THE LAW ON FAIR HEARING IN KENYA( CIVIL CASES)

THE LAW ON FAIR HEARING IN CIVIL CASES IN KENYA

BY DANIEL CHEGE LLB(HONS)

Article 50 of the constitution of Kenya provides for that every person is entiled to a Fair hearing,which  is an ingreadient to Natural justice.The principles of natural justice have been developed and followed by the judiciary to protect the right of the public against the arbitrariness of the administrative authorities. Natural Justice implies fairness, reasonableness, equity and equality. In Roman law the concept of natural justice consists of two essential rules:

1.      audi alteram partem,- the person, who has to be effected by a decision has a right to be heard; and

2.      nemo judex in re sua – the authority deciding the matter should be free from bias.

In the case of Ridge v. Baldwin⁸ , the applicability of natural justice to the quasi-judicial bodies took place. Ridge v. Baldwin is regarded as the Magna Carta of natural justice. The judgment of LORD REID widened the ambit of natural justice.Whenever this requirements are violated, the aggrieved party can apply for judicial review.

THE  KENYAN  POSITION

Fair hearing as an ingredient of Natural Justice is Provided for Under Article 50 of the constitution and Whenever Natural justice is denied, the aggrieved party can apply for judicial review provided under ORDER 53 of civil procedure rules 2010.Fair Hearing is operationalized by various laws, most importantly  the civil procedure rules 2010 under the following provisions;   

RULE OF FAIR HEARING.

The maxim audi alteram partem accentuates the rule of fair hearing. It lays down that no one should be condemned unheard. It is the first principle of the civilised jurisprudence that a person facing the charges must be given an opportunity to be heard, before any decision is taken against him. Hearing means ‘fair hearing’.The norms of reasonableness of opportunity of hearing vary from body to body and even case to case relating to the same body. In Cooper v. Wandsworth Board of Works¹⁷ , BYLES J. observed that the laws of God and man both give the party an opportunity to defend himself. Even God did not pass a sentence upon Adam before he was called upon to make his defence.

COMPONENTS OF RIGHT TO FAIR HEARING.

·         Right to notice

·         Right to know the evidence against him

·         Right to present case and evidence

·         Right to counsel.

1.      Right to notice. The term ‘Notice’ originated from the Latin word ‘Notitia’ which means ‘being known’. Thus it connotes the sense of information, intelligence or knowledge. Notice embodies the rule of fairness and must precede an adverse order. It should be clear enough to give the party enough information of the case he has to meet. There should be adequate time for the party, so that he can prepare for his defence. It is the sine qua non of the right of hearing. If the notice is a statutory requirement, then it must be given in a manner provided by law. Thus notice is the starting point in the hearing. Unless a person knows about the subjects and issues involved in the case, he cannot be in the position to defend himself.

The notice must be adequate also. Its adequacy depends upon the case. But generally, a notice, in order to be adequate must contain following elements:

·         Time, place and nature of hearing.

·         Legal authority under which hearing is to be held.

·         Statements of specific charges which the person has to meet.

This component is operationalized in Kenya by the following provisions of the civil procedure rules 2010

ü       ORDER 1 rule 15 provides for notice to third parties( third party proceedings)

ü       ORDER 3 rule 2(d) formal requirements  which presupposes notice that is a Demand letter.

ü       ORDER6  provides for appearance of parties

ü       ORDER 22rule 57 provides for the notification n of sale

ü       ORDER 53 provides for the application for Judicial  review

2.Right to know the evidence against him. Every person before an administrative authority, exercising adjudicatory powers has right to know the evidence to be used against him.. A person may be allowed to inspect the file and take notes. This component is operationalized  by

ü       ORDER 11 and1 of the civil procedure rules2010,Which provides for pre-trial conferences. 

3 Right to present case and evidence. The adjudicatory authority must provide the party a reasonable opportunity to present his case. This can be done either orally or in written. The requirement of natural justice is not met if the party is not given the opportunity to represent in view of the proposed action.

This component is operationalized  by

ü       ORDER 18 provides for hearing of suit and examination of witnesses.

3 Right to counsel. For sometime the thinking had been that the lawyers should be kept away from the administrative adjudication, as it saves time and expense. But the right to be heard would be of little avail if the counsel were not allowed to appear, as everyone is not articulate enough to present his case. In India few statutes like the Industrial Disputes Act, 1947, specifically bar the legal practitioners from appearing before the administrative bodies.

This component is operationalized  by

ü       ORDER 9 and1 for representation by an advocate or in person.

CONCLUSION

The rule of fair hearing must be followed to prevent  miscarriage of justice. If an accused is punished unheard, the purpose of law is defeated. The adjudicatory authority does not know whether the accused is innocent or not. What if the accused is punished unheard and later he turns out to be an innocent?

THE PRIVITY OF CONTRACT

Privity Of Contract

1. THE DOCTRINE OF PRIVITY

"The doctrine of privity means that a contract cannot, as a general rule, confer rights or impose obligations arising under it on any person except the parties to it." (GH Treitel, The Law of Contract)
The common law reasoned that:
1. Only a promisee may enforce the promise meaning that if the third party is not a promisee he is not privy to the contract. See:

• Dunlop Tyre Co v Selfridge [1915] AC 847 - The plaintiffs sold tyres to Dew & Co, wholesale distributors, on terms that Dew would obtain an undertaking from retailers that they should not sell below the plaintiffs' list price. Dew sold some of the tyres to the defendants, who retailed them below list price. The plaintiffs sought an injunction and damages. The action failed because although there was a contract between the defendants and Dew, the plaintiffs were not a party to it and "only a person who is a party to a contract can sue on it," (per Lord Haldane).

2. There is the principle that consideration must move from the promisee. See:

• Tweddle v Atkinson (1861) 1 B&S 393 - The fathers of a husband and wife agreed in writing that both should pay money to the husband, adding that the husband should have the power to sue them for the respective sums. The husband's claim against his wife's fathers' estate was dismissed, the court justifying the decision largely because no consideration moved from the husband.

The two principles of privity and consideration have become entwined but are still distinct.

2. EXCEPTIONS

If the doctrine of privity was inflexibly applied it would cause considerable injustice and inconvenience. Many exceptions to it have therefore been developed.

A) COLLATERAL CONTRACTS

A contract between two parties may be accompanied by a collateral contract between one of them and a third person relating to the same subject-matter. For example:

• Shanklin Pier v Detel Products [1951] 2 KB 854. The plaintiffs had employed contractors to paint a pier. They told them to buy paint made by the defendants. The defendants had told them that the paint would last for seven years. It only lasted for three months. The court decided that the plaintiffs could sue the defendants on a collateral contract. They had provided consideration for the defendants' promise by entering into an agreement with the contractors, which entailed the purchase of the defendants' paint.

There must, however, be an intention to create a collateral contract before that contract can be formed

B) AGENCY

The concept of agency is an exception to the doctrine of privity in that an agent may contract on behalf of his principal with a third party and form a binding contract between the principal and third party.
For example, a third party may be able to take the benefit of an exclusion clause by proving that the party imposing the clause was acting as the agent of the third party, thereby bringing the third party into a direct contractual relationship with the plaintiff:

• In Scruttons Ltd v Midland Silicones Ltd [1962] AC 446, a bill of lading limited the liability of a shipping company to $500 per package. The defendant stevedores had contracted with the shipping company to unload the plaintiff's goods on the basis that they were to be covered by the exclusion clause in the bill of lading. The plaintiffs were ignorant of the contract between the shipping company and the stevedores. Owing to the stevedores negligence, the cargo was damaged and, when sued, they pleaded the limitation clause in the bill of lading. The House of Lords held that the stevedores could not rely on the clause as there was no privity of contract between the plaintiffs and defendants.

Lord Reid suggested that the stevedores could be brought into a contractual relationship with the owner of the goods through the agency of the carrier provided certain conditions were met: (1) that the bill of lading makes it clear that the stevedore is intended to be protected by the exclusion clauses therein. (2) that the bill of lading makes it clear that the carrier is contracting as agent for the stevedore. (3) the carrier must have authority from the stevedore to act as agent, or perhaps, later ratification by the stevedore would suffice. (4) consideration must move from the stevedore.

• All of the above conditions were satisfied in New Zealand Shipping v Satterthwaite (The Eurymedon) [1975] AC 154.

C) TRUSTS

Equity developed a general exception to the doctrine of privity by use of the concept of trust. A trust is an equitable obligation to hold property on behalf of another.
The device was approved by the House of Lords in Les Affreteurs Reunis v Leopold Walford [1919] AC 801, where a broker (C) negotiated a charterparty by which the shipowner (A) promised the charterer (B) to pay the broker a commission. It was held that B was trustee of this promise for C, who could thus enforce it against A.
However, the trust device has fallen into disuse because of the strict requirements of constituting a trust and most particularly that there should be a specific intention on the part of the person declaring the trust that it should be a trust.

D) RESTRICTIVE COVENANTS

Restrictive covenants may, if certain conditions are satisfied, run with the land and bind purchasers of it to observe the covenants for the benefit of adjoining owners.
For example, in Tulk v Moxhay (1848) 2 Ph 774, the plaintiff who owned several houses in Leicester Square sold the garden in the centre to Elms, who covenanted that he would keep the gardens and railings in their present condition and continue to allow individuals to use the gardens. The land was sold to the defendants who knew of the restriction contained in the contract between the plaintiff and Elms. The defendant announced that he was going to build on the land, and the plaintiff, who still owned several adjacent houses, sought an injunction to restrain him from doing so. It was held that the covenant would be enforced in equity against all subsequent purchasers with notice.
This device was carried over into the law of contract by the Privy Council in Lord Strathcona SS Co v Dominion Coal Co [1926] AC 108, but Diplock J refused to follow the decision in Port Line Ltd v Ben Line Steamers [1958] 2 QB 146.

E) STATUTES

Certain exceptions to the doctrine of privity have been created by statute, including price maintenance agreements; and certain contracts of insurance enforceable in favour of third parties. For example, under s148(4) of the Road Traffic Act 1972, an injured party may recover compensation from an insurance company once he has obtained judgment against the insured person.

F) REMEDIES OF THE CONTRACTING PARTY

The question of the extent to which a contracting party may recover for loss sustained by a third party who is intended to benefit from the contract was raised in:

• Jackson v Horizon Holidays [1975] 1 WLR 1468. The plaintiff entered into a contract for himself and his family. The holiday provided failed to comply with the description given by the defendants in a number of respects. The plaintiff recovered damages and the defendants appealed against the amount. Lord Denning MR thought the amount awarded was excessive compensation for the plaintiff himself, but he upheld the award on the ground that the plaintiff had made a contract for the benefit of himself and his family, and that he could recover for their loss as well as for his own.
• However, in Woodar Investment Development v Wimpey Construction [1980] 1 WLR 277, the House of Lords rejected the basis on which Lord Denning had arrived at his decision, and reaffirmed the view that a contracting party cannot recover damages for the loss sustained by the third party. Their Lordships did not dissent from the actual decision in Jackson, which they felt could be supported either because the damages were awarded for the plaintiff's own loss; or because booking family holidays or ordering meals in restaurants calls for special treatment.

THE PINNELS PRINCIPLE

Part Payments of Debts

THE GENERAL RULE

If one person owes a sum of money to another and agrees to pay part of this in full settlement, the rule at common law (the rule in Pinnel's Case (1602) 5 CoRep 117a) is that part-payment of a debt is not good consideration for a promise to forgo the balance.
In Pinnel's Case (1602), Cole owed Pinnel £8-10s-0d (£8.50) which was due on 11 November. At Pinnel's request, Cole payed £5-2s-2d (£5.11) on 1 October, which Pinnel accepted in full settlement of the debt. Pinnel sued Cole for the amount owed. It was held that part-payment in itself was not consideration. However, it was held that the agreement to accept part-payment would be binding if the debtor, at the creditor's request, provided some fresh consideration. Consideration might be provided if the creditor agrees to accept:

• part-payment on an earlier date than the due date (ie, as in Pinnel's Case itself); or
• chattel instead of money (a "horse, hawk or robe" may be more beneficial than money); or
• part-payment in a different place to that originally specified.

Despite its harshness the rule in Pinnel's Case was affirmed by the House of Lords and still represents the law:
In Foakes v Beer (1884) 9 App Cas 605, Mrs Beer had obtained judgment for a debt against Dr Foakes, who subsequently asked for time to pay. She agreed that she would take no further action in the matter provided that Foakes paid £500 immediately and the rest by half-yearly instalments of £150. Foakes duly kept to his side of the agreement. Judgment debts, however, carry interest. The House of Lords held that Mrs Beer was entitled to the £360 interest which had accrued. Foakes had not "bought" her promise to take no further action on the judgment. He had not provided any consideration.

EXCEPTIONS TO THE RULE

Apart from the exceptions to the rule mentioned in Pinnel's Case itself, there are two others at common law and one exception in equity.

A) PART-PAYMENT OF THE DEBT BY A THIRD PARTY

A promise to accept a smaller sum in full satisfaction will be binding on a creditor where the part-payment is made by a third party on condition that the debtor is released from the obligation to pay the full amount. See:
Hirachand Punamchand v Temple [1911] 2 KB 330 - A father paid a smaller sum to a money lender to pay his son's debts, which the money lender accepted in full settlement. Later the money lender sued for the balance. It was held that the part-payment was valid consideration, and that to allow the moneylender's claim would be a fraud on the father.

B) COMPOSITION AGREEMENTS

The rule does not apply to composition agreements. This is an agreement between a debtor and a group of creditors, under which the creditors agree to accept a percentage of their debts (eg, 50p in the pound) in full settlement. Despite the absence of consideration, the courts will not allow an individual creditor to sue the debtor for the balance: Wood v Robarts (1818). The reason usually advanced for this rule is that to allow an individual creditor to claim the balance would amount to a fraud on the other creditors who had all agreed to the percentage.

C) PROMISSORY ESTOPPEL

This is the name that has been given to the equitable doctrine which has as its principal source the obiter dicta of Denning J in High Trees House Ltd [1947]

PROMISSORY ESTOPPEL
A further exception to the rule in Pinnel's Case is to be found in the equitable doctrine of promissory estoppel. The doctrine provides a means of making a promise binding, in certain circumstances, in the absence of consideration. The principle is that if someone (the promisor) makes a promise, which another person acts on, the promisor is stopped (or estopped) from going back on the promise, even though the other person did not provide consideration (in so far as is it is inequitable to do so).

DEVELOPMENT

The modern doctrine is largely based on dicta of Denning J in Central London Property Trust Ltd v High Trees House Ltd [1947] 1 KB 130 and on the decision of the House of Lords in Tool Metal Manufacturing Co Ltd v Tungsten Electric Co Ltd [1955] 1 WLR 761 and can be traced to Hughes v Metropolitan Railway (1877) 2 App Cas 439.
(a) Hughes Case (1877) - In October a landlord gave his tenant six months notice to repair and in the event of a failure to repair, the lease would be forfeited. In November the landlord opened negotiations for the sale of the premises, but these ended in December without agreement. Meanwhile the tenant had not done the repairs and when the six months period was up, the landlord sought possession.
The House of Lords held that the landlord could not do so. The landlord had, by his conduct, led the tenant to suppose that as long as negotiations went on, the landlord would not enforce the notice. He could not subsequently take advantage of the tenant relying on this. Therefore, the notice did not run during the period of negotiations. However, the six month period would begin to run again from the date of the breakdown of negotiations.
(b) High Trees (1947) - In 1937 the Ps granted a 99 year lease on a block of flats in London to the Ds at an annual rent of £2500. Because of the outbreak of war in 1939, the Ds could not get enough tenants and in 1940 the Ps agreed in writing to reduce the rent to £1250. After the war in 1945 all the flats were occupied and the Ps sued to recover the arrears of rent as fixed by the 1937 agreement for the last two quarters of 1945.
Denning J held that they were entitled to recover this money as their promise to accept only half was intended to apply during war conditions. This is the ratio decidendi of the case. He stated obiter, that if the Ps sued for the arrears from 1940-45, the 1940 agreement would have defeated their claim. Even though the Ds did not provide consideration for the Ps' promise to accept half rent, this promise was intended to be binding and was acted on by the Ds. Therefore the Ps were estopped from going back on their promise and could not claim the full rent for 1940-45.
(c) Tool Metal Case (1955) - see below.
Thus it seems that if a person promises that he will not insist on his strict legal rights, and the promise is acted upon, then the law will require the promise to be honoured even though it is not supported by consideration.

REQUIREMENTS

The exact scope of the doctrine of promissory estoppel is a matter of debate but it is clear that certain requirements must be satisfied before the doctrine can come into play:

(A) CONTRACTUAL/LEGAL RELATIONSHIP

All the cases relied on by Denning J in High Trees House were cases of contract. However, in Durham Fancy Goods v Michael Jackson (Fancy Goods) [1968] 2 QB 839, Donaldson J said that an existing contractual relationship was not necessary providing there was "a pre-existing legal relationship which could, in certain circumstances, give rise to liabilities and penalties".

(B) PROMISE

There must be a clear and unambiguous statement by the promisor that his strict legal rights will not be enforced, ie one party must make a promise which is intended to be binding: The Scaptrade [1983] QB 529. However, it can be implied or made by conduct as in the Hughes Case (1877).

(C) RELIANCE

The promisee must have acted in reliance on the promise. There is some uncertainty as to whether the promisee (i) should have relied on the promise by changing his position to their detriment (ie, so that he is put in a worse position if the promise is revoked): Ajayi v Briscoe [1964] 1 WLR 1326, or (ii) whether they should have merely altered their position in some way, not necessarily for the worse.
In Alan Co Ltd v El Nasr Export & Import Co [1972] 2 QB 189, Lord Denning disclaimed detriment as an element of promissory estoppel, saying it was sufficient if the debtor acted on the promise by paying the lower sum. He said that "he must have been led to act differently from what he otherwise would have done".

(D) INEQUITABLE TO REVERT

It must be inequitable for the promisor to go back on his promise and revert to his strict legal rights. If the promisor's promise has been extracted by improper pressure it will not be inequitable for the promisor to go back on his promise. See:

• D & C Builders v Rees [1965] 2 QB 617 - The Ps, a small building company, had completed some work for Mr Rees for which he owed the company £482. For months the company, which was in severe financial difficulties, pressed for payment. Eventually, Mrs Rees, who had become aware of the company's problems, contacted the company and offered £300 in full settlement. She added that if the company refused this offer they would get nothing. The company reluctantly accepted a cheque for £300 "in completion of the account" and later sued for the balance. The Court of Appeal held that the company was entitled to succeed. Lord Denning was of the view that it was not inequitable for the creditors to go back on their word and claim the balance as the debtor had acted inequitably by exerting improper pressure.

(E) A SHIELD OR A SWORD?

At one point it was said in Coombe v Coombe [1951] 2 KB 215 that the doctrine may only be raised as a defence: "as a shield and not a sword". It was held that the doctrine cannot be raised as a cause of action. This means that the doctrine only operates as a defence to a claim and cannot be used as the basis for a case. However, this was doubted in Re Wyven Developments [1974] 1 WLR 1097 by Templeman J, who appeared to think that this was no longer the case and that it could create rights. Lord Denning in Evenden v Guildford City AFC [1975] QB 917 also adopted this approach.

(F) EXTINCTIVE OR SUSPENSIVE OF RIGHTS?

Another question raised by this doctrine is whether it extinguishes rights or merely suspends them. The prevalent authorities are in favour of it merely suspending rights, which can be revived by giving reasonable notice or by conditions changing.
(a) Where the debtor's contractual obligation is to make periodic payments, the creditor's right to receive payments during the period of suspension may be permanently extinguished, but the creditor may revert to their strict contractual rights either upon giving reasonable notice, or where the circumstances which gave rise to the promise have changed as in High Trees. See:

• Tool Metal Case (1955) - Patent owners promised to suspend periodic payments of compensation due to them from manufacturers from the outbreak of war. It was held by the House of Lords that the promise was binding during the period of suspension, but the owners could, on giving reasonable notice to the other party, revert to their legal entitlement to receive the compensation payments.

(b) It is not settled law that there can be no such resumption of payments in relation to a promise to forgo a single sum. In D & C Builders, which concerned liability for a single lump sum, Lord Denning expressed obiter that the court would not permit the promisor to revert to his strict legal right and that the estoppel would be final and permanent if the promise was intended and understood to be permanent in effect.
The preferred approach is to look at the nature of the promise: if as in High Trees and Tool Metal, it is intended to be temporary in application and to reserve to the promisor the right subsequently to reassert his strict legal rights, the effect will be suspensive only; and if on the other hand, it is intended to be permanent (as envisaged in D & C Builders), then there is no reason why in principle or authority the promise should not be given its full effect so as to extinguish the promisor's right

THE LAW OF CONSIDERATION

The law on Consideration

By DANIEL CHEGE LLB (Hons)

Introduction

The mere fact of agreement alone does not make a contract. Both parties to the contract must provide consideration if they wish to sue on the contract. This means that each side must promise to give or do something for the other. (Note: if a contract is made by deed, then consideration is not needed.)

DEFINITION OF CONTRACT CONSIDERATION

Lush J. in Currie v Misa (1875) LR 10 Exch 153 refered to consideration as consisting of a detriment to the promisee or a benefit to the promisor:
"... some right, interest, profit or benefit accruing to one party, or some forebearance, detriment, loss or responsibility given, suffered or undertaken by the other."

TYPES OF CONSIDERATION

1. EXECUTORY CONSIDERATION

Consideration is called "executory" where there is an exchange of promises to perform acts in the future, eg a bilateral contract for the supply of goods whereby A promises to deliver goods to B at a future date and B promises to pay on delivery. If A does not deliver them, this is a breach of contract and B can sue. If A delivers the goods his consideration then becomes executed.

2. EXECUTED CONSIDERATION

If one party makes a promise in exchange for an act by the other party, when that act is completed, it is executed consideration, eg in a unilateral contract where A offers £50 reward for the return of her lost handbag, if B finds the bag and returns it, B's consideration is executed.

 

RULES GOVERNING CONSIDERATION

1. CONSIDERATION MUST NOT BE PAST

If one party voluntarily performs an act, and the other party then makes a promise, the consideration for the promise is said to be in the past. The rule is that past consideration is no consideration, so it is not valid and cannot be used to sue on a contract.

EXCEPTIONS TO THIS RULE:

(A) THE DOCTRINE OF ASSUMPSIT

If the promisor has previously asked the other party to provide goods or services, then a promise made after they are provided will be treated as binding. See:

• Lampleigh v Braithwait (1615) Hob 105.

If something is done in a business context and it is clearly understood by both sides that it will be paid for, then past consideration will be valid. See:

• Re Casey's Patents [1892] 1 Ch 104.

Note: The principles in Lampleigh v Braithwait as interpreted in Re Casey's Patents were applied by the Privy Council in:

• Pao On v Lau Yiu Long [1980] AC 614

(B) THE BILLS OF EXCHANGE ACT 1882

Under s27(1) it is provided that any antecedent debt or liability is valid consideration for a bill of exchange. For example, A mows B's lawn and a week later B gives A a cheque for £10. A's work is valid consideration in exchange for the cheque.

2. CONSIDERATION MUST BE SUFFICIENT BUT NEED NOT BE ADEQUATE

Providing consideration has some value, the courts will not investigate its adequacy. Where consideration is recognised by the law as having some value, it is described as "real" or "sufficient" consideration. The courts will not investigate contracts to see if the parties have got equal value.The courts will however inquire about the consideration given in the following situations;

a) EXISTING PUBLIC DUTY

If someone is under a public duty to do a particular task, then agreeing to do that task is not sufficient consideration for a contract. See:

• Collins v Godefroy (1831) 1 B & Ad 950.

If someone exceeds their public duty, then this may be valid consideration. See:

• Glassbrooke Bros v Glamorgan County Council [1925] AC 270.

b) EXISTING CONTRACTUAL DUTY

If someone promises to do something they are already bound to do under a contract, that is not valid consideration. Contrast:

• Stilk v Myrick (1809) 2 Camp 317.
• Hartley v Ponsonby (1857) 7 E & B 872.

The principle set out in Stilk v Myrick was amended by the following case. Now, if the performance of an existing contractual duty confers a practical benefit on the other party this can constitute valid consideration.

c) PART PAYMENT OF A DEBT

3. CONSIDERATION MUST MOVE FROM THE PROMISEE(THE DOCTRINE OF PRIVITY)

The person who wishes to enforce the contract must show that they provided consideration; it is not enough to show that someone else provided consideration. The promisee must show that consideration "moved from" (ie, was provided by) him. The consideration does not have to move to the promisor. If there are three parties involved, problems may arise. See:

• Price v Easton (1833) 4 B & Ad 433

SEE THE EXCEPTION TO THE DOCTRINE OF PRIVITY;