Attorney General & another v African Commuter Services Ltd [2014] KECA 790 (KLR)

Section 5B of the Civil Aviation Act requires delegation in writing; the Director General admitted he delegated orally. Regulation 57(1) permits provisional suspension only pending further investigations and only in the public interest. No investigation preceded the decision, the cause of the accident was unknown, and the permanent effect of grounding the entire fleet was admitted and foreseen. The discretion was thus exercised capriciously, unreasonably and in bad faith, and the suspension became indefinite in breach of Regulation 57(2) and Regulation 79 (audi alteram partem).

Drawing on Strouds and Black's Law Dictionary, the court defined public interest as the commonweal - matters such as public order, health, security, morals, safety and economic welfare. The respondent's aircraft had no history of accidents, the cause of the crash was unestablished at the time of suspension, and no evidence showed continued operations threatened the public. The party relying on public interest to justify the decision bore the onus of proving it.

The House of Lords authorities relied on by the appellants (O'Reilly v Mackman and others) presuppose that judicial review affords all remedies, which is not so in Kenya where judicial review remedies are limited and exclude damages. A public body that fails to exercise statutory discretion reasonably, or whose officers act negligently, may be liable in damages where harm is foreseeable. The trial judge therefore did not err in allowing the claim by plaint.

The plaint sued the Attorney General for and on behalf of the Minister for Transport, who acted lawfully in appointing the Commission of Inquiry under Regulations 6 and 9. The trial judge departed from the pleadings and found the Attorney General culpable for failing in his advisory constitutional role without that issue having been pleaded, denying him an opportunity to defend. A mandatory injunction cannot issue against the Government under Section 16 of the Government Proceedings Act as the law then stood.

The Director General admitted a suspended licence is put in abeyance. Had the 2nd appellant wished to end the licence, it had to revoke under Regulation 57(2) after investigations or reinstate and decline renewal. Instead the suspension remained sine die, permanently paralysing the respondent. The respondent sought reinstatement within days, sold aircraft to avert greater loss, and its principal client terminated the lease; it did all it reasonably could to mitigate.

The claim was for capital and revenue loss, not lost profits, so the audited accounts showing modest profits did not defeat it. Exhibit 43, compiled by PW3 from audited extracts and uncontested by contrary expert evidence, was a reliable basis. Loss of goodwill failed because some business loss would have flowed from the accident itself regardless of the legality of the suspension, and the respondent never resumed operations to permit ascertainment.

PW2, a career pilot of 30 years, testified that no other operator's AOC had ever been suspended or cancelled after accidents involving Kenya Airways, Blue Bird, East Aviation Safari Airways and Aircraft Leasing Services. The court accepted that the drastic action against the respondent was attributable to the status of the passengers aboard the ill-fated flight, reinforcing the finding of bad faith.