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ELCPartially AllowedConstitutional Petition (Further Amended Petition dated 21st October 2022), Murang'a· [2024] KEELC 248 (KLR)

Kakuzi PLC v County Government of Muranga (Petition 3 of 2022) [2024] KEELC 248 (KLR)

Environment and Land Court
30 January 2024
LGL. Gacheru
10,822 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~43 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court ruled Murang'a County cannot withhold paid-for trade licences to force payment of disputed land rates.

What this practically means

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Executive summary

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The Petitioner, a limited liability company engaged in large-scale avocado, macadamia and other farming in Murang'a County, petitioned against the County Government of Murang'a over two grievances: the withholding of its duly paid-for trade licences until disputed land rates were paid, and an alleged unprocedural variation of land rates from KES 627,700 per year to KES 8,788,600 (later revised) pursuant to the 6th Schedule of the Murang'a County Finance Act 2018. The Petitioner deposited disputed amounts in a joint interest-earning account held by the parties' advocates. The court framed three issues: whether the rate was varied without due process; whether withholding the trade licences was lawful; and whether the Petitioner was entitled to the reliefs sought. On the first issue, the court found the charge per acre (Ksh 200) had not changed; the increase arose from use of the correct acreage, which the Petitioner did not controvert, and the Petitioner failed to discharge its burden of proving a variation. On the second issue, the court held that pegging the release of trade licences to payment of land rates is an illegality, since Section 17 of the Rating Act prescribes civil suit as the enforcement mechanism for rates arrears, and the withholding breached Articles 40(1), 47(1) and 209(5) of the Constitution. The court granted declarations and a permanent injunction against withholding licences (reliefs 1, 2, 4 and 7), refused the declaration on rate variation, the injunction against levying rates and the refund order (reliefs 3, 5, 6), and awarded the Petitioner costs.

Key legal issues

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01

Whether the land rate per acre under the Murang'a County Finance Act 2018 was varied without due process

Holding

No variation of the rate per acre was established; the exponential increase in the amount demanded was explained by use of the correct acreage, which the Petitioner did not controvert.

Reasoning

The 6th Schedule of the 2018 Finance Act fixed the charge at Ksh 200 per acre, the same as the previous charges. The court held that since the Petitioner alleged a variation, it bore the burden under Section 107 of the Evidence Act to produce the previous Finance Act (2013) to prove a variance in the per-acre charge. The Petitioner did not do so and did not dispute the acreage relied on by the Respondent, so the claim of unlawful variation failed.

p. 14
02

Whether withholding duly paid-for trade licences to enforce payment of disputed land rates is lawful

Holding

It is unlawful and an illegality; Section 17 of the Rating Act provides the enforcement mechanism for rates arrears (a civil suit), and detention of trade licences is not one of the permitted mechanisms.

Reasoning

Section 14(3) of the Murang'a County Finance Act 2018 obliges issuance of a licence upon payment of the specified fee, and the Petitioner had duly paid. Section 17 of the Rating Act prescribes the sole mechanism for enforcing rates arrears. Withholding licences is an administrative action that was not lawful, reasonable or procedurally fair, breaching Article 47(1) and the Petitioner's right to freely engage in economic activities, and prejudicing its economic activities contrary to Article 209(5).

p. 17
03

Whether the Petitioner met the Anarita Karimi Njeru threshold and was entitled to the reliefs sought

Holding

The Petition met the threshold, and relief Nos. 1, 2, 4 and 7 were granted while Nos. 3, 5 and 6 were refused.

Reasoning

The Petitioner pleaded with reasonable precision the provisions violated and the manner of violation. Declaratory relief and a permanent injunction were warranted on the licence-withholding claim since the withholding affected economic and property rights and would cause irreparable loss to the Petitioner, its 2,000 outgrower farmers and its workforce. However, relief premised on variation of the rate failed for want of proof, and a refund was premature pending verification of acreage.

p. 19

Legal principles established

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  • A county government has no legal power to withhold duly paid-for trade licences as a mechanism of enforcing payment of disputed land rates; enforcement of rates arrears lies under Section 17 of the Rating Act by suit in court.
  • A party alleging variation of a rate must discharge the burden of proof under Section 107 of the Evidence Act by producing evidence of the previous rate.
  • Public bodies may only do what the law empowers them to do (doctrine of legality).

Court orders

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  1. 1.Declaration that the Respondent's action of withholding the Petitioner's duly paid-for trade licences is in contravention of Article 47(1) of the Constitution and the Fair Administrative Action Act (Relief No. 1)
  2. 2.Declaration that the Respondent cannot withhold the issuance of duly paid for trade licenses on the basis of unrelated levies (Relief No. 2)
  3. 3.Permanent injunction restraining the Respondent from withholding duly paid for trade licenses on the basis of other disputed and unrelated levies (Relief No. 4)
  4. 4.General/other reliefs deemed just: liberty for the Petitioner to supply correct acreages to the Respondent, who is then obligated to calculate land rates per the Murang'a County Finance Act 2018 (Relief No. 7)
  5. 5.Costs of the Further Amended Petition dated 21st October 2022 awarded to the Petitioner

Authorities

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Legislation

  • Constitution of Kenya, 2010Articles 22, 23, 40(1), 40(3)(a) & (b), 47(1), 176, 190(2), 191(2), 209(2), 209(3), 209(5), 210(1); Sixth Schedule para 7
  • Fair Administrative Action ActSections 4(1), 4(2), 4(3)(a), (b) and (4)
  • Murang'a County Finance Act 2018Sections 4(1), 4(3), 4(4), 14(3), 14(4); 6th Schedule Item 9; Tenth Schedule
  • Rating Act (Cap 267)Sections 2, 4(1), 5, 6, 7, 17
  • Valuation for Rating Act (Cap 266)Sections 2, 3, 10; Part II
  • Companies Act (Chapter 486, now repealed)Incorporation of Petitioner
  • Evidence Act (Cap 80)Sections 107(1), (2), 109
  • Civil Procedure ActSection 27
  • County Government Act No. 17 of 2012Sections 132, 134(1)
  • Local Government Act (Cap 265)Section 3(d) read with Rating Act
  • Banking ActSection 44 (referred to in quoted authority)

Cases cited (13)

  • Eastern Produce Kenya Ltd, Siret Tea Company and Others vs County Government of Nandi
    [2021] eKLR, ELC Petition 5 of 2020
  • County Government of Kwale vs Kenya Airports Authority
    [2017] eKLR
  • Mombasa Law Society and others vs County Government of Mombasa
    ELC Petition 12 of 2020
  • Republic vs Betting Control and Licensing Board and Another Ex Parte Outdoor Advertising Association of Kenya
    [2019] eKLR
  • Anarita Karimi Njeru v Republic
    [1979] eKLR / (1976-80) 1 KLR 1272
  • Godfrey Paul Okutoyi vs Habil Olaka (Executive Director, Kenya Bankers Association) & another
    [2018] eKLR
  • Christian Juma Wabwire vs Attorney General
    [2019] eKLR
  • Lt. Col Peter Ngari Kagume and 7 others vs AG
    Constitutional Application No. 128 of 2006
  • John Mining Temoi & another v Governor of Bungoma County & 17 others
    [2014] eKLR
  • Trusted Society of Human Rights Alliance v Attorney General & Others
    High Court Petition No. 229 of 2012
  • Republic vs Municipal Council of Nyeri, Exparte Ring Road Residents Association
    (2016) eKLR
  • Kenya Power & Lighting Co. Limited v Sherifi Molana Habib
    [2018] eKLR
  • AAA Investments (Pty) Ltd vs Micro Finance Regulatory Council and another
Jurisdiction invoked
Articles 22 and 23 of the Constitution of Kenya, 2010 (enforcement of Bill of Rights against a county government); land rates dispute within ELC jurisdiction

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kakuzi PLC v County Government of Muranga (Petition 3 of 2022) [2024] KEELC 248 (KLR)", Case Analysis (2024). Constitutional Petition (Further Amended Petition dated 21st October 2022), Murang'a. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/248/eng@2024-01-30

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