[2018] KEELC 4878 (KLR)

Republic v National Land Commission & another; Edifice Real Estate Limited (Exparte) (Environment and Land Judicial Review Case 25 of 2017) [2018] KEELC 4878 (KLR) (26 July 2018) (Judgment)

Neutral citation: [2018] KEELC 4878 (KLR)

Republic of Kenya

In the Environment and Land Court at Nairobi

Environment and Land Judicial Review Case 25 of 2017

AK Bor, J

July 26, 2018

Between

Republic

Applicant

and

National Land Commission

1st Respondent

Chief Land Registrar

2nd Respondent

and

Edifice Real Estate Limited

Exparte

Judgment

1. Through the Notice of Motion dated 16/8/2017, the Ex parte Applicant seeks an order of certiorari to remove into this court for purposes of quashing, the decision of the National Land Commission (NLC) contained in Gazette Notice No. 6862 dated 17/7/2017 which directed the Chief Land Registrar to revoke the title over L.R. No. 209/18866 (original L.R. No. 209/7437) Nairobi. The Applicant also seeks an order to prohibit NLC and the Chief Land Registrar from interfering with the Applicant’s proprietorship of L.R. No. 209/18866 (original L.R. No. 209/7437) Nairobi (“the Suit Property”).

2. The Applicant is the registered proprietor of the Suit Property which it claims it purchased from Azarel Investments Limited for the consideration of Kshs. 1,280,000,000/=. The transfer was registered on 16/10/2012 after payment of the stamp duty and other registration fees. The Applicant claims that it has been paying annual rent in the sum of Kshs. 1. 6 million to the Government as well as rates to Nairobi City County.

3. Sometime in 2016, NLC summoned the Applicant to respond to a complaint lodged by the Estate of the late Fred Kubai who had laid claim to the Suit Property. After hearing the parties, the Applicant avers that NLC arrived at the conclusion that the Suit Property was legally registered in the Applicant’s name and that its title was valid.

4. On 10/2/2017, the Attorney General wrote to NLC claiming that the Suit Property belonged to the Government. NLC invited interested parties to make presentations on this issue on 12/4/12017. The matter was adjourned to 18/4/2017 when it came up on 12/4/2017. On 18/4/2017 the 1st Respondent directed parties to file their written submissions and gave a new mention date of 24/4/2017. The Respondent was not sitting on 24/4/2017 and on 24/5/2017 when the matter was scheduled to be heard. The Applicant claims that there was no further communication from the 1st Respondent regarding the hearing of the matter or the delivery of a ruling until 17/7/2017 when NLC’s decision was published in the Kenya Gazette directing the Chief Land Registrar to revoke the Applicant’s title. The Applicant states that it was never invited to give evidence or cross examine witnesses before in the proceedings before NLC.

5. The Applicant states that the reasons given by the 1st Respondent in the Gazette Notice for the decision was:“Land, buildings and equipment were to revert to Government on 1/1/2001. Subsequent renewals and extension of lease, change of user and transfers were null and void and illegal and could not defeat or override the surrender of the land to Government as per the said agreement.”

6. The Applicant claims it purchased the Suit Property from Azarel Investments Limited in 2012 without any notice of any defect or impropriety after its advocates did due diligence on the title and found no defect or adverse claim by the Government or any other party.

7. The Applicant claims that the Attorney General filed High Court Case No. 936 of 2004 against the Tourist Paradise Limited which was the original owner and National Industrial Credit Bank Limited seeking to recover the Suit Property but that that suit was dismissed.

8. In recommending the revocation of Applicant’s title, the Applicant argues that NLC acted in contravention of Section 14 (7) of the National Land Commission Act (“NLC Act”) which states that no revocation of title shall be effected against a bona fide purchaser for value without notice of a defect in the title.

9. The Applicant urges that renewals and extension of leases are issued by the Ministry of Lands and that the charge over the Suit Property in favour of NIC Bank Limited was also registered at the Lands office. The Applicant argues that the original grant was surrendered to the Government and the Commissioner of Lands issued a new grant dated 25/11/2008 for a term of 50 years in favour of Galaxy Walker Limited which purchased the Suit Property when NIC Bank Limited exercised its statutory power of sale. The Registrar of Titles registered the transfer from Galaxy Walker Limited to Azarel Investment Limited for the sum of Kshs. 205 million on 17/2/2009 and the further transfer to the Applicant for Kshs. 1,280,000,000/= on 16/10/2012. The Applicant claims that it obtained the change of user from the Government.

10. It also argues that the 1st Respondent made the impugned decision after the period within which NLC was to review grants of public land had lapsed.

11. Bipin Ramnikal Mawjee, a director of the Applicant swore the affidavit in support of the application. He annexed a copy of the title for the Suit Property which shows that the Suit Property was transferred to the Applicant on 16/10/2012. He also produced a copy of the sale agreement made on 11/8/2012 between the Applicant and Azarel Investment Limited. The sale agreement stipulated that the purchase price was Kshs. 1,280,000,000/= out of which the purchaser was to settle the debt due to African Banking Corporation Limited. The agreement set out how the rest of the money was to be paid to the vendor. He also attached the assessment of stamp duty by Kenya Revenue Authority together with the evidence of payment of stamp duty on the transfer. He attached evidence of payments made to the Nairobi City County for approval of building plans as well as evidence of payment of rates and rent in 2017.

12. The Director attached an unclear copy of the 1st Respondent’s letter dated 6/9/2016 which summed up the 1st Respondent’s findings in respect of the review of the grant of public land in respect of L.R. No. 209/18866. The letter gave a list of the transactions effected against the Suit Property resting with the transfer in favour of the Applicant. The 1st Respondent noted that NLC had determined from the oral and written submissions of the parties and records held by Ministry of Lands and the Physical Planning Department that the Suit Property was legally registered in the Applicant’s name and the title it held was valid. The letter states that NLC had received a complaint over the Suit Property from Andrew Kubai, a representative of Kubai Investments Limited and the Estate of Fred Kubai alleging that the Suit Property had been illegally appropriated. NLC’s decision was copied to Andrew Kubai and the Acting Chief Land Registrar.

13. The Applicant also produced a copy of the Attorney General’s letter dated 10/2/2017 whose reference is L.R. No. 209/7437 – Tourist Paradise Investment Limited. The letter stated that at the Board Meeting of the Betting Control and Licensing Board it had been resolved that an inter-Ministerial Committee would be formed to ensure that the property and the buildings being on the land would revert back to the Government through the legal procedures.

14. The letter asked NLC to facilitate the transmission of the prime Government property back to the Government since the Attorney General was aware that there were parties who had approached NLC claiming to be the owners of the Suit Property. The Applicant also annexed copies of Gazette Notice No. 6862. It also annexed a copy of the Plaint in HCCC No. 954 of 2004 Commissioner of Lands v The Tourist Paradise Investments (Sued through its Receiver Manager Gitari Njeu) and National Industrial Credit Bank Limited. No other pleadings were annexed. The order dismissing the suit was not annexed.

15. NLC filed grounds of opposition to the application. It argued that the orders sought cannot issue as against it since by dint of Article 165 of the Constitution it became functus officio once it gazetted its decision. The NLC argued that the application does not meet the threshold for judicial review proceedings and that an order of prohibition is not available since it had already made its decision. NLC also argued that the Applicant had not demonstrated that it was denied an opportunity to be heard by NLC or the unreasonableness of the NLC’s decision.

16. Parties filed submissions. The Applicant submitted that the NLC acted in excess of its jurisdiction under Section 14 of the National Land Commission Act when it rendered its decision since its mandate to review grants of public land to establish their propriety or legality expired on 2/5/2017. The Gazette Notice was published on 17/7/2017. The Applicant also relied on Section 14 (7) of the NLC Act which protects the title of a bona fide purchaser for value without notice of any defect in the title from revocation of its title. The Applicant argues that it was a bona fide purchaser for value of the Suit Property without notice of any defect on the title and that it carried out due diligence. The Applicant faulted the conduct of the officers in the Lands Office who effected and registered the transfers over the Suit Property. The Applicant maintained that NLC previously held that its title was valid when it carried out investigations.

17. The Applicant submits that it was not afforded an opportunity to present its case and to cross examine witnesses by NLC who only directed it to file its written submissions. The Applicant relied on the decisions in Republic v Attorney General and others, Ex parte Tom Otoyo Oloo [2015] eKLR and Republic v Commission on Administrative Justice & Another, Ex parte Prof. Samson Ongeri [2015] eKLR in support of its submissions.

18. NLC submitted that it was mandated by the Constitution to review grants or dispositions of public land to establish their propriety and legality. It received a complaint from Kubai Investments Limited in respect of the grant over the Suit Property and after hearing the parties, it made a determination that the complaint was not valid. NLC pointed out that that determination was made before it received the complaint from the Attorney General to the effect that the Suit Property belonged to the Government by way of surrender. Upon perusal of the documents forwarded by the Attorney General, NLC arrived at the conclusion that it was necessary to revisit the grant over the Applicant’s land due to the new evidence tendered. The parties concerned were notified of the fresh complaint and invited to make presentations. The parties elected to proceed by way of written submissions based on the fact that the matter had previously been heard except for the new complaint raised by the Attorney General. NLC arrived at the decision that the land belonged to the Government by way of surrender.

19. On the issue of whether the Applicant was afforded an opportunity to be heard, NLC maintained that the parties were not only given an opportunity to be heard, but that they were also heard. NLC relied on the case of Republic v Kenyatta University, Ex parte Solomon J. Mummah [2013] eKLR in which the judge quoted the decision in Simon Gakuo v Kenyatta University and 2 Others, Misc. Civil Application No. 34 of 2009 where the court stated that the audi alteram partem rule should not be interpreted to mean a full adversarial hearing or anything close to the court room situation. The court stated that what is needed is what the court considers sufficient in the context of each situation with its own unique facts; and that there are no rigid rules as to what is needed in order to be procedurally fair.

20. On the issue as to whether the Applicant is a bona fide purchaser for value without notice, NLC submitted that the Applicant had not demonstrated that it acquired a valid and legal title after carrying out the necessary due diligence to determine that the owner from whom it acquired the Suit Property had a legitimate title and lastly, that it paid valuable consideration for the purchase of the Suit Property. NLC urged that having participated in the review proceedings before it and not having joined the company from which the Applicant acquired the Suit Property, the Applicant cannot claim to be a bona fide purchaser for value.

21. NLC submitted that judicial review deals with the process of decision making and not the merits of the decision. It submitted that the Applicant failed to show that the decision it arrived at was tainted with illegality, irrationality or procedure impropriety. It submitted that since the Applicant is aggrieved by NLC’s decision but not the process of making the decision, then the Applicant’s claim does not fall within the purview of judicial review. It surmised that the Applicant’s claim on ownership can only be determined in an ordinary suit where documents and evidence can be tested by way of interrogation and the cross examination of witnesses.

22. The 2nd Respondent filed submissions. It submitted that Article 68 of the Constitution and Section 14 of the NLC Act mandated NLC to review grants of public land to establish their propriety or legality. That NLC acted in accordance with its mandate and complied with the requirement under Section 14 (8) of the NLC Act which requires NLC when reviewing grants to be guided by the principles set out at Article 47 of the Constitution. The Applicant gave a chronology of how the matter proceeded before the 1st Respondent up to the time it made its determination which confirms that it was given a chance to present its case before the 1st Respondent.

23. The 2nd Respondent submitted that it is not in dispute that the head lease over the Suit Property is owned by the Government of Kenya and the Government has a reversionary interest and right at the expiry of the 99-year lease granted to private citizens. Further, that Section 6 (3) of the NLC Act mandated NLC to receive written or oral submissions from parties and that NLC is not bound by rules of evidence according the 2nd Respondent.

24. The 2nd Respondent argues that the Applicant is inviting the court to make a determination on the regularity of its title to the Suit Property which is tantamount to undertaking a review process yet this is the exclusive mandate of NLC under the Constitution. Such an action would be in violation of the doctrine of separation of powers and institutional independence. The 2nd Respondent submitted that if the court were to make a determination on the legality of the Applicant’s title to the Suit Property, it would be tantamount to usurping NLC’s powers to review grants of public land to determine their legality or propriety.

25. The 2nd Respondent submitted that Section 14 of the NLC Act sets out the elaborate procedure for undertaking the review which expressly gives powers to NLC and 2nd Respondents hence they cannot be acting in excess of their powers.

26. The 2nd Respondent argued that the orders sought by the Applicant are not available since judicial review does not deal with the merit of the case but only deals with the process.

27. The Applicant admitted that the right to property which is protected by Article 40 of the Constitution is qualified to exclude unlawfully acquired property. However, it submitted that it had demonstrated that it lawfully purchased the Suit Property and all the processes were sanctioned by the Government and that it continues to pay colossal amounts of money on account of annual rent and rates besides the stamp duty which the Government was happy to receive.

28. The issue for determination is whether the court should grant the orders of certiorari and prohibition sought by the Applicant.

29. Article 68 (c) (v) of the Constitution mandated Parliament to enact legislation to enable the review of all grants or dispositions of public land to establish their propriety or legality. Pursuant to this, Parliament enacted the NLC Act which came into force on 2/5/2012. Section 14 of the NLC Act states that subject to Article 68 (c) (v) of the Constitution, NLC would within five years of the commencement of the Act, either on its own motion or upon complaint, review all grants or dispositions of public land to establish their propriety. The five-year period Parliament gave NLC to review all grants lapsed on 1/5/2017.

30. Article 68 (c) (v) of the Constitution did not put a time frame within which the review of all grants and dispositions of public land was to be undertaken, it only enjoined Parliament to enact legislation to enable the review of grants of public land. What then happens after 1/5/2017? Does it mean that there will be no review of grants of public land to establish their legality? Is public land that was improperly or illegally acquired to be deemed to be properly or lawfully acquired? The court does not think this was the intention of people of Kenya when they passed the Constitution.

31. The definition of public land at Article 62 of the Constitution includes land which at the effective date was unalienated government land as defined by an Act of Parliament in force on the effective date. Land transferred to the State by way of reversion or surrender also constitutes public land under this Article.

32. Article 67 of the Constitution establishes NLC and gives it the function of managing public land on behalf of the national and county governments. For NLC to manage public land effectively, a determination must be made as to which land constitutes public land. In other words, the Constitution envisaged that the review of grants of public land to determine their legality would be an ongoing process until all the grants or dispositions of public land had been reviewed and their propriety established. After the review of grants, appropriate steps would have to be taken to correct the irregularity where the title is found to have been irregularly acquired. Titles acquired illegally over public land would have to be revoked. This resonates with Article 40 (6) of the Constitution which excludes property found to have been unlawfully acquired from the protection of the right to property afforded by that Article.

33. The 2nd Respondent argued that the suit land in this case was government land by way of reversion. It will be necessary for an enquiry to be undertaken as to whether the Suit Property is private land owned by the Applicant or if it is public land as the 2nd Respondent contends. That inquiry cannot be undertaken in judicial review proceedings. The investigation may be undertaken by the investigative organs such as the Ethics and Anti-Corruption Commission or the Directorate of Criminal Investigations.

34. The court agrees with the Applicant that NLC’s power to review the grants of public land to establish their legality lapsed on 1/5/2017 and it therefore ought not to have directed the 2nd Respondent to revoke the Applicant’s title as it purported to do vide gazette notice no. 6862 dated 17/7/2017. The court quashes the decision of NLC contained in Gazette Notice No. 6862 dated 27/7/2017.

35. This is not the proper forum for the court to make a finding as to whether the Applicant’s title was legally and properly acquired. The Applicant can file an ordinary suit and obtain orders to restrain the Chief Land Registrar from interfering with its proprietorship of the Suit Property. The court declines to issue the order of prohibition sought by the Applicant.

36. Having succeeded partially in its claim, the Applicant is not awarded the costs of the suit. Each party will bear its own costs.

DATED AND DELIVERED AT NAIROBI THIS THIS 26TH DAY OF JULY 2018. K. BORJUDGEIn the presence of: -Mr. Koech for the Ex parte ApplicantMs. Masaka for the 1st RespondentMr. A. Kamau for the 2nd RespondentMr. Adala for the Interested PartyMr. V. Owuor- Court Assistant