Reasonable expectation is the objectively justified belief in the likelihood of some future events generated by a legal right under a contract. In Mohan’s Oysterbay Drinks Limited v BAT (K) Limited Comm. Case No. 90 of 2014, the court held that the principle cannot be construed in the absence of a contractual relationship between parties having first been established. It therefore applies as between private parties and not where a public authority is involved.
Whereas the application of the principle of reasonable application requires a contractual relationship, it is instructive to note that this principle is not applicable in employment law where the contractual relationship is on a fixed term basis. This position was taken by the court in MARGARET A. OCHIENG -VS- NATIONAL WATER CONSERVATION& PIPELINE CORPORATION [2014] eKLR where the Court while dealing with the issue as to whether the Applicant legitimately expected her fixed term contract to be renewed after the lapse of the contract period, held that fixed-term contracts carry no expectancy of renewal. The import therefore is that the principle does not apply to fixed term contracts in employment related disputes.
Doctrine of Legitimate expectation
The doctrine concerns primarily the relationship between public bodies and individuals, whether to remedy arbitrariness, protect detrimental reliance or uphold some other requirement of morality or fairness by a public authority to prevent it from abusing its power. Essentially the principle of legitimate expectation relates to the relationship between public administration and an individual and elaborated expectations raised due to administrative conduct that might have legal consequences. It is rooted in consideration of fairness, reasonableness and a higher public interest beneficial to all citizens. It enables citizens to plan their lives with a sense of certainty, trust, reasonableness and reasonable expectation where a promise is made by a public authority, as an abrupt change in circumstances would certainly negatively impact their lives and be an abuse of power. The doctrine deters public authority from exercising their power arbitrarily.
We opine that at the core of this doctrine is the rule of law that requires the government’s regularity, predictability and certainty in dealing with the public in both procedural and substantive aspects. The Court of Appeal of Hong Kong in HONG KONG V. NG YUEN SHIU (1983) 2 AC 629 where the Court held that:
“When a public body has agreed to follow a certain practice, it is in the interests of good governance that it should behave reasonably and fulfil its commitment, as long as it does not conflict with its statutory obligation.
In COMMUNICATIONS COMMISSION OF KENYA V ROYAL MEDIA SERVICES & 5 OTHERS (2015) eKLR, the Supreme court of Kenya held that the doctrine of Legitimate expectation is applicable in public law where an individual is seeking remedy against a public authority and does not apply where both disputants are private parties.
The court went further to set out the criteria that must exist for one to invoke the doctrine, being that;
1. The presence of a clear and unambiguous promise or representation by a public authority. In KEROCHE INDUSTRIES LIMITED V KENYA REVENUE AUTHORITY & 5 OTHERS (2007) eKLR while dealing with a suit between the parties the court explained that the existence of a clear and unambiguous promise can be determined from correspondence between the parties. In the case the Respondent had made a promise by a letter dated 27th April, 1996 exhibited in court to only have the manufacturer pay tax on tariff 22.04 under its license.
2. The existence of a consistent practice in the past which the person can reasonably expect to operate in the same way. Further in KEROCHE INDUSTRIES CASE(SUPRA) the Court in holding that reliance on the was sustained noted that, the Respondent had for nine years accepted payments from the Applicant only on tariff 22.04 and the Applicant was right in expecting that it would only be subjected to that one tariff.
3. The presence of an arbitrary decision by the public authority. In R V INLAND REVENUE COMMISSIONER, EX-PARTE UNILIVER P/C [1996] STC P 681the court explained that legitimate expectation is about fairness at the end of the day. Whether or not there is unfairness in law has to be ascertained on a case-to-case basis and there cannot be a rule of thumb and courts should look into the loss or harm born by the individual to determine the arbitrariness/unfairness of the decision.
Distinction between the principle of legitimate Expectation and reasonable Expectation.
In HEINEKEN EAST AFRICA IMPORTS LIMITED & HEINEKEN INTERNATIONAL B.V V MAXAM LIMITED E404 OF 2020, the Supreme Court stated that the doctrine of legitimate expectation is a public law doctrine only applicable where one is claiming against a public authority while reasonable expectation is a contract law principle applicable where two private parties are claiming against each other.
This write-up is for informational purposes only and should not be construed as a legal opinion or advise. If you have any queries or need clarifications, please do not hesitate to contact Gregory Makambo, Partner, (gmakambo@makambolaw.com), Diana M. Kimiti, (dkimiti@makambolaw.com) or your usual contact at our firm, for legal advice.