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Case Number

Privy Council Appeal No. 8 of 1930

Attorney(S)

C.J. Colombos
Inskip
Sir Thos.
Solicitor General
A. Lavington

Judges

Sir Lancelot Sanderson
Atkin
Justice Lords Blanesburgh

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Smart Summary

Judgment Summary — Lord Atkin

Factual and Procedural Background

The case concerns an application for a writ of mandamus brought by Abdulhusein Kaderbhai, an Indian subject resident in Mombasa, challenging the Commissioner for Local Government Lands and Settlement in Kenya. The Commissioner had given notice of an auction sale of town plots on Mombasa Island at which only Europeans were to be allowed to bid and purchase. The sale notice also contained a special condition (referred to as condition No. 5) restricting use of dwelling-houses so that the grantee should not permit the dwelling house or outbuildings to be used as a place of residence for any Asiatic or African who was not a domestic servant employed by the grantee.

The applicant's motion (notice dated 9 August 1928) sought a mandamus commanding the Commissioner to allow him to bid and purchase at the auction scheduled for 11 August 1928 and to cancel condition No. 5. An ex parte judge initially postponed the sale and ordered a notice to show cause. After hearing counsel (in December), the learned Judge dismissed the motion. On appeal to the Court of Appeal for Eastern Africa the Court allowed the appeal insofar as it granted the applicant the right to bid and purchase, but dismissed it as to the restrictive condition. The present opinion (by Lord Atkin) addresses the appeal from that Court of Appeal decision; ultimately His Majesty's court allowed the appeal of the Commissioner, set aside the Court of Appeal's order dated 6 July 1929, restored the order of the Supreme Court of Kenya dated 10 December 1928, and dismissed the applicant's cross-appeal.

Legal Issues Presented

Whether, under the Crown Lands Ordinance (No. 12 of 1915), the Commissioner of Lands had power to restrict who may bid at public auctions of town plots (i.e., to limit bidding to Europeans only) or whether the Commissioner was bound to permit all members of the public or all subjects of the Crown to bid and purchase.
Whether the Commissioner had power under the ordinance to insert in leases of town plots special restrictive covenants (specifically condition No. 5) preventing dwelling-houses from being used as residences for Asians or Africans except as domestic servants, and whether such a restrictive condition could be objected to as beyond the Commissioner's statutory power.
Incidental procedural issue: whether the ex parte granting of interim relief (postponing sale and issuing notice to show cause) was appropriate in the circumstances (this issue is addressed in the opinion though it is procedural rather than a statutory construction point).

Arguments of the Parties

Applicant's Arguments (Abdulhusein Kaderbhai)

The Commissioner is obliged by the Crown Lands Ordinance to permit all members of the public, or alternatively all subjects of the Crown, to bid and purchase at auction of town plots.
The Commissioner is not permitted under the ordinance to insert lease conditions which impose racial or caste-based restrictions adversely affecting Asiatic or African residents of Kenya — at least not to such an extent as to render a purchase by them of no practical value.
Implicitly, the applicant relied on the wording and structure of the ordinance (including provisions related to sale by auction and notice) to argue that absent express words authorizing restriction, an exclusion from bidding could not be imposed.

Commissioner for Local Government Lands and Settlement — Respondent/Appellant

The Commissioner contended that the terms of the Crown Lands Ordinance do not prevent him from imposing the kinds of restrictions complained of — both as to who may bid and as to conditions of use included in the leases.
In the Supreme Court, counsel for the Commissioner stated he was instructed not to take technical points but to argue the case on its merits.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

Lord Atkin's opinion approaches the dispute strictly as a question of statutory power under the Crown Lands Ordinance (No. 12 of 1915). He emphasizes that courts are confined to deciding legal powers conferred by statute and should not decide policy questions about how those powers ought to be exercised.

The opinion analyzes the ordinance as a whole, identifying the relevant parts and sections:

Part 2 (Administration): S.6 gives the Governor certain broad powers to grant leases or otherwise alienate Crown lands "for any purpose and on any terms and conditions as he may think fit." S.8 provides for the appointment of a Commissioner of Lands "who shall have charge of the administration of this ordinance." S.10 confers on the Commissioner power to do acts that may be done by the Governor but contains a proviso excluding from its operation the powers conferred by S.6.
Part 3 (Disposal of Land within Township): S.15–S.20 include provisions that the Commissioner "may cause" portions of a township to be divided into plots and that leases of town plots "shall, unless the Governor shall otherwise order, in any particular case or cases, be sold by auction" (S.18). S.17 requires the Commissioner to determine the rent, upset price, building conditions to be inserted in the lease and special covenants before disposal; S.19 prescribes particulars that the Gazette notice must state; S.20 provides that "the auctioneer shall, before the commencement of the sale, read the terms and conditions of the sale, and all persons bidding at the sale shall be bound by the terms and conditions so read."
Part 4 (Disposal of Agricultural Land): S.25–S.27 and S.39 contain parallel provisions for agricultural land. In particular S.26 mirrors S.18 in directing that leases of farms "shall, unless the Governor shall otherwise order in any particular case or cases, be sold by auction." S.27 requires notice of sale in the Gazette and S.27(c) expressly requires the notice to state "Whether persons other than Europeans will be permitted to bid for the lease of the farms." S.39 implies a covenant restricting non-Europeans from occupying or being in control of leased agricultural land granted to Europeans, unless the Governor in Council consents.

Lord Atkin then addresses the interpretive dispute. He rejects the Court of Appeal's conclusion that the absence of a statutory notice requirement for town plots (as exists in S.27(c) for agricultural land) meant that the Commissioner could not restrict bidding for town plots. He reasons:

Prima facie the Crown and its servants have at least the rights of private owners when disposing of Crown property; where powers are given by statute they must comply with the statute, but within the statutory terms the officer may determine terms considered in the interests of the Crown or public.
Where the statute imposes a duty to sell by auction, that duty is to hold a public auction, but there is no indication that the statute also removes power to determine the terms and conditions of the auction (including possible restrictions on bidders) unless the statute expressly does so.
The words empowering sale "by auction" in S.18 (town plots) and S.26 (agricultural land) are identical and therefore prima facie should convey the same power. The fact that S.27(c) requires notice about whether non-Europeans may bid for agricultural land shows the legislature contemplated restricted auctions for agricultural land; that consideration supports, rather than undermines, an inference that identical empowering words in S.18 also allow restricted auctions for town plots.
Lord Atkin characterizes as fallacious the view that a notice clause (such as S.27) determines or limits the scope of the primary disposing power; rather, the notice clause calls attention to powers which are assumed to be given by the primary selling provisions. The absence of a parallel notice requirement for town plots is therefore not significant in limiting the Commissioner's power to impose restrictions for township sales.
If restrictions on user are permitted (for example, reserving plots for industrial or commercial uses), then it may be reasonable to limit bidding to those capable of undertaking the restricted user; by parity, a restriction as to class of bidders is not inherently impermissible in law.

Applying these principles, Lord Atkin concludes that the Commissioner did have statutory power to impose restrictions on bidding (including limitations based on who may bid) and that the objection to the particular restrictive condition as to user (condition No. 5) does not succeed on the statutory-power point.

The opinion also contains a procedural critique: Lord Atkin disapproves of how the application was brought (a last-minute ex parte motion with weak evidence of demand and refusal). He emphasizes that mandamus is a discretionary, high prerogative writ and that the form of the interim orders made in this case should not be treated as a precedent.

Holding and Implications

Core Ruling: The appeal of the Commissioner is allowed; the order of the Court of Appeal dated 6 July 1929 is set aside; the order of the Supreme Court of Kenya dated 10 December 1928 is restored; and the applicant's cross-appeal is dismissed.

Direct consequences stated in the opinion:

The Commissioner lawfully had power under the Crown Lands Ordinance to impose restrictions as to who may bid at auctions of town plots and to impose the restrictive condition as to user set out in condition No. 5 (the objection to that condition on the basis of the Commissioner's statutory power fails).
The applicant must pay the costs in this court and in the Court of Appeal.
The procedural orders previously made (including the Court of Appeal's allowance that the applicant be permitted to bid) are reversed and the earlier Supreme Court dismissal is restored.

Broader implications and cautions in the opinion:

The court framed its decision narrowly as one of statutory construction (powers conferred on the Commissioner) and emphasized that questions of policy — whether it is desirable to exercise such powers in a particular way — are for the appropriate constitutional authority, not for the court.
The court expressly warned that the procedure used in this case (an urgent ex parte mandamus application with minimal evidence) is not to be taken as a precedent and that care must be taken in defining precise orders in mandamus proceedings.

Disposition: Appeal allowed.

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Commissioner For Local Government Lands And Settlement v. Abdulhusein Kaderbhai

Lord Atkin.

This is an appeal from an order of the Court of Appeal for Eastern Africa, varying an order of the Supreme Court of Kenya, which dismissed a motion by the applicant Abdulhusein Kaderbhai for a mandamus addressed to the appellant, the Commissioner for Local Government Lands and Settlement in Kenya. The Commissioner had given notice of an auction sale of town plots at Mombasa at which Europeans only were to be allowed to bid and purchase. The notice contained the further special condition, that during the terms of the grant the grantee should not permit the dwelling house or outbuildings which had to be erected upon it to be used as a place of residence for any Asistic or African not a domestic servant employed by him. The applicant, who is an Indian subject of His Majesty resident in Mombasa on 10th August 1928, by notice of motion dated 9th August, moved the Court for a mandamus commanding the Commissioner to allow the applicant to bid for and purchase at the auction sale the plots on Mombasa Island, notified to be held on 11th August, and also commanding the respondent to cancel or annul the condition No. 5 of the special conditions, being the condition above referred to, restricting the use of the dwelling-house. The learned Judge before whom the application came ex parte made an order postponing the sale and ordered that

"a notice to show cause do issue to the respondent upon the above mentioned motion for a mandamus."

returnable in a month. Eventually, in December, counsel for the applicant and the Commissioner were heard on that order, and the learned Judge dismissed the motion. On appeal to the Court of Appeal for East Africa the Court allowed the appeal as to the right to bid and purchase, but dismissed it as to the restrictive condition. The decree reads :

"It is ordered that the appeal be allowed . . . to the extent that the rule in regard to the first prayer is made absolute, viz., the appellant is allowed to bid for and purchase certain Crown land proposed to be sold by auction in Mombasa Island."

No objection appears to have been taken at any time to the form of the proceedings, counsel for the Commissioner in the Supreme Court stating that he was instructed not to take any technical points, but to argue the case on its merits. Their Lordships will proceed therefore to dispose of the legal question involved, and will reserve any comments on the procedure.

The disposal of Crown lands in Kenya is regulated by the Crown Lands Ordinance No. 12 of 1915. The case made by the applicant is that under the provisions of the ordinance the Commissioner is bound to permit all members of the public or, alternatively, all subjects of the Crown, to bid and purchase at an auction of town plots, and is equally bound not to insert in the lease of any such plots restrictive conditions adversely affecting the Asiatic or African population of Kenya, at any rate, to such an extent as to make a purchase by them of no practical value. The case of the Commissioner is that the terms of the ordinance do not prevent him from imposing the restrictions of which complaint is made. It is desirable to point out that the Courts are concerned only with the bare question of law, viz., the powers of the Commissioner under the ordinance. Questions of policy, or, in other words, how the legal powers shall be exercised, are not matters for the legal tribunal, but have to be determined by the appropriate constitutional authority. Approaching thus the construction of the ordinance it is found that it is divided into twelve parts. Those with which this controversy is concerned are Part 2, Administration; Part 3, Disposal of Land within Townships; Part 4, Disposal of Agricultural Land. By S. 6, the first section falling under Part 2, the Governor is given power to grant lease or otherwise alienate on His Majesty's behalf, any Crown lands for any purpose and on any terms and conditions as he may think fit. He is further given power to remit covenants and conditions, extend the time for performing conditions and accept the surrender of any lease or licence.

By S. 8 the Governor is to appoint a Commissioner of Lands "who shall have charge of the administration of this ordinance." S. 10 confers on the Commissioner power to do any acts which may be done by the Governor; but as it contains a proviso excluding from the operation of the section the powers conferred, inter alia, by S. 6, we must look elsewhere for powers given to the Commissioner to dispose of any Crown lands. These are to be found in Parts 3 and 4. Part 3 is headed Disposal of Land within Township (1) Offering of Town Plots:

"15. The Commissioner of Lands may cause any portion of a township which is not required for public purposes to be divided into plots suitable for the erection of buildings for business or residential purposes, and such plots may from time to time be disposed of in the manner hereinafter prescribed.

10. Leases of town plots may be granted for any term not exceeding 99 years.

17. Before any town plot is disposed of under the next succeeding section the Commissioner of Lands shall determine :

(a) The rent which shall be payable in respect of such plot.

(b) The upset price at which the lease of such plot will be sold.

(d) The special covenants, if any, which shall be inserted in the lease.

18. Leases of town plots shall, unless the '"Governor shall otherwise order, in any particular case or cases, be sold by auction.

19. The place and time of sale shall be notified in the Gazette not less than four weeks or more than three months prior to the day of sale, and the notice shall state :

(a) The number of plots and the situation and area of each plot.

(b) The upset price at which the lease of each plot will be sold.

(d) The term of the lease and the rent payable in respect of each plot.

(e) The building conditions and the special covenants, if any, to be inserted in the lease to be granted in respect of any plot:

Provided however that the lease of any plot may be withdrawn from sale by the Commissioner of Lands at any time prior to the same being offered for sale.

20. The auctioneer shall, before the commencement of the sale, read the terms and conditions of the sale, and all persons bidding at the sale shall be bound by the terms and conditions so read."

With these provisions it is necessary to compare the corresponding sections of Part 4, Disposal of Agricultural Land (1) Offering of Land for Agricultural Purposes :

"25. The Commissioner of Lands may cause land available for leasing for agricultural purposes to be surveyed and divided into farms which shall not, except with the consent of the Governor, exceed five thousand acres, or except with the consent of the Secretary of State, exceed seven thousand five hundred acres.

26. Leases of farms shall, unless the Governor shall otherwise order in any particular case or cases, be sold by auction.

27. When land available for leasing for agricultural purposes shall have been surveyed and divided into farms and it is proposed that leases thereof shall be sold by auction, the Commissioner of Lands shall give notice in the Gazette of the place and time which shall not be within three months of the date of the publication of such notice at which leases in respect of such farms will be offered for sale by auction.

Such notice shall state:

(a) The situation of the farms and the approximate area of each farm and the time when and place where the plan of each farm may be seen.

(b) The upset price at which the lease of each farm will be sold,

(d) Any special covenant or condition to be inserted in any lease to be granted.

(e) The annual rent to be paid for each farm for the first period of the lease, as hereinafter defined.

(f) The survey fees and the cost of the deeds to be paid in respect of each farm.

Provided however that the Commissioner of Lands may withdraw any lease from sale at any time before the same is offered for sale.

(4) Covenant as to Occupation.

39. There shall by virtue of this ordinance be implied in every lease granted under this part to European a covenant that he shall not without the consent of the Governor in Council appoint or allow a non-European to be manager or otherwise to occupy or be in control of the land leased."

The contention of the applicant which has found favour with the Court of Appeal, is that the provision in S. 18 that leases of town plots shall be sold by auction involves that in the absence of express and unequivocal words, the sale cannot be restricted to a particular section of the community. Sheridan, Ag.C.J., thought that the ordinance itself indicated that no restriction was to be placed on the bidding. He referred to the absence in S. 19 of any requirement that notice should be given of such a restriction as compared with S. 27 (c) relating to the notice in sales of agricultural land, and attached importance to the words of S. 20: "all persons bidding at the sale." Guthrie Smith, Ag.C.J., thought that the Commissioner would be violating his duty as a trustee for the Government by restricting the class of purchasers. He thought that such a limitation tended to reduce the price, since it cut out a class of potential bidders. Muir Mackenzie, J., considered that on a comparison of the sections regulating the sale of town plots with the sections regulating the sales of agricultural land, as there was a mandatory provision in S. 27 (c), that the Commissioner should state whether persons other than Europeans will be allowed to bid and no such provision in S. 17, it must be taken that express power to restrict was given as to agricultural land and was not given as to town plots.

After careful consideration of the judgments in the Court of Appeal their Lordships find themselves unable to agree with the decision. Prima facie the Crown and the servants of the Crown exercising the right of disposing of Crown property, have at least the rights of private owners of making the disposition in any way that appears to them to be best in the interests of the Crown. The servants of the Crown, if given disposing power by statute, must comply with the terms of the statute, but within those terms their duty is to act honestly in what they conceive to be the ultimate interests of the Crown or of the public. In such disposition unless it is expressly given by statute there does not exist, and never has existed, any legal right of any particular member of the public to take part. Sales or leases, if permitted to be by private treaty, are regulated by the duty which the servant of the Crown owes to his superior, but owes to no individual member of the public. If the statutory duty of the Crown servant is to sell by auction, that duty must, no doubt, be observed. Their Lordships would agree that such a duty imposed by statute would ordinarily involve a duty to sell by public auction; but if there is no further express provision there would seem to be no reason for further limiting the discretion of the officer as to the terms and conditions of the public auction which he shall decide to hold. If there can be restriction of user there seems no objection to limiting the bidders to those capable of the restricted user. If plots are reserved for dwellings for the industrial classes it might well be expedient to restrict bidding to members of that class. In the very case in question bidding is to be limited, apparently without objection, to persons who have not already purchased a plot, and if to them why not, if thought desirable, to persons who had not already purchased a similar plot at a previous sale? Township plots include land for commercial purposes, and there would appear to be no reason why in appropriate cases the user should not be restricted to the building of wharves, warehouses or factories, or why the bidding should not reasonably be restricted to approved intending wharfingers, warehousemen or factory owners. If the words "sell by auction" therefore stood alone, there seems to their Lordships no reason why there should not be imposed a restriction as to the bidders. If any restriction be allowed the question whether the restriction should be based on racial distinctions is obviously not one of law, but of policy. Their Lordships cannot entertain the view that to restrict bidding is necessarily to sell at a disadvantage. In respect of residential plots in particular the very opposite result may be attained.

But in the present case the words of the ordinance construed as a whole appear to indicate that the words "sell by auction" in S. 18 are not confined to selling without restriction, but do involve the power to sell by restricted auction. Their Lordships' examination of the clause relating to the sale of agricultural land, leads them to the opposite inference to that formed on the same clauses by the Court of Appeal. The only disposing power given under either part is by Ss. 18 and 26. The leases are to be sold by auction. The empowering words are identical. Prime facie, they should convey the same power. But the nature of the power in respect of agricultural lands can be discovered from the provisions of S. 27 as to notice, and from S. 27 (c) it is obvious that the legislature contemplated that in the sale of which notice must be given, there was to be a power of restriction. If therefore power to sell by auction in S. 26 gives a power of restricted auction what reason is there for assuming that the same words in S. 18 give a different power ? With great respect to those who have expressed a contrary opinion, the fallacy is in assuming that a clause as to notice has anything to do with granting or limiting a power of disposition which has to be found independently. The value of the notice clause is to call attention to the powers which are assumed to be given, and which can only be given, in the identical terms of Ss. 18 and 26.

The absence of the statutory necessity of notice of restriction on the sale of town plots seems to their Lordships to be without special significance. It is easy to conceive reasons why the legislature made special provision for notice of an extension of the sale to non-Europeans in the case of agricultural land while omitting statutory provisions on the subject in the township areas. In the latter case notice as to the persons whose biddings would be accepted, might well be left, as in the former case it probably could safely have been left, to the discretion of a competent administrator of an auction sale. It is difficult to see how notice of a restriction could, in any case, be omitted.

If, as their Lordships have indicated, the Commissioner had the power to impose the general restriction as to bidding, it was not contended by counsel for the applicant that objection could be made to the restrictive condition as to user. Their Lordships entertain no doubt that the objection on this head fails.

It is not proper to part from the case without calling attention to the procedure in this case which it is not desirable should form a precedent. In respect of this sale fixed for a Saturday 11th August by a notice of 3rd July, the applicant, by a notice of motion dated on Thursday, moved the Court on Friday for a mandamus to the Commissioner. The necessary evidence of a demand and refusal was extraordinarily weak. The Court appears to have postponed the sale by an order made ex parte, a proceeding which nothing but extreme urgency would justify. The writ of mandamus which is a high prerogative writ, is of the greatest value in maintaining the law, but it is discretionary, and the granting of a rule in the circumstances seems to have conceded the applicant more than he was entitled to. The precise order asked for and made should in such cases be carefully defined. Their Lordships would have found it difficult to support an order which apparently commanded the Commissioner to allow the applicant to bid at a sale which had only been advertised subject to certain conditions. It would be wrong to prevent the Commissioner from withdrawing the sale altogether if he thought that it was inexpedient to sell at present without such conditions. Their Lordships have been able to decide the point of law which concerned the litigants without paying special attention to forms; but they must not be taken to approve the present proceedings as a precedent in any future attempt to decide similar questions.

For the reasons they have given they will humbly advise His Majesty that the appeal of the Commissioner be allowed and the order of the Court of Appeal, dated 6th July 1929, be set aside, and the order of the Supreme Court of Kenya, dated 10th December 1928, be restored, and that the cross-appeal of the applicant be dismissed. The applicant must pay the costs here and in the Court of Appeal.

Appeal allowed.

Commissioner For Local Government Lands And Settlement v. Abdulhusein Kaderbhai

Judgment Summary — Lord Atkin

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Applicant's Arguments (Abdulhusein Kaderbhai)

Commissioner for Local Government Lands and Settlement — Respondent/Appellant

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Commissioner For Local Government Lands And Settlement v. Abdulhusein Kaderbhai

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