The Process Of Conversion Of Titles in accodance with the Land Registration Laws

 

Pursuant to the Conversion Manual issued by the Ministry of Lands, the public is advised that all titles are to be converted from the regimes under Repealed Acts and in accordance with the Land Registration Act. 

In this article we seek to demystify the various titles and describe the process of conversion as provided by the Ministry of Lands.

1.0 Repealed Land Registration Systems In Kenya And The Process Of Land Registration Under The New Regime

Land law in Kenya is characterized by various pieces of Legislation which still dictate the processes in the issuance of title deeds.  Since colonialism, the process of registration and issuance of title has been governed by multiple statutes.  In Kenya there are five land registration systems namely; the Registered Land Act (RLA), the Registration of Titles Act (RTA), the Land Titles Act (LTA), Registration of Documents Act (RDA) and the Government Lands Act (GLA) (which have all been repealed) and the Land Registration Act.

These statutes determined the type of document under which a particular parcel of Land was registered.  Under the Registration of Documents Act (RDA), the Land Titles Act (LTA) and the Government Lands Act (GLA, the registration system was that of documents or deeds while under the Registration of Titles Act (RTA) and Registered Land Act (RLA), the registration system was that of titles.

1.1 Registration of Documents Act (RDA)

Enacted in 1902, the Act essentially sought to create a register of documents. It provided for both compulsory and optional registration. The Act made it obligatory to register any document that purported to confer a right, title or interest in immovable property. However, certain documents could be registered at the option of the owner such as Building Plans, Wills, Powers of Attorneys and Deed Polls.

1.2 The Lands Title Act (Cap 283 Laws of Kenya)

This act was enacted in 1908 specifically to assist the government to differentiate between private land and crown land leased from the Sultan of Zanzibar.  Persons who were entitled to private land were issued with Certificates of Ownership giving freehold title. On the other hand, if the title acquired was leasehold, then Certificates of Mortgage or Certificates of Interest were issued as evidence of ownership.

1.3 The Government Lands Act (Cap 280 Laws of Kenya)

This Act was enacted in 1915 and mostly dealt with land parcels considered as farm land such as land in Central Province, Kericho and Nairobi. The title deeds issued under this system contained the words “Indenture”, “Conveyance” or “indenture of conveyance” as part of their heading.

1.4 The Registration of Titles Act (Cap 281 Laws of Kenya)

This statute came into force in 1920 with the aim of improving the issuance of titles to land as well as regulating the same. Just like the Lands Titles Act, under this act, the documents evidencing ownership were Certificates of Ownership, Mortgage or Interest. The Registered Land Act (Cap 300 Laws of Kenya)

Under the Registered Land Act, A certificate of Lease was issued for leasehold Land and an Absolute title deed registered where the land in question was freehold land.

2.0 The process of conversion of titles

The above statutes have since been repealed and the Ministry of Land and Physical Planning has embarked on the process of registration of these titles under the newly enacted Land Registration Act, 2012. In order to effect the provisions of the Land Registration Act 2012, all titles issued under the repealed laws shall be cancelled and replaced with titles under the Land Registration Act, 2012.

Essentially, the process of conversion begins with the preparation of cadastral maps which serve as a unified survey document together with a conversion list showing the old parcel numbers of land within a registration unit and their corresponding sizes.

Upon receipt of the cadastral maps and the conversion list from the registrar, the Cabinet Secretary in charge of the ministry of Land and Physical Planning shall in line with regulation 4 (4) of the Land Registration (Registration Units) Order, 2017, notify the Public through the Kenya Gazette and two daily newspapers of nationwide circulation of the list of old parcel numbers and new parcel numbers after conversion. The Gazette notice shall specify the date after which the land registry shall be open to the public for transactions or dealings within the registration unit.

Any complaints relating to information in the conversion list or cadastral maps shall file be filed within ninety (90) days from the date of publication of the notice. The complaints shall be made, in writing in Form LRA 96 set out in the Second Schedule to the Land Registration (Registration Units) Order, 2017 or Form LRA 67 set out in the Sixth Schedule to the Land Registration (General) Regulations, 2017 for the registration of a caution pending the clarification or resolution of any complaint. The complaints shall thereafter be resolved within ninety (90) after receipt.

At the commencement date, all registers maintained in any other registry previously dealing with the parcels within the registration unit shall be closed for any subsequent dealings and all transactions carried out in the new register.

The registrar will then issue a notice inviting registered owners to make an application for replacement of title documents from the closed registers.  The application shall be accompanied by the original title and the owner’s identification documents. The registrar will then replace the title deeds with new ones and retain the old title documents for records and safe custody.

However, it is important to note that this conversion does not interfere with the ownership, size and other interests registered against the respective title. When it comes to titles in the possession of third parties such as banks, hospitals and courts, the process of conversion shall commence on application by the proprietor.

3.0 Conclusion

The conversion process is an continuing process intended to be carried out in stages. The Ministry of Lands has already issued a Gazette Notice listing various parcels of Land to be converted. Land proprietors are expected to be vigilant and compliant with these notices. To this end land owners are encouraged to confirm whether their properties are listed and make complaints if any within the stipulated period.

Disclaimer: The content of this document is intended to be of general use only.

ANALYSIS OF THE LAW ON CAVEAT AND CAUTION

 

WHAT IS A CAVEAT?

The word Caveat means warning or proviso (something said as a warning, caution, or qualification). The lodging of a caveat over a property is a way telling anyone who wants to deal with the property to be aware of the fact that someone else’s interest already has priority.

 

WHAT IS A CAUTION?

A Caution is a notice in the form of a register to the effect that no action of a specified nature in relation to the land in respect of which the notice has been entered may be taken without first informing the person who gave the notice.

 

HOW DOES ONE PLACE AND REMOVE A CAVEAT OR CAUTION?

a) Notice and effect of Caution

The registrar shall give notice in writing of a caution to the proprietor whose land, lease or charge is affected. So long as the caution remains registered, no disposition which is inconsistent with it shall be registered, except with the consent of the cautioner or by order of the court.

 

b) Withdrawal/removal of the Caution

i. A caution can be removed by the person lodging the same, or by order or the court, or by the Registrar, if such person fails to remove it after being served with a notice to do so by the Registrar.

 

ii. The registrar may, on the application of another person interested, serve notice on the cautioner warning him that his caution will be removed at the expiration of the time stated in the notice. If at the expiration of the time stated the cautioner has not objected, the registrar may remove the caution.

 

c) Second Caution in respect to the same matter

The registrar may refuse to accept a further caution by the same person or anyone on his behalf in relation to the same matter as a previous caution.

 

d) Wrongful Caution

Any person who lodges or maintains a caution wrongfully and without reasonable cause shall be liable, in an action for damaged at the suit of any person who has sustained damage, to pay compensation to such person.

 

WHO CAN LODGE A CAVEAT OR CAUTION ON LAND?

Any person who is claiming a contractual or other right over land amounting to a defined interest capable of creation by a registable instrument, e.g. a lease, may lodge a caution with the Registrar against any dealing which is inconsistent with his interest. Entry of a transaction, with respect to such land, may not then be made unless the cautioner has received notice. Lodging of a caveat or caution without reasonable cause can lead to a remedy in damages.

 

Sacco Societies Regulatory Authority (SASRA)/Frequently asked questions on Regulation of SACCOS in Kenya

What regulates SACCOs in Kenya?

The SACCO Societies Regulatory Authority (SASRA) is the primary regulatory body charged with licensing Deposit‑Taking Sacco Societies (Savings and Credit Co-operatives Societies) - DT regulation 2010 and authorizing specified Non Deposit taking saccos - NDTS Regulations 2021 in the Republic of Kenya.

The Sacco Societies Regulatory Authority (SASRA) is a statutory state corporation established under the Sacco Societies Act (Cap 490B) of the Laws of Kenya (the Act) which came into full operation upon the gazettement of the Sacco Societies (Deposit-taking Sacco Business) Regulations, 2010 (the Regulations 2010) on 18th June 2010. The principal mandate of the Authority under the Act as read with the aforesaid Regulations, 2010 has been to license Sacco Societies to undertake deposit-taking Sacco business in Kenya (popularly known as Front Office Service Activity or FOSA), and to supervise and regulate such Sacco Societies in Kenya among other things.

Are SACCOs regulated by CBK?

ii) CBK has a formal working partnership with SASRA to engage in continuous technical consultations to guide the licensing, regulation and supervision of deposit taking SACCO Societies.

How are SACCOs governed?

According to Part II of the SACCO Societies Act 2008 Kenya, an authority is established to regulate and manage SACCO societies. This authority is called SACCO Societies Regulatory Authority (SASRA).

How do SACCOs operate in Kenya?

Like banks, SACCOs accept deposits and make loans—but unlike banks, SACCOs are not in business to make a profit. Banks exist to make money for their stockholders, not for their depositors. SACCOs exist solely to serve their member-owners, and benefits are returned in lower loan rates and higher deposit rates.

Are all SACCOs regulated by Sasra?

SASRA's mandate allows it to regulate, supervise, and license all the deposit-taking Saccos in the country in accordance with the Sacco Societies Act of 2008. Before a Sacco is registered, it has to comply with all the SASRA regulations.

Can one join two SACCOs in Kenya?


Yes. As long as the said member shall belong to no more than one Sacco Society having similar objectives as mentioned above.

Which is best Sacco in Kenya?

STIMA SACCO SOCIETY LTD

Membership is open and any Kenyan citizen is eligible to join Stima Sacco regardless of his or her area of residence. Stima Sacco is currently ranked as the best performing Sacco in the country.

How many members can form a SACCO?


The number of members in the society (At least 10 members); The names, occupation and postal addresses of the Chairman, treasurer and secretary; Proposed Physical address of the society.

How do you manage a SACCO?

SACCO members are the owners and they decide how their money will be used for the benefit of each other. Savings and Credit Cooperatives are democratic organizations and decisions are democratically made. Members elect a board that in turn employs staff to carry out the day-to-day activities of the SACCO.

Does a Sacco have a Constitution?


Section 2 of the SACCO Societies Act defines a Sacco as a savings and credit co-operative society registered under the Co-operative Societies Act. A Sacco is therefore a co-operative society regulated under Part 2 of the Fourth Schedule to the Constitution.

How do you earn dividends in a SACCO?


Saccos pay dividends to all members with balances in deposits and share capital for a given financial year. Most Saccos pay their members' dividends after approval, usually done after the Annual General Meeting.

Which is the richest Sacco in Kenya?

Mwalimu National remains the wealthiest Sacco new Sacco Societies Regulatory Authority (SASRA) data shows.

Procedure for Registration of non-deposit taking saccos

1. Formal request in writing to the commissioner for cooperative development with intent for the formation of a non-deposit taking Sacco

2. Proposed Names for Search and approval

3. Objectives of the society

4. The number of members in the society ( at least 10 members)

5. The name, occupation and postal addresses of the chairman, treasurer and secretary

6. Proposed physical address of the society, address includes road, plot number, town and county

7. Constitution of the society

8. Sacco Registration Forms

Procedure for Registration of deposit-taking saccos

1. The Sacco has to provide a minimum core capital of Kshs 10 million as shown in their financial or through submission of bank statements

2. All directors and senior management will be subject to a fit and proper test vetting their moral and professional suitability to be on the board and to manage the Sacco Society Respectively.

3. A detailed four year business plan and feasibility study including projected financial statements.

4. Fill in and submit application forms to SASRA and required documents

5. If satisfied SASRA will issue a letter of intent, upon which the Sacco will be required to set up its business premises, put in place the management information systems and develop a comprehensive risk management framework.

6. Once the above is completed SASRA will conduct an onsite inspection within 30 days and if satisfied will issue a Letter of Compliance to the Sacco within another 30 days.

7. The body will then issue a License upon payment of the stipulated license fees.

8. The estimated time is 4 months for a Sacco that fully complies with all the licensing requirements. The license for deposit taking is renewable annually.

 Courtesy of SSRA

A Review of the Salient Features of the Sectional Properties Act, 2020 and the Sectional Properties Regulations, 2021

1.0 Introduction

The Sectional Properties Act, 2020 laws of Kenya (the “new law”) has effectively repealed the Sectional Properties Act of 1987, laws of Kenya (the “repealed law”).

The sectional properties law seeks to sub-divide buildings into units to be owned by individual proprietors and common property to be owned jointly by the proprietors as tenants in common.

The new law seeks to simplify the process of registration of sectional properties and create an enabling environment for investors and property owners. It seeks to guarantee the rights of property owners by conferring absolute rights to individual unit owners over their units and vest in them the reversionary interests thereto.

This will give the unit owners greater power and liberty to deal with their units as they please and it is anticipated that their transactional ability to access financing and dispose their units will be dramatically expanded. This will also motivate lenders and financiers to offer credit facilities to the individual unit owners as they may now charge the individual units directly without requiring the consent of the developer and or the manager.

We highlight the salient features of the Sectional Properties Act, 2020 as below: -

1.1. Leasehold Tenure

The sectional properties law applies to land held on a freehold tenure or on land held on leasehold tenure where the intention is to confer ownership. The new law has reduced the leasehold period to twenty-one years from the forty-five years required under the repealed law. This enlarges the purview of the sectional properties laws to extend to proprietors of all long term leaseholds which are defined in law as leases for a period of twenty-one years and above.

1.2. Nexus Between The Sectional Properties Act 2020 And The Land Registration Act, 2012

The efforts of the Ministry of Lands and Planning (the “Ministry”) in the recent past have been geared towards phasing out the different land registration regimes that have existed and give effect to the Land Registration Act, 2012 (the “LRA”); such that all dealings in or dispositions of land shall be registered under the LRA. The new law makes express reference to this by providing that the title to a sectional property shall be deemed to be issued under the LRA and all dealings and dispositions regarding the sectional property shall be in accordance with the LRA.

1.3. Registration And Mandate Of The Management Corporation

Upon registration of a sectional property, the individual owners are constituted in a Corporation which is responsible for management of the common property. The new law provides that upon registration of the sectional plan, the registrar shall issue a Certificate of Registration in respect of the Corporation. This was not the case under the repealed law.

The new law mandates the Corporation to do all things to ensure the common property is well managed and may engage the services of a property manager or any other person to this end. The new law further mandates the Corporation to establish an internal dispute resolution mechanism through the Committee established under the Act to hear and determine any disputes. It also empowers the Corporation to execute any of its duties by the use of technology. These provisions were not in the repealed law and reflect the dynamics of the current world.

The new law has repealed section 29 of the old law which provided for the compulsory appointment of an institutional manager and extensively set out the qualifications and duties of the said institutional manager who would be responsible for management of the units, any property of the Corporation as well as the common property. As discussed above, section 20(1) of the new law provides that the Corporation may, if it deems it necessary appoint a property manager to manage the common property.

1.4. Conversion of Sub-Leases

The new law further provides that all long term sub-leases intended to confer ownership on a mansionette, apartment, flat, town house or office that were registered before the new law shall be reviewed to conform with section 54(5) of the LRA and the proprietors thereto shall be issued with certificates of lease. The import of this provision is to transition all buildings to sectional status and guarantee the absolute rights of the owners of such units to deal with the same without being subject to the power and direction of the developer and or the management company.
This said review and transition of sub-leases shall be done within a period of two years from the date of commencement of the new law. This will not entail a transaction from scratch and an owner who has already paid stamp duty in respect of the said sub-leases shall not be required to pay stamp duty during the revision.
The process of conversion may be commenced by the developers, the management company or the individual unit owner. If the developer is unwilling to surrender the mother title for purposes of the conversion, the registrar may register a restriction against the title to prevent any further dealings on it.

The review process anticipated in the new law must be read and understood alongside the provisions of the Gazette Notice Number 11348 of 31st December, 2020 providing for conversion of land titles. It would appear that the efforts of the Ministry are geared towards bringing all land dealings in Kenya under the purview of the LRA as earlier discussed. The surrendered sub-leases would be subject to the new land registration units established under the said Gazette Notice depending on where the property is situated. Noting the timelines set out for conversion of the land titles commencing from the month of April, 2021, a diligent unit owner should peruse the Gazette Notice to confirm whether the mother title is part of the phase one of the conversion of land titles. It is not clear which of the two between the conversion and the surrender and revision of the sub-leases should precede the other or whether they can be undertaken at the same time.

1.5. Registration And Removal Of Caution In Respect Of Unpaid Amounts

The Corporation may register a caution against the title to an owner’s unit for any amounts due and unpaid by the owner, provided that upon payment of the amounts due, the Corporation shall within thirty days of payment withdraw the caution. The new law has prescribed the period within which the caution should be withdrawn. The repealed law was silent on this.

1.6. Renting Of Residential Units

Under the repealed law, an owner renting out their unit was required to disclose to the Corporation the amount of rent chargeable to the unit as well as pay a deposit to the Corporation for maintenance, repair and or replacement of the common property. This is not a requirement under the new law which recognizes the autonomy of an individual unit owner to deal with their individual unit as they please independent of the common property and the mandate of the Corporation.

1.7. Termination Of The Sectional Status Of A Building

Under the new law, the sectional status of a building may be terminated by unanimous resolution of the unit owners, the substantial all total destruction of the building or pursuant to an order for compulsory acquisition and the Corporation shall stand dissolved upon the termination of the said sectional property status. Under the repealed law, the sectional status would only be terminated by unanimous resolution or by an order of the Court. The Corporation was also required to apply to court for an order winding up the affairs of the Corporation.

1.8. Dispute Resolution

Under the repealed law, any disputes relating to the contravention of the by-laws of the Corporation were referred to a tribunal established under the Landlords and Tenants Act which was mandated to recover from an errant owner or tenant a penalty not exceeding Kenya shillings twenty-five thousands. Under the new law, disputes in relation to contravention of the by-laws are referred to the Committee which is an internal dispute resolution mechanism of the Corporation and without any prescribed limit as to the penalties to be levied.

Under the new law, in the event of non-compliance with an order of the Committee or if a party is disgruntled with the decision of the Committee, both may apply to the Environment and Land Court for enforcement of the order or in the case of an appeal from the decision of the Committee as the case may be. The repealed law provided that enforcement of an order of the tribunal in the event of non-compliance would lie with the Resident Magistrate Court and any right of appeal would be exercised at the High Court of Kenya.

The Sectional Properties Regulations, 2021

Introduction

The Cabinet Secretary for Lands and Physical Planning has gazetted the Sectional Properties Regulations, 2021 (“the Regulations”). Their objective is to operationalise the Sectional Properties Act, 2020 (“the Act”). The Act covers ownership of units in a building such as offices, apartments, flats, and townhouses. We summarize below the key provisions of the Regulations.

Salient features of the Regulations
A key aspect of the Act is that ownership of the unit is devolved to the unit owners and held exclusively by them. This is illustrated by the below:

Sub-division and Consolidation
Owner may sub-divide or consolidate their unit by registering a sectional plan of sub-division, or consolidation respectively. 

Where the subdivision or consolidation is likely to affect the incidental rights of other unit owners, their consent will be required. If the property is charged, the chargee’s consent will be required, as well. 

Apportionment of Rent and Rates 

The obligations to pay rent and rates is now on the unit owners. 

Rates Apportionment is determined by the County Government of the area the parcel is located. 

The Unit factor attributable to the unit, as computed below is one of the factors taken into account in determining rates or rent payable. 

Unit factors 

Each registered unit shall be allocated a unit factor/unit entitlement. The unit factor is critical in determining the ownership of Common Property held by all the unit owners as tenants in common and the number of votes that a person may cast in a poll. 

The unit factor may be determined in reference to any of these 3 factors or a combination: 

❖ by the unit floor area; or 

❖ by the selling/ value of the unit; or 

❖ by location/position of the unit e.g. a penthouse or a riverfront unit as opposed to the other units.

The recommended basis under the Regulations is the use of unit floor area, which is the simplest. The total of the unit factors for all units in the parcel is assumed to be 10,000, for ease in determining unit factors in whole numbers. 

Note: The size of the Common area is not factored in when determining the total area. 

Conversion 

Documents supporting a conversion application are the: sectional plan, sub-lease/ long term lease and the Title or a Copy of the Title of the parcel. Where the original title is unavailable, the applicant shall apply for a replacement title. 

After conversion, the Registrar shall issue the unitowner with a Certificate of Title/Lease. 

 Upon conversion, the management company should transfer all its assets and liabilities to the corporation within a period of one year from the date of registration of the corporation. 

If the property is charged, the application for conversion may be prepared by the developer, Management Company or unit owners but submitted by the chargee or its appointed representative for processing at the Lands Registry. Failure to make an application for conversion shall not invalidate a charge over a Unit meant to secure the unit owner’s obligations to a chargee. A charge may as well exercise its statutory power of sale and the Registrar shall issue a new sectional title in the name of the transferee upon registration of transfer by the chargee.

Conclusion 

The Regulations are a positive step towards the implementation of the Act, which seems to have a lot of confidence from the end purchasers.  

The Act requires conversion of long term leases within 2 years from its commencement i.e. December 28, 2020. With almost a year having lapsed before the publishing of the Regulations and considering any operational delays, it may be prudent that the Act is amended to allow the CS by gazette notice provide for the period within which conversion must be complete. 

Additionally, conversion where the Property is charged as security may be problematic for example where only a portion of the units have been sold. There would need to be co-operation between the developer and the buyers who were issued with long term leases, pursuant to a Partial Discharge. If these individual buyers had then used their units as security to other financial institutions, it presents another hurdle. Even where transfer of all units is complete to individual buyers, noting that securities are noted against the individual leases and not the Head Title, the accuracy of data to ensure no gaps in transition should be ensured. 

More so, a transparent and phased approach such as the one for Conversion of Land parcels, where a gazette notice is published identifying parcels that will be converted may be of some utility, as well as any records by Management Companies for any consents to charge also presented with the application. 

Review: Opposing a bankruptcy petition

 

The purpose of bankruptcy/insolvency proceedings is for reasons that the bankruptcy is a judicial attachment on all assets of the debtor for the benefit of his creditors, almost always resulting in the execution of such assets. A bankruptcy aims ensring the distributiin of the proceeds of exeution of the assets of the debtor to all its creditors, and with due observance of the rights of the debtor. Further, it serves to terminate all existing attachments and prevent future seperate attachments and executions by one or more creditors.

Introduction

The overall design of The Insolvency Act is to give a distressed Debtor a second chance. Where the Debtor is a natural person, Part 11 of The Insolvency Act provides for Alternatives to Bankruptcy. One such alternative is for a Debtor to seek an Interim Order so as to make a proposal to his/her Creditors for a Composition in satisfaction of the debts or a Scheme of Arrangement of its financial affairs. This remedy is provided in section 305 of The Insolvency Act.

If you are served with a bankruptcy petition which seeks to adjudge you bankrupt in securing a debt that is allegedly owed by you, there are various grounds upon which you can rely on in opposing the steps that may result to the making of a bankruptcy order. 

 

How can I oppose a bankruptcy petition?

A bankruptcy petition may be challenged based on the following substantive grounds:

• ·The debt alleged in the demand to be owing is genuinely disputed on substantial grounds by the debtor. If the debt is disputed, the petition will likely be dismissed by the court;
• ·however, unsuccessful arguments presented in an attempt to set aside a statutory demand cannot be reheard by the Court at the bankruptcy petition hearing;
• ·the Court can also dismiss the petition if it is satisfied that the debtor is able to pay all the debts to the creditor; or
• ·The company has a genuine right of set-off against the creditor which exceeds the amount claimed in the demand.
• ·One can argue that the petition is pre-mature; an abuse of the court process as the creditor is yet to exhaust recovery mechanisms available to it in law against the Debtor. Alternatives to bankruptcy are provided for under S. 14 of the Insolvency Act.
• ·More grounds to be added…

What is the procedure to oppose a bankruptcy petition?

The procedure to oppose a bankruptcy petition is to file a replying affidavit in response to the filed bankruptcy petition. in the R.A. you will be expected to provide grounds upon which you decline issuance of a bankruptcy order. The response is to be filed as per the timeline set out by the Insolvency Regulations and Act. This is usually days before the hearing date is set. 

You are equally expected to file copies of evidence which support the reasons as to why you should not be declared bankrupt as soon as it is reasonably practicable.

Malicious Presentation of a bankruptcy Petition

A malicious bankruptcy petition is one that has been presented against a debtor for an improper or wrongful motive. A debtor that suffers a malicious petition can bring a Court claim for malicious prosecution against the petitioner.

Expert Bankruptcy Petition Lawyers

It is very important that you seek legal advice as soon as a bankruptcy petition is served upon you. To reduce failure risk, it is advised that you instruct specialist bankruptcy petition lawyers.

References

Rajendra Ratilal Sanghani v Schoon Ahmed Noorani [2018] eKLR available at http://kenyalaw.org/caselaw/cases/view/161951/

If you have any questions, or for request of PDF Version of the notes, please send a request mail to gechangazacharia@gmail.com

Format/Structure of a Demand Letter

DEMAND LETTER

A demand letter is a formal notice demanding that the addressee perform a legal obligation on specified terms and within a specified time.

The demand letter usually gives the recipient a chance to perform the legal obligation without being taken to Court.

It is sent before the commencement of a suit it serves to inform the adversary of the pending claim.

The purpose of a demand letter and any other notices prior to commencement of a suit is to afford both parties an opportunity to avoid embarking on unnecessary litigation or incurring any additional costs.

Where it is excluded, a party may not be able to claim for costs in the suit.

A demand letter is provided for in Order 3 Rule 2 of the Civil Procedure Code.

A demand letter should be signed by an Advocate meaning that it cannot be drawn by an unqualified person.

Contents of a Demand Letter.

• A date, recipient’s contact information
• The authority to act for the claimant
• The summary of the matter in issue
• A demand for a specified relief
• A deadline by which the matter must be settled
• Consequences of non-adherence to the demand of claim.
  

 

GENERAL FORMAT:

1. Letter head of the firm (optional)

2. Our REF - YOUR REF

3. Address of the Defendant

4. Date

5. Dear Sir/Madame

6. Subject Matter: RE (to be precise and concise)

7. Introduction: 

a) authority to act from clients instructions

b) Facts

c) cause of action arising from the facts

8. Demand for relief/remedy

9. Ask for liability to be admitted

10. Specify time within which you seek compliance (7 days within Nbi, 10 daysoutside)

11. Consequences for non adherence to time line

12. Authenticate letter

13. CC. Client

(acronym:LOAD DS IDA SCAC) - you can make your own

BILL OF COSTS: STEP BY STEP GUIDE ON DRAFTING A BILL OF COSTS

What is it?

Generally, the party who is successful in a High/Subordinate Court proceeding may ask the court for an order that the unsuccessful party pay their costs. These costs are commonly referred to as “party/party” costs. The “costs” are to partially indemnify a person for the legal costs incurred by them or the time spent prosecuting or defending a court proceeding. The costs are then, based on the tariff set out in the Advocates (Remuneration) (Amendment) Order, (specific Year)
All court related civil matters are said to be litigation matters and the law sets the minimum fees. The mechanism of charging fees is different in the High Court with subordinate courts having a separate scale of fees. In civil litigation, there are two distinct methods of determining fees and these are said to be ‘party and party’ fees and ‘advocate and client’ fees.
 

Before the hearing
The party who was awarded costs will prepare their bill following regulations of each set of rules under the advocates remuneration order of a specified year. The Tariff sets out items involved in prosecuting/defending a proceeding and assigns a number of units or sets a prescribed amount of costs for each of these events. In civil matters, some of the items show a range of units; others are fixed depending on how long the event took. If there is a range, the number of units awarded is based on the work done within the description of the items covered under a particular tariff item. The bill will also include a list of disbursements. A copy of the bill is served on all affected parties. If a party does not agree with the amount of the bill, a hearing to assess the costs must be arranged before a registrar. A date for the hearing is obtained from Supreme Court Scheduling in the court registry where the proceeding originated or the registry where all parties have agreed the costs assessment should take place.

At the hearing
The onus is on the party who was awarded costs to prove their bill. This means they must produce proof of work done and disbursements incurred. If proof is not given, the items may be disallowed. This is often done by producing at the hearing copies of the pleadings, any interim orders made, notices to admit and the like. The party presenting the bill of costs for assessment may make an affidavit setting out the work done, as well as an affidavit of disbursements. Sometimes, a party testifies in court, at the assessment hearing itself. The opposing party must be prepared to tell the registrar why they object to disputed items and disbursements on the bill. The assessment is conducted like any other court hearing. The person presenting the bill of costs goes first, the opposing party then makes their objections and then the party awarded costs has a right of reply. Sometimes the registrar will rule on the tariff items before turning to the disbursements but usually, the registrar will deal with all matters and provide their decision at the conclusion of the hearing. If the opposing party does not appear, proof of service of the appointment (i.e. an affidavit of service) is required.
 

Mode of charging
Party and party’ costs are based on the principle that the unsuccessful party in any case must, unless the court otherwise orders for good reason, pay the successful party. After a matter is finalized, the successful party and the losing party may agree on the costs to be paid. Failure to this, a Resident Magistrate of any designation who has been gazetted as a Registrar or Deputy Registrar of the High Court can adjudicate upon the quantum of fees between opposing parties or between an advocate and client.
The Magistrate (in his capacity as Taxing Officer), decides on all matters of fees. The taxing officer’s decision is appealable to the High Court and the Court of Appeal. And what are ‘advocate and client fees? In a concluded matter, the minimum advocate/client fees is that assessed by the taxing officer increased by one half. An unsuccessful litigant pays the opposing side and his own lawyers’ costs and in the same breath the winning side’s lawyer gets fees from the losing party and his own client. Every single aspect of costing is provided for by law, from writing a letter, perusing it to appearances in court. But the ‘instruction fees’ are based on the value of the subject matter, and whether the matter is defended or undefended.
For step by step guidance on preparation of a Bill of costs in Kenya and samples please consult through the mail.

Termination of a Contract, Benefits and Wages (Labour Law)

1.0 Key Areas

• Termination of a Contract
• Termination of a Contract and Benefits and Wages
• Termination of a Contract and Labour Laws in Kenya

2.0 Introduction

Termination of employment can be initiated by either of the parties to a contract of employment (Employment Act, section 35 (1)). Lawful termination of employment under common law includes:

• Termination of employment by agreement: When the employer and employee agree to bring a contract of employment to an end following an agreement. This may be in case of terminating a contract of apprenticeship; where the period of training expires then the contract will obviously come to an end.
• Automatic termination: A contract of employment may be terminated automatically in circumstances such as death or loss of business of the employer.
• Termination of employment by the employee/resignation: This happens when an employee due to material breach of the contract by the employer decides to resign from his/her employment.
• Termination of employment by an employer: An employer may also terminate the employment of an employee but there is a need to comply with the provisions of the law and contract relating to termination. 

3.0 On what grounds can a contract of employment be terminated by an employer?

A contract of employment may be terminated by an employer on the following grounds:

• By mutual agreement between the employer and the worker (Industrial Training Act, section 13 (1) (a)).
• By the employer when the employee dies before the expiration of the period of employment.
• By the employer, if the worker is found by a medical examination to be unfit for employment. Due to sickness or accident, the employee becomes unable to carry out his or her work (Employment Act, section 41(1)).
• By the employer based on the misconduct of employee (Employment Act, section 44 (3)) 

4.0 What should an employer do if he or she wants to terminate a contract of employment?

A contract of employment may be terminated at any time by an employer who must give the employee a period of notice of termination (e.g. at the close of day in case of a contract for daily wages, one month or more in case of monthly pay contracts). 

5.0 What form of notice should I give as an employer?

A termination notice shall be in writing. In case the employee does not understand the notice, the employer is responsible to ensure that the notice is explained orally to the worker in a language he/she understands (section 35 (2) (3)).  

• If the employee is employed on a daily wage contract, the notice is given at the close of any day without notice. 
• If the employee is employed on a weekly pay or two-week basis the notice period shall be one week or two weeks respectively, given in writing or payment of one week’s salary in place of notice.
• If the employee is employed every month the notice period shall be 28 days and in writing or payment of one month’s salary in lieu of notice.
• In the case where a contract of employment provides that the notice of termination be given for a greater period than one month, then there will be agreed in writing between employer and employee for a longer notice and the agreed notice period shall be of equal duration for both employer and the employee (section 35 (2)). 

6.0 Can an employer terminate an employee immediately without allowing them to work during the notice period? Does the law allow this?

In the event, the employer wants to terminate an employee without allowing her/him to serve the notice period the employer will be required to pay the employee the amount that an employee would have received if she/he had worked during the notice period. This is what is usually referred to as payment in lieu of notice (section 36) also (section 38). 

Section 36 provides for payment of equivalent salary in place of notice instead of serving the notice. The length of notice will depend on the interval at which the salary is paid.

7.0 What happens if an employee is terminated but they have outstanding leave they have not taken?

In the case of accrued leave upon termination the employer shall pay an employee on a pro-rata basis an amount in cash for the accrued annual leave to which that employee is entitled (section 40 (1) (e)) - provided that it is taken not later than six months after the end of leave cycle or twelve months after the end of leave cycle if (if the employee consented or extension is justified by operational requirements) (section 28(4)). 

8.0 Can an employer terminate a contract of employment without notice?

Yes. Either party to a contract of employment may terminate the contract without notice if that party pays the other party a sum equal to the amount of remuneration which would have accrued to the worker during the period of the notice (section 36).

9.0 Is a certificate of service and notice mandatory even when terminated on misconduct?

Yes. Both are mandatory regardless of the reason for termination unless the period of service of the employee to the employer has lasted less than four weeks (section 51). 

10.0 Four grounds that justify termination of the employment by the employer

• Misconduct.
• Physical incapacity.
• Poor performance.
• Employer’s operational requirements/retrenchment. 

An employer may also terminate an employee due to participation in an illegal strike. Therefore for an employer to terminate an employee he/she should have a genuine reason as specified in section 45 (2) and section 46. An employee cannot be fired because an employer does not like them - unless the grounds for this dislike are based on the above-mentioned factors.

11.0 What amounts to fair terms termination of employment?

For termination to be fair in the eyes of the law, it has to be both substantively and procedurally fair. The employer needs to have a valid and fair reason for termination. 

Apart from this valid reason of termination, the employer must follow fair procedures for termination as are provided under the Employment Act, section 45 (2) and section 46.). In any form of termination, the employer is required to prove the reasons for the termination otherwise it will be termed as unfair (section 45 (2)). The procedures for termination are different depending on the reason for termination but they all have a common item - the right of an employee to be heard before a termination decision is taken against an employee (section 41 (2)).

12.0 Am I to follow the procedure for termination even in cases where an employee is caught red-handed committing serious misconduct, for example, stealing?

Yes. Notwithstanding the serious misconduct of the employee, and the evidence available, the law requires that procedures outlined under the law be followed. Failure to follow the procedure will amount to summary dismissal, meaning an employee is terminated without being availed of an opportunity to defend herself/himself before a fair disciplinary committee. In labor laws, summary dismissal amounts to unfair termination with consequences specified in section 47 and 49 (1) & (3).

Can I terminate an employee who is facing a criminal charge before a court of law?

No one can terminate or take disciplinary action against an employee who is facing the same charges before a court of law unless the two charges are different or do not arise in the same cause of action. 

What are the likely consequences of unfair termination for an employer?

If the labor officer makes the decision that the summary dismissal or the termination of the contract of an employee is unjustified, he may recommend to the employer to pay the employee any or all of the following:

• The wages which the employee would have earned had the employee been given the period of notice to which he was entitled under this Act or his contract of service. 
• Where dismissal terminates the contract before the completion of any service upon which the employee’s wages became due, the proportion of the wage due for the period of time for which the employee has worked; and any other loss consequent upon the dismissal and arising between the date of dismissal and the date of expiry of the period of notice referred to in paragraph (a) which the employee would have been entitled to by virtue of the contract.
• The equivalent of several months’ wages or salary not exceeding twelve months based on the gross monthly wage or salary of the employee at the time of dismissal.
• Alternatively, the employer may have to reinstate the employee and treat the employee in all respects as if the employees' employment had not been terminated; or 
• Re-engage the employee in work comparable to that in which the employee was employed before his/her dismissal, or other reasonably suitable work, at the same wage.
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• For PDF Version of notes just send a request mail to ---gechangazacharia@gmail.com---

Principle of Unreasonableness - Kenyan Case Study: Keroche Industries Limited vs. Kenya Revenue Authority & 5 Others

 Case Study: Keroche Industries Limited vs. Kenya Revenue Authority & 5 Others - Associated Provincial Picture Houses vs. Wednesbury Corporation [1948] 1 KB 223

 

This case involved an application for judicial review by the applicant company, a manufacturer of wines, against various orders and decisions of the KRA.

Facts of the case

The facts were that the applicant and its predecessors applied for a license to the customs department to manufacture wines on or about 1996 and 1997 and a license was granted which classified the applicant's product under Tariff Heading 22.04. According to the applicant, they paid duty under Tariff Heading 22.04 from 1997 to 2006. That is, until a decision to change the tariff was communicated to it vide a letter dated 29^th November 2006. The decision communicated was that the Applicant's fortified wine products were wrongly classified under tariff 22.04 but should have been classified under Tariff Heading 22.06. The latter Tariff, namely 22.06 attracts a higher rate of duty than tariff 22.04 in that it attracts 60% instead of 45%.

By the same letter, the Respondents issued a tax assessment based on the new tariff 22.06 from the year 2002 to 2005. Consequently, the letter demanded from the applicants the payment of approximately Kshs. 1.1 Billion with 14 days of November 2006. This amount was without the usual penalties and therefore the actual amount due was certainly higher than the figure stipulated. Although the figure quoted included amounts in the rest of the various tax regimes, namely; Custom Excise Duty, VAT, Withholding tax and Income ax, only one global demand was sent to the applicant.

Key issues for determination

There are two key issues relevant that the court tackled ably as to deserve revisiting. One is jurisdictional competence of the court to intervene in matters where the applicant has failed to exhaust other tribunals with jurisdiction on the matter. On this point, it was submitted for the Respondents that the court ought not to have intervened in the matter because various tax tribunals could have sorted out the matter. The court however did not agree. It was the court's view that the issue should be considered from the standpoint of the rule of law. It held that while judicial review could be a collateral attack, the right of assess to court is a fundamental principle and cannot be taken away except in exceptional cases.  The present case, in the courts view, fell within the bounds of the exception. The court did not however lay down the criteria for determining when the right to access court for judicial review should or should not be denied in Kenya.

Retrospective application of tax tariff similar to ex-post facto law

The other issue worthy revisiting is whether retrospective application of Tariff is similar to ex-post facto laws. The court held that retrospective application is a Wednesbury unreasonable, irrational, oppressive, biased, discriminating, mala fides, unfair, arbitrary, and procedurally improper and abuse of power. The court, in so holding, upheld the legitimate expectation of the applicant, that it would not abruptly and unilaterally be transplanted from Tariff 22.04 which had been the basis of its business and its business plans and projections over the nine years. In particular, the court found the respondent's decision to have threatened or threatens to thwart the above legitimate expectations and the court reasoned that it must come to the defense of legitimate expectations because fair bargains ought not to be thwarted-this being a principle of fairness.

Excepts from judgment on topical issues

The court stated in conclusion:

"It seems apt to state that public authorities must constantly be reminded that ours is a limited government- that is a government limited by law-this in turn is the meaning of constitutionalism. Certainty of law is a major requirement to business and investors. Imposition of a different tariff, to that an investor contemplated when setting up an industry is reckless, irrational and unreasonable and it violates the principle of certainty and the rule of law. Such a style of decision making cannot offer a conducive business and investment climate. The courts have a role in keeping public authorities within certainty of law. To enable them to do this, the frontiers of judicial review have to expand. For now, let it suffice to state and hold that the actions and decisions of public authorities must be questioned, directed and shaped by the law and, if not, the courts must intervene. This is the essence of the decision."

 The court added on certainty of law:

"I think it is significant to stress on the ground of certainty of law as an ingredient of the rule of law because it is very easy for public authorities and bodies to overlook it in their decision making processes as has happened in this case."

The judgment is not complete without the courts statement on rule of law. It stated:

"The rule of law is the cog upon which all provisions of the constitution turn. For example, the intended tariff change has clearly been shown to have been discriminatory in its effects contrary to section 82 of the constitution. I hold that the public bodies decisions and activities should always turn on this cog as well, failing which the courts are entitled to intervene where this is overlooked, as I have done in this case."

Conclusion

The court's finding that retrospective applications of tax legislations are unenforceable as they are similar to ex-post facto laws is a relief to business and businessmen. The case stands out as an authority in that respect and promises to boost Kenya's standing as an ideal investment destination no small deal.

 To impose a condition that did not exist previously retrospectively was clearly unreasonable. This practice was deprecated in Keroche Industries Limited vs. Kenya Revenue Authority & 5 Others (supra) when it was held that:

“imposing a liability of 1 billion on the applicant to be paid within 14 days though attractive in terms of enhanced public revenue and perhaps for the zeal of meeting annual tax targets, I find is not such an overriding interest for the reasons set out in this judgment including failure to satisfy the principle of legality. In order to ascertain whether or not the respondents decision and the intended action is an abuse of power the court has taken a fairly broad view of the major factors such as the abruptness, arbitrariness, oppressiveness and the quantum of the amount of tax imposed retrospectively and its potential to irretrievably ruin the applicant. All these are traits of abuse of power.”

83. The principle of unreasonableness was projected in Associated Provincial Picture Houses vs. Wednesbury Corporation [1948] 1 KB 223 where it was held:

“It is true the discretion must be exercised reasonably. Now what does that mean? Lawyers familiar with the phraseology commonly used in relation to exercise of statutory discretions often use the word "unreasonable" in a rather comprehensive sense. It has frequently been used and is frequently used as a general description of the things that must not be done. For instance, a person entrusted with discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his consideration matters which are irrelevant to what he has to consider. If he does not obey those rules, he may truly be said, and often is said, to be acting "unreasonably." Similarly, there may be something so absurd that no sensible person could ever dream that it lay within the powers of the authority. Warrington LJ in Short vs. Poole Corporation [1926] Ch. 66, 90, 91 gave the example of the red-haired teacher, dismissed because she had red hair. That is unreasonable in one sense. In another sense it is taking into consideration extraneous matters. It is so unreasonable that it might almost be described as being done in bad faith; and, in fact, all these things run into one another.”

Legal Framework of Emergency Care in Kenya

1.0 Background

The legislative framework on emergency medical treatment in Kenya is anchored on the provisions of the Constitution which guarantees every person the right to the highest attainable standard of health. [1] In particular, Article 43(2) provides that no person shall be denied emergency medical treatment. Naturally, in law, given that the Constitution is only meant to provide broad guiding principles, it does not expound further on the circumstances under which this right can be enforced.

Between 2010 and 2017, there was no enabling law to give life to these constitutional provisions, and as such, health care practitioners were largely guided by the Kenya Health Policy 2014 – 2030. The Policy defines emergency treatment to include first aid treatment of ambulatory patients and those with minor injuries; public health information on emergency treatment, prevention, and control; and administrative support, including maintenance of vital records and providing for a conduit of emergency health funds across government. The policy further provides that “Emergency health services shall be a part of the referral services and shall be provided by the nearest health facility, regardless of ownership (both public and private).”

Relatedly, the 2013 Ministry of Health National Patients’ Rights Charter provides that every patient has a right to receive emergency treatment in any health facility. The Charter goes further to state that, in emergency situations, irrespective of the patient’s ability to pay, treatment to stabilize the patient’s condition shall be provided.

2.0 Discussion/Analysis

Notably, in May 2017, Parliament enacted the Health Act, which has subsequently given more clarity and legal direction on the rights and duties encompassed in emergency care. Section 7 of the Act is instructive on what constitutes emergency medical treatment including:

(a) pre-hospital care;

(b) stabilizing of the individual; or

(c) arranging for referral in cases where the health provider of the first call does not have the facilities or capability to stabilize the victim.

The Act further states that any medical institution that fails to provide emergency medical treatment, while having the ability to do so, commits an offense and is liable upon conviction to a fine not exceeding three million shillings. Besides medical institutions, healthcare providers, whether in the public or private sector, also have a personal duty to provide emergency medical treatment. [2]

Moreover, the Act instills a critical duty upon the government under section 15 to achieve the following as part of the realization of emergency medical treatment: First, a duty to develop policies, laws, and procedures, in consultation with the county governments and other stakeholders for the realization of emergency care. Second, a duty to ensure that financial resources are mobilized for uninterrupted access to all health services. Third, a responsibility to establish an emergency medical treatment fund for unforeseen situations, and lastly, to provide policy and training, maintenance of standards, and coordination mechanisms for the provision of emergency healthcare. It is worth noting, however, that while section 112 of the Act enshrines an obligation on the Ministry of Health to enact regulations for the better carrying out of the obligations under the Act, the National Policy on Emergency Medical Care in Kenya remains a draft that is yet to be endorsed into law. [3]

From the Kenyan judiciary, there is little jurisprudence that has interrogated emergency medical care. In the 2013 case of LN & 21 others vs Ministry of Health, the court, in its analysis held that renal dialysis did not constitute an emergency as the petitioner’s condition did not create a need for immediate remedial treatment but rather, was an ongoing state of affairs.

In the absence of national precedents, several cases can be used to give guidance on emergency care from the international sphere. First, the Supreme Court of India has long established a duty to provide emergency treatment for accident victims, regardless of the ability to pay. This was declared in the case of Parmanand Katara v. Union of India. [4] Generally, the jurisprudence from India on emergency care is indicative of the duty of a hospital to respond positively and admit a patient if they have facilities for dealing with the condition. [5] Lack of bed space has been held as not being a justifiable reason for turning away a critically ill patient whose condition needed to be stabilized urgently. The medical facility should be able to make internal arrangements to accommodate the patient if challenges relating to bed space arose.

3.0 Comparison

Closer home, the 2015 South African case of Charles Oppelt v Head: Health, Department of Health Provincial Administration: Western Cape also provides useful guidance on the legal duties that arise in emergency care. These duties include: First, the duty to ensure that a patient is transferred in time to be treated; second, the duty to ensure that the patient is given appropriate treatment with the greatest possible urgency and lastly, the duty to ensure that hospital personnel working in trauma units are properly instructed. Those who fail to do thus incur liability.

In addressing the regulatory weaknesses of emergency care in Kenya, guidance may be placed on the recommendations made in the Ruling of the Medical Practitioners and Dentist Board in the Alex Madaga Complaint of 2016. The Board noted with concern that to date, there exist several lacunae in emergency medical treatment that would benefit from the enactment of an overall emergency care policy at the national level. The Board recommended that the Ministry of Health, in collaboration with the Council of Governors enact guidelines that would regulate: Payment of emergency medical care, particularly in private hospitals, inter-hospital transfers, and referrals where a hospital does not have the capacity to offer emergency care; and lastly, regulation, licensing and operation of ambulances. [6]

4.0 Conclusion

In conclusion, therefore, the legal duty in emergency medical treatment can be summarized as follows: First, medical institutions that fail to provide health care services necessary to prevent and manage the damaging health effects due to an emergency situation are culpable. Further, facilities that have systems that are inappropriately designed and invariably cause a patient deserving of emergency medical treatment not to receive such treatment, are also culpable. Hospitals that prioritize monetary security before admission can also be held in violation of the Constitution as well as the Kenya National Patients’ Rights Charter. The liability of the government, on the other hand, arises from its duties as stipulated in the Constitution as well as sections 15 and 112 of the Health Act. Where the government thus fails to enact policies; mobilize financial resources, regulate, train and accredit emergency care providers or ensure compliance with already existing guidelines by medical institutions, then it is liable in law. This, must, of course, be done in consultation with county governments and other stakeholders in the health sector acknowledging that health is now a devolved function.