[2018] KEELC 2320 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT OF KENYA AT EMBU

E.L.C.A. NO 4 OF 2014

(FORMERLY KERUGOYA E.L.C.A 18 OF 2014)

SAMMY NJERU KIVUTI RUPIA..........................................................APPELLANT

VERSUS

LYDIA WANGUI MAINA (As legal representative of

DANIEL MAINA KIBAGE (Deceased)...............................................RESPONDENT

(Being an appeal from the judgement of the Honourable M.W. Wachira – Chief Magistrate on 9th January, 2014 in Embu Civil Suit No. 81 of 1988)

BETWEEN

DANIEL MAINA KIBAGE........................................................................PLAINTIFF

VERSUS

SAMMY NJERU KIVUTI RUPIA.........................................................DEFENDANT

JUDGEMENT

1. This is an appeal against the judgement and decree of the Hon Margaret Wachira (Chief Magistrate) dated 9th January 2014 in Embu CMCC No. 81 of 1988. By the said judgement, the court entered judgement for the Respondent against the Appellant in the sum of Kshs 301,650/- together with costs and interest. The Respondent was the Plaintiff whereas the Appellant was the Defendant in the said suit.

2. The brief facts of the suit before the Magistrate’s Court were as hereunder. By a plaint amended on 8th April 2011, the Respondent pleaded that on 21st November 1983, he entered into an agreement for the purchase of Title No. Kyeni/Kigumo/911 (hereinafter the suit property) from the Appellant at an agreed price of Kshs 75,000/-. The Respondent further pleaded that despite having paid the entire purchase price and having issued a notice of intention to sue, the Appellant had failed to transfer the suit property to him.

3. The Respondent, therefore, sought the following reliefs against the Appellant before the Chief Magistrate’s Court;

a. Transfer of Title No. Kyeni/Kigumo/911 from the Defendant’s name to the Plaintiff.

b. Compensation for the developments on Title No. Kyeni/Kigumo/911 valued in the sum of Kshs 1,403. 050/- plus the purchase price and interest.

c. Costs of this suit.

d. Interest on (b) and (c) at court rates.

e. Any other relief the court may deem fit to grant.

4. The Appellant denied the Respondent’s claim in its entirety. He denied the existence of the sale agreement for the suit property and the payment of the purchase price. The Appellant further pleaded, on a without prejudice basis, that the sale transaction became void upon refusal of the consent of the Land Control Board (hereinafter LCB).

5. By a judgement dated 9th January 2014, the learned Chief Magistrate declined to order the transfer of the suit property to the Respondent since the consent of the LCB had not been obtained but granted an order for refund of the sums paid towards the purchase price and incidental costs as well as the value of developments all totaling Kshs 301,650/-. The court also awarded the Respondent interest at court rates from the date of filing suit until payment in full.

6. Being aggrieved by the said judgement and decree the Appellant filed a memorandum of appeal dated 4th February, 2014 raising the following five (5) grounds of appeal.

a. The learned Chief Magistrate erred in law when she made a finding that the Defendant was liable to pay the Plaintiff a sum of Kshs 301,650. 00 when the evidence on record was to the contrary.

b. The learned Chief Magistrate erred in law and fact when she failed to consider that the Plaintiff’s claim was based on a null and void transaction and that the same was null and void for all purposes.

c. The learned Chief Magistrate erred in law and fact when she entered judgement together with interest from the date of filing the suit without considering that the Plaintiff had substantially contributed to the delay of the suit.

d. The learned Chief Magistrate erred in her judgement by believing the Plaintiff’s evidence as against the Defendant.

e. The learned Chief Magistrate erred in law and fact when she gave judgement against the weight of the evidence adduced.

7. The record shows that the original Respondent in this suit, Daniel Maina Kibage, died whilst this appeal was pending. He was substituted with Lydia Wangui Maina as his personal representative on 31st March 2016. Consequently, the said personal representative shall be considered as the Respondent for purposes of this appeal.

8. It would appear from the record that the parties herein appeared before the Deputy Registrar on 21st August 2017 whereby they agreed to dispose of the said appeal through written submissions. Consequently, the Appellant filed his submissions on 2nd November 2017 whereas the Respondent filed hers on 20th November 2017.

9. In his written submissions, the Appellant chose to argue only one ground of appeal which is based upon the provisions of the Land Control Act (Cap 302)(hereinafter the LCA). It was submitted that the suit property was agricultural land within the meaning of the LCA hence the consent of the Land Control Board was mandatory for the transaction to be valid. It was contended that under section 6 (1) of the LCA, a controlled transaction in respect whereof the consent has not been granted was null and void and that under section 22 of the same Act it was a criminal offence for a person to remain in possession of any land pursuant to a transaction which had become void for lack of consent.

10. The Appellant, therefore, submitted that the learned Chief Magistrate misdirected herself in awarding compensation to the Respondents for developments undertaken on the basis of a void and illegal transaction. The Appellant accused the trial court of encouraging an illegality by awarding the Respondent compensation for developments on the suit property undertaken in violation of the law. The Appellant relied on Nairobi Civil Appeal No. 76 of 2014 David Sironga Ole Tukai Vs Francis Arap Muge & 2 Others [2014] eKLR in support of his submissions. The Appellant, therefore, urged the court to allow the appeal with costs.

11. The Respondent supported the judgement of the trial court. It was submitted, firstly, that the trial court was right in ordering a refund of the purchase price since the Appellant could not be allowed to keep both the money and the suit property. It was submitted, secondly, that the trial court was right in awarding compensation for the developments on the suit property because the Respondent was given possession by the Appellant and the developments thereon were undertaken with his knowledge and consent.

12. The Respondent also supported the trial court’s award of interest from the date of filing suit on the basis that the Appellant had kept the Respondent out of his money for a very long period of time. The Respondent, therefore, urged the court to dismiss the appeal with costs.

13. The court is aware of its duty as a first appellate court. The court is obliged to re-look at the entire evidence before the trial court, make its own evaluation and draw its conclusions thereon. The guiding principles were summarized in the case of Selle Vs Associated Motor Boat Co. Ltd & Others [1968] EA 123 at P. 126 as follows;

“…Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in that respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression on the demeanor of a witness is inconsistent with the evidence in the case generally.”

14. The court has perused the record of appeal, the grounds of appeal as well as the respective submissions of the parties. The Appellant did not argue any of the evidentiary grounds of appeal relating to the adequacy of the evidence on record to justify the award by the trial magistrate. The issue of the award of interest from the date of filing suit to the date of payment was also not pursued.

15. That leaves the second ground of appeal as the only one which was argued. It is purely a point of law which is based upon the provisions of the LCA and decided cases. The entry of judgement for a refund of the purchase price and costs incurred in the discharge of charge totaling Kshs 93,000/- was not challenged. The only aspect of the judgement which was challenged was the award of Kshs 203,650/- as compensation for developments undertaken by the Respondent on the suit property.

16. The Appellant’s contention was that since the consent of the LCB was not obtained for the sale of the suit property to the Respondent, that transaction became null and void for all purposes under section 6 (1) of the LCA and that an award for compensation for any developments on the suit property was untenable in law. The Appellant contended that the Respondent’s possession of the suit property was illegal and criminal hence the trial court erred in law in compensating the Respondent for the developments thereon.

17. The Appellant relied on the case of David Sironga Ole Tukai Vs Francis Arap Muge & 2 Others (supra) (hereinafter the Ole Tukai case) in support of his appeal. In that case, the Appellant had entered into an agreement with the Respondents who were officials of Kapkween Farmers Cooperative Society for the sale of some agricultural land which was subject to the LCA. It was common ground that although the Respondents took possession and made part payment of the purchase price, the consent of the relevant LCB was not obtained.

18. When the Appellant filed suit for orders of eviction and permanent injunction against the Respondents, the latter counterclaimed for transfer of part of the suit property equivalent in value to the purchase price they had paid. The High Court declined to grant the Appellant the orders of eviction and injunction sought but granted the Respondents the order for transfer of part of the suit property representing the amount of the purchase price paid.

19. The Appellant was aggrieved by the decision of the High Court and appealed against it to the Court of Appeal on the basis, inter alia, that the High Court had erred in disregarding the mandatory provisions of the LCA in ordering specific performance of a sale agreement which was declared to be null and void by statute.

20. The Court of Appeal sitting at Nairobi heard and allowed the appeal. The court analyzed a host of previous authorities on the application of the LCA and held that the sale agreement between the parties was void by virtue of the provisions of the LCA and as such it was not enforceable. The court also considered and departed from the earlier Court of Appeal decision in Macharia Mwangi Maina & 57 Others v. Davidson Mwangi Kagiri, Nyeri Civil Appeal Nos 26 and 27 of 2011 (hereinafter the Macharia Mwangi case) in which the court had applied the equitable principle of constructive trust.

21. With respect to an award of damages, the Court of Appeal observed as follows;

“Speaking for the court in Kariuki v. Kariuki [1983] KLR 225, at p. 227, Law, JA affirmed that when a transaction is stated by the express terms of an Act of Parliament to be void for all purposes for want of necessary consent, a party to that transaction cannot be guilty of fraud if he relies on the statute to argue that the transaction is void. His Lordship also added that no general damages are recoverable in respect of a transaction which is void and that the only remedy open to a party to a transaction which has become void under the Act is recovery of any money or consideration paid in the course of the transaction under section 7 of the Act.”

22. In a more recent decision by the Court of Appeal sitting at Eldoret in Willy Kimutai Kitilit v. Michael Kibet, Eldoret Civil Appeal No. 51 of 2015 (hereinafter the Willy Kimutai case), the court considered both the case of Ole Tukaiand the case of Macharia Mwangi. In a judgement delivered on 17th May 2018, the court approved of the judgement in the Macharia Mwangi case and departed from the case in the Ole Tukai for the various reasons given in the said judgement.

23. It is, therefore, evident that there are two schools of thought in the Court of Appeal on the consequences of lack of consent of the LCB with respect to a controlled transaction. One view excludes the application of equity whereas the second one favours the application of equity on the basis of Article 10 (b) of the Constitution of Kenya 2010 which recognizes equity as one of the national values and principles of governance.

24. The Court of Appeal in the case of Willy Kimutai Case(supra) therefore held as follows;

“For the reasons in paragraphs 20, 21, 22, 23, 24 and 25 above, we are in agreement with the Macharia Mwangi Maina decision that the equitable principles of constructive trust and proprietary estopell are applicable and enforceable to land subject to the Land Control Act, though this is subject to the circumstances of the particular case. Upon the application of the equitable doctrines, the court in its discretion may award damages and where damages are an inadequate remedy grant the equitable relief of specific performance.”

(Emphasis added).

25. This court is persuaded by the most recent decision of the Court of Appeal in the Willy Kimutai Case that a court has judicial discretion to award damages in equity even though the underlying transaction is not enforceable for lack of consent of the LCB. It should be noted that the trial court in this matter declined to order specific performance but ordered only a refund of the money paid and compensation for the developments on the suit property.

26. This court is of the view that the judgement of the learned Chief Magistrate was just and equitable. It could not be faulted solely on the basis of lack of the consent of the LCB. In the circumstances of this matter, the decision of the trial court cannot be faulted. The court finds no merit in the appeal before this court.

27. The upshot of the foregoing is that the court disallows all the grounds of appeal raised. The appeal is hereby dismissed with costs to the Respondent.

28. It is so decided.

JUDGEMENT DATED, SIGNED and DELIVERED in open court at EMBU this 26TH day of JULY, 2018

In the presence of Mr. Siro holding brief for Ms Muthoni for the Respondent and in the absence of the Appellant.

Court clerk Mr. Muinde.

Y.M. ANGIMA

JUDGE

26. 07. 18