[2014] KECA 203 (KLR)

IN THE COURT OF APPEAL

AT NAIROBI

CORAM: (KIHARA KARIUKI, PCA, M’INOTI & MURGOR, JJ.A)

CIVIL APPLICATION NO. NAI. 151 OF 2014 (UR.122/2014)

BETWEEN

MUTUKU MUTINGA……..…………………………………APPLICANT

AND

JORETH LIMITED…………..…...….……..…..…..……1ST RESPONDENT

PETER WAMBUGU MWANGI………..…....…......…....2ND RESPONDENT

JUSTIN MIANO KABAIKU……...…….....……….....….3RD RESPONDENT

REBECCA NJERI MIANO………………......………..…4TH RESPONDENT

(An application for injunction and/or a stay of execution and/or maintenance of the status quo pending the hearing and determination of an intended appeal from the judgment and order of the High Court of Kenya at Nairobi (Milimani) ELC of P.M. Mwilu, J) dated 22nd May, 2012 inH.C.C.C. NO. 164 of 2012 (OS) ELC Consolidated with

H.C.C.C 193 of 2009 (OS))

*************

RULING OF THE COURT

In an Originating Summons application dated 29th April 2009 Mutuku Mutingaand Gloria Jean Mutinga,his wife (“the applicant”) sought orders to the effect that they had acquired through adverse possession title to premises know previously as Plot Nos. 436, 432 and 437 Thome Farmers No. 5 Limited, and now known as LR. Nos. 13330/307, 13330/310, 13330/335 respectively (“the suit premises”). Also sought were orders that the registration of the 1st respondent or any other person deriving title with respect to the suit premises be cancelled forthwith and the Registrar of Titles do rectify the register to enter the names of the applicant as the registered proprietors, as well as a permanent injunction against the respondents to stop them from transferring, assigning, building, entering, charging or in any other way interfering with the applicant’s occupation and use of the suit premises.

At the same time a Chamber Summons application was filed dated 29th April 2009 seeking orders that a temporary injunction do issue against the respondents, their agents, servants, or any other person claiming title through the respondents restraining them from selling, transferring, assigning, building, entering, charging or in any way dealing with all those parcels of land known as Plot. Nos. 436, 432, and 437 Thome Farmers No. 5 Limited and now known as LR.Nos.13330/307, 13330/310, 13330/335, and all further registration or change of registration in ownership, leasing, subleasing, allotment, user occupation or possession in any kind of right, title or interest over the suit premises within the Nairobi registry, government department and all other registering authorities be prohibited pending the hearing and final determination of the application.

The background to the case is that the applicant and his wife, are the registered proprietors of three shares in a limited liability company known as Thome Farmers No. 5 Limited, following the transfer of shares from persons known as, Gichuki Muchiri, Kamuyu Ndungu and Benedict Wakaba Kihiu which related to the suit premises. They claim that they have been in actual, open, physical and uninterrupted possession of the suit premises for a period in excess of 35 years and had acquired title by adverse possession, so that, any claim by the 1st respondent or any other person claiming or acquiring title was extinguished by the applicant’s title to the suit premises. They further claim that the 1st respondent wrongfully trespassed on the suit premises and illegally sought to transfer it to unsuspecting members of the public, thereby interfering with their peaceful and quiet possession of the suit premises.

The 1st respondent filed a replying affidavit sworn by the Hon. James Njenga Karume(now deceased) opposing the application. It was contended that the 1st respondent was the registered owner of LR No. 13330 since 19th February 2000, and that, LR No. 13330 which was subdivided into LR. Nos. 13330/307, 13330/310, 13330/335 resulted from an amalgamation or consolidation of two titles namely LR Nos. 4920 and 4912/3 both of which had been in the 1st respondent’s possession since the 1950s. It was argued that no relationship, partnership or joint venture existed between the 1st respondent and Thome Farmers No. 5 Limited, and at no time were the properties registered in the latter’s name. As such, there could not have been any open, uninterrupted and continued occupation of the suit premises as alleged, as the respondent had for the last 30 years been involved in consolidating and subdividing the suit premises.

The 1st respondent explained that a civil case, HCCC No. 6206/1992 was filed against several trespassers onto LR No. 13330, which culminated in a consent order filed in 2002, wherein the 1st respondent retained the remaining portions of LR. 13330, including the suit premises, which it later subdivided and sold to third parties.

In a further affidavit filed in the court below, the applicant, added that sometime in 1974, the 1st respondent, as the registered owner entered into an agreement with Thome Farmers No. 5 Limited for sale of the property known as LR No. 4920/3 and LR No. 4921/3, which properties were amalgamated into LR No. 13330, and later subdivided into LR. Nos. 13330/307, 13330/310, 13330/335. They stated that, they were not given notice of the sale of the suit premises to third parties and neither were they made parties to HCCC No. 6206/1992.

By Chamber Summons application of 16th July 2009, the applicant sought leave to enjoin Thome Farmers No. 5 Limited, Justin Miano Kabuiku and Rebecca Njeri Miano,the3rdand 4th respondentsto the suit herein, which application was granted by the court. In their reply, the 3rd and 4th respondents contended that they were the bona fide purchasers for value of the property known as LR. 13330/307 and that the applicant has not shown continuous and uninterrupted occupation of the suit premises for 12 years.

Upon hearing and considering the pleadings and the rival submissions of counsel, Mwilu, J, (as she then was) concluded that the sole issue for determination was whether the applicant had acquired title to the suit premises through adverse possession. The learned Judge found that the claim for adverse possession failed, as the 1st respondent had interrupted the applicant’s possession when it filed HCCC. 6206/1992 seeking an eviction order against trespassers.

Being dissatisfied with the decision of the court, the applicant filed this the Notice of Motion dated 27th June 2014 under Rule 5(2)(b)of the Court of Appeal Rules for orders that:-

“1. THAT the application filed herewith be certified urgent….

2. THAT a temporary injunction do issue against the respondents, their agents, servants, or any other person claiming title through the respondents from selling, transferring, assigning, building, entering, charging or in any way dealing with all those parcels of land known as Plot. Nos. 436, 432, and 437 Thome Farmers No 5 Limited and now known as LR. Nos. 13330/307, 13330/310, 13330/335, pending the hearing and final determination of this application.

3. THAT a temporary injunction do issue against the respondents, their agents , servants, or any other person claiming title through the respondents from selling, transferring, assigning, building, entering, charging, or in any way dealing with all those parcels of land known as Plot. Nos. 436, 432, and 437 Thome Farmers No 5 Limited and now known as LR. Nos. 13330/307, 13330/310, 13330/335, pending the hearing and final determination of the intended appeal.

4. That all further registration of change or registration in ownership leasing, subleasing, allotment, user occupation, or possession in any kind of right, title or interest over the suit premises within the Nairobi registry, Government department, and all other registering authorities be and are hereby prohibited by way of a temporary injunction pending the hearing and determination of the intended appeal.”

The applicant advanced five grounds, and in his affidavit sworn on 27th June 2014, he relied on the pleadings and submissions filed in the court below. The applicant complained that the learned Judge in failing to apply the principles of adverse possession, came to the wrong conclusion on the definition of what amounted to physical possession. As a consequence he concluded that he had an arguable appeal. On whether the appeal would be rendered nugatory, he contended that the circumstances of the parties should be balanced, but in any event, he intended to bequeath the suit premises to his children.

In a replying affidavit dated 9th July 2014 sworn by Robertson Nderitu Mwihu, the 1st respondent’s Operations Manager, it was stated that at no time had the suit premises been sold to Thome Farmers No. 5 Ltd, or to the applicant. He deponed further that the 2nd , 3rd and 4th respondents had taken possession of their respective portions of the suit premises and therefore the orders sought had been overtaken by events.

In a replying affidavit sworn by the 2nd respondent,Peter Wambugu Mwangi,the averments that were before the High Court were restated but it was further deponed that, the subdivided portions of the suit premises had been sold to the 2nd, 3rd and 4th respondents, where the transfers had already been registered in the Lands Registry, and possession had been handed over to them.

When the application came up for hearing before us, Mr. Thangeiappearing withMr. Oriema Okoth,learned counsel for the applicant submitted that there was an arguable appeal as the learned Judge was wrong in concluding that the applicant had not met the threshold for a finding of adverse possession, yet, the applicant had been in possession for a period of more than 12 years between 1981 and 1990. Counsel pointed out that the 1st respondent who owned the land did not testify in the court below, and as such, there was no evidence relating to the period before 2009. On the issue of physical possession, counsel contended that the evidence of fencing and cultivation, ought to have been considered, and, the court was wrong to conclude that there had been no physical possession by the applicant. Counsel cited Hazel Wanjiku Wamutitu & another vs JorethCivil Suit (ELC) No. 42 of 2007where physical possession was found to exist even though there was no actual possession. Counsel complained that the trial court also failed to recognize that possession by the applicant amounted to an overriding interest against the title under section 30 (g) of the Land Act, the effect of which, would defeat any subsequent registration. As to whether the appeal would be rendered nugatory if the orders sought were not granted, it was argued that the interests of the parties should be balanced, so as to preserve the suit premises, while also having regard for the amounts paid by the respondents. From the bar counsel informed us that the 1st respondent had taken over one of the plots, but that nevertheless, the other two plots were still vacant. Finally counsel enjoined us to invoke the Court’s overriding objectives under sections 3A and 3B of the Appellate Jurisdiction Act and grant the orders for the just determination of the intended appeal.

Ms. Mainalearned counsel for the 1st respondent holding brief for Mr. C. Wainaina submitted that the applicant had no right or title upon which to base a claim for adverse possession, as, the 1st respondent had been in possession since the 1950s; that Thome Farmers No. 5 Ltd was a separate legal entity from the 1st respondent, and had never been registered as proprietor of the suit premises. Counsel argued that following the consent in HCCC 6206/1992, the 1st respondent took over the remaining properties, including the suit premises, invited claimants to lodge any claims by way of an advertisement in the Daily Nation, and subsequently subdivided and sold portions of the suit premises to the respondents. Counsel continued that the 2nd, 3rd, and 4th respondents had since taken over possession of the suit premises. On the claim for adverse possession, counsel submitted that the learned judge was right in finding that there had been no actual possession, particularly as the applicant had confirmed that he did not reside in the suit premises.

Mrs. Okech, learned counsel for the 3rd and 4th respondents, and also holding brief for Mr. Kaburu for the 2nd respondent also opposed the application, and submitted that there was no arguable appeal to warrant a grant of the orders sought. Counsel informed us that the 3rd respondent would be relying on the affidavit on the record, while the 4th respondent, would rely on the replying affidavit of Peter Wambugu Mwangi filed on 17th July 2014. Counsel submitted that in the judgment, the court dismissed the suit, and in so doing, did not issue any order or restrain the parties from doing anything. And therefore there was no order upon which the applicant could seek an order of injunction or stay of execution. No proof of actual or physical possession was presented before the court below, as no structures or farming activities were evident from the documents produced. To the contrary, the respondents have shown that they have been in possession all along. Counsel further argued that the applicant had stated that it purchased the suit premises from Thome Farmers No. 5 Limited, yet there was no evidence to show when the permission to occupy the suit premises ceased. Counsel submitted that there can be no adverse possession where there is a licence, as such interests are incapable of coexisting together. Counsel further submitted that the applicant has not demonstrated when he entered the land, nor did he specified when time began to run. On whether the appeal would be rendered nugatory, counsel reiterated that the 3rd and 4th respondents are in possession of the land, and since the applicant’s view is that the land will continue to be in existence, the only conclusion that can be drawn is that the appeal would not be rendered nugatory should it succeed.

In reply, Mr. Thangei reiterated that the dispute is in respect of the suit premises. The order sought was not for a stay of execution against the decision of the High Court but, was in respect of an injunction pending appeal.

We have considered the arguments, submissions and the obtaining circumstances in respect of this application for injunction brought pursuant to rule 5(2) (b) of the Court of Appeal Rules. The principles which guide the Court in applications under rule 5 (2) (b) are now well settled, and we need only restate them from Reliance Bank Ltd (In Liquidation) vs. Norlake Investments Ltd – Civil Appl. No. Nai. 93/02, thus:

“Hitherto, this Court has consistently maintained that for an application under rule 5(2) (b) to succeed, the applicant must satisfy the court on two matters, namely:-

That the appeal or intended appeal is an arguable one, that is, that it is not a frivolous appeal,

That if an order of stay or injunction, as the case may be, is not granted, the appeal, or the intended appeal, were it to succeed, would have been rendered nugatory by the refusal to grant the stay or the injunction.”

Before we determine whether the guiding principles under rule 5 (2) (b) of this Court’s rules have been satisfied, we will first address the plea by counsel for the applicant that we apply the overriding objectives to the circumstances of this case. Section 3A and 3B Appellate Jurisdictions Act, set out the overriding objectives or the O2principles of this Court. Under the O2principles, the Court is enjoined to adopt case management principles to ensure that appeals are resolved in a just, fair, quick and cheap manner, whilst at the same time complying with applicable rules and precedents which are “O2’ compliant so as to maintain consistency and certainty in our decisions.

In the case of Hunker Trading Company Limited vs Elf Oil Kenya LimitedCivil Application No. Nai 6 of 2010 (UR 3/2010) this Court stated,

“It seems to us that in the exercise of our powers under the “O2 principle,” what we need to guard against is any arbitrariness and uncertainties. For that reason, we must insist on full compliance with past rules and precedents which are “O2” compliant so as to maintain consistency and certainty. We think that the exercise of the power has to be guided by a sound judicial foundation in terms of the reasons for the exercise of the power. If improperly invoked, the “O2 principle” could easily become an unruly horse.”

With this in mind, we turn first to the question of whether there is an arguable appeal. From the draft Memorandum of Appeal, it is clear to us that, central to the intended appeal is the question whether the applicant acquired title to the suit premises by way of adverse possession. The applicant’s complaint is that the learned judge was wrong in finding that the applicant had failed to prove physical possession of the suit premises yet, he had been in possession for the past 35 years, and had tendered sufficient evidence in support of his claim for adverse possession. In citing Hazel Wanjiku Wamutitu & another vs Joreth(supra),where the existence of fencing and farming activities were found to constitute physical possession, the applicant’s complaint was that the learned Judge had taken a narrow and restrictive approach, despite existing decisions to the contrary. A further issue was that assuming the applicant acquired title through adverse possession, then the court failed to consider the existence of an overriding interest to which the respondents’ title was subject.

In our view, there is certainly an arguable appeal on whether the court below correctly applied the principles pertaining to adverse possession, and particularly, with respect to the question of what would constitute physical possession, in the light of the existing decisions.

On the nugatory aspect, the applicant’s concern is that any hardship visited on the parties should be balanced, so that on the one hand, the suit premises should be preserved, whilst on the other, it should be acknowledged that the respondents have paid for the suit premises. The respondents’ take the view, that since the applicant is not in possession, and yet there is no risk to the continued existence of the land, then, what loss will the applicant suffer in the face of a successful appeal?

At this juncture, we must ask ourselves, what it is that we are being requested to stay? What the applicant seeks is a temporary injunction to stop the respondents from selling, transferring, assigning, building, entering, charging or in any way dealing with the suit premises, yet in the judgment, the trial court merely dismissed the suit. We agree with the respondents that the applicant could not have competently applied for stay of execution because no orders were issued requiring the parties to perform act, and nor did were they restrained from doing anything.

In Moraa Ndege vs Moenga Moenga Civil Application 116 of 2011 (UR 77/2011 (Kisumu)it was stated,

“Under Rule 5(2)(b) of the Court of Appeal Rules, the Court has powers to order stay of execution, an injunction or stay of further proceedings on such term as it thinks just. Although this power is discretionary, it is trite law that the Court will only grant orders under Rule 5 (2) (b) of the Court of Appeal Rules where an applicant has satisfied the court that the appeal or intended appeal will be rendered nugatory(Kileleshwa Service Station Limited vs Kenya Shell Limited[2008] KLR 55. In this case, it is evident that the applicant’s suit having been dismissed, and no orders capable of execution having been made, an order for stay of execution will not serve any useful purpose at there is nothing to stay or execute, nor will the applicant’s appeal be rendered nugatory if such orders are not issued.”

In determining whether the intended appeal will be rendered nugatory, we bear in mind that, the subdivided portions of the suit premises have already been sold, and the transfers duly registered in the names of the respective respondents. It is also undisputed that the applicant is not in possession of the suit premises. Since there is no impending eviction of the applicant, and seeing as the transfers have already been effected, we are unable to see what would be achieved by granting the temporary injunction sought.

Having said that, by virtue of section 30 (g) of theLand Act, as well as section 7of the Limitation of Actions Act, it is evident that, the law relating to prescription affects not only present holders but their predecessors, -see Peter Thuo Kairu vs Kuria Gacheru [1988] 2 KAR pages 111 – 116. Consequently, if the applicant is found to have acquired title through adverse possession, then any future dealings in the suit premises by the respondents would be subject to those overriding interests, meaning that, the applicant’s interest in the suit premises if found to exist, is adequately preserved. Additionally, though the applicant has indicated that he would wish to bequeath the suit premises to his children, we consider that, he could always be adequately compensation in damages. In the circumstances, we are not convinced that the intended appeal would be rendered nugatory.

As to whether we should invoke the “O2 principle” to grant the orders sought to the circumstances of this case, it is our view that without the due satisfaction of rule 5 (2) (b), we find that to do so would be inappropriate, and contrary to the requirements of the laid down principles.

Accordingly, the orders sought in the Motion dated 27th June 2014 be and are hereby dismissed. We order that the costs of this application shall be costs in the intended appeal.

Dated and delivered at Nairobi this 28th day of NOVEMBER, 2014.

P. KIHARA KARIUKI

…………..………………………..

PRESIDENT, COURT OF APPEAL

K. M’INOTI

…………….…………………….

JUDGE OF APPEAL

K. MURGOR

…………….…………………..

JUDGE OF APPEAL

I certify that this is a

true copy of the original.

DEPUTY REGISTRAR