On 10 November 2023, the Kenyan Court of Appeal delivered its judgment in Patrick Kabundu & Another v County Government of Mombasa, offering additional clarity on considerations guiding the court’s merits assessment of decisions taken by public authorities (after the approach set in the Edwin Dande Supreme Court judgment). The Court of Appeal’s judgment revealed the slippery slope characterising merits review, which permits a judicial review court to exert deeper scrutiny, an issue which is potentially relevant for the protection of the right to a fair trial under Articles 25 and 50 of the Constitution. This important ruling partly offers the much-sought clarity on the remits of merits review, as well as the extent to which a judicial review court may analyse evidence.
The appellants had filed a judicial review application before the High Court challenging the arrest and prosecution of the members of the second appellant, an association from Mombasa, for failure to pay what they termed illegally imposed fines. They averred that they had been subjected to double taxation by being charged for business and liquor license levies simultaneously under the Mombasa County Finance Act 2019 and the Mombasa County Liquor Licensing Act 2014 (the Acts). Conversely, the respondent submitted that the charges imposed by the County Government were in line with Article 209 (2) and (4) of the Constitution. Besides, Article 185 of the Constitution empowered County Assemblies to make laws.
The High Court judgment acknowledged that the respondent (a County Government) had conducted a process of public participation and, because of that, found that the decision-making process had been fair. Due to the limited scope of judicial review, the trial court could not decide the merits of the taxation decision and was restricted to assessing the fairness of the decision-making process. Aggrieved, the affected persons appealed.
Issue and determination
Before the Court of Appeal, the crux of the appeal was whether the trial court had conflated the issue of public participation with that of double taxation, thereby failing to address the concerns raised by the appellants on double taxation by ruling that this was an issue of merit review.
The Court of Appeal’s judgment observed that in appropriate cases arising from the grounds for judicial review set out in section 7 of the Fair Administrative Action Act (FAAA), merit review was necessary for judicial review . It ruled that the trial court should have addressed the legality, constitutionality, and reasonableness of simultaneously imposing the single business permit and liquor licencing fees under the Acts . Ultimately, the judgment assessed the case’s merits on double taxation by ascertaining whether the provisions in the two Acts were discriminatory and unconstitutional .
Crucially, in dismissing the appeal, the Court of Appeal ruled that the Acts were neither discriminatory nor amounted to double taxation, as the purposes of the Acts differed . Impliedly, the objectives and purposes of the Acts were diametrically opposed, and any fees raised from the activities under the two Acts could not be said to be for the same purposes, and there was no double taxation.
This judgment entails an important sea change in the approach to merits review. It partly clarifies the extent to which a court may embark on merits review, as well as on analysing evidence. In assessing the case’s merits, the Court of Appeal focused on the legality, constitutionality, and reasonableness of simultaneously imposing the single business permit fees and liquor licencing fees.
In so doing, the appellate court offered glimpses of how much a court may examine the case’s merits. It held that, in merits analysis, the focus is on all the elements of the impugned decision, including how a decision maker may have exercised discretion conferred upon them by assessing the principles of proportionality, public trust, accountability by public officers, justice and equity, as well as other factual findings of a case. Notably, the merits review in this appeal fundamentally differs from the traditional understanding of judicial review, which was historically concerned with whether the impugned decision was reached through a lawful decision-making process, as public law experts such as Professor Migai Akech and Ochiel Dudley have submitted.
From a public law theory perspective, this judgment promotes Article 259 of the Constitution, which requires courts to interpret it in a manner that contributes to good governance. The judgment shuns the misconception that judicial review must be limited to a dry or formalistic examination of the process, thereby bolstering the right to a fair trial under the Constitution. However, merits review is not yet fully settled, as broadening judicial review may require legislative responses to create certainty and limit the second-guessing of courts’ determinations. It will be interesting to monitor the evolving jurisprudence on merits review, considering the primacy of the constitutionally-entrenched doctrine of separation of powers, limiting courts’ role in interfering with the administrative functions of other democratically-elected government arms.
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