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Court of AppealPartially AllowedCivil Appeal (Mombasa) arising from Mombasa JR Case No 15 of 2020· [2023] KECA 1330 (KLR)

Patrick Kabundu & 1 other v County Government of Mombasa

Court of Appeal of Kenya
10 November 2023
SKS. Gatembu KairuPNP. NyamweyaGOG. V. Odunga
6,086 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~24 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal upheld Mombasa's county levies, ruling that business permit and liquor licence fees are different charges, not double taxation.

What this practically means

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Executive summary

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This first appeal arose from a High Court judicial review judgment (D Chepkwony J, 2 September 2020) concerning the Mombasa County Finance Act 2019. The High Court had quashed the Act for non-compliance with Article 199(1) of the Constitution on public participation, while preserving other Acts in force until 31 December 2020, denying prohibition orders, and ordering each party to bear its own costs. The appellants challenged the findings on public participation and double taxation, and sought orders compelling the establishment of a Department of Public Participation and quashing the Mombasa County Finance Act 2021. The Court of Appeal held that the establishment of a public participation department and the 2021 Finance Act were not in issue in the trial court and could not be raised on appeal. It upheld the finding that public participation was adequate, holding that who conducted the participation was a matter of the county's internal workings. On double taxation, the court found the trial judge had conflated public participation with double taxation and erred in refusing any merit analysis, since section 7 of the Fair Administrative Action Act permits some measure of merit review in appropriate cases. Nevertheless, on the merits the court held that the single business permit fees under the Finance Act 2019 and the liquor licensing fees under the Mombasa County Liquor Licensing Act 2014 serve diametrically opposed purposes, are discretionary as to licensing, and do not amount to double taxation or discrimination. The appeal partially succeeded: only the High Court's order keeping other Acts in force until 31 December 2020 was set aside; all other orders were upheld, and each party was ordered to bear its own costs of the appeal.

Key legal issues

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01

Whether public participation in the enactment of the Mombasa County Finance Act 2019 met the legal requirements

Holding

The trial judge's finding that public participation was adequate is upheld; who conducted the participation is a matter of the county's internal workings, the relevant question being whether legal requirements were met

Reasoning

The trial judge considered the constitutional and statutory requirements of public participation and the evidence of notices, public forums, stakeholder meetings, media reports and written presentations. The court found the judge took into account relevant factors and her decision was supported by evidence, so there was no basis to interfere.

p. 9
02

The scope of merit review in judicial review after the Fair Administrative Action Act

Holding

The trial court erred in refusing to examine the double taxation claim on the ground that judicial review is confined to process; some measure of merit analysis is permissible under section 7 of the Fair Administrative Action Act, though judicial review is not transformed into a full merits inquiry

Reasoning

Relying on Judicial Service Commission v Njora and the Supreme Court's decision in Saisi v DPP, the court held that a court may adopt some measure of merit review limited to uncontroverted evidence, and the trial court ought to have addressed the legality and reasonableness of the concurrent levies under section 7 of the FAAA.

p. 12
03

Whether charging single business permit fees under the Finance Act 2019 and liquor licensing fees under the Liquor Licensing Act 2014 amounts to double taxation or discrimination

Holding

No: the two statutes have different purposes, the licensing under the Liquor Licensing Act is discretionary while the Finance Act charges are mandatory, and the additional fees are reasonable and justified

Reasoning

The Finance Act raises revenue from a wide range of business activities, while the Liquor Licensing Act regulates and controls the production, distribution, sale and consumption of alcohol for consumer protection, including protection of minors. The objectives are diametrically opposed, licensing is not mandatory, and the additional fees are reasonable in the circumstances.

p. 13

Legal principles established

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  • An issue or relief not raised or sought in the trial court cannot be raised for the first time on appeal
  • Charges under a county Finance Act and liquor licensing fees under a separate liquor licensing statute with different objects do not constitute double taxation or discrimination
  • On a first appeal, the Court of Appeal reconsiders the evidence and draws its own conclusions, departing from trial findings only where they were not based on the evidence, were based on wrong principles, or the discretion was exercised injudiciously

Court orders

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  1. 1.The order of the High Court that 'The various Acts that were operational as listed in the application for Leave to remain in force until the end of the Financial Act will be enacted (sic). And so as to avoid any doubt as to the time, till 31 December 2020' is set aside
  2. 2.All the other orders in the High Court judgment are upheld
  3. 3.Each party shall bear its own costs of the appeal
On appeal from
High Court of Kenya at Mombasa
Mombasa JR Case No 15 of 2020
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Patrick Kabundu & 1 other v County Government of Mombasa", Case Analysis (2023). Civil Appeal (Mombasa) arising from Mombasa JR Case No 15 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1330/eng@2023-11-10

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