Court of Appeal Comes to the Aid of Gov’t in Auction of Assets

The Court of Appeal came to the aid of the government stating its assets cannot be attached in the execution of an order.

The only method of execution, the three-judge bench stated is to institute Judicial Review proceedings and seek an order of mandamus compelling the accounting officer in the relevant ministry to pay the decretal amount.

This is because the government is protected and given immunity from execution and attachment of its properties/goods under Section 21(4) of the Government Proceeding Act.

The order of mandamus is of a most extensive remedial nature, and is, in form a command issuing from the High Court of justice, directed to any person, corporation or inferior tribunal, requiring him or them to do some particular thing therein specified which pertains to his or their office and is in the nature of a public duty.

The government, the Court of Appeal stated, includes constitutional commissions such as Kenya National Human Rights Commission (KNHRC), National Land Commission (NLC), Independent Electoral and Boundaries Commission (IEBC), Teachers Service Commission (TSC), Independent offices and County Governments.

According to section 21 of the Government Proceedings Act, a party must obtain the certificate of order against government and issue a 21 days’ notice before filing the Judicial Review application.

“….The only requirement which serves as the enforcement of a decree for money issued against the government is the payment will be based on a certificate of costs obtained by the successful litigant from the court issuing the decree which should be served on the attorney general.”

“The certificate of order against the government should be issued by the court after expiration of 21 days after entry of judgment,” ruled the COA

Justices Daniel Kiio Musinga, Mumbi Ngugi and Grace Wangui Ngenye-Macharia made the decision in a case brought against the NLC by Five Star Agencies Limited.

NLC in 2006 compulsorily acquired a parcel of land property of Five Star for the construction and upgrading of the Nairobi Southern bypass, subsequently NLC awarded them Sh84.8 million compensation for the portion acquired.

Aggrieved by the award, the agency moved to the Environment and Land court in 2014 and argued that the award was not fair and just compensation.

In November 2014, the court awarded Five Star Sh413 million after finding that the compensation awarded to them by NLC was “a gross undervalue and not full and just compensation as required by the constitution, the land act and the repealed land acquisition act.”

The NLC however did not comply with the orders prompting Five Star to file an application on July 2016 seeking an order of mandamus to compel the NLC to fully comply with the judgment and decree issued by the trial court.

The trial court ruled in favor of Five Star.

NLC was served with a letter dated November 24, 2023 requiring payment of Sh1.2billion being decretal sum plus interest.

They however did not honor the demand, leading to the institution of garnishee proceedings on January 20, 2023.

Garnishee proceedings is a process of enforcing a money judgment by the seizure or attachment of the debts due or accruing to the judgment debtor which forms part of its available property.

Five Star sought orders, compelling National Bank of Kenya, garnishee to the NLC appear before court to show cause why it should not pay them Sh1.2 billion.

It alleged that the funds held to the NLC’s credit at NBK had been set aside for compensation of land owners whose parcel of land had been compulsorily acquired.

In opposing the proceedings, NLC said the application was premature and misconceived subsequently, asked the court to dismiss it.

In dismissing the application, the court held that the mode of execution adopted by Five Star was contrary to the provision of the Government Proceedings Act and order 29 rule 2(2) of the civil procedure rules.

“Five Star was constitutionally entitled to receive compensation for its compulsorily acquired property, the funds in the special account held at NBK could not be garnished to satisfy the decree, the obvious discrimination by the NLC in prioritizing compensation for other PAPs notwithstanding.”

In the civil appeal by Five Star before the Court of Appeal, they alleged that the “learned judge erred in law in holding that the NLC was not subject to garnishee proceedings on supposition that the government proceedings Act and the civil procedure rules confer immunity to it against such proceedings.”

The court however, ruled that Five Star did not obtain certificate of order against the government from the trial court instead it obtained a copy of the decree which it served upon the NLC.

The bench said the garnishee proceedings were “incompetent, bad in law and unsustainable.”

Furthermore, Five Star ought to have commenced execution proceedings against the NLC in strict adherence with the provision of section 21 of the government proceedings Act said the court of appeal.

“In the present case applicant has no other option of realizing the fruits of his judgment since he is barred from executing against the government. Apart from mandamus he has no option of ensuring that the judgment that he has been awarded is realized.”

“Unless something is done, he will forever be left babysitting his barren decree,” ruled the three judge bench.

The High court on March 25, 2024 declared section 31a and 21 of the Government Proceedings Act unconstitutional.

Justice Nixon Sifuna termed the section as colonial relic that has no place in the modern society

The judge ruled that the laws frustrate rather that facilitate the processing and expeditious disposal of cases.

“The legislation is an archaic colonial outfit that inadvertently escaped the post-2010 legal reforms that sought to align the laws with the Kenya Constitution 2010 and the new legal order it had established as well as the wind of change that it brought,” the judge said.

But officials argue the ruling by the Court of Appeal now overtakes that of Justice Sifuna.