[2012] KEHC 1009 (KLR)

REPUBLIC OF KENYA

High Court at Nairobi (Nairobi Law Courts)

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IN THE MATTER OF AN APPLICATION FOR ORDERS IN THE NATURE OF CERTIORARI, MANDAMUS AND PROHIBITION

AND

IN THE MATTER OF THE CONSTITUTION OF KENYA

AND

IN THE MATTER OF THE EXCHEQUER AND AUDIT ACT, CAP 412 OF THE LAWS OF KENYA

AND

IN THE MATTER OF THE EMPLOYMENT ACT, ACT NUMBER 11 OF 2007

AND

IN THE MATTER OF LEGAL NOTICE NUMBER 47 OF 21ST FEBRUARY 2001

BETWEEN

LUCY GETANGE

CAROLINE GAITA

JACQUELINE OUKO

GEOFFREY KOECH

JANET KISERIAN

MOSES MUKUNIDO

WILFRED WAWERU

MERCY KATELA...........................................................................................APPLICANTS

AND

THE HONOURABLE ATTORNEY GENERAL......................................1st RESPONDENT

THE MINISTER OF TOURISM.............................................................2nd RESPONDENT

THE PERMANENT SECRETARY MINISTRY OF TOURISM.............3rd RESPONDENT

RULING

Through the Notice of Motion dated 23rd January 2012, Lucy Getange, Caroline Gaita, Jacqueline Ouko, Geoffrey Koech, Janet Kiserian, Moses Mukunido, Wilfred Waweru And Mercy Katela (herein collectively referred to as the Applicants) seek the following orders:

a)An order of certiorari to quash the 2nd Respondents decision of winding up the Tourism Trust Fund pursuant to the letter dated December 29, 2011 and oral directives for the reason that he lacks the legal authority to do so;

b)An order of certiorari to quash the 3rd Respondent’s directives contained in the letter dated January 18th 2012 for a change of signatories in relation to account numbers 6534570016 and 6534570021 known as Tourism Trust Fund Development Account and Tourism Trust Fund Counterpart Funds respectively at the Commercial Bank of Africa;

c)An order of mandamus to compel the 2nd and 3rd Respondents to seek the advice of the 1st Respondent and of the Board of Trustees of Tourism Trust Fund and the Commission of the European Union and the approval of Parliament in relation to the winding up of the Tourism Trust Fund as it is a quasi-government institution;

d)An order of prohibition against the 2nd 3rd Respondent stopping the taking over of the operations of the Tourism Trust Fund by officers designated by them, and if such take will have taken place,(sic) an order of the court declaring the taking over its operations for the purposes of winding up Tourism Trust Fund a nullity;

e)An order of mandamus to compel the 2nd and 3rd Respondents to reinstate the Applicants and an order that the budgetary sums of Kshs 30,000,000. 00 now being held in trust for the Tourism Trust Fund and that the said sum be forthwith released to the Tourism Trust Fund for the running of its operations until June 2012 in accordance with the approval by Parliament;

f)An order of prohibition prohibiting the 2nd and 3rd Respondents from interfering with the operations of the Tourism Trust Fund, winding it up, taking possession of its bank accounts and assets or firing the Applicants otherwise than in accordance with due process and in accordance with the law;

g)That the costs of this application be provided for.

The application is supported by the statutory statement, the verifying affidavit, a further affidavit and two further supplementary affidavits, all by the 3rd Applicant Jacqueline Ouko. The application is premised on the following main grounds:

a)The Applicants are employees of the Tourism Trust Fund and are therefore entitled to lawful, reasonable and procedurally fair administrative action;

b)The Applicants' employment with the Tourism Trust Fund is likely to be adversely affected by the 2nd and 3rd respondents arbitrary administrative directives of the 1st Respondents through the letter dated 29th December 2011 to wind up the Tourism Trust Fund;

c)The legal advice of the 1st Respondent who is the principle legal advisor to the government has not been sought on the question of the degazettment of Legal Notice No 47 of the 21st February 2001 which the 2nd and 3rd Respondents cannot legally degazette;

d)The approval of parliament to wind up the Tourism Trust Fund has not been granted although parliament approved an amount of Kshs 40,000,000. 00 for the recurrent operations of the Tourism trust Fund for the financial year June 2011 – June 2012.

e)…

f)The concurrence of the founding members of the Tourism Trust Fund which includes the Commission of the European Union, the Treasury and that of the Board of Trustees of the Tourism Trust Fund have not been obtained and thus the 2nd and 3rd Respondents are therefore acting illegally and with impunity.

g)The 2nd and 3rd Respondents’ directive to the acting Chief Executive Officer [of the Tourism Trust Fund] to terminate the Applicants’ employment contravenes the express provisions of the Constitution and the Employment Act. The 2nd and 3rd Respondents do not have the legal mandate to terminate the Applicants.

h)The Applicants cannot handover to the 2nd and 3rd Respondents or to the or officers designated by them as this would be a total disregard of the due process and procedures spelt out in Legal Notice No 47 of 2001, the Financing Agreement and Memorandum of Understanding by the Founding Members of the Tourism Trust Fund;

i)the 2nd Respondent is not the appointing authority of the Board of Trustees of the Tourism Trust Fund or its staff, the Applicants herein, and the only the lawful procedure of winding up Tourism Trust Fund is a decommitment process between the Government of Kenya and the Commission of the European Union.

The application is opposed. Grounds of opposition dated 14th March 2012 were filed on behalf of the 1st, 2nd and 3rd Respondents. The substance of this grounds are that this court lacks jurisdiction to hear and determine this matter, that the application contravenes the mandatory provisions of the Constitution of Kenya and the Employment Act, and that the application does not raise issues that can form the subject of judicial review proceedings.

The application is also opposed through a Replying Affidavit deponed by Leah A. Gwiyo. According to the 3rd Respondent, the Tourism Trust Fund was formed in March 2001 under Legal Notice No 47of the Exchequer and Audit Act, Chapter 412 of the Laws of Kenya. The founding members of this Fund were the Government of Kenya and the Commission of European Communities. The Fund was formed to support two projects: the Tourism Diversification and Sustainability Programme and the Tourism Institutional Strengthening and Market Promotion Programme. The operations of the Fund were governed by a Memorandum of Understanding which was entered into by the Chair of the Board of Trustees of the Tourism Trust Fund, the Permanent Secretary in the Ministry of Tourism, an officer of the National Authorising Officer of the European Development Fund and the Head of the Delegation of the European Commission in Kenya.

The Tourism Diversification and Sustainability Programme was to run from December 2001 to December 2007. This period was later extended by twelve months. The Tourism Institutional Strengthening and Market Promotion Programme was to run from 5th March 2001. The tenure of both programmes was to end by 31st December 2008. After 2008, the government of Kenya continued to support the fund financially so that unfinished projects undertaken by this Fund could be completed.

The 2nd respondent got into talks with Treasury and the Attorney General with a view to issue a fresh gazette notice to review Legal Notice No 47 of 2001 so that the Fund could attract other donors to the project. The Ministry of Finance was of the view that there was no need to establish a new fund, and that the activities could be undertaken by the Ministry of Tourism. The 3rd Respondent appealed to the Ministry of Finance to review this decision, but the appeal failed. As a result, the winding up process for the Tourism Trust Fund commenced in August 2011. This position was communicated to the founders of the Tourism Trust Fund and the head of the Delegation of the European Commission by way of a letter dated 5th August 2011. On 22nd August 2011, the European Union wrote to the 3rd Respondent indicating that they supported the winding up of the Fund, and that aimed to close the two programmes that had been managed by the Tourism Trust Fund by 31st December 2011. The contracts of employment of the Applicants had been renewed for a term of 12 months from 1st January 2010. The Acting Chief Executive Officer of the Fund was also made aware that due to the winding up of the Fund, the contracts of service of the staff of the Fund would not be renewed.

The Respondents are of the view that the issues raised by the Applicants fall within the ambit of private contractual rights, and the do not raise any issues that warrant judicial review.

The parties filed submissions to advance their respective positions. The application was argued before me on 1st October 2012. During highlighting of the submissions, the Applicants relied on the pleadings filed in court as well as their submissions and authorities dated 11th April 2012. The Respondents relied on their submissions dated 27th February 2012 and further submissions 25th April 2012.

Counsel for the Applicants raised various issues, key among them the manner in which the Respondents purport to wind up the Tourism Trust Fund, and the violation of the employment rights of the Applicants.

I will not deal with the issue of the employment rights of the Applicants. It is now settled, as counsel for the Respondents pointed out, that the Industrial Court has exclusive jurisdiction to deal with matter touching on employments rights. See the holding of Justice D Majanja inUnited States International University (USIU) v Attorney General [2012] eKLR(Petition 170 of 2012)

“It follows that all employment and labour relations matters pending in the High Court shall now be heard by the Industrial Court which is now a court of the status of the High Court. The High Court therefore lacks jurisdiction to deal with matters of employment and labour matters whether filed in the High Court before or after the establishment of the Industrial Court.”

Moreover, the fact that the Applicants were employed by the Tourism Trust Fund would not necessarily make a decision to terminate them amenable to judicial review. It also settled that the mere employment of a person by a public authority does not per se inject public law into the relationship. In this case, there is evidence to show that the Applicants were aware that their contracts had come to an end and would not be renewed.

Having gone through the pleadings before court, the submissions and the arguments of counsel before me, I am of the opinion that the main issue for my determination is whether the winding up of the Tourism Trust Fund has been done in accordance with the relevant law.

It is uncontroverted that the Tourism Trust Fund was established by Legal Notice No. 47, under sections 34 and 36 of the Exchequer and Audit Act. According to this Legal Notice, the founders of the Tourism Trust Fund are the Government of Kenya and the Commission of the European Communities.

The enabling provisions of the Exchequer and Audit Act were deleted and saved under the provisions of the Government Financial Management Act, Chapter 418B of the Laws of Kenya, which came into operation on 1st November 2005.

Section 5 of the First Schedule of the Government Financial Management Act provides:

“5. A fund established under section 34 of the Exchequer and Audit Act shall be deemed to be a fund established under section 26. ”

Consequently, section 26 of the Government Financial Management Act applies to this situation. This section states:

26. (1) If moneys are appropriated by Parliament to establish a fund separate from the Consolidated Fund, the Minister may establish such a fund.

...

(4) The Minister may, by order, wind up a fund established under this section and upon the winding up of such a fund any amounts remaining in the fund shall be paid into the exchequer account.

(5) A person administering a fund established under this section shall prepare and submit accounts for each financial year under the Public Audit Act, 2003 for audit by the Controller and Auditor-General.

(6) The Minister may make regulations governing funds established under this section.

(emphasis mine)

To my mind, the law is very clear that the Minister may order the winding up of a Fund that is established under this section.

From the annextures before the court, it appears that the winding up of the Tourism Trust Fund was done following deliberations between Treasury and the Ministry of Tourism. The Fund was to secure funding for its two projects from the European Development Fund, or other sources of the Commission for European Committees. The rationale behind the winding up was that the funding for the projects that the Fund was to undertake had ended, and so it was important that new regulations were gazetted to allow the Fund to seek alternative sources of funding in order to allow it to undertake other projects.

The Ministry of Finance was of the view that the projects proposed could be undertaken by the Ministry of Tourism, and in view of the fact that another Fund had been established under the Tourism Act, there really was no need to have two funds. The treasury therefore asked the 3rd Respondent to expedite the winding up of the Fund. This was in June 2010. The Commission of the European Committees also wrote to the 3rd Respondent indicating that it supported the winding up of the Tourism Trust Fund. This is the decision that the Applicants would have me review. The decision of the Respondents would only fall under the purview of this court if it was made outside the provisions of the law, or in excess of jurisdiction or in violation of the rules of natural justice. I appreciate that in exercising jurisdiction in order to determine whether or not to grant judicial review orders, the court must be guided by the circumstances of each case. There are however some basic grounds that guide the court in deciding whether the court should grant these orders. I adopt the guidelines of Nyamu J, in the case of Republic V Kenya Revenue Authority Ex-Parte Yaya Towers Limited [2008] eKLR (Misc Civil Application 374 of 2006)wherein he set out the grounds as follows:

...However, there are conservative grounds that have remained outstanding in judicial review challenge such as:-

(i) Abuse of discretion.

(ii) Irrationality.

(iii) Excess of jurisdiction.

(iv) Improper motives.

(v) Failure to exercise discretion

(vi) Abuse of the rules of natural justice

(vii) Fettering of discretion.

(viii) Error of law.

Having gone through the Legal Notice No 47 of 2001, I am of the considered view that the decision to wind up the Tourism Trust Fund was made within the ambit of the law. I must also point out that the decision to wind up the Tourism Trust Fund was made by the Ministry of Finance, and not the Ministry of Tourism as has been stated by the Applicants.

The Legal Notice clearly states that the founders of the Fund are the government and the Committee for European Committees. There is evidence before the court that both these entities were in agreement that the purpose for which the Fund was enacted was spent. The Legal Notice allows them to make any administrative decisions regarding the running of the Fund. It is therefore my decision that there is nothing to warrant a review by this court.

In view of this, I have no choice but to dismiss the Notice of Motion. There shall be no order as to costs.

Dated at Nairobi this 9th day of October, 2012

M. WARSAME

JUDGE