[2023] KECA 1330 (KLR)

Kabundu & another v County Government of Mombasa; Clerk County Assembly of Mombasa & 7 others (Interested Parties) (Civil Appeal E005 of 2021) [2023] KECA 1330 (KLR) (10 November 2023) (Judgment)

Neutral citation: [2023] KECA 1330 (KLR)

Republic of Kenya

In the Court of Appeal at Mombasa

Civil Appeal E005 of 2021

SG Kairu, P Nyamweya & GV Odunga, JJA

November 10, 2023

Between

Patrick Kabundu

1st Appellant

Mombasa County Entertainment, Bars, Pubs, Restaurants, Hotel, Guest Houses, Wines & Spirit Owners Organization

2nd Appellant

and

County Government Of Mombasa

Respondent

and

The Clerk County Assembly Of Mombasa

Interested Party

The Mombasa County Inspectorate

Interested Party

Chief Magistrate’s Court, Mombasa

Interested Party

The Inspector General, National Police Service

Interested Party

Director Of Public Prosecution

Interested Party

The Office Of The Attorney General

Interested Party

Mombasa Law Society

Interested Party

Lydia Wamuyu Ngari

Interested Party

(Appeal against a judgment delivered by the High Court at Mombasa (D. Chepkwony J.) on 2nd September 2020 in Mombasa JR Case No 15 of 2020. )

The Mombasa County Finance Act, 2019 and the Mombasa County Liquor Licensing Act, 2014 were neither discriminatory nor do they amount to double taxation

The appeal largely revolved around the issue of whether the Mombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014, were discriminatory and amounted to double taxation for imposing single business permits and liquour licencing fees. The court held that the two Acts were neither discriminatory nor did they amount to double taxation for among other reasons that the two legislations were different.

Reported by Kakai Toili

Civil Practice and Procedure– appeals – matters to be raised in appeals - whether an issue that was not raised at the High Court could be raised on appeal at the Court of Appeal.Statutes– interpretation of statutes – interpretation of the Mombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014 -whether the Mombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014, were discriminatory and amounted to double taxation for imposing single business permits and liquour licencing fees – Constitution of Kenya, 2010, Fourth Schedule, paragraph 4. Words andPhrases – license definition of license - a permission usually revocable, to commit some act that would otherwise be unlawful, and includes the certificate or document evidencing such permission - Black’s Law Dictionary Ninth Edition at page 1002. Words and Phrases– tax – definition of tax - a charge, usually mandatory imposed by the government on persons, entities, transactions or property to yield public revenue - Black’s Law Dictionary Ninth Edition at page 1594. Words and Phrases- double taxation – definition of double taxation - the imposition of two taxes on the same property during the same period and for the same taxing purposes - Black’s Law Dictionary Ninth Edition at page 1598.

Brief facts The appellants had filed the judicial review application at the High Court together with the 8th interested party. They challenged the arrest and prosecution of the 2nd appellant’s members for failure to pay what they termed as illegally imposed fines, and averred that they were being subjected to double taxation by being charged for business as well as liquor license levies. Further, that the enabling Act being the Mombasa County Finance Act, 2019, was enacted without public participation. The appellants therefore sought for among other orders of certiorari to quash the decisions to enact the Mombasa County Finance Act, 2019. The High Court in its judgment found that the criteria for public participation were met. It was further found that due to the limited scope of judicial review, it was not for the court to make a finding on the merits of the decision on taxation, but rather to find whether or not there was fair treatment in the decision-making process. The High Court however quashed the Mombasa County Finance Act, 2019. Aggrieved, the appellants filed the instant appeal.

Issues

Whether the Mombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014, were discriminatory and amounted to double taxation for imposing single business permits and liquour licencing fees.

Whether an issue that was not raised at the High Court could be raised on appeal at the Court of Appeal.

Held

There was no positive prayer seeking the establishment of Department of Public Participation at the High Court, and the same could not therefore be sought on appeal or granted by the court. For the same reasons, the court could not make any orders as regards the enactment of the Mombasa Finance Act, 2021, as that was not in issue in the trial court.

The High Court in reaching its decision considered the relevant factors, being the legal and the constitutional requirements in with respect to public participation and the decision was supported by the evidence that was presented to it. The issues raised by the appellants of the persons required to undertake the public participation and their recruitment was a matter of the internal workings of the Mombasa County Government. What was relevant for public participation was whether the legal requirements were met, and the High Court addressed that issue extensively in the judgment. There was no reason to interfere with the findings of the High Court on the issue of public participation.

There was appropriate public participation and the Mombasa County Finance Act, 2019, was enacted without any constitutional impropriety. Further, the applicants had not placed material evidence to show that the County Government of Mombasa was not entitled to levy taxes on liquor licences. The criteria set by law for public participation was met, removing the barriers for enactment of the law.

The High Court appeared to have conflated the issue of public participation with that of double taxation, and did not therefore address the concerns raised by the appellants as regards double taxation, and also held that it was an issue of merit review. In appropriate cases and arising from the grounds for judicial review set out in section 7 of the Fair Administrative Action Act, an element of merit review may be required in judicial review.

The legality, constitutionality and reasonableness of imposing the single business permit fees and liquor licencing fees at the same time under the Mombasa County Finance Act, 2019 and Mombasa County Liquor Licensing Act, 2014 was one that the High Court ought to have addressed pursuant to the provisions of section 7 of the Fair Administrative Action Act, without necessarily delving into the merits of the decisions to do so, and therefore erred in not addressing the concerns raised by the appellants in that respect.

The actions by the respondent and 1st and 2nd interested parties in enacting and enforcing the Mombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014, was permitted by the Constitution. As to whether the provisions in the two Acts imposing single business permits and liquour licencing fees were discriminatory and unconstitutional, the Mombasa County Finance Act, 2019, imposed fees, charges, penalties and taxes enforceable by the County Government of Mombasa, while the Mombasa County Liquor Licencing Act, 2014, provided in its long title that it was an Act of Mombasa County Assembly to provide for liquor licensing to give effect to paragraph 4 of Part II of the Fourth Schedule to the Constitution and for connected purposes. The types of liquor licences that may be granted under the Act and fees payable for the licences were specified in the Third Schedule to the Act.

The provisions in the Mombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014, were neither discriminatory nor did they amount to double taxation for three reasons; the purposes of the two legislations were different. The Mombasa County Finance Act 2019 targeted a wide range of activities that were likely to generate revenue, and the main purpose was to raise revenue from those businesses. A business was defined in the Mombasa County Finance Act, 2019, as a trade, commerce manufacture, profession, vocation or occupation;

any other activity in the nature of trade, commerce, or manufacture profession, vocation or occupation;

any activity carried on by a person continuously or regularly whether or not for gain or profit and which involved, in part or in whole, the supply of goods or services for consideration;

The object and purpose of the Mombasa County Liquor Licencing Act, 2014, was set out in section 3 thereof, and it was to regulate and control the production, distribution, sale and consumption of alcohol in the interests of consumer protection, including the protection of minors. The two objectives and purposes were diametrically opposed, and any fees raised from the activities under theMombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014, could not be said to be for the same purposes, and there was therefore no double taxation in that respect.

In terms of operation of the Mombasa County Finance Act, 2019, and the Mombasa County Liquor Licensing Act, 2014, while the taxing under the Finance Act was mandatory, the licencing under the Mombasa County Liquor Licencing Act, 2014 was not, and the respondent had the discretion to or not to grant a liquor license to a business, and the carrying out of such a business was also not mandatory. Given the purposes of the liquor and alcohol licensing regime as set out in the Mombasa County Liquor Licencing Act, 2014, any additional fees paid by the businesses involved were reasonable and justified in the circumstances.

The order by the High Court on other legislation made by the respondent, which although mentioned in the notice of motion application dated April 24, 2020 were not the subject of the prayers sought therein and were inexplicable and ambiguous. That order was therefore not merited and could not stand.

Appeal partially allowed.

Orders

The order by the High Court made in the judgment delivered on September 2, 2020 in Mombasa JR Case No 15 of 2020 that “the various Acts that were operational as listed in the application for leave to remain in force until the end of the Financial Act will be enacted and so as to avoid any doubt as to the time, till December 31, 2020” was set aside.

All the other orders in the High Court judgment were hereby upheld.

Each party to bear its own costs of the appeal.

Citations Cases Cortec Mining Kenya Ltd v Cabinet Secretary Ministry of Mining and 9 others (Civil Appeal 105 of 2015; [2017] KECA 515 (KLR)) — Followed

Jabane v Olenja (Civil Appeal 2 of 1985; [1986] KECA 21 (KLR)) — Followed

Judicial Service Comission v Mbalu Mutava & another (Civil Appeal 52 of 2014; [2015] KECA 741 (KLR)) — Followed

Judicial Service Commission & another v Njora (Civil Appeal 486 of 2019; [2021] KECA 366 (KLR)) — Explained

Kabundu, Patrick Mukiri v The Executive in charge of Tourism Development and Culture Mombasa County & 2 others (Patrick Mukiri Kabundu v The Executive in charge of Tourism Development and Culture Mombasa County & 2 others, Civil Appeal no 2 of 2016) — Followed

Saisi & 7 others v Director of Public Prosecutions & 2 others (Petition 39 & 40 of 2019 (Consolidated); [2023] KESC 6 (KLR)) — Followed

Suchan Investment Limited v Ministry of National Heritage & Culture & 3 Others (Civil Appeal 46 of 2012; [2016] KECA 729 (KLR)) — Followed

Mbogo & another v Shah (Mbogo & another v Shah (1968) EA 93) — Followed

Selle & another v Associated Motor Boat Co. Ltd & others (Selle & another v Associated Motor Boat Co. Ltd & others (1968) EA 123) — Followed

Statutes Constitution — article 27 (1);27 (5);174;184;185;186;196;199;199(1);209;209 (2);209(3);209 (4);260; Schedule 4 — Interpreted

Fair Administrative Action Act (cap 7L) — section 7 — Interpreted

Mombasa County Finance Act — Interpreted

Mombasa County Liquor Licensing Act — Interpreted

Mombasa County Public Participation Act — Interpreted

AdvocatesNone mentioned

Judgment

1. This appeal arises from a judgment delivered by the High Court at Mombasa (D. Chepkwony J.) on 2nd September 2020 in Mombasa JR Case No 15 of 2020. The Appellants herein, Patrick Kabundu and Mombasa County Entertainment, Bars, Pubs, Restaurants, Hotels, Guest Houses Wines & Spirit Owners Organisation, had filed the judicial review application in the High Court together with Lydia Wamuyu Ngari, the 8th Interested Party. The said applicants challenged the arrest and prosecution of the 2nd Appellant’s members for failure to pay what they termed as illegally imposed fines, and averred that they were being subjected to double taxation by being charged for business as well as liquor license levies. Further, that the enabling Act being the Mombasa County Finance Act 2019 was enacted without public participation in accordance with the Mombasa County Public Participation Act 2017, and that Part II thereof was based on ungazetted laws that breach Articles 199, 174, 184, 196, and 260 of the Constitution.

2. The Appellants therefore sought orders of certiorari to quash the decisions to enact the Mombasa County Finance Act 2019, and to separately charge for single business permits and alcoholic drinks licenses on businesses operated by the 2nd Appellant’s members, as well as orders restraining the charging and collection of double taxation or prosecution under the Mombasa County Finance Act 2019.

3. The Respondent in response filed a replying affidavit sworn on 15th July 2020 by Maryam Mbaruk, its County Executive Committee Member for Finance and Economic Planning, who deponed that County Governments had the obligation and powers inter alia to impose property rates, entertainment and any other taxes by an Act of Parliament and impose charges for services they provided in line with Article 209 (2) and (4) of the Constitution. In addition, that Article 185 empowered County Assemblies to make laws that were necessary for the effective performance of the functions and exercise of the powers of the County Government under the 4th Schedule of the Constitution. Therefore, that the Respondent through the 1st Interested Party enacted the Mombasa County Finance Act 2019, and that due process was observed during enactment from its inception as a Bill to conclusion, including public participation. The deponent detailed the said process of enactment and annexed supporting documents on public participation.

4. It was the Respondent’s argument that the Constitution gave County Governments the function and powers of liquor licensing, therefore there was no double taxation, and the law enabling the Mombasa County to prosecute individuals and enabling the single business permit to be issued was the Mombasa County Finance Act and Mombasa Trade License Act 2014. In addition, that the taxation introduced by the Mombasa County Finance Act 2019/2020 did not offend the provisions of Article 209 of the Constitution, since the Appellants had failed to provide evidence on how the said taxation had prejudiced national economic policies and activities, and on whether they had paid the levies imposed by the Mombasa County Finance Act 2019/2020. Therefore, that the Appellants were using the Courts as an avenue to stop the Respondent from performing an otherwise legal duty imposed by the Constitution, and avoid paying revenue legally due to the County Government of Mombasa. Lastly, that the application had been overtaken by events as the Mombasa County Finance Act was enacted and assented on 4th December 2019 and commenced operations on 31st December 2019, while the Appellants moved the High Court three (3) months later to challenge its legality.

5. A perusal of the judgment of the High Court revealed that during the pendency of the application, the Applicants filed another Notice of Motion application dated 25th June 2020 seeking interim orders, the 1st and 2nd Interested Parties also filed a Notice of Preliminary Objection dated 5th June 2020 while the 3rd, 4th and 6th Interested Parties filed grounds of opposition dated 4th June 2020. These pleadings were however not provided in the record of appeal, and as a result we were not able to address any issues raised in the appeal in relation thereto.

6. The High Court in its judgment found that the criteria for public participation were met, and there is no satisfactory material that has been placed before the court to convince it that the Applicants were deprived of an opportunity to participate in the process as a result of that omission. It was also found that the issue of double taxation was tabled during public participation and there was an opportunity to address the same. It was further found that due to the limited scope of judicial review, it was not for the court to make a finding on the merits of the decision on taxation, but rather to find whether or not there was fair treatment in the decision making process.

7. The High Court however found that the Mombasa County Finance Act 2019 was not enacted in accordance with Article 199(1) of the Constitution, and the final orders of the Court were as follows:a.The Mombasa County Finance Act 2019 be and is hereby removed into court and quashed.b.The various Acts that were operational as listed in the application for Leave to remain in force until the end of the Financial Act will be enacted (sic). And so as to avoid any doubt as to the time, till 31st December, 2020. c.The Order of Prohibition sought in the Notice of Motion dated 24th April 2020 and Notice of Motion dated 25th June 2020 be and is hereby denied and the later motion decreed as spent.d.The Notice of Preliminary Objection dated 5th June, 2020 in so far as it relates to technicalities in the main motion having seen decided on merit in super flows (sic).e.Each party to bear its own costs.

8. The Appellants, being dissatisfied with the decision filed a notice of appeal dated 5th October 2020 and a memorandum of appeal dated 26th January 2021, in which they raised four (4) grounds of appeal, namely, that the learned Judge erred in finding that the process of public participation was followed in enactment of Mombasa County Finance Act, 2019/2020, in finding that the subject application was a judicial review application which dealt with process and procedure and not merit; by failing to order the Respondent to put in place the establishment of a department of public participation under Mombasa County Public Participation Act, 2017 as per its laws and enact the Finance Act as per the law; and by failing to address the issue of double taxation.

9. The Appellants therefore seek the following orders from this Court:a.That the Appeal be allowed and the judgment and decree of the High Court dated 2nd September 2020 be set aside on the issue of double taxation and establishment of a department of public participation under Mombasa County Public Participation Act, 2017, as per its laws and enact the Finance Act as per the law.b.With prejudice to the above, the Honourable Court order the Respondent County Government of Mombasa to establish the department of Public Participation and Director of Public Participation under Mombasa County Public Participation Act, 2017, as per its laws and enact the Mombasa Finance Act, 2021 as per the lawc.Without prejudice to the above, the Honourable Court order of certiorari do issue to remove to this Court and quash the decision by County Government of Mombasa County Assembly of Mombasa enacting the Mombasa County Finance Act, 2021 without following its own legislation in enacting the Mombasa County Finance Act 2021 in contravention of Mombasa County Public Participation Act, 2017d.That the order of certiorari do issue to remove to this Honourable Court and quash the decision by the County Government of Mombasa to charge separately for single business permit and alcoholic drinks licenses in respect of the same business operated by the Exparte Applicants members and Mombasa citizens in contravention of the lawse.That the Court be pleased to grant further or other orders as it may deem justf.That the Cost of this appeal be granted to the Appellants.

10. We shall address preliminary issues arising from the above prayers later on in this judgment. We heard the Appeal on 29th March 2023 on this Court’s virtual platform and Mr. Patrick Kabundu appeared in person and also for the 2nd Appellant, and indicated that he had withdrawn the appeal as against the 1st and 2nd Interested parties. Learned counsel Mr. Tajbhai, appeared for the Respondent, learned counsel Mr. Mwandeje, appeared for the 3rd, 4th, 5th and 6th Interested Parties and learned counsel Mr. Mwiti, appeared for the 8th Interested Party. There was no appearance for the 7th Interested Party. Mr. Kabundu highlighted his written submissions dated 24th March 2022, and Mr. Mwiti indicated that the 8th Interested Party was supporting the appeal and relied on the Appellants’ submissions. Mr. Tajbhai and also highlighted his submissions dated 28th March 2023 while Mr. Mwandenje relied on his written submissions dated 20th March 2023.

11. Mr. Kabundu stated that he was appealing part of the decision of the High Court on the findings on public participation and double taxation. He urged that the learned trial Judge did not address the issue raised that the procedures set out in the Mombasa County Public Participation Act 2017 were not followed in the enactment of the Mombasa County Finance Act 2019 and in particular, that the public participation was spearheaded by the acting County Secretary of Mombasa County government instead of the Director of Public Participation as required by the Act, who was to be appointed by the County Public Service Board which was not in place. The Appellants made reference to various High Court decisions on the legality of actions undertaken outside the statutory powers.

12. Additionally, that the trial Judge only mentioned the issue of double taxation but never made any pronouncement on the same, and failed to appreciate the judicial review application was not interrogating the merit but the process and procedure of public participation. The Appellants submitted that in a Judicial Review process in the High Court, the Court was vested with the prerogative powers to supervise the operations of the tribunals and public bodies and a person who felt that an exercise of such power by, a government minister, the local council or statutory tribunal is unlawful because it had violated their rights and may apply to court for judicial review remedies. The Appellants placed reliance on the cases of Cortec Mining Kenya Ltd v Cabinet Secretary Ministry of Mining and 9 others [2017] eKLR and Judicial Service Commissions v Mbalu Mutava & another [2015] eKLR on the scope of judicial review.

13. Lastly, the Appellants submitted that once the trial Judge issued the writ of certiorari to quash Mombasa County Finance Act, 2019, the Court became functus officio and could not grant any further orders, but instead proceeded to breathe life into the already quashed Act by creating ambiguity in her pronouncements.

14. Mr. Tajbhai in response submitted that the appeal was overtaken by events since the Mombasa County was now in the financial year 2022/ 2023 and the current Finance Act in place was the Mombasa County Finance Act 2023. Additionally, that the Mombasa County Government had established the Department of Public Participation stationed at the Public Service Betting Control Building in Mombasa. The counsel submitted that intensive public participation was carried out as evidenced by their annexures to the application. The counsel also pointed the orders sought as regards the Mombasa County Finance Act 2021 were not the subject of dispute in the trial Court. Lastly, that the matter of double taxation was res judicata and had already been determined by Court in Patrick Mukiri Kabundu v The Executive in charge of Tourism Development and Culture Mombasa County & 2 others, Civil Appeal No 2 of 2016, where this Court held that the Mombasa County Liquor License Act, 2014 was a proper, valid and legal instrument and there was no double taxation.

15. Mr. Mwandeje similarly submitted that the learned trial Judge did not err in her decision and that the issue for the Court’s determination was what amounted to public participation and whether the same was done by the Respondents. Further, that public participation was done as the Mombasa County Residents were duly notified of the process of enactment of the Mombasa County Finance Act 2019 vide a notice on the dailies and there were public forums, meetings with stake holders, media reports, lobbying and an opportunity to make written presentations. Therefore, that the learned trial Judge made an informed decision based on the evidence presented to the Court.

16. This being a first appeal, the duty of this Court was set out in the decision of Selle & another v Associated Motor Boat Co. Ltd & others (1968) EA 123, which is to reconsider the evidence, evaluate it and draw our own conclusion of facts and law. We will only depart from the findings by the trial Court if they were not based on evidence on record; where the said Court is shown to have acted on the wrong principles of law as was held in Jabane v Olenja (1986) KLR 661, or where its discretion was exercised injudiciously as was held in Mbogo & another v Shah (1968) EA 93.

17. We need to point out at the outset that there was no specific prayer in the application filed by the Appellants in the High Court seeking the establishment of the Department of Public Participation and Director of Public Participation, and this issue cannot therefore be raised on appeal. The prayers sought by the Appellants in the Notice of Motion application dated 24th April 2020 which was the subject of the impugned judgment were as follows:1. An Order of certiorari do issue to remove to this Court and quash the decision by County Government of Mombasa, County Assembly of Mombasa enacting the Mombasa County Finance Act, 2019 without following its own legislation in enacting the Mombasa County Finance Act 2019 in contravention of Mombasa County Public Participation Act, 20172. An Order of certiorari do issue to remove to this Court and quash the decision by the County Government of Mombasa, to charge separately for single business permit and Alcoholic Drinks Licenses in respect of the same business operated by the Applicants members in contravention of Mombasa County Finance Act 2019 and ungazetted laws.3. An Order of Prohibition do issue restraining the Respondent from demanding, levying, charging, collecting retaining or howsoever impose any taxes double charges for business licenses upon the Applicants members and Mombasa citizens in contravention of the Mombasa County Finance Act, 2019 and founded on ungazetted Law4. An Order of Prohibition do issue restraining the Respondent and interested party from instituting and or conducting any criminal prosecution under the Mombasa County Finance Act 2019 or ungazetted Acts or law there under in respect of the issues of licensing, permit fees, county land rates fees until the Respondent puts in place establishment of the department of public participation under the Mombasa County Public Participation Act 2017 as per its law and enact the Finance Act as per the law.5. An Order of Prohibition do issue do operated as a stay of implementation and/ or execution of the decision by the County Government of Mombasa to charge single business permits and Alcoholic Drinks Control Licenses against the Applicants and public in respect of the same in contravention of the Mombasa County Finance Act 2019 and ungazetted law6. The Costs of the application for leave and the substantive motion be provided to the Applicants.

18. The prayers sought and issues raised in the High Court with respect to public participation were that there was lack of compliance with Mombasa County Public Participation Act 2017 in the enactment of the Mombasa County Finance Act 2019, and an order seeking to restrain further prosecution of the Appellants’ members in the absence of a Department of Public Participation under the Mombasa County Public Participation Act 2017. There was thus no positive prayer seeking the establishment of Department of Public Participation, and the same cannot therefore be sought on appeal or granted by this Court. For the same reasons we cannot make any orders as regards the enactment of the Mombasa Finance Act 2021 as we are being asked to do in the Memorandum of Appeal, as this was not in issue in the trial Court. The issues that arise for determination in this appeal are therefore two, namely whether there is ground to interfere with the decisions by the learned trial Judge on public participation and double taxation, and the appropriate reliefs in the circumstances.

19. It is notable in this respect that a considerable part of the judgment by the learned trial Judge, specifically from paragraphs 28 to 42 thereof, dealt with the issue of public participation in the enactment of the Mombasa County Finance Act 2019, including the requirements of public participation as set out both in Mombasa County Public Participation Act 2017 and the Constitution. The learned trial Judge in this respect noted that the Court would be guided by the obligation to determine whether a particular legislation was in fact and in substance enacted in accordance with the Constitution and not to just satisfy itself as to the formalities or the motions of doing so, and after considering the legal and constitutional provisions as well as various case law, found that the yardstick for public participation is that a reasonable opportunity has been given to the members of the public and all interested parties to know about the issue and to have an adequate say. The learned trial Judge considered the evidence presented in this respect and reached the conclusion that “in this case, there was an opportunity for public participation and there is no evidence that any member of the public was deprived of an opportunity to participate in the law making process”.

20. We cannot fault the trial Judge in reaching this decision for the reasons that firstly, the learned Judge took into account the relevant factors, being the legal and the constitutional requirements in with respect to public participation, and secondly that the decision was supported by the evidence that was presented to the trial Court. In our view, the issues raised by the Appellants of the persons required to undertake the public participation and their recruitment was a matter of the internal workings of the Mombasa County Government. What was relevant for public participation was whether the legal requirements were met, and the learned trial Judge addressed this issue extensively in the judgment. We therefore find no reason to interfere with the findings of the trial Judge on the issue of public participation.

21. On the issue of double taxation, the trial Judge noted that the Applicants purported that the Mombasa County Finance Act 2019 was imposing double taxes and it would be unfair to them and their members, and that the Applicants’ case was anchored on the levies imposed on Liquor licenses as opposed to the Act generally. The learned Judge found as follows in this respect:“42. …. Whereas it is submitted that there is no justification to levy taxes twice, the court’s view is that Judicial Review is not concerned with the merits of the decision but whether or not there was fair treatment in the decision making process. The Court of Appeal in the case of Cortec Mining Kenya Ltd v Cabinet Secretary Ministry of Mining & 9 Others [2017]eKLR, considered the scope of Judicial Review and after reviewing several authorities stated thus……43. In the instant application for Judicial Review the issue is whether there is any illegality, irrationality and/or procedural impropriety in the enactment of the Mombasa County Finance Act by failing to involve public participation. This Court has established that there was appropriate public participation and the Act was enacted without any Constitutional impropriety. Further, the Applicants have not placed material evidence to show that the County Government of Mombasa is not entitled to levy taxes on liquor licences. It is therefore safe to conclude that the criteria set by law for public participation was met, removing the barriers for enactment of the law.

22. It is evident that the trial Court appears to have conflated the issue of public participation with that of double taxation, and did not therefore address the concerns raised by the Appellants as regards double taxation, and also held that this was an issue of merit review. In this respect it has been held by this Court in various decisions including in Suchan Investment Ltd v Ministry of Natural Heritage & Culture & 3 others [2016] eKLR, that in appropriate cases and arising from the grounds for judicial review now set out in section 7 of the Fair Administrative Action Act, an element of merit review may be required in judicial review.

23. This position was explained in detail by this Court (PO Kiage, SG Kairu & F Sichale JJA) in Judicial Service Commission & another v Njora (Civil Appeal 486 of 2019) [2021] KECA 366 (KLR) as follows:“The superior courts of this country have spoken with near-unanimity that the current constitutional and statutory landscape calls for a more robust application of the relief of judicial review to include, in appropriate cases, a merit review of the impugned decision. See, for instance, Communication Commission of Kenya v Royal Media Services & 5 others [2014] eKLR by the Supreme Court, this court’s decisions in Suchan Investment Ltd v Ministry of Natural Heritage & Culture & 3 others [2016]eKLR and Child Welfare Society of Kenya v Republic & 2 others ex parte Child In Family Focus Kenya[2017]eKLR and the High Court’s. in Republic v Commissioner of Customs Services Exparte Imperial Bank Ltd[2015] eKLR (per Odunga, J). They all speak to the unmistakable sea change and approach, stated thus by this court in Super Nova Properties Ltd & anor v district Land Registrar Mombasa & 2 others, Kenya M_anti Corruption Commission & 2 others (interested Parties)[2018] eKLR;27. "On our part, we find no fault that the judge expanded the grounds of judicial review above the conservative grounds to include the principles of proportionality, public trust, accountability by public officers, justice and equity. The test of proportionality would automatically lead to a greater intensity of review of the merits as it invites a court to evaluate the merits of the decisions by assessing the balance to make; that is whether the decision to be made is within the range of rationality or reasonableness. Secondly, the proportionality test may go deeper into examination of the interests of those affected by the said decision.” 49. This court conducted a thorough and exhaustive review of the post- 2010 jurisprudence on the evolution of judicial review into the deeper scrutiny, hard look, merit-based standard of review mode in its recent decision in *Geoffrey Ajuong Okumu & anor v Engineers Board of Kenya [2021] eKLR . I respectfully echo as representing the current legal position on the subject what we said there was on our way to the conclusion that;"--- we have been able to demonstrate from … the decisions we have enumerated that, by stating that he could not consider evidence presented as defence or analyze the agreements executed by the parties in the dispute because doing so would amount to a merit review, the learned judge erred.”50. We emphatically find and hold that there is nothing doctrinally or jurisprudentially amiss or erroneous in a judge’s adoption of a merit review in judicial review proceedings. To the contrary, the error would lie in a failure to do so, out of a misconception that judicial review is limited to a dry or formalistic examination of the process while strenuously and artificially avoiding merit. That path only leads to intolerable superficiality.”

24. The Supreme Court of Kenya thereafter also addressed this issue in Saisi & 7 others v Director of Public Prosecutions & 2 others (Petition 39 & 40 of 2019 (Consolidated)) [2023] KESC 6 (KLR) and noted that there are two schools of thought on merit review in judicial review from decided cases, with the first holding that since the promulgation of the Constitution of 2010, judicial review has shifted from the “process only approach” to merit review in appropriate case; while the second has maintained the traditional approach that believes that judicial review proceedings involve a “process only approach” limited to the interrogation of the process and not the merits of the decision being challenged.

25. The Supreme Court then pronounced the law on this issue to be as follows:“75. In order for the court to get through this extensive examination of section 7 of the FAAA, there must be some measure of merit analysis. That is not to say that the court must embark on merit review of all the evidence. For instance, how would a court determine whether a body exercising quasi-judicial authority acted reasonably and fairly “in the circumstances of the case”, without examining those circumstances and measuring them against what is reasonable or fair, and arriving at the conclusion that the action taken was within or outside the range of reasonable responses. However, it is our considered opinion that it should be limited to the examination of uncontroverted evidence. The controverted evidence is best addressed by the person, body or authority in charge. To borrow the words of the Court of Appeal in Judicial Service Commission & another v Lucy Muthoni Njora, Civil Appeal 486 of 2019; [2021] eKLR there is nothing doctrinally or legally wrong about a judge adopting some measure of review, examination, or analysis of the merits in a judicial review case in order to arrive at the justice of the matter. Rather a failure to do so, out of a misconception that judicial review is limited to a dry or formalistic examination of the process only leads to intolerable superficiality. This would certainly be against article 259 of the Constitution which requires us to interpret it in a manner that inter alia advances the rule of law, permits the development of the law and contributes to good governance.76. Be that as it may, it is the court’s firm view that the intention was never to transform judicial review into to full-fledged inquiry into the merits of a matter. Neither was the intention to convert a judicial review court into an appellate court. We say this for several reasons. First, the nature of evidence in judicial review proceedings is based on affidavit evidence. This may not be the best suited form of evidence for a court to try disputed facts or issues and then pronounce itself on the merits or demerits of a case. More so on technical or specialized issues, as the specialised institutions are better placed to so. Second, the courts are limited in the nature of reliefs that they may grant to those set out in section 11(1) and (2) of the Fair Administrative Actions Act. Third, the court may not substitute the decision it is reviewing with one of its own. The court may not set about forming its own preferred view of the evidence, rather it may only quash an impugned decision. This is codified in section 11(1)(e) and (h) of the Fair Administrative Action Act. The merits of a case are best analyzed in a trial or on appeal after hearing testimony, cross-examination of witnesses and examining evidence adduced. Finally, as this court held in the case of Kenya Vision 2030 Delivery Board v Commission on Administrative Justice, Attorney General and Eng Judah Abekah, SC Petition 42 of 2019; [2021] eKLR, in matters involving the exercise of judgment and discretion, a public officer or public agency can only be directed to take action; it cannot be directed in the manner or the particular way the discretion is to be exercised.”

26. In our view the legality, constitutionality and reasonableness of imposing the single business permit fees and liquor licencing fees at the same time under the Mombasa County Finance Act, 2019 and Mombasa County Liquor Licensing Act, 2014 was one that the trial Court ought to have addressed pursuant to the provisions of section 7 of the Fair Administrative Action Act, without necessarily delving into the merits of the decisions to do so, and therefore erred in not addressing the concerns raised by the Appellants in this respect.

27. Mr. Kabundu’s submissions in this respect, while relying on the definition of tax and double taxation in Black’s Law Dictionary, were that the Respondent enacted the Mombasa County Liquor Licensing Act, 2014 and Regulations and the Mombasa County Finance Act, 2019, in which it was charging both single business permit and liquor license which amounted to double taxation and was discriminatory, as no other class of business people were receiving similar treatment. That this was thus a selective application of the law, an abuse of power, was arbitrary, vague and unreasonable. According to the Appellants, double taxation contravenes Article 27 (1) of the Constitution which entitled everyone to equal protection and benefit of the law and Article 27 (5) which prohibited discrimination of any form and on any ground including the ground of one’s profession.

28. The Appellants proceeded to give reasons why the two taxes were not justified, namely that the liquor license was more expensive as compared to other businesses and that the Respondent had not demonstrated that the County expended huge capital expense due to alcohol license to justify the imposition of the two licenses. Therefore, that the provisions for the licensing must be contained in either the Mombasa County Finance Act or the Mombasa County Liquor Licensing Act, 2014, and one of the Acts must be quashed.

29. The Appellants are aggrieved by the provisions of the Mombasa County Finance Act 2019 that provided for a single business permit and fees and charges payable as a result, while there is also a requirement to pay liquor licencing fees under the Mombasa County Liquor Licencing Act of 2014. They claim that this is double taxation, discriminatory and unconstitutional. Section 209(3) of the Constitution in this respect provides that certain taxes can only be imposed by the national Government, namely, income tax, value-added tax, customs duties and other duties on import and export goods; and excise tax; while a county may impose property rates; entertainment taxes; and any other tax that it is authorised to impose by an Act of Parliament. Further, the national and county governments may impose charges for the services they provide. Section 210 is specific that No tax or licensing fee may be imposed, waived or varied except as provided by legislation. Article 186 provides that the functions and powers of the national government and the county governments, are as set out in the Fourth Schedule, and Part 2 paragraphs 4 and 7of the Fourth Schedule specifies that liquor licencing and trade licencing are functions of County Government.

30. We accordingly find that the actions by the Respondent and 1st and 2nd Interested Parties in enacting and enforcing the Mombasa County Finance Act 2019 and the Mombasa County Liquor Licensing Act, 2014 were to this extent permitted by the Constitution and legal. As to whether the provisions in the two Acts imposing single business permits and liquour licencing fees were discriminatory and unconstitutional, it is notable that the Mombasa County Finance Act 2019 imposed fees, charges, penalties and taxes enforceable by the County Government of Mombasa, while the Mombasa County Liquor Licencing Act of 2014 provides in its long title that it is “ An Act of Mombasa County Assembly to provide for liquor licensing to give effect to paragraph 4 of Part II of the Fourth Schedule to the Constitution and for connected purposes.” The types of liquor licences that may be granted under the Act and fees payable for the licences are specified in the Third Schedule to the Act.

31. A license is defined in Black’s Law Dictionary Ninth Edition at page 1002 as “a permission usually revocable, to commit some act that would otherwise be unlawful”, and includes the certificate or document evidencing such permission. A tax on the other hand, is defined at page 1594 as “a charge, usually mandatory imposed by the government on persons, entities, transactions or property to yield public revenue”. Double taxation is defined at page 1598 as the imposition of two taxes on the same property during the same period and for the same taxing purposes.

32. It is our view that the provisions in the two Acts are neither discriminatory nor do they amount to double taxation for three reasons. Firstly, it is evident that the purposes of the two legislations are difference. The Mombasa County Finance Act 2019 targeted a wide range of activities that were likely to generate revenue, and the main purpose is to raise revenue from these businesses. A business was defined in the Mombasa County Finance Act 2019 asa.trade, commerce manufacture, profession, vocation or occupation;b.any other activity in the nature of trade, commerce, or manufacture profession, vocation or occupation;c.any activity carried on by a person continuously or regularly whether or not for gain or profit and which involves, in part or in whole, the supply of goods or services for consideration;

33. The object and purpose of the Mombasa County Liquor Licencing Act of 2014 on the other hand is set out in section 3 thereof, and it is evident that it is to regulate and control the production, distribution, sale and consumption of alcohol in the interests of consumer protection, including the protection of minors. The two objectives and purposes are diametrically opposed, and any fees raised from the activities under the two Acts cannot be said to be for the same purposes, and there is therefore no double taxation in this respect. Secondly, it is also evident that in terms of operation of the two Acts, while the taxing under the Finance Acts is mandatory, the licencing under the Mombasa County Liquor Licencing Act of 2014 is not, and the Respondent has the discretion to or not to grant a liquor license to a business, and the carrying out of such a business is also not mandatory. Lastly, given the purposes of the liquor and alcohol licensing regime as set out in the said Act, it is our finding that any additional fees paid by the businesses involved are reasonable and justified in the circumstances.

34. The last issue for our determination is that of the appropriate reliefs in the circumstances. We have found that the relief granted by the trial Court on public participation was justified, and our examination of the arguments by the Appellants on double taxation and findings thereon also leads to the conclusion that the reliefs they sought in this respect were not merited. We however feel constrained to comment on an order by the trial Court on other legislation made by the Respondent, which although mentioned in the Notice of Motion application dated 24th April 2020 were not the subject of the prayers sought therein, and which we also found to be inexplicable and ambiguous. The said order was therefore not merited and cannot stand.

35. In the end this appeal is found to be partially merited only to the extent that the order by the High Court at Mombasa (D. Chepkwony J.) made in the judgment delivered on 2nd September 2020 in Mombasa JR Case No 15 of 2020 that “The various Acts that were operational as listed in the application for Leave to remain in force until the end of the Financial Act will be enacted (sic). And so as to avoid any doubt as to the time, till 31st December, 2020” is hereby set aside. All the other orders in the said judgment are hereby upheld. Lastly, given the circumstances giving rise to this appeal and given it has partially succeeded, each party shall bear its own costs of the appeal.

36. It is so ordered.

DATED AND DELIVERED AT MOMBASA THIS 10TH DAY OF NOVEMBER, 2023S. GATEMBU KAIRU, FCIArb...........................JUDGE OF APPEALP. NYAMWEYA...........................JUDGE OF APPEALG. V. ODUNGA...........................JUDGE OF APPEALI certify that this is a true copy of the originalSignedDEPUTY REGISTRAR