Hakim Commercial Agencies v County Government of Tharaka Nithi & another [2023] KEHC 25161 (KLR) | Exhaustion Of Statutory Remedies | Esheria

Hakim Commercial Agencies v County Government of Tharaka Nithi & another [2023] KEHC 25161 (KLR)

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Hakim Commercial Agencies v County Government of Tharaka Nithi & another (Constitutional Petition E004 of 2023) [2023] KEHC 25161 (KLR) (2 November 2023) (Ruling)

Neutral citation: [2023] KEHC 25161 (KLR)

Republic of Kenya

In the High Court at Chuka

Constitutional Petition E004 of 2023

LW Gitari, J

November 2, 2023

Between

Hakim Commercial Agencies

Petitioner

and

County Government of Tharaka Nithi

1st Respondent

Tharaka Nithi County Liqour Licensing Committe

2nd Respondent

Ruling

1. The Petitioner herein instituted the proceedings herein vide the Constitutional Petition dated and filed on 14th September, 2023. On the even date, the Petitioner filed a Notice of Motion Application brought under the provisions of Articles 22, 23 and 258 of the Constitution of Kenya and the rules on the enforcement of fundamental rights and freedoms. The said application seeks for the following orders:i.Spent.ii.Spent.iii.Spent.iv.That pending the hearing and determination of this petition, this Honourable Court be pleased to issue an interim conservatory order prohibiting the respondent and/or its agents or anyone else acting under their authority from interfering with the Petitioner’s business operations of manufacturing alcohol.v.That pending the hearing and determination of this petition, the Honourable Court be pleased to issue an order suspending the decision dated 01/08/2023 issued by the Secretary Tharaka Nithi County Liquor Licensing Committee.vi.The costs of the application be borne by the Respondents.

2. The Application is premised on the grounds on its face and supported by affidavit sworn 14th September, 2023 by Albert Gitari Luka, the managing director of the Applicant Company herein.

3. The main issue upon which the Application is brought is that the Petitioner feels aggrieved by the Respondent’s decision in denying them the licence to engage in the business of manufacture of alcohol after it rejected its application for a licence for operating the business in its business premises in Tharaka Nithi County.

4. In response to the Application, the Respondents jointly filed a Preliminary Objection dated 20th September, 2023 against both the Petition and Notice of Motion dated 14th September, 2023 on the grounds THAT:i.This Honourbale Court lacks jurisdiction over the matter in view of the express provisions of Section 18(1) of Tharaka Nithi County Alcoholic Drinks Control Act, 2021 which clearly stipulates that an aggrieved party should submit an application for review of the decision of a committee to revoke a licence within fourteen (14) days.ii.This Honourable Court lacks jurisdiction to entertain the present petition as the Petitioners have not exhausted all legal avenues of settlement contrary to the principle of constitutional avoidance.iii.The petition as drafter does not satisfy the strict requirements of the Mutunga rules for a constitution petition thereby failing to raise a cause of action against the respondents.iv.The Petition is fatally defective as it seeks to canvass issues of judicial review clothed as a constitutional petition.v.The Petition and the orders as served upon the respondents on 19th September, 2023 is a glaring breach of Rule 14(1) Legal Notice No. 117 The Constitution of Kenya (Protection of Rights and Fundamental Freedoms) Practice and Procedure Rules, 2013, Order 5, Rule 9 and Section 13 of the Government Proceedings Act as read together with Order 48 Rule 4 as the same were granted on 14th September, 2023, directed for service within 3 days, and subsequently, served upon the respondents on 19th September, 2023 in contemptuous disregard of the said orders.vi.The petition is an abuse of process with the grounds set forth bordering on matters criminal well within the jurisdiction of the subordinate court in Criminal Case No. E461 of 2023. vii.The suit is sub judice as there is another similar suit pending before the lower court regarding the same matter and the case of action – Chuka Criminal Case No. E461 of 2023.

5. This Court directed that although it had certified the Application as urgent, it is trite that once the issue of jurisdiction is raised, it has to be determined first as the court has to be sure that it has the authority to take a step in the matter. The Court ordered that the preliminary objection to be determined first as a matter of urgency and the parties were directed to canvass the same by way of written submissions.

6. In compliance with the directions of the Court, the Respondents filed their written submissions on 4th October, 2023. The Petitioner, on the other hand, filed its written submission on 11th October, 2023.

7. It was the Respondents’ submission that upon receiving the decision of the Tharaka Nithi County Liquor Licensing Committee (the “committee”) denying it the license to operate its business, the Petitioner ought to have exhausted all remedies available including but not its right to re-submit the revised application to the committee within thirty (30) days of the refusal of the committee in line with the provisions of Section 13(5) and (6) of the Tharaka Nithi County Alcoholic Drinks Control Act, 2021. Further, that the Petitioner did not exercise their right of review as provided for under Section 18(1) of the Tharaka Nithi County Alcoholic Drinks Control Act, 2021. It was thus the Respondents’ submission that the Petitioner brought this matter before this Court prematurely before exhausting the available dispute resolution mechanisms provided for under the Act. For this reason, the Respondents maintained that at this stage, this Court lacks to entertain this matter.

8. It was the Respondent’s further submission that the Petitioner brought this matter by way of a Constitutional Petition while the issues and prayers canvassed in the Petition ought to have been addressed by way of a Judicial Review. That the Petitioner seeks for orders of mandamus and prohibition which are remedies available under the Fair Administrative Action Act. The Respondents thus submitted that the Petition is fatally defective.

9. Further, the Respondents took issue with the fact that they were served with the ex-parte orders obtained under the Application outside the time limit that the Court had ordered. That the orders were obtained on the same date that the Application was filed, that is, 14th September, 2023, and the Petitioner was directed to serve the orders on the Respondents within three (3) days but in violation of the orders, the Petitioner served the Respondents on 19th September, 2023, which is five (5) days after obtaining the ex-parte orders.

10. Finally, it was the Respondents’ submission that the Petitioner is trying to use this court to seek refuge vide a constitutional petition so as to circumvent the criminal due process. That this Court should read mischief in the Petitioner’s claim in light of the fact that this suit was instituted after warrants of arrest were issued in Chuka Criminal Case No. E461 of 2023. That is if the orders sought herein are granted, the same will be used to canvass the criminal case in the subordinate court to paint the Respondents as an entity with ulterior motives against the Petitioner and hence discharge the accused therein of his criminal liability. The Respondents thus urged this Court to dismiss both the Petitioner’s Petition and Notice of Motion dated 14th September, 2023 with costs.

11. On its part, it was the Petitioner’s submission that the instant preliminary objection does not meet threshold required for preliminary objections which is that the objection should only be limited to points of law and must not deal with disputed facts that need to be ascertained and tested by normal rules of evidence. In this regard, the Petitioner based his submission on the ground that on the issue of service of the ex-parte orders it obtained, there is an affidavit of service dated 20th September, 2023 showing that the respondents were served with the pleadings and court order on 18th September, 2023 via email which the Petitioner asserts was within the stipulated period of service of 3 days as directed by the court. Further, that on the issue that there exists Chuka Criminal Case No. E461 of 2023 is an issue based on fact that requires to be ascertained through production of evidence by way of affidavit evidence. Further, that the Petitioner herein is not a party to the said criminal proceedings as the Petitioner is a limited company, body corporate that is not subject to any criminal proceedings and has not been charged in its corporate capacity in any criminal court.

12. On whether this Court has jurisdiction to determine the matter, it was the Petitioner’s submission that its claim is for procedural impropriety with respect to the decision made by the Respondents which according to the Petitioner, was in contravention of Sections 7, 12, and 13 of the Tharaka Nithi County Alcoholic Drinks Control Act, 2021 and in infringement of its constitutional right as enshrined under Articles 27, 47, and 50(2) of the Constitution. That the orders sought herein cannot be issued and be subject to review as provided under Section 18(1) of the Nithi County Alcoholic Drinks Control Act, 2021 as the issue being raised is the procedural aspect and legal propriety of the decision made by the 2nd Respondent which can only be dealt by the court. Further, that the Petitioner is faulting the decision made by the 2nd Respondent as the 2nd Respondent was allegedly only mandated to sit as a review body and not to make the decision in the first instance.

13. The Petitioner further submitted that the Alcoholic Drinks Control Act, 2010, which is the governing national law in regards to licensing of alcoholic business, expressly provides that the redress forum is the High Court in the first instance. It was thus the Petitioner’s submission that the objections based on the jurisdiction of this court are misconceived and ought to be declined.

14. On whether the issue raised that the petition raises issues of judicial review, it was the Petitioner’s submission that the Petitioner is seeking refuge under the provisions of Articles 22, 23, 165, and 258 of the Constitution and not under any other law. That the orders sought are declaratory orders and that the Petitioner is not raising an issue of a fair administrative action.

15. Finally, on whether the petition is sub judice, it is the Petitioner’s maintained that the Petitioner is not a party in Chuka Criminal Case No. E461 of 2023 and that the issue of sub judice is a factual issue that cannot form a basis of a preliminary objection.

Analysis 16. I have considered the Respondents’ application on a point of Preliminary Objection to the effect that the Petitioner’s/Applicant’s Application should be dismissed as the court has no jurisdiction to determine the matter when the Petitioner have failed to exhaust the dispute resolution mechanisms provided for in statute. I have also considered the respective submission by the parties on the preliminary objection. The main issue for this court to determine is whether the preliminary objection raised is sustainable.

17. The case of Mukisa Biscuits Manufacturing Ltd –vs- West End Distributors (1969) EA 696 is notorious on the issue of what constitutes a preliminary objection where their Lordships observed thus:“----a preliminary objection consists of a point of law which has been pleaded, or which arises by clear implication out of pleadings, and which if argued as a preliminary point may dispose of the suit. Examples are an objection to the jurisdiction of the court or a plea of limitation or a submission that the parties are bound by a contract giving rise to the suit to refer the dispute to arbitration”.In the same case Sir Charles Newbold, P. stated:“a preliminary objection is in the nature of what used to be a demurrer. It raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of preliminary objections does nothing but unnecessarily increase costs and on occasion, confuse the issue, and this improper practice should stop”.

18. An objection to the jurisdiction of the court has been cited as one of the preliminary objections that consist of a point of law. Indeed the locus classicus case on the question of jurisdiction is the celebrated case of The Owners of Motor vessel Lillian ‘S’ vs Caltex Kenya Limited. [1989] KLR 1 where the Court held:“Jurisdiction is everything. Without it, a Court has no power to make one more step. Where a Court has no jurisdiction, there would be no basis for a continuation of proceedings pending other evidence. A Court of Law downs tools in respect of the matter before it the moment it holds the opinion that it is without jurisdiction.”

19. The Applicant herein contends that the Respondents infringed its constitutional rights specifically the right to a fair hearing, freedom from discrimination, legitimate expectation to render a procedurally fair and reasoned decision, right to fair administrative action, and failed to comply with the statutory requirements under the Tharaka Nithi County Alcoholic Drinks Control Act, 2021 in rejecting to approve the Petitioner’s application for a licence to manufacture alcohol.

20. The Tharaka Nithi County Alcoholic Drinks Control Act, 2021 (the “Act”) was enacted by the County Assembly of Tharaka Nithi to repeal the Tharaka Nithi County Alcoholic Drinks Control Act, 2015 and for connected purposes. The Act came into operation on 8th April, 2021.

21. Section 11(1) of the Act provides that“(1)A person intending to produce, manufacture, import, and or distribute any alcohol in the county (Tharaka Nithi County) or to operate an establishment for the sale of an alcohol shall make an application in a prescribed form to the Committee and shall pay the prescribed fee.”

22. Once the above application is made, Section 13(1) provides as follows:“(1)The Committee shall, after considering the Grant of a licence application under section 11, indicate in writing whether it objects to the grant of the licence applied for.”

23. In this case, the Petitioner made an application as required under Section 11(1) of the Act and the 2nd Respondent communicated a rejection of the application vide a letter dated 1st August, 2023. Aggrieved by the said decision, the Petitioner has instituted these proceedings indicating that its constitutional rights have been infringed and thus seek an interim order suspending the said decision and conservatory orders prohibiting the respondents and/or its agents from interfering with the Petitioner’s business operation of manufacturing alcohol.

24. Section 13(4), (5), and (6) of the Act provides as follows:“(4)Where the Committee is not satisfied with the application under subsection (1), it may—(a)reject the application giving reasons and notify the applicant accordingly within thirty days of the decision to reject; or(b)make comments and recommendations thereon and return it to the applicant within fourteen days.(5)The applicant to whom the application is returned under subsection (4) (b) may re-submit a revised application within thirty days of the date of notification.(6)On receipt of any revised application under subsection (5), the Committee shall, within thirty days determine the application in accordance with this Act and upon such determination, if satisfied, recommend for issuance of a licence.”

25. In addition, Section 18(1) of the Act provides as follows:“(1)An applicant whose application for a new licence, to renew or transfer a licence has been refused or cancelled may within fourteen days of such refusal, request in writing the review of such refusal by the Committee.”

26. The Petitioner in this case contends that the 2nd Respondent was only meant to sit a review body and not to make the impugned decision in the first instance. The “Committee” is defined under Section 2 of the Act to mean “the Tharaka Nithi County Liquor Licensing Committee” which is the 2nd Respondent herein. As such, the 2nd Respondent had the authority, by virtue of the provisions of Section 13 of the Act to make the impugned decision and following the making of the decision, the Petitioner on the other hand had several remedies available to it under the same Act.The respondents have based the preliminary objection on the notion that there is in place a Dispute Resolution Mechanism which is anchored under Section 18(1) of the Act and an aggrieved party should resort to by seeking review of the decision of the committee.Exhaustion of alternative remedies is now a constitutional and legal imperative under the Constitution and the Statutes. Under Article 159(2) c of the Constitution it is provided:-“In exercising judicial authority the courts and tribunals shall be guided by the following principles-c.alternative form of dispute resolution including reconciliation, mediation, arbitration and traditional Dispute Resolution Mechanisms shall be promoted subject to clause (3).On the other land under Article 24 of the Constitution which guarantees rights and fundamental freedoms implies that the rights may be limited by the operation of the law and are therefore not absolute. The article states inter alia-“ A right or fundamental freedom in the Bill of Rights shall not be limited except by law and then only to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom taking into account all relevant factors----.”As such where there is clear procedure provided under the relevant Statute, a party cannot overstep the statutory procedures and cling on Constitutional right where there is clear laid down procedure for redress of a grievance, the party is under an obligation to follow that procedure without exception. This was the holding in speaker of the National Assembly –v- James Njenga Karume (1992) eKLR where the Court of Appeal held-“….. In our view there is considerable merit in the submission that where there is a clear procedure for the redress of any particular grievance prescribed by the Constitution or an Act of Parliament, that procedure should be strictly followed. We observe without expressing a concluded view that orders 53 of Civil Procedure Rules could oust clear Constitution and Statutory provisions.”The ruling embodied the doctrine of exhaustion of remedies. This Doctrine is defined in Black’s Law Dictionary 10th Edition as follows-“exhaustion of remedies. The doctrine that if an administrative remedy is provided by Statute a claimant must seek relief first from the administrative body before judicial relief is available. The Doctrine’s purpose is to maintain comity between the courts and administrative agencies and to ensure that courts will not be burdened by cases in which judicial relief is unnecessary.”The courts are called upon to ensure that parties follows the procedure laid down in the statute and approach the administrative agencies for redress. This is what is envisaged under Section 9(2) of the Fair Administrative Act which provides:“The High Court or the Sub-ordinate court under sub-section (1) shall not review an action or decision under this Act unless the mechanisms including the internal mechanisms for appeal or review and all remedies available under any other written law are first exhausted.”3)“The High Court or a sub-ordinate court shall if it is not satisfied that the remedies referred to in sub- section (2) have been exhausted, direct that applicant shall first exhaust such remedy before instituting proceedings under sub-section (1).”In Geoffrey Muthinya & 2 Others –v- Samuel Munga Henry & 1756 Others (2015) eKLR, Court of Appeal, it was held-“ It is imperative that where a dispute resolution mechanism exists outside courts, the same be exhausted before the jurisdiction of the court is invoked. Courts ought to be Fora of last resort and not the first port of call the moment a storm brews within churches as is bound to happen. The exhaustion doctrine is a sound on and serves the purpose of ensuring that there is a postponement of judicial consideration of matter to ensure that a party is first of all diligent in the protection of his own interest within the mechanism in place for resolution outside courts. This accords with Article 159 of the Constitution which commands courts to encourage alternative means of dispute resolution.”It follows that a party will invoke the doctrine of exhaustion where a litigant who is aggrieved by an agency’s actions and seeks redress in a court of law without pursuing the available remedies before the agency itself. See William Odhiambo Ramogi & 3 Others –v- Attorney General and 4 Others Muslim for Human Rights & 2 Others (Interested Parties) (2020) eKLR.It follows that where the Petitioner failed to exhaust all the remedies available by re-submitting the revised application to the committee within thirty (30) days and if refused to apply for review of the decision by the committee, the respondent could therefore invoke doctrine of exhaustion. By coming to this court before pursuing the available mechanism, the dispute is not properly before this court.

27. I am minded as correctly submitted by the Petitioner, the doctrine of exhaustion notwithstanding, courts still retain residual jurisdiction to intervene in exceptional circumstances despite existence of alternative remedies where the action complained of is marred with illegalities and procedural irregularities. See: Chief Justice and President of the Supreme Court of Kenya & another v Khaemba (Civil Appeal 522 of 2019) [2021] KECA 322 (KLR) (17 December 2021) (Judgment).Courts will not hesitate to intervene where there is clear abuse of discretion buy such bodies, where arbitraries, malice, capriciousness and disrespect of Rules of Natural Justice are manifest. See Fleur Investment Limited-v- Commissioner of domestic Taxes and Another (2018) eKLR.The Petitioner has relied on Section 15 of the Alcoholic Drinks Control Act (2010) to state that an appeal lies of the High Court where a licence is denied. I however note that what he has filed is a petition not an appeal. The fact that he did not use the laid down Dispute Resolution Mechanism mars him from coming to this court by way of an appeal. The impugned decision raised various acts of none compliance with necessary permits, approvals and other conditions for licensing. This as submitted by the respondents are laws which the applicant should have complied with. He cannot therefore allege violation of his rights without prove of compliance.

28. I have carefully considered the impugned decision communicated to the Petitioner by the letter dated 1st August, 2023. The 2nd Respondent, in line with the provisions of Section 13(4)(a) of the Act rejected the Petitioner’s application for a licence, gave its reasons for the rejection, and communicated the decision to the Petitioner. In my view, the circumstances of this case are not exceptional circumstances that justify the intervention by this court as the process leading to the impugned decision cannot be said to have been marred from the start with illegality and procedural irregularity.The second issue raised by the respondent is whether the petition is properly before this court. The contention by the respondent is that the Petitioner has filed this matter as a Constitutional Petitioner whereas the substantive prayers are for Judicial Review. Citing Article 50 of the Constitution the respondent submits that the Petitioner has not utilized the Statutory provisions for review. That since they did not re-submit the application as provided under the statute, they cannot allege that the right to fair hearing has been arbitrary denied. The Fair Administrative Action Act under Section 9 (supra) lays down elaborate procedure for judicial review. The Act provides that a person aggrieved by an administrative action may apply for judicial review. It however limits the judicial review where a person has not exhausted the mechanisms including the internal mechanism for appeal or review and all other remedies available under any other written law. The applicant seeks reliefs of Mandamus, Certiorari and prohibition in the relief sought from this court. As submitted, these are reliefs which ought to be claimed in a judicial review under the Administrative Action Act. Under paragraph 35 the Petitioner alleges, “Constitutional violations, violation of Fair Administrative Action Act and Infringements of Tharaka Nithi County Alcoholic Drinks Control Act”. The Petitioner then claims various violations of his rights. Where a person seeks the writs to certiorari, Mandamus, and prohibition, the law requires that he seeks leave before filing such an application. The procedure is provided under Section 9(1) while Section 11 provides the orders which the court may issue. On the other hand the Mutunga Rules 2013 came into place to facilitate expeditions, efficient and reasonable and lawful access to justice in case of a breach or threat of violation one’s right and fundamental freedom. The scope and the objective of the Rules under Section 3(1) is that the rules shall apply in proceedings under Article 22 of the Constitution. The objectives is to facilitate access to justice. Under Article 48 of the Constitution. The Rules deals with contravention of rights and Fundamental Freedoms. The procedure of filing proceedings is by way of a petition.I find that the Mutunga rules applies to petition for violations or threat to violation of Constitutional Rights while fair Administrative Action Act deals with Judicial Review. The two cannot be used inter changeably.I find that the petition filed seeking a reliefs for judicial review of administrative actions is not properly before this court. It violates Section 16 of the Government Proceedings Act. Whether the suit is sub-judice:The Petitioner submits that the Petitioner is not a party to the proceedings in Chuka Criminal Case No. E461/2023. That the Petitioner here is a body corporate that not subject to Criminal Proceedings. The rule does not apply as the Petitioner is not a Party in the Criminal Proceedings.On the issue of Service of Notice of Motion, I find that it was not served in compliance with the Court Orders.I however note that the delay was not inordinate, the respondent filed their response and appeared in court. No prejudice was suffered by the respondent.

29. From the foregoing analysis, it is my view that the preliminary objection is merited. The Petition and subsequent Notice of Motion application both dated 14th September, 2023 were prematurely brought before this court before exhausting all the dispute resolution mechanisms provided under the Tharaka Nithi County Alcoholic Drinks Control Act, 2021. For these reasons I order that the petition is dismissed with costs.

DATED, SIGNED AND DELIVERED AT CHUKA THIS 2ND DAY OF NOVEMBER 2023. L.W. GITARIJUDGEMs Mutegi holding brief for Mr. Mwendani for RespondentMr. Mwirigi for Petitioner.The ruling has been read out in open court virtually.