Bishop Zakaria Kahuth & Hannelore Maillu (Suing as the Registered Trustees for the German Speaking Evangelical Lutheran Congregation in Kenya v County Government of Nairobi & County Secretary Nairobi City County [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