Business law Notes 22.pdf

TOPIC 1 ELEMENTS OF THE LEGAL SYSTEM NATURE PURPOSE AND CLASSIFICATION OF LAW MEANING OF LAW Law, simply put, refers to the set of rules which guide our conduct in the society and...

TOPIC 1 ELEMENTS OF THE LEGAL SYSTEM NATURE PURPOSE AND CLASSIFICATION OF LAW MEANING OF LAW Law, simply put, refers to the set of rules which guide our conduct in the society and is enforceable by the state via public agencies. Law in its general sense tends to be as a result of the necessary relations arising from the nature of things. In this sense all things have their laws. Humans, material world, superior beings and even animals all have their own laws. Simply put, the nature of these relationships tends to determine the nature of the laws.But the intelligent world is far from being so well governed as the physical. This is because intelligent beings are of a finite nature, and consequently liable to error; and on the other, their nature requires them to be free agents. Hence they do not steadily conform to their primitive laws. Law in general is human reason, inasmuch as it governs all the inhabitants of the earth: the political and civil laws of each nation ought to be only the particular cases in which humanreason is applied. According to the oxford dictionaries law can be defined as; The system of rules which a particular country or community recognizes as regulating the actions of its members and which it may enforce by the imposition of penalties NATURE OF LAW The different schools of thought that have arisen are all endeavors of jurisprudence: Natural law school Positivism, realism among others. It is these schools of thoughts that have steered debates in parliaments, courts of law and others. 1 Natural law theory asserts that there are laws that are immanent in nature, to which enacted laws should correspond as closely as possible. This view is frequently summarized by the maxim: an unjust law is not a true law, in which 'unjust' is defined as contrary to natural law. Legal positivism is the view that the law is defined by the social rules or practices that identify certain norms as laws Legal realism- it holds that the law should be understood as being determined by the actual practices of courts, law offices, and police stations, rather than as the rules and doctrines set forth in statutes or learned treatises. It had some affinities with the sociology of law. Legal interpretivism- is the view that law is not entirely based on social facts, but includes the morally best justification for the institutional facts and practices that we intuitively regard as legal. Generally speaking law has the following characteristics 1. It is a set of rules. 2. It regulates the human conduct 3. It is created and maintained by the state. 4. It has certain amount of stability, fixity and uniformity. 5. It is backed by coercive authority. 6. Its violation leads to punishment. 7. It is the expression of the will of the people and is generally written down to give it 2 definiteness. 8. It is related to the concept of 'sovereignty' which is the most important element of state. PURPOSES OF LAW 1. It promotes peaceful coexistence/ maintenance of law and order/ prevents anarchy 2. It is a standard setting and control mechanism. Law sets standards of behaviour and conduct in various areas such as manufacturing, construction, trade e.g. The law also acts as a control mechanism of the same behavior 3. It protects rights and enforces duties by providing remedies whenever these rights or duties are not honoured. 4. Facilitating and effectuating private choice. It enables persons to make choices and gives them legal effect. This is best exemplified by the law of contracts, marriage and succession. 5. It resolves social conflicts. Since conflicts are inevitable, the rule of law facilitates their resolution by recognizing the conflicts and providing the necessary resolution mechanism. 6. It controls and structures public power. Rules of law govern various organs of 7. Government and confer upon them the powers exercisable by them. The law creates a limited Government. This promotes good governance, accountability and transparency. It facilitates justice in the society. 3 CLASSIFICATION OF LAW Law may be classified as: 1. Written and Unwritten. 2. Municipal (National) and International. 3. Public and Private. 4. Substantive and Procedural. 5. Criminal and Civil. Written law This is codified law. These are rules that have been reduced to writing i.e. are contained in a formal document e.g. the Constitution of Kenya, Acts of Parliament, Delegated Legislation,International treaties etc. Unwritten law These are rules of law that are not contained in any formal document. The existence of such rules must be proved. E.g. African Customary law, Islamic law, Common law, Equity, Case law e.t.c Written law prevails over unwritten law. Municipal/ national law This refers to rules of law that are applicable within a particular country or state. This is state law. It regulates the relations between citizens inter se (amongst themselves) as well as between the citizens and the state. It originates from parliament, customary and religious practices. International law 4 This is a body of rules that generally regulates the relations between countries or states and other international persons e.g. United Nations. It originates from international treaties or conventions, general principles and customary practices of states. Public law It consists of those fields or branches of law in which the state has a direct interest as the sovereign. It is concerned with the Constitution and functions of the various organizations of government including local authorities, their relations with each other and the citizenry. Public law includes: Criminal Law Constitutional Law Administrative Law Public Law asserts state sovereignty. Private law It consists of those branches of law in which the state has no direct interests as the state sovereign. It is concerned with the legal relationships between persons in ordinary transaction e.g. Law of contract Law of property Law of succession 5 Law of marriage Law of torts Substantive law It consists of the rules themselves as opposed to the procedure on how to apply them. It defines the rights and duties of the parties and prescribes the remedies applicable. Substantive law defines offences and prescribes the punishment, for example: The Law of torts The Law of succession The Law of contract The Law of marriage The Penal Code Procedural law This is adjectival law. It consists of the steps or guiding principles or rules of practice to be complied with in the administration of justice or in the application of substantive law. For example: The Civil Procedure Code The Criminal Procedure Code This is the law of crimes. A crime is an act or mission committed or omitted in violation of public law e.g. murder, treason, theft, e.t.c. All crimes are created by parliament through statutes A person who is alleged to have committed a crime is referred to as a suspect. 6 As a general rule, suspects are arrested by the state through the police at the instigation of the complainant. After the arrest, the suspect is charged in an independent and impartial court of law whereupon he becomes the accused. Criminal cases are generally prosecuted by the state through the office of the Attorney General (AG) hence they are framed as R (the State) Vs Accused E.g. R v Kamenchu under the Constitution, an accused person is presumed innocent until proven or pleads guilty. If the accused pleads not guilty, it is the duty of the prosecution to prove its case against him by adducing evidence i.e. the burden of proof in criminal cases is borne by the prosecution. The standard of proof is beyond any reasonable doubt i.e. the court must be convinced that the accused committed the offence as charged. In the event of reasonable doubt, the accused is acquitted. If the prosecution proves its case i.e. discharges the burden of proof, then the accused is convicted and sentenced. The sentence may take the form of:- 1. Imprisonment 2. Fine 3. Probation 4. Corporal punishment 5. Capital punishment 6. Community service 7. Conditional or unconditional discharge 7 Under the Constitution, a person cannot be held guilty of an act or omission which was not a criminal offence on the date of omission or commission. Civil law It is concerned with the rights and duties of persons i.e. individuals and corporations. Branches of civil law include:- Law of contract Law of torts Law of property Law of marriage Law of succession When a person’s civil or private rights are violated, he is said to have a cause of action. Examples of causes of action: Breach of contract Defamation Assault Negligence Trespass to goods e.t.c Causes of action are created by parliament through statutes as well as the common law and equity. The violation of a person’s civil rights precipitates a civil case or action. The person whose rights are allegedly violated sues the alleged wrongdoer hence civil cases are framed as 8 Plaintiff v Defendant. It is the duty of the plaintiff to prove his allegations against the defendant. This means that the burden of proof is borne by the plaintiff. The standard of proof in civil cases is on a balance of probabilities or on a preponderance of probabilities i.e. the court must be satisfied that it is more probable than improbable than the plaintiff’s allegations are true. If the plaintiff proves his allegations by evidence, he wins the case and is awarded judgment which may take the form of:- 1. Damages (monetary compensation) 2. Injunction 3. Specific performance 4. Account 5. Tracing 6. Winding up a company 7. Appointment of receiver Differences between civil wrong and crime CIVIL WRONG CRIME Definition offence against another individual Offence against the state Purpose to deal with the disputes between individuals, organizations, or between the two, in which compensation is awarded to the victim. To maintain the stability of the state and society by punishing offenders and deterring them and others from offending. Standard of proof Claimant must produce evidence beyond the balance of probabilities. 9 Beyond reasonable doubt Parties involved The plaintiff, the party that is suing The defendant , the one being sued Prosecution which represent the state and the accused Burden of proof Claimant must give proof however, the burden may shift to the defendant in situations of Res Ipsa Loquitur (The fact speaks for itself). "Innocent until proven guilty": The prosecution must prove defendant guilty. Type of punishment Compensation (usually financial) for injuries or damages, or an injunction in nuisance. A guilty defendant is subject to Custodial (imprisonment) or Noncustodial punishment (fines or community service). In exceptional cases, the death Penalty. The rule of law The concept of the Rule of Law is a framework developed by Dicey on the basis of the English Legal system. It is also described as the due process. According to Dicey, rule of law comprises three distinct conceptions namely: 1. Absolute supremacy or predominance of regular law: this means that all acts of The State are governed by law. It means that a person can only be punished for disobedience of the law and nothing else. 2. Equality before the law: this means equal subjection of all persons before the law. It means that no person is exempted from obeying the law. All classes of persons are subjected to the same judicial process regardless of their age, sex, creed, gender or race. 3. The law (Constitution) is a consequence and not the source of rights: means that the law is a manifestation of the will of the people. 10 Factors undermining rule of law Excessive power of the Executive Non - independent Judiciary Corruption Selective prosecution Civil unrest Ignorance of the law PROFESSIONAL ETHICS AND THE LAW Principles that have to be followed by a professional accountant include: a) Integrity It refers to the character of the accountant. The accountant should be one who is of unquestionable morals, honest, trustworthy and forthright. b) Professional Independence This refers to the ability of the accountant to do his work without following any instructions from the client or any other person for any reason. The independence ensures that the accountant will be truthful and will carry out his duties in accordance with the dictates of the profession as opposed to personal whims. c) Confidentiality This is the duty of secrecy. It is the duty not to divulge to third parties any information that has been received by the accountant in his capacity as such or to use such information in any way for any other purpose without the consent of the client or express authority of the law. 11 d) Professional Competence Means that for a person to render professional services as an accountant he must have attained the professional ability to do so i.e. he must inter alia have the necessary qualifications after having gone through a prescribed course of study. A person who has fulfilled the requirements of the Accountants Act 5 in relation to qualifications is deemed to be professionally competent. LAW AND MORALITY Morality is the sense of judgment between right and wrong by reference to certain standards developed by society over time. It defines standards of behavior widely accepted by a society and is binding on the conscience of the members of that society. An action that is considered to be opposed to morality will generally be frowned upon by that society. However, morality is not enforceable by courts of law. This is compared to rules of law, which are binding, enforceable and have sanctions in all cases. Wrongs in society are contraventions of law or morality or both. However, the law incorporates a significant proportion of morality. In such instances, where law and morality overlap, morality is enforced as a rule of law. Such morality becomes part of the law. E.g. Killing a person is immoral as well as a crime. So is theft. However, certain wrongs in society contravene morality but not the law e.g. disrespects failure to provide for parents, failure to rescue a drowning person e.t.c. What then is the relation of morality to law? 12 1. The existence of unjust laws (such as those enforcing slavery) proves that morality and law are not identical and do not coincide. 2. The existence of laws that serve to defend basic values such as laws against murder, rape, malicious defamation of character, fraud, bribery, etc. proves that the two can work together. 3. Laws govern conduct at least partly through fear of punishment. When morality, is internalized, when it has become habit-like or second nature, governs conduct without compulsion. The virtuous person does the appropriate thing because it is the fine or noble thing to do, not because not doing it will result in punishment. 4. As such, when enough people think that something is immoral they will work to have a law that will forbid it and punish those that do it. However if there is a law that says doing X is wrong and illegal and enough people no longer agree with that then those people will work to change that law. BUSINESS ETHICS AND CORPORATE SOCIAL RESPONSIBILITY In the recent years, nation have been surprised by a number of major corporate scandals triggering widespread public skepticism, shock among other behaviors towards the executives who run them. Such tend to range from inflating profits, obstruction of justice, manipulating the market, etc. In most business set ups, it would appear, when a behavior has a direct identifiable price, it is much easier to motivate corporate behavior. However; 13 1. Should corporate managers consider moral choices or should their focus be based on profit and loss 2. In a world of ever increasing complexity and interdependency, how does one go about determining what conduct is or is not ethical PROMINENT ETHICAL THEORIES Let us look at four ethical theories in relation to the above questions. The theories are; rights theory, justice theory, utilitarianism, and profit maximization. The rights theory is also referred to as deontological ethical theory since it focused on the actions and process and not just consequences. The other three which focus on the consequences of an action are teleological ethical theories. Rights theory This is based on the view that certain human rights are fundamental and should be observed. This therefore means that its primary focus is on individuals in society. There are two primary category of rights theory 1) Kantianism 2) The modern rights theory Kantianism Immanuel Kant was a strict deontologist. He viewed humans a moral actors free to make choices. According to this philosopher morality of a given action was determined by applying categorical imperative, that is, judge an action by applying it universally. For instance if you are to steal then the question is, are you will to let everyone steal freely? Since this threatens your future security then you may conclude that stealing is wrong. Modern right theories 14 One major problem with Kantianism is that it imposes duties to be absolute. This implies that lying or killing for instance would be perceived to be unethical. Modern theorist believes that there may be circumstances when action like lying and killing could be morally acceptable for instance self-defense. One popular theory believes that you should abide by a moral rule unless a more important rule conflicts with it, that is, our moral compulsion is not to compromise a person’s right unless a greater right takes priority over it. Due to this moral relativism, modern rights theorists have choices to make. They must determine what the fundamental rights are and how they are ranked in importance. Most courts tend to use this approach. Justice theory This is derived from John Rawls’s book A Theory of Justice, which argued for just distribution of society’s resources. This can be referred to as a fair allocation of societys benefits and burdens among all members of society. Rawls argues that self-interested rational persons behind the veil of ignorance would choose two general principles of justice to structure society in the real world: 1. Principle of equal liability- each person has equal right to basic rights and liberties. 2. Difference principle- social inequities are only acceptable if they cannot be eliminated without making the worst-off class even worse off. Under the justice theory, the decision makers’ choices are to be guided by fairness and impartiality, however, the focus in on the outcome of the decision. Consider a company 15 that has two choices in terms of production, that is, produces locally or outsource, based on this theory the company can choose to outsource assuming the workers in the other country are badly off than the local workers. Utilitarianism This derived from the workings of Jeremy Bentham and John Stuart Mill. Under utilitarianism, an ethical decision is one that maximizes utility for society as a whole. Thus, in our individual decision we should always calculate their costs and benefits for every member of society. An action is ethical only if the benefits to society outweigh their costs. This means that at times decision makers have to sacrifice their own interest if doing so gives greater benefit to society. Profit maximization This is a teleological theory that is based on the laissez faire theory of capitalism championed by Adam Smith. It proposes that managers should managers should maximize a business’s long run profits within the limits of law. Unlike utilitarianism, in profit maximization the managers focus solely on those decisions result into more profits for the organization. Critics view this to be entirely untrue since in the quest for more profit other issues such as employees’ welfare could be ignored. SOURCES OF LAW The various sources of law of Kenya are identified by: 1. Judicature Act 2. Constitution 16 3. Hindu Marriage and Divorce Act 4. Hindu Succession Act 5. Kadhis Court Act. Sources identified by the Judicature Act 1. The Constitution 2. Legislation (Act of Parliament) (Statutes) 3. Delegated legislation 4. Statutes of General Application 5. Common law 6. Equity 7. Case law or (judge–made law) 8. Africa Customary law Sources identified by the Constitution and the Kadhis Court Act Islamic law Sources identified by the Hindu Marriage and Divorce Act1 and The Succession Act2 Hindu law Sources of law of Kenya may be classified as: 1) Written and unwritten sources 2) Principal and subsidiary sources THE CONSTITUTION A Constitution is a public document, which regulates the relations between the state and its citizens as well as the relations between the organs of the state. This is a body of the 17 basis rules and principles by which a society has resolved to govern itself or regulate its affairs. It contains the agreed contents at the political system. A Constitution sets out the basic structure of government. The Constitution of Kenya is a source of law from which all other laws derive their validity. Any law which conflicts or is inconsistent with the Constitution is void. Article 2 (4) of the Constitution provides '' any other law is inconsistent with the Constitution, the Constitution shall prevail and the other law shall be to the extent of the inconsistency, he void". Any law which is inconsistent can be passed if only the Constitution is first amended by the votes of not less than 65% of all the members of the National Assembly and supported by Presidential assent. ISSUES ADDRESSED IN THE CONSTITUTION OF KENYA. The Constitution of Kenya 2010 covers the following matters: 1. That the people of Kenya are the sovereign i.e. all powers are derived from the people 2. The supremacy of the Constitution. 3. The republic. That Kenya is an independent state with an organized government. 4. Bill of rights. It contains the fundamental rights and freedoms 5. Citizenship, i.e. how one acquires and losses citizenship. 6. Leadership and integrity under chapter six of the Constitution i.e. how morals play a central role in leadership. 18 7. Representation of the people. 8. Separation of powers i.e. how the three organs of the state operate under different heads. This includes; the Legislature, Executive, and the Judiciary. 9. Devolved governments. There is a central and county government. 10. Matters of public finance. 11. Amendment of the Constitution. Supremacy of the Constitution Supremacy of the Constitution is provided for under Article 2. All other sources of law derive their validity from the Constitution and are therefore required to be consistent with all provisions of the constitution Any source of law if inconsistent with the Constitution is null and void to the extent of its inconsistency. Any act or omission in contravention of the Constitution is invalid. The Constitution is the supreme law of the Republic and binds all persons and all State organs at both levels of government. No person may claim or exercise State authority except as authorized under the Constitution. The validity or legality of the Constitution is not subject to challenge by or before any court or other state organ. The Constitution is also supreme since it outlines the governing structure of a country and defines the various organs of the government. 19  It gives the functions of the various arms of the government and clearly indicates the separation of powers. The Constitution establishes highest office in the land i.e. office of the President and grants the occupant power as head of state and government. The Constitution provides the fundamental rules and freedoms of individuals and guarantees their protection. It provides procedure of its amendment within itself. LEGISLATION / ACTS OF PARLIAMENT Legislation is the process of law making through Parliament or any other body specially constituted for the purpose. Legislation can be direct or indirect. Direct legislation is the law making process by Parliament. Law made by Parliament is known as a statute or an Act of Parliament. Indirect legislation is where an individual makes law through powers derived from the statute or Act, known as an Enabling Act. This Is referred to as delegated legislation e.g. by-laws made by local authority. In Kenya, Parliament is the supreme law making body of the country as stipulated in the Constitution. The law making process begins by Bills being passed by the National Assembly. BILLS A Bill is a draft of a proposed Act of Parliament. When a Bill has been passed by the National Assembly then it is presented to the President for his assent. Once the assent is given, it becomes law and is now called an Act of Parliament or statute. Types of Bills 20 Bills may be classified total a) Public Bills b) Private Bills c) Private Member's Bills Public Bills: Public Bills deal with matters of public policy and their provisions affect the general public. These Bills are introduced by the Minister concerned. Private Bills: Private Bills are those which are intended to affect or benefit some particular person, association or corporate body. Private Member's Bill: Private Member's Bills is introduced by a private member of Parliament. Such a member must move a motion seeking leave of the House to introduce the Bill. The member is responsible of drafting his own bill. The passing of a Bill into law The Bill passes through the following stages to become law i. First reading ii. Second reading iii. Committee stage iv. Reporting stage v. Third reading vi. President's Assent Before the first reading, the Bill is published in the Kenya Gazette for information purposes. All bills must be published in the Kenya Gazette to inform the public and 21 parliamentarians of the intended law. As a general rule, a Bill must be published at least 14 days before introduction to the National Assembly. However, the National Assembly Is empowered to reduce the number of days. First reading: Under this stage, the clerk reads out only the title of the bill. No debate or vote takes place here. After the first reading the date for the second reading is fixed. If the Bill is approved at this stage, then it is printed and circulated among the members of Parliament to enable them prepare for a debate of this Bill. This Is the Introductory stage of law making. Second reading: This is the most important stage of the bill. At this stage the Minister or the member in charge of the Bill explains the main feature of the Bill. A debate takes place and the members of the house are allowed to participate in the debate. Committee stage: It the bill is passed at the second reading, then it moves to the committee stage. Here the details of the various aspects contained in the bill are analysed and scrutinized by the committee of the whole house or a select committee which consists of some selected members of the house. Report Stage: After scrutiny and analysis at committee stage, the report of the same is submitted to the house. If any amendments are made at the committee stage, the same are debated again, then the bill moves to the third reading if approved Third reading: Here there are no much debates. A final vote is given after minimal debate, and if approved, the bill is said to have been passed 22 President's Assent: A bill passed by the National Assembly does not become law until the President gives his assent. The President may refuse to give his assent if in his opinion the bill does not serve the best interest of the people. A bill becomes a law as scan as it gets the President’s assent. PRESIDENT'S REFUSAL TO ASSENT TO THE BILL. 1. Within fourteen days after receipt of a Bill, the President shall assent to the Bill; or refer the Bill back to Parliament for reconsideration by Parliament, noting any reservations that the President has concerning the Bill. 2. If the President refers a Bill back for reconsideration, Parliament may, following the appropriate procedures under this Part -amend the Bill in light of the President’s reservations or pass the Bill a second time without amendment. 3. If Parliament amends the Bill fully accommodating the President’s reservations, the appropriate Speaker shall re-submit it to the President for assent. 4. Parliament, after considering the President’s reservations, may pass the Bill a second time, without amendment, or with amendments that do not fully accommodate the President’s reservations, by a vote supported-- by two-thirds of members of the National Assembly; and two-thirds of the delegations in the Senate, if it is a Bill that requires the approval of the Senate. 23 5. If Parliament has passed a Bill under clause (4)-- the appropriate Speaker shall within seven days re-submit it to the President; and the President shall within seven days assent to the Bill. 6. If the President does not assent to a Bill or refer it back within the period prescribed in clause (1), or assent to it under (5)(b), the Bill shall be taken to have been assented to on the expiry of that per Statute law legislation is a principal source of law applicable throughout Kenya. It must be consistent with the Constitution. It is the most important source of law. Advantages of Statutes Law 1. Democratic: Parliamentary law making is the most democratic legislative process. This is because parliaments the world over consist of representatives of the people they consult regularly. Statute Law, therefore, is a manifestation of the will of the people. 2. Resolution of legal problems: Statute Law enables society to resolve legal problems as and when they arise by enacting new statutes or effecting amendments to existing Law. 3. Dynamic: Statute Law enables society to keep pace with changes in other fields e.g. political, social or economic. Parliament enacts statutes to create the necessary policies and the regulatory framework. 4. Durability: Statute Law consists of general principles applicable at different times in different circumstances. It has capacity to accommodate changes without requiring amendments. 24 5. Consistency/Uniformity: Statute Law applies indiscriminately i.e. it regulates the conduct of all in the same manner and any exceptions affect all. 6. Adequate publication: Compared to other sources of Law, statute Law is the most widely published in that it must be published in the Kenya Gazette as a bill and as a Law. Additionally, it attracts media attention. 7. It is a superior source of law in that only the Constitution prevails over it. Disadvantages of Statute Law 1. Imposition of Law: Statute Law may be imposed on the people by the dominant classes in society. In such a case, the Law does not reflect the wishes of the citizens nor does it cater for their interests. 2. Wishes of M.Ps: Statute Law may at times manifest the wishes and aspirations of M.Ps as opposed to those of the citizenry. 3. Formalities: Parliamentary Law making is tied to the Constitution and the National Assembly standing orders. The Law making process is slow and therefore unresponsive to urgent needs. 4. Bulk and technical Bills: Since parliament is not made up of experts in all fields, bulky and technical Bills rarely receive sufficient treatment in the national assembly, their full implications are not appreciated at the debating stage. Functions of parliament 1. Controls government spending 2. Critical function 25 3. Legislative functions How to make the law making process effective 1. M.Ps should consult constituents on a regular basis. 2. Subdivision of large constituencies. 3. Establishment of offices in constituencies for M.Ps 4. Enhance civic education 5. All Bills ought to be supported by not less than 65% of all MPs so as to become Law. 6. Bills should be widely published e.g. the Kenya Gazette should be made available to larger segments of the society. Bills must be published in newspapers STATUTES OF GENERAL APPLICATION Kenyan Law does not define the phrase “Statutes of General Application”. However, then phrase is used to describe certain Statutes enacted by the UK parliament to regulate the inhabitants of UK generally. These Statutes are recognized as a source of Law of Kenya by Section 3 (1) (c) of the Judicature Act. However, there application is restricted in that they can only be relied upon: 1. In the absence of an Act of parliament of Kenya. 2. If consistent with the provisions of the Constitution. 3. If the Statute was applicable in England on or before the 12/8/1897 4. If the circumstances of Kenya and its inhabitants permit. 26 Examples include: a. Infants Relief Act, 1874 b. Married Women Property Act 1882 c. Factors Act, 1889 Statutes of general application that have been repealed in the UK are still applicable in Kenya unless repealed by the Kenyan parliament. DELEGATED LEGISLATION Delegated legislation is also referred to as subsidiary (subordinate legislation). It is Law made by parliament indirectly. Delegated legislation consists of rules, orders, regulations, notices, proclamations e.t.c. made by subordinate but competent bodies e.g. 1. Local Authorities 2. Professional bodies such as ICPA(K) 3. Statutory boards 4. Government ministers These bodies make the laws in exercise of delegated legislative power conferred upon them by parliament through an Enabling or Parent Act. Delegated legislation takes various forms e.g. 1. Local Authorities make by-laws applicable within their administrative area 2. Government ministries, professional bodies and others make rules, orders, regulations, notices e.t.c. 27 Characteristics of delegated legislation 1. All delegated legislation is made under the express authority of an Act of Parliament. 2. Unless otherwise provided, delegated legislation must be published in the Kenya Gazette before coming into force. 3. Unless otherwise provided, delegated legislation must be laid before parliament for approval and parliament is empowered to declare the delegated legislation null and void by a resolution to that effect whereupon it becomes inoperative to that effect Why delegated legislation? Delegated legislation is described as a “necessary evil” or a Constitutional impropriety”. This is because it interferes with the doctrine of separation of powers which provides that the Lawmaking is a function of the legislature. Parliament delegates Law-making powers to other persons and bodies for various reasons: 1. Parliament is not always in session 2. Parliament is not composed of experts in all fields 3. Inadequate parliamentary time 4. Parliamentary Law-making is slow and unresponsive to urgent needs. Additionally it lacks the requisite flexibility 5. Increase in social legislation Advantages of delegated legislation 28 1. Compensation of last parliamentary time: Since members of parliament are not always in the National Assembly making Laws, the Law-making time lost is made good by the delegates to whom legislative power has been given hence no Lawmaking time is lost. 2. Speed: Law-making by government Ministers, Professional bodies and other organs is faster and therefore responsible to urgent needs. 3. Flexibility: The procedure of Law-making by delegates e.g. Government Ministers Is not tied to rigid provisions of the Constitution or other law. The Minister enjoys the requisite flexibility in the Law-making process. He is free to consult other persons. 4. Technicality of subject matter: Since parliament is not composed of experts in all fields that demand legislation, it is desirable if not inevitable to delegate Lawmaking powers to experts in the respective fields e.g. Government Ministries and local authorities. Disadvantages of delegated legislation 1. Less Democratic: Compared to statute law, delegated legislation is less democratic in that it is not always made by representatives of the people affected by the law. E.g. rules drafted by technical staff in a government ministry. 2. Difficult to control: In the words of Professor William Wade in his book “Administrative Law” the greatest challenges posited by delegated legislation is not that it exists but that it’s enormous growth has made it impossible for parliament to watch over it. Neither parliament nor courts of law can effectively control delegated legislation by reason of their inherent and operational weakness. 29 3. Inadequate publicity: Compared to statute law, delegated legislation attracts minimal publicity if any. This law is to a large extent unknown. 4. Sub-delegation and abuse of power: Delegates upon whom law making has been delegated by parliament often sub-delegate to other persons who make the law. Sub- delegation compounds the problem of control and many lead to abuse of power. 5. Detailed and technical: It is contended that in certain circumstances, delegated legislation made by experts is too technical and detailed for the ordinary person. Unwritten sources of law Unwritten sources of law apply subject to the written sources. Written sources prevail over unwritten sources in the event of any conflicts. This is primarily because unwritten law is generally made by a supreme law-making body. These sources include: 1. Common law 2. Equity 3. Case law 4. Islamic law 5. Hindu law 6. African Customary law. COMMON LAW 30 It may be described as a branch of the law of England which was developed by the ancient common Law Courts from customs, usages and practice of the English people. These courts relied on customs to decide cases before them thereby giving such customs the force of law. The court of Kings Bench, Court Exchequer and the court of common pleas are credited for having developed common law. These courts standardized and universalized customs and applied them in dispute resolution. At first, common law was a complete system of rules both criminal and civil. The development of the common law is traceable to the Norman Conquest of the Iberian Peninsula. The Romans are credited for having laid the foundation for the development of the common law. Characteristics of common law 1. Writ System. 2. Doctrine of stare decisis 1. The writ system At common law, actions or cases were commenced by a writ. There were separate writs for separate complaints. Writs were obtained at the Royal office. A Writ stated the nature of the compliant and commanded the police officer of the country in which the defendant resided to ensure that the he appeared in court on the mentioned date. Often, police officers demanded bribes to compel the defendant to appear in court and would not compel an influential defendant. 31 The writ system did not recognize all possible complains and many would be plaintiffs could not access the courts. 1It also lengthened the judicial process. 2. Doctrine of stare decisis Stare Decisis literally means “decision stands” or “stand by the decision.” This is a system of administration of justice whereby previous decisions are applied in subsequent similar cases. At common Law, a judge having once decided a case in a particular manner had to decide all subsequent similar cases similarly. This made the common Law system rigid. Common Law consists of decisions handed down by courts of law on the basis of customs and usages and may be described as the English Customary Law. Problems/shortcomings of common law 1. Writ System: Cases at common Law were commenced by a writ issued by the Royal office. There were separate writs for different complaints. However: a) This system did not recognize all possible complaints and many would be plaintiffs had no access to the courts b) The writ system encouraged corruption c) It lengthened the course of justice 2. Rigidity/inflexibility: The common Law courts applied the doctrine of Stare Decisis.This practice rendered the legal system rigid and hence unresponsive to changes. 3. Procedural technicalities: The Common Law procedure of administration of justice 32 was highly technical. Common Law courts paid undue attention to minor points of procedure and many cases were often lost on procedural matters. 4. Delays: The administration of justice at common Law was characterized by delays. Defendants often relied on standard defenses to delay the course of justice. These defenses were referred to as essoins and included; Being out by floods, being unwell or being away on a crusade. If sickness was pleaded, the case could be adjourned for 1 year and 1 day. 5. Non-recognition of trusts: Common Law did not recognize the trust relationship. This is an equitable relationship whereby a party referred to as a trustee, expressly, impliedly or constructively holds property on behalf of another known as beneficiary. At common Law beneficiaries had no remedies against errant trustees and trustees had no enforceable rights against beneficiaries. 6. Inadequate remedies: Common Law courts had only one remedy to offer namely monetary compensation or damages. They could not compel performance or restrain the same. 7. Inadequate protection of borrowers: At common Law, a borrower who failed to honour his contractual obligations within the contractual period of repayment would lose not only his security but the total amount paid. THE DOCTRINES OF EQUITY Equity is a set of rules formulated and administered by the court of chancery before 1873 to supplement the rules of common law. This court dealt only those cases where 33 common law either provided no remedy or provided a remedy which was not adequate. Equity therefore is a body of principles constituting what is fair and right. Origins of equity Citizens dissatisfied with the decision of the judges of common law often made petitions to the kings in council. The petitions were decided by the king himself or by his council. Due to much work, the king later delegated his function to his lord chancellor (advisor to the king) a clergyman to decide the appeals applying the rules of natural justice and morality. The petitions to the Lord Chancellor were made on the following grounds:- 1. The common law courts provided no remedy for certain wrongs e.g. trusts were not recognized. 2. The remedies provided in certain situations were not satisfactory e.g. in case of breach of contract, the only remedy available was damages, and specific performances injunctions were not recognized. 3. The common law courts sometimes acted under pressure or influence or bribes of the other party. The remedies granted by equity courts become known as equitable remedies. Principles of Equity During the early development of equity the early chancellors acted at their own discretion,but eventually they did follow the decisions of early chancellors. But the 8th century, some firm rules of equity were established which guided later chancellor in 34 deciding disputes.These rules are known as equitable maxims – which are propositions or statement of equitable rules. The Maxims of Equity include: 1. He who seeks equity must do equity 2. He who comes to equity must come with clean hands 3. Equity is equality (Equality is equity) 4. Equity looks to the intent or substance rather than the form 5. Equity regards as done that which ought to be done 6. Equity imputes an intent to fulfil an obligation 7. Equity acts in personam 8. Equity will not assist a volunteer (Equity favours a purchaser for value without notice) 9. Equity will not suffer a wrong to be without a remedy (Where there is a wrong there is a remedy for it) Ibi jus ibi remedium 10. Equity does not act in vain 11. Delay defeats equity 12. Equity aids the vigilant and not the indolent (Vigilantibus non dorminentibus jurasubveniunt) The distinction between legal and equitable remedies remains relevant to students of business law; however, because these remedies differ to seek the proper remedy for a wrong one must know that remedies are available. 1. He who seeks equity must do equity 35 This maxim means that a person who is seeking the aid of a court of equity must be prepared to follow the court‟s directions, to abide by whatever conditions that the court gives for the relief. And this is most commonly applied in injunctions. The court will normally impose certain conditions for granting the injunction. 2. He who comes to equity must come with clean hands This scenario was summed up in the case of Jones v. Lenthal (1669) as “He who has committed inequity shall not have equity”. There is a limit to this rule. In some cases the court has the discretion whether to apply this maxim. Limit to the extent that maxim can be applied The limit is this: It is not all unclean hands that will deny a plaintiff his remedy. The conduct must be relevant to the relief being sought. In Loughran v. Loughran (1934), Justice Brandeis said equity does not demand that its suitors shall have lead blameless lives. We are not concerned with issues of morality. If the breach is a trifle, a small matter, a minor breach, then that in itself should not deny the plaintiff the remedy. The first maxim deals with now/future, the second deals with conduct in the past. 3. Equity is equality (equality is equity) In general, the maxim will be applied whenever property is to be distributed between rival claimants and there is no other basis for division. For example, husband and wife who operate a joint bank account; each spouse may deposit or take out money. Upon divorce, the maxim applies. They share 50-50. The authority is that equity does not want to concern itself with the activities of a husband 36 and wife - to go into the bedroom and make deep inquiries, hence equal division. Another example relates to trusts. How do you divide the property? Say there are three beneficiaries. Then one of the beneficiaries passes away, i.e. one of the shares fails to vest. What should accrue to the surviving beneficiaries? Redistribute equally, applying the rule “Equity is equality”. 4. Equity looks to the substance or intent rather than the form This maxim makes a distinction between matters of substance and matters of form. Equity will give priority to substance (intention) as opposed to form, if there is a contradiction. This maxim is normally applied to trusts. There have been cases where the court has inferred a trust even where the word trust does not appear. Another illustration is the remedy of rectification of contract, where equity looks to the intention, where intention matters. This maxim lies at the root of the equitable doctrines governing mortgages, penalties and forfeitures. Equity regards the spirit and not the letter. Courts of Equity make a distinction in all cases between that which is a matter of substance and that which is a matter of form; and if it finds that by insisting on the form, the substance will be defeated, it holds it to be inequitable to allow a person to insist on such form, and thereby defeat substance. Thus if a party to a contract for the sale of land fails to complete on the day fixed for completion, at law he is in breach of his contract and will be liable for damages e.g. for delay. Yet in equity it will usually suffice if he is ready to complete within a reasonable period thereafter, and thus the other party will not be able to avoid performance. 37 5. Equity regards as done that which ought to be done This maxim has its most frequent application in the case of contracts. Equity treats a contract to do a thing as if the thing were already done, though only in favour of persons entitled to enforce the contract specifically and not in favour of volunteers. Agreements for value are thus often treated as if they had been performed at the time when they ought to have been performed. For example a person who enters into possession of land under a specifically enforceable agreement for a lease is regarded in any court which has jurisdiction to enforce the agreement as if the lease had actually been granted to him. In Walsh v. Lonsdale, the agreement for lease was as good as the agreement itself where a seven-year lease had been granted though no grant had been executed. An equitable lease is as good as a legal lease. Equity looked on the lease as legal the time it was informally created. In Souza Figuerido v. Moorings Hotel it was held that an unregistered lease cannot create any interest, right or confer any estate which is valid against third parties. However, it operates as a contract inter-parties; it is valid between the parties and can be specifically enforced. The tenant in this case was therefore liable to pay rent in arrears. 6. Equity imputes an intent to fulfill an obligation If a person is under an obligation to perform a particular act and he does some other act which is capable of being regarded as a fulfilment of this obligation, that other act will prima facie7 be regarded as fulfilment of the obligation. 7. Equity acts in personam 38 This is a maxim which is descriptive of procedure in equity. It is the foundation of all equitable jurisdictions. Courts of law enforced their judgments in Rem (against property of the person involved in the dispute), e.g. by writs but the originally equitable decrees were enforced by Chancery acting against the person of the defendant (i.e. by imprisonment) and not in Rem Later, equity invented the alternative method of sequestrating the defendant’s property until he obeyed the decree. These methods can still be used where necessary, but other and more convenient methods are often available today. Although the maxim has lost much of its importance, it is responsible for the general rule that an English court has jurisdiction in equitable matters, even though the property in dispute may be situated abroad, if the defendant is present in this country. This was so held in Penn v. Baltimore where the Defendant was ordered to perform a contract relating to land in America. However there must be some equitable right arising out of contract, trust or fraud. 8. Equity will not assist a volunteer Equity favours a purchaser for value without notice. A volunteer is a person who has not paid consideration.The exception to the application of this maxim is in Trust. In Jones v. Lock (1865) it was stated that the court is prevented from assisting a volunteer regardless of how undesirable the outcome might appear. Equity will therefore not grant specific performance for a gratuitous promise. 9. Equity will not suffer a wrong to be without a remedy 39 “Ibis jus ibi remedium”: This means that if there is a wrong, there is a remedy for it. He who seeks solace in the arms of equity will not go away broken hearted. No wrong should be allowed to go unredressed if it is capable of being redressed by equity. However, not all moral wrongs can be redressed by equity. The maxim must be taken as referring to rights which are suitable for judicial enforcement, but were not enforced at common law owing to some technical defect. 10. Equity does not act in vain The court of equity is shy and does not want to be embarrassed by granting remedies that cannot be enforced or issuing orders that cannot be obeyed by the Plaintiff. 11. Delay defeats equity or equity aids the vigilant and not the indolent: (vigilantabus,non dormientibus, jura subveniunt) A court of equity has always refused its aid to stale demands i.e. where a party has slept on his right and acquiesced for a great length of time. Nothing can call forth this court into activity, but conscience, good faith, and reasonable diligence. Where these are wanting, the Court is passive and does nothing. Delay which is sufficient to prevent a party from obtaining an equitable remedy is technically called “laches”.This maxim, however, has no application to cases to which the Statutes of Limitation8 apply either expressly or, perhaps, by analogy. There are thus three cases to considera) Equitable claims to which the statute applies expressly; b) Equitable claims to which the statute is applied by analogy; and c) Equitable claims to which no statute applies and which are, therefore, covered by the ordinary rules of laches. 40 12. Equity follows the law The Court of Chancery never claimed to override the courts of common law. “Where a rule, either of the common or the statute law, is direct, and governs the case with all its circumstances, or the particular point, a court of equity is as much bound by it as a court of law and can as little justify a departure from it. It is only when there is some important circumstance disregarded by the common law rules that equity interferes. “Equity follows the law, but neither slavishly nor always.” If Common law and Equity conflict Equity prevails. Both Common law and Equity are recognized as sources of law of Kenya (c) Of the Judicature Act. However, only the substance of common Law and the doctrines of equity are recognized. Their application by Kenyan Courts is further qualified. A court of law can only rely on Common law or equity as a source of Law: 1. In the absence of an Act of parliament. 2. If it is consistent with written law including the Constitution. 3. If it was applicable in England on 12/08/1897. 4. If the circumstances of Kenya and its inhabitants permits. 5. Subject to such qualifications as those circumstances may render necessary. 41 42 ADMINISTRATIVE LAW MEANING OF ADMINISTRATIVE LAW Administrative Law can be defined as the law relating to public administration. It is the law relating to the performance, management and execution of public affairs and duties. Administrative law is concerned with the way in which the Government carries out its functions. Administration is the act or process of administering, which simply means it is the act of meting out, dispensing, managing, supervising and executing government functions. It is the law relating to control of governmental power. It can also be said to be the body of general principles, which govern the exercise of powers and duties by public authorities. The primary purpose of administrative law, therefore, is to keep the powers of 43 government within their legal bounds, so as to protect the citizen against their abuse. Administrative law is also concerned with the administration and dispensation of delivery of public services. However it does not include policy making. Administrative law is concerned with how the government carries out its tasks. The government tasks include delivery of public services such as health, security, facilitating trade, arbitration of disputes, and collection of revenue. Administrative law is the law relating to the executive branch of government. The law deals with a variety of things e.g. i. The establishment of public authorities e.g. the city council, establishment of public bodies and organs. ii. The nature of the tasks given to various public organs and public agencies. iii. The legal relationship between the public bodies themselves and also between the public agencies and the public and between public agencies and the citizens. Administrative Law is concerned with the means by which the powers and duties of the various public agencies, public bodies and public institutes can be controlled. FUNCTIONS OF ADMINISTRATIVE LAW Administrative functions can be divided into a number of broad categories namely 44 1. Ministerial functions; Examples of Ministerial Functions are those functions carried out or performed by Government Ministers in their implementation of governmental policies and programs. Examples include appointment of public officials by Ministers and the grant of ministerial approvals and consents. 2. Administrative functions: these are the functions carried out by public officials and public bodies in their management of various governmental bodies in their provision of services for example educational services and in their administration of various social services as in the case of social security services. 3. Legislative functions: These include the function of making or creating subsidiary legislation. The responsibility of legislative functions is on the respective Ministers‟. The duty of making by-laws is also the respective ministers. 4. Judicial functions: These primarily involve the functions of determining claims or disputes between individuals and other bodies. A good example of administrative body that performs judicial functions is the Industrial Court which functions as a court of law. 5. Quasi-Judicial functions: These involve the exercise of powers which are fundamentally judicial but without the usual trappings of a court of law for example without strict requirement of rules of evidence or the observance of rules of evidence, without strict requirements of examination of witnesses and without other legal Technicalities. A good example being the Liquor Licensing Court, the Land Control Boards and the Motor Vehicle Licensing Authorities. Functions/purposes of administrative law 45 1. It ensures proper dispensation of services. 2. It seeks to protect citizens from abuse of power. 3. To keep the powers of government i.e powers of various public bodies within their legal bounds, so as to protect citizens from their abuse. Abuse of power can arise either from malice, bad faith or even from the complexities of the law. 4. There are duties placed in public bodies (public institutions) such that another function of the law is to see that the duties are performed and that the public agencies can be compelled to perform their duties where there is laxity or where they refuse or otherwise fail to do so. DOCTRINE OF SEPARATION OF POWERS Doctrine of separation of powers is a legal framework developed by a French jurist named Montesquieu whose concern to contain the over-concentration of governmental powers in the hands of one person or a body. This doctrine is a characteristic of Constitutionalism which is the theory of limited government. According to Montesquieu the only way to create a system of checks and balances was to ensure that governmental powers were devolved. He developed the so-called classical doctrine of separation of powers. He suggested that: 1. There should be different organs of government i.e. executive, legislature and judiciary. 46 2. These organs must exercise different functions. The legislature makes the law, the judiciary interprets it and the executive administers. 3. No person should be a member of more than one organ. According to Montesquieu, such an arrangement would ensure that no single organ exercises unchecked power, however, this framework cannot operate in any country in its pure state, as government does not operate in water-tight compartments. Montesquieu is credited for having suggested that these ought to be an independent judiciary. Montesquieu’s framework is generally effected in many Constitutions of the world. Independence of the judiciary The principle of independence of the judiciary is an integral part of the doctrine of separation of powers. It means that: i. There should be a distinct organ of government whose function is to administer justice ii. The organ must operate impartially and in an unbiased manner. It must be disinterested as possible in the proceedings. iii. The organ must administer justice on the basis of facts and law without fear or favour and without eternal influence. Independence of the judiciary may be actualized in various ways: i. By providing security of tenure for judicial officers. ii. Economic independence i.e adequate financial provisions to judicial officers. 47 iii. Immunity from court action for actions taking place in the course of judicial proceedings. iv. Appointment of persons of unquestionable professional and moral integrity Independence of the judiciary is critical in that: i. It promotes the liberty of human beings by checking on the excesses of the state. ii. It promotes the rule of law. NATURAL JUSTICE Definitions: Natural: Natural is being in accordance with or determined by nature i.e. based on the inherent sense of right and wrong. Just: Means morally upright, correct, proper, good, merited deserved etc. Natural Justice is the administration, maintenance, provision or observance of what is just, nright, proper, correct, morally upright, merited or deserved by virtue of the inherent nature of a person or based on the inherent sense of right and wrong. The principles of natural justice are rules governing procedure and conduct of administrative bodies. They were developed by the courts in England and imported into Kenya as part of common law principles. 48 Principles of natural justice are implied i.e. they are not expressed in a statute; they are supposed to apply in every case unless a statute expressly states that they will not apply. Principles of natural justice are applicable in the absence of statutory provisions authorizing their applicability or their observance. Unless the application of principles of natural justice is expressly or impliedly excluded by statutory provisions these principles are always to be implied. It is to be implied that parliament has authorised the applicability and observance of the principles of natural justice in every case. To which bodies do the principles of natural justice apply? In Kenya these principles apply so long as a public body has power to determine a question affecting a person’s rights. The principles also apply to bodies in every case involving a question affecting a person’s interest. Wherever there is a right there is an interest but not vice versa. Interest may include other things. Interest may be pecuniary interest or something else and does not necessarily have to be a right. In Mirugi Kariuki v. The Attorney General,the court of appeal held that the mere fact that the exercise of discretion by a decision making body affects the legal rights or interests of a person makes the principles of natural justice applicable. These principles apply to administrative bodies that are judicial, quasi-judicial legislative or administrative. THE PRINCIPLES/RULES OF NATURAL JUSTICE Broadly the principles are two 49 1. Nemo Judex in causa sua – which means that procedures must be free from bias. 2. Audi Alteram Partem – which means that no person should be condemned unheard i.e. a person should not be denied an opportunity to be heard. These two Principles have been broken down into a number of principles or rules which are as follows: 1. Rule against bias 2. The right to be heard 3. Prior notice 4. Opportunity to be heard 5. Disclosure of information 6. Adjournment 7. Cross examination 8. Giving reasons 9. Legal representation 1. RULE AGAINST BIAS In summary there can be bias when: 1. There is some direct interest in the matter to be adjudicated; e.g. pecuniary interest; 2. Where short of a direct interest there is a reasonable appearance or likelihood of bias; 3. Where there is actual bias. In R v. Hendon Rural District Council ex-parte Chorley, the court quashed the decision of a 50 Rural District Council allowing some residential property in Hendon to be converted into a garage and restaurant because one of the councilors who was present at the meeting which approved the application to convert the premises was an Estate Agent who was at the same time acting for the owners of the properties. The Court issued Certiorari to quash the decision of the council on the ground that the agent’s interest in the business disqualified him from taking part in the council’s consideration of the matter. Concerning likelihood of bias, the case is Metropolitan Properties Ltd v. Lannon applies. The court quashed the decision of a rent assessment committee reducing rent of a certain flat because the chairman of the rent assessment committee lived with his father in those flats. In this case, the court said; “… in considering whether there was a real likelihood of bias, the court does not look at the mind of the Chairman of the tribunal who sits in a judicial or quasi-judicial capacity. The Court looks at the impression which would be given to other people. Even if he was as impartial as he could be nevertheless, if right minded people would think that in the circumstances there was a real likelihood of bias on his part then he should not sit. And if he does sit, his decision cannot stand. Surmises or conjecture is not enough there must be circumstances from which a reasonable man would think it likely or probable that it would or did favor one side unfairly at the expense of the other”. 2. RIGHT TO BE HEARD This is simply that a concerned person must be given a right to be heard. If an administrative body fails to give a concerned person the right to be heard, whatever 51 decision it makes will be invalidated upon review. The case that illustrates the point is the case of David Onyango Oloo v. The Attorney General, where the Commissioner of Prisons purported to deprive Onyango Oloohis sentence remission to which he was entitled under the Prisons Act without giving him an opportunity to be heard. Quashing the decision, Justice Nyarangi stated; “… there is a presumption in the interpretation of statutes that the rules of natural justice will apply. In this case the rule in question was the one concerning the right to be heard.” 3. PRIOR NOTICE This rule requires that adequate prior notice be given to a person of any charge or allegation. It simply means that if an administrative body makes a charge it has to give a person against whom allegations have been made adequate notice before a decision is made. Prior notice must be served on the relevant party. The notice must contain sufficient detail to enable the person concerned to know the substance of any charge, allegation or action to be taken against him. Again the case of David Onyango Oloo applies here. In that case the court also stated “The commissioner of prisons at the very least ought to have done the following acts: i. Inform the Appellant in writing in a language the Appellant understands the disciplinary offence he is alleged to have committed and the particulars of the offence; ii. Afford the Appellant an opportunity to be heard in person and to fix reasonable time within which the appellant must submit his written answer.” 52 4. OPPORTUNITY TO BE HEARD There is no settled rule as to whether hearing should be oral or written but in all cases one must be afforded a chance to present his case whether oral or written. 5. DISCLOSURE OF INFORMATION A concerned party must be given all information which the decision maker will rely on to make his judgment. This rule requires that all allegations and reports bearing on a person’s case must be disclosed to that person. Failure to do so is fatal to a decision. In Ridge v. Baldwin the House of Lords held that the Chief Constable of Brighton who held an office, from which by statutory regulations he could only be removed on grounds of neglect of duty or inability, could not validly be dismissed in the absence of the notification of the charge and an opportunity to be heard in his defense. This is one of the key cases in Judicial Review and disclosure of information. 6. ADJOURNMENT Natural Justice requires that a party be granted adjournment of a hearing of a case if the exigencies require (it does not matter how guilty a person is, if exigencies arise, they must be accorded an adjournment by the administrative body and if they are denied an adjournment and a decision is given, the court will quash such a decision) Please note that wrongful refusal to adjourn amounts to a denial of a fair hearing and will result in the quashing of a decision. This was stated in the case of Priddle v. Fisher & Sons. A heating engineer was denied an adjournment in a case he was supposed to be 53 represented by a trade union representative. The decision of the court arising out of the proceedings in the absence of the applicant was held to be unfair. 7. CROSS EXAMINATION An opportunity to cross-examine can only be availed if there is an oral hearing i.e. the rule applies to cases where there is an oral hearing. Whenever there is an oral hearing and a party requests to cross-examine, the affected party must be granted an opportunity to Cross-examined. If an affected party requests to cross-examine but an opportunity is denied, the decision made can be voided on grounds of breach of principles of natural justice. Please note that if a party does not ask for a chance to cross-examine, he is precluded from complaining. 8. GIVING REASONS Progressively, courts are insisting on giving reasons for a decision as a component for natural justice. (If an administrative body denies you let’s say a licence, they must give you the reasons why failure to which you can petition the High Court for a review). In the case of Padfield v. The Minister for Agriculture Fisheries and Food (1968), Lord Reid stated; “I cannot agree that a decision cannot be questioned if no reasons are given”. It means that if no reasons are given a decision can be questioned. 9. LEGAL REPRESENTATION This does not apply in every case but in suitable cases and suitable circumstances, the right to representation by a lawyer or some other person may be part of natural justice. 54 For example in the Liquor Licensing Act, it allows for a person applying for a license to be represented by an authorised agent in which case he becomes the legal representative before the court. Where legal representation is necessary, authorised and is requested by a party the right to legal representation must be granted. If denied, a decision may be quashed on grounds of failure to observe the principles of natural justice. Effect of breach of principles of natural justice The effect of failure to comply with the rules of natural justice is that any decision or other administrative action taken is null and void and can be invalidated by the courts. Breach of principles of natural justice has been a good ground of judicial review. Please note that breach of any one of the rules that we have discussed will give rise to judicial review. Judicial review remedies There are only three remedies that the courts can grant for judicial review Certiorari Prohibition Mandamus Whether the courts will grant one of these rules depends on the circumstances. 1. CERTIORARI The word Certiorari is a Latin word which simply means „to be informed‟. Historically it was a royal command or demand for information. The practice was that the sovereign who was the king or the queen upon receiving a petition from a subject complaining of 55 some injustice done to him would state that he wishes to be certified of the matter and then he would order the matter to be brought up to him. Ordering the matter to be brought up to him will include ordering that the records of the proceedings be brought up to the sovereign. The purpose of calling up the records was in order for the sovereign to quash any decision that has been made after acquainting himself of the matter in other words after being certified of the matter. Currently, certiorari is an order to remove proceedings from an administrative body or an inferior court to the High Court in order to be investigated and if found wanting on any one of the grounds we studied including ultra vires, be quashed. The order can issue against: 1. Administrative tribunals. 2. Inferior courts such as the industrial courts. 3. Local authorities. 4. Ministers of Government. 5. Miscellaneous public bodies exercising public functions. In Majid Cockar v. Director of Pensions, a case between the former Chief Justice Cockar and the Director of Pensions, in computing the pension payable to the CJ the Pensions Department made a mistake in their calculations. The former Chief Justice went to court and upon application for Judicial Review. The court issued the order of Certiorari to quash the decision awarding the former CJ the amount of money as pension. 56 For Certiorari to be issued, indeed for any one of the 3 orders to be issued, a person must be having Locus Standi which is crucial as you must have the capacity to sue. A person has capacity to sue by having a sufficient interest in the matter. If you don’t have sufficient interest in the matter, the court will not grant you any of the orders. 2. PROHIBITION The order of Prohibition is one issued by the High Court which prohibits a body (administrative bodies) from continuing proceedings. It will also prohibit a body from continuing to carry out decisions wrongly or wrongfully made. This order may be issued against: 1. A judicial body acting in an administrative capacity i.e. Industrial Court. 2. An administrative body performing administrative duties or against the government officials. 3. It can be issued to stop a public body from continuing proceedings that are ultra vires. 4. It can also be issued to stop an administrative body from continuing to do something in excess of jurisdiction. 5. It can also be used to stop an administration body from abusing their powers. In R v. Electricity Commissioners Ex parte Electricity Joint Committee (1924) Lord Denning stated as follows; “It is available to prohibit administrative authorities from exceeding their powers or misusing them. ”Lord Atkin in the same case stated that “If proceedings establish that the body complained of exceeded its jurisdiction, by entertaining matters which would result in its final decision being subject to being 57 brought up and quashed on certiorari, I think that Prohibition will lie to restrain it from exceeding its jurisdiction.” This illustrates the point that prohibition will lie to restrain an administrative body from doing something wrongly or misusing its power, abuse of power etc. When one applies for the order of Certiorari, one is seeking to quash a decision that has already been made. At the time of application for judicial review, the order you seek the court to quash must be presented to the court by making a photocopy of the order and attaching it to the Application. With Prohibition, you do not have to attach the copy of the order. 3. MANDAMUS The order of Mandamus is derived from the Latin word “Mandare” meaning “to command”. It is a court order issued to compel the performance of a public duty where a public body or official has unlawfully refused, declined or otherwise failed to undertake the duty. Mandamus issues where there is a duty imposed by statute or common law. The duty must Be a public duty. Mandamus will not issue in respect of a duty that is of a private nature even if The body in question is a public body. For example where two construction companies agree to undertake some work who agree to resolve any dispute between them by 58 arbitration through the industrial court, the industrial court will be performing a private function and thus the order of Mandamus cannot issue. For Mandamus to issue, the Applicant must have made a request for the performance of a public duty which has been refused, declined or ignored. This means that if a public administrative body refused to do something, you must approach it and request it to perform the function or the courts will not hear you. Unreasonable delay on the part of the public body will be treated as refusal. The duty must be a specific duty. You cannot apply for the order of Mandamus for a duty that is general, it must be specific. Mandamus is used to enforce performance of specific duties and not the exercise of merepowers. In Daniel Nyongesa & Others v. Egerton University College (1989), Nyongesa’s exam results were held by the university and when he went to court, the court issued an order of mandamus for the court to release the results. Nyongesa had requested the University for his results and they had refused so he applied for an order of mandamus to the court and he was granted. There was a specific duty for the university to release the results. JUDICIAL CONTROL OF THE EXECUTIVE Judicial Review is the process through which an aggrieved person can find redress in a Court of Law. Judicial Review forms part of administrative law because it is the most appropriate way that a party aggrieved by an administrative body can find redress. Judicial Review refers to the examination of the actions or inactions of public bodies by the 59 High Court. Judicial Review is an examination of the manner in which a decision was made or an act done or not done. This definition is found in Chief Constable of North Water Police V. Evans. The purposes of Judicial Review from that definition are as follows: 1. To prevent excessive exercise of powers by administrative bodies and officials; 2. To ensure that an individual is given fair treatment by Administrative authorities; 3. To keep Administrative excesses in check and also to provide a remedy to those aggrieved as a result of excessive exercise of power by administrative bodies. The primary legal basis of Judicial Review is the Law Reform Act.1 From the wording of Section8 of the Law Reform Act, one can only apply for Judicial Review in the High Court and not the Magistrates Courts. Grounds of judicial review By looking at the grounds of judicial review, we will be studying the circumstances in which an aggrieved person may petition the High Court for Judicial Review. Courts of Law will intervene in public administration in one or more of the following circumstances i.e. courts of law will review actions of administrative bodies in one or more of the following circumstances: 1. When a body acts ultra vires; 2. Unreasonableness; 3. When there is jurisdictional error; 4. When there is an error of law; 60 5. When there is an error of fact; 6. When there is an abuse of power; 7. When irrelevant considerations governed the making of a decision; 8. When there is bias; 9. When there is unfair hearing; 10. When there is procedural flaw; 11. When there is irrationality 12. When a public official or body acts in bad faith; 13. When there is breach of the principles of natural justice. There are some overlaps in these grounds e.g. what amounts to procedural flaw may at the same time amount to ultra vires. In actual practice any one of the grounds will entitle an aggrieved party to apply for judicial review and in actual practice circumstances occasioning judicial review will involve one or more of those grounds. One does not have to have all the 13 circumstances to apply for judicial review. Any one of the grounds will suffice and the list is not exhaustive. 1. DOCTRINE OF ULTRA VIRES The doctrine of ultra vires is a legal doctrine. In the English Legal System judicial control of administrative agencies is based on the doctrine of ultra vires. This is the doctrine on the basis of which the courts will interfere or intervene in matters of public administration. Ordinarily courts would not interfere. 61 What is ultra vires? It simply means “beyond the powers” so that if ultra vires is the basis in which courts will interfere or intervene on matters of public administration then the point is that courts will intervene on matters of public administration if the administrative bodies have acted beyond the powers that have been conferred on them. The essence of this doctrine is that administrative bodies must act within the powers granted them by statutes. They must also act within the requirements of common law. Administrative bodies must act only within the powers that they have been given by the statutes. They must also recognize the limits imposed on them by the statutes. The exercise of powers by administrative bodies often affects the rights of citizens and for this reason it is necessary that these powers be exercised only with accordance with the statute granting the power so that people do not suffer. Limits are placed by statutes to ensure that powers conferred to administrative bodies do not end up causing suffering to citizens. For these reasons any act of a public administrative body that is outside the limit of law has no legal validity because it is Ultra Vires. The term Ultra vires can cover a wide range of actions undertaken in excess of the law or in excess of the powers granted. For example an administrative body acts ultra vires if that body does an act which it has no Authority to do. The second example is where an administrative body in the process of exercising the powers, it abuses those powers, which amounts to acting ultra vires. There are also cases where bodies act ultra vires 62 because in the cause of exercising those powers that are authorized, they have failed to follow prescribed procedure. Types of ultra vires i. Substantive Ultra Vires. ii. Procedural Ultra Vires. i. substantive ultra vires Substantive ultra vires is acting in excess of powers with regard to matters of substance. This would include for example an administrative body acting beyond what is authorized to do. Substantive ultra vires includes the following cases: 1. Exercising power in excess of statutory limits; 2. Acting in excess of jurisdiction; 3. Breach of the principles of natural justice; in this case failure to give notice of hearing to a concerned party. For example would amount to breach of principles of natural justice and that falls under substantive ultra vires ii. Procedural ultra vires These are cases where administrative bodies fail to follow prescribed procedure. They also include cases where an error occurs in following the procedure. Whereas we do have procedure prescribed in statutes, there are also matters of procedure that are not in the statutes but they are applicable under common law and 63 this is where we find the procedural requirements that fall under the principles of natural justice. A person has to be given notice of a hearing of their case; this is one of principles of natural justice. This is in order that the person affected must be made aware of what is going on and be given an opportunity to raise any objection that they might have. They must also have the chance to defend themselves. Courts are mandated to use or to apply ultra vires doctrine to invalidate actions of public bodies. If a body has done something that amounts to procedural ultra vires, the court will be prepared to apply the doctrine of ultra vires to invalidate that action. The effect of finding that an act or a decision is ultra vires is that it is invalidated. It means that the court will declare that act or decision null and void. Consider the case of White and Collins v. Minister of Health. This case concerns the exercise of power of compulsory purchase of land. In this case a housing authority was granted power under the Housing Act of 1936 to acquire land compulsorily for housing „provided that land did not form part of any park, garden or pleasure ground.‟ The Housing Authority went ahead and acquired land or purported to acquire land that was a park. After they acquired this land, they sought and obtained confirmation of their acquisition from the Minister of Health (the one responsible for giving confirmation of such services). The parties brought a suit seeking to have the purchase order invalidated on the grounds that the order to 64 purchase this land was Ultra Vires because the land was a park and there was a statutory restriction on the purchase of any land that was a park. The court quashed the order for purchase as well as the purchase declaring it null and void 2. UNREASONABLENESS One of the things the court considers, in determining unreasonableness is whether a public body has considered or taken into account any matter that it ought not to take into account. Another thing that the court will consider is whether a public body has disregarded any matter that it ought to take into account. In R v. Ealing London Borough Council Ex parte Times Newspapers Ltd, the council was held to be unreasonable in refusing to provide certain Newspapers to their libraries because the council did not agree with the Newspapers Proprietors on political grounds. The court held that the council was unreasonable in refusing to provide their libraries with certain Newspapers. 3. JURISDICTIONAL ERROR Jurisdiction means the scope or area in which a body is allowed to act. It includes Territorial limits. Where there is an error it means: 1. That an administrative agency has acted without jurisdiction i.e. they have acted over matters which they have no authority to act. 2. They have acted within jurisdiction but have gone beyond or exceeded their limits. 65 This can happen: When a body erroneously exercises power or authority over a matter that is outside of its territorial limits. Where a body legislates over a matter that falls outside of the matters it is authorised to legistate over. Where an administrative body declines to exercise jurisdiction to hear and decide a case or to legislate over a matter over which it has jurisdiction to hear or decide or legislate over. (the Administrative body has the authority to do something but it declines to do it.) It may also arise when a body fails to administer a function or to carry out a duty that it has the statutory authority to administer or to carry out. In case any one of these things occurs and a person is aggrieved, the aggrieved person can apply to the High Court for Judicial Review on the ground that a public body has committed jurisdictional error. 4. ERROR OF LAW An error of law is a condition or an act of ignorance, negligence or imprudent deviation or departure from the law. Ignorant departure would include a situation where an administration official is ignorant of the law. If the Minister of Local Government for example has no idea that he cannot sack an elected mayor, this is an act of ignorance. Negligence would be where an 66 administrative body fails to do what the law provides and in that case they have failed to look up the law to see what it provides. This can result from a number of things: 1. Failure to ascertain what the law says about a particular matter; 2. Misconstruction of the law; 3. Misinterpretation of the law; 4. Blatant disregard of the law; 5. Misunderstanding of the law; or 6. Misdirection on the law (this involves a situation where an administrative body seeks direction on the law) i.e. if the head of civil service seeks direction from the AG or from the Chief Justice or Minister for Justice and Constitutional Affairs and they give incorrect directions on the same, this is misdirection. 5. ERROR OF LAW ON THE FACE OF THE RECORD In all the above cases, it is usually said that there is an error of law on the face of the record. An error of the law on face of the record is an error which may be ascertained by an examination of the record of proceedings without recourse to any evidence. Just by looking at the record of proceedings, one can tell that the law was not followed. The result of error of law is that the decision made and all the acts done in error of law are invalidated upon judicial review because they are illegal. 67 In R v. Northumberland Compensation Appeals Tribunal ex parte Shaw a former employee of an administrative body claimed compensation on termination of his employment. Under the applicable regulations the tribunal was required to assess compensation payable by aggregating two periods of employment i.e. the law was saying that in computing compensation one would have to aggregate two periods of employment. In its decision the tribunal stated that of the two periods of employment, they would take into account only the second period. Upon application for judicial review this decision was quashed because of the error of law that had been committed. The court found that this amounted to an error on the face of the record and the decision was quashed. The court issued an order of certiorari which involves the production of proceedings of the tribunal to the High Court so they can be quashed. 6. ERROR OF FACT It is important to note that facts are integral to the making of a decision. The validity of a decision depends on the proper appreciation and interpretation of facts. An error of fact occurs where there has been an act or a condition of ignorance, negligence or imprudent deviation from facts. This may occur from a number of facts: 1. Where facts have not been properly appreciated; 2. Where facts have not been properly interpreted; 3. Where there is an incorrect finding of facts; 4. Where irrational conclusions are made from facts; 68 5. Where a decision is made without giving due regard to the factual circumstances of the case at hand. The effect of error of facts is that it renders a decision null and void. 7. ABUSE OF POWER Abuse of power includes cases where the power and authority given public bodies have: 1. been put to a wrong or improper use; 2. been used so as to injure or to damage; 3. been misused; 4. Been used corruptly. If the court finds that an administrative body has abused its power or his power, any act done or decision made will be invalidated. 8. IMPROPER EXERCISE OF DISCRETION An administrative body has the authority to exercise discretion whenever the limits of its statutory authority leave it to decide between two or more causes of action or inaction. There will have to be a statutory authorisation to do something but the statutory provisions does not completely specify what one is authorised to do. The exercise of discretion is an important aid to the exercise of statutory powers. Whenever circumstances give rise to the exercise of discretion: 1. Discretion must be exercised properly; 2. Discretion must be exercised reasonably; 69 3. Discretion must be exercised by the proper authority only and not by a delegate; 4. Discretion must be exercised without restraint;Certain circumstances will give rise to improper exercise of discretion which includes: 1. Exercising discretion for improper motive; 2. Where power to exercise discretion is delegated to a person who is not charged with the responsibility in question; 3. Where discretion is exercised so as to serve self-interest. Consider Fernandes V. Kericho Liquor Licensing Court. The case concerns the authority given to Kericho Liquor Licensing Court to grant licences. In this case they decided they were only going to give liquor licences to Africans. The Court ruled that they had exercised their discretion improperly by deciding to issue licences only to Africans. 9. IRRELEVANCY Irrelevancy occurs in two situations: 1. Where a decision making body considers a matter which it ought not to consider in arriving at a decision; e.g. if on the basis of gender a licence is denied. 2. Where an administrative body disregards something which it ought to consider in making a decision. 10. BIAS It is a predetermined tendency to favour one outcome, one outlook or one person against another. It involves acting partially i.e. acting favourably to one side. Whenever an allegation of bias is made, a reviewing court will investigate whether there is an 70 appearance of partiality. A reviewing court will evaluate whether there is a tendency of one side to favour one person. There are certain principles that will guide the court in determining the presence of bias. (i) The Real Likelihood of Bias; Circumstances in which the court will conclude that there was a real likelihood of bias include cases where the decision maker has an interest in the matter under consideration. Interest may be pecuniary, interest may also be adverse. (ii) The Real Danger Test: This is another of the tests that the court will apply in determining the presence or absence of bias. The consideration is whether there is a real danger that a public official or body participating in a decision will be influenced by a personal interest in the outcome of a case. The question to ask is how significant the interest is and how closely or remotely related to the issue it is. In the real danger test the consideration is whether there is a real danger that an official participating in a decision will be influenced by a pecuniary interest and how closes or remote it is to the matter decided. (iii) Actual Bias: There are cases where in the absence of the real likelihood of bias, pecuniary or other interests and the real danger of partiality, bias does actually occur and in this situation the test is whether there was actual bias. In cases where there is a likelihood of bias, for example in cases where members of the decision making body have a pecuniary 71 interest in the matter to be considered, they must disqualify themselves from taking part in making that decision. If they do not, this will give rise to bias and the decision made can be invalidated upon review. Invalidation is by way of quashing the decision. 11. UNFAIR HEARING Administrative bodies are bound to give a fair and proper hearing to those who come before them. Often the statutes will prescribe the procedure for hearing indicating how concerned parties are to be heard. In such statutory provisions, the duty to grant a fair and proper hearing may be implied. In the absence of statutory provisions setting forth procedure for hearing, common law rules regarding fair and proper hearing will apply. Where a public body makes a decision without due regard to prescribed procedure or without due regard to common law principles of fair hearing, an aggrieved party will be entitled to petition the court for review. In Neil v. North Antrim Magistrate’s Court it was suggested that even if a right decision is arrived at a party may still petition the court if some procedural flaw occurred occasioning damage. This means that if a party had a case and even if he argued that case as cogently as he could, failure to grant a fair hearing will bring the court to invalidate that decision no matter how bad the case was. A person must have a chance to be heard. 72 It is important to note that if a party petitions the court for judicial review on the ground that he was not granted a fair hearing and should the court find that this person was not given a fair hearing, the court will declare the decision null and void. 12. IRRATIONALITY Irrationality is derived from the word irrational. This means that if a decision making body or an administrative body acts irrationally, whatever that body does or whatever decision it makes can be invalidated upon judicial review. Irrationality means conduct beyond the range of responses reasonably open to an administrative body. In determining whether a particular act or decision is irrational, a reviewing court will consider whether a public body has done something which a reasonable body with the same function and confronted with the same circumstances could not do. This is an objective test. 13. BAD FAITH (Mala Fides) If the court finds that a body made a decision in bad fai