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Court of AppealPartially AllowedCivil Appeal No. 25 of 2000· [2000] KECA 222 (KLR)

Narok County Council v Trans Mara County Council & another [2000] KECA 222 (KLR)

Court of Appeal
7 April 2000
EOE. O. O'Kubasu
1,902 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Court of Appeal ruled that county councils must exhaust the statutory process for splitting assets before suing each other in the High Court.

What this practically means

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Executive summary

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This appeal arose from the creation of the County Council of Trans Mara by Legal Notice No. 285 of 11th August 1994, carved out of the larger Narok County Council under the Local Government Act (Cap 265). The two councils disputed the distribution of assets and liabilities, and Trans Mara sued Narok and the Kenya Association of Tour Operators, the agent collecting game-reserve entry fees, claiming KShs 69,362,400 collected within its area of jurisdiction. Narok admitted the carve-out but denied the debt, contending the suit was premature because mutual deliberations were in progress; the tour operators raised a preliminary objection that the dispute had not been referred to the Minister for Local Government. Mbaluto J of the High Court at Kisii, by judgment dated 4th June 1998, gave judgment in favour of Trans Mara, and Narok appealed to the Court of Appeal. O'Kubasu JA disposed of the appeal on jurisdiction alone. He held that Section 270 of the Act prescribes the method of distribution: apportionment of rights, liabilities, property and assets must be made on a fair and equitable basis, either as agreed between the local authorities or, in default of agreement, as directed by the Minister. The Minister had appointed Commissions of Distribution of Assets and Liabilities by Gazette Notice No. 2183 of 2nd May 1997, whose work was unfinished. Because the statute provided the procedure, the parties were bound to follow it before resorting to court; the High Court therefore had no jurisdiction and the preliminary objection should have been upheld. The appeal was allowed with costs to Narok in both courts. The certified copy contains only O'Kubasu JA's judgment and cites no case authorities.

Key legal issues

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01

Jurisdiction of the High Court over disputes on the distribution of assets and liabilities between local authorities.

Holding

The High Court had no jurisdiction; Section 270 of the Local Government Act governs the distribution of assets and liabilities between local authorities and had to be exhausted first.

Reasoning

The court traced the dispute to Legal Notice No. 285 of 11th August 1994, which created the County Council of Trans Mara out of Narok County Council, and identified the real question as the distribution of assets and liabilities between the two authorities. Section 270 of the Local Government Act prescribes that such apportionment be agreed between the authorities or, failing agreement, directed by the Minister. Since the suit was filed while negotiations were ongoing and before the ministerial distribution commissions had reported, the High Court had no jurisdiction to entertain it.

p. 4
02

Exhaustion of the statutory dispute-resolution mechanism under Section 270 before litigation.

Holding

Parties are bound to follow the statutory procedure for distribution of assets and liabilities - agreement between the local authorities or, in default, direction by the Minister - before resorting to a court of law.

Reasoning

The court held that where the law provides a specific procedure for distribution of assets and liabilities between local authorities, the parties are bound to follow it before resorting to a court of law. The plaint was filed on 11th January 1996, before the Minister appointed Commissions of Distribution of Assets and Liabilities on 2nd May 1997, and the commissions' determinations had not been made public. Exhaustion of the statutory mechanism was therefore a precondition to litigation, and the response that Section 60(1) of the Constitution conferred unlimited jurisdiction did not avail the plaintiff.

p. 4
03

Statutory scheme for apportionment of assets on the creation of a new local authority.

Holding

Where a new local authority is carved out of an existing one, apportionment of rights, liabilities, property and assets must be made on a fair and equitable basis, either as agreed between the authorities or, in default of agreement, as directed by the Minister.

Reasoning

Reading Section 270(b), the court stated the legal position where a new local authority is carved out of an existing one: apportionment of rights, liabilities, property and assets must be made between the authorities concerned on a fair and equitable basis, either as agreed between them or, in default of agreement, as directed by the Minister. The Minister's appointment of distribution commissions for Narok, Trans Mara and other councils under sections 269 and 270, by Gazette Notice No. 2183 of 2nd May 1997, showed the statutory scheme in operation.

p. 3

Legal principles established

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  • Where a statute provides a specific procedure for the distribution of assets and liabilities between local authorities, the parties must follow that procedure, including reference to the Minister, before resorting to a court of law.
  • The High Court has no jurisdiction to entertain a dispute between local authorities over apportionment of assets and liabilities where Section 270 of the Local Government Act applies and has not been exhausted.
  • Where a new local authority is carved out of an existing one, apportionment of rights, liabilities, property and assets must be made on a fair and equitable basis, either as agreed between the authorities or, in default of agreement, as directed by the Minister.

Court orders

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  1. 1.Appeal allowed.
  2. 2.Costs of the appeal and of the suit in the superior court awarded to the appellant, Narok County Council.

Authorities

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Legislation

  • Local Government Act (Cap 265)Section 5
  • Local Government Act (Cap 265)Section 28
  • Local Government Act (Cap 265)Section 29
  • Local Government Act (Cap 265)Section 39
  • Local Government Act (Cap 265)Section 269(1), paragraphs (c) to (h)
  • Local Government Act (Cap 265)Section 270
  • Local Government Act (Cap 265)Section 270(b)
  • Constitution of KenyaSection 60(1)
  • The Local Government (County Council of Trans Mara) Order, 1994 (Legal Notice No. 285 of 11th August 1994)Articles 1-3, First and Second Schedules
  • Kenya Gazette Notice No. 2183 of 2nd May 1997 (Appointment of Commissions of Distribution of Assets and Liabilities among Local Authorities)Made under sections 269 and 270 of the Local Government Act
On appeal from
High Court of Kenya at Kisii
Jurisdiction invoked
Not stated in the judgment; the matter is a first appeal from the High Court. The jurisdictional argument turned on Section 270 of the Local Government Act (Cap 265), invoked as ousting the High Court's jurisdiction, as against Section 60(1) of the Constitution of Kenya relied on by the 1st respondent.

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Narok County Council v Trans Mara County Council & another [2000] KECA 222 (KLR)", Case Analysis (2000). Civil Appeal No. 25 of 2000. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2000/222/eng@2000-04-07

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.