Kenya Revenue Authority v Menginya Salim Murgani
The bottom line
#Kenya's Court of Appeal slashed a dismissed KRA employee's award from Kshs.28.8 million to about Kshs.1.9 million, ruling even permanent jobs can end on reasonable notice.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the contract of service was determinable and, if so, by what period of notice, and whether a permanent and pensionable contract could be terminated by reasonable notice
- 2.Whether the contract was properly terminated and the legal consequences of termination
- 3.Whether the superior court was justified in awarding general damages in respect of a contract of employment in lieu of salary for the period of notice
- 4.Whether the superior court was justified in awarding exemplary damages
- 5.Whether the superior court was correct in awarding only one head of damages and directing the Deputy Registrar to calculate the other heads, and the effect of those directions
- 6.Whether the appellant committed the tort of misfeasance in public office
Key legal issues
#Incorporation of natural justice and constitutional fair hearing into contract of service
The superior court erred in importing section 77 of the Constitution and natural justice rules into the contract; section 77(9) applies only to courts or adjudicating authorities established by law, not contractual tribunals.
The Code of Conduct governed discipline. The Staff Committee put the charge in writing, the respondent replied in writing, and an appeal lay to the Board. Fairness is not determined solely by the oral nature of a hearing; an exchange of letters suffices. Neither the Staff Committee nor the Board was a court or adjudicating authority under section 77, so constitutional fair-hearing guarantees were inapplicable.
Termination of permanent and pensionable employment
Even permanent and pensionable contracts are terminable by reasonable notice; where notice is unspecified, damages are limited to salary for the notice period, here six months.
Contracts of service have mutuality; either party may terminate on stipulated or reasonable notice or payment in lieu, without giving reasons. The respondent himself admitted six months would be reasonable. Past decisions of the Court (Alfred Githinji; David Chege Mwangi; Central Bank of Kenya v Nkabu) confirm damages are confined to the notice period even where dismissal is wrongful.
Misfeasance in public office
The tort was not established: the appellant acted under contractual disciplinary power, not statutory power, and the tort would lie only against a public officer, not the public body.
The dismissal flowed from the contract of service, not from powers under the Kenya Revenue Authority Act. Calverley and Three Rivers require bad faith or deliberate dishonest abuse of public power; the facts fell outside those parameters. Abuse of power by public bodies is addressed through judicial review, not by converting contractual discipline into tort.
Exemplary damages
The award of exemplary damages was a serious error; the Rookes v Barnard categories were not satisfied.
Exemplary damages lie only for oppressive, arbitrary or unconstitutional action by government servants, or where the defendant profited beyond compensatory damages. The appellant's conduct was not oppressive, arbitrary or unconstitutional; it substantially followed the Code of Conduct. The award also duplicated the salary-based compensation.
Delegation of assessment of damages to the Deputy Registrar
Assessment and quantification of damages are judicial functions that cannot be delegated to a Deputy Registrar; the direction was a nullity.
Order 48 confers only ministerial powers on the Deputy Registrar; assessment of damages is not a ministerial act under Order 48 and a judgment left incomplete pending assessment contravenes Order 20. Precedents (Oraro & Rachier; Kola Chacha; Herbert Asava) establish that judgments delivered or completed by registrars are nullities.
Legal principles established
#- A court cannot import rules of natural justice or constitutional fair-hearing provisions into a written contract of service; disciplinary organs created by contract are masters of their own procedure.
- A permanent and pensionable contract of service is terminable by stipulated or reasonable notice, and damages for wrongful termination are limited to salary in lieu of notice.
- A parastatal acting as an employer exercises contractual, not statutory, power, so the tort of misfeasance in public office does not arise against it for dismissal of an employee.
- A superior court cannot delegate the assessment or quantification of damages to a Deputy Registrar; such delegation is a nullity.
- A judgment must be complete when pronounced and cannot be left to the Deputy Registrar to perfect.
Court orders
#- 1.Appeal allowed; judgment of the superior court set aside in its entirety
- 2.In substitution, respondent awarded six months' salary in lieu of notice of Kshs.527,794.20
- 3.Respondent awarded his own contributions to the pension fund in the sum of Kshs.1,387,658.80 with effect from the date of judgment
- 4.Cross-appeal dismissed
- 5.Each party to bear their respective costs of the appeal and in the court below
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 1139 of 2002
- Jurisdiction invoked
- Appellate jurisdiction of the Court of Appeal over the High Court (first appeal against judgment and decree); respondent's cross-appeal dated 3rd November 2009 also before the Court
Relief refused
#Salary and leave allowance for seven years and six months
Finding not based on any evidence and arbitrary; damages limited to notice period
Exemplary damages of Kshs.1 million
No oppressive, arbitrary or unconstitutional action by the appellant; Rookes v Barnard categories not met
Claim based on tort of misfeasance in public office
Appellant exercised contractual, not statutory, power; tort lies only against a public officer
Cross-appeal for Kshs.91,629,856.00
Based on the same flawed tortious foundation as the main claim
Costs
The parties shall bear their respective costs of this appeal and in the court below.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
A court of law cannot in our view, import into a written contract of service rules of natural justice and the Constitutional provisions relating to the right of hearing.
This applies whether or not the contract is permanent or pensionable and this right vests in both the employee and the employer.
There is no provision in law for delegating any judicial functions to the Deputy Registrar. Any such delegation would be a nullity.
A judgment must be complete and conclusive when pronounced and therefore it cannot be left to the Deputy Registrar to perfect it.
The upshot is that, the appeal is allowed and the judgment of the superior court is set aside in its entirety. In substitution thereof, we award to the respondent six (6) months' salary in lieu of notice in the sum of Kshs.527,794.20 together with the respondent's own contributions to the pension fund in the sum of Kshs.1,387,658.80 with effect from the date of this judgment.
In the circumstances, the order that commends itself to us is that the parties shall bear their respective costs of this appeal and in the court below.
Issues in the judgment
#Appellant's written submissions dated 3rd March 2000 predate the High Court judgment of 2008, an evident typographical error in the judgment.
Signature block misprints 'JUDE OF APPEAL' for R.S.C. Omolo.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (5)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Elizabeth Alila Ochaye v County Government of Migori & another[2026] KECA 1934 (KLR)25 Sept 2026
- Ethics and Anti-Corruption Commission & 2 others v Mwithia & another[2024] KECA 1956 (KLR)20 Dec 2024applied
- Republic v National Land Commission & 2 others; Gitau & 6 others (Interested Parties); Kipchoge Keino Trustees National Olympic Committee-Kenya & 2 others (Exparte)[2023] KEELC 18374 (KLR)22 Jun 2023applied
- Kenya School of Law v Akomo & 41 others[2022] KECA 1132 (KLR)21 Oct 2022applied
- Judicial Service Commission v Njuguna & another[2019] KECA 1040 (KLR)25 Jan 2019applied
Cite this brief
#Cite this brief
Caselaw, "Kenya Revenue Authority v Menginya Salim Murgani", Case Analysis (2010). Civil Appeal 108 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2010/508/eng@2010-07-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.