pay the said amount claimed.

5. It is further alleged that the demand by the respondent is against the Rules of natural justice and fairness as the applicant has never been given a hearing by the respondent for failure to pay the said amount and neither is there any notice of revocation of the exemption issued in 2000 which exemption was given legally hence the demand for rates is arbitrary.

6. The exparte applicant annexed to its affidavit copy of title for the subject property to prove ownership of LR 991/3 Grant No. 82773 issued for a 50 year term from 1st January 1997; Deed Plan No. 223615 dated 16th March 1999; letter of conditional exemption from payment of rates dated 21st November 2000 Ref CRO/R/JGO/490/2000 addressed to the applicant by the then Nairobi City Council signed by J.G. Omondi for City Treasurer; the impugned demand for rates letter dated 23rd February 2017 on the said property LR No. 991/3 which rates inclusive of penalties amounting to shs 59,566,462; letter dated 7th June 2000 communication by the respondent’s valuation directorate informing the applicant that the property being a religious worship user plot had been booked for exemption in accordance with Section 27(1) of the valuation for Rating Act, Cap 266 Laws of Kenya signed by F.M. Muraa; certificate of registration of the applicant under the Societies Act on 7th July 1971 and certificate of incorporation under the Land (Perpetual Succession) Act ( Cap 286) Laws of Kenya on 8th December1972; notice of Annual General Meeting dated 6th May 2016; demand notice by the applicant’s counsel dated 3rd March 2017 upon receiving demand for rates, among other documents.

7. The respondents filed a replying affidavit sworn by Erick Odhiambo Abwao sworn on 20th April 2017 deposing, principally, that the letter of exemption is clear that the exemption was to take effect from the year 2000 and does not apply to arrears of rates before the said date; That the applicant’s own annextures show that there was a statement enclosed for the outstanding amount as at 31st December 1999 although the applicant is silent about that statement; That the arrears demanded relate to the years before 2000 as there is no proof of settlement of the same to have warranted a waiver; That there is no disclosure of material information unfavourable to exparte applicant.

8. Further, it was contended by the Respondent that the application herein application is defective as it is not brought in the name of the Republic but in the exparte applicant’s name hence it is fatally defective; That the application is preemptive and premature since the applicant never explored all other avenues available before resorting to court for relief and that neither has it pleaded that it visited the respondents for reconciliation of accounts hence the demand for rates is not capable of challenge by way of Judicial Review.

9. It was further contended that the proceedings to commence Judicial Review were initiated even before 14 days elapsed from date of demand and that in the absence of evidence that the rates for the period before the year 2000 were settled, the applicant cannot proof that there was exemption.

10. The respondent further contended that the appropriate remedy lies in the normal suit before the Environment and Land Court or High Court to determine whether there is an exemption hence the prayers sought are not applicable as the applicant seeks to challenge the merits of the implementation of the decision but not the process.

11. In a further affidavit filed by Bishop Zakaria Kahuthu, the applicant reiterates the depositions in the verifying affidavit and maintains that the communication on exemption was from the respondent hence it could not deny 14 years later.

12. The parties advocates filed written submissions to canvass their respective positions and adopted the said submissions for the court’s decision.

13. According to the exparte applicant, in reiterating the grounds and depositions by Bishop Zakaria Kahuthu, the letters written by the respondent which are annexed to its verifying affidavit and other annextures BZK8, it was submitted that the applicant had demonstrated that there was exemption granted by the respondent hence the demand for rates in 2017 is not justified. Reliance was placed on Eldoret JR 13/2013 Republic vs The Board of Governors, Our Lady of Victory Girls School Kapnyeberal where the court cited with approval Halburys Laws of England ( Administrative Law) 4th Edition 2001 Reissue page 218 paragraph 95, defining natural justice. Further reliance was placed on Kenya Revenue Authority vs Menginya Salim Murgani[2010] e KLR CAon the procedure for hearing of parties by administrative bodies.

14. It was submitted that in this case there was no sign of any hearing taking place and neither was the applicant asked to provide any document in relation to the exemption and that all attempts to amicably settle the matter with the respondent had not borne fruit. That the applicant had no idea how the rates were arrived at during the pendency of the exemption which exemption had never been revoked and therefore the issue of filing suit does not arise. Reliance was placed on Republic vs Attorney General & Others exparte William Kariuki Ngugi [2016]e KLRwhere Odunga J held inter alia that an introduction of a procedure which does not permit the hearing of a party in his case whether orally or otherwise, may well amount to bad faith and constitute irrationality as one cannot be in a position to know what factors were considered by the authority in arriving at the decision . Such a decision may well be described as having been arbitrarily arrived at.

15. Further reliance was placed on Registered Trustees Supkem v Attorney General and City Council of Nairobi Miscellaneous Application 79/2010 and a submission made that in this case there is no reason why the exemption should be lifted since there is no evidence that the applicant has deviated from the purpose for which the exemption was granted hence the orders sought should be granted.

16. Further reliance was placed on Homabay CA 7/2014- Evans Otieno Nyakwana v Cleophas Bwana OngaroandKisumu CA 51/3013 Robert Ouma Njoga vs Benjamin Osano Njoga on the burden of proof lying on he who alleges.

17. On the part of the respondents, it was submitted vide written submissions filed on 10th May 2017 reiterating the depositions of Mr Eric Odhiambo Abwao and maintaining that the application is not well founded. Further, that the decision complained of should have been annexed to the pleadings and the applicant should be the Republic, unlike in this case where there are no minutes showing whether the County Government sat down and agreed to collect rent (sic) from the applicant.

18. It was submitted that the letter complained of is a demand notice and no explanation or evidence is provided to show that the rates for the years before 1999 had been settled.

19. It was submitted that the motion is preemptive and premature since the applicant never explored all avenues for settlement of the matter before seeking Judicial Review remedy. Further, that the exparte applicant should have visited the respondents for reconciliation of accounts since the amount claimed is for land rates and penalties outstanding as at 31st December 1999 as per the payment request on record.

20. In addition, it was submitted that there was no suit at the City Court for recovery of the claimed rates initiated by the respondent to warrant challenge by way of Judicial Review as the nature of the dispute requires adduction of viva voce evidence and cross examination of witnesses and documents presented to determine whether truly the rates are owing or not.

21. According to the respondent, whether there is an exemption or not and the letter for the exemption is a forgery since the documents presented are photocopies incapable of verification in Judicial Review proceedings hence it will not be fair if the respondents are not given an opportunity to verify documents and make out whether the exparte applicant was granted an exemption from paying the rates or not and or whether the rates due before 1999 were paid.

22. The respondents further submitted that a party should not seek Judicial Review orders if there is another remedy available to seek redress and that the most efficacious remedy in this case would have been a normal civil suit either in the High Court or before Environment and Land Court as there are many controversies on whether or not the applicant was exempted from paying rates it was further submitted that the applicant had not demonstrated any, or how unfair the decision made calling for rates is, but only alleges exemption hence the exemption should be proved.

23. Further, it was submitted that the exparte applicant had not proved any breach of the rules of natural justice by the respondents in the process leading to the making of the decision to warrant the orders sought.

24. In the respondent’s view, the exparte applicant’s prayers are coined in such a way as to appear like what the applicant seeks is to challenge the merits of the implementation of the decision but not the process.

25. It was submitted that collection of rates is a constitutional mandate of the respondent and affects the larger public unlike what is complained of which shall affect just the applicant hence there is need to scrutinize the exemption to make out the truth before granting the orders sought.

26. It was therefore submitted that it will be in the interest of justice not to grant the orders sought unless in a matter where the documents submitted can be scrutinized; and that in responding to prayers, the court should always opt for the lowest rather than the higher risk of injustice. Reliance was placed on JR 447/2014 The National and Transport and Safety Authority & 4 Others vs Equity Bank Ltd & 5 Others where Odunga G.V J held that where an applicant brings Judicial Review proceedings with a view to determining contested matters of facts and in effect determine the merits of the dispute the court would not have jurisdiction in a Judicial Review proceeding to determine such a dispute and would leave the parties to ventilate the merits of the dispute in the ordinary civil suits.

27. Accordingly, the respondents urged the court to dismiss the exparte applicant’s application with costs.

DETERMINATION.

28. I have considered all the foregoing and in my humble view, the main issue for determination is whether the exparte applicant is entitled to Judicial Review orders sought in the nature of Certiorari and prohibition and who should bear costs of these proceedings.

29. According to the exparte applicants there is absolutely no justification for the respondents to demand for payment of rates amounting to kshs 59,566,462 vide its letter dated 23rd February 2017 because the respondents vide the letters dated 7th June 2000 and 21st November 2000 exempted the exparte applicant from payment of rates respecting property No. LR No. 991/3 after satisfying itself that the property was being used for religious worship.

30. On the other hand, the respondent contends that the prayers sought are not available owing to the contentious issue of whether or not there was any exemption from payment of rates and that the forum for determination of those controverted issues is by way of a civil suit and not by way of Judicial Review which latter does not look at the merits but at the decision making process. Further, that the exparte applicant has not demonstrated any illegality or breach of any rule of natural justice to warrant grant of the orders sought.

31. In addition, it is contended by the respondents that there is no evidence that the rates for the period upto 2000 were settled by the applicant to warrant the waiver alleged taking place. Further, that there is no decision capable of being challenged as there was only a demand and that the application is incompetent as it is not brought in the name of the Republic.

32. Commencing with the question of whether the application is competent before the court since it is not initiated in the name of the Republic, it is my humble view that Judicial Review not being the old age common law remedy but now being a constitutional remedy as stipulated in Articles 22 and 23 of the Constitution cannot be subjected to outmoded demands that it must be initiated in a certain format before the court. Want of form in this constitutional dispensation cannot defeat a cause as it is a mere procedural technicality curable by application of Article 159 of the Constitution which is clear that justice shall be administered to all and that justice shall be administered without undue regard to procedural technicalities.

33. Accordingly, I hold and find that the technical objection as to the form in which these proceedings were initiated is unfounded and the same is therefore overulled and dismissed.

34. There is also the question of whether there is a decision capable of being quashed by this court. According to the respondents, a demand for payment of rates cannot be a decision to be challenged before this court.

35. In my humble view, the letter dated 23rd February 2017 titled RE: Demand 2017 for Rates and interest( Section 17 of the Rating Act and giving notice of 14 days to the applicant to make payment to the respondent the sum of shs 59,566,462 being rates due in respect of the year upto 2017 on plot No. LR 991/3/467 which the applicant is alleged to be a ratable owner, together with interest on the said sum at the rate of three percent per month from date when such rates were payable, until payment in full, while threatening that default will give rise to a suit being instituted in a subordinate court in accordance with Section 17 of the Act, is no doubt a demand based on an administrative decision reached as stipulated in the Fair Administrative action Act, 2015. It is therefore frivolous and vexatious of the respondent to claim that there was no decision of the respondent. A decision need not necessarily be in the form of a resolution or judgment or order of the court. It is sufficient that there was communication to the exparte applicant by the respondent’s authorized persons demanding for settlement of rates. Furthermore, the respondent concedes that it has a constitutional mandate to collect rates.

36. That being the case, it does not require any court order or resolution to demand for the rates due and if that were the case, nothing prevented the respondent from instituting legal proceedings for recovery of the rates allegedly due.

37. Accordingly, I find and hold that the objection as to the existence of a decision capable of being challenged by way of Judicial Review is unfounded and the same is hereby dismissed.

38. Delving into whether these proceedings seek to challenge the merits or the process of decision making, the respondent claims that there is no evidence that the rates due before 2000 were settled to warrant exemption and that since that issue is controverted, the appropriate forum is the civil court or Environment and Land Court where evidence would be adduced and original documents produced and witnesses cross examined to establish the truth hence the Judicial Review remedy does not lie.

39. The exparte applicant claims that it was never given a hearing before the demand for rates was made since there was no evidence that the exemption granted in 2000 was ever lifted to warrant demand for rates upto 2017 inclusive of interest. I totally agree that Judicial Review does not delve into the merits of the decision but on the decision making process and further, it is trite law that the right to be heard before an administrative decision is made is no longer just an issue of a rule of natural justice but a constitutionally guaranteed right stipulated in Articles 47 and 50 of the Constitution of Kenya, 2010.

40. Article 47 of the Constitution as implemented by the Fair Administrative Action Act, 2015 is clear that every person must be given written reasons for any administrative action that is taken against them. The Judicial Review application herein challenges the respondent’s demand for rates and interest pursuant to Section 17 of the Rating Act, on property No. LR No. 991/3/467 amounting to shs 59,566,462, as the applicant is said to be a ratable owner of the property yet the applicant has a valid exemption on the said property.

41. The applicant claims that the respondent having exempted them from paying rates cannot wake up 14 years later and claim for rates over the same property, before lifting the exemption especially where circumstances have not changed regarding user of the property. The question is whether there was any exemption or not.

42. My meticulous examination of the annextures filed by the exparte applicant reveals that the principal rates claimed is shs 25,875,300 while penalties amount to kshs 27,352,912 and the land rate for the current year claimed is kshs 6,341,250 all totaling kshs 59,566,462 as reflected in the annexed property rates payment request attached to BZK3.

43. Annexture BZK 4 is a letter dated 7th June 2000 addressed to the exparte applicant by the respondent’s Deputy Director of valuation whose subject is rates exemption – LR No. 991/3 Riverside Drive. The letter is a response to letters by the applicant dated 23rd November 1999 and 3rd May 2000 on the subject. The respondent states that:-

“ Following a physical inspection by this office, I am pleased to inform you that being a religious worship user plot, it has now been booked for exemption in the 2000 supplementary valuation roll in accordance with the Section 27(1) of the valuation for Rating Act, Cap 266( Laws of Kenya)”.

44. On 21st November 2000, the respondent wrote to the applicant on the same subject of Rates Exemption LR No. 991/3 and stated that:

“ Please note that the exemption from rates payment is valid with effect from the year 2000 and does not apply to arrears of rates before the said date.

Enclosed please find rates statement for the outstanding amount as at 31st December 1999 and which is due before the exemption date.

Yours faithfully;

J.G. Omondi

For: City Treasurer.”

45. Annexture BZK8 is a demand for rates as at 27th December 2001 being 334,116. 25 with an endorsement on 2nd April 2002 in hand written format that:

“This property is exempted vide letter Ref Val 388/F/A/1/G/TW /MNW dated 7th June 2000. ”

46. There is also a document dated 6th November 2009 which is form of statement of payments of rates and other charges. In that document serialized 037524,it is certified that all sums due at the date of that certificate or estimated to become due on or before the date of expiry thereof in respect of the property LR No. 991/3 have been paid to the said Nairobi City Council.

47. The respondent’s counsel claims that there is no evidence of payment of the rates prior to the alleged exemption. I agree that this is not a civil court for examination of documentary evidence on whether or not rates were settled and for cross examination of witnesses.

48. However, there is no denial that in Judicial Review, unless there is need to call for original documents, the parties annex copies of the documents they wish to rely on, supported by depositions on oath. The respondents have not denied that the documents annexed to the applicant’s verifying affidavit are from the respondents and or authored by the respondent. It is not sufficient for the respondents to claim that the documents could be forged documents. Fraud is a serious offence punishable by imprisonment. One cannot merely allege fraud in proceedings like these simply because they do not have an opportunity to cross examine witnesses. Nothing prevented the respondents from applying to cross examine the deponent of the verifying affidavits that introduced the annextures/documents allegedly authored by the respondent.

49. In the premise, I find the claim by the respondent to be nothing but hot air. It is trite law that he who alleges must proof. It was not enough for the respondent to allege fraud. It was under a duty to prove that the documents annexed to the applicant’s verifying affidavit were a forgery. There is no law that says that forgery can only be proved in civil cases or in criminal cases.

50. Having said that, I am persuaded that in the absence of evidence that the exemption granted by the respondent in view of the certificate No. 037524 dated 6th November 2009, was ever revoked or rescinded, the respondents are estopped from demanding for rates from the exparte applicant as they made the exparte applicant believe that the latter had been exempted from payment of rates since 2000 and in the absence of any other decision to rescind that exemption, the respondents would be acting irrationally and with procedural impropriety if they just woke up as they it did in this case and demanded for payment of rates, and penalties amounting to nearly 60 million Kenya shillings( see BZK 9).

51. The respondents’ action in my view would be in violation of the exparte applicant’s legitimate expectation that it had been lawfully granted exemption from paying rates on the property which is used for religious worship which circumstances have not changed.

52. It is for the above reasons that I find the exparte applicant’s motion dated 17th March, 2017 merited. Accordingly, I grant the motion in the following terms:

a. Certiorari is hereby issued bringing into this court for purposes of quashing and I hereby quash the decision of the respondents County Secretary, Nairobi City County, demanding shs 59,566,462 from the exparte applicant on account of Rates and Interest on plot No. 991/3 contained in the letter dated 23rd February 2017.

53. Having quashed that decision, prohibition would not serve any purpose and as the respondents cannot be prohibited from demanding for Land Rates and Interest on plot No. LR 991/3 in the event that there is change of user or the exemption is rescinded.

54. Accordingly, prayer 2 of the motion is declined.

55. I order that each party do bear their own costs of these Judicial Review proceedings.

Dated, signed and delivered in open court at Nairobi this 11th day of October, 2017.

R.E. ABURILI

JUDGE

In the presence of:

Mr Wasonga advocate for exparte applicant

N/A for the Respondents

Court Assistant: Mike