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UNIVERSITY OF BOTSWANA LAW JOURNAL
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Ghana Institute of Management and Public Administration, (GIMPA), Accra, Ghana.
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UNIVERSITY OF BOTSWANA LAW JOURNAL
VOLUME 9 DECEMBER 2009
Exploiting Patent Regulatory "Flexibilities" to Promote Accessto Antiretroviral Drugs in Sub-Saharan Africa.3P. Adusei Real Property as Security for Advances: Avoiding the Pitfalls Under the Extant Law in Nigeria.25N.E. Ojukwu-Ogba Rethinking Matrimonial Property Rights on Divorce in Botswana.47E.K. Quansah Is Judicial Ideology a Useful Criterion for Evaluating Judiciaries in Developing States? A Reply to Asara .69D. Watson RECENT LEGAL DEVELOPMENTS
E.N. Macharia-Mokobi .77 BOOK REVIEW
World Trade Law: - J. Pfumorodze .87 Text, Materials and Commentary 2 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
Exploiting patent regulatory "flexibilities" to promote access
to antiretroviral drugs in Sub-Saharan Africa
Poku Adusei*
The HIV/AIDS pandemic has reached a crescendo in Sub-Saharan Africa(SSA). This disease threatens to exterminate the human race in the Saharanregion. The situation is further exacerbated by high prices of brand nameantiretroviral medicines due to the prevailing international patent regime.
And, attempts to promote the manufacture and import of generic versions ofantiretroviral drugs are sometimes met with stiff resistance frompharmaceutical companies who own the patents. This paper, therefore, seeksto examine the subject of patent regulation of antiretroviral drugs in the lightof the threat posed by HIV/AIDS in SSA. It urges the exploitation of diversepatent regulatory mechanisms to promote access to antiretroviral drugs in theregion worst hit by HIV/AIDS epidemic. Regulatory diversity here emphasisesthe use of: negotiations, compulsory licensing mechanisms, public-privatepartnerships, collaborative initiatives among regional economic blocs,increased drug-pricing competition, and a rejection of TRIPS-plus obligations,among others, to procure relatively cheaper versions of antiretroviralmedicines for persons infected with the virus. This will enable policy makers inthe Sub-Saharan region to respond more effectively to expand the capacities ofHIV/AIDS-affected persons and make them more productive. It will furthersave the healthcare systems in SSA from imminent collapse. Sub-Saharan Africa (SSA)1 is teetering on the brink of a human calamitybecause of the HIV/AIDS pandemic that has engulfed the region. Conservativeestimates indicate that two-thirds of the world's HIV infection rate is in SSA,and more than three in four (76 per cent) AIDS-related deaths occur in thisregion.2 Worse still, the region accounts for 67 per cent of the world's LeastDeveloped Countries (LDCs) and millions of people infected with HIV do nothave access to antiretroviral drugs. As a consequence, being HIV positive is LL.B., B.L. (Ghana); LL.M. (Alberta); Doctoral Candidate (McGill); Lecturer, Faculty of Law,University of Ghana, Legon (email: [email protected]).
Sub-Saharan Africa comprises 48 developing and least developed countries.
2007 AIDS Epidemic Update, UNAIDS/07.27E/JC1322E, Geneva, UNAIDS & WHO (2007). 4 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
rapidly becoming a death sentence. And, there is ample evidence to support thefact that HIV/AIDS has become a national emergency in parts of Africa.3Indeed, the disease threatens to exterminate the human race in SSA. The rise in the incidence of HIV/AIDS in SSA has escalated the demand for antiretroviral drugs. Antiretroviral drugs, where they areaccessible, can prolong the lives of people infected with HIV.4 Antiretroviralsare therefore needed to promote the health care needs of millions of peopleinfected with HIV in SSA. But as it now stands, access to quality health careremains the province of a few elite in SSA. The general population cannotafford to buy patented brand name medicines and, most often, people on anantiretroviral regimen experience treatment interruptions due to financialdifficulties.5 Also, the sustainability of health care institutions is under threatowing largely to the high cost of pharmaceutical products in the marketplace.
Accordingly, access to medicines has become the most important issue on theagenda for policy makers in SSA. Policy makers should put in placemechanisms to promote access to antiretroviral medicines that prolong humanlives and increase the health and well-being of people living with HIV/AIDS. Meanwhile, patents in the medicines that grease the wheels of life are owned by private pharmaceutical companies, which regulate the prices ofpatented medicines on the market. This private regulation of essential life-saving medicines, via pharmaceutical patents, makes the cost of an effectiveantiretroviral regimen expensive. Stiglitz rightly notes that theimplementation of patent rules "makes it difficult for developing countries toget access to these vital medicines at prices that they can afford."6 Consequently, this paper will explore mechanisms to promote affordability of and/or access to antiretroviral medicines in SSA. Given theimportance of human survival, an effective management of the cost ofantiretroviral medicines in Africa must aim at reducing the cost of access tomedicines and making health care services available to the largest populationpossible. A poorly executed patent system can perpetuate high prices formedicines and hinder access to essential life-saving medicines in SSA. To this For instance, Ganslandt et al have revealed that: "In Botswana, 36 percent of adults are now infected withHIV, whereas in South Africa, the figure is 20 percent. South Africa has 4.2 million infected people, thelargest number in the world…Economic studies suggests that the South African gross domestic product(GDP) will be 17 percent lower in 2010 than it would be without AIDS. In Botswana, there could be a 13to 15 percent reduction in the income of the poorest households." M. Ganslandt et al, "Developing andDistributing Essential Medicines to Poor Countries: The Defend Proposal," in Carsten Fink et al, eds.,Intellectual Property and Development: Lessons from Recent Economic Research, New York, OxfordUniversity Press (2005), p. 207 at p. 212.
See J. Kuanpoth, "Patents and Access to Antiretroviral Medicines in Vietnam after World TradeOrganization Accession" 10 Journal of World Intellectual Property (2007), p. 201.
See E.F.M. 't Hoen, The Global Politics of Pharmaceutical Monopoly Power: Drug Patents, Access,Innovation and the Application of WTO Declaration on TRIPS and Public Health, The Netherlands,AMB (2009), p. 5 (citing MSF Report, "Forcing Patients to Pay for AIDS Care Endangers TreatmentSuccess," 2005).
J.E. Stiglitz, "Economic Foundations of Intellectual Property Rights," 57 Duke Law Journal (2008), p.
1693 at p. 1717.
ACCESS TO ANTI-RETROVIRAL DRUGS 5
end, countries in SSA should adopt effective mechanisms that fully exploit allthe "flexibilities" in the WTO's TRIPS Agreement,7 especially with the recent"August 30" Decision8 of the WTO Council which has culminated in theamendment to article 31 of the TRIPS Agreement. By analysing these "flexibilities," the paper proposes the adoption of diverse patent regulatory mechanisms that promote access to antiretroviralmedicines and lead to human development in SSA. Such regulatory diversityshould emphasise: the use of negotiations, compulsory licensing mechanisms,public-private partnerships, other collaborative initiatives among regionaleconomic blocs, increased drug-pricing competition, and a rejection ofTRIPS-plus obligations, among others, to procure relatively cheaper versionsof antiretroviral medicines for persons infected with the virus. The paper will also focus on how domestic enforcement mechanisms can be balanced against government policies to improve the lot of theircitizenry. Additionally, the paper will consider how regional economic groupssuch as the Southern African Development Community (SADC), theEconomic Community of West African States (ECOWAS), and the EastAfrican Community (EAC) can take advantage of international patent rules toensure that antiretroviral medicines reach the suffering masses in SSA. Thiswill enable policy makers in the region to respond more effectively to expandthe capacities of HIV/AIDS-affected persons and make them moreproductive. It will further save the healthcare systems in SSA from imminentcollapse.
INTERNATIONAL PATENT PROTECTION OF
Any meaningful appraisal of the existing regulation of antiretroviral medicinesdeserves a closer look at the prevailing international patent regime within thecontext of the TRIPS Agreement. The Agreement emerged as part of theUruguay Round of trade negotiations that ushered in the liberalised tradepolicies of the WTO in 1995. This Agreement sets the minimum threshold forintellectual property (IP) rights protection and enforcement for all memberstates of the WTO. Consequently, the TRIPS rules have since entry into forcebecome the foundation of legitimacy for patent systems across the globe. Thekey feature of TRIPS is that its rules confirm the commitment of theinternational community to "achieve uniformity as to the nature of the [IP]rights, combined enforceability and sanctions for breaches thereof."9 Agreement on Trade Related Aspects of Intellectual Property Rights Annex 1C of the Agreementestablishing the World Trade Organization (WTO), signed in Marrakesh, Morocco on 15 April 1994.
WTO, Implementation of Paragraph 6 of the Declaration on the TRIPS Agreement and Public Health,WTO Doc. WT/L/540.
P.F. Kihwelo, "Intellectual Property Rights Jurisprudence in Tanzania: Turning an Eye to the Commercial 6 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
For instance, the TRIPS Agreement makes it obligatory for all members of the WTO to grant a 20-year patent protection to pharmaceuticalproducts and processes.10 The grant of protection is extended to cover utilitypatents, otherwise known as "utility models."11 In addition, TRIPS allowsstates to grant protection for medicinal test data, thereby creating an additionalform of monopoly for data needed to obtain marketing approval formedicines.12 To this end, all new health related products and processes, suchas medicines, vaccines and diagnostics, are enclosed by the "fence" ofprotection by the TRIPS-based patent framework.13 The grant of suchpharmaceutical patents confers exclusive rights on the owner to make, use,sell and/or import protected medicines.14 The TRIPS Agreement contains extensive provisions that oblige states to provide effective and adequate enforcement procedures against theinfringement of IP rights.15 January 1, 2005 was the deadline for alldeveloping countries to comply with the TRIPS Agreement. LDCs have until2016 to comply with the TRIPS Agreement,16 but in reality a number of thoseLDCs in SSA comply with the treaty, to the extent that some have beencompelled to assume more obligations than the minimum standards requiredby the TRIPS Agreement.17 Besides the TRIPS Agreement requirements for a country to grant or enforce pharmaceutical patents, there are also provisions that allow states toexclude inventions from patentability on the basis of inter alia, ordre publicor morality.18 Additionally, the TRIPS Agreement allows states to makeprovisions for pharmaceutical patent exceptions in cases of emergency andextreme urgency, public non-commercial use, anti-competitive use, and theproduction of pharmaceutical products for eligible states.19 Thus, on thestrength of public interest considerations and also on the basis of abuse ofpatent rights, states can limit the exercise of pharmaceutical patent rights intheir respective jurisdictions.20 Division of the High Court," 9 Journal of World Intellectual Property (2006), p. 673.
Article 27.1 of the TRIPS Agreement. See Part II of Ghana's Patents Act, 2003; Article 27.3(b) of the TRIPS Agreement.
Article 39.3 of the TRIPS Agreement. See Karin Timmermans, "Intertwining Regimes: Trade,Intellectual Property and Regulatory Requirements for Pharmaceuticals," 8 Journal of World IntellectualProperty (2005), p. 67 [The protection of data further disables generic producers from entering the marketuntil the end of the exclusivity period].
Hoen, op.cit. at p. 2.
Article 28 of the TRIPS Agreement.
P. Drahos & J. Braithwaite, "Who Owns the Knowledge Economy: Political Organising Behind TRIPS,"Corner House Briefing 32, online: Paragraph 7 of the Doha Declaration.
See S. Hill & K. Johnson, Emerging Challenges and Opportunities in Drug Registration and Regulationin Developing Countries, London, DFID Health System Resource Centre (2004), p. 7.
Article 27.2/.3 of the TRIPS Agreement.
Article 31 & 31bis of the TRIPS Agreement.
H.M. Haugen, "Human Rights and TRIPS Exclusion and Exception Provisions," 11 Journal of WorldIntellectual Property (2008), p. 345 at p. 346.
ACCESS TO ANTI-RETROVIRAL DRUGS 7
PATENTS AND ACCESS TO MEDICINES: THE
There is an ongoing debate about the impact of the above patent rules on accessto medicines. There is also disagreement on the extent to which patentsinfluence innovation.21 For proponents of private patent rights, researching,developing and subsequent production of medicines, requires significantfinancial investment, and therefore pharmaceutical companies should beallowed to recoup their costs and make a profit.22 Others justify the position that patentees should receive robust economic reward to spur innovation and creativity.23 Trebilcock observes that"if I spend considerable resources inventing a new product but others are ableto copy my idea without making any such investments and withoutreimbursing me, I have little incentive to use my innovative talents in thisfashion."24 The position of the International Federation of PharmaceuticalManufacturers and Associations (IFPMA) is that "[w]ithout patent protection,the world would have been deprived of the innovative medicines which havesaved countless lives."25 The point here is that proponents of patents justifythe grant of monopoly as a necessary tool to motivate firms to undertakepharmaceutical research and development.26 However, the arguments made by proponents of pharmaceutical patents tell only half of the story. The other part comes from critics, who positthat patents are not necessary for pharmaceutical research and development.27Others also contend that the existence of pharmaceutical patents leads to highprices of medicines on the market.28 This is confirmed by the World HealthOrganisation-Health Action International survey which has predicted thatessential medicines will be very expensive and not universally available due See E.R. Gold et al, "The Unexamined Assumptions of Intellectual Property: Adopting an EvaluativeApproach to Patenting Biotechnological Innovation," 18 Public Affairs Quarterly (2004), p. 299.
See M. Boldrin & D.K. Levine, Against Intellectual Monopoly, New York, Cambridge University Press(2008), p. 70. See also Gold et al, op. cit. at p. 301. See: R. Rapp & R.P. Rozek, "Benefits and Costs of Intellectual Property Protection in DevelopingCountries," 75/77 Journal World Trade Law (1990), p.75; A.S. Gutterman, "The North-South DebateRegarding the Protection of Intellectual Property Rights," 28 Wake Forest Law Review (1993), p. 89;D.M. Gould & W.C. Gruben, "The Role of Intellectual Property Rights in Economic Growth," 48 Journalof Development Economics (1996), p. 323.
M.J. Trebilcock, "Economic Analysis of Law," in R.F. Devlin, ed., Canadian Perspectives on LegalTheory, Toronto, Emond Montgomery (1991), p. 111 at p. 111.
The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) (2008),available onli See J.A. Schumpeter, Capitalism, Socialism and Democracy, 5th ed., London, Taylor & Francis (1976), p.
102.
See: R.D. Smith et al, "Trade, TRIPS, and Pharmaceuticals," 373 Lancet 684 (2009), p. 686; Stiglitz,op.cit. See: Michael Heller, The Gridlock Economy: How too Much Ownership Wrecks Markets, StopsInnovation, and Costs Lives, New York, Basic Books (2008); R.L. Ostergard, The Development Dilemma: The Political Economy of Intellectual Property Rights in the International System, Eric Rice,ed., New York, LFB Scholarly Publishing LLC (2003); S.K. Sell, Private Power, Public Law,Cambridge, Cambridge University Press (2003); Boldrin & Levine, op.cit. at p. 69.
8 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
to the prevailing patent regime.29 The pharmaceutical industry is said to be themost profitable industry when compared to the other industries, such thatproducers sometimes sell way above the cost of production.30 Angell notes thatthe "[d]rug company profits are so large that one will hope the companieswould be willing to make less profitable [sic] but vital drugs as a socialservice."31 Heller for his part argues that patents contribute to a reduction in the capacity of the pharmaceutical industry to generate new products.32 In supportof this assertion is a 2006 Report by the US Government AccountabilityOffice which has concluded that the "current patent law discouraged drugcompanies from developing new drugs by allowing them to make excessiveprofits through minor changes to existing pharmaceuticals."33 Temin has alsoremarked that the pharmaceutical companies spend huge amounts onexcessive advertising to sustain a form of price-fixing cartel and monopolisethe market, rather than focusing on real research to produce new medicines.34For instance, AstraZeneca is said to have spent a half billion dollars toadvertise Nexium alone.35 In addition, pharmaceutical companies spendmillions of dollars on legal fees and other lobbying activities to ward offgeneric manufacturers and other potential infringers.36 A more moderate position (which the author favours) is that researching and developing a new product should draw inspiration from thesocial environment.37 Therefore, claiming robust protection for invention maycreate short term benefits for the patent holder, but in the longer term is likelyto create social inequities and imbalances.38 As Gold et al poignantly observe:"the recognition that innovation is a social, collaborative phenomenonchanges the way that policy-makers, researchers, industry and technologyconsumers ought to view and appreciate IP: as something to be shared andbuilt upon rather than as something to accumulate for its own sake."39 In 2001, anti-TRIPS proponents achieved some breakthrough at the See Z.U.D. Babar et al, "Evaluating Drug Prices, Availability Affordability and Price Components:Implications for Access to Drugs in Malaysia," 4 PLoS Med (2007), p. 82. See P. Temin, "Technology, Regulation, and Market Structure in the Modern Pharmaceutical Industry,"10 Bell Journal of Economics (1979), at pp. 432-433 & 440.
Marcia Angell, The Truth About the Drug Companies: How they Deceive us and What to do About it(New York: Random House, 2004) at p. 92.
Heller, op.cit. at p. 59.
"New Drug Development, Science, Business, Regulatory, and Intellectual Property Issues cited asHampering Drug Development Efforts," Report of the United States Government Accountability Office,2006.
Temin, op. cit. at p. 440.
Angell, op.cit. at p. 78.
Heller, op.cit. at p. 51.
E.R. Gold et al, "Toward a New Era of Intellectual Property: From Confrontation to Negotiation," (2008)A Report from the International Expert Group on Biotechnology, Innovation & Intellectual Property,online: The Innovation Partnership Website > at p. 15.
Gold et al, ibid. at p. 16.
Gold et al, ibid. ACCESS TO ANTI-RETROVIRAL DRUGS 9
Fourth WTO Ministerial Conference by pushing for the passage of the DohaDeclaration on the TRIPS Agreement and Public Health. This Declarationaffirms the sovereign right of governments to take measures to promote accessto medicines. For Hoen, Doha signaled a sea change in thinking about "IP as asocial policy tool for the benefit of society as a whole, rather than [as] amechanism to protect limited commercial interests."40 The Declaration thustriggered renewed efforts to exploit the "flexibilities" in the TRIPSAgreement via compulsory licensing and parallel imports. Still, Doha failed to allow for export to countries which lacked domestic manufacturing capacity; countries were allowed to use compulsorylicenses to produce medicines ‘predominantly' for the domestic market.41Two years of additional negotiations resulted in the WTO General Council'sdecision on 30 August 2003 to allow for such exports and imports amongcountries with and/or without manufacturing capacities. And so far, onlyRwanda has notified the TRIPS Council that it intends to use the mechanismto import generic medicines from Canada.42 As to whether the "August 30" Decision promotes real flexibility will be discussed below. Suffice it to say that notwithstanding what Stiglitzcalls "the inflexibilities in these flexibilities,"43 this paper urges policy makersin SSA to pursue diverse regulatory mechanisms to promote access toantiretroviral medicines in the region. REGULATORY DIVERSITY AS AN INSTRUMENT
The central goal of a patent system is to promote social benefits.44 This goal isconfirmed by Article 7 of the TRIPS Agreement which provides that IPprotection should be seen as a social policy instrument for societal benefits andthe promotion of economic welfare. In this regard, the pursuit of socialbenefits, such as the promotion of access to antiretroviral medicines in SSA,should be made to trump individual reward.45 The success of such pro-accesspolicies will however depend on practical governmental interventions, flexiblepatent administration and enforcement mechanisms, and the building ofalliances through institutional frameworks in SSA to overcome access-barriers. So, as part of a multifaceted strategy to promote access to antiretroviral medicines, policy makers in SSA must put in place practical Hoen, op. cit. at p. xvi.
Article 31(f) of the TRIPS Agreement.
See Hoen, op.cit. p. 37.
Stiglitz, op.cit. p. 1717.
Gold et al, op.cit. at p. 300.
See Integrating Intellectual Property and Development Policy (2002) Report of the Commission onIntellectual Property Rights, Department for International Development, London, available online:6 the Report provides: "In particular, there are no circumstances inwhich the most fundamental human rights should be subordinated to the requirements of IP protection." 10 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
measures that allow states to: negotiate with pharmaceutical patent holders tomake the prices of essential medicines affordable; grant compulsory licencesto allow third parties to produce and/or sell antiretroviral medicines; allowparallel imports of medicines at reduced prices without the consent of thepatent holder; encourage and support the patent application and managementof essential life-saving medicines; and promote sustainable financingmechanisms for pharmaceutical research and development.46 Twelve of suchpro-access mechanisms will now be discussed.
Although there is no legal requirement that countries must first resort tonegotiations for licences before exploring other pro-access mechanisms suchas compulsory licences in cases of national emergency or others circumstancesof extreme urgency, adopting a non-confrontational approach to promoteaccess to medicines will ensure cooperation among governments andpharmaceutical patent holders. Governments should therefore negotiate withpharmaceutical patent holders for voluntary licences that will allow thirdparties to market medicines and/or import generic versions of patentedmedicines in order to bring down prices of antiretroviral medicines in SSA.
Negotiation, as a non-confrontational mechanism, will also promote bettercommunication among patent stakeholders. This will in turn establish trustamong the interlocutors.47 Through negotiations, governments can also influence drug-pricing in both domestic and international arenas. This can be effectively undertakenby offering other trade-offs such as the reduction of the cost involved in theapplication and management of patents for essential medicines. There couldalso be other incentives that allow for easier access to a country's market withnew antiretroviral medicines. For instance, through negotiations,GlaxoSmithKline (GSK) and Boehringer Ingelheim (BI) granted licences tothe government of South Africa in 2003 in return for the payment of royaltiesnot exceeding 5 per cent.48 However, the use of voluntary negotiation iswithout prejudice to the rights of governments to use compulsory licences indrug patent regulation. Presently, pharmaceutical companies are beginning to accept the reality that patent protectionism and continued confrontation with proponentsof pro-access policies will not work. They are therefore making some Smith et al, op.cit. at p. 686.
See: J.F. Morin & E.R. Gold, "Consensus-Seeking, Distrust and Rhetorical Entrapment: The WTODecision on Access to Medicines," European Journal of International Affairs (2009) [forthcoming]; Goldet al, op. cit. at pp. 23-27.
See Treatment Action Campaign Case, 2003 (cited in Hoen, op.cit. at p. 53). Admittedly, this voluntarylicense became possible after the two pharmaceutical companies were found "guilty" by the SouthAfrican Competition Bureau for abusing their dominant market positions.
ACCESS TO ANTI-RETROVIRAL DRUGS 11
concessions to promote access to medicines. For instance, the CEO of GSKhas promised his organisation's commitment to slash prices on all medicinesin the poorest countries and supply less expensive medicines to the developingworld.49 Also, GSK announced that it is willing to contribute to a patent poolfor research into neglected diseases in developing countries.50 This proposal,however, excluded antiretroviral medicines. Developing countries should seethis proposal as an opportunity to open further dialogue in order to build trustfor the inclusion of antiretroviral medicines in the study. Also, the governments of India and Brazil have expressed their displeasure with the Netherlands government's seizure of generic medicinesbound for developing countries.51 These trade barriers can be resolved byresorting to negotiations and also making a case for bilateral arrangementswith the West to aid in the shipment of future consignments of genericmedicines to developing countries. This proposal is consistent with recentsuggestions for the use of negotiations rather than confrontation in resolvingdisagreements over access to medicines.52 Sometimes all that it may take is tomake a case that generics constitute a meagre fraction of the globalpharmaceutical market and also that generic production is consistent withinternational law. Compulsory Licences for Domestic Production
The grant of compulsory licences for purposes of local production of medicinesis another proven mechanism to contain the high cost of medicines. It involveslicensing the use of a patented invention to a third party or a governmentagency without the consent of the patent holder by paying adequatecompensation to the owner. In the same way, if efforts to secure voluntarylicences from pharmaceutical companies are being impeded, a compulsorylicensing mechanism is another effective option to explore in SSA. Moreimportantly, paragraph 5 of the Doha Declaration allows domesticgovernments to determine the grounds upon which such licences are granted totackle health related emergencies. States are also not required to consult patentright holders before issuing compulsory licenses to address public healthconcerns.53 This waiver of prior consultation is aimed at avoiding inordinatedelays in the issuance of compulsory licences in cases of national emergency.
S. Boseley, "Drug giant GlaxoSmithKline Pledges Cheap Medicines for World's Poor," The Guardian,February 13, 2009, onl W. New, "International Health Groups Warn WHO, WTO on Medicines Seizure," online . See Gold et al, op. cit.
Article 31(b) of the TRIPS Agreement.
12 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
As a price leveraging instrument, countries in SSA must create national frameworks to facilitate the use of compulsory licensing for themanufacture of antiretroviral medicines.54 This may require changes todomestic patent regulatory frameworks which restrict the possibility ofgranting sub-licenses to third parties. For instance, between 1969 and 1992,Canada issued 613 compulsory licences as part of its cost containmentmechanisms.55 Through this, price competition for medicines was promoted.
This also helped to develop the capacity of the local generic pharmaceuticalindustry.56 Countries such as India have in the past used compulsory licencesfor production of generics as leverage in price negotiations with patentholding pharmaceutical companies.57 This propelled the genericpharmaceutical industry in India to become the largest in the world.
Parallel Imports
Another pro-access mechanism is the use of parallel imports by countrieswhich do not have domestic capacity to manufacture such medicines. Parallelimports involve cross-border trade in patented products without the permissionof the patent holder. It allows countries that do not have the manufacturingcapacity to purchase medicines from other countries after comparing prices indifferent markets.58 This power of governments to import relatively cheapermedicines from other markets tends to force domestic distributors to reduceprices of medicines and also increases competition.59 Correa identifies two other grounds upon which generic medicines manufactured and sold elsewhere can be imported into a country. These are:(i) import of generic medicines in situations where there are no existingpatents, and (ii) parallel import of medicines put on the market withauthorisation of the patent holder.60 With the WTO Council's "August 30"Decision, exploring the possibilities of parallel imports of generic medicineshas become a truly viable alternative for states to consider. This can be donewithout any challenge by pharmaceutical patent holders.61 Indeed, countries in SSA have a lesson to learn from India. It for instance has embodied the "August 30" Decision in its legislative frameworkas follows: See Report of the Commission on Intellectual Property Rights, Innovation and Health of the World HealthOrganisation (2006), p. 139.
Hoen, op.cit. at p. ix.
Hoen, ibid. at p. 41.
Hoen, ibid. at p. xvi.
Smith et al, op. cit. at p. 686.
Kuanpoth, op. cit. at p. 204.
C. Correa, Integrating Public Health Concerns into Patent Legislation in Developing Countries, Geneva,South Centre (2000), pp. 100-102.
Paragraph 5(d) of the Doha Declaration.
ACCESS TO ANTI-RETROVIRAL DRUGS 13
"Compulsory licensing shall be available for manufacture of andexport of patented pharmaceutical products to any country havinginsufficient or no manufacturing capacity in the pharmaceuticalsector for the concerned product to address public health problems,provided compulsory licensing has been granted by such country orsuch country has, by notification or otherwise, allowed importationof the patented pharmaceutical products from India."62 This progressive provision opens the door for countries in SSA to work together with India to procure medicines at affordable cost. All that isrequired of countries in SSA is that they should have "by notification orotherwise [have been] allowed importation of patented pharmaceuticalproducts from India." The onus therefore rests on countries in SSA to takesteps to notify the TRIPS Council of their intention to make use of the"August 30" Decision. Since most of these countries lack the expertise onmatters pertaining to the use of compulsory licences and how to determinereasonable royalty rates, guidance on such issues is sorely needed to make theTRIPS "flexibilities" meaningful. This could come in the form of capacitybuilding for domestic policy makers while taking into account the peculiarsocio-economic conditions of countries in SSA.
Public/Private Sector Initiatives
The use of public-private partnership is one mechanism to promote thedevelopment of, and subsequent dissemination of antiretroviral medicines.63With over US$80 billion worth of patented medicines including first-lineantiretroviral medicines expected to expire by 2010,64 a huge opportunity ispresented to governments in SSA and private entrepreneurs to target suchmedicines for purposes of generic production. Thus, once those essentialmedicines are identified, the governments must assist the private sector inestablishing companies to boost local production of generic medicines. Thisassistance can come in the form of tax incentives to reduce the cost ofpharmaceutical research and development by generic producers. In making asimilar argument, Kuanpoth notes that "prices can be reduced further bywaiving taxes, duties and fees on both finished products and raw materials;such waivers should probably also include packaging materials and non-active Section 92(A) of the Indian Patent (Amendment) Act, 2005.
See Smith et al, op. cit. at p. 690. For a detailed study on how public-private partnership can be harnessedto ensure sustainable intellectual asset management see: M. Herder, "Public-Private Partnerships:Sustainability through Better Intellectual Asset Management," Report for the Innovation Partnership(2008), onl See K. Sivaprakasam, "Tale of Two Patent Regimes and the Indian Pharmaceutical Industry, Health andFitness," available online: >. 14 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
ingredients."65 According to Rai, such initiatives have been successfullyundertaken in India and the pharmaceutical industry has grown rapidly.66 This,however, requires countries in SSA to build the capacities of domesticpharmaceutical industry and scientists to take advantage of some of the lessonsfrom countries such as India.
Additionally, recent studies have suggested that patents cannot be the main mechanism for financing innovation.67 Another way to achieve the de-linking of research and development costs from drug pricing is through thesetting up of an effective prize-system, "research guaranteed fund" and theuse of public-private financing mechanisms.68 This, it is argued, can promotea burden-benefit sharing approach to patent regulation of medicines, ratherthan over-reliance on a patent regime that is based on a "winner-takes-all"reward structure.69 In the case of SSA, countries and regional economic blocsshould work with philanthropic organisations such as the Gates Foundation,the Clinton Foundation, International Dispensary Association and the GlobalFund to commit substantial resources to antiretroviral medicines research anddevelopment. In this way, patents can be prevented from being used as pricingmechanisms. Also, through private-public initiatives, cost could be saved onthe value of antiretroviral medicines procured from elsewhere.
Medicines Patent Pool and Other Collaborative
Over the years, international efforts have been made to procure essentialmedicines for people who cannot afford them. The Global Fund, the WorldBank, PEPFAR (i.e. the US President's Emergency Plan for AIDS Relief), andthe EU have all financed the procurement of health related products andprocesses. To some degree, these access support initiatives show thewillingness of Western governments and other philanthropic organisations tocontribute to the provision of medicines to countries in need. However, moreneeds to be done to ensure that a sizeable number of people infected with HIVhave access to antiretroviral medicines. The reality now is that the Westernsupport mechanisms have not succeeded in catching up with the surge in HIV/AID fatalities in SSA. This necessitates the adoption of other collaborativeinitiatives such as patent pool to promote access to fixed-dose combinations ofantiretroviral medicines. Gold et al have recently suggested that it is legallyfeasible to establish medicines patent pool targeted at fixed-dose combinations Kuanpoth, op. cit. at p. 204.
R.K. Rai, "Effects of the TRIPS-Mandated Intellectual Property Rights on Foreign Direct Investment inDeveloping Countries: A Case Study of the Indian Pharmaceutical Industry," 11 Journal of WorldIntellectual Property (2008), p. 404 at p. 406.
WHO Commission on Intellectual Property Rights, Innovation and Public Health (2006).
See Stiglitz, op. cit. at pp. 1720-1723.
ACCESS TO ANTI-RETROVIRAL DRUGS 15
of antiretroviral medicines.70 As a result, there is an ongoing initiative by theinternational drug agency UNITAID71 to establish a patent pool to boostinnovation in and access to HIV/AIDS medicines. It involves bringing anumber of patent rights together so that they become available on a nonexclusive basis to manufacturers and distributors of medicines, in return for thepayment of royalties. Indeed, co-funding medicines' research and developmentcost, through a patent pool, will make it easier for generic manufacturers toenter the market and also give sufficient voice to governments in matterspertaining to drug pricing to promote access.72 Such a scheme therefore needs broader participation and contribution from countries as a tool for managing issues relating to patents and access tomedicines. After all, giant corporations are presently enjoying support fromcentral governments across the globe in the form of "financial bailouts."Similar support from governments should be offered to public-orientedentities, such as UNITAID, which seek to promote access to antiretroviralsand research into diseases. Governments and pharmaceutical companiesshould therefore be educated about the need to make such contribution for theeventual support of the suffering masses. Others have also suggested the use of blanket royalty schemes, as used in copyright, to promote access to essential life-saving medicines indomestic jurisdictions.73 This can be done through governmental negotiationswith private right holders to promote mass production of antiretroviralmedicines, against the payment of royalties to right holders. In this case, theapproaches being adopted in copyright administration could be a guide.
Taking Doha Declaration and WTO Council's
"August 30" Decision Seriously
As earlier indicated, the Doha Declaration signalled a modest breakthrough inthe quest to facilitate access to medicines in developing countries. Under Doha,the production of medicines to alleviate human suffering was to "be authorizedpredominantly for the supply of the domestic market."74 This permissionhowever failed to address the concern of countries which lack the capacity toproduce medicines in their domestic settings. Subsequently, the WTO Councildecided on 30 August 2003 to allow for the export of medicines manufacturedunder compulsory licences into countries that lack domestic production E.R. Gold et al, "Preliminary Legal Review of Proposed Medicines Patent Pool," (2007) available online:The Innovation Partnership Websi UNITAID is a 2006 collaborative initiative under the aegis of the World Health Organisation to scale upaccess to treatment for HIV/AIDS, Malaria and tuberculosis.
Gold et al, ibid.
Heller, op. cit. at p. 72.
Article 31(f) of TRIPS Agreement.
16 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
capacity. This permission has culminated in the amendment to article 31 ofTRIPS.75 Paragraph 2 of the "August 30" Decision sets out the conditions under which the obligations under Article 31(f) and (h) of TRIPS are waivedfor purposes of importation and exportation of antiretroviral medicines. Therequirements include: a notification by the eligible importing member statespecifying names and quantity; confirmation of insufficient manufacturingcapacity, except in the case of LDCs; notification about the issuance of acompulsory licence by the exporting country if the product is patented in theeligible importing member state. Besides other packaging requirements, theexporting member state should notify the TRIPS Council of the quantityproduced for export and other distinguishing features of the products so as toavoid re-exportation.76 So far, only Rwanda has taken steps to inform theTRIPS Council that it intends to use the new provision. This notification wasused to import antiretroviral therapy, TriAvir, from Canada.
As earlier indicated, India has adopted a more progressive approach under its patent regime to support countries which lack domestic productioncapacity to have access to antiretroviral medicines. As a consequence,countries in SSA should establish cooperation with India to procure relativelycheaper antiretroviral medicines by resorting to the "August 30" waiver.77Countries in SSA are also urged to ratify the new amendment to TRIPS andimplement it in domestic drug patent regulatory frameworks to promoteaccess to medicines. In doing so, the Indian approach should be their guide.
One major concern with the "August 30" Decision, as Gopakumar notes, is that the "notifications, along with the additional conditions for theissuance of compulsory license and safeguards against re-exportation, makethe Decision a highly cumbersome and inoperable mechanism with which toensure the supply of cheap drugs to developing countries."78 To some extent,the required processes impede the full realisation of any benefits that theDecision intended to bestow. Worse still, countries, such as Canada, haveimposed additional bureaucratic procedures which significantly underminethe purpose of the "August 30" Decision to facilitate access to medicines. ForMorin & Gold, the procedural obstacles are too gargantuan to make thedictates of the "August 30" Decision realisable, especially in Canada.79 The As of December, 2008 only seven out of the 150 WTO Member countries had ratified the Amendment.
They are: US (17 December 2005), Switzerland (September 13, 2006), El Salvador (September 19, 2006),Republic of Korea (January 24, 2007), Norway (5 February 2007), India (26 March 2007), andPhilippines (30 March 2007). (taken from Hoen, op. cit. p. 36).
See K.M. Gopakumar, "The WTO Deal on Cheap Drugs: A Critique," 7 Journal of World IntellectualProperty (2004), p. 99 at p. 105.
See Hoen, supra note 5 at pp. 22-23.
Gopakumar, supra note 76 at pp. 108.
Morin & Gold, supra note 47 at p. 4. See also L. Taylor, "Low-Cost Medicines for Developing CountriesLost in Red Tape," Financial Post 18 April, 2009, onli ACCESS TO ANTI-RETROVIRAL DRUGS 17
point here is that extricating countries in SSA from complying with suchprocedural, legal and institutional obstacles in the implementation of the"August 30" Decision, can effectively promote access to antiretroviralmedicines.
Avoiding TRIPS-plus Obligations
This section argues that adopting TRIPS-plus obligations in the protection ofpharmaceutical products and processes impedes access to medicines in SSA,especially in LDCs.80 Although LDCs are not obliged to grant or enforcepharmaceutical patents until 2016, the trend is that they go to extra lengths toassume stricter obligations than the minimum standards required by TRIPS, aphenomenon commonly known as TRIPS-plus. These countries are sometimesmisled into accepting that higher protection will better serve their interests inreceiving increased investments and other support from developed countries.81But as they stand, TRIPS-plus standards have largely undermined technologytransfer promises. Also, such high levels of protection for pharmaceuticalpatents in particular prevent access to medicines in LDCs.82 However, recent trends from the US and the EU provide disturbing signals; trade agreements being negotiated with countries of the SouthernAfrican Customs Union (SACU) show a push for TRIPS-plus conditions.83Also, the European Partnership Agreements (EPAs) with African, Caribbeanand Pacific (ACP) countries impose new TRIPS-plus obligations that couldhave negative effects on access to medicines.84 These EU TRIPS-plus demands include: (i) the acceptance of European IP treaties which will lead to more extensive protection ofmedicines in ACP countries, and (ii) the implementation of EU IPEnforcement Directives, which permit seizure of medicines.85 The ruleseffectively compel domestic regulatory institutions in SSA to act as "patentpolice," so as to enforce frivolous patents.86 TRIPS-plus obligations in theEPAs thus sustain dominant market position for pharmaceutical originatorcompanies, and create substantial obstacles to the introduction of genericmedicines.87 The stringent nature of TRIPS-plus obligations is not the only issue See Hoen, op. cit. p. xvii; see also Timmermans, op. cit. at p. 70.
See Smith et al, op.cit. at p. 688.
Smith et al, ibid.
Hoen, op. cit. at p. 71.
See F.M. Abbott & J.H. Reichman, "Access to Essential Medicines: Lessons learned since the DohaDeclaration on the TRIPS Agreement and Public Health, and Policy Options for the European Union,"Report to the Directorate-General/External Policies for the European Union (cited in Hoen, op. cit. at pp.
75 &76).
Abbott & Reichman, ibid.
Timmermans, op. cit. at p. 72.
Abbott & Reichman, op. cit.
18 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
of concern; they also asphyxiate the existing fragile "flexibilities" underTRIPS and the Doha Declaration.88 For Morin, the imposition of TRIPS-plusobligations via bilateral free trade agreements represents the frontline ofimpeding access to affordable medicines in developing countries.89 In theopinion of Waxman, a member of the US Congress, the imposition of TRIPS-plus obligations on developing countries via bilateral trade agreements is"irresponsible and even unethical."90 Developing countries should thereforenegotiate to exclude such TRIPS-plus obligations which tend to affect publichealth programmes. Moreover, since the majority of countries in SSA are leastdeveloped, they should avoid rigid compliance with TRIPS, not to mentionTRIPS-plus obligations.
Making Use of Competition Law
The use of competition law can be another effective mechanism to checkmedicine pricing abuses on the markets. In 2002, Treatment Action Campaignlaunched a complaint against GSK and BI at the South African CompetitionBureau.91 The complaint was that the companies engaged in excessive pricingof antiretroviral medicines. On 16 October 2003, the Competition Bureaufound that the respondents had contravened the South African Competition Actof 1998 by abusing their dominant positions. In particular, the respondentswere held to have hindered competitors from having equal access to themarkets and engaged in excessive pricing and in an exclusionary act. In furtherreference to the Competition Tribunal, the Competition Bureau recommended:(i) the use of compulsory licences to allow third parties to market genericversions of GSK's and BI's patented medicines in return for the payment of areasonable royalty, and (ii) a 10 per cent penalty on GSK's and BI's annualturnovers in South Africa for each year that they are found to have violated theAct. These measures forced the two companies to the negotiating table.
Eventually, the companies agreed to license four generic companies toproduce, import, sell and distribute antiretroviral medicines to other countriesin SSA.92 The lesson from this South African experience is that countries in SSA that do not have competition legislation and institutions to check anti-competitive practices need such regulatory frameworks. Also, NGOs need to G.P. Krikorian & D.M. Szymkowiak, "Intellectual Property Rights in the Making: The Evolution ofIntellectual Property Provisions in US Free Trade Agreements and Access to Medicine," 10 Journal ofWorld Intellectual Property (2007), at p. 395.
J.F. Morin, "Tripping up TRIPS Debates: IP and Health in Bilateral Agreements," 1 International Journalof Intellectual Property Management (2006), p. 37.
H.A. Waxman, Statement for the Records, US Congress, House Committee on Ways and Means,Washington D.C., 10 June, (2003).
For a detailed narrative of this complaint, see: Hoen, op. cit. at pp. 52-54.
Hoen, ibid. at p. 53.
ACCESS TO ANTI-RETROVIRAL DRUGS 19
play an important watchdog role of working with governments to tacklepractices which stifle access to antiretroviral medicines. Such a move, ashappened in South Africa, can force pharmaceutical companies to agree tovoluntary settlements. In the South African situation, GSK and BI grantedvoluntary licences to both private and public sector marketers in return forroyalties below 5 per cent. Taking Advantage of Expired pharmaceutical
patents/Setting Standards for Pharmaceutical patents
This section combines two mechanisms that could be explored to promoteaccess to antiretroviral medicines in SSA. As earlier indicated, one way toreduce the cost of medicines is to promote the generic manufacture ofmedicines whose patents have expired or are about to expire. Most of theearlier patented combinations of antiretrovirals might fall within the categoryof medicines whose terms have expired or are about to expire. In that case,countries must reject granting protection to "evergreen medicines" that do notinvolve new innovation.93 By this, high standards should be set to avoidgranting patents to "me-too drugs" – drugs which extend patent durationwithout significant improvement in their efficacy.94 This means that patentexaminers should be trained to interpret patentability requirements strictlybefore granting pharmaceutical patents.95 India, for instance, has raised thecriteria for patentability so as to prevent "evergreen patents" from beenregistered.96 In this case, applicants are made to establish to a high degree ofcertainty that the medicine for which an application for a patent has been madeis more effective than those already being used for the same condition.97 Thismakes it harder for inventors to receive pharmaceutical patents for "me-too"medicines. Moreover, avenues should be provided for patent opposition proceedings during patent application processes since the court processes tendto be more expensive. In India, section 3(d) of the Patent (Amendment) Act,2005 allows the public to bring evidence for patent rejection to the attention ofthe patent controller. This remedial measure aided the Indian Network ofPeople Living with HIV/AIDS and the Manipur Network of Positive People tosuccessfully oppose GSK's patent application for zidovudine and lamivudinein 2006 on grounds that the patent claim in question was not for a newinvention.98 Therefore, if a country such as South Africa with the world's Smith et al, op. cit. at p. 686.
Angell, op. cit. at p. 75.
Heller, op.cit. at p. 76 See section 3(d) of the Indian Patent (Amendment) Act, 2005.
See Angell, op.cit. at p. 75.
See Hoen, op.cit. at p. 78.
20 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
highest HIV infection rate lacks a requirement for pre-grant oppositionproceedings, then its patent administration deserves a rethink.
Overcoming Fear of Litigation/Targeted "Piracy"99
It is not always the case that once a patent has been granted, the patentee willopt to enforce it. A case in point is the Myriad patents in Canada.100 AlthoughMyriad genetics are protected in Canada, the Utah-based patent holder has notyet enforced the patents against clinics that use the patented testing process.
Presumably, the same situation will apply if countries in SSA target theproduction of first-line antiretroviral medicines. The reason is thatpharmaceutical companies have already recouped significant profits from first-line antiretroviral regimen and have now focused their attention on the moreexpensive second-line antiretroviral regimen. As a consequence,pharmaceutical patent holders will be unwilling to litigate to stop the genericproduction of first-line antiretroviral medicines; rather, they will be willing toaccept low royalty payments. Also, enforcing patent rights via domesticjudicial systems in most countries in SSA may not be lucrative. Indeed, noserious minded pharmaceutical patent holder would like to use theZimbabwean judicial system to litigate for patent infringement against thegovernment.
Also, the fact that private patent holders lack legal standing before the WTO's Dispute Settlement Board will require aggrieved right holders toproceed through a WTO member state. In most cases, those member stateswill weigh the economic harm and its international reputation and opt not totake any action besides the usual rhetoric. Helfer succinctly expresses thispoint thus: "Governments litigate only a subset of TRIPS disputes that rightsholders bring to their attention. In some cases a state may decline tofile a complaint because it fears a WTO countersuit. In others, itmay refuse to do so because the probability of success is low orbecause victory will only marginally benefit domestic industries. Instill others, geostrategic factors unrelated to trade or intellectualproperty may lead governments to refrain from litigating."101 Let me state in emphatic terms that this section should not be misconstrued as urging countries in SSA toviolate their international obligations. It mainly points to the gap in the formal law (as emblematized byTRIPS) and the reality on the ground when it comes to the enforcement of rigid patent rules.
100 See E.R. Gold & J. Carbone, "Myriad Genetics: In the Eye of the Policy Storm," A Report from the International Expert Group on Biotechnology, Innovation & Intellectual Property, online: TheInnovation Partnership Webs 101 L.R. Helfer, "The New Innovation Frontier? Intellectual Property and the European Court of Human Rights," 49 Harvard International Law Journal (2008), p. 1 at p. 44.
ACCESS TO ANTI-RETROVIRAL DRUGS 21
This is a lacuna which developing countries in SSA should exploit to their advantage. Like "a carcass that fears no knife," countries in SSA shouldnot fear the threats of legal suits in promoting targeted "piracy" for first-lineantiretroviral medicines, subject of course to the payment of some form ofroyalty to the patent holder.
Expanding the Scope TRIPS Exclusion for LDCs
Currently, the TRIPS Agreement excludes least developed countries fromprotecting or enforcing pharmaceutical patents within their jurisdictions.
Perhaps, the moratorium will need to be extended beyond the 2016 deadlinesince the current approach will not be able to address the myriad of problemsin most LDCs. Also, making a case for extension alone will not be enough tomeaningfully integrate those countries into the international trading system.
LDCs, due to their lack of production capacities, depend on middle-incomecountries such as India and Brazil, in procuring generic medicines for theircitizenry. But since Brazil and India are not excluded from TRIPS obligations,the realisation of the objective for excluding LDCs from internationalobligations under TRIPS will remain unfulfilled. By suggestion, countries that can supply sufficient antiretroviral medicines should be identified and given "differentiated opportunity" to assistLDCs. Put differently, the TRIPS related "flexibilities" can effectivelyameliorate the conditions in SSA, if middle-income countries such as Indiaand Brazil are allowed to operate under a flexible drug-patent regime to assistthe world's poor.102 This regime must target essential life-saving medicines,such as antiretrovirals, that are sorely needed for human survival in theworld's poorest region. Also, there are suggestions for the use of effective price discrimination to enable the large pharmaceutical companies to charge a lowprice to Africans without lowering the price they charge rich Westerners.103In addition, others have sagely argued for the adoption of south-southcooperation among developing countries to implement the TRIPS"flexibilities."104 Indeed, paragraph 6 of the "August 30" Decision supportssuch initiatives for "harnessing economies of scale for purposes of enhancingpurchasing power for, and facilitating the local production of, pharmaceuticalproducts." A united stand is therefore required among regional economicblocs such as EAC, ECOWAS and SADC to undertake such south-southcooperation. Since the majority of each union's membership is leastdeveloped, they should use bilateral/regional administration to aid in the 102 See Hoen, op.cit. p. 62.
103 Boldrin & Levine, op.cit. at p. 70.
104 S.F. Musungu et al, "Utilizing TRIPS Flexibilities for public health protection through south-south regional frameworks," South Perspectives Report, Geneva, South Centre (2004).
22 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
importation of generic antiretroviral medicines into their respective countries.
This will, however, require strong political will and determination fromgovernments in SSA to counter powerful interest groups that may want tofrustrate such initiatives.
In short, the unique strength of the proposed model is that it draws the attention of policy makers in SSA to the need to take practical steps toimplement the existing TRIPS "flexibilities," no matter how inadequate theymay be. Such implementation requires a domestic pro-access guide thatdetails the various processes, procedures and institutions to contact to ensurethat access to antiretroviral medicines takes place. The proposed multifacetedstrategy further illustrates the point that years of counter-narratives relating tothe negative impact of strict drug-patent frameworks have opened new vistasof opportunity for fresh dialogue over the effects of patents on access tomedicines. Pharmaceutical patent holders are beginning to accept the need forthe injection of real flexibility into the commercialization of patented productsand processes. This creates an avenue for policy makers in SSA to furtherengage the pharmaceutical patent holders in order to make antiretroviralmedicines accessible and/or affordable to millions of people in theirrespective countries. The fact that there are TRIPS "flexibilities" is hardly a novel idea in discourseson drug patent regulation. Yet, practical implementation of the "flexibilities"has eluded policy makers in SSA. This paper has therefore stressed that havingelaborate provisions on the statute books do not in themselves promote accessto medicines unless those "flexibilities" are effectively utilised. It argues forthe exceptions built into the TRIPS Agreement, the Doha Declaration and the"August 30" Decision to be taken seriously. As a start, policy makers must takepractical steps to implement and exploit diverse regulatory mechanisms topromote access to antiretroviral medicines. It can be undertaken via thedevelopment of domestic pro-access guide which emphasises the use of:voluntary negotiations, compulsory licensing, scrapping of patent protection inLDCs, avoidance of TRIPS-plus obligations, public-private partnerships, andthe use of competition law, among others. Such a diverse approach will providethe necessary breakthrough to enhance access to medicines in SSA, andliberate countries in that region from being prisoners of their own patentsystems. Since countries have diverse backgrounds, a state may need to invokemore than one strategy in tackling the HIV/AIDS quandary. Also, the abovediverse regulatory mechanisms can be used to aid in the procurement ofmedicines other than antiretroviral medicines.
Finally, the argument for the actualisation of the above pro-access ACCESS TO ANTI-RETROVIRAL DRUGS 23
regulatory mechanisms is hinged on the adage that "half a loaf is better thanno bread." The paper, however, does not overlook the fact that post-TRIPS"flexibilities," which convinced optimists to conclude that a new era of IP isemerging,105 deserve further evaluation to inject real flexibility into theprevailing international patent and institutional frameworks to make access toantiretroviral medicines sustainable. It is only through such re-evaluation thatcritics can be convinced. Such re-examination will also safeguard thefundamental right to health. As Nnamuchi aptly notes, "to contend that anindividual possesses the right to life in the absence of the ingredientsnecessary for its sustenance (such as health care) is, on many levels,vacuous."106 For Sen, making health care services available and/or accessibleto persons infected with HIV will expand their capability and substantivefreedoms, and make them more productive.107 Access to antiretroviralmedicines will also go a long way to ameliorate crumbling health care systemsand ensure sustainable human development in SSA. The above suggestionsresonate with Adam Smith's observation that "[n]o society can surely beflourishing and happy, of which the far greater part of the members are poorand miserable."108 105 Gold et al, op.cit. at pp. 13-14.
106 O. Nnamuchi, "Kleptocracy and Its Many Faces: The Challenges of Justiciabilty of the Right to Health Care in Nigeria," 52(1) J.A.L. (2008), p. 1 at p. 10.
107 A. Sen, Development as Freedom, New York, Anchor Books (1999), p. 3.
108 A. Smith, The Wealth of Nations, Alan B. Krueger, ed., New York, Bantam (2003) [1776], pp. 110-111.
Real property as security for advances: Avoiding the pitfalls
under the Extant law in Nigeria
The introduction of the Land Use Act in Nigeria in 1978 fundamentally alteredthe law on ownership of land in the country. This development equally changedthe perception of real property as good collateral for advances because of thenovel nature of the ownership regime foisted on the Nigerian society by certainprovisions of the Act. Significantly, with the coming into force of the Act, anytransfer of interest in land in whatever form, without the prior consent of theGovernor of the State where the land is situated becomes void ab initio. Thisposition of the law applies even for mortgages. There is a complex process ofdocumentation of title to real property in Nigeria which involves applying forand obtaining the State Governor's consent to the transfer of interest. All thesehave combined to make the application of real property as security foradvances rather unattractive. Certain judicial decisions further compounded the problem, especially thosetaken after the coming into force of the Land Use Act, culminating in lendersexhibiting reticence over the full embrace of real property as security foradvances; an otherwise primary and generally preferred category of collateralamong lenders in the Nigerian financial sector. The process of investigation oftitle to real property, the rule on title documentation and the contemporaryproblems associated with them are fully discussed in this paper. The paperends with some suggestions on the improvement of the present regime. On 29 March 1978, the Land Use Act1 came into force in Nigeria. The novelregime introduced by that statute on ownership of real property changed thenature of land tenure system and placed all land comprised in each State of thefederation in the hands of the State Governor to hold in trust on behalf of thepeople of the State.2 Consequently, every transfer of interest in land byindividuals and corporate bodies, effective from that date, must be executed LL.M; B.L. Barrister and solicitor of the Supreme Court of Nigeria and Lecturer, Faculty of Law,University of Benin, Benin City, Nigeria. E-mail:e author is presently a PhDcandidate at the University of Benin, Benin City, Nigeria. The author is grateful to Professor EmekaChianu, former Dean of law and Professor of private and property law at the University of Benin, for hisvery useful comments on the earlier draft of this paper.
The statute is now Cap. L5 Laws of the Federation of Nigeria 2004 See section 1 of the Land Use Act 26 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
with the prior approval of the Governor of the State where the land is located.3In Calabar Central Co-operative Thrift & Credit Society Ltd and Others vBassey Ekpo, Niki Tobi, JSC in talking about the Land Use Act and its effecton the transfer of interest in land said: "Section 22 of the Land Use Act requires the consent of theGovernor of a State before the alienation of a right of occupancyand section 26 provides that any transaction or instrument whichconfers or vests interest or right over land not in accordance with theAct is null and void. Section 22 comes within section 26 andtherefore alienation of land without the consent of a Governor of aState is null and void."4 The above dictum illustrates the difficulty entailed in securing a valid transfer of a right of occupancy in land and its use as collateral for creditpurposes. However, the importance and advantages of securing creditfacilities with fixed assets, especially real property, cannot be over-emphasized. This is especially so when it is considered that the propensity ofrapid value volatility of real property is slimmer than that which obtains whenother types of assets are employed in securing advances. However, the radicalownership regime introduced by the Land Use Act5 into the real propertysector in Nigeria has made this otherwise generally preferred means ofsecuring loans and overdrafts rather unattractive to lenders in the financialsector. Nevertheless, a wary lender willing to accept real property as collateralfor his credit exposure must take certain conscientious steps to verify title tothe property to avoid the pitfalls inherent in the present regime of the LandUse Act.6 One of the fundamental steps required in the perfection of mortgage or other documentation on the transfer of interest in real property is theconduct of investigation into the title documents covering the property inquestion.7 This simply means that the registered title to the borrower'sproperty is investigated through a visit to the Registry of Deeds at theMinistry of Lands of the State where the security is located,8 in addition to Sections 21 and 22 (2008) 11 MJSC 104 at 133.
This statute was originally promulgated as the Land Use Decree (No. 6) of 1978 by the then FederalMilitary Government under General Olusegun Obasanjo as military head of state. This was changed to anAct through the instrumentation of the Adaptation of Laws (Redesignation of Decrees etc) Order, 1980.
Principal among these pitfalls is the requirement of obtaining the consent of the State Governor as acondition precedent to a valid transfer, even for mortgages, which by their nature are not really absolutetransfers but rather temporary ones, which reverts back to the mortgagor upon the full discharge of themortgage. L. Babatunde, Hints on Land Documentation and Litigation in Nigeria, Lagos, Lawbreed (2002), p. 229.
The security in this context refers to the real property. The essence of the search would be realized, allthings being equal, because a registered deed ordinarily should have a copy of it duly bound within itsfolio in a volume at the Lands Registry. The entry would also have a history card which should have all REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 27
other steps taken to ascertain the authenticity of the title to the property.
This paper examines the process of using real property as security for loans and overdrafts, the problems inherent in the present rule on the processof documentation of real property and the dilemma that lenders face inaccepting real property as security. The paper concludes with suggestionstowards engendering a more efficient regime of protection for lenders againstthe unconscionable activities of borrowers who may take consideration andfail to deliver the security or, in delivering security, tender one with defectivetitle. PRELIMINARY STEPS TO PROTECT THE
Investigation of title at the Lands Registry will be relevant where the propertyin question is registered. An unregistered title is risky for the purpose ofsecurity advances as it will be difficult to ascertain the history and authenticityof such real property.9 Moreover, such document cannot even be pleaded incourt as proof of title due to its non-compliance with the provisions of theregistration of instruments statutes.10 It is instructive to note that a registeredowner remains the owner in law until that status changes upon his name beingreplaced with the name of the new owner.11 For example, the provision underLagos State jurisdiction is very clear. Section 28 (2) of the Registration ofTitles Law states: "Any transfer by a registered owner shall be completed byregistration of the transferee as owner of the land transferred anduntil such registration, the transferor shall remain the registeredowner of the land." 12 The need for the prospective lender to take further conscious steps, other than investigation of title at the Lands Registry, is naturally germanebecause of other issues that may arise even when there is valid registration; forexample, in a situation of multiple registration or a dispute arising at the pointof application for registration. The idea is that the registration of an instrument entries and subsequent encumbrances on the property. That way, a perusal of the folio and the history cardwould give the correct insight into the nature and extent of the title covering the property. The essence of registering land is that it signposts a degree of genuineness as the prospective borrower orpurchaser would have a basis for enquiring into the authenticity of the title the property owner holds outas his and which is then offered to the lender or purchaser as the case may be. See section 16 of the Lands Registration Act and the respective versions in the Land InstrumentRegistration Law re-enacted by the various government of the States of Nigeria. See for example, s. 15 ofLand Instruments Registration Law of Lagos State. See also the case of Registered Trustees of ApostolicFaith Mission v James [1987] 3 NWLR (part 61)556. See Section 28 (2) of the Registration of Titles Act, 1935.
Cap. 116 Laws of the Lagos State of Nigeria 1994.
28 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
does not amount to absolute proof of title. Rather, it signposts the fact thatthere is prima facie presumption of validity of ownership of the party applyingfor registration as the officials in charge of registration at the Lands Registrymust, all things being equal, have conducted their investigation on the land inquestion before approving the application for registration. This position isbased on the opinion of the Supreme Court in the case of GladysMajekodunmi v. Mutiu Abina13 where the apex court in dealing with thepower of the Registrar of Titles, said: "It does not come within the power of the Registrar to make adeclaration of title to land under section 9 of the Registration ofTitles Law. That section limits him to the investigation of anapplication and to be satisfied that the applicant is entitled to beregistered as the owner of the whole or part of the land claimed."14 It is equally very instructive to note the effect of the Lands (Title Vesting, etc) Act15 which vests the title of all land within the 100 metres limitof the 1967 shoreline and all land reclaimed near the lagoon, sea or ocean in orbordering Nigeria exclusively in the Federal Government of Nigeria. Byvirtue of section 3 of that Act, all previous ownership acquired by way ofallocation or transfer of claim are invalidated. The obvious implication will bethat even persons who had enjoyed ownership rights over such property werethereby divested of such interest. Where such property is tendered ascollateral for a loan or an overdraft, the lender is completely exposed to highcredit risk as such an advance becomes a clear naked facility16 unless theowner had taken conscious steps with the necessary agency of the FederalGovernment of Nigeria to perfect his interest in the property. The position of the prospective borrower, vis-à-vis his interest in the real property suffers another problem. The net effect of the provision of theLand Use Act17 on private ownership of land after the statute came intoforce18 operates to further create doubts as to the express validity of the fullinterest of the holder. This is because of the implication of certain provisionsof the Act to the effect that there is no longer absolute ownership of landunder the regime of the statute.19 What obtains presently is a qualified orlimited ownership which is subject to the pleasure of the State Governor. On (2002) 3 MJSC 41. Ibid, at p. 44.
Cap. 27 Laws of the Federation of Nigeria 2004.
In credit risk management, a naked facility is a loan or overdraft which is not secured with any form ofcollateral. Upon the default of the borrower, the lender is not covered, save for his right to action forrecovery of money advanced.
That is, the radical changes introduced in terms of the degree of ownership of land as from the date theAct came into force.
The Land Use Act came into effect on 27 March, 1978. See Makanjuola v Balogun [1989] 3 NWLR (part 108) 192.
REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 29
the nature of ownership of land under the present dispensation, the Act states: "Subject to the provisions of this Act, all land comprised in theterritory of each State in the Federation is hereby vested in theGovernor of that State, and such land shall be held in trust andadministered for the use and common benefit of all Nigerians inaccordance with the provisions of this Act."20 It therefore translates into a situation where the lender must not only confirm that the prima facie title to the land is vested in the party tendering itbut that all statutory conditions precedent to a valid transfer has beencomplied with.21 This saves the lender the nasty experience of losing out oncertain avoidable statutory technicalities as was unfortunately the fate of thelender in the celebrated case of Savannah Bank of Nigeria Limited andAnother v Ammel Ajilo and Another.22 In this case, the plaintiffs/respondentsobtained credit facility from the 1st defendant/appellant and executed a validdeed of mortgage in September 1980 in favour of the latter. Upon theplaintiffs/respondents' default, the 1st defendant/appellant sought to invoke itspower of sale as mortgagee under the mortgage contract. The plaintiffs/respondents sued for a declaration that the deed of mortgage was void for non-compliance with the statutory requirement of obtaining the prior consent ofthe Governor,23 which, of course, is a condition precedent to a valid transferof interest in land after the coming into effect of the Land Use Act. Theplaintiffs/respondents premised their action on section 22 of the Land Use Actwhereas the defence of the defendant/appellant was based on the argumentthat the section did not apply to land held before the coming into effect of theAct. The High Court held for the plaintiffs, which decision was affirmed bythe Court of Appeal. Upon further appeal to the Supreme Court, the courtdismissed the appeal on the ground that upon the coming into effect of theLand Use Act,24 all land in the State became vested in the Governor of theState who holds the land on behalf of the people of the State as trustee; andthat even rights over land existing before the coming into force of the LandUse Act was no longer unlimited and must now be expressed as right ofoccupancy.25 Therefore, the transaction ought to have been executed with the Section 1, Land Use Act. Of particular importance in this regard are the provisions which vest all land in the State on the StateGovernor (section 1); and the one that requires the prior consent or authorization of the Governor for anytransfer of interest in land by way of sale, mortgage or otherwise [section 22(1)]. [1989] 1 NWLR (Part 97) 305.
In fact, sections 21 and 22 prohibit any alienation of customary or statutory rights of occupancy withoutthe requisite consent or approval of the Governor. This haze occasioned by the decision in this case may be attributable to the initial confusion generated bythe coming into force of the Act, beginning from 1978. The Right of Occupancy, which is now limited in the extent of the right, could be Deemed Right ofOccupancy or Statutory Right of Occupancy, covering the right existing before and after the coming intoforce of the Land Use Act respectively. 30 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
prior consent of the Governor. The non compliance with that fundamentalstatutory requirement proved fatal to the case of the bank as lender.
Since the landmark decision in Savannah Bank v Ajilo, there has been an avalanche of criticisms and general comments attacking thedecision.26 The decision27 in that case represented a sad reflection on themechanical application of the law and a wholesale disregard for the principlesof equity.28 Agreed that the court is not to canvass points for litigants, there isno harm in the court being largely influenced by the principles of equity inpreventing the severe hardship that certain legal principles may wreck on thecitizens if not given a human face in its interpretation. Nevertheless, as will beseen in the later part of this paper, there has been a positive departure from thedraconian principles applied in Savannah Bank v Ajilo in subsequentdecisions of the courts; which, while distinguishing the principles of Ajilo,laid down a new set of rules to the effect that an agreement to sell realproperty or the mortgagee's right to sell does not require the prior consent ofthe Governor.29 Also, a party who has benefited from a void or voidablecontract cannot turn round to rely on the debilitating factor to renege on thecontract after taking benefits from the relationship. That is to say, no oneshould be allowed to approbate and reprobate. The corollary of this argumentis that the courts now rely on equitable principles as a mitigating factor in notallowing a mortgagor, whose duty it is to obtain the Governor's consent in thefirst place, to subsequently seek the setting aside of the mortgage for lack ofconsent; after taking the benefit of the mortgage contract.30 Moreover, an agreement to sell or mortgage real property remains a mere agreement without more. Such agreements should be construed to meanthat the agreement is made conditional upon the requisite consent beinggranted. Where consent is denied, then the sale or mortgage falls through andnone of the parties would be under further obligation only as the relationshiprelates to the sale or mortgage contract. All other contractual obligations,including the lending agreement or money already paid, would still be bindingon the parties, especially on the party that has already received consideration.
See for example, J. A. Omotola, "The Question of Consent under the Land Use Act 1978: Has the LastBeen Said? SBN v. Ajilo", 8-9, Journal of Private & Property Law, (1987-88) p. 99; P.E. Oshio,"Farewell to the Consent Controversy: Savannah Bank of Nigeria Ltd & Anor v. Ajilo & Anor", 2 (7)Gravitas Review of Business & Property Law (1989) p. 29; A. A. Utuama, "The Crocodile Tears inSavannah Bank v. Ajilo", 2 (4) Gravitas Review of Business & Property Law (1989) p. 20.
That is, the decision of the three tiers of courts, including the Supreme Court.
Since the judge presides over a court of justice, the administration of justice must always be veiled inhuman face. Where the strict application of the principles distilled from statutes would result in injustice,or severe hardship then the court must fall back on equitable principles to do substantial justice to thecase. For example, a mortgage cannot be illegal only because the deed was executed without theGovernor's consent. If anything, a subsequent procurement of the consent should suffice. See Okuneye v. First Bank of Nigeria Ltd [1996] 6 NWLR (part 457) 749. See also Moses Ola & Sons Ltdv. Bank of the North Ltd [1992] 3 NWLR (part 229) 337, 339 per Mustapha, JCA (as he then was).
Amadi v. Nsirim [2004] 17 NWLR (part 901) 111 CA; Anaeze v. Anyaso [1993] 5 NWLR (part 291) 1SC; Owoniboys Technical services Ltd v. Union Bank of Nigeria [2003] 15 NWLR (part 844) 545 SC. REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 31
In fact, in Orjiako v Orjiako,31 the Court ruled that whereas by section 11 ofthe Land and Native Rights Ordinance, an occupier cannot lawfully alienate hisright of occupancy without the requisite consent, it did not therefore translateto mean that a mere agreement to alienate was unlawful. Accordingly, theCourt said: "An agreement to alienate simply, not being an agreement toalienate if the consent is withheld, is not unlawful by the section,which is silent as to agreements. The only effect of the section in myopinion is to make any agreement to alienate conditional upon thenecessary consent being obtained."32 In more recent times, the courts have applied the principles of equity in interpreting mortgage contracts that have become a subject matter oflitigation. In Ugochukwu v Cooperative & Commerce Bank (Nigeria)Limited,33 the Supreme Court held that a mortgagor whose duty it is to obtainthe Governor's consent to a mortgage and who fails to do so cannot rely onsuch absence of consent to escape liability on the transaction or to void themortgage. Even in the absence of a valid transfer of interest by way ofmortgage, at least the basic obligation of the borrower in a normal loan oroverdraft contract must still be fulfilled. It is submitted that the decision of thecourt in the Ugochukwu case could not have been more correct. The only snagis that upon the failure of the process of perfection of the collateral used insecuring the exposure by the lender, the facility becomes an unsecured ornaked credit, which is of high risk in nature on the part of the lender.34 Upon completion of investigation, there is the need to write a search report as this makes for subsequent ease of reference. The search report isusually prepared for the attention of the lender, in this case the mortgagee.35 Itis important that the report be as objective and precise as possible because itscontent, to a large extent, will influence the lender to either grant the creditfacility or decline, based on the suitability of the property as collateral for theadvance.36 Unreported, Suit No. JD/27/1955; cited in Niki Tobi, Cases and Materials on Nigerian Land Law,Mabrochi, (1997) p. 163.
Ibid, per Hurley J.
(1996) 40/41 LRCN 1270.
Under such circumstance, even where the lender has succeeded in an action to recover, as judgmentcreditor he may still find it an uphill task levying execution especially where the debtor dissipates hisassets upon reading the handwriting on the wall and anticipating the likely outcome of the action. It goes without saying that the prospective lender/mortgagee commissions the search. This is easilydiscernable. If title to the mortgaged property turns out to be defective, it is the mortgagee that wouldsuffer loss, especially where credit has already been granted and cannot easily be recalled. The lendermust therefore prudently ascertain the validity of the title to the property being offered. The professionalengaged by him to investigate the title is best placed to render him good advice. The legal practitioner who conducts the search must ensure that the report, as much as possible, reflectsthe correct situation. It would be rather preposterous for the legal practitioner to do otherwise because the 32 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
However, it should be noted that the conduct of investigation on property belonging to a prospective borrower-company does not just stop atthe perusal of title deed at the Lands Registry. Further steps must be taken toconduct a search at the Corporate Affairs Commission (CAC).37 A search atthe Commission will provide a good insight into the history of the company,including the objectives, powers and level of capitalization of the company.38Part of the essence of the investigation at the Commission is to ensure that thecompany is the bona fide owner of the property being offered as security forthe credit facility; or if it is not the owner, then that the property validlybelongs to the party who is holding it as mortgagor. It is also apposite toconduct such search so as to determine whether the attempt to borrow is intravires the company.39 It is very important that this aspect is properly cleared upto avoid a situation where the borrower tenders property which does notvalidly or legally belong to him; or for which he lacks the legal capacity tooffer as collateral.
IMPERATIVE OF PRELIMINARY
INVESTIGATION OF TITLE
A wary lender or a purchaser for that matter would want to be sure that theproperty being offered as collateral or for sale is free of any encumbranceseither by way of a subsisting third party interest or that the property is not thesubject matter of an on-going litigation. A conscientious lender wouldnormally insist that the borrower stamps and registers his interest over realproperty with the Deeds Registrar in the Ministry of Lands of the State wherethe land is located. That way, the professional given charge of the investigationto ascertain valid title would have an opportunity to properly undertake thetask. Put in a nutshell, some of the reasons for ensuring that proper preliminaryinvestigation is conducted include but not limited to the followingconsiderations:40 report he renders to the interest that commissioned him would logically be relied upon by such interest informing his opinion as to whether or not to grant the facility. The Corporate Affairs Commission (hereafter also referred to as "CAC" or "the Commission") is thefederal agency charged with the responsibility for the regulation of company law and practice in Nigeria.
The Commission, a creation of the Companies and Allied Matters Act (CAMA) Cap. C24 Laws of theFederation of Nigeria 2004 has its corporate headquarters at Abuja with branch offices in all the Statecapitals. All incorporated companies must register its debenture stock with the Commission hence asearch with CAC will ordinary show any indebtedness of the company to outside interests. See sections 1– 17 and 197 CAMA. Ordinarily, such company documents filed with the CAC are public documents hence can be viewed byany interested party who has complied with the requirements for the exercise of such rights. See section 39 CAMA.
The advantages derivable from taking these important steps are not exhaustive. The few that are listedhere only serve to signpost the desirability of painstakingly conducting search on the title beforecommitting fund to a borrower in reliance on such title to property as collateral. REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 33
i) it makes it possible for the lender to ascertain whether theborrower is actually the real owner of the property; ii) it will expose any encumbrances, especially where all propersteps were taken in terms of updating the history card on theproperty and indicating subsequent alteration of interest; iii) It will afford the lender the independent opportunity ofevaluation or assessment of the value of the property and ultimatelydetermining whether it is sufficient security for the credit facilityproposed to be advanced. This, of course, will include theassessment of the property's market value and the forced-sale-value.41 COMPLETING THE SEARCH REPORT
The crux of the content of the search report will definitely depend on whetherthe borrower is a natural person or a corporate personality. Where the borroweris a natural person borrowing in his individual capacity, the job of perfectionof the security applied as collateral for the facility is simpler. This would be sobecause, tracing title in such situation would be easier to accomplish. However,where the borrower is a company, perfecting the security may involve a morecomplex procedure.42 All things being equal, the search report should be aguide to the lender's determination of the outcome of an application for anadvance, which application seeks to secure the credit with the property subjectmatter of the search. Unfortunately, some unscrupulous property owners havebeen known to register more than one title document on the same property.
This could happen by way of the property owner first registering the deed ofassignment and subsequently registering the right of occupancy granted on thesame property.43 A criminally-minded vendor might register both his deed ofconveyance and the statutory right of occupancy granted on the same propertyin two different folios of different volumes of the same Lands Register. Thisinvariably means that either of such registered instruments may be used to The forced-sale-value refers to the immediate value any real property would attract when the needsuddenly arises to put the property on the real property market. This will happen for example, when themortgaged seeks to exercise his right of sale or, generally when a lender recalls the facility and decides tosell the property used in securing the advance when the borrower is unable or unwilling to repay thefacility. Consequently, the forced-sale-value of a given property will ordinary be lower than the marketvalue. Apart from the necessity of registration of title with the Lands Registry at the Ministry of Land, it maystill be advisable and in fact desirable to confirm the status of the company and that it conforms to therecord of the company's property as duly documented. In the course of conducting investigation on a property in the Lands Registry in one of the state capitals inSouthern Nigeria, this writer shockingly discovered that a prospective vendor had in fact registered bothhis deed of conveyance and the Statutory Right of Occupancy granted on the same property in twodifferent folios of different volumes of the Lands Register. This invariably means that either of suchregistered instruments may be used to deceive an unsuspecting purchaser thereby purporting to transfer anunencumbered title; whereas the other document may have been used to secure a facility. 34 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
deceive an unsuspecting purchaser thereby purporting to transfer anunencumbered title, whereas the other document may have been used ascollateral to secure a facility or may have even been sold. Having sold suchproperty, the vendor's interest in the land is thereby extinguished. Anypurported subsequent sale of the same property but with another set ofdocuments conveys absolutely no interest whatsoever. This problem has beena frequent one in Nigeria with banks and other corporate bodies as well asindividuals falling victims. Emeka Chianu's comment on the issue bestencapsulates the problem. According to the author: "It is unnecessary to provide statistics to show that everydayimpostors, charlatans, scoundrels sell land over which they do notpretend to have any title. No matter how cute and attractive theinstrument of transfer may be it would convey nothing. It is a caseof trying to place something on nothing, an exercise in emptiness,futility and vanity."44 There is no hard and fast rule that requires that the report must be in any particular format or language. Nevertheless, it should generally be of anature that affords the lender the opportunity to obtain enough information toguide him in assessing whether the security is satisfactory or otherwise.45 Where the land owner is a natural person
The borrower may not always be the same person as the owner of the property,the subject matter of the mortgage. A typical example is the Ajilo case wherethe 1st respondent was the property owner who tendered his personal propertyas collateral for the credit facility granted to the 2nd respondent by the 1stappellant. Where the land owner is a natural person, the search report shouldas of necessity reflect the private capacity of the individual borrower or landowner, including the nature of the private ownership. Sometimes, a propertymay belong to two different persons; for example, husband and wife or twofriends. In such case, it is imperative to first determine the proportion ofindividual interest in the property and the nature of powers exercisable by thejoint owners. Generally, it is our opinion that the report should comprise of thefollowing information: a) the date of the search; E Chianu Law of Sale of Land, Panaf Lagos (2009), at p. 420, citing the evergreen dictum of LordDenning in Mcfoy v United African Company Ltd [1962] AC 152, 160.
The report ordinarily should as much as possible benefit from the input of professionals so that all thedirect and indirect facts surrounding the property will be brought to the fore. That way, the lender is ableto properly and freely consider the future of the facility and effectiveness of the cover. REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 35
b) the name of the land owner; c) the detailed description of the property; d) the nature of the title of the property so as to show whether theproperty is of such interest that is easily transferable; e) the report should clearly state any encumbrance on the propertyby way of a charge or mortgage; or other facts that will expose anythird party interest adverse to that being proposed by the borrower,in favour of the lender.46 Land Owner or borrower as a company
Where the land owner or borrower is a company, the search report must ofnecessity be a little more detailed because of the complexity often associatedwith the principle of corporate personality.47 This becomes necessary not onlyto determine the ownership of the property being offered as collateral but alsoto ascertain the true status of the company and thus avoid subsequentunpleasant circumstances.48 If for example, the loan or overdraft is granted toa company and such facility is not secured by debenture on the company'sasset, the property of a third party may instead be applied. In suchcircumstance, there is the need to make sure that the situation surroundingownership of the collateral is very clear so as to know the appropriate personthe creditor may proceed against; and the party to join, should the need for arecovery action arise. Sometimes, it is a director (or directors) of the borrowercompany that offers to guarantee the facility and tenders his personal propertyas collateral. If this is the case, the arrangement should be properly spelt outin the search report. This peculiar situation played itself out in the Nigeriancase of Ademola Majekodunmi & Another v African International Bank Ltd.49In that case, the plaintiff/respondent granted overdraft to Ile-Oluji Oil PalmPlantation Limited and two directors of the company (that is, the defendants/appellants in this case) guaranteed the facility. The two guarantors furthermortgaged their buildings at Lekki, a choice area of Lagos City, as collateral.
Upon default by the borrower, the bank proceeded against the two directors.
The Court of Appeal was of the opinion that the failure of the bank to join theprincipal debtor proved fatal to the action for recovery of the overdraft or See Babatunde supra, at p.45. In this case, the primary purpose would be to ensure the maintenance of the distinctiveness between thecompany and its owners and /or the directors as exemplified by the definitive decision in Salomon vSalomon Co. Ltd (1897) AC 22. On the principle, see the Nigerian cases of Trenco (Nigeria) Limited vAfrican Real Estate and Investment Co. Ltd (1978) 11 NSCC 220; Berliet Nigeria Limited v Francis[1987] 2 NWLR (part 58) 673. Bank of Baroda v. Iyalabani Company Limited (2002) 11 MJSC 102.
[2005] All FWLR (part 254) 933, 937 36 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
enforcement of the mortgagee's rights under the mortgage contract.50 In African Continental Bank Plc v Emmostrade Limited,51 the Supreme Court addressed the necessity of establishing the legal personality ofa company. An entity which is held out as a company but which is notincorporated will be unable to successfully sue or defend any action that mayarise, following any transaction which calls to question its legal status.52 It istherefore imperative that the solicitor given charge of the search shoulddetermine the correct status of the borrower so that the lender's credit riskexposure is not subsequently jeopardized upon the discovery of fundamentaldefects later on. Where a party holds itself out as incorporated entity whereasit is not; or where such party when it obtains credit from a lender and purportsto secure it with its property happens not to enjoy any modicum of corporatepersonality due to its non-incorporation, any action against it in the capacityof a company will fail. Moreover, it should also be desirable to conduct suchsearch with CAC53 in order to determine whether the prospective borrower/company is a public or private company, and also determine the suitability ofcreating debenture on the company's fixed or floating assets.54 For a company, it is our recommendation that the report of a search on its property should contain the following information: a) the date of the search; b) the name of the borrower; that is the name of the company; c) the date of incorporation of the company; d) the registration number of the company; e) the names and addresses of the directors of the company; f) the names and addresses of the shareholders of the company; g) the borrowing powers of the company, including information onthe procedure, extent and limit of the exercise of the borrowingpower of the company. This information can easily be distilled fromthe company's constitution (that is, the memorandum and articles ofassociation); h) any registered charge against the company's assets;55 See also the earlier Supreme Court authority of National Bank (Nigeria) Ltd & Another v Shoyeye &Another (1977) 5 SC 18, which was followed in Majekodunmi v African International Bank [2005] AllFWLR (part 254) 933. [2002] 8 NWLR 503.
See the Registered Trustees of Apostolic Church v. Attorney General of Mid-Western State (1972) 7NSCC 247. Section 166 CAMA.
A company files particulars of its liability to third parties with the Corporate Affairs Commission. Wherethe liability is discharged, the company files, through its director and secretary, a declaration verifyingmemorandum of satisfaction of mortgage or charge in Form CAC 6.2. See the Seventeenth Schedule tothe Companies and Allied Matters Act. REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 37
i) the last annual returns filed by the company with the CAC. Thiswill provide the lender the independent opportunity of examiningthe company's financial statement and determine how financiallyhealthy or viable it is.56 TOWARDS A PRUDENT INVESTIGATION OF
CORPORATE BODIES
Because of the complex or intricate nature of the corporate personality; andtaking into consideration the implication of the principle in company law andpractice, there is the need to pay particular attention to the affairs of theprospective borrower-company in certain aspects.57 For example, it may benecessary to determine if the company carries on business through the mediumof another. A multinational company may, for instance, do this in Nigeria inorder to fall outside the jurisdiction of Nigerian courts and to protect its assetsfrom the claims of Nigerian creditors.58 The present law is that a subsidiarycompany is separate and distinct from the parent company even where thearticles of association do not necessarily demand that position.59 When applied to multinational companies, this process allows the interests of the host country of these companies to prevail over those of thehome country, but unfortunately, it also fails to protect the interests of thecreditors of the subsidiaries of a parent company carrying on speculativebusiness through a wholly-owned subsidiary, even when such business hurtsthe economy of the host country.60 This will be especially so where theforeign parent company has so reduced the assets of a Nigerian subsidiarycompany that it will no longer be able to meet the company's liabilities. Adeveloping economy like Nigeria needs to know the multinational companieswhich have interests in its economy. Where possible, it would be shrewd toascertain the strength of the holding company. That way, a lending financialinstitution or individual may also be protected against being used as conduit The recommendation is entirely our opinion. However, see Babatunde supra, at p.46. See also NigerianLaw School Handbook on Company Law & Practice, Council of Legal Education (2005) p.42. Above all,the lender needs to be sure that the borrowing company is in substantial compliance with Chapter One ofPart XI of CAMA on rendering of financial statements, because among other penalties for non-compliance is the likelihood of winding –up of the company that violates the statutory requirement ofrendering of returns. See sections 370 and 408(b) CAMA. The information bank of the Corporate Affairs Commission will be handy in this circumstance to give theinvestigating counsel the proper guide.
See section 54 of CAMA which obligates all foreign companies operating in Nigeria before the cominginto force of the statute or that is coming subsequently, to incorporate a separate company in Nigeriaunder CAMA. The independence of operation of this subsidiary provides a measure of insulation for theparent company against any direct claim that may be brought against it.
See sections 37 and 625 CAMA. Due to the principle of corporate personality, the liability of the members of the company will be limitedto their shareholding in the company. Therefore, a subsidiary company that is incorporated in Nigeria isdistinct from the parent company. The process of incorporation and the drawing up of the memorandumand article of association of the subsidiary may be done in a way so as to insulate the parent companyfrom certain liabilities emanating from the business relationship of the subsidiary with third parties. 38 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
for negative practices such as money laundering, violation of exchangecontrol and other fund transfer laws in operation in Nigeria.61 In the course of investigating the affairs of the company, it important that the solicitor given charge of conducting the search should pay particularattention to the company's capacity, the abolition of constructive notice andthe pedigree of the directors.
As concerns the capacity of the company, with the abolition or qualification of the ultra vires doctrine under the Companies and AlliedMatters Act (CAMA),62 theoretically it is no longer necessary to examine acompany's objects as set out in the memorandum of association.63 Presently,CAMA recognizes the universal principle of artificial personality byproviding that a company can contract the same way as a natural person.64Even so, CAMA enables any member of the company or a debenture holder toseek an injunction to restrain a company that enters a contract which is outsidethe objects clause.65 So, the need to search for and report on a company'sobjects remains imperative. The effect of the doctrine of constructive notice is that a third party who deals with a company is treated as having notice of the company's lack ofcapacity by reason only that the memorandum of association is a registeredpublic document. This logically subjective presumption has now beeneffectively abolished under CAMA.66 Yet, it is still the law that in order tocreate an estoppel between a company and a third party, the representationmust be made by some persons who have actual authority from the companyto make the representation.67 This is because a company, unlike a naturalperson, can only make a representation through an agent. Where the borroweris a company, it is necessary to determine that the person holding himself outas transacting on behalf the company is actually a bona fide representative ofsuch company.
Finally, although basic company law and practice provides that a company is a legal personality, quite distinct from its owners and separatefrom its incorporators and directors, the reality is that what befalls thedirectors and prime shareholders may determine the fortune of the company.68In these days of active policing of financial crimes by officials of the Some of these other legislations are the Money Laundering Act, Cap. M18 Laws of the Federation ofNigeria 2004 and the Economic and Financial Crimes Act, Cap. E1 Laws of the Federation of Nigeria2004.
Cap. C24 Laws of the Federation of Nigeria 2004. See section 39 (3) CAMA.
This is simply now the case because CAMA has abolished the principle of constructive notice by virtue ofsection 68 thereof. This placed reliance on the universal principle of law which was long laid down in Salomon v Salomon(1897) AC 22. See also Lee v Lee's Air Farming Ltd (1961) AC 12 PC.
Section 39(4) (a) and (b).
See sections 68 and 69.
Section 69(c).
For example, the confiscation of the assets of a director or shareholder of a company for falling foul ofstate laws may include the seizure of his interest in the company. Such situation may affect the company'sfortune both in its daily operation and in its standing at the stock market, if it is quoted. REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 39
Economic and Financial Crimes Commission69 and National Drug LawEnforcement Agency70 in Nigeria, it would be prudent to search and find outhow some persons raised capital to float a company or carry on their business.
The statutes setting up these anti-corruption agencies empower officers to liftthe veil of incorporation and even effect forfeiture of the assets of a companywhere capital has been raised by criminal or fraudulent means, such as theft ofpublic fund; or local or international financial crimes.
PHYSICAL INSPECTION OF PROPERTY
This is another very important aspect of the task of investigation of title toproperty proposed as security for an advance.71 The essence of physicalinspection is to be able to easily identify the property anytime the need arisesand to be sure that there are no encumbrances on the land which an ordinaryvisit to the property would expose. The physical inspection would ordinarily besubsequently backed by certain steps aimed at properly documenting theidentity of the property. In Udenze v Nwosu,72 the Supreme Court said : "The two method of identifying the land in dispute with itsboundaries … are (i) by the plaintiff adducing oral description of theland in dispute that a surveyor acting on the strength of thedescription can make a plan of the land and (ii) by the plaintiff filinga plan showing the land in dispute with its boundaries."73 The importance of physical inspection is to ascertain whether the property actually exists; and in the condition in which the borrower portraysit. The investigator will also ascertain whether the property is underoccupation and if it is, whether it is so by or with the consent and approval ofthe owner; in this case, the prospective borrower or a third party guarantor.
Enquiries made from people in the neighbourhood as to the nature and state ofthe property will be of much assistance. Some other measures, such as theadministration of questionnaire on the borrower or property owner as the casemay be, regarding any encumbrance should also be a prudent step because ofthe apparent low level of morality or sincerity on the part of some elements ofthe Nigerian society.74 Some borrowers may want to borrow money fromlenders without disclosing the encumbrances on their collateral. This was established by virtue of the Economic and Financial Crimes Commission (Establishment) ActCap. E1 Laws of the Federation of Nigeria 2004. See the National Drug Law Enforcement Agency Act Cap. N19 Laws of the Federation of Nigeria 2004.
This step gives immediate insight into the physical condition of the property even before other steps maybe taken further to the investigation of title.
(2007) 8 MJSC 98.
Ibid, at pp. 103 and 104. See also Orunengimo v Egebe (2007) 11 MJSC 138, 140.
See L. Babatunde, Hints on Land Documentation and Litigation in Nigeria, op. cit. at p. 211.
40 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
It must be mentioned that the search report should as of necessity state the name of the particular Lands Registry of the State where the propertyis registered. It must also clearly state whether or not there has been any act ofgovernment acquisition in the area and in what way this may have affected theproperty, directly or indirectly.75 Getting information in this respect willnormally be easy as such acquisition by government will normally bepublished in the official gazette.
Another issue to consider in making up the report is the planning law. This is necessary so as not to fall foul of the law. It must be ascertainedthat the usage of the property and all other issues surrounding the property arein compliance with the planning laws. For example, it must be ascertained thatthe property is not used as a commercial plot whereas it is located in a sectionmarked as strictly residential area in the town planning statute. A violation ofthe town planning law in putting up the property will not stand it in good steadin the eyes of the law.
Furthermore, the ownership structure of the property must be considered. This is particularly necessary where there is joint ownership; thatis, where the property is owned by a group of persons in which case the extentof interests held by the respective persons need to be ascertained; particularlythe interest of the borrower in this case. An example is where the property is ajoint ownership between husband and wife; or between friends or partners. Inthis case, it should be determined how the ownership structure is expresslystated. For instance, the property's title document may be in the husband'sname or in a particular friend's or partner's names. It is important to ensurethat the property is in the borrower's name and if interest in the property isjoint, then the borrower's portion of the interest must adequately cover thecredit risk.
The issue of estoppel should be considered here too. Normally, property that is offered as security for credit facility is valued to determine itssuitability for the level of advance sought. The engagement of an expert tovalue the property is done by either the mortgagor or the mortgagee. It isapparent that, to obtain a relatively objective assessment of the current marketvalue of the property, the engagement of the expert should be by themortgagee since he is the one whose credit risk is to be covered by thecollateral. In that way, the mortgagee will be sure that at least the evaluation isan objective one, carried out by a person engaged and paid by him as lender.
The objectivity of the evaluation, from the point of view of the lender, is veryimportant because he is the party that is exposed and who apparently stands to If a private property is acquired by the state for public interest by way of the Governor revoking the rightof occupancy and the owner paid the necessary compensation by virtue of sections 28 and 29 of the LandUse Act, it follows that the property owner's interest thereby completely extinguishes. Any further act ofholding out the documents of title to the property under the guise of using it as collateral is not onlyimmoral but also criminal. It does not then mean that an unscrupulous person may not attempt to do so. REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 41
lose in the event of the borrower failing to pay and not having collateralwhose value covers the lender's credit risk exposure. However, a mortgageewho conducts evaluation of the property is estopped from faulting the value ofthe property and subsequently selling at gross undervalue in exercise of hispower of sale as a mortgagee.76 In this respect, the case of Taiwo vAdegboro77 is instructive. Here, it was proved that the mortgagee, in exerciseof his right of sale, sold the property earlier valued at N340, 000 for N140,000. The sale was held to have been done mala fide at a gross undervalue. Thesale was therefore set aside.
In concluding the search report, it must finally be noted that the solicitor's opinion must be expressed on whether the lender should grant thecredit facility or not. This opinion will be influenced by the facts alreadyconsidered in the body of the report. The bottom line is that the report shouldbe objective as the lender is relying on the objectivity and expertise of thesolicitor whose report is before him as lender.
PROPER IDENTIFICATION OF LAND: HOW
It may appear that the need for a conscientious identification of the land whichbecomes subject of a mortgage transaction is not all that too important.
However, this should not be so. Identification in this context does not just stopat physically inspecting the property. There is still the overriding need to carryout a survey of the land and produce a valid survey plan, at least to operate onthe side of caution. Although it is not strictly the rule that in all situations asurvey plan is fundamental for proving title to land, some measure ofdescription is however desirable and in fact necessary to make a land which issubject matter of a dispute easily ascertainable.78 A survey plan provides oneof the best means of this description.79 In Lasisi Aremu v Lawal Adetoro80 theSupreme Court said: "The test for the establishment of the identity of land is whether asurveyor can, from the record produce an accurate plan of such land.
While it is the law that a plan is not in all cases a sine qua non, somedescription is necessary to make a disputed land ascertainable."81 It therefore goes without saying that the need to tread on the side of See E. Chianu, Law of Securities of Bank Advances, Benin City, Ambik Press (2000), p. 138 [1997] 11 NWLR (Part 528) 224.
See Awoyoolu v Aro (2006) 4 MJSC 128.
Idehen v Osemwenkhae [1997] 10 NWLR (Part 525) 358. (2007) 11 MJSC 159.
Ibid at 161 per Niki Tobi JSC. Further on this principle, the Supreme Court cited with approval its earlierdecision in the classical case of Akpagbue v. Ogu (1976) 6 SC 63.
42 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
caution cannot be overemphasized. A lender who is taking the risk of givingout money against real property as collateral should, in exercise of duecaution, insist that all good measures are complied with; including carryingout and producing a valid survey plan as well as producing a good buildingplan where applicable. The dictum of the Supreme Court82 in the Aremu caseis quite instructive in this sphere. Ordinarily, the survey plan may not benecessary where the identity of the land is already ascertained and not indispute. The need for a survey plan becomes apposite when the issue borderson the identity of the property.83 Therefore a prudent property owner or lendershould have the property appropriately surveyed. In doing so, he will ensurethat his interest is relatively protected against any future contention as to theidentity of the property in a litigation over ownership of land. PERFECTION OF TITLE: AVOIDING THE
"LAND MINE"
As has been noted earlier in this paper, as from the date of the coming into forceof the Land Use Act, any transfer of interest in real property in whatever formmust be done with the prior consent of the Governor of the State.84 Theimplication of this fundamental requirement has been the uproar in the realestate sector in Nigeria. The initial confusion, culminating in such decision asSavannah Bank v Ajilo,85 is symptomatic of one of the problems associatedwith the Land Use Act. The bottleneck in completing the process of getting theGovernor's consent to any transfer of interest in land has had the net effect ofslowing down the desired rate of development in the real estate sector inparticular and the economy in general. A conscientious and strictimplementation of the provisions of the Land Use Act to the letter would resultin many transactions in land in Nigeria being held invalid, especially fortransactions between private individuals and those consummated on landoutside the cosmopolitan areas.86 Most land developers and speculators inNigeria find it difficult going through the process of perfection of their deedswith the Lands Registry because of the unnecessary bureaucratic bottleneck,corruption, unwarranted delays and steep fees charged for services. Theprocess of documentation for stamping and registration of deeds takes quitesometime because of the very many stages it passes at the Lands Registry. This Per Niki Tobi, JSC.
United Bank for Africa v Ibhafidon [1994] 1 NWLR (Part 318) 90; Tsokwa Motors (Nigeria) Ltd vAwoniyi [1999] 1 NWLR (Part 586) 199. Sections 21 and 22 Land Use Act.
Supra. See also Lagos State Development and Property Corporation v Foreign Financing Corporation[1987] 3 NWLR (Part 50) 413. Because of the difficulty often encountered in seeking to secure the Governor's consent to a transfer ofinterest in real property makes persons in this category to consummate their transactions without furtherseeking the Governor's consent; especially where there is no intention to apply the property as securityfor loan or overdraft.
REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 43
situation results in persons that are desirous of stamping and registering thedeeds on their property finding it a rather complex procedure.87 The officialcost of stamping, registration and obtaining the consent of the Governor mayalso be seen as being on the high side.88 Thus, property owners see theseproblems of cost and the duration it takes to complete the process asdisincentives to complying with the procedure. As an exception however, prospective borrowers are compelled to stamp and register their title on real property with the Lands Registry and tofurther obtain the requisite consent of the State Governor. This is because thegeneral trend has been that banks and other financial institutions licensed tolend money make it a condition precedent for accepting such property ascollateral for credit facilities.89 It cannot be disputed that, given a choice,some of such property owners would ordinarily not go the whole hog ofperfecting title to their property. The major reason for this attitude cannot beunconnected with the bottleneck encountered in going through the process ofsuch perfection.
However, because of the certain effect of not properly securing their credit risk exposure, lenders are wont to be careful about perfecting the titledocuments being offered by borrowers. This is especially so because mostborrowers are rather reticent about revealing all information surrounding theirreal property to the lender. Often time, it is the professional given charge ofconducting search that ends up ferreting out those hidden information thatwould most times be fundamental to the future of the transaction. The solicitorgiven the onerous task of conducting the search on the property must thereforebe wary at all times of the need to go about his assignment conscientiously soas to avoid the land mines that are present all over the way in the process ofperfecting title documents. The use of the phrase "land mines", in this context,refers to those statutory requirements that have the potential for invalidatingany transaction that is not conducted in strict compliance with its provisions.
Examples of this include the strict requirements on obtaining the Governor'sconsent to alienate, corruption, prohibitive fees paid for stamping andregistration, time bar and the attitude of State officials given charge of theprocess, especially at the Lands Registry.
Chianu Law of Securities for Bank Advances (Mortgage of Land) supra, at p. 2 For example, in Lagos and Edo States of Nigeria, there has been a recent upward review of the feesregime for transactions at the Lands Registry. In Edo State, the cost of stamping and registration wasreviewed from 5% and 9% to 10% and 18% of the value of the property, subject matter of the application,respectively. This means that for a transaction with face value of 10 million naira the applicant wouldhave to pay 2.8 million naira for stamping and registration alone. Chianu Law of Securities for Bank Advances (Mortgage of Land) supra, at p. 216 44 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
PERSPECTIVES ON THE EXTANT LAW ON
LAND INSTRUMENT REGISTRATION: NEED
FOR REVIEW
There is no disputing the fact that there are problems inherently associated withour real property document-perfection procedure. Apart from the problem ofbureaucratic bottleneck involved in the entire process, beginning with theinitial application stage down to the final point of approval, there is still theprevalent problem of poor record-keeping which renders the system easilyamenable to manipulation by unauthorized persons. There is therefore the needto computerize the entire record-keeping process at the Lands Registry in aneasily accessible electronic programme that is retrievable but adequatelysecured electronically against unauthorized access. Moreover, the envisagedcomputerization must be supported by a very effective electronic back upprogramme that ensures immediate recovery in the event of the occurrence ofdata loss. There is also the urgent need to make the entire documentation procedure more transparent. The Lands Registry must develop a blueprint forfast-tracking the process so that a title holder desirous of stamping orregistering his deed, or applying for the requisite consent or certificate ofoccupancy, should be able to know how long it would take to complete theentire process. Such applicant must also be aware of the cost implication forcompleting the full process without being ambushed with new charges after hehas already commenced the process. Apart from developing an approximate time frame for completing the title- perfection procedure, there is also the need to streamline the processin respect of persons that may present the application. Just like in thecompany-registration procedure at the Corporate Affairs Commission90where persons who may present applications for incorporation of companies,registration of business names or registration of incorporated trustees must beprofessionals who must have completed a prior accreditation procedure withthe Commission, the process of perfection of instrument's registration withthe Lands Registry should also be conducted by professionals who possess aform of prior accreditation qualification. That way, a measure of sanity wouldbe entrenched in the system of land documentation procedure in Nigeria. There is the need to make the fees for perfection of documents with the Lands Registry more attractive. That way, a larger number of propertyowners would be encouraged to perfect their documents, even when there is The Commission is the agency charged with the regulation and administration of company law andpractice in Nigeria. With headquarters at Abuja and branches in all State capitals of Nigeria, the CAC hasrelatively been effective in its assigned responsibilities. The accreditation of professionals to handletransactions with the CAC has largely contributed in the enthronement of relative sanity in its operation.
The same system of accreditation is recommended for the lands registration system.
REAL PROPERTY AS SECURITY FOR ADVANCES IN NIGERIA 45
no immediate need for using the property as collateral for credit facility. It isour opinion that where the system of real property document-perfectionprocedure is made attractive and affordable, the generality of property ownerswould be more inclined to perfect the documents covering their property, iffor no other reason, at least to have handy, valid documents that comply withall statutory requirements on property ownership.
There is also the urgent need to amend the Land Use Act to reflect the universal principles of mortgage, to wit, that a mortgage is not a sale of theproperty which is the subject matter of the mortgage contract and it remains sofor the duration of the mortgage. Therefore, the tendering of real property ascollateral for loan or overdraft, applied by way of mortgage should notnecessarily require the consent of the Governor as contemplated by the Actunder sections 21 and 22. The strict interpretation of the statutory requirementof consent to mortgage by the courts has largely affected credit expansion inthe Nigerian economy as the banks shy away from the wholesale embrace ofmortgage, and where they do; they tend to be rather too cautious. Thissituation does not in any way contribute to rapid economic development,including the development of the real estate sector. At this point, it should be apt to recommend the enactment of a more issue-specific legislation to provide protection for lenders. Such envisagedstatute must include such issues as fraudulent dealing by borrowers andmultiple application of the same real property to secure several credit facilitiesor a purchaser selling land and turning round to sell the same land to anotherpurchaser when the vendor has already been divested of all interest in theproperty. This trend has been prevalent among fraudulent land speculators inNigeria, especially in high density cosmopolitan areas. Unless such nefariousact is made heavily punishable, outside what is provided for under the extantcriminal code laws in Nigeria, the attraction on the part of the criminals thatperpetrate it, to be involved in the activities due to the laxity in the presentpunishment regime will still be prevalent. This envisaged protection couldeither be incorporated in the new attempt at amending the Land Use Actwhich bill is before the National Assembly, or it could be incorporated in theCriminal Code Act91 by way of amendment. While the latter suggestion maytake time to be effected, the former suggestion is more feasible since a billrelating to that is already before the National Assembly. CONCLUSION
Without doubt, the system of perfecting title documents in Nigeria is fraughtwith difficulties, which tend to influence many property owners in shying away Cap. C38 Laws of the Federation of Nigeria 2004.
46 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
from doing the right thing by way of stamping and registering their title andobtaining the requisite consent to transfer of title to the real property. Thefoundation to the problem is clearly linked to the lacunae in the Land Use Act.
That there is a comprehensive bill now before the Nigerian National Assemblyaimed at amending the Land Use Act to bring it in tune with present dayrealities and cure the inherent defects in the Act is a good omen for the futureof deeds perfection and the real property sector.92 However, it remains to be determined whether the Nigerian law- making process, especially the National Assembly, will produce an all-embracing legislation that addresses all the problems. Nevertheless it isearnestly hoped that the suggestions proffered by this paper and the effect ofthe envisaged amendment to the Land Use Act would engender an effectiveregime of real property management that guarantees safety of risk asset forlenders and an owner-friendly procedure for document perfection in all partsof Nigeria. See for example, M Onuorah, "Yar'Adua begins review of Land Use Act", The Guardian, Monday 23February 2009; O Muogbo, "Yar'Adua begins amendment of Land Use Act", Nigerian Tribune, Monday23 February, 2009. See also S Ojeifo, "Nigeria: Senate Debates Land Use Amendment Bill", ThisDay,Thursday 7 May 2009. Rethinking matrimonial property rights on divorce in
ABSTRACT
Marriage is generally considered as a partnership in which the spousescontribute their quota towards acquisition of property for the use of themselvesand their children, if any. Consequently, when the marriage unfortunatelycomes to an end there is a need for available property to be distributedequitably in the light of the prevailing circumstances. Depending on thematrimonial property regime governing the marriage, the existing law allowsequitable distribution of matrimonial property in some types of marriages butin others, no discretion exists for such equitable distribution. This invariablydefeats the legitimate expectations of the spouses in this latter type ofmarriages leading to dire economic consequences to some, generally wives.
Furthermore, the existing law creates uncertainty in the relationship betweenspouses married out of community of property in that they cannot assume, inthe event of a divorce, that they will benefit from any interest in property ownedby their spouses. This article will attempt to critically analyse the existing legal regimes in the light of contemporary social and economic changes to thestructure of the family and assess their impact on married couples.
Thereafter, it will suggest that the fairest way of ensuring equitabledistribution of matrimonial property on divorce, irrespective of the type ofmarriage entered into, is to grant the court wide discretion, which currentlydoes not exist, to do substantial justice to the spouses in the light of theparticular circumstances of the marriage. In doing this, the empty legal shellof the marriage will be destroyed with the maximum of fairness and minimumof bitterness. "The bridegroom bends a gaze of ineffable tenderness on his bride –‘…with this ring…with my body…and with my worldly goods Ithee endow"1 This article is a revised version of an inaugural lecture delivered by the writer on 21 April 2010 at theuniversity of Botswana.
Professor of Law, University of Botswana.
Per Sir Jocelyn Simon "With all my worldly goods", Presidential address to the Holdsworth Club,University of Birmingham (1964) pp. 1-4, cited by B.M. Hoggett and D.S. Pearl Family, Law and Society– Cases and Materials London, Butterworths, 1983, at pp. 100-101.
48 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
These fine and lovable sentiments expressed in the idyllic setting of a marriage ceremony give the impression that the bridegroom intends to endowhis bride with his property. This is far removed from the reality that occursduring the subsistence of the marriage. In Botswana, this is certainly not thecase where the matrimonial property regime governing the marriage is one outof community of property or one governed by the customary law. These tworegimes have as their fundamental principle the separation of the properties ofthe spouses on marriage.2 Even in the community of property regime, whichis also applicable in Botswana, by which the spouses' properties are joinedtogether in a joint estate on marriage, there are sometimes difficulties in thesharing of the estate.3 The acquisition and determination of matrimonialproperty4 is bedevilled by problems, which arise in the often acrimonioussetting of a divorce proceeding. It is at this point in time that the law isgenerally called upon to play an active role in seeking to reconcile theconflicting proprietary interests of the spouses.5 The legal principles for thedetermination of those interests and the power of the court to effect anequitable sharing of the property have not been adequately articulated. This article will attempt to critically analyse the existing legal regimes in the light of contemporary social and economic changes to thestructure of the family and assess their impact on married couples. Thereafter,it will suggest that there should be a rethink about the distribution ofmatrimonial property on divorce by giving the court a wide discretion to dosubstantial justice to the spouses irrespective of the type of marriage enteredinto.
The law of Botswana recognises two types of marriages; those contracted under the various customary/religious laws and those contractedunder the Marriage Act 2001. Each of these marriages is governed by aproperty regime. The customary law marriage subscribes to the separateproperty regime and under the statute the primary regime is also separation ofproperty unless the parties express a prior written wish that their marriageshould be in community of property.6 In the separation of property regime,each spouse retains his or her separate estate, which he or she possessedbefore the marriage and continues to do so with any other property acquired A variant of this regime exists in South Africa in the form of the ‘Accrual System' whereby upondissolution of marriage the spouse whose estate shows no accrual, or a smaller accrual than the estate ofthe other spouse, acquires a claim against the other spouse for an amount equal to half of the differencebetween the accrual of the respective estates of the spouses. The object of the system is to cause some ofthe advantages of a marriage in community of property to apply also to a marriage out of community ofproperty. See Chapter I Matrimonial Property Act 88 of 1984.
See Ruwona v Ruwona [1998] BLR 415 at p. 417.
This is taken in this lecture to mean those things which are acquired by one or other or both of thespouses, with the intention that they should be continuing provision for them and their children duringtheir joint lives and used for the benefit of their family as a whole. See Wachtel v. Wachtel [1973] 1 AllE.R. 829 (CA) at p. 836.
See J.G. Miller Family Property and Financial Provision (2nd ed.) London, 1983, at p. 1.
See ss. 3 & 7 Married Persons Property Act 1970 as amended by s. 4 Statute Law (MiscellaneousAmendments) Act, 2008.
MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 49
during the subsistence of the marriage unless the spouses decide to acquirejoint property in which case they will be treated as if they were married incommunity of property as far as that joint property is concerned.7 In the eventof divorce, each spouse departs with whatever property he/she owns. A courthas no discretion to order one spouse to give his/her property to the other.
Unless it is proved that a spouse has made some kind of financial contributiontowards the acquisition of the matrimonial property he/she acquires noproprietary interest in such property. Moreover no economic value is attachedto the domestic services rendered by a spouse (wife), which services enabledthe other spouse (husband) to exploit his/her earning potential to the fullest.8Consequently, years of devoted service to the husband/wife and the childrenwill go unrecognised. The community of property concept on the other hand,entails the pooling of all the assets and liabilities of the spouses in co-ownership, in equal undivided shares, under the joint control of the spouses.9In the event of a divorce the assets in the joint estate are divided equallybetween the spouses subject to the possibility of an order of forfeiture ofbenefits against the guilty party.10 Here again equal distribution may begrossly unfair where the marriage, for example, was short lived.
Be that as it may, the current state of the matrimonial property laws generally works to the disadvantage of the economically inactive spousegenerally wives. In many marriages the natural division of economicfunctions makes the husband the breadwinner, and deprives the wife whodevotes her time and energy to looking after the husband and children, of anequal opportunity to acquire property. Thus, when the marriage ends indivorce she may be left destitute because she has not acquired any property ofher own.11 It is therefore imperative that some legal mechanism should be putin place to enable the court to determine and adjust post-divorce matrimonialproperty rights. The Matrimonial Causes Act 197312 attempts to do this bygiving the courts power to "determine the mutual property rights of husbandand wife" on divorce.13 However, the courts have interpreted this power tomean that they have no discretion to adjust matrimonial property equitablybetween spouses on divorce particularly where the spouses were married outof community of property.14 The lack of discretion in such circumstances is See s. 15 Abolition of Marital Power Act, 2004. See EK Quansah, "Abolition of marital power inBotswana: A new dimension in marital relationship?" 1 University of Botswana Law Journal 5 (2005).
See Rabantheng v Rabantheng [1988] BLR 260.
See s. 7 Abolition of Marital Power Act, 2004.
See Molomo v. Molomo [1979-80] B.L.R. 250 (HC) and Molefe v Molefe [2004] 2 BLR 80 (CA). See alsoH.R. Hahlo, The South African Law of Husband and Wife (5th ed.) Cape Town, 1985, at p. 157-161(hereinafter cited as Husband and Wife).
See A. Molokomme, "Women's law in Botswana and research needs" in J. Sterwart and A. Armstrong(eds.) The Legal Situation of Women in Southern Africa – Women and the Law in Southern Africa Vol.II,Harare, 1990, at p. 18.
Cap. 29:02 1987 Rev.
See s. 13 of the Act.
See for example, Molomo v. Molomo op. cit. supra. 50 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
compounded by the fact that customary law governs the proprietaryconsequences of the marriage of persons subject to customary law (whichmost Batswana are) who marry under the Marriage Act,15 subject to theiropting out of it under the Married Persons Property Act. Customary law is notknown for its benevolence towards women. If anything, it generally treatswomen inequitably regarding property rights.16 Tswana society ispredominantly patrilineal. Descent is traced through the father; property andrank normally passes to the son, or the next male member of the lineage.17Thus, the regulation of the proprietary consequences of marriage of personssubject to customary law by that law does not enhance women's proprietaryrights.18 EXISTING POWERS OF THE COURTS TO
ADJUST PROPERTY RIGHTS ON DIVORCE
Adjustment of property rights under customary
The Customary Court Act does not give express power to Customary Courts todetermine the proprietary rights of spouses on divorce. Such a power mayhowever be taken to be ancillary to the jurisdiction conferred by s. 13(b) of theAct which allows such courts to grant divorce of customary marriages. Thereis also the well-known practice of the High Court of referring the division ofproperty of spouses subject to customary law and who married under thestatute, to customary courts, a practice which was rationalised by the Court ofAppeal in Metswinyane v Metswinyane19 on the basis that such a referral is nota delegation of the High Court's powers but a process based on the parties' owndesire to submit themselves to the jurisdiction of the customary court.20 The principles for determining the property rights of spouses on divorce are derived from the customary rules of the tribe concerned. Because See s. 2 Dissolution of Marriage of Persons Subject to Customary Law (Disposal of Property) Act, 1926.
See P.E. Kidd et al Botswana Families and Women's Rights in a Changing Environment, Gaborone,1997, at pp. 47-57 and O. Gulbrandssen Access to Agricultural Land and Communal Land Managementin Eastern Botswana, Gaborone, 1984. and O. Selolwane, "Customary law and Ethnic inequality: Land,marriage and the Basarwa case" a seminar paper presented at the University of Botswana on 5 October2005 at pp. 8-9 (on file with author).
On the organization of Tswana society see I. Shapera, A Handbook of Tswana Law and Custom, London,1938 Chap. 1 and A. Molokomme "Children of the Fence" - The maintenance of extra-marital childrenunder law and practice in Botswana, PhD. thesis, University of Leiden, 1991, deposited at the Universityof Botswana Library. Chap. 3.
However, the Dissolution of Marriage of Persons Subject to Customary Law (Disposal of Property) Act,1926 allows a court to apply the common law instead of the customary law to the disposal of propertywhere it would appear unjust and inequitable to apply customary law. See Molomo v Molomo op. cit.
supra and Rabantheng v Rabantheng op. cit. supra. [2004] 1 BLR 47. See also Maoto v. Maoto [2004] 1 BLR 158. For an analysis of the rationale behind such a referral, see Mosemele v Mosemele (MC27/03) (30 March2009) unreported (Rwelengera Ag.J.) MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 51
of poor record keeping in the Customary Courts, it is difficult to ascertainfrom court records the guiding principles used to divide matrimonial propertyon divorce. What principles there are can be gleaned from the efforts ofresearchers. Roberts,21 for instance, has stated that: "Traditionally, clear-cut rules determined this division. A womantook away with her, following divorce, little property which had notbeen derived from her own descent group, as it was assumed thatshe could rely upon members of it for her subsequent maintenance.
Today, property disposition made on divorce varies widely fromcase to case, and any rule stated can be no more than a broadgeneralisation. However it is clear from the court records that thetwo considerations accorded most weight by the court in making adivision are the matrimonial ‘fault' of the respective parties and theneed to maintain the woman and the children of the marriagefollowing divorce."22 The application of the customary principles usually works to the disadvantageof the wives, as they tend to be biased in favour of husbands. Aggrieved wivestherefore invariably turn to the High Court for redress of what they see as unfairtreatment. In Moisakamo v. Moisakamo (2),23 the court in its judgmentobserved that changing social and economic conditions affect and mouldcustoms24 and that these changes should be taken into account in assessing thesocial utility of customary rules. In the court's opinion, "a rule that may havebeen just and suitable in a subsistence farming community may work gravehardship and injustice in a commercial farming economy." 25 Radijeng in his research among the Bakgatla, has concluded that there seem to be a shift towards community of property but when it comes todistribution the customary courts do not apply the principle of equal divisionimplicit in the concept of community of property. Rather they revert topatriarchal reasoning.26 In Rakwadi v Rakwadi,27 the Court of Appeal put agloss on this type of community by saying that it is not the same as understoodunder the Roman Dutch common law. This notwithstanding, certain basicprinciples can be inferred from the cases. These are (a) the maintenance needsof the wife will be taken into account, (b) fault of the parties, if any, may be Tswana Family Law, London, 1972 at pp. 50-51.
See Schapera op. cit., at p. 160 for similar views. Recent research among the Bakgathla has indicated agradual move to equal division of matrimonial property on divorce. See G.O. Radijeng, Customary Lawand Gender Equality: The Legal Status of Women in Botswana DPhil thesis, Oxford University, (2004)unpublished.
[1981] B.L.R. 126. See Radijeng op. cit. note 22 supra and Reeletsang Nkhwa v Darius Nkhwa CCA Civ. App. (Francistown)36/2001 (unreported) relied upon by Radijeng.
[2006] 1 BLR 73.
52 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
taken into account and (c) the maintenance need of children will also be takeninto account.
2.1.1 Adjustment of property rights under the Marriage
With regard to marriages under the Marriage Act, the court's power to adjustthe property rights of the spouses on divorce is set out in s. 13(1) of theMatrimonial Causes Act (MCA). That section provides that: "Any court which tries an action for divorce or for judicialseparation under this Act shall also have jurisdiction to make anorder- (a) determining the mutual property rights of the husband and thewife."28 Unlike the English Divorce Reform Act, 1969, which was used as a model for the Act,29 no guidelines were provided for the court in thedetermination of the mutual property rights. In the leading case of Molomo v.
Molomo,30 Hannah, J. expressed the view that: "The powers of the court under section 13 are substantially the sameas in any other proceedings where the ownership or possession ofproperty is in issue. The discretion is no wider and no narrower thanthe ordinary discretion of the court in such cases." 31 What is this "ordinary discretion of the court" referred to in the case? In deciding what has been called "the cold legal question"32 of who ownswhat on divorce the court is likely to find an answer in the question "whose is In Mosemele v Mosemele supra, Rwelengera Ag. J. held that the word "determine" does not have onespecific and natural meaning. After exploring the dictionary meaning of the word he concluded that atleast two of the definitions fitted into the context of the section, namely, (1) come to a judicial decision,make or give a decision about something and (2) lay down authoritatively; pronounce, declare.
The memorandum accompanying the Bill Stated as follows: "The present Bill introduces a concept thatthe sole ground of which a petition for divorce can be presented is that the marriage has broken downirretrievably. Such an approach has been accepted and become law in the United kingdom consequentupon the adoption of the recommendations of a Committee, presided over by an Anglican bishop, whichsat for a considerable time in the 1960's, heard a vast amount of evidence, considering widely differingviews and finally a report." The United Kingdom law referred to in the memorandum was the DivorceReform Act 1969. See also C.M.G. Himsworth "Effects of matrimonial causes legislation in Botswana"[1974] 18 Journal of African Law 173.
At p. 251. In Tlale v. Tlale MC F112/1994 unreported (8 August 1997) High Court Francistown, GaefeleA.J. held that the power under s. 13 can be exercised by the court even though there was no prayer for thedivision of property in the Plaintiff's Declaration.
See Gissing v. Gissing [1969] 2 Ch. 85 at p. 93 per Lord Denning.
MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 53
this?" rather than "to whom shall this be given?"33 The answer will also dependon the type of matrimonial regime under which the couple were married. Ifthey were married in community of property, very little discretion exists todetermine their mutual property rights because on dissolution of the marriagethe community comes to an end and the constituent property is divided equallyby operation of law unless there has been an order of forfeiture of benefits.34Such an order was designed to punish the "guilty" spouse who, it is said, mustnot be allowed to benefit from a marriage he has wrecked.35 If the "innocent"spouse requests such an order, the court has no discretion to refuse it.36 Thesurvival of this order under the Matrimonial Causes Act, which abolished fault-based divorce, is debatable.37 It is submitted that the order is a completeantithesis to the professed rationale behind the Matrimonial Causes Act thatfault should no longer be a determinant for the granting of a divorce.38 It musttherefore be taken to have been impliedly abolished39 although there is somehint from the Court of Appeal that this is not the case.40 However, if the matrimonial regime is one of out of community of property there is potentially more room for the exercise of the discretion. Alook will now be taken at how the courts have exercised whatever discretionthere is concerning these two matrimonial regimes.
2.1.1.2 Exercise of discretional power in relation to marriage
in community of property
Subject to the doubtful application of the order of forfeiture of benefits, whena marriage in community of property is dissolved by a divorce decree, the jointestate, which the marriage brought about, is divided equally between the Per Lord Morris in the English case of Pettitt v. Pettitt [1970] A.C. 777 at 798. For a discussion of thiscase, see J.G. Miller "Family Assets" (1970) Law Quarterly Review 98.
See Hannah J's dictum in Molomo v. Molomo supra at p. 252 and Ruwona v Ruwona [1998] BLR 415(CA).
See Hahlo Husband and Wife op. cit., at p. 373, Cronje & Heaton op. cit., at p. 266, Murison v. Murison1930 A.D. 157 and Harris v. Harris 1949 (1) S.A. 254 (A). See the South African case of Murison v. Murison supra. Under s. 9(1) of Divorce Act 70 of 1979, theSouth African courts now have discretion to order a spouse to forfeit the patrimonial benefits of themarriage either wholly or partly.
Hahlo Husband and Wife op. cit., at p. 373 opines that the forfeiture rule under s. 9(1) of the 1979 Act haslittle in common with the pre-1979 forfeiture rule, except the word "forfeiture". His reasons for this vieware that "substantial misconduct" under s. 9(1) is only one of the factors which the court may take intoaccount in granting the order and that furthermore, the court has a discretion whether to grant the order ornot, which was not the case before the 1979 Act. See also HR Hahlo & JD Sinclair The Reform of theSouth African Law of Divorce, Cape Town, Juta & Co. 1980.
Under s. 25(1) of the Act, however, the conduct of the parties is a factor to be taken into account inawarding a gross or annual sum to the wife See Himsworth "Effects of matrimonial causes…" op. cit., at p. 176. A similar conclusion has beenreached in relation to s. 9(1) of the South African Divorce Act 70 of 1979 - see Hahlo and Sinclair TheReform of the South African Law of Divorce, Cape Town, 1980 at pp. 51-52 See Molefe v Molefe supra. See also EK Quansah, "The Order for forfeiture of benefits in divorceproceedings in Botswana: A relic of a bygone era or a ghost from the past?" 1 University of BotswanaLaw Journal (2005) 120.
54 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
spouses. In Molomo's case, Hannah J., having delimited the ambit of s. 13 ofthe MCA, held that: "It follows from my view of s. 13 that if it be held that a marriagewas in community of property and of profit and loss then on adissolution the court in exercising its powers under s. 13 will holdthat the matrimonial assets with certain possible exceptions are injoint ownership and fall to be divided in equal shares41 He stated further that: "In determining the parties' mutual property rights I must thereforeproceed on the basis that the rights in issue were in joint ownershipand I must endeavour to effect a division in equal shares." 42 The court divided the available assets in such a way that Mrs Molomo got assets worth P17, 600 and Mr. Molomo P17, 580. Thus, a nearexact equality was achieved between the parties. However, no discernibleprinciples for the exercise of discretion in allocating the various propertiesemerge from the case although it seems that the needs of the minor childrendid influence the court in awarding the matrimonial home to Mrs Molomo. Where an order for forfeiture of benefits is asked for, the criterion used by the court in the exercise of its discretion is whether the party againstwhom the order is sought will, in relation to the other party, be undulybenefited if such order is not made. Factors such as the duration of themarriage and the conduct of the party in relation to the breakdown of themarriage will be taken into account. What is forfeited is not the party's sharein the joint estate but only the pecuniary benefits that he/she would otherwisehave derived from the marriage. It is in reality an order for division of theestate plus an order that the other party is not to share in any excess that theparty seeking the order may have contributed over that of the other party.43 At p. 252. See also Ruwona v. Ruwona op. cit. at p. 416 where the court said: "I am satisfied that inBotswana, when parties are married in community of property, their joint property requires to be dividedequally between them on divorce." per Allanbridge JA.
See the South African case of Smith v Smith 1937 WLD 126 at pp. 127-128. Section 9 of the SouthAfrican Divorce Act 70 of 1979 has slightly modified the common law position applicable in Botswana inthat this is no ‘automatic forfeiture' under the Act as exists under the common law. See notes 34 & 35supra. MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 55
2.1.1.3 Exercise of discretional power in relation to marriage
out of community of property
With regard to this matrimonial regime, the general rule is that on divorce eachspouse takes his or her property.44 If there is evidence of joint ownership thenthe said property will be dealt with as if the spouses were married incommunity of property.45 In the absence of such joint ownership if one of thespouses claims to be entitled to a share in the other's property by virtue of acontribution, whether in cash or in kind, then it is the duty of the court todetermine the proper share which such a spouse has in the said property. In thelight of the restrictive ambit drawn by Hannah J. in Molomo's case, it seemsthat the mutual property rights of the spouses must, adopting the words of LordUpjohn in the English case of Pettit v Pettit,46 be "judged on the general principles applicable in any court of lawwhen considering questions of title to property, and though theparties are husband and wife these questions of title must be decidedby the principles of law applicable to the settlement of claimsbetween those not so related, while making full allowances in viewof the relationship." What are these allowances, which the court is to make in view of the marital relationship between the parties? A spouse must establish, whereverpossible, a beneficial interest in such property, for example, the matrimonialhome.47 Where the property had been purchased in the sole name of thehusband, for instance, without the wife making any direct contribution to thepurchase price or without the parties making an agreement or declarationregarding the beneficial interest in the property, there was a prima facieinference that the husband was the sole legal and beneficial owner.48 Thatinference could only be displaced if the court could impute, from the conductof the couple down to the date of their separation, a common intention that thewife was to have a beneficial interest in the property. That in turn dependedon whether the wife had made a financial contribution regarded as substantialtowards the expenses of the couple's household, which could be linked to the See Hahlo Husband and Wife op. cit., at pp. 287-288 and Cronje & Heaton op. cit., at p. 117.
See s. 15Abolition of Marital Power Act 2004.
Pettitt v. Pettitt [1970] A.C. 777 at p. 813 and also at p. 803 per Lord Morris and at p. 821 per LordDiplock.
See Button v. Button [1968] 1 W.L.R. 457 at p. 462.
See Pettitt v. Pettitt supra at p. 813. The term "legal and beneficial owner" is used to describe ownershipcoupled with benefits as opposed to a bare title where the ownership is for the benefit of another. Thisduality of ownership is a historical development of the English Common Law and Equity. For furtherdetails see E. H. Burn Cheshire and Burn's Modern Law of Property (13th ed.) London, 1982 Chap. 3.
56 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
acquisition of the property.49 In Rabantheng v. Rabantheng50 the parties werefound to be subject to customary law and thus, prima facie, customary lawgoverned the matrimonial property regime. However, relying on dicta inMolomo,51 the court held that the parties lived a "sophisticated" way of life. Ittherefore exercised its discretion not to apply customary law to thedetermination of the rights of the parties.52 The evidence adduced revealed thatthe wife contributed P675 towards the mortgage repayment of the matrimonialhome and P1, 601.01 towards the payment of rates on the house, the purchaseprice of which was P2, 813.78. She also made indirect financial contributionfor food and general housekeeping. The value of the house had risen to P68,000 at the time of the litigation. After reviewing the evidence, the courtconcluded that the spouses never pooled their resources to form a uniquepartnership, a term that may have been used as synonymous to universalpartnership. 53 The court further held that there was no intention by the spousesto share equally in the de facto ownership of the matrimonial home and that inthe absence of an expressed intention, this cannot be implied. However, it heldthat the wife's financial contribution towards the down payment of the houseamounted to a substantial contribution entitling her to a one-third share in theproceeds of the house. The court did not explain the basis for the arrival at aone third share for the wife. One would however, suspect that it is theapplication of the English practice of awarding one third of the joint assets ofthe spouses to a wife in such situations.54 This one-third share in the equity ofthe house translated into P22, 667 which the court ordered that the husband payto the wife within three months. Although the judge said he was consideringmany factors in determining the share of the wife, it is not clear from thejudgment what these factors were. It seems however, that the wife's financialcontribution was the sole determinant. A factor that was clearly not taken intoaccount though was the indirect contribution made by the wife during thesubsistence of the marriage. This non-recognition of the wife's indirectcontribution may work injustice to many a housewife who does not go out towork after the marriage but devotes her time to caring for her husband andchildren, thus sacrificing the opportunity of acquiring any capital asset.55 Had See Burns v. Burns [1984] 1 All E.R. 244; Gissing v. Gissing [1971] A.C. 886 and Bernard v. Joseph[1982] Ch. 391. For the South African position on the point, see Hahlo Husband and Wife op. cit., at pp.
290-291.
[1988] B.L.R. 260.
At p. 265. However, it may also seem from the judge's acceptance of the dictum of Berman J. in theSouth African case of Kritzinger v. Kritzinger 1987 (4) S.A. 85 (C) at p. 94, in which the term "a uniqueform of partnership" was used, that he was using the term in the sense used in that case. The requirementsof universal partnership were set out in the South African case of Muhlmann v. Muhlmann 1981 (4) S.A.
632 (W) at pp. 634-635 per McCreath J. confirmed on appeal in 1984 (3) S.A. 102 (A) and Pezzutto v.
Dreyer 1992 (3) S.A. 379 (A) at p. 390 per Smalberger J.A. See Page v. Page [1981] 2 F.L.R. 198, Foley v. Foley [1981] 2 F.L.R. 215 and Wachtel v. Wachtel op. cit See E.K. Quansah "Determining property rights between spouses on divorce: A tale of two jurisdictions(Ghana and Botswana)" op. cit., at p. 98.
MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 57
there not been evidence of a financial contribution from the wife towards thepurchase of the house, the court may not have awarded her a share in theenhanced value of the matrimonial home.
EFFICACY OF THE MATRIMONIAL PROPERTY
One glaring shortcoming of the matrimonial property regimes applicable inBotswana is the court's inability to exercise adequate discretion in determiningand readjusting the mutual property rights of the spouses on divorce. Apartfrom marriages in community of property where equality of distribution is thenorm, and where the courts can decide which property goes to which spouse,there is no power to exercise discretion in the other matrimonial regimes. Inmarriages out of community and under customary law, the philosophy ofmatrimonial partnership is completely ignored when property is distributed ondivorce. To adapt the words of Scarman L.J. in the English case of Calderbankv. Calderbank,56 under these two regimes the spouses do not come to thejudgment seat in matters of money and property upon the basis of completeequality. Despite recent statutory imposition of equality in matters of post-divorce maintenance,57 the odds are still heavily weighted against a spousewho claims a part of the other spouse's separate property. In particular wives,whose traditional role in a marriage, even in a culturally conservative societylike Botswana, is gradually changing and the law should reflect this newreality.58 At this juncture, the attendant problems and injustice which the lack of discretion in adjusting post-divorce proprietary rights causes will bediscussed.
Marriage under customary law
The customary law matrimonial property regime discriminates against womenby placing them in a position of relative inequality with men in respect of theownership and allocation of matrimonial property upon divorce.59 TheCustomary Courts generally consider the husband to be the owner of almost allproperty acquired during the marriage even where a contribution towards theiracquisition has been made by the wife. This bias towards the husband, as was [1976] Fam. 93 at p. 101.
See s. 4 Statute Law (Miscellaneous Amendments) Act, 2008 which has amended s. 25 of theMatrimonial Causes Act, 1973 which hitherto was beneficial only to wives.
A typical example of such conservatism was the speech of the then Attorney-General during the thirdreading of the Matrimonial Causes Bill in 1972 where he asserted that the Bill says that a woman shall notsupport a man, only a man shall support a woman. See 1972 Hansard at pp. 22-23 and p. 92.
See A. Armstrong et al, "Uncovering reality - Excavating Women's Rights in African Family Law"(1993) 7 International Journal of Law and the Family 314. 58 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
stated above, has led to wives bringing action in the High Court to rectify whatthey perceive to be unfair distribution of matrimonial property. The HighCourt has distributed such property in accordance with the relevant customarylaw but has acknowledged the contemporary societal changes that have taken,and are taking place and has taken these into account in such distribution.
Recent research conducted among the Bakgatla by Radijeng shows that therehas been a shift in the attitude of the customary courts towards equality ofdivision of matrimonial property. He found as follows: "Where the parties to a marriage accumulate property together suchproperty constitutes their joint estate except property that the partieshad before marriage. On divorce such property is to be sharedequally."60 However, the distribution of the matrimonial propertiesin the cases from which this conclusion was drawn did not followthe principle of equal division implicit in community of property butwas rather based on patriarchal reasoning. A case of old habits diehard.
Marriage in community of property
This type of matrimonial regime allows for equal division of the matrimonialproperty on divorce.61 However, such a division may be affected by customarylaw where the spouses are subject to that law.62 The application of customarylaw to such a division has generally proved unsatisfactory. The fairness ofcommunity of property in the division of matrimonial assets is acknowledgedbut it is predicated on the scrupulous management of the joint estate by thespouses during the currency of the marriage and adherence to the consentprovisions stipulated in section 9 of the Abolition of Marital Power Act 2004.
This perceived fairness of the regime will be illusory if the consequences ofthese consent provisions are not strictly enforced. In terms of section 10 of the2004 Act, an act performed in contravention of section 9 may be set aside at theinstance of the spouse who suffered prejudice as a result of the act. What if thesaid transaction did not result in prejudice? Will the act without consent be stillvalid? It is my submission that this provision is not effective enough to curbpossible dissipation of assets of the joint estate. In Moisakamo v. Moisakamo63it was held that for a wife to obtain an interdict restraining her husband fromdisposing or otherwise dealing with the joint property, she had to show anactual or well-grounded apprehension that if no interdict were granted she See G.O. Radijeng, Customary Law and Gender Equality: The Legal Status of Women in Botswana op.
cit. See the remarks of Hannah J. in Molomo's case supra at p. 88.
See notes 18 and 25 supra.
[1979-80] B.L.R. 131. MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 59
would suffer irreparable loss. Such a loss cannot be presumed but must beestablished by the applicant as an objective fact.64 It is not enough for theapplicant to allege that she herself bona fide feared such loss. If this attitude ofthe court persists in the context of section 10 of the 2004 Act, the consentprovisions will be seriously undermined. Furthermore, equal division of the joint estate may not be fair where for example, the marriage was short lived or there is sufficient evidence thatthe profligacy of one spouse has disproportionately saddled the joint estatewith debts. As the law stands now irrespective of the origin of the debts bothspouses stand to share them equally.
Marriage out of community of property
The inability of the court to reorganise the economic relationship of the spouseson divorce is brought into a sharp focus where the matrimonial regime is out ofcommunity of property. This is due to the separate-property characteristic ofthe regime. The concept of separate property was intended to be beneficial tomarried women65 but the reality of married life in Botswana is that the husbandinvariably has the superior economic power and therefore is in a far moreadvantageous position to acquire capital assets. Even where the wife isworking, her income in most cases will be less than that of her husband and shewill not be in the same position as the husband to acquire capital assets.66Hence when it comes to claiming a share in the matrimonial property herposition is not satisfactory. In order for her to do this, she would have to baseher claim on some recognised principle of property law.67 This invariably shewill not be able to do. The court cannot impute a common intention that a wifewas to have a beneficial interest in the property merely on account of her In vindictory or quasi-vindictory actions, that is actions in which the plaintiff claims delivery of a specificproperty as owner or lawful possessor, such irreparable loss is presumed until the contrary is proved. Seethe South African case of Stern and Ruskin NO v. Appleson 1952 (3) S.A. 800 (W) at pp. 810-813 perMillin J. which was relied upon by the court. In the court's view, there was no clear indication whetherthe applicant's action for the division of property was vindicatory or quasi-vindicatory; consequently, shemust show irreparable loss as an objective fact before an interdict could be given to her. She could not doso hence the interdict was refused.
See Hahlo Husband and Wife op. cit. at pp. 287-292 where some of the advantages conferred on womenby this matrimonial regime are said to be - that they may freely contract and dispose of their property byacts inter vivos or mortis causa, if their husbands alienate or encumber their property without theirconsent they may recover it from the third party with the rei vindicatio, i.e. an action brought to assert therights of ownership. See also S.M. Cretney & J.M. Masson Principles of Family Law (6th ed.), London,1997, 124 and M.D.A. Freeman "Towards a rationale reconstruction of family property law" (1972)Current Legal Problems 84.
The latest census figures (1991) indicate that women accounted for just 39% of the workers aged 12 yearsand above. According to this data base less than 50% of Botswana's female population (that is, excludingschool children and the retired) was actually classified as labour force participants whereas 90% of theirmale counterparts were recognised as workers. See the 1991 Housing and Population Census, Gaborone,1991 and National Report for the Fourth World Conference on Women: Beijing, China, 1995, Gaborone,1994, at p. 13. See for example, the South African case of Hanel v. Hanel 1962 (3) S.A. 625 (C) and Hahlo Husband andWife op. cit. at p. 290.
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domestic contribution towards the well being of the family. In Rabantheng'scase, Hallchurch J. in deciding whether there was a universal partnershipbetween the spouses with regard to the acquisition of the matrimonial home,said: "Thus if the spouses conducted a business together to which eachcontributed money and/or labour, a partnership may have to beimplied, but the mere fact that the wife has worked in her husband'sbusiness or on his farm is not sufficient. It must be shown that shemade a substantial financial contribution or regularly renderedservices going beyond those ordinarily expected of a wife in hersituation: the court will not readily imply a partnershipagreement."68 (Emphasis added.) The reality of the marriage situation is that it is a partnership of the couple and consequently the law should give effect to their legitimate andreasonable expectations.69 The present situation in which the court refuses toacknowledge a spouse's indirect contribution towards the welfare of thefamily, it is submitted, is not only unfair but also does not fulfil the legitimateexpectations of couples. This undoubtedly undermines the presumedpartnership of the marriage. Furthermore, increased urbanisation and labourmigration have eroded the built-in insurance mechanism of the extendedfamily group without putting anything in its place.70 A spouse with a weakeconomic base is therefore unlikely to find financial/material support fromthat group which used to serve as a safety net in time of need. The provision inthe Abolition of Marital Power Act to the effect that where spouse married outof community of property acquire property jointly, they will be treated, as faras that property is concerned, as if they were married in community ofproperty, should partially ameliorate possible hardship. However, for thisprovision to be effective there must firstly be established existence of jointownership with regard to such property. This will entail proof of specific At p. 265 relying on Hahlo Husband and Wife op. cit. at p. 290. See also the English case of Button v.
Button [1968] 1 All E.R. 1064 at p. 1067. This case represents the English courts' attitude to a wife'sindirect contribution to the matrimonial home before the passing of the Matrimonial Proceedings andProperty Act, 1970. That Act gave the courts extensive powers to redistribute virtually all the spouses'economically valuable assets.
See Judith Freedman et al Property and Marriage: An integrated approach, London, 1988, at p. 9. Theword "partnership" is not being used in this context in a commercial sense, for as explained in anAmerican case Rey v. Rey (1973) 279 So. 2d 360 at p. 361f and cited by K.J. Gray Reallocation ofProperty on Divorce. Abingdon, 1977, at p. 23 note 5, "The marital relationship, although classified as a‘partnership' in terms of demonstrating the equality of the individuals involved, was never intended to bea ‘partnership' in the ordinary business sense where each party is required ‘to give an accounting' at thetermination of the relationship.[I]t is somehow degrading to the marital relationship and to the institutionof marriage itself to see a dissolution degenerate into a battle between accountants where the spoils go tothe better bookkeeper." Similar views about the matrimonial ‘partnership' can be found in the followingSouth African cases: Van Gysen v. Van Gysen 1986 (1) S.A.56(C), Kritzinger v. Kritzinger 1989 (1) S.A.
67(A) and Katz v. Katz 1989 (3) S.A. 1(A).
See Beyond Inequalities: Women in Botswana, Botswana/UNICEF Report, 1998, at pp. 55-56.
MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 61
agreement or joint inclusion of the names of the spouses on the document ofownership. No amount of protestation that the property is "ours" will sufficeto create such joint ownership. Finally, the narrow interpretation given to the provision in s. 13 of the Matrimonial Causes Act will continue to hamper any willingness on thepart of the High Court to equitably readjust the property rights of the spouses.
The operation of the doctrine of judicial precedent is well entrenched inBotswana71 and unless the Court of Appeal, the ultimate court in thehierarchical system of courts, has an opportunity to revisit the interpretation ofthe said section, the High Court will continue to employ the narrowinterpretation of the section.72 The tyranny of this narrow interpretation of s.
13 of the Matrimonial Causes Act can only be reversed by legislation.
RETHINKING MATRIMONIAL PROPERTY
As indicated earlier, the High Court has given a restricted interpretation to thepower to determine the matrimonial property of spouses on granting a divorce.
This has led to little or no discretion being exercised in order to effect anequitable distribution of matrimonial property. The customary courts which,invariably, determine the matrimonial property of persons subject to customarylaw who marry under the Marriage Act as well as those who marry undercustomary law, have generally followed the example set by the High Court byalso exercising little or no discretion in determining and distributingmatrimonial property. The cumulative effect of all these is that economicallyinactive spouses under customary law or in a marriage out of community ofproperty face an uncertain financial situation on the dissolution of the marriage.
Their counterparts who marry in community of property only fare a little betterfor although they may hope to gain from the industry of each other at the endof the marriage, there is no guarantee that this will happen. It is thereforesubmitted that the court should be given statutory discretion to adjust the post-divorce proprietary rights in all marriages irrespective of the applicablematrimonial regime where the particular circumstances of the marriagewarrant.73 Arguing the same solution to the problem in South Africa someyears ago, Prof. June Sinclair, a leading authority on the subject, observed asfollows:74 See C.M. Fombad & E.K. Quansah, The Botswana Legal System, Durban, LexisNexis, 2006, pp. 72-82and I.G. Brewer "Sources of the criminal law of Botswana" [1974] 18 Journal of African Law 24 at p. 31.
Although the High Court is generally not bound by its own previous decisions, it will follow its previousdecisions to aid consistency and predictability of the law. See Morgan Moathode v. Kgabywana Mekgwe[1968-70] BLR 52 (HC) at p. 53 and State v. Macheng [1968-70] BLR 189 (HC) at p. 197 where the HighCourt refused to follow its previous decisions.
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"My belief that the judicial discretion equitably to redistribute assetson divorce should apply to all marriages stems from the fact thatequal apportionment of property is too rigidly built into unionsbased on sharing and is absent from those based on completeseparation of goods. Equity must surely be the necessary correctiveof legal justice when laws are defective in their very universality.
At times it will be necessary for the courts to use the discretion toprevent automatic equal division, and at other times, where nosharing would otherwise take place, it will be necessary for them toimpose a form of sharing. In this way we can bring together thedisparate forms of marriage that are (undesirably, perhaps) availablein South Africa." I respectfully associate myself with this rationale for the imposition of judicial discretion in the determination of post-divorce proprietary rightsbetween spouses.75 Equity, as has been said, is not past the age of childbearing76 and as such new ways must be found to rectify obvious anomaliesexisting in the law of matrimonial property. The type of discretion being advocated here is not an unstructured discretion but one structured by a clear basic statutory policy as to thefinancial consequences of divorce. The statutory policy must be basedgenerally on the "property approach" to financial provision on divorce, that is,that the financial affairs of the spouses are to be resolved generally by meansof readjustment of property, if any, rather than the "support approach" whichcalls for some form of permanent or long-term maintenance in favour of aspouse.77 The present post-divorce financial provisions in Botswana areheavily tilted towards the "support approach".78 See for example, s. 7 (5) of the South African Divorce Act 70 of 1979 which enjoins the court to take thefollowing factors into consideration in transferring the assets of one spouse to the other in marriages outof community of property and profit and loss to which the accrual system does not apply: (1) the natureand extent of any direct or indirect contribution by a spouse; (2) the existing means of the parties (eachone's assets and obligations); (3) any donation made by one party to the other during the subsistence ofthe marriage, or which is owing and enforceable in terms of the ante nuptial contract; (4) any court orderin terms of which a forfeiture of benefits was ordered and (5) any other factor which, at the discretion ofthe court, should be taken into account. Similar provisions exist under s. 114 of the Tanzanian Law ofMarriage Act No. 5 of 1971 which were discussed in Mtui v Mtui [2001] 2 BLR 333 (CA).
See "The financial provision on divorce – need, compensation or entitlement?" (1981) 98 South AfricanLaw Journal 469 at pp. 485.
This is to be contrasted with the fixed rule approach for distribution of matrimonial property on divorcewhich does not depend on financial or other contribution but from the marriage relationship itself as in thecase of marriage in community of property. However, the disadvantage of this is that no account is takenof any special circumstances in particular cases. For example, it might give an underserved benefit to aspouse whose contribution to the marriage had been nil and who had failed to fulfill his matrimonialobligations.
Per Lord Denning MR, Eves v Eves [1975] 1 WLR 1338, CA).
See Gray op. cit. at pp. 282-292, J.M. Eekelaar "Some principles of financial and property adjustments ondivorce" (1979) 95 Law Quarterly Review 253 at pp. 261-265 and Sinclair "Financial provision ondivorce - need, compensation or entitlement?" op. cit. at p. 476.
See s. 25 Matrimonial Causes Act 1973 (as amended by s. 4 Statute Law (Miscellaneous Amendments)Act, 2008) which provides for post-divorce maintenance for a spouse.
MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 63
HOW SHOULD THE COURT EXERCISE A
Judicial discretion in determining and redistributing matrimonial property ondivorce provides flexibility to enable the court to take into account the peculiarcircumstances of the case before it and to adapt the law to socio-economicchanges in society.79 On the flip side, judicial discretion may createuncertainty, as one cannot predict with any measure of exactitude what thecourt's reaction will be in a particular case and may lead to judicialarbitrariness and subjectivity.80 This latter aspect of the exercise ofdiscretionary power was found by the English Law Commission to be afundamental cause of dissatisfaction of the powers given to the court under theEnglish Matrimonial Causes Act 1973.81 However, it has been demonstratedthat discretionary decisions, in the judicial context, can be (and are) controlledby the operation of legal principles.82 The possibility of subjective justice isavoided by the legislature setting out the considerations to be taken intoaccount by the courts in the exercise of their discretion and the objectives theyare to seek to achieve.83 It follows that the essentially discretionary nature ofthe "matrimonial adjustive jurisdiction" need not and should not be an occasionfor sliding into subjective justice.84 Despite some criticisms of judicial discretion to adjust matrimonial property,85 it is my submission that its strengths outweigh the perceivedweaknesses it may have. If the legislature sets realistic and workableperimeters within which the court is to exercise the discretion, this will go along way to bringing about the realisation of the legitimate expectations ofspouses on divorce. The general outcome should be one of fairness. Butfairness, like beauty, lies in the eye of the beholder.86 Consequently, theremust be perimeters within which the judicial discretion should be exercised.
To help achieve this goal, section 13 of the Matrimonial Causes Act should beamended and the following guidelines are proposed for the guidance of the See the English case of Martin v. Martin [1978] Fam. 12 at p. 20, M. Maclean & J. Johnson, "Alimony orcompensation" (1990) Family Law 20 and H.R. Hahlo, "Recent trends in Family Law: A global survey"1983 Acta Juridica 1 at p. 13.
See generally, E. Jackson et al, "Financial Support on Divorce: The right Mixture of Rules andDiscretion?" (1993) 7 International Journal of Law, Policy and the Family 230; H.R. Hahlo, "Recenttrends in family law…" op.cit at p. 13 and J. Sinclair, "Financial provision on divorce…" op. cit. at p.
481.
See Working Paper No. 42 op. cit. at para. 0.22.
See R. Dworkin, Taking Rights Seriously, London, 1977 at pp. 31-39 relied upon by Eekelaar in "Someprinciples of financial and property adjustment on divorce" op. cit. at p. 254.
See for example s. 25 (1) of the English Matrimonial Causes Act 1973 as amended by the Matrimonialand Family Proceedings Act, 1984, s.7 (5) of the South African Divorce Act 70 of 1979 and s. 7(3) of theZimbabwean Matrimonial Causes Act, 1986.
See Eekelaar "Some principles of financial and property adjustment on divorce" op. cit. at p. 254.
See G Davis et al, Simple Quarrels Oxford, Clarendon Press 1994 pp. 255-256.
See the remark of Lord Nicholls in the English case of White v. White [2000] 3 W.L.R. 1571 at p. 1573.
64 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
4.1.1 Presumption of equality
The first guideline in the adjustment of the matrimonial property must be onethat presumes equality of sharing. This will be in line with treating a marriageas a "partnership" of equals in which each spouse contributes, economic orotherwise, to the general welfare of the family. In this regard the contributionmade by a spouse towards looking after the home or caring for the family mustbe accorded the significance it deserves notwithstanding the fact that such aspouse is unable to show that he/she made a financial contribution towards theacquisition of the property in question. This is a most important considerationin the Botswana context where women form a minority of the workforcealthough a majority of the population.88 It follows from this that very fewwomen will be able to show any significant financial contribution towards theacquisition of matrimonial property, and consequently be able to claim aninterest in such property as a right. The evaluation of a spouse's indirectcontribution towards the acquisition of matrimonial property should not bequantified in monetary terms but rather on ".the relative approach ofdifferential equality between financial and non-financial contributions to theacquisition of matrimonial assets."89 There should be no requirement that thenon-financial contribution must be shown to have had an impact upon the valueor to have assisted materially in the acquisition of the property in question. Itis submitted that to fully acknowledge the economic importance of a spouse'snon-financial contribution, a contribution of a general nature, not specificallyreferable to the acquisition of a particular property, should be held sufficient towarrant the spouse concerned to be given a share in the said property.90Sharing under this guideline does not however mean complete equality underany circumstance, for there may be particular cases in which the peculiarcircumstances of a particular marriage may dictate otherwise. For example, ina short marriage where there are no children, it will be highly inappropriate toadhere to the presumption of equality.
4.1.2 Conduct of the spouses
Secondly, conduct, which features as a factor in the award of a gross sum ofmoney to a spouse under s. 25(2) of the MCA 1973 (as amended), should not For a succinct elaboration of these guidelines, see E.K. Quansah, "Some contemporary challenges facingfamily law in Botswana" 9 University of Botswana Law Journal (2009).
32% of women as opposed to 72% of men are in paid employment. See Beyond Inequalities - Women inBotswana op. cit. at p. 36.
Gray op. cit. at p. 71.
See a similar view expressed by Botha JA on s. 7 (4) of South African Divorce Act 70 of 1979 inBeaumont v. Beaumont 1987 (1) S.A. 967 (A) at pp. 996-997.
MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 65
be considered a significant factor in deciding the share of a spouse in theproperty of the other spouse. It should only play a part if the conduct hasadversely affected the financial well being of the couple or it is such that itwould be inequitable to ignore. The court's approach to the issue of conductin apportioning the matrimonial property should be modelled on the dictum ofOrmrod J in the English case of Wachtel v. Wachtel.91 He said: "The court can only approach this issue in a broad way. It shouldbear in mind the new basis of divorce which recognises that,generally speaking, the causes of breakdown are complex and rarelyto be found wholly or mainly on one side, and that the forensicprocess is not well-adapted to fine assessments or evaluations ofbehaviour, and that it is not only conduct in relation to thebreakdown which may affect the discretion of the court in manyways, e.g. the appearance of signs of financial recklessness in thehusband or of some form of socially unacceptable behaviour by thewife which would suggest to a reasonable person that in justicesome modification to the order ought to be made. In my experience,however, conduct in these cases usually proves to be marginal issuewhich exerts little effect on the ultimate result unless it is bothobvious and gross." 92 Thus, for conduct to be a significant factor, it must be one of exceptional gravity, for example, the profligacy of a spouse which has broughtdebts to the spouses. 4.1.3 Welfare of Children (if any)
Thirdly, the welfare of children of the marriage, if any, must be taken intoaccount in adjusting the matrimonial property. Thus, where there are minorchildren of the marriage, the spouse who is granted custody should generallybe favoured.93 However, it must be remarked here that if this guideline is notapplied equitably, it could be detrimental to the wife's right to share in thematrimonial property. This is because in custody cases there is a generaltendency on the part of the courts to recognise the father's right as superior tothat of the mother.94 This is despite the fact that the courts are enjoined to make [1973] 1 All E.R. 113 at p. 119.
See further elucidation of this dictum by Denning M.R. when the case went on appeal in Wachtel v.
Wachtel op. cit. pp. 835-836. A similar view of conduct is taken by the South African courts under s. 7 ofthe Divorce Act 70 of 1979 - see for example, Beaumont v. Beaumont op. cit. at pp. 994-995 per BothaJ.A.
See for example, Molomo v. Molomo op. cit. where although the couple was given joint custody of theminor children, the wife was awarded the matrimonial home because the children were residing with her.
This is a common law principle reiterated, for example, in the South African case of Calitz v. Calitz 1939A.D. 56 at p. 61-63 per Tindall J.A. See also M. Sornarajah "Parental custody: The recent trends" (1973) 66 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
the best interest of the child the paramount consideration in determining issuesrelating to children.95 This tendency of the courts to recognise the father's rightis a hangover from the customary law, which confers that superiority on thehusband by virtue of his, having paid "bogadi"96 for the wife. One of theconsequences of such payment is to transfer the reproductive power of thewoman from her own family to that of her husband's.97 It is submitted that theproper application of the ‘best interest' principle will enable the court to dealequitably with both spouses depending on the peculiar circumstances of thecase.
4.1.4 Clean break principle
Fourthly, the court must strive to adhere to the "clean break" principle in termsof which the financial relationship between the spouses is severed as fully aspossible if the circumstances permit. Currently, there is no expressed statutoryprovision enjoining the court to attempt to sever the financial relationshipbetween the spouses as soon as possible after divorce. Rather, the existingstatutory provisions rely heavily on permanent/long-term maintenance for aspouse and this would have to be jettisoned in favour of a provision that willenable the court where possible to sever the financial relationship between thespouses on divorce. Although it has been suggested above that the law shouldmove away from the present "support approach" to post-divorce financialarrangement and that the court should strive for a clean break of the financialobligations between the spouses, there may be situations where a spouse maystill need the financial support of an ex-spouse. Therefore in exercising itsdiscretion to redistribute matrimonial property, the court must make aconscious effort to relate the discretion to the award of maintenance for aspouse.98 Thus, if in the view of the court some form of maintenance is to begiven to a spouse, then this should be taken into account in determining thenature and extent of the redistribution of the matrimonial property under theproposed dispensation. A limited order for maintenance may be necessary inorder to help a spouse who was formerly dependent to become self-sufficient 9 South African Law Journal 13. It must be noted that the above common law principle no longer appliesin South Africa. The current primary guideline used by the court in deciding which parent should beawarded custody is what is in the child's best interest. See s. 28(2) of the 1996 Constitution and McCallv. McCall 1994 (3) S.A. 201 (C) at p. 205.
See Rectification of Laws (No. 5) Order, 2000 (17 November 2000) S.I. No. 74 of 2000 and ss. 5 & 6Children's Act 2009. Dicta in cases such as Peter v. Peter [1975] 2 B.L.R. 18, Ex parte Veen [1978]B.L.R. 43, Verona v. Verona [1983] B.L.R. 9, Mazile v. Mazile [2001] 1 BLR 175 and Motlogelwa vKhan [2006] BLR 147 emphasis the best interest of the child.
This is cattle delivered by a man's family to a woman's family after agreement to marry. For furtherdetails of the significance of bogadi in a customary marriage, see I. Schapera A Handbook of Tswana Lawand Custom, op. cit. at p. 138, S. Roberts Tswana Family Law op. cit. p. 34, and D.D.N. Nsereko "Thenature and function of marriage gifts in customary African marriage" (1975) 23 American Journal ofComparative Law 682. See Schapera op. cit. at p. 139.
See Determining Matrimonial Property Rights on Divorce…at pp. 115-116.
MATRIMONIAL PROPERTY RIGHTS IN BOTSWANA 67
while making the transition from being married to being single. It must be ofsuch duration as to facilitate the transition instead of the present situation whereit could be for the joint lives of the spouses.99 Alternatively, where this ispossible, such limited maintenance can be computed into a lump sum payableforthwith in order to lessen the post-divorce dependency of the recipient spouseon the paying spouse. In dealing with all these circumstances, particular regardmust be paid to the payer's earning capacity, future financial obligations andthe payee's ability to earn an income to support himself or herself.
4.1.5 Any other relevant factor
Fifthly, the court should also be empowered to take into account any otherrelevant factor, which the justice of the case may warrant. This may beapposite, for example, in the exercise of discretion not to allow an equaldivision of the joint estate in marriages in community of property because, forexample, of the short duration of the marriage.
The overall picture painted above is that the existing law for determiningmatrimonial property rights on divorce need to be appraised. The law lacksflexibility in its application. The available discretion is circumscribed by arestricted interpretation and is concerned with ownership rather than need. It istherefore submitted that a statutory discretion circumscribed by definitivestatutory guidelines be introduced to remedy the current shortcoming.
Botswana as a nation has undergone significant socio-economic changes inrecent years which have brought pressures to bear on marriages culminating inincreased marital breakdowns. The law should be responsive to these changesby adapting itself to deal with the problems entailed in them. To adapt thewords of the English Law Commission, when a marriage breaks down, itsempty legal shell should be destroyed with the maximum fairness, and theminimum bitterness, distress and humiliation.100 The existing law falls short ofachieving this. The proposals put forward in this article may serve as a springboard for a rethink of the proprietary rights of spouses in a post-divorcesituation with a view to stream lining them to accord with contemporaryrealities in order to achieve the goal of a compassionate, just and caring nationas envisaged in the national vision 2016.101 See s. 25 (2) (b) Matrimonial Causes Act 1973 as amended.
100 See Reform of the Grounds of Divorce – The Field of Choice, Law Com No. 6, 1966) para. 15.
101 See Long Term Vision For Botswana, Gaborone, 1997 at pp. 49-54.
Is judicial ideology a useful criterion for evaluating
judiciaries in developing states? A reply to Asare
In a thought-provoking article in this journal in 2006, S K Asare critiqued theperformance of Ghana's judiciary with respect to three criteria: efficiency,independence, and what he termed "jurisprudential orientation". This articleanalyses, briefly, the usefulness of Asare's third criterion in assessing theperformance of constitutional courts in developing states. It explores thenature of rights, and argues that a ‘narrow' reading of some rights is notnecessarily a ‘deficient' one; particularly when the comparison is being madewith courts in jurisdictions far different from that which is being assessed.
Secondly, it argues that, even if a ‘narrow' interpretation of rights is not ideal,such a course might be sensible in developing states in light of historical andsocial conditions, and the need to build respect for government institutions.
Next, it analyses the practical implications of Asare's argument – such asselecting judges on ideological grounds – and argues that they might becounterproductive. Finally, it explores other factors that are relevant to thestrengthening of constitutional rights in developing states. Constitutions that entrench judiciable human rights are diffuse in thedeveloping world. The judiciaries which interpret them should be evaluated;but by what criteria? Asare, a prominent Ghanaian legal scholar, mounts theseductive argument that judicial ideology ought to be a factor in any suchassessment: that a judiciary populated by judges committed to broad, creativeand liberal interpretations of rights is inherently better than one in which judgesemploy a "narrow mechanistic approach".1 I will argue against Asare'sposition that "jurisprudential orientation" should be used to evaluate judicialperformance in developing countries and will use, as he does, Ghana as a casestudy.2 Ghana is emblematic of the political development of post-colonial BA, LLB (Hons) (Qld). S.K. Asare, "Accounting for Judiciary Performance in an Emerging Democracy – Lessons From Ghana",4 U Botswana LJ (2006), p 57 at p 57.
Asare equates a judge's ‘ideology' with their philosophical views on the breadth and relative importanceof certain human rights. It is in that sense that the term will be used in this article. I note that judicialideology can be seen in a broader sense, to encompass, for example, a judge's philosophical view as totheir role as a judge. There is an important debate as to which aspects of a judge's ideology in this broadersense should properly be used to assess them. I do not engage in this wider debate in this article, exceptwhere it is incidental to my argument.
70 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
Africa: it was the first colony to gain independence, in 1957; suffered an"alternating cycle of (long) military and (short) democratic rule"3characterised by systematic violations of human rights; and has, since 1992,seen a peaceable transition to civilian government.4 The 1992 Constitutionentrenches a comprehensive series of "Fundamental Human Rights andFreedoms",5 and gives the judiciary power to enforce those rights andinterpret the Constitution.6 It is the exercise of those powers that this paperexamines.
Asare argues that the Supreme Court of Ghana's "narrow mechanistic approach when interpreting the Constitution … undermin[es] theubundant rights it guarantees."7 This is, at first glance, an appealing argumentbecause, instinctively, human rights should be interpreted broadly. However,it is not self-evidently true. Asare's position is weakened by the bias in hisselection and analysis of the judgments he uses as examples, which is clearestwhen he criticises the Court for decisions in which he himself was theplaintiff.8 Indeed, the Supreme Court of Ghana arguably does interpret theConstitution liberally.9 It is beyond the scope of this article to undertake adetailed analysis of the jurisprudence of this court. I will assume, for thepurpose of examining Asare's argument, that it is relatively conservative.
Even if it does adopt a ‘mechanistic' approach, it does not follow that rightsare "shred[ed]".10 Rights set minimum standards11 and often conflict with other rights and with the interests of society. It is for the courts to decide the balance H Kwasi Prempeh, "Marbury in Africa: Judicial Review and the Challenge of Constitutionalism inContemporary Africa", 80 Tul L Rev (2005-2006), p 1239 at p 1243.
For more detailed discussion of Ghana's interesting and chequered political history, see: B J Brown,"Ghana's New Constitution", 2 U Malaya L Rev (1960), p 62; Jenny Goldschmidt, "Ghana Between theSecond and Third Republican Era: Recent Constitutional Developments and their Relation to TraditionalLaws and Institutions", 18 Afr L Stud (1980), p 43; Samuel O Gyandoh, Jr, "Interaction of the Judicial andLegislative Processes in Ghana Since Independence", 56 Temp LQ (1983), p 351; Egon Schwelb, "TheRepublican Constitution of Ghana", 9 Am J Comp L (1960), p 634; U U Uche, "Changes in Ghana LawSince the Military Take-Over", 10 J Afr L (1966), p 106.
Constitution, Chapter 5. See also Chapter 12, which codifies the freedom and independence of the media. Articles 33, 130.
Asare, above n 1, p 57. Other commentators agree that courts in developing countries ought to interpretrights broadly and liberally: see Aharon Barak, "Foreword: A Judge on Judging: The Role of a SupremeCourt in a Democracy", 116 Harv L Rev (2002), p 16 at p 63; Prempeh, above n 2, pp 1310-1319; P NBhagwati, "The Role of the Judiciary in the Democratic Process: Balancing Activism and JudicialRestraint", 18 Commw L Bull (1992), p 1262 at p 1263; Nsongurua Udombana, "Interpreting RightsGlobally: Courts and Constitutional Rights in Emerging Democracies", 5 Afr Hum Rts LJ (2005), p 47 atpp 56-57.
See Asare, above n 1, pp 81-83, 88-96, analysing Asare v Attorney-General, unreported, 3/2002, 28January 2004 and Asare v Attorney-General & Ors, unreported, AP 21/2006. See also Asare, above n 1,footnote 89, denouncing the presidency of Jerry Rawlings from 1992-2000 as "illegitimate", withoutproviding any justification for that claim. For a discussion of the problems of selection bias in analyses ofjudicial decision-making, see Lee Epstein et al, "The Supreme Court During Crisis: How War AffectsOnly Non-War Cases", 80 NYU L Rev (2005), p 1 at pp 37-38.
T. Modibo Ocran, "Nation Building in Africa and the Role of the Judiciary", 28 N Ill U L Rev (2007-2008), p 169 at p 177 (note that Justice Ocran was a member of the Supreme Court of Ghana: his opinionon that Court's approach ought to carry some weight); Omaboe v Attorney General [2005-2006] SCGLR579.
Asare, above n 1, p 76.
See Epstein et al, above n 7, p 95, citing Justice Scalia of the Supreme Court of the United States.
A REPLY TO ASARE 71
between them.12 Importantly, though the minimum standards are almostuniversally accepted, the balance between them must be struck in the social,historical, political and cultural context:13 international norms must be craftedinto local solutions. Asare devotes much analysis to the Supreme Court of Ghana's decisions impacting on freedom of speech. The thrust of the analysis is thatthe Court interprets the right more narrowly than the American and Englishjudiciaries and that, therefore, the right is undermined.14 But, as a generalprinciple, this is an unfair criticism: peculiarities in political culture have ledeven judiciaries in mature democracies to differ on the proper balance in thisarea.15 One example Asare uses is Republic v Mensa Bonsu.16 In that case, anewspaper article denounced a Supreme Court judge as a ‘liar', for mis-attributing a quote in an important judgment. The author and the newspaperwere convicted of contempt of court. The case may have been decideddifferently in other jurisdictions;17 but in a country where building respect fora judiciary that has historically been mistrusted and abused18 is vitally There is a convincing argument that courts are not the appropriate forum to decide these normativequestions at all: P A Keane, "In Celebration of the Constitution" (Speech delivered to the NationalArchives Commission of Australia, Supreme Court of Queensland, Brisbane, 12 June 2008) available at 2-9; Jeremy Waldron, "A Right- e e forum to decide t r, where the Constit h charges s at all: the judi P A Keane, "In C ciary with that taselebrat o note that t our int" of th ailable bana, dron, "A Ri above n 6, p ght 6. ed Critique of Constitutional Rights", 13 OJLS (1993). However, where the Constitution specifically , Internatie argum rispru interesting to dence?", 24 Mi no ch J te that th cal sub-Saharan A on", 4 Cambridge Student L Rev (2008), p 40 at p 41; D M Davis, "Constitutional Borrowing: The e Reconstitutirative C l J CMich 5; Grant Huscroft, ove ti 9-30, 42-43, 96, 111, 118-11 tutional and Cult ural Underpinning of ritical Approach t Expression: Less o th land LJ L Rev 18 40 at Constituti of Legal C li ure and Local Hist sm and Transnat ory in the ", 2 Int' mparativ l J Const e Influence: The So L (2004), p 91 at uth 2-3; l J Co tution 5; Grant Hus the Au tural Underpin stralian and th nings of ed Statesom of Expressi ce", 16 Lessons f our U Queensl i, "Promotin and LJ ersal Huma 1 as of Integrati icki Constitutional Federal Yale Hum Rts & De ism v LJ ( and 001), p snational Carlos R In o t'l J Co sencrant nst L ritative Us Sir An ign Law", n, "The 75-277 ederation: ghter, "Jud he Au Va J Int' es 0), p ", 16 1103 FL Rev ; Udom 1 at p ularly ting Universal Hum so where the cons a ons thating Develop are "reas ing Count onable ne ries", 4 "justifi m Rts & Dev LJ in the 25 an Borrowings and on.thoritative Uses of Foreign Law", 1 Int'l J Const L (2003), p 269 at pp 275-277; Anne-Marie 73-81 i.zation", 40 Va J Int'l L (2000), p 1103 at p 1111; Udombana, above n 6, 67.
th tified" or "requ fference for exam is the politi ple, a abov itution.
e n 12, pp 183, 191-197. R 1 pp 73-81.
30. See Asare, above n 1, pp 78-79.
See Asare, ab ple, the p 79. ting contrast between American and Canadian jurisprudence in this area, and See, in pa ent that a ce rticular, Repntra rt of th son for t ission ture of the tw , Ghana [4.7.1 o countries: t in 1982, in 1, pp 78-79.
which three High Court judges were abducted and killed, widely ers of the military government.
72 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
important, and where the press is vibrant and free,19 the decision is notabhorrently wrong. The European Court of Justice's margin of appreciation doctrine is a further recognition that the balance between competing rights and interestscan legitimately be determined differently by different states.20 It is theCourt's task to determine the appropriate balance between norms, and byunilaterally deciding on the appropriate balance, Asare has supplanted thatrole: the Court should not be condemned simply because Asare would havestruck the balance differently. Asare's argument, that the Ghanaian Court'sjurisprudence is narrow and therefore inherently deficient, is unconvincing.
Even if a narrow interpretation of rights is not ideal, in Ghana and other developing countries it is arguably sensible.21 Barak argues that human rights can only be protected in strong, safe, and stable democracies;22 it is arguably acceptable to tip the balance of rightsand interests in favour of the State in circumstances where its survival isthreatened. Wartime (or ‘crisis') jurisprudence in developed countriesdemonstrates this.23 Ghana is not at war; but it has a long history of militarycoups, and its current democratic iteration is young. Arguably the ‘fear for thesurvival of the polity'24 is at least as ‘heightened' in Ghana as it has been instable democracies in times of war – if not more so, given that democraticpolities have not survived there in the past. Even if the restriction on rightsevident in crisis jurisprudence is normatively unacceptable, it occurs in eventhe most liberal democracies.25 It is difficult to brand the Ghanaian judiciary afailure if it adopts a similar approach: to hold the Ghanaian Court to aWestern, peacetime standard is to set the bar unfairly high.
The legitimacy and stability of the institutions of government are See, in particular, Report of the National Reconciliation Commission, Ghana [4.7.1.10]-[4.7.1.11] chdetails an infamous event in 1982, in which three High Court judges were abducted and killed, widelythought to be on the orders of the military government.
US State Department, "Country Reports on Human Rights Practices; Freedom House, "Ghana" (2 Gerda Kleijkamp, "Comparing the Application and Interpretation of the United States Constitution andthe European Convention on Human Rights", 12 Transnat'l L & Contemp Probs (2002), p 307 at p 323. Note that this argument does not seek to condone extreme or clearly unacceptable intrusions into humanrights: minimum standards should still apply. For example, the vilified examples of Re Akoto [1961] 2GLR 523, in which the Ghanaian Supreme Court upheld a law permitting lengthy arbitrary detention, andNkumbula v Attorney-General [1972] ZLR 204, where the Zambian Court of Appeal upheld provisionsoutlawing all opposition political parties, clearly go beyond "narrow" interpretations of rights. Theywould probably be recognised universally as unacceptable restrictions on rights. As Monshipouri notes,there is a distinction between altering the balance between rights and interests, and abandoning somerights altogether: above n 12, p 26. The idea of a "zone of reasonableness" also recognises this: Barak,above n 6, p 145-146.
Barak, above n 6, p 155.
Oren Gross, "Chaos and Rules: Should Responses to Violent Crises Always be Consitutional?", 112 YaleLJ (2003), p 1011 at p 1134.
Vicki Jackson, "Proconstitutional Behaviour, Political Actors, and Independent Courts: A Comment onGeoffrey Stone"s Paper", 2 Int'l J Const L (2004), p 368 at pp 373-375.
Epstein et al, above n 7, pp 9-10, 109; Jackson, above n 23, pp 373-375; Geoffrey Stone, "Free Speech inWorld War II: ‘When are You Going to Indict the Seditionists?'", 2 Int'l J Const L (2004), p 334. A REPLY TO ASARE 73
vitally important to developing countries, and must be developedincrementally.26 This is particularly true in states such as Ghana where,historically, the judiciary has suffered from a lack of legitimacy.27 Thejudiciary must balance the need for change with the need for stability – if it isthe revolutionary ‘flag bearer' for rights too often, striking down legislation orotherwise actively advancing a broadly liberal interpretation of rights, it risksits legitimacy.28 In new democracies, where Parliamentary and Executivepowers have been historically twisted or misused, the legitimacy of thesebranches of government (particularly in the eyes of the public) is alsoimportant. When legislation or executive action is struck down as contrary toconstitutional rights, the legitimacy of those branches is undermined. As longas legislation and executive conduct fall within the ‘zone of reasonableness'29there is a strong argument that, to protect the legitimacy of each branch, thejudiciary should defer to the other institutions.
There are other reasons, both normative and practical, why the judiciary ought to defer to the other branches on questions of the properbalance between rights. The other branches are elected: they have a directmandate from the populous to set broad policy objectives. The judiciary doesnot.30 Nor does it have any special claim to wisdom in establishing the boundsbetween competing "broad aspirational statements" such as those in theConstitution.31 The courts are also bound by precedent. If the socially andpolitically acceptable balance between rights and interests changes, thelegislature is the legitimate body to enact that change. This is reflected in anexample Asare himself uses to lambast the judiciary: the GhanaianParliament, "[r]eflecting the people's aspirations", repealed the laws inrelation to criminal and seditious libel in 2001.32 This point is recognised evenby commentators that advocate liberal judicial activism.33 Further, courtsresolve specific disputes, as they arise. Their opportunity to make policychanges is therefore sporadic and limited; judge-driven reform is necessarily Barak, above n 6, pp 29-30; Monshipouri, above n 12, pp 34, 39.
Prempeh, above n 2, pp 1258, 1260-63, 1269, 1300-1302.
Barak, above n 6, p 88.
See Barak, above n 6, pp 145-146, and note 20 above. As Barak (above n 6, p 102) notes, deferenceshould not condone illegality. See also Prempeh, above n 2, p 1256.
Barak, above n 6, pp 136-138, 148; David Barron, "Constitutionalism in the Shadow of Doctrine: ThePresident's Non-Enforcement Power", 63 Law & Contemp Probs (2000), p 61 at p 90; Epstein et al,above n 7, p 111; Huscroft, above n 12, pp 181-182; Keane, above n 11, p 3; Mason, above n 12, pp 4, 12;Richard Posner, "In Defence of Looseness: The Supreme Court and Gun Control", The New Republic 27August 2008; Rosencrantz, above n 12, pp 283-285.
Keane, above n 11, pp 7-8. Cf Barak's argument (above n 6) that judges are better placed to determine the"objective values of society." It is a confusing argument, which both accepts that judges' subjectivevalues colour their decisions (at pp 57-58, 60) and argues that, effectively, they do not (at pp 56, 59, 85-88). Barak also posits that the objective values of a society may not be held by a majority of its members(at p 52). If judges simply discover the objective fundamental values of society, without applying theirown, it is theoretically difficult to understand why judgments are not unanimous within each jurisdiction.
Asare, above n 1, p 79. See also Prempeh, above n 2, p 1289, who notes that the incoming governmenthad campaigned in part on its promise to repeal those laws, clearly demonstrating the chain of legitimacyadhering to Parliamentary acts.
Eg Barak, above n 6, pp 136-138.
74 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
piecemeal. The judiciary's powers are also far more restricted in scope andflexibility than other branches'.34 A narrow and restrained constitutional jurisprudence is therefore arguably a sensible approach for courts in developing states to adopt, in lightof prevailing and historical factors.
Even if Asare's argument is accepted, and Ghana's judiciary (and that of other developing states) would be ‘better' if it interpreted theConstitution more expansively, some of his consequential recommendationsfor improvement would be counter-productive. In particular, he argues thatParliament should interrogate judicial nominees "on their jurisprudentialleanings"35 before confirming them: "merit must be demonstrated byjurisprudential credentials".36 This is a necessary corollary of his argumentthat a judge who interprets constitutional rights broadly and liberally is‘better' than one who does not. But it is troubling for a number of reasons. First, such a plan would be an attempt by the legislature to pre- determine judicial decisions. Selecting judges based on their ideologicalleanings would be a naked attempt to guide the court's decision-making in away that will be acceptable to the other branches of government, therebyrobbing the judiciary of its role. It might seem that, as discussed above in adifferent context, the Parliament would have a mandate to do exactly that; butthere is a difference between determining policy (which is a legitimateexercise of parliamentary power) and attempting to pre-determine judicialdecisions (which is not). Secondly, politicising the selection process in thisway arguably undermines the legitimacy and objectivity of the judiciary.
Independence in the eyes of the public is a key factor in the courts' legitimacy,and it would clearly be undercut if the political branches openly chose judgeson the basis that their jurisprudential views were ‘acceptable'.37 Thirdly,Asare recommends the process because it makes "judges know that they mayone day be called upon to explain their decisions".38 That has the clearpotential to impact on a judge's objectivity, particularly in cases involving thegovernment (as most constitutional cases do), and may lead to judgesupholding legislation or executive action in situations where Asare wouldhave them struck down. Asare's suggestion ought not to be encouraged.
Even if a judiciary which interprets constitutional rights broadly is integral to the development of an emerging democracy, there are moreimportant factors in strengthening its foundation. This is important torecognise, because until this point, my argument might be seen as condoning Barak, above n 6, pp 32-33.
Asare, above n 1, p 107.
Asare, above n 1, p 110.
Barak, above n 6, p 160; Keane, above n 11, p 4; Jeremy Sarkin, "Examining the Competing Processes inBurma/Myanmar from a Comparative and International Democratic and Human Rights Perspective", 2Asia-Pac J on Hum Rts & Law (2001), p 42 at p 56.
Asare, above n 1, p 107.
A REPLY TO ASARE 75
(or even approving of) the decisions in Re Akoto39 or Nkumbula v A-G,40 bysaying that courts should not be actively liberal and should defer to thepolitical branches. The most important factor is what Jackson describes as‘pro-constitutional behaviour'41 on the part of non-judicial actors: behaviourwhich respects constitutional rights and structures, and facilitates theirimplementation. Pro-constitutional behaviour by the other branches of government is most important. It is their conduct that decides what cases come before thecourts, what arguments are presented, and where the "reasonable centre"lies.42 Importantly, these actors have the power to thwart the judiciary.
Legislating to overcome the effect of a judgment is not necessarily inimical tothe rule of law;43 but if a government were committed to violatingconstitutionally entrenched rights, a court could not stop it. At its highestlevel, this is because the political branches control the military.44 If aconstitution were merely "semantic" in this way,45 broad interpretations of therights it entrenches would be equally ineffective.
Other actors are also important. Civil society and the media perform important oversight and educational functions. If potential violations ofconstitutional rights are not brought to light, or are not recognised as such, nocourt will have the opportunity to examine them. The pro-constitutionalbehaviour of the general population is central: Liberty lies in the hearts of men and women; when it dies there noconstitution, no law, no court can save it; no constitution, no law, nocourt can even do much to help it. While it lies there it needs noconstitution, no law, no court to save it.46 In Ghana, since 1992 (or at least since 2000), each of the non-judicial actors I have discussed has been broadly committed to pro-constitutional [1961] 2 GLR 523. See note 20 above.
[1972] ZLR 204. See note 20 above.
Jackson, above n 23, pp 376-379. See the similar concepts of constitutional liberalism (Monshipouri,above n 12, p 48), a culture of constitutionalism (Prempeh, above n 2, pp 1277-1280) and the restraint ofthe majority (Ocran, above n 8, p 174-175). See also Basnet, above n 12, p 44; Keane, above n 11, p 2-3;John Sangwa, "Constitution-Making and Experience with Constitutional Rule in Zambia Since 1990", 10Transnat'l L & Contemp Probs (2000), p 483 at p 514.
Jackson, above n 23, pp 376-379.
Barak, above n 6, pp 132-135.
See, for example, John Ademola Yakubu, "Trends in Constitution-Making in Nigeria", 10 Transnat'l L &Contemp Probs (2000), p 423 at pp 444-446, discussing the constitutional history of Nigeria. He providesthe revealing example of Lakanmi v Attorney-General of the Western State [1971] 1 UILR 201 and itsaftermath. In that case, the Supreme Court held that Executive Decrees passed by the military governmentwere subject to the constitution, and could not oust the jurisdiction of the courts. Following the decision,the military government passed another Decree enabling it to ignore the judgment. A Chen, "Hong Kong's ‘Basic Law' from the Perspective of Comparative Constitutions" [1989] NZLJ, p383 at p 384.
Judge Learned Hand, The Spirit of Liberty, New York, Alfred A Knopf, 1974 (3rd ed), pp 189-190. Seealso Keane, above n 11, pp 2-3.
76 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
behaviour.47 This has attracted increasing international recognition.48 If non-judicial actors behave pro-constitutionally, judicial orientation becomes almost unimportant, even in light of Asare's arguments, asfundamental rights are safeguarded. If those actors do not behave so, judicialorientation is irrelevant, as the judiciary's power to prevent or remedyviolations of rights is hobbled.
Asare's argument that a judiciary should be judged according to how broadly it interprets constitutional rights is attractive but flawed. A ‘narrow'interpretation of rights is not inherently destructive of those rights: indeed,courts should be free to determine the proper balance between competinginterests in context, rather than be evaluated on how closely they match the‘correct' balance as decided by other countries or academics. Further, even ifa narrow interpretation of rights is not ideal, it is arguably sensible inemerging democracies where the survival of the polity is not assured, and thestability and legitimacy of the three branches of government are notentrenched. The evaluative model presented by Asare has the potential topoliticise the appointment of judges and undermine their independence. Thebehaviour of other actors in the system makes judges' ideological positionalmost irrelevant in the safeguarding of fundamental rights. Ghana's judiciaryhas a number of flaws,49 but the ideology of its judges is not one of them.
I acknowledge that this is a sweeping generalisation; it is unfortunately beyond the scope of this article toundertake an extensive review of pro-constitutional behaviour in Ghana, and this point should be readwith this caveat in mind. It is, however, important to note that there is a significant difference betweencriticising the judiciary – for example, in the present Attorney-General's widely publicised remarks, madebefore she took office, as to ‘kangaroo courts' – and undermining the framework of the constitution.
See, for example, US State Department, above n 18, and its predecessor reports; the Draft Report of theHuman Rights Council on its Eighth Session (2 President Barack Obama's speech to the GhanaianParliament (Accra, 11 July 2009) available In particular, Asare's arguments on the efficiency and independence of Ghana's judiciary are well made:see Asare, above n 1, pp 62-68, 100-105. RECENT LEGAL DEVELOPMENTS
JUDGEMENTS
Gomolemo Motswaledi v. The Botswana Democratic Party , Seretse KhamaIan Khama, President of Botswana Democratic Party N.O and Chairman,Gaborone Central Branch Committee, Botswana Democratic Party N.O.1 Gomolemo Motswaledi, a long standing member of the Botswana DemocraticParty (BDP), the ruling party in Botswana, also served as its Secretary General.
On 17 August 2009, Motswaledi was suspended for 60 days from membershipof the BDP by the President of the Party Seretse Khama Ian Khama, who is alsoPresident of the Republic of Botswana and therefore Head of State. Thesuspension was interim in nature pending disciplinary proceedings for allegedmisconduct. The domino effect of the suspension was the removal ofMotswaledi as parliamentary candidate for Gaborone Central constituency. Asa result of the suspension, he was precluded from standing as a parliamentarycandidate in the general elections which were to be held on 16 October 2009. In a bid to forestall the looming catastrophe, Motswaledi filed an urgent application at the High Court against the BDP, cited as the FirstRespondent; Seretse Khama Ian Khama in his representative capacity asPresident of the BDP, cited as Second Respondent; and the Chairman of theGaborone Central Branch Committee of the BPD in his representativecapacity, cited as the Third Respondent. Motswaledi sought the followingrelief from the High Court: firstly, that the decision of the Second Respondentto suspend him be set aside; secondly, that the Respondents be interdictedfrom taking any decision to give effect to the decision of the SecondRespondent of 17 August 2009 suspending the Applicant; thirdly that theRespondents be interdicted from taking any steps to organise and hold aprimary election for a parliamentary candidate in the Gaborone Centralconstituency; fourthly, that the Respondents be interdicted from taking anysteps to approve any candidate for the Gaborone Central constituency other LL.B (Botswana); LL.M (Cantab); A.Arb; Lecturer, Department of Law, University of Botswana;Attorney, Botswana.
78 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
than the Applicant; and lastly, that the costs of the application be borne by theRespondents jointly and severally. In suspending Motswaledi, the Second Respondent averred that he had acted in accordance with his powers under paragraph 34 of the BDPConstitution which provides as follows "34.1.5 The President of the party shall have the power inexceptional circumstances, as specified in the Disciplinary Rules ofthe Party, to suspend any member if the Party for up to sixty (60)days on grounds of such members behaviour pending action by theDisciplinary Committee." Motswaledi argued that the Second Respondent's use of the paragraph 34 powers was unlawful, mala fides and not for the benefit of theParty. He averred that the precondition of existence of exceptionalcircumstances had not been met. The Second Respondent denied the misuseof paragraph 34 powers. He maintained that Motswaledi had been suspendedfor being divisive and that Party unity and discipline were essential in the preelection period. Before the High Court could delve into the merits of the case, it was seized with preliminary arguments from the parties to the dispute. In the firstpreliminary point, the Second Respondent contended that being the currentPresident of the Republic, he had immunity by virtue of section 41 (1) of theConstitution of Botswana2 against prosecution in criminal matters andimmunity against the hearing of civil suits against him. Two other preliminarypoints were raised, one by the Second Respondent3 and another by theApplicant4. However finality in this matter ultimately lay in resolution of thequestion of the Second Respondents immunity. The Court's decision on thispoint would turn out to be dispositive of the case. For this reason, the othertwo preliminary points were not traversed in detail by the Court neither shall Ibelabour them here.
The Court noted that the rationale behind presidential immunity is that "the presidency is the embodiment of the state and its values and majesty.
The immunity therefore serves to protect the dignity of the office of the Cap 01:01 The Laws of Botswana Section 41. Protection of President in respect of legal proceedings (1)Whilst any person holds or performs the functions of the office of President no criminal proceedings shallbe instituted or continued against him or her in respect of anything done or omitted to be done by him orher either in his or her official capacity or in his or her private capacity and no civil proceedings shall beinstituted or continued in respect of which relief is claimed against him or her in respect of anything doneor omitted to be done in his or her private capacity. The Second Respondent argued that the suspension of the Applicant was not an administrative act underpublic law and was therefore not reviewable by the High Court. The party was a private organisation overwhose actions the High Court had no power of review. The applicant argued that the Second Respondent had no authority to represent the First Respondentwhich had not passed a resolution clothing the Second respondent with a mandate to represent it. RECENT LEGAL DEVELOPMENTS – BOTSWANA 79
President, and to a lesser extent to allow the President full time on the affairsof state without the distraction necessitated by such suits. In that respect theimmunity is in the interest of the state and the public, but not necessarily in theinterests of the individual president".5 In interpreting section 41 of theConstitution the Court was mindful to have regard to its importance as aconstitutional provision and its purpose which is the protection of the dignityof the Head of State, the embodiment and symbol of the State. The Court identified the issue for determination to be the "meaning and extent" 6 of the immunity granted by section 41 of the constitution and inparticular whether in private matters the presidential immunity is total orpartial in a situation where the President has "engaged in a voluntaryorganisation and there does things which others deem to be injurious ofthem".7 The Court considered if such actions by an incumbent President werereviewable in Court. The Court accepted that the Applicant stood to suffer irreparable harm if his suspension was upheld.8 The Applicant contented was that theConstitution could not have intended to grant the President such extensiveimmunity that would allow such harm to occur to ordinary citizens. TheRespondents argued that immunities were by their nature granted at theexpense of the aggrieved party. The Courts duty, they maintained, was toattach to section 41 its natural meaning, without having regard to likely harm. In arriving at its decision the Court recalled that its duty was not to legislate but to interpret the law.9 Further, that section 41 must be read as awhole with regard being had to the mischief it is meant to protect against. TheCourt also noted that the words of section 41 must be afforded their ordinary,natural and literal meaning.10 Interpreting section 41 within the bounds ofthese rules, the Court held that section 41 conferred upon the Presidentabsolute immunity from criminal proceedings for acts or omissions in hisofficial and private capacity. Further, the Court held that the President hadimmunity from civil proceedings in respect of acts or omissions in his privatecapacity. This immunity from civil proceedings, the court noted, is partial and See par. 15 of cyclostyled judgement.
See par. 20 of cyclostyled judgement.
See par. 20 of cyclostyled judgement.
Motswaledi stood to lose his candidature in the Gaborone Central Constituency which he had won theright to contest in party primary elections (termed bulela ditswe) two years prior dealing a heavy blow tohis political ambitions. "A judge has authority to interpret but not to legislate, and he cannot do violence to the language of thelawgiver by placing upon it a meaning which is not reasonably capable, in order to give effect to what hemay think to be the policy or objective of the particular measure." Dadoo Ltd and Ors v. KrugersdorpMunicipal Council 1929 AD 530 at 543; Seluka v. Susken and Sulkow 1912 (1) TPD 258 "It is a very useful rule, in the construction of statute, to adhere to the ordinary meaning of the wordsused, and to the grammatical construction, unless that it is at variance with the intention of the legislature,to be collected from statute itself or leads to any manifest absurdity or repugnance in which case thelanguage may be varied or modified, so as to avoid such inconvenience, but no further." Molefe v. TheAttorney General and Ano BLR 301 at 306 80 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
does not extend to acts and omissions done in his official capacity.11 In conclusion the Court noted that the immunity lasted for the period of the presidency only. Whilst recognising that some litigants would sufferharm from having to await the president's retirement in order to sue him, theCourt firmly stated that this was the intended result of section 41. It noted thatany variation of the words of section 41 by the Court, in order to escape thatresult, would amount to legislation by the Court and a distortion of theenactment. The Application to set aside Motswaledi's suspension from theBDP by the Second Respondent was dismissed with costs. Aggrieved by this decision, Motswaledi filed an appeal at the Court of Appeal claiming similar relief as that which he claimed at the High Court,which that his suspension from the BDP by the Second respondent be setaside. Motswaledi argued that the Court a quo had taken a simplistic view ofthe matter. He also urged the Court of Appeal to give a purposiveinterpretation to subsection 41(1) so as to align it with the democratic spirit ofthe rest of the Constitution. Motswaledi also invited the Court to admit of athird category of capacities in which a President could act. In addition to apublic and private capacity, he suggested an intermediate third capacity wherethe President acted in a representative capacity, for instance as Chairman ofhis local tennis club if President if his political party. If such a capacity wererecognised, he argued, the Second respondent would not enjoy immunity fromcivil suit from private acts or omissions in his representative capacity. Finally,Motswaledi submitted that the Court should consider the constitutions of othercountries in order to determine if section 41 was too favourable to thePresident.
The Court dismissed this argument stating that it could only apply a purposive interpretation to an enactment where there was some ambiguity.
Further the Court held that the immunity clause was justified on the basis thatthe public interest should in this instance bow to another good, "that the headof state be not impeded in his duties in the service of democracy".12 The Courtruled that there was no need to recognise a third capacity in which thePresident could act. Recognising a new capacity would defeat the purpose ofthe legislation which is to ensure the President was not impeded in his dutiesby litigation. The Court ruled that it had no power to re write the constitution.
It found that the meaning of section 41 was perfectly clear and the Court hadno mandate to amend it.13 The decision of the Court a quo was upheld by theCourt of Appeal. See Par30 – 32 of cyclostyled judgment. For acts or omissions done in his public capacity, the Presidentcould be sued under the provisions of the State Proceedings (Civil Actions By or Against the Governmentor Public Officers) Act Cap 10:01 At par 25 of the cyclostyled judgment.
Court referred to S v. Makwanyane and Another 1995 (3) SA 391 (CC) at 415 per Chaskalson P. "Indealing with comparative law we must bear in mind that we are required to construe the South African RECENT LEGAL DEVELOPMENTS – BOTSWANA 81
This case is notable as it is the first opportunity the Courts in Botswana have had occasion to define the nature and extent of PresidentialImmunity. Whilst some constitutional law commentators have offered theirinterpretation of the extent of this immunity as envisaged by section 41 of theConstitution,14 the Court of Appeal has now made the parameters of section41(1) crystal clear. In a nutshell, the Court conclusively stated thatPresidential immunity in Botswana is absolute in the case of criminal mattersand partial in the case of civil matters. Further, where the president acts in hisprivate capacity, civil proceedings may not be launched against him. Wherehe acts in his public capacity, civil proceedings may be launched under theprovisions of the relevant statute.15 The Court may be criticised for not delving deeper into a comparative assessment of the law in other jurisdictions. It is laudable thatthe Court recognised that a constitutional provision cannot of itself beunconstitutional. In other words, the constitutionality of Section 41 could notbe tested against any document be it the constitution itself, other municipal orforeign laws. Whilst the foreign constitutions may be instructive, theconstitutional practice of other states was certainly not binding on Botswana.
A criticism that the Court could have borrowed some nuggets of wisdom fromother jurisdictions and in some way arrived at a decision that had less severeconsequences would be simplistic. The Court was bound to apply the law as itstood.
The Court may also be criticised for failing to take a more liberal approach as it was encouraged to do by Motswaledi. On several occasions, heinvited the Court to make law. He proposed a third capacity in which thePresident could act, that is a representative capacity. He also suggested that apurposive and interpretation of section 41 may be more in line with thedemocratic spirit of the constitution. However, one is mindful of the Court'swarning that it was not for it to usurp the role of the legislature and make lawas it deems fit. It could not descend into the political arena and make decisionsthat may be more palatable to the Court. The Court stood firm on the questionof its mandate. Its task was to interpret the law as it stood; in spite of theirreparable harm it would cause Motswaledi. In the absence of any ambiguity,it was obliged to attach to section 41 its ordinary natural and literal meaning,and so it did.16 Constitution, and not an international instrument or the constitution of some foreign country, and that thishas to be done with due regard to our legal system, our history and circumstances and the structure andlanguage of our constitution. We can derive assistance from public international law and foreign case law,but we are in no way bound to follow it." D. Nsereko, Constitutional Law in Botswana, Gaborone, Pula Press, (2002), pp. 82.
State Proceedings (Civil Actions By or Against the Government or Public Officers) Act Cap 10:01 Motswaledi's suspension was confirmed through disciplinary proceedings in the BDP. He was suspendedfrom the party for 5 years. See "BDP suspends Motswaledi for five years" in the Daily News, 26 October2009. Retrieved 5 February 2009. http://www.gov.bw/cgi-in/news.cgi?d=20091026&i=BDP_suspends_Motswaledi_for_five_years.
82 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
The Competition Act establishes a Competition Authority in Botswana toregulate competition in the economy.18 Until now, Botswana has not had anylegislation against anti competitive practice whatsoever. The growing size ofher economy has made such legislation a necessity. The primary functions of the Competition Authority are the prevention of and redress for anti competitive practices in the economy, andthe removal of constraints on the free play of competition in the market. 19The Authority shall also make rules increasing fair and transparent businesspractices, regulate mergers and advise the government on anti competitiveeffects of current or proposed polices and legislation. The Act prohibits enterprises from entering into horizontal agreements and vertical agreements that negatively affect competition. It alsoproscribes bid rigging as well as the abuse by enterprises of dominant positionin the market. Horizontal agreements are defined in the Act as arrangementsbetween enterprises in the same market that are actual or potential competitorsthat involve price fixing, dividing markets by allocating customers, supplies,territories or specific goods or services. Vertical agreements on the other handare defined as deals between enterprises at different levels of the productionchain which affect conditions under which parties may purchase, sell or resellgoods or services. Bid rigging encompasses agreements not to submit a bid, oragreement on price terms and conditions of a bid, concerted practice,restraints on production or sale and denial of access to enterprises. Lastly, theabuse of a dominant position in the market by an enterprise is defined asconduct aimed at adjusting prices or output without effective constraint fromcompetitors and potential customers.20 Section 6 of the Act provides for the creation of a Competition Commission which shall govern the Authority. The Authority, acting throughthe Commission, may launch investigations into reported anti competitivepractices. The Commission is empowered to convene a hearing, receiveevidence and make determinations as to the presence or otherwise ofanticompetitive practices and give directions aimed at bringing such practicesto an end. This power includes the imposition of financial penalties of up to10% of an enterprise's turnover for up to three years where breach of anticompetition legislation is found to have been negligent or intentional.21 No 17 of 2009 assented to on 24/12/2009 and commencing on notice.
See section 4 thereof.
See section 5 thereof.
See Part X thereof.
See sections 35, 39 and 40 thereof.
RECENT LEGAL DEVELOPMENTS – BOTSWANA 83
Appeals from the decision of the Commission lie with the High Court. Small Claims Court Act22
The Small Claims Court has been established by order of the Chief Justice todecongest the Magistrate's Courts by swiftly disposing of simple and noncontentious matters. Some interesting provisions have been enacted in order to expedite proceedings. Unlike all other courts in the Republic, the Small Claims Courtis not a court of record, though the presiding officer will be required to recordand sign every order.23 The elimination of the need for a record will have agreat impact on disposition times. Traditionally, records in the Magistrate'sCourt are written by the Magistrate as proceedings progress. This makes thetrial process slow trial. Proceedings in the Court shall be in either ofBotswana's official languages which are English or Setswana.24 This measurewill definitely speed up proceedings. As matters stand now the process ofinterpretation can be painstakingly slow since the record must be kept inEnglish. The Act also specifies the types of parties that may appear before it.
In terms of section 7 of the Act, only natural persons may appear before theSmall Claims Court. Corporations and associations may appear through theirdirectors, members, employees or other representatives only if they are citedas defendants.
Notably, the jurisdiction of the Court is limited to claims not exceeding P 10 000. Claims prescribe after 2 years and the Court may notentertain them. Further, interest claimable is capped at 10%. Matters relatingto status, marriage and its ancillaries are excluded from the Court'sjurisdiction though maintenance claims may be entertained.25 Proceedings may not last more than one day. Matters that prove to be too complex and likely to extend over the day limit may be ceased by theCourt.26 Presumably such matters would be referred to trial in theMagistrate's Court. Finally, judgment in the Small Claims Court is final withno right of appeal. Review of judgments is a possibility in cases of grossirregularity or lack of jurisdiction.27 Act No 7 of 2009 assented to on 11/05/2009 and commencing on 19 June 2009.
See section 3 thereof.
Proceedings in other languages are possible with the aid of a free interpreter.
See section 11 thereof.
See section 12 thereof.
See ssection 17 thereof.
84 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
The Botswana Tourism Organisation Act28 and
The Botswana Tourism Organisation Act serves to create a new watchdogbody.30 The objects of the Botswana Tourism Organisation are the regulationof the tourism industry, promotion and development of the industry, marketingand promoting tourism as well as attracting engaging and facilitating travel totourist attractions in Botswana.31 The Organisation is also empowered to carryout grading of tourist enterprises and for such purposes it has powers to inspectsuch entities, report on its findings and then determine the grading for theenterprise.32 This Organisation replaces the now defunct Botswana TourismBoard.
Promulgated along with the Botswana Tourism Organisation Act is the Tourism Act. The primary objective of the Tourism Act is the creation of aTourism Industry Licensing Committee.33 The powers of the LicensingCommittee include inter alia determining if a particular tourist enterpriseshould be licensed, the cancellation and suspension of licences and carryingout inspections of tourist enterprises.34 The overall thrust of this newlegislation on licensing is succinctly captured in section 15 which providesthat no one may carry out a tourist enterprise without a licence. The penaltyfor falling foul of this prohibition is a hefty fine of P20 00035 or a jail term ofup to five years or both. The Act also reserves some tourist enterprises for citizens or companies wholly owned by citizens.36 This reservation is found in manysectors of Botswana's economy as a tool to encourage citizenentrepreneurship. Magistrates Court Amendment Bill37
This Bill proposes to provide for the appointment of assessors in civil andcriminal proceedings in Magistrates Courts. In the past, assessors could only Act No. 14 of 2009 assented to on 24/12/2009 and commencing on notice.
Act No. 16 of 2009 assented to on 24/12/2009 and commencing on notice.
See section 3 thereof.
See section 4 thereof.
See section 25 thereof.
See section 3 thereof. See section 6 thereof.
Approximately USD 3000. Se section 23 thereof.
No 19 of 2009; 6 November 2009 RECENT LEGAL DEVELOPMENTS – BOTSWANA 85
be appointed to sit with magistrates in civil proceedings.38 The legislature nowproposes to extend this provision to criminal matters. The proposed legislation has been necessitated by public outcry over the manner in which stock theft is handled by magistrates. Stock is thelifeblood of the rural economy in Botswana. A tribesman counts his wealth interms of his stock. Rampant stock theft coupled with serious difficulties thathave arisen in the prosecution of stock theft, in the areas of identification ofthe stolen stock and preservation of evidence, have resulted in a dip in publicconfidence in Magistrate's ability to properly decide stock theft cases.
The most prevalent criticism of the current system has been that magistrates, many of them unschooled in Setswana language and culture, areunable to appreciate certain attributes of stock and stock descriptions given inSetswana, without English equivalents. This knowledge gap, the argumentsuggests, results in acquittals of accused persons on technical grounds.
Indeed, there has been much agitation over the years for stock theft to betreated as a crime sui generis. In response to this, the Stock Theft Act waspromulgated in 1996 removing stock theft from general penal code legislationagainst theft and instituting it as a crime with its own special characteristics.
The new Bill proposes to go a step further by amending section 66 to includesection 66A allowing the magistrate to summon assessors, in an advisorycapacity, to assist him in Court. Whilst the judgment remains vested in the magistrate alone, the assessor may offer assistance to the magistrate as he requires. Further,agreement or disagreement by the assessor with the magistrate's decisionmust be noted on the record. See section 20 Magistrates Court Act Cap 04:04 BOOK REVIEW
WORLD TRADE LAW: TEXT, MATERIALS AND
By Lester S and Mercurio B with Davies A and Kara L
[Oxford, Hart Publishing (2008) 892 pp. £35.00, ISBN 978-1-84113-660-8]
World trade law is one of the fastest growing areas of international law. Justover a decade ago, the current World Trade Organisation (WTO), how it hasdeveloped its rules and disciplines and how it has dealt with disputes, wasbeyond imagination. The newly formed dispute settlement system hasentertained numerous cases which cover areas like trade in goods, trade inservices and protection of intellectual property. At the same time, a new roundof negotiations which was launched in 2001 has not yet come to a conclusiondue to numerous contentious issues like subsidies and market access foragricultural products. To some stakeholders, expectations, hopes andfrustrations concerning the WTO are increasing. The negotiating landscape ischanging: the European Community is enlarging; China has also joined theWTO; and we are now in a multi polar world where there is no one singlepower which dictates the pace of negotiations. Developing countries areincreasing speaking with one voice in asserting their interests.
Due to these dynamics in international trade law many authors prefer to write only on one subject matter like on ‘Trade in Services' or thematicallylike ‘Africa and the multilateral trade system'. Moreover, some books are acompilation of articles from different authors. There are only a few bookswhich attempt to cover the wider scope of international trade law. This bookon world trade law is a new book and one of those which attempt to coverbroad items relating to the multilateral trading system. It emphasises thecentral role of the WTO in regulating the rules of world trade. Although theWTO is not the only organisation governing international trade, it is by far themost comprehensive in its coverage as it also governs some bilateral andregional agreements concerning international trade. The main focus of thisbook is on international trade issues, although it also discusses someeconomic issues which are related to international trade in its first twochapters which are mainly concerned with some economic arguments for and LL. B (Hons) (UZ), LL.M (Cum Laude) (UWC & Amsterdam); Lecturer, Department of Law,University of Botswana, Private Bag UB 00705, Gaborone, Botswana. Email:[email protected], Alternate Email: [email protected]. 88 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
against free trade (Chapter one) and also with the economics of tradeagreements (Chapter two).
Concerning international trade issues, this book focuses on legal instruments that regulate international trade and these include the WTOAgreement and numerous bilateral, regional and plurilateral trade agreements.
This book is written with students in mind and provides an ideal learning tool to appeal to both undergraduate and post graduate students andtheir instructors. It is also suitable for learners from developing countryinstitutions. The book is divided into 8 parts with 20 chapters. Thisarrangement makes it easier for the reader to follow, especially the students.
Each chapter ends with some questions to enable the reader to reflect on thesubject matter in each chapter, thus the book is user friendly to students.
However, the book only contains essay type question and lack case studieswhich would have assisted students in applying the concept they have learnt inreal world scenarios. Thus it is suggested that the authors should include casestudy based questions in some appropriate chapters in the subsequent edition.
Although this book boasts of extracts from cases and monograms, it does nothave extracts from the WTO agreements relevant to this book. These wouldhave been of much use to the reader.
The book is written in a simple and straight forward manner.
Throughout the book, the authors' discussion is clear, objective and indicatesthat they have applied their mind to the complex issues bedeviling the WTO atthe present time. Thus the scope, coverage and depth of treatment of thesubject matter are something the authors should be commended for. Part I contains two chapters. Chapter one introduces the reader to international trade and economics in a general manner. It considers the role oftrade in the world economy. It answers some preliminary questions like whydo nations trade; why integration is increasing and the effects of globalisation.
The authors ably articulated the debate on free trade versus protectionism.
They carefully selected some extracts from conflicting views of a number ofesteemed economists in order to give a reader a balanced view. Thus from theonset the book provokes the keen reader into thinking more concerning meritsor otherwise of free trade. The chapter ends by providing salient questions onissues which goes beyond the free trade debate. They pose questionsconcerning international trade agreements and sovereignty; and the currentinternational trade rules and their appropriateness for developing countries.
By introducing these salient questions at earlier stages of study, it prepares thereader to find answers to these questions throughout the study.
Chapter 2 which is also part of the foundation to the book deals with the economics of trade agreements. This chapter is premised on the authors'argument that international trade agreements are an expression of economicpolicies. However, they also correctly concede that ‘both domestic politics (in BOOK REVIEW 89
the form of, for instance, political pressure) and international politics (andcompromise) inevitably play a part in the final outcome of an internationaltrade agreement.'1 Consequently, although economic objectives are still at theheart of any trade agreement, it should be noted that an outcome of anegotiation is influenced by other factors like the bargaining power of partiesand their respective interests which may not necessarily align to specificenvisaged economic goals. The economic policy issues dealt with in this bookinclude the concept of comparative advantage; inefficient or ineffectiveregulation; harmonisation and mutual recognition; intellectual propertyprotection; policies to competition; and the promotion and protection offoreign investment. It very helpful for international trade practitioners andstudents to have at least a basic knowledge of the economic issues involved ininternational trade law if they are to fully appreciate these trade agreementsand their practical implications.
Part II deals with the history, institutional aspects and the relationship between world trade law with both international law and domesticlaw. Chapter three deals with the history and institutions of the multilateraltrading system. It traces the genesis of the GATT 1947 and the WTO. Theauthors take the reader into great and detailed nuances of origins of the oldGATT and the WTO. In the same chapter, authors discuss WTO objectives,scope and functions. They also give a comprehensive description of themembership, institutional structure, the decision making system, as well asmembership, accession and withdrawal from the WTO. Chapter four deals with a very complex and controversial issue pertaining to the nexus between world trade law and international law. On onehand, it is argued that international law applies in WTO law due to the natureof WTO law being part of the larger body of international law.2 On the otherhand, some argue for a lesser role of international law which is limited only toa textual interpretation of WTO Agreements in the WTO dispute settlementsystem.3 The authors did not attempt to add to this debate. Instead they simplynoted that WTO panels have shown some flexibility in how they take intoaccount international law as part of the Vienna Convention treatyinterpretation when interpreting WTO Agreements. They did note, however,that Members are likely to refer to international law whenever they believe ithelps their arguments. Having raised this crucial issue, the keen reader wouldexpect that the authors would take the opportunity to add more to thejurisprudence rather than reiterating the established position. Thus in the nextaddition, the authors are encouraged to add more flesh to this argument andmake practical arguments which may assist in the development of law in this See page 45.
See page 103. See also J. Pauwelyn, "The Role of Public International Law in the WTO: How Far CanWe Go?"95 A.J.I.L (2001), pp.535-552.
See page 103.
90 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
Chapter five which discusses the relation between world trade law and domestic law is one of the most thoroughly researched and well writtenchapters in the book. It gives an excellent overview of the subject matter andcomes to the conclusion that the relationship between world trade law anddomestic law varies considerably depending on two main factors. First, itdepends on the type of international law, whether it is a treaty, an internationalcourt decision, custom or jus cogens. Secondly, it depends on how a particularcountry treats that type of international law in its domestic law. They providean excellent overview on different practices of different countries. In theUnited States (US) and the European Community (EC) for instance, the courtshave decided to give WTO panel and Appellate Body reports a very limitedrole. In Part II authors only limited their discussion to the relationship between world trade law and international law; and world trade law anddomestic law. They did not seek to canvass the issue of the relationshipbetween world trade law and regional trade law. They did not even introducethe subject and waited until Part V where they are dealing with this matter indetail. Since Part II dealt mainly with the relationship between world tradelaw and other branches of law like international law and domestic law, a briefintroduction on its relationship with regional trade law would have been inorder even though the issue would be dealt with in detail in Part V. The first two parts discussed above are introductory and general in nature. Part III which deals with dispute settlement in the WTO is the first oneto deal with substantive issues. It is consisted of a single chapter. TheUnderstanding on Rules and Procedures Governing the Settlement of Disputes(DSU) has been described as the ‘crown jewel' of the entire multilateraltrading system because it provides a binding adjudicatory system that givesforce to the WTO rules.4 This part or chapter introduces the reader to thehistory, institutional aspects of the DSU and its processes and systemic issuesin contrast to its predecessor, the GATT dispute settlement mechanism. Inaddition, it also discusses alternatives to the dispute settlement namelymediation and arbitration. It winds up with an evaluation of the success andeffectiveness of the DSU. The DSU is one of the topics which has attractedmuch interest from academic writers on WTO law. It has also generatednumerous proposals in the ongoing Doha round of trade negotiations.
However, the authors did not discuss these proposals in their work. It wouldhave been useful had the authors discussed some of the major proposals forDSU reform in their work and evaluate them accordingly. This would be ofmuch value not only to students but also to policy makers and negotiators.
See J Bacchus, ‘Inside the World Trade Organization', speech on 17 April 2002 to the Columbia BusinessSchool APEC Study Center, at 6, available at:. BOOK REVIEW 91
Part IV, which is composed of two chapters, deals with traditional General Agreement on Tariff and Trade (GATT) obligations. Chapter sevendeals with border measures namely tariffs and quotas. These are measureswhich are imposed at the border which are used to restrict trade in goods.
Chapter eight gives an overview of the concept of non-discrimination,examines cross cutting issues that apply in both national treatment and MostFavoured Nation (MFN) contexts before addressing national treatmentprovisions in GATT Article III and MFN provisions in GATT Article I. Thischapter is commendable in that it provides tariff schedules of differentcountries as case studies and this makes it easier for the reader to appreciatethe subject matter. In addition, the authors provide numerous GATT/WTOcases to illustrate the jurisprudence on important concepts such as ‘likeproducts' and ‘substitutable products'. Closely linked to Part IV is Part V which deals with exceptions to the GATT obligations discussed in Part IV. Major exceptions are provided forunder GATT XXIV which authorises the formation of customs unions andfree trade unions (FTAs) in spite of the non-discrimatory concepts set downthroughout the GATT as well as GATT XX general exceptions which permitcountries to impose WTO inconsistent measures in order to fulfill some publicpolicy measures. These public policy measures include public morals;protection of human, animal or plant life or health; and conservation ofexhaustive natural resources. Unlike in other chapters where the authors seemto detach their work from the ongoing Doha round of trade negotiations, theauthors discuss and suggest proposals for improving the current regulatoryframework of regional trade agreements. In this chapter there is strongeremphasis on policy in addition to law.
The authors, in Part VII discuss interesting issues mainly concerned with international trade and domestic regulation or the harmonisation ofinternational trade law and other issues beyond trade in goods like services,investment, procurement and intellectual protection. Chapter 15 deals withtrade in services. The authors are of the view that it is helpful for one tounderstand GATT before studying the General Agreement on Trade inServices (GATS). They also underscored the importance of understanding thedifference between these two agreements. They discussed one of the majorcase in trade in services namely the US Gambling case.5 Again the authors didnot discuss the major proposals in the Doha round of trade negotiationsconcerning the reform of the GATS. In addition, the authors did not deal withcrucial elements like the progress or otherwise made in the negotiations onmovement of natural persons, financial services, maritime transport servicesand basic telecommunications. There is a lot of debate on these topics but United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R.
92 UNIVERSITY OF BOTSWANA LAW JOURNAL DECEMBER 2009
these debates are not reflected in this chapter, so it provides little to thecurious reader. Chapter 16 discusses international investment regulation bothin the context of WTO and outside the WTO. Two major cases in this area arecanvassed in the context of GATT/WTO namely the Canada FIRA case6 andthe Indonesia Autos case.7 Outside the WTO, it discusses investmentprovisions in the Bilateral Investment Treaties (BITs) and investmentprovisions of the Free Trade Agreements (FTAs) and the prospects of havingthe Multilateral Agreement on Investment (MAI). Commendably, the authorsdiscuss the Doha Round and Investment. Part VIII which is entitled ‘Social Policy Issues' contains two last chapters of the book which deal with developing countries in the multilateraltrading system and linkages between trade and social issues like environment,culture, labour standards, human rights and safety. Chapter 19 examines anumber of issues relating to the participation of developing countries in theWTO system. These include the role of developing countries in thenegotiation of rules and in the dispute settlement system. It also deals withseveral rules that were designed to address special circumstances ofdeveloping and least developed countries. In conclusion, although there are many books dealing with international trade law, this book is an excellent resource and is unique in itscombination of text, cases and materials. This book is a very useful resourcefor teaching especially from the perspective of one teaching world trade law indeveloping countries. Since the book was written specifically for students, thebook's straightforward style and manner of presentation would make it anexcellent book for teaching purposes. The book is a most valuablecontribution to the information about world trade law. For those interested intopical issues on world trade law this book can be relied upon. I wouldhowever encourage the authors, in their subsequent edition, to update the bookso that it reflects the current state of play in international trade negotiationsand also to canvass major proposals, if any. It is also useful for authors toinclude some extracts from relevant WTO Agreements and to add a list oftables, figures and cases which are included in this book.
Canada- Administration of Foreign Investment Review Act ("FIRA") (BISD 30S/140, 1984).
Indonesia- Certain measures Affecting the Automobile Industry, WT/DS 54,55,59,64/R.
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