Republic v County Secretary, County Government of Embu & Chief Officer, Finance /County Treasurer, County Government of Embu Ex parte Union Technology Kenya Limited [2022] KEHC 2321 (KLR) | Judicial Review | Esheria

Republic v County Secretary, County Government of Embu & Chief Officer, Finance /County Treasurer, County Government of Embu Ex parte Union Technology Kenya Limited [2022] KEHC 2321 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT EMBU

JUDICIAL REVIEW MISC. APPLICATION NO. 24 OF 2018

IN THE MATTER OF AN APPLICATION FOR JUDICIAL REVIEW FOR ORDERS OF MANDAMUS

IN THE MATTER OF HIGH COURT OF KENYA AT EMBU HCCC NO. 2 OF 2017

AND

IN THE MATTER OF THE ARBITRATION ACT NO. 1995 (AS AMENDED) AND THE AWARD GIVEN ON 29. 05. 2017

AND

IN THE MATTER OF THE HIGH COURT OF KENYA AT EMBU MISC. APPLICATION NO. 67 OF 2017

AND

IN THE MATTER OF THE CONSENT JUDGMENT DATED 27TH JULY, 2017

REPUBLIC......................................................................................................APPLICANT

VERSUS

THE COUNTY SECRETARY,

COUNTY GOVERNMENT OF EMBU..............................................1ST RESPONDENT

CHIEF OFFICER, FINANCE /COUNTY TREASURER,

COUNTY GOVERNMENT OF EMBU.............................................2ND RESPONDENT

UNION TECHNOLOGY KENYA LIMITED...........................EX PARTE APPLICANT

RULING

1. The Applicant brought judicial review proceedings herein vide Miscellaneous Application No. 24 of 2018, seeking an order of mandamus to compel the respondents to pay the decretal amount owed as a result of a consent judgment entered between the ex parte applicant and the respondents in Embu High Court Miscellaneous No. 67 of 2017.  The said order was granted vide a judgment dated 22. 11. 2018.

2. By a notice of motion dated 17. 05. 2019, the applicant sought for the following orders that:

i. Spent.

ii. That the Honorable Court be pleased to find and hold that the Respondents; the County Secretary, County Government of Embu and the Chief Officer, Finance/County Treasurer, County Government of Embu are in contempt of court for disobeying and/or disregarding the Judgment and Decree of this Honourable Court given on 22/11/2018 ordering them to pay the Ex-parte Applicant the amount of Kshs.64,098,156/= accrued as at 31/05/2018.

iii. That the Honorable Court be pleased to order that the Respondents; the County Secretary, County Government of Embu and the Chief Officer, Finance/County Treasurer, County Government of Embu be committed to civil jail for a term of six (6) months or to such other term for failure to pay the amount now owing of Kshs.64,098,156/= owing as at 31/05/2018 plus further interest of Kshs.8,973,742/= accruing up to 31/05/2019 making a total amount of Kshs.72,071,898/=.

iv. That costs of this application be provided for.

3. The application is premised on the grounds on its face and its supported by the annexed affidavit of Peter Munene Kimani. The core grounds are that the High Court issued an order of mandamus compelling the Respondents to pay the ex parte applicant the decretal amount passed in Embu High Court Miscellaneous No. 67 of 2017,Union Technology v County Government of Embu and which the court ordered that it be paid in three (3) equal installments of Kshs. 19,752,898/= commencing 31. 08. 2017 and thereafter the same amount in the following two subsequent months until payment in full. That the 2nd respondent herein being the County Government of Embu has failed to pay the decretal amount, outstanding at the sum of Kshs. 64,098,156/= as at 31. 05. 2018.

4. It was the applicant’s case that he entered into an agreement with the Municipal Council of Embu for the erection and installation of street poles for purposes of lighting and displaying advertisements within Embu town. That upon its creation and establishment as a successor of the Municipal Council of Embu, the County Government of Embu breached and unlawfully terminated the said agreement occasioning loss and damage to the applicant. That consequently the applicant filed a Civil Suit being HCC No. 2 of 2017 before this court whereby the matter was referred for arbitration whereupon the applicant was on 29. 05. 2017 awarded an amount Kshs. 59,258,696. 50. Thereafter, the award was filed in court under Embu High Court Misc. Application No. 67 of 2017 and upon the court hearing both parties, the same was adopted as a judgment of the court. Upon failure by the County Government of Embu to pay the decretal sum as ordered and directed, the ex parte applicant filed this application.

5. Mr. Damiano Muthee, Chief Officer in charge of Public Service, Embu County Government on behalf of the respondents swore a replying affidavit dated 20. 09. 2018 in response to the application herein. He deponed that this matter was referred to a single arbitrator who had control and direction of the matter until its conclusion. It was his case that they were aggrieved by the judgment and consent order but denied allegations of disobedience and defiance of the order. He proceeded to state that the respondents were constrained to realize the payment of the decretal amount and the interests thereon, since it operates on budgetary allocations approved by the County Assembly. That it is in the interest of justice that the respondents be given more time to petition the County Assembly for additional supplementary budget to cater for the payment of the decretal amount and the interest thereon. He further deponed that they dispute the amount sought for execution as the applicant has not shown how the figure was arrived at. It was his contention that the application for contempt by the ex parte applicant is premature and as such, prayed that the same be dismissed with costs.

6. When the matter came up for hearing, directions were taken that the same be canvassed by way of written submissions and wherein all the parties complied. The applicant thus submitted that the respondents have willfully disobeyed the court order and have not made any attempt to pay to the ex parte applicant his dues as ordered by court. That the respondents have not denied that the amount ordered to be paid has remained unsatisfied since they were duly served with the order and the subsequent demand letter. That their response to the application has been casually made to the effect that the claim is against public funds and the mode in which the order for payment was obtained was fraudulent and further that the amount can’t be paid until the County Assembly makes approval and allocate funds for the same. That the applicant has presented before this court evidence that shows that the respondents were served and thus, are aware of the court orders but in blatant contempt, they have chosen to ignore the same. Reliance was made inter alia on the case of Soloh Worldwide Inter –Enterprises v County Secretary Nairobi County & Another [2016] eKLR where they urged this court to allow the prayers as sought.

7. The respondents submitted that the ex parte applicant claim is for payment of works it undertook for the defunct local authority between the years 2011 and 2013. That on or about the year 2015, the exparte applicant wrote a demand letter for settlement of the unpaid amount of Kshs. 103,464,000/= upon which the County government of Embu referred the ex parte applicant to the Transition Authority which according to them, was best suited to pay as it inherited all assets and liabilities of the Defunct Local Authorities (D.L.A.). They proceeded to state that the ex parte applicant willfully failed and/or neglected to file a claim with the Transition Authority and as such, the Embu County Government engaged a firm of lawyers trading as Ireri and Co Advocates who without instructions consented to the dispute being referred to arbitration.

8. That an award was given and to their dismay, their lawyers adopted the award as an order of court in Embu J.R. Misc. 67 of 2017 Union Technology Kenya Limited v The County Government of Embu.That this turn of events raises suspicion over the whole process and decisions emanating therefrom, and the only logical explanation can only be fraud. It was their case that the financial year had passed and so there was no willful disobedience of the court orders. That the applicant has not met the threshold for grant of contempt of court orders and that an unknown contemnor can’t be found in breach given that the ex parte applicant never mentioned the names of the office holders but cited the offices instead. Reliance was made inter alia on the case Katsuri Limited v Kapurchand Depar Shah [2016] eKLR wherein they buttressed their case that the respondents cannot be held liable for contempt of court orders. They urged this court to find that the ex parte applicant has not met the threshold for grant of contempt orders and as such, the application should be dismissed with costs.

9. It is of importance to determine first whether the respondents herein are the rightful parties against whom the application herein should be brought. This is so since, the respondents have argued that the decretal amount and the interest thereon demanded by the ex parte applicant lay against the Defunct Local Authority of Embu and that it was upon the Transition Authority to satisfy the said amount; reference is made to Section 33 of the Sixth Schedule to the Constitution which provides that an office or institution established under the constitution of Kenya, 2010 is a legal successor of the corresponding office. In the same breadth, it has been a practice where courts have acknowledged that there are no transitional provisions in the County Governments Act, 2012 dealing with actions and legal proceedings that were pending as at the date of the repeal of the Local Government Act; the general legal position adopted is that the legal proceedings which were instituted against the Defunct Local Authority should proceed against the County Government under whose jurisdiction the concerned local authority was located. To buttress this view, the court inJ.A.S Kumenda & Another v clerk Municipal Council of Kisii & 6 Others, ELC at Kisii, Judicial Review Application No. 3 of 2013 [2013] eKLRobserved that:

County Governments under the new constitution took over the powers and functions of the local authorities as they were recognized and defined under the old constitution and the Local Government Act. Pursuant to the provisions of the said section 33 of the 6th Schedule to the constitution of Kenya 2010, County Government are therefore the natural and presumptive legal successors of the defunct local authorities.

10. The exparte applicant has argued that the respondents herein are estopped from denying liability, if any, in regard to the previous acts or omissions of the local government, and in any event the transition process of determination of the assets and liabilities of the defunct municipal councils by the Transition Authority is no longer pending according to the 4th schedule of the transition to Devolved Government Act, 2012.

11. I have considered the application, submissions by the parties herein and authorities cited; and in my considered view, the issue for determination is whether the respondents should be cited for contempt of court.

12. It is not in dispute that an order of mandamus was issued by the court pursuant to a judgment delivered on 22. 11. 2018, wherein the ex parte applicant was granted the following orders:

(a) An order of mandamus do and is hereby issued compelling the respondents to pay the ex parte applicant Kshs.64,098,156/= being the Decretal amount ordered plus interest accrued thereon from 31. 05. 2018 within sixty (60) days.

(b) The respondent meets the costs of these proceedings.

13. That even after the order of mandamus was issued, the respondents have ignored and/or neglected to satisfy the decretal amounts as had been ordered by this court. This is what the ex parte applicant describes in his application as disobedience of the said court orders that has brought about this application.

14. The Contempt of Court Act is, however, no longer operational as from the date of the judgment declaring it unconstitutional in Kenya Human Rights Commission v Attorney General & Another(supra).  I am therefore obliged to revert to the provisions of the law that operated before the enactment of the Contempt of Court Act to avoid a lacuna in the enforcement of Court orders.It was in this respect observed in Republic v Returning Officer of Kamkunji Constituency & The Electoral Commission of Kenya HCMCA No. 13 of 2008, that the High Court has the responsibility for the maintenance of the rule of law, hence there cannot be a gap in the application of the rule of law.

15. The Court of Appeal inChristine Wangari Gachege v Elizabeth Wanjiru Evans & 11 Others, [2014] eKLR found that the English law on committal for contempt of court under Rule 81. 4 of the English Civil Procedure Rules, which deals with breach of judgment, order or undertakings, was applied by virtue of Section 5(1) of the Judicature Act which provides that:

“The High Court and the Court of Appeal shall have the same power to punish for contempt of court as is for the time being possessed by the High Court of Justice in England, and that power shall extend to upholding the authority and dignity of subordinate courts.”

16. In Katsuri Limited v Kapurchand Depor Shah[2016]eKLR, citing Kristen Carla Burchell v Barry Grant Burchell (Eastern Cape Division Case No. 364 of 2005) it was stated that ‘’in order for an applicant to succeed in civil contempt proceedings, the applicant has to prove -

(i) The terms of the order,

(ii) Knowledge of these terms by the Respondent,

(iii) Failure by the Respondent to comply with the terms of the order.

17. Upon proof of these requirements, the presence of willfulness and bad faith on the part of the respondents would normally be inferred, but the respondents could rebut this inference by contrary proof on a balance of probabilities.

18. In this case, the court orders were outright and unambiguous. I will then proceed to determinewhether the respondents were aware of the material order, ordering them to pay the amount in question; and secondly, whether they acted in disobedience of the order without justifiable cause.

19. It is trite that unless the court dispenses with service, a judgment or order may not be enforced by way of an order for contempt unless a copy of it has been served on the person required to do or not do the act in question.  Rule 81. 6 of the English Civil Procedure Rules specifically provides that the method of service shall be personal service, which is effected by leaving the order with the person to be served.

20. It is also the position, and it has been held in several judicial decisions that if personal awareness of the court orders by the alleged contemnors is demonstrated, they will be found culpable of contempt even though they had not been personally served with the orders and penal notice. [See Court of Appeal decision in Shimmers Plaza Limited v National Bank of Kenya Limited [2015] eKLR] where it was held that: –

“Would the knowledge of the judgment or order by the advocate of the alleged contemnor suffice for contempt proceedings" We hold the view that it does. This is more so in a case such as this one where the advocate was in Court representing the alleged contemnor and the orders were made in his presence. There is an assumption which is not unfounded, and which in our view is irrefutable to the effect that when an advocate appears in court on instructions of a party, then it behoves him/her to report back to the client all that transpired in court that has a bearing on the client’s case.”

21. In the same breadth, in Basil Criticos v Attorney General and 8 Others [2012] eKLR Lenaola J. (as he then was) pronounced himself as follows: -

“... the law has changed and as it stands today knowledge supersedes personal service ..... where a party clearly acts and shows that he had knowledge of a Court Order; the strict requirement that personal service must be proved is rendered unnecessary.”

22. The respondents argue that the firm of Ireri & Co. Advocates never had instructions to represent them; I am guided by a notice of appointment and a replying affidavit dated 30. 06. 2018 sworn by one Damiano Muthee, the Chief Officer in Charge of Public Service Embu County Government on behalf of the respondents in response to the application dated 17/05/2018. It is of importance to note that the said firm remained on record for the respondents for a period running more than a year when respondents made an application dated 05. 07. 2019 seeking to replace the firm in question and vide a ruling dated 29. 10. 2019, Muchemi J. ruled that there is no prejudice occasioned if a party seeks to change an advocate. From the court record dated 05. 11. 2018, it shows that the parties herein argued in regard to the application dated 17/05/2018 which had inter alia sought for orders of mandamus to issue.

23. Prayer number three in the same application was for notice to show cause why the respondents should not be cited for contempt of court. In that regard, it is evident that the respondents were not only duly served but equally were aware of the same orders, which was a command they were expected to heed in promoting constitutional values and principles of governance such as rule of law beside upholding the dignity and authority of the Court. Further, the respondents through their Counsel on record swore a reply dated 20. 09. 2018 wherein they sought for time to be given to petition the County Assembly for additional supplementary budget to cater for the payment of the decretal amount and the interest thereon. With this evidence in place, I am satisfied that the service was made upon the respondents and further that they were in the know of the court orders.

24. It is now established that the mental element for liability for contempt arising out of disobedience of a court order is simply that the disobeying party either intended to disobey or made no reasonable attempt to comply with the order.  [See in this respect the English House of Lords decision in Heatons Transport (St Helens) Ltd v Transport and General Workers Union (1973) AC 15].

25. In the same breadth, the court in the case of Canadian Metal Co. Ltd v Canadian Broadcasting Corp (No.2) 48 D.L.R. (30), stated that:

“To allow court orders to be disobeyed would be to tread the road to anarchy. If orders of the court can be treated with disrespect, the whole administration of justice is brought into scorn….if the remedies that the courts grant to correct….wrongs can be ignored, then there will be nothing left for each person but to take the law into his own hands. Loss of respect for the courts will quickly result into the destruction of our society.’’

26. Therespondents have urged this court to find that office bearers cannot be found to be culpable for contempt since the alleged persons being cited for contempt should be out rightly mentioned by their names instead of the offices that they hold. The respondents relied on the case of Shela Cassatt Issenberg & Another v Anthony Kinyanjui [2021] eKLR. I have had an opportunity to go through the authority, however, the facts in that case and the case herein are distinguishable and as such, the same is misplaced. In  the case of Republic v County Secretary Nairobi County & 3 Others: Koceyo & Co & Company Advocates (Ex parte )[2020] eKLR, the court held that it is the obligation of Government in conjunction with the treasury to ensure that all funds are allocated towards the settlement of liabilities owed by the government.

27. The respondents submitted that the County Government requires a vote to pay which can only be raised if an amount is budgeted for. That if they are condemned to pay the amount forthwith, they shall be committing a crime contrary to section 196 and 197 of the Public Finance Management Act of Kenya. It is their case that for the ex parte applicant to be paid the decretal amount, then the same ought to be budgeted for since the respondents would be going against the provisions of the said Act. I need to underscore the point that settlement of decretal sum by the County Government does not necessarily depend on the availability of funds; the defence of non-allocation of funds by the County Assembly as raised by the respondents was equably dealt with in a case where Githua J. inRepublic v Permanent Secretary, Ministry of state for Provincial Administration and Internal Security Exparte Fredrick Manoah Egunza [2012] eKLR stated that:

“In ordinary circumstances, once a judgment has been entered in a civil suit in favour of one party against another and a decree is subsequently issued, the successful litigant is entitled to execute for the decretal amount even on the following day. When the Government is sued in a civil action through its legal representative by a citizen, it becomes a party just like any other party defending a civil suit. Similarly, when a judgment has been entered against the government and a monetary decree is issued against it, it does not enjoy any special privileges with regards to its liability to pay except when it comes to the mode of execution of the decree…..Once the certificate of order against the Government is served on the Hon Attorney General, Section 21(3) imposes a statutory duty on the accounting officer concerned to pay the sums specified in the said order to the person entitled or to his advocate together with any interest lawfully accruing thereon.

28. It is essential for the maintenance of the Rule of Law and Order that the authority and the dignity of courts is upheld at all times. The court will neither condone deliberate disobedience of its orders nor shy away from its responsibility to deal firmly with proved contemnors. It is the plain and unqualified obligation of every person against, or in respect of whom, an order is made by a court of competent jurisdiction, to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or void. [See Econet Wireless Kenya Ltd vs. Minister for Information & Communication of Kenya & Another[2005] 1 KLR 828 Ibrahim, J (as he then was)].

29. In view of the foregoing, the court finds that:

i.The Respondents have been found to be in contempt of court orders.

ii.The respondents are hereby given a period of 60 days to purge their contempt.

iii.The matter shall be mentioned on a date to be fixed by the court for further orders.

30. It is so ordered.

DELIVERED, DATED AND SIGNED AT EMBU THIS 9TH DAY OF FEBRUARY, 2022.

L. NJUGUNA

JUDGE

……………………………………….Applicant

……………………………………….Respondents

……………………………………….Ex Parte Applicant