Uasin Gishu Memorial Hospital Limited v Moi Teaching and Referral Hospital Board & 2 others (Civil Appeal 184 of 2012) [2017] KECA 96 (KLR)
The bottom line
#Kenya's Court of Appeal ruled the government unconstitutionally took a private hospital's property and must compensate the owners, though the hospital stays with the State.
What this practically means
#Executive summary
#Key legal issues
#Competence of the Originating Summons under the retired Constitution and the Chunga/Gicheru Rules
The Originating Summons was competent; the infringements alleged under sections 70(a) and (c) and 75 were adequately defined and the essential elements of a valid constitutional petition were present.
The suit was filed under the retired Constitution while the Chunga Rules were in force; rule 32 of the Gicheru Rules continued pending matters under the new rules. Applying Anarita Karimi Njeru as restated in Mumo Matemu, the appellant pleaded the specific provisions infringed and the manner of infringement with sufficient precision. Exactitude is not demanded of constitutional pleadings; precision suffices. The summons also sought specific declaratory and conservatory reliefs.
Whether the appellant was a public or private entity / State Corporation
The appellant was a private company limited by guarantee, not a State Corporation, and its inclusion in the Legal Notice did not convert it into one.
Section 2 of the State Corporations Act excludes companies incorporated under the Companies Act unless wholly owned or controlled by the Government or declared State corporations under section 3. The appellant's memorandum and articles showed private citizen directors and members with no Government shareholding or control, and nothing showed the President established it as a State corporation under section 3. Following Salomon v Salomon, it was a separate legal entity capable of owning its own assets.
Ownership of the hospital and suit properties
The suit properties belonged to the appellant; from 1961 the titles were always registered in the appellant's name and were never in the Government's name.
Re-evaluating the conveyancing chronology, original Title I.R. 2958 passed to the Municipal Board of Eldoret and District Council of Uasin Gishu as tenants in common for Kshs. 10/=, then on 31st October 1961 to the appellant for Kshs. 10/=. The endorsement on I.R. 2958 referenced the new Registered Land Act parcels back to the original title, undermining the allegation of fraudulent variance. The 1st respondent's fraud allegations belonged to HCCC No. 78 of 2005, which was not before the trial court.
Whether the Legal Notice violated the appellant's constitutional rights
The inclusion of the appellant's rights, duties, obligations and assets in the Legal Notice amounted to compulsory acquisition contrary to sections 70 and 75(1) of the retired Constitution and the Land Acquisition Act, and was unconstitutional, illegal, null and void.
Section 75(1) permits compulsory acquisition only where necessary for a public purpose, reasonably justified, and with provision for prompt payment of full compensation. The Legal Notice ordered automatic transfer of all the appellant's assets to the 1st respondent as Government successor without any compensation before or after dispossession, and the take-over, effected on the Attorney General's direction, disregarded the Land Acquisition Act. Following Speaker of National Assembly v De Lille, no official or presidential act inconsistent with the Constitution is valid.
Reliefs available for the established violation
A declaration of unconstitutionality issued, and compensation under section 75 was ordered in lieu of ejectment, because granting the mandatory conservatory orders after years of dispossession would be unconscionable given the public services rendered by the hospital.
Section 84 empowers the court to make such orders as appropriate to enforce rights. Declaratory relief was appropriate to mark the ultra vires action, per Wade and Forsyth. However, equity suffers no wrong: the appellant had been dispossessed since March 2005 and the hospital renders public services, so compensation rather than restitution was the fitting remedy.
Legal principles established
#- A company registered under the Companies Act, not wholly owned or controlled by the Government and not established under section 3 of the State Corporations Act, is not a State Corporation, and no presidential Legal Notice can convert it into one or vest its private assets in a State corporation without due process and compensation.
- A presidential order or Legal Notice purporting to deprive a private person of property without compliance with the constitutional conditions of compulsory acquisition - necessity, reasonable justification and prompt full compensation - is unconstitutional, illegal, null and void.
- A constitutional petition under the retired Constitution must plead with reasonable precision the provisions infringed and the manner of infringement, but exactitude is not required; precision suffices.
- Where a court has found a complainant to be the registered owner of property and that a constitutional challenge to its deprivation is properly pleaded, it is under a constitutional mandate to determine whether a violation occurred and may not decline jurisdiction on the basis of pending related suits not before it.
- On a first appeal, the Court of Appeal re-analyzes and re-evaluates the evidence and reaches its own conclusions, interfering with findings of fact only where they are based on no evidence, misapprehension of the evidence, or wrong principles.
Court orders
#- 1.Declaration that to the extent the appellant was included in Legal Notice Number 78 of 1998 vesting its rights, duties, obligations, assets and liabilities, including Eldoret Municipality/Block 7/125 and 7/126, in the Moi Teaching and Referral Hospital Board, that inclusion violates the appellant's fundamental rights to ownership of property and is unconstitutional, illegal, null and void and of no effect
- 2.Order under section 75 of the retired Constitution that the respondents compensate the appellant for deprivation of Eldoret Municipality/Block 7/125 and 7/126, the hospital and related facilities
- 3.Respondents to bear the costs in the High Court and in this Court
- On appeal from
- High Court of Kenya
- Originating Summons filed 10th January 2006 (Eldoret HCCC No. 123 of 1998 related)
- Jurisdiction invoked
- First appeal from the High Court exercising supervisory jurisdiction and enforcement of fundamental rights and freedoms under sections 70 to 83 and 84 of the retired Constitution; appeal to the Court of Appeal under the Court of Appeal Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Uasin Gishu Memorial Hospital Limited v Moi Teaching and Referral Hospital Board & 2 others (Civil Appeal 184 of 2012) [2017] KECA 96 (KLR)", Case Analysis (2017). Civil Appeal No 184 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/96/eng@2017-10-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.