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The Executive Director, National Environment Management Authority (NEMA) v Solid State Limited (Civil Appeal 15 of 2015)

Supreme Court · [2018] UGSC 93 · 2018 Appeal Partly Allowed ✦ AI-generated summary ↓ Download
Jurisdiction
Uganda
Case Type
Second appeal to the Supreme Court from a Court of Appeal decision in a judicial review matter, with a cross-appeal by the respondent on damages
Decision
Appeal allowed in part: general damages reduced to UGX 200,000,000 and interest reduced to 6% per annum; certiorari quashing the cancellation upheld; cross-appeal on special damages dismissed

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Holding

The Supreme Court held that judicial review proceedings may competently be brought against the Executive Director of NEMA in his official capacity, following Commissioner General URA v Meera Investments. NEMA breached the rules of natural justice by cancelling the respondent's EIA Certificate without disclosing the complaints and inspection findings or giving it an opportunity to respond, so the cancellation was void and certiorari was the appropriate remedy. The court upheld liability for general damages but, finding the award unsupported by verified evidence and the basis unexplained, reduced it from UGX 400,000,000 to UGX 200,000,000, and reduced interest from 20% to the court rate of 6% per annum. The cross-appeal on special damages was dismissed.

Facts

Solid State Limited intended to establish a stone quarry at Lubani Hill, Butagaya Sub-county, Jinja District. It applied to NEMA and, on 16 July 2012, was granted an Environmental Impact Assessment Certificate. After receiving complaints from members of the surrounding community that the project posed environmental and health hazards, and following an inspection that found the EIA report had omitted critical information about nearby schools, residences and a mosque, the Executive Director of NEMA cancelled the Certificate on 14 September 2012. Apart from correspondence and telephone contacts, NEMA did not disclose to Solid State the identity or nature of the complaints, nor the findings of the post-EIA inspection, before cancelling the Certificate. Solid State challenged the cancellation by judicial review, contending it had been denied a fair hearing. The High Court quashed the cancellation and awarded special and general damages plus interest. The Court of Appeal upheld the certiorari, general damages and interest but set aside the special damages, prompting this appeal and the respondent's cross-appeal.

Issues

  1. Whether judicial review proceedings could be competently instituted against the Executive Director of NEMA, who is not a separate legal entity.
  2. Whether the respondent was accorded a fair hearing before the cancellation of its Environmental Impact Assessment Certificate.
  3. Whether the order of certiorari quashing the cancellation was warranted in the circumstances.
  4. Whether the award of UGX 400,000,000 in general damages was based on wrong principles and was excessive.
  5. Whether the interest of 20% per annum awarded on general damages was excessive.
  6. Whether the Court of Appeal erred in setting aside the award of special damages (cross-appeal).

Orders

  • The appeal is allowed in part.
  • The orders of the Court of Appeal with respect to general damages are set aside.
  • The appellant pays the respondent Shs. 200,000,000 as general damages for loss of future business opportunity.
  • The appellant shall pay interest on the general damages at 6% per annum from the date of the High Court judgment till payment in full.
  • The appellant shall pay 70% of the costs of the appeal in the Supreme Court and the courts below.
  • Payment of the general damages, interest and costs shall be made by NEMA.
  • The cross-appeal is dismissed with costs to the appellant.

Key headnotes

Judicial Review — Proper Party — Public Official as Respondent
Judicial review proceedings may competently be instituted against the public official whose statutory decision is impugned, in his official capacity, even though the official is not a separate legal entity, where the law reserves the relevant functions to that office.
Natural Justice — Fair Hearing — Right to Know the Case
Before cancelling a licence or certificate, the decision-maker must inform the affected party of the nature of the complaints and the evidence against it and give it a reasonable opportunity to respond; mere correspondence and telephone contacts that withhold the complaints and inspection findings do not amount to a fair hearing.
Right to Fair Hearing — Non-Derogable Right (Article 44)
The right to a fair hearing guaranteed by Article 28(1) of the Constitution is an absolute right that cannot be derogated from under Article 44, and an administrative body is obliged by Article 42 to treat affected persons fairly before taking a decision against them.
Certiorari — Decision Void Ab Initio — Public Interest
A decision taken in non-observance of the rules of natural justice is void ab initio, and certiorari is the appropriate remedy to quash it; public interest considerations do not excuse an administrative body from observing natural justice.
Judicial Review — Power to Award Damages
The High Court may award damages in judicial review proceedings under section 33 of the Judicature Act read with rule 8 of the Judicature (Judicial Review) Rules, where the claim is pleaded in the motion and the applicant could have been awarded damages had the claim been brought as an ordinary action.
General Damages — Appellate Interference — Duty to Explain Basis
An appellate court will not interfere with an award of general damages unless the trial court acted on a wrong principle or the amount is so high or low as to be an entirely erroneous estimate; a trial judge exercising this discretion must explain the basis of the award, and an award resting on unverified or speculative evidence cannot stand.
Interest — Court Rate versus Commercial Rate
Interest on general damages is normally awarded at the court rate of about 6% to 8% per annum from the date of judgment; awarding the commercial rate of 20% on general damages is erroneous.

Legislation cited (15)

  • National Environment Act (Cap 53) s.11
  • National Environment Act (Cap 53) s.12
  • National Environment Act (Cap 53) s.13
  • National Environment Act (Cap 53) s.22(4)
  • Uganda Revenue Authority Act s.9
  • Uganda Revenue Authority Act s.11
  • Judicature Act (Cap 13) s.33
  • Judicature (Judicial Review) Rules S.I No. 11 of 2009 r.8
  • Constitution of Uganda 1995 Article 28(1)
  • Constitution of Uganda 1995 Article 42
  • Constitution of Uganda 1995 Article 44
  • Constitution of Uganda 1995 Article 8A
  • Evidence Act s.61
  • Evidence Act s.63
  • Court of Appeal Rules r.30

Cases cited (21)

  • Commissioner General URA v Meera Investments Ltd (Civil Appeal No. 22 of 2007)
  • Charles Harry Twagira v Attorney General & 2 Others (Civil Appeal No. 4 of 2007)
  • Charles Twagira v Uganda (Criminal Application No. 3 of 2003)
  • R v Race Relations Board, Ex parte Selvarajan 1 WLR (1975) 1686
  • Ridge v Baldwin (1964) AC 40
  • Barabra & Ors v Minister for labour and Youth Development and Others [1995-1998]2 EA 52 (CAT)
  • Kakooza John Baptist v Electoral Commission & Another (Election Petition Appeal No. 11 of 2007)
  • Rossage v Rossage [1960] 1 ALLER 599
  • Kifamunte vs. Uganda (1999) 2. E.A 127
  • Bogere Moses v Uganda (Criminal Appeal No. 1 of 1997)
  • Panda vs. R. (supra)
  • Kairu vs. Uganda (1978) HCB 123
  • Seviri vs Uganda Land Commission. [1979] HCB
  • Kaggwa Andrew & 5 Others v The Honourable Minister of Internal Affairs (Miscellaneous Cause No. 0105 of 2002)
  • Kanda vs. Government of Malay (1962) AC 322
  • Amooti Godfrey Nyakaana v NEMA & 6 Others (Constitutional Appeal No. 5 of 2011)
  • Hon. Hanifa Kawooya vs. Attorney General & Another, [2011] ULR 247
  • Robert Coussens v Attorney General (Civil Appeal No. 8 of 1999)
  • Uganda Revenue Authority v Wanume David Kitamirike (Civil Appeal No. 43 of 2010)
  • Hirji vs. Modesta [1967] EA 724
  • Bullingha vs. Hughs [1949] 1 K.B 643
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.