DAIRYCOM (K) LIMITED v KENYA DAIRY BOARD AND KENYA BUREAU OF STANDARDS [2004] KEHC 53 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

(MILIMANI LAW COURTS)

CIVIL SUIT  763 OF 2003

DAIRYCOM (K) LIMITED............................................................ PLAINTIFF

VERSUS

KENYADAIRY BOARD..................................................... 1st DEFENDANT

KENYABUREAU OFSTANDARDS.............................. 2nd DEFENDANT

RULING

The Plaintiff, Dairycom (K) Limited filed the present application under certificate of urgency on 28th November, 2003 under the provisions of Order 39, Rules 1, 2 and 9 of the Civil Procedure Rules and Sections 4, 17, 19 and 70 of the Dairy Industry Act, Chapter 336 Laws of Kenya. The Defendants are the Kenya Dairy Board and the Kenya Bureau of Standards.

The Plaintiff seeks the following orders in this application:-

•  That the court grant a mandatory injunction against the1st Defendant/Respondent to lift the seizure of the

Plaintiff/Applicant's container MAE0567919 pending thehearing interpartes and determination of thisapplication.

•     That this honorable court be pleased to declare theseizure of the Plaintiff/Applicants containerMAE05679191 as ultra vires the power granted to theDefendant under the Dairy Industry Act, Cap 336 Lawsof Kenya.

•     That the 1st and 2nd Defendants be restrained frommaking and publishing any and/or further defamatorystatements of and concerning the Plaintiff pending thehearing and determination of this suit.

The application is supported by 3 affidavits of Mr. Andrew Omboto sworn on 28th November, 2003, the Managing Director of the Plaintiff Company. The Plaintiff's case is that during the normal course of business it purchased and imported  a  consignment of  sweet  salted  butter  from Northern Ireland for domestic resale  The Plaintiff claims that on 21st November, 2003 the 1st Defendant's officials seized the said consignment which was contained in a container marked MAE 05679191. The Plaintiff contends that the said seizure was unlawful and illegal and that it was for undisclosed reasons.   That the butter in issue had been certified as having met international and local standards.

That the 20 metric tons of sweet salted butter is a highly perishable Dairy product and the cost of its refrigeration is exorbitant and further containment would destroy the entire consignment.

The Plaintiff initially came to this court on 28th November, 2003  under certificate of urgency.   This court granted interim orders on an ex parte basis.  Upon service of the orders on the Defendants the Kenya Dairy Board and the Kenya Bureau of Standards, the parties recorded further orders by consent on the following terms:-

1. A fresh sample of the butter from the Container inissue be given to the government chemist and theDepartment of Food, Science and Technology,University of Nairobi for testing on the followingparameters:-

(i)    Saponification Value

(ii)    Ph. Value

(Hi)    Acidity of extracted fat

2.    The matter be mentioned on 6thJanuary, 2004 forpresentation of the Report to the court.

3.   Status quo to be maintained.

After the said Reports were presented in court andparties exchanged their respective affidavits, grounds ofopposition etc, the matter came before me on 19th February,2004 when I heard it. The application was opposed by bothDefendants.

After listening to the submissions of all the counselsand reading the pleadings, and all affidavits and looking atannexures, it becomes clear that there are preliminary issuesor points of law which this court ought to consider anddetermine. These relate to the applicability of the DairyIndustry Act, Chapter 336 Laws of Kenya and the DairyImport Registrations and the Dairy Industry Inspector’s Regulations made hereunder. Do these laws apply to thebutter which is the subject of this suit, does the 1stDefendant have the legal authority or powers to impound orseize the butter as it did in this case, is the 1st Defendantvested with statutory powers to regulate the import of butterand if so to what extent? Was the seizure of the butterherein legal?

It is necessary for the court to look at the objectives ofthe Dairy Industry Act the establishment of the Kenya DairyBoard, and its functions and power.

The Board is established by Section 4 of the Act and its functions are set out in Section 17. The preamble of the Act reads:-

"An Act of Parliament to provide for theimprovement and control of the Dairy industry andits products".

This gives a general picture of the objective of the Act.

Section 17 of the Act provides as follows:-

"PART III- FUNCTIONS, POWERS AND DUTIES OF THEBOARD

17.  (1)  The functions of the Board shall be -

(a)to organize, regulate and develop the efficientproduction, marketing, distribution and supply ofDairy produce, having regard to the various typesof dairy produce required by different classes ofconsumers;

(b)to improve the quality of dairy produce;

(c)to secure reasonable and stable prices toproducers of dairy produce.

(d)to promote market research to Dairy produce;

(e)to permit the greatest possible degree of privateenterprise in the production, processing and saleof dairy produce, consistent with the efficiency ofthe producer and the interests of other producersand of consumers; and

(f)generally to ensure, either by itself or inassociation with any Government department orlocal authority; the adoption of measures andpractices designed to promote greater efficiency inthe dairy industry;

(2) In the exercise of its powers and in theperformance of its functions under thisAct, the Board shall act in accordance withgeneral or special directions that may begiven to it by the Minister.

Under Section 19 of the Act the Minister may, on theadvise of the Board make regulations generally for the bettercarrying out of the purposes and provisions of the Act withregard to Dairy produce. And in the definitions Section(Section 3) - "Dairy Produce" is defined as "milk, cream,butter, ghee, cheese and any other product or by-product ofmilk". It is clear that the 1st Defendant has been mandatedto regulate virtually all matters pertaining to Dairy producewhich includes butter.

As the court considers this application, it is important that it bears in mind that the substantive relief in the suit and on which all the injunctive orders are based or pegged is:-

"4. A declaration that the Dairy Industry Act, Cap336 Laws of Kenya does not provide for anyrequirement for Import Licence or Import permitin regard to the importation of Dairy produce".

The Defendant on its defence says that it admitsseizing the Plaintiff's container but with good reasons. Thatthe consignment of butter was imported without validauthority to import, that the licence used to import thebutter had expired and the Plaintiff flouted procedures laiddown of the 1st Defendant concerning importation by DairyProducts into Kenya. That the butter was imported from acountry which is under disease quarantine by virtue of LegalNotice No. 326 of 1996. The Defendant says that it hasrefused to lift the seizure of the Plaintiff's container since thePlaintiff despite requests to be supplied with all evidence,documents and information regarding importation of the saidcontainer, has failed to do so and has resorted to supplyingincorrect, misleading and inaccurate information.

It would appear to the court that the dispute hereinand the basis of the seizure at this stage is in fact with regard to importation and procedures. Strictly, it is not aboutthe unfitness of the butter for human consumption orotherwise. Definitely this will be and could be an issue inthese proceedings but at the first instance, it is the seizurewhich is due to questions about importation. The 1stDefendant in the replying affidavit of Mr. David MwauraMaina sworn on 13th February, 2004 says as much. He saysthat the seizure of the butter was not on the basis of failureto meet the requirements of the safety but on the basis thatthe Plaintiff failed to supply relevant information on thesame and/or supplied incorrect information and further failedto comply with laid down procedures on the importation ofDairy products.

Despite the foregoing both the Plaintiff and Defendanthave delved into the question of quality, fitness, andsuitability of the butter with each side producing reportsand/or findings  to  support  their  respective  cases.  The Defendant claims that tests locally show that the butter failed the tests and has been condemned as unfit.

The seizure of the butter herein took place on 21st November,  2003  by the  1st Defendant's inspectors. The seizure order, inter alia, reads as follows:-

"The following Dairy produce has been seized by KDBInspectors on behalf of the Kenya Dairy Board inaccordance with the powers given under the DairyIndustry (Inspectors) Regulations 1964 (Legal NoticeNo. 215 dated 2/h June, 1964).

From (Name) Evans KimemiaVehicle -Address c/o Diarycom (K) LtdContainer No.P.O. Box 10608, NairobiAEU567919(1)(If bicycle list frame number)Type and quantity of Dairyproduce seizedFRESHL Y SAL TED BUTTER

Containers seizedContainer No. MAEU 567919(1)How disposed of   Transami Container YardDid the 1 Defendant's inspectors have the legal powerto seize the said produce under Legal Notice No. 215 dated27th June, 1964? I have read the said Notice and confirmed that it is the one that enacted the Dairy Industry(Inspectors) regulations. The said regulations inter alia,provide :-

"3. If an inspector has reasonable grounds forsuspecting that evidence of an offence under theAct or any regulations or orders made hereunderis to be found on or in any lands, premises, place,vehicle, bicycle, pack, animal or vessel or in thepossession of any person, he may-

(vi) seize, remove and detain any Dairy produce whichgives reasonable cause to suppose will affordevidence of an offence under the Act or anyregulations or orders made thereunder, and forthe same reasons seize, remove and detain ortake charge of any vehicle, bicycle, pack animalplant, machinery, vessel, container, or receptable,and any book account or document............. ".

I uphold that the said provision gives the 1st Defendant's inspection the power or authority to seize the Plaintiff's butter consignment.   However, the inspectors must have reasonable cause to exercise this power and I think that they must give reasons for the seizure.   There must be sufficient justification.  This  could  be  the  reasons  why Regulation 7 of the said Regulations requires that:-

"7. Every seizure under these regulations shall bereported without unnecessary delay to a magistratewho shall also be furnished with a copy of any writtenstatement provided for under regulation 6".

In this case the seizure took place on 21. 11. 03 givingrise to this dispute. The Plaintiff moved to court on 28thNovember, 2003 for the exparte injunction. The parties didnot give the court a clear sequence of events from the timeof seizure to the filing of the suit. It is therefore not possibleto say that the Inspectors failed to comply with Regulation7. Once the suit was filed in the high court, such a referenceto a magistrate could have been pre-empted.

As indicated earlier, the 1st Defendant inter alia, claimsthat the butter was imported without valid authority toimport, the Plaintiff's licence to import had expired and thatit flouted  procedures laid  down  by the  1st  Defendant concerning importation of dairy products in Kenya.  I have carefully read the Dairy Industry (Imports) Regulations. The said  regulations deal with the dairy produce prescribed thereunder  -  see  Regulation  2.    The  Dairy  produce prescribed under regulation 2 are:-

"Sweetness skimmed condensed milkDried full cream milk powderCondensed full cream milk sweetenedEvaporated milkCheese, including processed cheese".

There is no mention of butter or any type of butter. Asa result the 1st Defendant cannot purport to rely on theDairy Industry (Import) regulations as a basis for theseizure. They certainly have no powers or authority to seizebutter. They did not show the court any Legal Notices after1966 introducing other Dairy produce as prescribedproduced under the said regulations.

The courts would usually not interfere with statutorybodies in the performance of their functions and it is not the role of the court to direct them as to how they should runtheir affairs. However, such statutory bodies must be run inaccordance with the provisions in the Act or statute thatestablished them and any subsidiary legislation. If the bodiesbreach the provisions of the said statute or purport to doacts that are not permitted under the said acts and notauthorised by any law, then the court must intervene.

In its Notice of seizure, the 1st Defendant's inspectorsdid not say why the butter was impounded. The reasonscame out in their defence. Now that this matter is beforethe court, the court will rely on the pleadings. I ampersuaded that the 1st Defendant had no legal powers toimpound or seize the butter herein under the Importregulations. Butter is not a prescribed Dairy produce underthe Regulation 2 of the said regulations.

Apart from the aforesaid the 1st Defendant in itsdefence says that the butter was imported from a country which is under disease quarantine by virtue of Legal Notice No. 326 of 1996. I have seen the aforesaid Legal Notice which reads as follows:-

"The Animal Diseases Act(Cap. 364)

IN EXERCISE of the powers conferred by Section 8of the Animal Diseases Act,  the  Director ofVeterinary Services prohibits the importation fromEuropean  countries  of  live  bovine,  semen,embryos, carcasses, meat, bone meal and theirproducts

Dated the 2nd December, 1996

R.S. Kimanzi

Director of Veterinary Services"

The   1st  Defendant  claims  that  in   seizing  the consignment of butter, the 1st Defendant was acting in the public interest and within the mandate and powers given to it by the  Provisions of the  Dairy Industry (Inspectors) Regulations.  The 1st Defendant says that the consignment of butter was  later analysed  by the  Kenya  Bureau  of Standards and results indicated that the salted butter did not comply with the requirements of Kenya StandardSpecification for butter. I saw a copy of the certificate ofanalysis. The 1st Defendant also claims that the importationdocuments produced by the Plaintiff indicated that theconsignment was imported from Australia which informationwas false, inaccurate and intended to mislead the 1stDefendant. That it is its duty to protect the Kenyan publicfrom consuming uncertified dairy product.

I have seen the purported letter of no objection issuedby the Ministry of Agriculture and Rural Development. Thecountry of origin is shown to be Australia and not NorthernIreland.

I have also seen the conflicting certificates of analysisof the butter and of great significance the letter dated 28thNovember, 2003 by the Kenya Bureau of Standards orderingthe Plaintiff to re-ship the salted butter back to the country oforigin within (30) days from said letter.

When considering the application I must be guided bythe three principles set out and established in the case ofGIELLA—vs- CASSMAN BROWN LIMITED (1973) EA.358. First the Applicant must make out a prima faciecase with aprobability of success at the trial. Secondly, that normally aninjunction will not be granted unless it can be shown thatthe Applicant is likely to suffer irreparable injury whichcannot be adequately be compensated in damages andthirdly, that if the court is in doubt it shall decide on abalance of convenience.

If I go by the plaint, I would say that the Plaintiff hasshown a prima faciecase with a probability of success inrespect of its main substantive relief, namely a declarationthat the Dairy Industry Act, Cap. 336 Laws of Kenya doesnot provide for any requirement for import licence or importpermit in regard to the importation of dairy produce If at allthe  seizure  was  in  enforcement  of the  Dairy  Industry (Imports) regulations, the said seizure would be illegal asbutter is not a prescribed product under the saidRegulations.

If this was the only issue then this court would beinclined to grant the injunctions sought herein. But theDefendant has given other reasons for effecting the seizureand which this court is obliged to look at. The 1st Defendantclaims that the butter was imported from a country which isunder disease quarantine by virtue of Legal Notice No. 326of 1996 which I have fully set out above,. I have readSection 8 of the Animal Diseases Act and found that the saidprovisions deals with animals and their products but applyingall rules of interpretation I do not think milk and milkproducts or in this case Dairy produce are covered by thesaid Act and in particular Section 8. The section reads:-

"8(1) The Director may, by notice in theGazette, prohibit for such time as he thinksnecessary or regulate the importation or theexportation of all animals or any specified kinds ofanimals, or of carcasses, meat, hides, skins, hair,wool, litter, dung, semen, live viruses capable ofsetting up infections in animals, sera, vaccines andother biological or chemical products intended tobe used for the control of animal disease or fodderfrom any specified country, port or territory".

I do agree that the Kenya Dairy Board is authorised to work together with other Government agencies or authorities in performing its work.   However, section 8 above does not cover butter. As a result, the aforesaid quarantine notice cannot give the 1st Defendant any legal basis to seize the produce herein.

I now come to the issue of the safety standards and fitness of the butter for human consumption. As indicated earlier by consent of all the 3 parties on 18th December, 2003, it was agreed that a fresh sample of the butter from the container in issue be given to the Government chemist and the Department of Food, Science and TechnologyUniversity of Nairobi for testing on various parameters.Through the affidavit of Cindano Gakuru, the reports of thesaid institutions was presented to the court.

From the contents of the said reports and affidavit ofMr. Gakuru, the reports and analysis appears to be in favourof the Plaintiff. When faced with the said 2 reports theaffidavit of Mr. Gakuru, the 1st Defendant responded asfollows:-

3. That the 1st Defendants case is not premised on thesuitability of the butter for human consumption. The1st Defendants case rests on the irregularimportation of the said consignment of butter andthe breach of the provisions of the Dairy IndustryAct, Cap. 376.

4.   That I am informed by Mr. Peter Mutua, theAdministrative Manager of the 1st Defendant that theseizure of the butter was not on the basis of itsfailure to meet the requirement for safety but on thebasis of the Plaintiff failure to supply relevantinformation on the same and/or supplied incorrectinformation and further failed to comply with laiddown procedures  on  the  importation  of Dairyproducts........ "

This is stated in a sworn affidavit of Mr. David MwauraMaina, advocate for the 1st Defendant in reply to Mr.Cindano Gakuru, advocate's affidavit. This court does notapprove of advocates making affidavits in respect ofcontentious issues and which relate to evidence. Counselsshould not enter the arena of conflict of the parties.

Be that as it may, for the time being I can state that inview of the foregoing the 1st Defendant is not entitled toquestion the quality of the butter, its safety and fitness orotherwise, for human consumption.

From the foregoing, I am convinced that the Plaintiff wasjustified to be aggrieved with the actions of the 1stDefendant. I hold that on a balance of probability, thePlaintiff has made out of prima faciecase with probability ofsuccess as against the 1st Defendant.

What about the 2nd Defendant? I agree with Mr. Omulelethat the application does not have any prayer or ordersdirected to the 2nd Defendant. The seizure was by the 1stDefendant and the second Defendant was not involvedwhatsoever in the said actions. I do note and this court isaware of the letter dated 28. 11. 03 directed to the Plaintiff tore-ship the said consignment. Despite the existence of thesaid order, the 2nd Defendant was a party to the consentorder which referred the butter herein for fresh analysis. Iwould like to leave those matters between the Plaintiff andthe second Defendant to deal with probably under theStandards Act. For now, no orders can issue against the 2ndDefendant.

The Plaintiff having succeeded in respect of the 1st limb ofGIELLA -vs- CASSMAN BROWN,can it succeed on thesecond limb. The butter has a monetary value. If it is re-shipped and  perishes or is destroyed, any loss or damage can be compensated in damages. Be that it may, the seizureherein was executed without any legal basis and totally ultravires the Dairy Industry Act. It was illegal. As a result, thequestion of damages cannot arise that this court allows anillegality to continue because it can be compensated indamages. This is against public policy.

At this last stage in this ruling, the court would like tostate that it is not ignorant of the discrepancies in thePlaintiff's importation documents including the allegationthat the country of origin of the butter is Australia. Despitethat, the Act does not confer on the 1st Defendant thepower to seize in the circumstances of this case. Any otherirregularities should be dealt with applying the correct lawand by the appropriate enforcement agencies.

The standard for the grant of mandatory injunctions ishigher than prohibitory ones. The court must act cautiouslyand diligently.  However in a proper case a court of law and equity will not hesitate in correcting or reversing a statusquo or situation obtained or created by a violation of thelaw.

I do hereby grant prayer 2 of the summons and order the1st Defendant to release the said container and its contentsto the owner, the Plaintiff forthwith. I also grant prayer 4 asthe said publications arose from the seizure. The costs of theapplication shall be paid by the 1st Defendant to the Plaintiffand the 2nd Defendant.

DATED and DELIVERED at Nairobi this 8th day of March, 2004.

M.K. IBRAHIM

JUDGE