Republic v Nairobi City County Alcoholic Drinks Control and Licensing Board & Nairobi City County Government Exparte Space Lounge Bar & Grill Limited [2017] KEHC 4433 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

JR. MISC APPLICATION NO. 613 OF 2016

IN THE MATTER OF AN APPLICATION BY SPACE LOUNGE BAR AND GRILL LIMITED FOR ORDERS PF MANDAMUS AND CERTIORARI

AND

IN THE MATTER OF THE NAIROBI CITY COUNTY ALCOHOLIC DRINKS CONTROL AND LICENSING BOARD

REPUBLIC……..........................................................……..…….APPLICANT

VERSUS

NAIROBI CITY COUNTY ALCOHOLIC DRINKS CONTROL

AND LICENSING BOARD…........................................….1ST RESPONDENT

NAIROBI CITY COUNTY GOVERNMENT……..........…2ND RESPONDENT

EX PARTE: SPACE LOUNGE BAR & GRILL LIMITED

JUDGEMENT

1. By a Notice of Motion dated 14th December, 2016, the ex parteapplicant herein, Space Lounge Bar & Grill Limited, seeks the following orders:

a. An order of certiorari quashing the decision of the Nairobi City County Alcoholic Drinks Control and Licensing Board revoking liquor licence number 5952 and 5953 for the year 2016-2017 issued to Space Lounge Bar and Grill limited.

b. An order of Mandamus be issued compelling the Nairobi City County Alcoholic Drinks and Licensing Board to reinstate liquor licence number 5952 and 5953 for the year 2016-2017 issue to Space Lounge Bar and Grill Limited.

c. That the costs of these proceedings be provided for.

2. According to the ex parte applicant, on 1st November, 2016 it applied for the renewal of its liquor licence which application was approved by the Nairobi City County Alcoholic Drinks and Licensing Board. Subsequent to the foregoing, the Ex parte Applicant effected payment of the requisite license fees levied by the Nairobi City County Government and on 23rd November, 2016 it was issued with liquor license number 5952 and 5953 for the year 2016-2017.

3. It was however averred that on 25th November, 2016 Nairobi City County Alcoholic Drinks Control and Licensing Board unilaterally cancelled the licenses issued to the Ex parte Applicant without affording the Applicant a hearing. According to the applicant it was not represented in the forum whereat the decision to cancel its licenses was made and neither was it called upon to show cause why such action should not be taken.

4. The applicant averred that it has over 80 employees whose livelihood is at stake and a closure of the business operated by the Applicant would compromise the ability to pay workers and suppliers not to mention far reaching ramifications including a collapse of the business.

5. It was disclosed that the Applicant herein had initially filed judicial review application No. 520 of 2016 for refusal to issue him a license but which proceedings were withdrawn to give room for negotiations with the Nairobi City Liquor Licensing Board which negotiations bore fruits as the Ex parte Applicant complied with the County Government noise level directives a state of affairs which was confirmed by a noise pollution initial self-audit report on the basis of which the licenses were issued to the ex parte Applicant.

6. It was the applicant’s case that the decision to cancel the licenses issued was motivated by ill will and may possibly have been informed by simmering business rivalry. Based on legal advice the applicant averred that:

a. That the unilateral revocation of licenses number 5952 and 5953 was unreasonable, unjustified and oppressive.

b. That the move to revoke the licenses was unreasonable, unlawful and irregular coming barely two (2) days after payment of the requisite licensing fees and without affording the applicant a hearing.

c. That the decision complained of was made in excess of jurisdiction and is consequently illegal and null and void for all intents and purposes.

d. That it is only fair, just and in the interest of justice that the orders sought herein be granted.

Respondent’s Case

7. The application was opposed by the Respondent.

8. According to the Respondent, the Ex parte Applicant herein operated a bar and restaurant located along Ngong Road, Nairobi within the premises of residential houses. The Respondent revealed that the Ex parte Applicant’s business premises had been accused by the residents of noise pollution by emitting loud music which affected the residents situate in the residential premises adjacent to the bar and restaurant business. It was disclosed that there had been numerous complaints filed by the affected residents with regard to the amount of noise emitted by the ex parte Applicant’s business premises and nothing had been done to curb the nuisance.

9. The Respondent asserted that it is mandated in ensuring that the county residents of Nairobi County do not have their rights infringed upon by any alcohol dealing business entity established. It was its case that the Ex parte Applicant herein did not duly comply with the requirements for the issuance or the continued holding of a license for carrying on business for the bar and restaurant.

10. In support of its case the Respondent relied on Article 42 of the Constitution of Kenya 2010 which guarantees to every person the right to a clean and healthy environment, which the residents of the adjacent residential estate to the Ex parte Applicant’s business premises are being denied. It also relied on Article 70 of the Constitution which gives an aggrieved person a right to apply to court for redress due to the infringement of the fundamental right to a healthy environment.

11. The Respondent contended that some of the residents are old and aged and cannot stand the loud vibrations generated by the Ex parte Applicant’s premises and also it is impossible to get a good rest at night when the Ex parte Applicant is in operation. Further, the customers of the Ex parte Applicant have immoral behaviors as they proceed to partake drugs and other paraphernalia outside the Ex parte Applicant’s premises and next to the adjacent residential estate, and on many occasions things such as used condoms are found scattered around the adjacent residential block yet the residents have young children who are not meant to be exposed to such misdoings at such a tender age.

12. The Respondent averred that the Ex parte Applicant in operation of its business has been in breach of the provisions of the Environmental Management and co-ordination Act Cap 387 on the recommended standards of noise and the regulations made there under. While section 58 of the Act provides that anyone undertaking a project must apply for an Environmental Impact Assessment License before proceeding with the said project, the Applicant herein did no such thing and as such was in violation of the law right at the inception of its business. It was averred that section 102 of the above Act maintains that any person who emits noise in excess of the noise emission standards as established under the same Act is committing an offence.

13. Therefore given the numerous complaints received by the 1st Respondent with regard to the noise emission from the Ex parte Applicant premises, it is clearly in breach of the provisions of the Act. While the Ex parte Applicant alleged that they had carried out sound proofing of the premises which was approved by the National Environment Management Authority (NEMA) the report does not touch on noise pollution but rather solid waste management, resource use and liquid waste. It was revealed that the Ex parte Applicant later on commissioned an officer from NEMA to develop a robust noise control and conservation program to help the Ex parte Applicant improve on its quality of operations. This was however done after it attempted to mislead the court and the county in general that it had already conducted the exercise and had been given a clean bill of health.

14. According to the Respondent, the Ex parte Applicant’s single business permit was issued by incompetent officers of the 1st Respondent and was therefore issued irregularly and in contravention of the law making the approval null and void ab-initio. Its position was that it has legal mandate to serve upon and enforce a closure notice in respect to the Ex parte Applicant. Since the Ex parte Applicant failed, neglected and/or refused to comply with the closure notice duly issued under the law and having failed to do so the Respondents were entitled to revoke and cancel the Ex parte Applicant’s licenses and approvals.

15. The Respondent therefore urged the Court not to issue the order of Certiorari as quashing of the revocation order issued by the 2nd Respondent would serve as an injustice to the residents who are situate in the residential estate given that their complaints are the driving force behind the revocation and subsequent closure of the Ex parte Applicant business premises. Similarly the Court was urged not to issue the order of Mandamus as the Respondents were well within their mandate by deciding not to renew the single business permit which was held by the Ex parte Applicant. It was its view therefore that the Ex parte Applicant has caused this suit to be filed as a way of defeating justice and thus the same ought to be struck out with costs.

Determinations

16. I have considered the foregoing including the submissions filed on behalf of the parties herein and the authorities relied upon.

17. Article 47 of the Constitution provides:

(1) Every person has the right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair.

(2) If a right or fundamental freedom of a person has been or is likely to be adversely affected by administrative action, the person has the right to be given written reasons for the action.

18. That the revocation of the Permit and the Licence by the Respondent were administrative actions is not in dispute since section 2 of the Fair Administrative Action Act, 2015 defines “administrative action” to include:

(i) the powers, functions and duties exercised by authorities or quasi-judicial tribunals; or

(ii) any act, omission or decision of any person, body or authority that affects the legal rights or interests of any person to whom such action relates;

19. The same section defines ‘administrator” as “a person who takes administrative action or who makes an administrative decision.” Section 3 on the other hand provides:

(1)This Act applies to all state and non-state agencies, including any person

(a) exercising administrative authority;

(b) performing a judicial or quasi-judicial function under the Constitution or any written law; or

(c) whose action, omission or decision affects the legal rights or interests of any person to whom such action, omission or decision relates.

20. As was held in Peter Okech Kadamas vs. Municipal Council of Kisumu Civil Appeal No. 109 of 1984 [1985] KLR 954; [1986-1989] EA 194 in which O’reilly vs. Mackman [1982] 3 All ER 1129 was cited with approval:

“Wherever any person or body of persons has authority conferred by legislation to make decisions affecting the rights of the subjects, it is amenable to the remedy of an order to quash its decisions either for an error of law in reaching it, or for failure to act fairly towards the person who will be adversely affected if the decision maker fails to observe either one or other to the two fundamental rights accorded him of the rules of natural justice or fairness, viz: to have afforded to him a reasonable opportunity of learning what is alleged against him and of putting forward his own case in answer to it, and to the absence of personal bias against him on the part of the person by whom the decision falls to be made...”

21. The Respondent was therefore under a duty to ensure that its action was expeditious, efficient, lawful, reasonable and procedurally fair. Procedural fairness necessarily requires that persons who are likely to be affected by the decision be afforded an opportunity of being heard before the decision is taken. Further, it is a Constitutional requirement that that person be given written reasons for the action.

22. As to whether a licensee is entitled to a hearing before the same is revoked, in Congreve vs. Home Office [1976] QB 629, Lord Denning expressed himself inter alia as follows:

“But now the question comes: can the Minister revoke the overlapping licence which was issued so lawfully? He claims that he can revoke it by virtue of the discretion given to him by section 1(4) of the Act. But I think not. The licensee has paid £12 for the 12 months. If the licence is to be revoked – and his money forfeited – the Minister would have to give good reasons to justify it. Of course, if the licensee had done anything wrong – if he had given a cheque for £12 which was dishonoured, or if he had broken the conditions of the licence – the Minister could revoke it. But when the licensee had done nothing wrong at all, I do not think the Minister can lawfully revoke the licence, at any rate, not without offering him his money back, and not even then except for good cause. If he should revoke it without giving reasons, or for no good reason, the courts can set aside his revocation and restore the licence. It would be a misuse of power conferred on him by Parliament: and these courts have the authority – and I would add, the duty – to correct a misuse of power by the Minister or his department, no matter how much they resent it or warn us of the consequences if we do. Padfield vs. Minister of Agriculture, Fisheries and Food [1968] AC 997 is proof of what I say. It shows that when a Minister is given a discretion – and exercises it for reasons which are bad in law – the courts can interfere so as to get him back on to the right road.”

23. Before the Respondent can determine whether a licensee or the holder of a permit has not complied with the conditions for the issuance thereof, it is my view and I so hold that the Respondent ought first to afford the person concerned an opportunity of addressing the issue before revoking the same. There is no such evidence on record and the Respondent has not even alleged that it afforded the applicant an opportunity of being heard before taking the action complained of.

24. This Court does not doubt that the Respondent has the power to revoke the permit or licence issued by it. However, the issue that the Court has to determine in this application is whether based on the facts before the Court the decision made by the Respondent was procedural and ought to stand. As was held by Emukule, J in Republic vs. Kombo & 3 Others Ex Parte Waweru Nairobi HCMCA No. 1648 of 2005 [2008] 3 KLR (EP) 478:

“The rule of law has a number of different meanings and corollaries. Its primary meaning is that everything must be done according to the law. Applied to the powers of government, this requires that every government authority which does some act which would otherwise be wrong (such as taking a man’s land), or which infringes a man’s liberty (as by refusing him planning permission), must be able to justify its action as authorised by law – and nearly in every case this will mean authorised directly or indirectly by Act of Parliament. Every act of government power that is to say, every act which affects the legal rights, duties or liberties of any person, must be shown to have a strictly legal pedigree. The affected person may always resort to the Courts of law, and if the legal pedigree is not found to be perfectly in order the Court will invalidate the act, which he can safely disregard.”

25. It is clear that the said action was both unlawful and unprocedural.

26. As was held by the Court of Appeal in Onyango Oloo vs. Attorney General [1986-1989] EA 456:

“The principle of natural justice applies where ordinary people would reasonably expect those making decisions which will affect others to act fairly and they cannot act fairly and be seen to have acted fairly without giving an opportunity to be heard...There is a presumption in the interpretation of statutes that rules of natural justice will apply and therefore the authority is required to act fairly and so to apply the principle of natural justice......A decision in breach of the rules of natural justice is not cured by holding that the decision would otherwise have been right since if the principle of natural justice is violated, it matters not that the same decision would have been arrived at...It is improper and not fair that an executive authority who is by law required to consider, to think of all the events before making a decision which immediately results in substantial loss of liberty leaves the appellant and others guessing about what matters could have persuaded him to decide in the manner he decided...In the course of decision making, the rules of natural justice may require an inquiry, with the person accused or to be punished, present, and able to understand the charge or accusation against him, and able to give his defence. In other cases it is sufficient if there is an investigation by responsible officers, the conclusions of which are sent to the decision-making body or person, who, having given the person affected a chance to put his side of the matter, and offer whatever mitigation he considers fit to put forward, may take the decision in the absence of the person affected. The extent to which the rules apply depends on the particular nature of the proceedings...It is not to be implied that the rules of natural justice are excluded unless Parliament expressly so provides and that involves following the rules of natural justice to the degree indicated...Courts are not to abdicate jurisdiction merely because the proceedings are of an administrative nature or of an internal disciplinary character. It is a loan, which the Courts in Kenya would do well to follow, in carrying out their tasks of balancing the interests of the executive and the citizen. It is to everyone’s advantage if the executive exercises its discretion in a manner, which is fair to both sides, and is seen to be fair...Denial of the right to be heard renders any decision made null and void ab initio.”

27. Consequently, I find merit in the Notice of Motion dated 14th December, 2016.

28. Section 11 of the Fair Administrative Action Act, 2015 however provides as hereunder:

(1) In proceedings for judicial review under section 8 (1), the court may grant any order that is just and equitable, including an order

(a) declaring the rights of the parties in respect of any matter to which the administrative action relates;

(b) restraining the administrator from acting or continuing to act in breach of duty imposed upon the administrator under any written law or from acting or continuing to act in any manner that is prejudicial to the legal rights of an applicant;

(d) prohibiting the administrator from acting in a particular manner;

(e) setting aside the administrative action or decision and remitting the matter for reconsideration by the administrator, with or without directions;

(f) compelling the performance by an administrator of a public duty owed in law and in respect of which the applicant has a legally enforceable right;

(g) prohibiting the administrator from acting in a particular manner;

(h) setting aside the administrative action and remitting the matter for reconsideration by the administrator, with or without directions;

(i) granting a temporary interdict or other temporary relief; or

(j) for the award of costs or other pecuniary compensation in appropriate cases.

29. This Court is therefore empowered to fashion appropriate remedies.

30. Therefore the order which commends itself to me and which I hereby issue is an order of certiorari removing into this Court for the purposes of being quashed and quashing the decision of the Nairobi City County Alcoholic Drinks Control and Licensing Board revoking liquor licence number 5952 and 5953 for the year 2016-2017 issued to Space Lounge Bar and Grill limited. I also issue an order of Mandamus compelling the Nairobi City County Alcoholic Drinks and Licensing Board to reinstate liquor licence number 5952 and 5953 for the year 2016-2017 issued to Space Lounge Bar and Grill Limited.

31. I however appreciate that the Constitution of Kenya at Article guarantees to all persons the right to a clean and healthy environment. This includes the right to peaceful environment devoid of noise and the right not to pollute the morality of the residents and their children.

32. It is open the operators of leisure and social places to ensure that they conduct their businesses in a manner that does not violate the rights of others. Accordingly I direct the ex parte applicants to take all the necessary measures to ensure that its standards of operation meets the legislative requirements and to this end the applicants are directed to within 45 days of this decision to seek and obtain a certification from the National Environmental and Management Authority (NEMA) to the effect that their business meets the standards prescribed by and under the relevant laws. In default the Respondent would be at liberty to take any legal remedial steps necessary to protect the rights of the residents within the area in which the ex parte applicant operates.

33. There will be no order as to costs.

34. Orders accordingly.

Dated at Nairobi this 20th day of July, 2017

G V ODUNGA

JUDGE

Delivered in the presence of:

NA for the parties

CA Mwangi