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Court of AppealPartially AllowedCivil Appeal 54 of 2005· [2013] KECA 545 (KLR)

Kenya Airways Limited v Satwant Singh Flora

Court of Appeal
19 July 2013
David Kenani MaragaD. K. MaragaKMK. M'InotiJMJ. Mohammed
5,025 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 working without a valid work permit makes an employment contract illegal and unenforceable, even if the employer allowed it.

What this practically means

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Executive summary

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The Court of Appeal (Maraga, M'Inoti and Mohammed, JJA) allowed Kenya Airways' appeal against a High Court decision by Nyamu, J which had awarded Satwant Singh Flora KShs.76,698/= being three months' salary in lieu of notice. Flora, a foreign Avionics Engineer employed on expatriate terms since 1977, worked under two-year contracts each dependent on a valid work permit. His last contract, expressly subject to permit renewal, was terminated by notice in October 1996 to end on 14th January 1997, but duty rosters showed he continued working until 30th June 1997 without a valid permit. The High Court found an implied new contract of employment for that period. The Court of Appeal held that continued employment without a valid work permit was an offence under the then Immigration Act (Cap 172), sections 4(2) and 13(2)(c), tainting the contracts with illegality. Applying the ex turpi causa principle from Mistry Amar Singh v Serwano Kulubya and Heptulla v Noormohamed, the court held that no rights accrue from an illegal contract and the trial judge had no legal basis to enforce it. It further held that failure to obtain a work permit was an intervening event which vitiated the contract. However, the court criticised the appellant for allowing the respondent to work knowing he had no permit, and therefore made no order as to costs, each party bearing its own costs.

Key legal issues

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01

Whether a valid contract of employment existed after 14th January 1997 and whether one could be implied

Holding

Although a contract of employment may be implied from conduct such as continued work and payment, any contract implied after the permit expired was illegal and unenforceable.

Reasoning

The court accepted that employment contracts can be implied from conduct, citing Halsbury's Laws of England. However, the respondent continued working without a valid work permit, an offence under sections 4(2) and 13(2)(c) of the Immigration Act. The implied contract was therefore tainted with illegality, and no rights could accrue from it.

p. 9
02

Whether the contract was frustrated by an intervening event

Holding

Failure to obtain a work permit, a condition of the contract, was an intervening event which vitiated the contract.

Reasoning

The contract expressly provided that employment was subject to renewal of the work permit. Applying the doctrine of frustration as formulated in Davis Contractors Ltd v Fareham UDC, the court held that once the permit expired, further work was illegal, and the failure to obtain a permit was an intervening event vitiating the contract between the parties.

p. 2
03

Whether the High Court could enforce the contract despite the illegality

Holding

The trial judge had no legal basis to enforce the illegal contract; the court cannot lend its aid to a party implicated in illegality.

Reasoning

Relying on the ex turpi causa maxim as quoted in Mistry Amar Singh v Serwano Wofunira Kulubya and Heptulla v Noormohamed, the court held that once illegality is evident from the plaintiff's own evidence, the court ought not to assist him, regardless of whether the defendant pleaded the illegality.

p. 9

Legal principles established

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  • No rights can accrue from an illegal contract, and no court may enforce an illegal contract where the illegality is brought to its notice and the person invoking the court's aid is implicated in the illegality, whether or not the defendant pleaded it.
  • A foreigner who engages in employment in Kenya without a valid work permit commits an offence under the Immigration Act, rendering the employment contract tainted with illegality and unenforceable.
  • Failure to obtain a work permit, where the contract is expressly subject to permit renewal, is an intervening event which vitiates the contract.
  • A contract of employment need not be in any particular form and may be implied from conduct showing an intention to contract, such as actual service of the kind usually performed by employees.

Court orders

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  1. 1.Appeal allowed
  2. 2.No order as to costs

Authorities

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Legislation

  • Immigration Act (Cap 172) (Repealed)section 4(2)
  • Immigration Act (Cap 172) (Repealed)section 13(2)(c)
  • Employment Act, 2007 (Act No. 11 of 2007)sections 41, 43, 45, 46, 49

Cases cited (9)

  • Heptulla v Noormohamed
    [1984] KLR 580

    No court ought to enforce an illegal contract where the illegality is brought to its notice and the person invoking the court's aid is implicated in the illegality.

  • Mistry Amar Singh v Serwano Wofunira Kulubya
    [1963] EA 408

    Quoted Scott v Brown with approval on the ex turpi causa maxim and refusal to enforce illegal contracts.

  • Davis Contractors Ltd v Fareham Urban District Council
    [1956] AC 696; [1956] 2 All ER 145; [1956] UKHL 3

    Lord Radcliffe's modern formulation of the doctrine of frustration - radical difference in contractual obligation.

  • Holman v Johnson
    (1775) 1 Cowp 341

    Cited by the appellant on illegality of contracts; no court lends its aid to enforce an illegal transaction.

  • Scott v Brown, Doering, McNab & Co
    [1892] 2 QB 724

    Lindley LJ's statement of the ex turpi causa maxim, quoted with approval by the Privy Council.

  • St John Shipping Corporation v Joseph Rank Ltd
    [1957] 1 QB 267

    Devlin J on contracts expressly or implicitly prohibited by statute being unenforceable regardless of intent.

  • Satyabrata Ghose v Mugneeram Bangur & Co
    1954 AIR 44; [1954] SCR 310

    Cited by the appellant on the doctrine of frustration of contract.

  • Mapis Investment [K] Ltd v Kenya Railways Corporation
    [2006] eKLR

    Referenced alongside the ex turpi causa principle on refusal to enforce illegal contracts.

  • Hall v Wootton Hall Leisure Ltd
    EATRF/1998/0297

    Illegality operates as a defence where there is illegal performance by one party and knowledge and participation by the other.

On appeal from
High Court of Kenya at Nairobi
HCCS No. 232 of 1999
Jurisdiction invoked
First appeal to the Court of Appeal against the judgment and decree of the High Court in civil proceedings

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Kenya Airways Limited v Satwant Singh Flora", Case Analysis (2013). Civil Appeal 54 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/545/eng@2013-07-19

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