[2023] KEELC 17273 (KLR)

Barclays Bank of Kenya Limited v National Land Commission & another (Enviromental and Land Originating Summons 152 of 2018) [2023] KEELC 17273 (KLR) (10 May 2023) (Judgment)

Neutral citation: [2023] KEELC 17273 (KLR)

Republic of Kenya

In the Environment and Land Court at Mombasa

Enviromental and Land Originating Summons 152 of 2018

SM Kibunja, J

May 10, 2023

IN THE MATTER OF THE LAND ACT NO. 6 OF 2012

AND

IN THE MATTER OF AN APPLICATION UNDER SECTION 128 OF THE LAND AND NO. 6 OF 2012 TO SET ASIDE AN AWARD DATED 4TH JUNE 2018 BY THE NATIONAL LAND COMMISSION

AND

IN THE MATTER OF COMPULSORY ACQUISITION OF TITLE NO. 3669/BLOCK V1/MAINLAND NORTH REGISTERED IN THE NAME OF BARCLAYS BANK OF KENYA LIMITED

Between

Barclays Bank of Kenya Limited

Plaintiff

and

National Land Commission

1st Defendant

Kenya National Highways Authority

2nd Defendant

Judgment

1. Barclays Bank of Kenya Limited, the Plaintiff, commenced this proceeding through the originating summons dated the June 25, 2018 against National Land Commission and Kenya National Highways Authority, the 1st and 2nd defendants respectively. The plaintiff seeks for determination of the following questions;a.“Did the 1st defendant, the National Land Commission, violate sections 111(1) and 112(1) to (6) of the Land Act No 6 of 2012 and Article 47 of theConstitution of Kenya in arriving at the award dated June 4, 2018?b.Should the award dated June 4, 2018 for Kshs 68,541,182. 00 made by the 1st defendant be set aside in its entirety for being in breach of the law as stated in (a) above?c.Should judgement be entered for the plaintiff, against the 1st & 2nd defendants jointly and severally, for the sum of Kshs 132,050,000. 00 or such other sum as the court will consider fair and just compensation?d.Should the sum awarded in (c) above attract interest at commercial rates at 14% per annum from the date of filing suit till payment in full?e.Should the plaintiff be awarded costs of this suit to be paid by the 1st & 2nd defendants jointly and severally?The application is supported by the affidavits sworn by Jonathan Kariuki, the plaintiff’s facilities manager, and Gladys Njeri, the facilities manager - corporate real estate services, sworn on the June 25, 2018 and April 30, 2021 respectively, in which they inter alia deposed that the plaintiff’s is the registered owner of parcel No 3669/Block V1/Mainland North, the suit property, on which it has constructed the Changamwe Branch; that the plaintiff was approached by the 2nd defendant with a view of compulsory acquisition when it wanted to expand the Mombasa/Nairobi highway into a dual carriage; that the 2nd defendant published Gazette Notice No 1388 of February 17, 2017 on the intention to acquire a portion of the suit property measuring 0. 937 hectares; that upon noting the inaccurate acreage, the plaintiff engaged the 1st defendant who in turn engaged the 2nd defendant with a view of correcting the acreage to be acquired, but the plaintiff received no response; that on the February 27, 2018, the plaintiff came to know that the 1st defendant had corrected the acreage to be acquired to 0. 0937 hectares and had Gazette Notice No 176 of January 12, 2018 for public inquiry on February 6, 2018 published; that the plaintiff did not attend the public inquiry as it expected an invitation to attend a public inquiry would be personally served at its headquarters or Changamwe branch offices in line with section 112(1)(b) of the Land Act No 6 of 2012; that on the June 8, 2018, the 1st defendant served the plaintiff through Changamwe branch with an award of Kshs 68,541,182. 00 for the acquired property; that the award was unreasonable and unlawful for it failed to indicate value of the land and developments thereon as required under section 113(2)(a) of the Land Act, developments thereon, take into account 15% statutory disturbance and is a global figure without setting out the self-contained. That the award is not fair and just as expected in section 111(1) of the Land Act, as its valuation report dated the March 9, 2017 that took into account all relevant factors valued the suit property at Kshs 132,050,000. 00.

2. The originating summons is opposed by the 2nd defendant through the replying affidavits by Nathaniel Munga, Senior Legal Officer, and Daniel Mbuteti, Senior Land Surveyor, sworn on the July 3, 2019 and November 1, 2022 respectively, among others deposing that it intended to expand the Mombasa/Nairobi highway to a dual carriage and this was published by 1st defendant through Gazette Notice No 1388 of February 17, 2017; that the notice had an error in the acreage of some of the properties and the 1st defendant published Gazette Notice No 176 of January 12, 2018 with the correct acreage and further inviting the public to attend an inquiry; that the 2nd defendant discharged its statutory obligations and forwarded the sum of the award to the 1st defendant for transmission to the plaintiff; that the claim by the plaintiff of Kshs 132,050,000 constitutes of a privately conducted valuation by the plaintiff and should not be accepted as the plaintiff has failed to prove that the 2nd defendant had violated any provisions of the Act, and the application should be dismissed with costs.

3. The 1st defendant also opposed the originating summons through the replying affidavit by Fidelis K. Mburu, the Acting Director Valuation and Taxation, sworn on the February 10, 2020 in which he inter alia deposed that they were required to compulsorily acquire land by the 2nd defendant in line with Part V111 of the Land Act and Article 40 of theConstitution to facilitate expanding Mombasa/Nairobi highway to dual carriage; that they caused the publication of the Notice of Intention to acquire land including the suit property in Gazette Notice No 1388 of February 17, 2017 and on discovering an error on acreage to be acquired, they published Gazette Notice No 176 of January 12, 2018 with the correct acreage; that the plaintiff was informed of the developments and has attached copies of the correspondence; that both defendants undertook inspections of the suit property in March 2017 to establish the extent and nature of the developments thereon, and the corridor the road would traverse; that the plaintiff had notice of the inquiry to ascertain the interests subsisting over the subject property that was conducted on the February 6, 2018, and that they made their representations; that the 1st defendant issued an award to the plaintiff dated the June 4, 2018 as required under section 112 of the Land Act of Kshs 68,541,182, that in their opinion was just and fair compensation for the land compulsorily acquired, improvements thereon and 15% disturbance allowance; that they were guided by the Land [ assessment of just compensation] Rules 2017, prevailing market prices for land as established from comparable sales and stamp duty assessments and declarations for land transactions in the area in coming up with the valuation; that the figure of Kshs 132,050,000 claimed by the plaintiff has no basis, is not supported by empirical evidence, was arrived at erroneously, is against applicable valuation standards and methods for it is based on incorrect acreage of 0. 0969 hectares instead of 0. 0937 hectares; includes detached structures/warehouse that can stand on their own and utilized separately from the main banking hall even after compulsory acquisition; and the value of the land placed at Kshs 35,000,000 is exaggerated as it translates to Kshs 146,000,000 per acre when the market value of an acre of land in the locality is Kshs 70,000,000. That the acquisition was done in strict compliance with Part V111 of Land Act and allowing the plaintiff’s claim at Kshs 132,050,0000 would amount to gross violation of theConstitution that calls for prudence in financial management of public resources. That the public interest militates against the plaintiff’s claim and should be dismissed with costs.

4. Gladys Njeri Nderitu and Richard Munyua Kambi testified as PW1 and PW2 respectively in support of the plaintiff’s case. Each of them adopted the contents of their filed affidavits as their evidence in chief.

5. Daniel Kariuki Mbuteti testified as DW1 in support of the 2nd defendant’s defence. He also adopted the contents of his filed affidavit as his evidence in chief.

6. The court gave directions on filing and exchanging submissions on the January 24, 2023 and fixed the matter for mention on the March 9, 2023. By that date only the counsel for the plaintiff had filed submissions dated the February 17, 2023 and the date for judgement was fixed. The court has considered the said submissions.

7. The following are the issues for the court’s determinations;a.Whether the defendants complied with the provisions of the law in compulsorily acquiring 0. 0937 hectares of the plaintiff’s land.b.Whether the defendants should have compulsorily acquired 0. 0969 hectares of plaintiff’s parcel, suit property, measuring 0. 2222 hectares.c.Whether the plaintiff has made a reasonable case for the court to interfere with the 1st defendant’s award.d.Who pays the costs of the suit.

8. The court has carefully considered the pleadings, oral and documentary evidence tendered, the submissions filed, superior courts decisions cited thereon and come to the following findings;a.That from the certificate of title dated May 28, 1990 that is annexed to the plaintiff’s supporting affidavit, parcel number 3669/Block V1/Mainland North, the suit property, measures 0. 2222 hectares, and at all material times belonged to the plaintiff.b.That it is also not disputed by the parties that the acreage of the suit land that was acquired compulsorily by the 1st defendant was 0. 0937 hectares. This is indeed confirmed by the Kenya Gazette Notice No 176 of January 12, 2018, and the award dated June 4, 2018. c.The plaintiff main complaints are that it was not notified of the public inquiry and inadequate award for the portion of land acquired that is not particularized. The plaintiff seeks for the award of Kshs 68,541,182 to be set aside, and instead judgement be entered for them against defendants for Kshs 132,050,000. The plaintiff has relied on a valuation report by Tysons Limited reportedly dated March 9, 2017 and marked “JK-7” in the initial affidavit by Jonathan of June 25, 2018 and “GN-7” in the subsequent affidavit of Gladys sworn on the April 30, 2021. I have perused the two copies of the valuation report annexed to the two affidavits detailed above and confirmed they are indeed copies of the same report dated March 10, 2015 under reference “VAL/RMK/9441/rmm” and over “LR Number: Mainlanland North/section V1/3669 (PART)”. At page 30 of the said report it indicates that “The portion to be acquired extends to 0. 0969 of a hectare or 0. 2394 of an acre approximately”. At page 34 under warehouse it states that “Only a small edge of the warehouse falls within the area to be acquired leaving the rest unaffected. However, in our view this building will have to be entirely demolished in order to create room for redesigning the bank branch to fit into the remaining plot. We have thus taken account of the whole building as part of this valuation.” At page 37 are the valuation figures which are reproduced herein below;“Current Market Value:Improvements - Kshs 54,000,000. 00Land (0. 0969Ha) - Kshs 35,000,000. 00Kshs 89,000,000. 00Statutory 15%Disturbance Kshs 13,350,000. 00Cost of alternativeAccocmondation - Kshs 11,300,000. 00Total value - Kshs 113,650,000. 00Words: Kenya Shillings OneHundred Thirteen MillionSix Hundred Fifty Thousand Only.”That while Jonathan and Gladys at paragraph 16 of their affidavits deposed that the Tysons Limited valuation report they had annexed was dated the March 9, 2017, and had a value of Kshs 132,050,000. 00, there is no such report annexed to their supporting affidavits or in the court record. The one attached to the deposition of the two deponents is dated March 10, 2015 and the total value is Kshs 113,650,000. 00 as shown above. It is a report prepared before the 1st defendant even issued the first notice of intention to compulsorily acquire the land under GN No 1388 of January 17, 2017 that had an error on the acreage and the subsequent one number 176 of January 12, 2018, that corrected the acreage and gave notice of the public inquiry. It is doubtful whether by the date Tysons Limited prepared the valuation report dated March 10, 2015 the 2nd defendant had placed beacons on the ground to mark the extent of the plaintiff’s land that it intended to have the 1st defendant compulsorily acquire for it.d.In the replying affidavit of Fidelis K. Mburu on behalf of the 1st defendant, he deposed that the 1st defendant followed the due process in the compulsory acquisition and defended the award made to the plaintiff. He deposed that the award was just and fair compensation for the land acquired and developments thereon, plus 15% disturbance allowance all totaling Kshs 68,541,182. He also took issue with the valuation report relied upon by the plaintiff pointing out that it was on an incorrect acreage of 0. 0969 hectares instead of 0. 0937 hectares, included the value of detached warehouse that can be used on its own after the compulsory acquisition and was exaggerated on the market value of the land. To the affidavit is attached a “Report And Valuation on Commercial Property Title No MN/V1/3669 Mombasa County” by the National Land Commission that though undated, indicates at page 3 that “The property was inspected for valuation purposes on March 8, 2017”. At page 8 of the report, the valuation figures are as follows;“Kenya Shillings: Sixty Eight Million Five Hundred Forty One Thousand Four Hundred Eighty Two (Kshs 68,541,482/=) only.Broken down as follows:-Land (0. 0937 Ha): 16,207,289/=Improvements: 43,394,000/=15% statutory allowance: 8,940,193/=”.Even though the said Fidelis was not availed in court as a witness and the other parties did not cross examine him, the court will consider the contents of his affidavit as they are deposition unlike the contents of a witness statement.e.That in the Tysons Limited report the improvements are valued Kshs 54,000,000, and in the National Land Commission they carry a value of Kshs 43,394,000. The court will take the difference between the two figures of Kshs 10,606,000 to be probably the value of the warehouse structure that is not in the portion of land compulsorily acquired, but which Tysons Limited indicated at page 34 that they had taken into account in the valuation, plus any other development that may be in that portion of 0. 0969 hectares that they took account of in their valuation, but which is outside the 0. 0937 hectares that the 1st defendant actually acquired.f.That on the values for the land in the two reports, Tysons Limited had a value of Kshs 35,000,000 for the 0. 0969 hectares land while National Land Commission value for 0. 0937 hectares came to Kshs 16,207,289. Neither of the parties explained this difference of Kshs 18,792,711 [35,000,000 – 16,207,289 = 18,792,711]. The difference between the acreages considered in the two reports is 0. 0032 hectares [0. 0969 – 0. 0937 = 0. 0032]. Though Fidelis K. Mburu was not availed as a witness, he had deposed at paragraph 15 of 1st defendant replying affidavit that the plaintiff’s valuation of the 0. 0969 hectares portion translated to Kshs 146,000,000 per acre as opposed to the Kshs 70,000,000 market value in the locality. There is no figure given as the market value of an acre of land in the Tysons Limited report for the court to consider. That considering that an acre equals 0. 405 hectares, then it is apparent the portions of land valued by Tysons Limited and National Land Commission of 0. 0969 and 0. 0937 hectares respectively were each less than a (1/4) quarter of an acre. Going by the value of 70 million per acre, then a quarter acre would come to about Kshs 17,500,000 which value is nearer that given by the 1st defendant than that by the plaintiff.g.From the available evidence, the plaintiff has not disputed knowledge of the notice of intention to compulsorily acquire their land. The plaintiff has stated it was aware of the Kenya Gazette Notice No 1388 of February 17, 2017 and have deposed in their affidavits that it engaged the 1st defendant on the acreage of the land to be acquired. What the plaintiff disputes is knowledge of the notice and date of the public inquiry, saying the Kenya Gazette Notice No 176 of January 12, 2018 only came to their attention through their then counsel on the February 27, 2018. I have perused the copy of the email annexed to the plaintiff’s affidavits from on Abbas Alihussein to Jonathan Kariuki and have not seen any protestations to the effect that the plaintiff or its counsel then were not aware of the notice and date of the public inquiry. The email of February 27, 2018 of 3. 08pm at page 1 simply says that “GOK gazetted the right acreage for acquisition and we now await their award letter for compensation. Please see attached gazette notice as attached and highlighted on page 50 on January 12, 2018”. That email appear to have been a response to an inquiry made earlier at 11. 35 as seen at page 2 as follows “I trust this finds you well. Was there any resolution of this dispute with NLC? The claim by the plaintiff that the acreage being acquired and the notice of the public inquiry were never communicated despite it having engaged the 1st defendant do not appear to be true as the documents attached to its affidavits says otherwise.h.That apart from the 1st defendant filing the National Land Commission valuation report referred to earlier, they did not present any evidence to contradict or rebut the plaintiff’s deposition at paragraph 17 of their affidavits that it sought for the reasons for the Kshs 68,541,182, but none has been provided. On that aspect, the court finds the 1st defendant was wrong for failing to give the plaintiff the reasons for their award. [See Ravaspaul Kyalo Mutisya v National Land Commission [2022] eKLR]. That as the National Land Commission valuation report is before the court, and considering the findings in (d) to (f) above, the court finds the failure by the 1st defendant to give the plaintiff reasons for the award is not on its own sufficient ground to interfere with an otherwise reasonable award.i.That further, and as pointed out in (d) above, the valuation by Tysons Limited having been done on August 10, 2015, which is about two (2) years before the intention to compulsorily acquire a portion of the plaintiff’s land, and before the 2nd defendant had marked off the ground so as to ascertain the acreage and the developments falling thereon, is unreliable and insufficient to challenge the valuation done by the 1st defendant on the portion of land actually acquired that was the basis of the award presented to the plaintiff. The upshot of the foregoing is that the plaintiff’s claim against both defendants fails.j.Under section 27 of the Civil Procedure Act chapter 21 of Laws of Kenya, costs follow the events and as the plaintiff has failed to prove its claim against the defendants, it should pay the costs of the suit.

9. Flowing from the above conclusions, the court finds and orders as follows;a.The plaintiff has failed to prove its case against the defendants to the standard required of balance of probabilities and the suit is hereby dismissed.b.The plaintiff to pay the defendants costs.Orders accordingly.

DATED AND VIRTUALLY DELIVERED THIS 10th DAY OF MAY 2023S M Kibunja, J.ELC MOMBASA.IN THE PRESENCE OF;PLAINTIFF : AbsentDEFENDANTS : AbsentCOUNSEL: Mr Kongere for the Plaintiff and Mr Mbuthia for 1st Defendant and holding brief for Ndirangu for 2nd Defendant.WILSON – COURT ASSISTANT.S M Kibunja, JELC MOMBASA.