[2022] KEHC 14036 (KLR)

Gatabaki & 2 others (All suing as the Co-administrators of the Estate of Samuel Mundati Gatabaki (Deceased)) v Muga Developers Limited & 3 others (Commercial Case 151 of 2017) [2022] KEHC 14036 (KLR) (Commercial and Tax) (18 October 2022) (Ruling)

Neutral citation: [2022] KEHC 14036 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Commercial Case 151 of 2017

DAS Majanja, J

October 18, 2022

Between

Nancy Wanja Gatabaki

1st Plaintiff

Esther Susan Wangari Gatabaki

2nd Plaintiff

Josephine Beatrice Gathoni

3rd Plaintiff

All suing as the Co-administrators of the Estate of Samuel Mundati Gatabaki (Deceased)

and

Muga Developers Limited

1st Defendant

Suraya Sales Limited

2nd Defendant

Suraya Property Group Limited

3rd Defendant

Equity Bank Limited

4th Defendant

Ruling

1. The plaintiffs have moved the court by the notice of motion dated September 21, 2022 seeking an order that this court lacks jurisdiction to entertain the suit as the matter relates principally to ownership of land and that the suit be transferred to the Environment and Land Court at Nairobi for hearing and determination.

2. The application is supported by the 1st plaintiff’s affidavit and supplementary affidavit sworn on September 21, 2022 and 12 October 2022 respectively. The 4th defendant (“the Bank’’) opposed the application through the replying affidavit of its officer, Moses Ndirangu and grounds of opposition which are both dated October 5, 2022. The 1st, 2nd and 3rd defendant did not participate in the matter. The parties agreed that I should consider the application based on depositions and material on record.

3. Jurisdiction is the very foundation of judicial work hence the formulation by Nyarangi JA, inOwners of the Motor Vessel “Lillian S” v Caltex Oil (Kenya) Limited [1989] KLR 1 that jurisdiction is everything. Jurisdiction is conferred by the Constitution and or statute and it is within those confines that a court should operate. The Supreme Court inSamuel Kamau Macharia v Kenya Commercial Bank andothers SCK Application No 2 of 2011 [2012] eKLR explained that:A court’s jurisdiction flows from either the Constitution or Legislation or both. Thus a court can only exercise jurisdiction as conferred by the Constitution or other written law. It cannot arrogate to itself jurisdiction exceeding that which is conferred upon it by law ….. the Court must operate within the constitutional limits. It cannot expand jurisdiction craft or innovation.

4. If this is a land matter then this court, the High Court, lacks jurisdiction to entertain the matter. The Environment and Land Court (“ELC”) is established pursuant to article 162(3) of theConstitution which provides that Parliament shall establish Court with the status of the high Court to hear and determine disputes relating to the environment and the use and occupation of and title to land. Consequently, Parliament enacted the Environment and Land Court Act, Act No 19 of 2011 establishing the Environment and Land Court whose jurisdiction is set out in section 13 as follows:13. Jurisdiction of the court(1)The court shall have original and appellate jurisdiction to hear and determine all disputes in accordance with article 162(2)(b) of the Constitution and with the provisions of this Act or any other law applicable in Kenya relating to environment and land.(2)In exercise of its jurisdiction under article 162(2)(b) of the Constitution, the court shall have power to hear and determine disputes-(a)relating to environmental planning and protection, climate issues, land use planning, title, tenure, boundaries, rates, rents, valuations, mining, minerals and other natural resources.(b)relating to compulsory acquisition of land;(c)relating to land administration and management;(d)relating to public, private and community land and contracts, choses in action or other instruments granting any enforceable interest in land; and(e)any other dispute relating to environment and land.

5. The Supreme Court in Republic v Karisa Chengo and 2 Others SCK Petition No 5 of 2015 [2017] eKLR emphasized the High Court, ELC and Employment and Labour Relations Court are three different and autonomous courts which exercise different and distinct jurisdictions. Further, that article 165(5) of the Constitution precludes the High Court from entertaining any matters that fall within the jurisdiction of the other two equal status courts.

6. What constitutes use and occupation of, and title to land is clear in some case and not so clear in others. InSuzanne Achieng Butler andothersv Redhill Heights Limited andanotherKBU HCCC No 2 of 2016 [2016] eKLR, Ngugi J, explained that while the provisions on jurisdiction of the ELC in land related matters is clear, what is not clear is the what, “land related’’ means and this would require case by case determination. The learned judge then explained that:(23)When faced with a controversy whether a particular case is a dispute about land (which should be litigated at the ELC) or not, the courts utilize the pre-dominant purpose test: In a transaction involving both a sale of land and other services or goods, jurisdiction lies at the ELC if the transaction is predominantly for land, but the High Court has jurisdiction if the transaction is predominantly for the provision of goods, construction, or works.(24)The court must first determine whether the pre-dominant purpose of the transaction is the sale of land or construction. Whether the High Court or the ELC has jurisdiction hinges on the predominant purpose of the transaction, that is, whether the contract primarily concerns the sale of land or, in this case, the construction of a townhouse.

7. I agree that land and land related cases rarely come in black and white, the land element may only be part of the overall milieu of the dispute between the parties. Further, even where the dispute appears to be land related, it may not fall within the jurisdiction of the ELC. For example, in Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna and 5others MSA CA Civil Appeal No 83 of 2016 [2017] eKLR, the Court of Appeal held a dispute over the amount secured by a charge over land does not constitute use of land within the meaning of article 162 of the Constitution. The court observed that, “the dominant issue in this case was the settlement of amounts owing from the respondents to the appellant on account of a contractual relationship of a bank and lender.”

8. In the Suzanne Achieng Butler case (supra), the learned judge identified some factors that would assist the court determine whether it has jurisdiction. These include the language of the contract, the nature of the business of the parties, if the contract is mixed, the intrinsic worth of the two parts; the land acquisitions and the other services or provisions of material, the gravamen on the dispute and whether it is rooted in contests about ownership, deficiency in title, occupation or use of land or whether the dispute involves quality of services offered, construction or works and remedies sought by the plaintiff.

9. With the aforesaid principles in hindsight, does this suit fall within the jurisdiction of the ELC? The plaintiffs’ contention is that this matter belongs to the ELC because the main dispute in this suit is the ownership of the LR No 5980 and LR 4508/1 and the subsequent amalgamations and subdivisions thereunder. The 1st plaintiff depones that following investigations the plaintiffs have established that the 1st defendant without her knowledge and consent unlawfully, illegally and without any colour of right amalgamated plots LR Nos 5980 and 4508/1 which were jointly owned between herself and her deceased husband.

10. That the plaintiffs later discovered that the 1st, 2nd and 3rd defendants have not only encroached on their land and proceeded to construct houses without their knowledge and consent, they also proceeded to dispose off the property to third parties and charge it to other parties such as Access Bank Limited. The plaintiffs state that they have since sought revocation of the titles issues to the 1st defendant which order can only be issued by the ELC.

11. In order to resolve the issue, an understanding of the plaintiffs’ case as set out in the plaint dated April 6, 2017 is necessary. At the material time, the Dr Samuel Mundati Gatabaki (“the Deceased”) was the registered owner of LR 28223/33 (“the suit property’’) and entered into a joint venture agreement dated May 23, 2007 with the 2nd and 3rd defendants and incorporated the 1st defendant. The 1st defendant then entered into several transactions involving the suit property which was transferred to the 1st defendant including the charging of the suit property to the Bank. All these transactions were necessary for the development of the Fourways Junction Estate, a real property development of the Joint Venture (“the Development”).

12. In this suit, the deceased claimed that he was entitled to certain units, 50 in number, within the development. In particular, the plaintiffs’ claim that the 2nd defendant on behalf of the 1st defendant through written offers dated February 1, 2016 offered to the deceased several units on terms and conditions contained therein. The deceased pleads that he discharged his obligation under the said offers by paying the full purchase price however the 1st, 2nd and 3rd defendant failed to complete part of their obligations and breached the contracts by failing to complete construction of the units on the agreed completion date, failed to transfer the sub-leases to him and hand over possession of units and also failed to give him vacant possession for some of the units. The deceased further complained that the 2nd, 3rd and 4th defendants have made attempts to dispossess him of the units he had purchased and as such he sought several reliefs in the plaint dated April 6, 2017 as follows:a.Against first defendant specific performance by way of transfer of sublease for the properties enumerated in the schedule of paragraph 7 of the plaint herein.b.A permanent injunction to restrain the first, second, third and fourth defendants, their servants and/or agents from committing acts of trespass by sending strange visitors, charging, alienating, leasing, or in any way interfering with the quiet possession of the properties stated in schedule in paragraph 7 of this plaint.c.Damages for breach of contract against the first, second and third defendant.d.Costs.e.Interest at court rates.f.Such other or further orders as the court may deem just in the interest of justice.

13. On the substantive issue, the bank rejects the plaintiffs’ contention that the ownership of LR No 5980 and 4508/1 is in dispute as they have not sought any reliefs in that respect. It also points out that this matter has been settled by consent of the parties and that the application is an attempt to change the nature of the case in order to have the matter transferred to the ELC. The bank also states that the 1st defendant also raises new issues in her deposition including allegations of encroachment of their land by the 1st, 2nd and 3rd defendants and charging of properties by Access Bank Limited which is not part of this suit.

14. It is evident from the aforesaid summary of the plaintiffs’ case as pleaded in its plaint dated April 6, 2017 that the title or ownership of the suit property is not dispute. The deceased transferred the suit property to the 1st defendant as the joint venture company to develop the property in consideration for receiving units in the development. In the application under consideration, the plaintiffs’ contends that the main dispute is the ownership of LR No 5980 and LR 4508/2 and the subsequent amalgamations but as the Bank points out this contention is not borne out in the plaint. In fact, this position which the plaintiffs now assert as the dispute is in direct conflict with the reliefs they seek in plaint being specific performance of certain agreements based on the suit property and the joint venture agreement which is the substratum of the claim.

15. I also note that even in the proposed amended plaint dated March 10, 2021, the plaintiffs included additional reliefs seeking compensation, reimbursement and or refund incurred in carrying on works and repairs on the uncompleted units amounting to Kshs 46,035,790. 00, in the alternative payment of Kshs 1,186,500. 00 being the market price of the 50 units claimed by the plaintiffs and special damages of Kshs 1,150,000. 00 for the cost of preparation of the valuation report and bill of quantities. All these reliefs go to show that the issue for resolution is not the land per se but the obligations arising out of the joint venture agreement hence i can affirmatively state that this matter is outside the purview of the ELC.

16. Ultimately, the basis of the plaintiffs’ application must be dismissed because it is founded on the wrong premise that the dispute between the parties involves the ownership of LR 5980 and LR 4508/1 when no such plea exists in the pleadings. Finally, even if I were to accept the plaintiffs plea that this court lacks jurisdiction, the only order I would make would be to strike out the suit as the Court of Appeal held in Phoenix of EA Assurance Company Limited v SM Thiga t/a Newspaper Service NRB CA Civil Appeal No 244 of 2010 [2019] eKLR that, “[A suit] filed before a court devoid of jurisdiction ……... was a nullity ab initio and was not transferable to another court; jurisdiction cannot be conferred by consent and ultimately, all orders emanating from that suit are null and void.”

17. The plaintiffs’ application dated September 21, 2022 is dismissed with costs to the 4th defendant.

DATED AND DELIVERED AT NAIROBI THIS 18TH DAY OF OCTOBER 2022. D. S. MAJANJAJUDGECourt of Assistant: Mr M. OnyangoMs Beacco instructed by Wanyonyi and Muhia Advocates for the Plaintiffs.Mr Kimani, SC with him Mr Ondieki instructed by Hamilton Harrison and Mathews Advocates for the 4th Defendant.