Kitengela Mini Bus Sacco v National Transport & Safety Authority [2020] KETLABT 138 (KLR)

IN THE TRANSPORT LICENSING APPEALS BOARD ATMACHAKOS

APPEAL CASE NO 037 OF 2019

KITENGELA MINI BUS SACCO..................................................APPELLANT

VERSUS

THE NATIONAL TRANSPORT & SAFETY AUTHORITY....RESPONDENT

JUDGMENT

Introduction

1. The Appellant is a Sacco registered under the Co-operative Societies Act (cap 490) Laws of Kenya. It was registered by the Registrar of Cooperative Societies on 1st December 2010 and is licensed by the Respondent Authority to carry out Public Service Vehicle (PSV) business along Nairobi-Kitengela, Machakos route.

2. The Respondent, National Transport and Safety Authority (NTSA), is established under section 3 of the National Transport and Safety Authority Act No. 33 of 2012 and has the responsibility to: advise and make recommendations to the Cabinet Secretary on matters relating to road transport and safety; implement policies relating to road transport and safety; plan, manage and regulate the road transport system; ensure the provision of safe, reliable and efficient road transport services and to administer the Traffic Act.

The Appellants’ Case

3. The Appellant received a letter dated 17th September 2019 from NTSA indicating that the Sacco had failed to comply with Section 5(1) a of the NTSA (PSV Regulations) 2014, which require a Sacco to have registered a minimum of 30 serviceable motor vehicles for it to be operational.

4. In response to the above letter, the Appellant requested NTSA, through a letter dated 07th October 2019 and signed by its chairman, Stanley Onesmus Momanyi, that they be given two months to comply.

5. However, through a letter dated 17th October 2019 and addressed to the Chairman of Kitengela Mini Bus Sacco (hereinafter referred to as KIMISA), NTSA communicated its decision to suspend the Sacco and all its operations for 30 days and invalidated the Road Service Licenses.

6. NTSA justified its decision to suspend KIMISA on the basis of non-compliance with the set regulations, specifically section 5(1) a of the NTSA (PSV Regulations) 2014, which requires PSV saccos/companies to operate a minimum of 30 serviceable motor vehicles and that it could not agree to the request for two months extension, as it was contrary to public interests, safety, security and good.

7. Aggrieved by the decision of NTSA to suspend its operations, the Appellant filed an Appeal at the Transport Licensing Appeals Board (TLAB) on the 29th of October 2019. The Appeal is premised on the following grounds adumbrated in the Memorandum of Appeal, inter alia:

a) that the Respondent erred in law and facts by failing to give the Appellant prior and adequate notice before such suspension contrary to the provisions of Fair Administrative Action Act, 2015.

b)  that the Respondent erred in law and fact by failing to accord the Appellant an opportunity to be heard and make its representation before the Appellant’s suspension on 17th October 2019.

c)   that the Respondent neglected and/or failed to completely act on a request by the Appellant to have it register the remaining number of vehicles within two months and also did not give reasons for having failed to act on the request contrary to the provisions of Article 47 of the Constitution of Kenya, 2010.

d) that the Respondent Authority’s decision to suspend the Sacco was in breach of the Appellant’s legitimate expectation.

e) that the Respondent’s decision to suspend the Appellant was made in bad faith since the same was taken merely a few days after a request of more time to comply with the law.

f)  that the Respondent Authority should lift the suspension order issued on 17th October 2019 by NTSA.

8. The Appellant also filed a Notice of Motion Application; a Supporting Affidavit sworn by its chairman, Stanley Onesmus Momanyi and a Certificate of Urgency signed by its advocate, Eric Amati, all of them dated 29th October 2019 reiterating and buttressing the arguments made in the Memorandum of Appeal and asking the application (notice of motion) to be heard expeditiously and orders sought be granted.

9. Two of the members of the Appellant Sacco withdrew from the suit after they had left the Sacco by filing a withdrawal of suit notice on 7th January 2020. This was corroborated by the Appellant’s counsel who termed the move inconsequential, as the remaining seven members were ready to continue with the case.

10. In court, Mr. Ombati holding brief for Mr. Amati, advocate for the Appellant, averred that the issue was that NTSA had improperly and unprocedurally arrived at the decision of suspending the Sacco and had thus violated the rights of the Appellant to procedural justice and fair administrative action. He urged the court to order an award of costs to be paid to the Appellant by the Respondent Authority for the expenses of the appeal since NTSA had lifted the suspension of the Sacco on 20th November 2019 which it had improperly, unfairly, in bad faith and without procedural justice ordered on 17th October 2019.

11. The Counsel also argued that even though the Respondent Authority had not communicated its decision to revoke the suspension on 20th November 2019, it had gotten what it wanted which was the lifting of the suspension order and the Sacco could now operate without the encumbrances of the suspension. He, however, still pleaded with the board that due to the difficulty and inconvenience occasioned to the Appellant Sacco, the expenses incurred in preparing for the trial should be paid by the Respondent.

Respondents’ Case

12. The Respondent Authority suspended the operations of KIMISA Sacco on 17th October 2019 after it had asked it to ensure it complies with section 5(1)a of the NTSA (PSV Regulations 2014) which require a Sacco to have a minimum of 30 serviceable motor vehicles registered in the portal before operation. This demand had been communicated to the Appellant vide a letter dated 17th September 2019 to which the Appellant replied on 07th October 2019 expressing its willingness to comply and requesting for two months in order to comply. NTSA argued that it suspended the Sacco because it had not complied with the law and its request for two months in order to comply was prejudicial to public interest.

13. On 17th January 2020, the Respondent Authority adduced before the board a letter dated 20th November 2019 whose reference was the revocation of the suspension of the Sacco which had been effected on 17th October 2019.

14. Further, Mr. Ronald, counsel for the Respondent Authority, pontificated that the reason that they lifted the suspension on 20th November 2019 was because the Appellant had since complied with section 5(1)a of the PSV regulations, 2014 which require a minimum of 30 motor vehicles to be registered for every Sacco/Company operating PSV business.

15. The Respondent’s counsel noted in court that most of the grounds of Appeal relied upon by the Appellant Sacco were centred around the decision of NTSA to suspend of the Sacco. He therefore averred that since the suspension had been lifted and the Sacco was now legally operational, the issues had been dispensed with and the appeal should be settled with both parties bearing their own costs.

16. The Respondent Authority argued that the Appellant was misleading the honourable board in its claims that NTSA had suspended the Sacco unprocedurally. The Respondent averred that many meetings were held with the Appellant’s representatives prior to the suspension of the Sacco.

Determination

17. Section 5(1) a of the NTSA(Operation of PSV Regulations, 2014) provides that:

5. (1) A person desirous of operating public service vehicles shall be a member of a body corporate which shall —

(a) be licensed to operate if the body corporate owns a minimum of thirty serviceable vehicles registered as public service vehicles or in respect to which an application for a licence has been or is to be lodged with the Authority;

18. The board notes that the parties agreed that the issue of suspension of the Sacco had been dealt with through the letter dated 20th November 2019 and adduced before the board on 17th January 2020 which lifted the suspension. The Board also takes consideration of the evidentiary standard of the letter and its cogent nature to be relevant and admissible as documentary evidence.

19. Following the arguments made and evidence adduced by the parties before the Transport Licensing Appeals Board has extrapolated only one discernible issue for determination, whether:

i. The board should make an order as to costs and if yes, who should bear the costs of the Appeal.

Whether the board should make an order as to costs and if yes, who should bear the costs of the Appeal.

20. In the case of KANU Elections Board & 2 others vs Salah Yakub Farah (2018) eKLR, the court held that: “ Costs are awarded to a successful/prevailing party in order to indemnify him/her for the expense to which he/she has been put through having been unjustly compelled either to initiate or to defend litigation.This underscores that a moderating balance must be struck which affords the innocent party adequate indemnification, but within reasonable bounds.”However, awarding of costs is at the discretion of the court (in our case this board). The costs that may be awarded may include fees, charges, disbursements, expenses and remuneration.

21. Section 27(1) of the Civil Procedure Act, 2010 provides that:

27 (1) Subject to such conditions and limitations as may be prescribed, and to the provisions of any law for the time being in force, the costs of and incidental to all suits shall be in the discretion of the court or judge, and the court or judge shall have full power to determine by whom and out of what property and to what extent such costs are to be paid, and give all the  necessary directions for the purposes aforesaid; and the fact that the court has no jurisdiction to try the suit shall be no bar to the exercise of those powers; provided that the costs of any action, cause or other matter or issue shall follow the event unless the court or judge shall for good reason otherwise direct.

22. Retired Justice Kuloba assertively states in his book titled Judicial Hints on Civil Procedure, 2nd Edition, ( Nairobi) Law Africa) 2011 at page 101 that “The law of costs as it is understood by courts in Kenya, is this, that where a plaintiff comes to enforce a legal right and there has been no misconduct on his part-no omission or neglect, and no vexatious or oppressive conduct is attributed to him, which would induce the court to deprive him of his costs-the court has no discretion and cannot take away the plaintiffs right to costs. If the defendant, however innocently, has infringed a legal right of the plaintiff, the plaintiff is entitled to enforce his legal right and in the absence of any reason such as misconduct, is entitled to the costs of the suit as a matter of course”

23. As a general rule, costs usually follow the event in most civil cases as is the case in this appeal. As per Retired Justice Kuloba’s book on Judicial Hints the terms ‘the event’ is explained comprehensively thus “The words “the event” mean the result of all the proceedings to the litigation. The event is the result of the entire litigation. It is clear however, that the word “event” is to be regarded as a collective noun and is to be read distinctively so that in fact it may mean the “events” of separate issues in an action. Thus the expression “the costs shall follow the event” means that the party who on the whole succeeds in the action gets the general costs of the action, but that, where the action involves separate issues, whether arising under different causes of action or under one cause of action, the costs of any particular issue go to the party who succeeds upon it. An issue in this sense need not go to the whole cause of action, but includes any issue which has a direct and definite event in defeating the claim to judgement in the whole or in part”

24. Some types of costs that may be awarded by the court include:

Fixed Costs in which one party pays a defined sum to the other party; Costs in the cause where whichever litigant is successful at the end of the case is awarded costs; Plaintiff’s/applicant’s/appellant’s or defendant’s/respondent’s costs which are to be awarded to the named party only if he/she succeeds in the proceedings but the named party does not have to pay the costs of the other party if the other party succeeds in the proceedings; Costs in any event where one party is awarded the costs for an interlocutory matter regardless of whether or not he is successful in the suit; Costs thrown away where costs are awarded to a non-blameworthy party to compensate him for efforts put in and expenses incurred which turn out to be wasted because of the blameworthy party’s conduct.

25. With respect to costs, the prevailing party must prepare and substantiate what is known as a "bill of costs" that itemizes expenses incurred in the litigation that are taxable under the Kenyan law. These costs usually include: filing fees; fees paid to compel witnesses to attend court proceedings; fees paid to expert witnesses; document preparation fees, and miscellaneous costs associated with trial preparation and trial proceedings. Rarely, however, do these taxable costs cover all of the prevailing litigant's actual out-of-pocket expenditures, and as a result many of those expenditures are not reimbursed. Advocate’s fees are by far the largest component of a litigant's practical expenses in pursuing a lawsuit, but these fees are usually considered separately from "costs" when it comes to what the prevailing party may recover from the other party.

26. It is imperative to note that in determining the issue of costs, the court is entitled to look at inter alia(i) the conduct of the parties, (ii) the subject of litigation, (iii) the circumstances which led to the institution of the proceedings, (iv) the events which eventually led to their termination,(v) the stage at which the proceedings were terminated, (vi) the manner in which they were terminated, (vii) the relationship between the parties and (viii) the need to promote reconciliation amongst the disputing parties pursuant to Article 159 (2) (c) of the Constitution. In other words, the court may not only consider the conduct of the party in the actual litigation, but the matters which led to the litigation, the eventual termination thereof and the likely consequences of the order for costs. This board has prudently and tactfully dissected these factors in writing of this judgment.

27. It is also trite law that every case depends on its own facts and courts should decide on a case-by-case basis as was also argued in the case of Jasbir Singh Rai & Others vs Tarlochan Rai & Others HC EP No. 6 of 2013. In this present Appeal, the board has distilled some factors for consideration. It has analysed the matters and chain of events that led to the filing of this appeal. It is noteworthy to state that it is the suspension of the Appellant Sacco by the Respondent Authority that led to the filing of this appeal. On the strength of the fact that the Respondent Authority has tendered before this board a letter lifting the suspension to the satisfaction of the Appellant, it behoves on the board to decide that most grounds of Appeal which centred around the decision of NTSA to suspend the Appellant Sacco have been dispended with.

28. Given that the Sacco was suspended because it had not complied with section 5(1)a of the NTSA (PSV Regulations) of 2014 which obligates a Sacco to have registered in its portal a minimum of 30 serviceable motor vehicles before operation, there was nothing wrong in the rationale of NTSA to suspend the Sacco. Moreover, as argued before the board and adduced as evidence on 17th January 2020 through a letter dated 20th November 2019, the Respondent Authority only lifted the suspension after the Appellant Sacco had complied with the law and had registered 30 serviceable motor vehicles.

29. On the question of procedural steps taken by NTSA in reaching at the decision of suspending the Sacco, it was the argument of Appellant that the decision was arrived at without following the due procedure (none-issuance of prior and adequate notice) and had violated the rules of natural justice and fair administrative action of the Appellant (lack of reasons given for the decision taken and decision made in bad faith).

30. The need to be given prior notice and reasons for an administrative action that affects a person negatively is now a fundamental right under Article 47 of the Constitution, which is given effect by the Fair Administrative Action Act 2015. Section 4 of the Fair Administrative Action Act (2015) provides that:

“(2) Every person has the right to be given written reasons for any administrative action that is taken against him.

(3) Where an administrative action is likely to adversely affect the rights or fundamental freedoms of any person, the administrator shall give the person affected by the decision-

(a) prior and adequate notice of the nature and reasons for the proposed administrative action;

(b) an opportunity to be heard and to make representations in that regard;

(c) notice of a right to a review or internal appeal against an administrative decision, where applicable;

31.  As a result, all administrative bodies are under an obligation to respect this right and the failure to do so invalidates the administrative action taken. As Kaluma notes:

“Notice is a condition precedent to fair hearing. Any hearing undertaken without due notice to the affected party violates the requirements of natural justice, is null and void and lends itself to being quashed … notice to be good should contain sufficient detail to enable one to fully appreciate the charge or complaint he is to face. The details requiring specific mention in a notice include the complaint or charge, the time, day and location of the incident charged or matter complained about … the action proposed to be taken and the grounds on which the charge or complaint is based.” (Peter Kaluma, Judicial Review: Law Procedure and Practice (Law Africa, Second Edition, 2012), p. 178. )

32. However, nothing can be further from the truth as was argued by the Respondent Authority in dismissing the Appellant’s arguments when it averred that several meetings were convened in which the Appellant representatives were in attendance and also that NTSA could not acquiesce to and grant  the request of the appellant for two months as it would be against public interest.

33. As a matter of fact, section 29 of the NTSA Act, 2012 which we will reproduce herein below posits that:

“The Authority may grant or decline to grant any application for a licence, or grant a licence subject to such conditions as it may consider fit to impose, and, in exercising its discretion, the Authority shall have regard to the public interest, including the interest of persons requiring and those of persons providing facilities for transport, and to such other matters as may be prescribed…”Predicated on this provision, the decision and action of NTSA, the Respondent Authority in this case, should always as a matter of priority fervently safeguard public interest.

34. This board postulates that what is essentially subject to consideration is not which party is blameworthy or wrong and which is not but a juristic analysis of whether awarding of costs to the Appellant will be prejudicial to the interests of fostering mutual relationship between the parties and whether it will have a detrimental impact to the operations of NTSA and its interaction with other litigants.

35. In light of the above and having considered the circumstances that led to this appeal; the conduct of the parties during the case and the termination of the case, this board in its discretion makes a finding that each party should and ought to bear its own costs in order to preserve, safeguard and maintain the mutual relationship of the parties and also cushion the Respondent Authority from whimsical depletion of its resources in defending itself against duplicitous and vexatious litigants, resources which could be channelled into maintaining and regulating road transport system and ensuring safe, reliable and secure road transport.

36. The board is guided in arriving at this decision by the dictum given in the Ugandan case of Re Ebuneiri Waisswa Kafuko Kampala HCMA No. 81 of 1993where the judge brilliantly summed up thus:

“The judge in his discretion may say expressly that he makes no order as to costs and in that case each party must pay his own costs. If he does not make an order as to costs, the general rule is that he shall order that he costs follow the event except where it appears to him in the circumstances of the case some other order should be made as to the whole or any part of the costs. But he must not apply this or any other general rule in such a way as to exclude the exercise of the discretion entrusted to him and the material must exist upon which the discretion can be exercised. The discretion, like any other must be exercised judicially and the judge ought not to exercise it against the successful party except for some reason connected with the case. It is not judicial exercise of the judge’s discretion to order a party who was completely successful and against whom no misconduct is even alleged to pay costs.” Alternatively put and by dint of the authority of Halsbury’s laws of England, this board has the power to exercise its discretion in awarding costs or not but of course that discretion should be exercised judicially and within the ambit of the law. Volume 10, paragraph 16 of the 4th Edition of Halsbury’s Laws of England, 2010 reissue opine thus: “The court has discretion as to whether costs are payable by one party to another, the amount of those costs, and when they are to be paid. Where costs are in the discretion of the court, a party has no right to costs unless and until the court awards them to him, and the court has an absolute and unfettered discretion to award or not to award them. This discretion must be exercised judicially; it must not be exercised arbitrarily but in accordance with reason and justice”(Emphasis added).

37. Having considered the facts of the case, evidence tendered before the board and the law applicable to this case, the Transport Licensing Appeals Board hereby makes the following orders:

1. That NTSA had justifiably and fairly suspended KIMISA Sacco and subsequently justifiably and fairly lifted the suspension of the Sacco.

2. That NTSA had not violated the rights to fair administrative action of the Appellant in suspending the Appellant Sacco.

3. No order as to costs.

4. Each party should bear its own costs.

Delivered, dated, and signed in Machakos by the Transport Licensing Appeals Board on this 24th day of January 2020.

Dick WaweruChairman   ....................................

Prof. Kiarie Mwaura  Member   ...........................

Aden Noor Ali   Member   .....................................

Moses Parantai      Member   ................................