Benedetta Mbatha Muema v Witeithie Gwaka Investments Limited & Charles Mwaura [2020] KEELC 212 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT THIKA

ELC APPEAL NO. 36 OF 2019

BENEDETTA  MBATHA MUEMA....................................................APPELLANT

AND

WITEITHIE GWAKA INVESTMENTS LIMITED...............1ST RESPONDENT

CHARLES MWAURA................................................................2ND RESPONDENT

(Being an Appeal  from the decision of the Senior  Principal Magistrate Hon. A. M. MAINA, delivered on the 9th  day of April 2019 in Chief Magistrate Court at Thika in Civil Case  No. 510 of 2014)

JUDGMENT

The Appellant hereinBenedetta Mbatha Muema,was the Plaintiff in Thika CMCC No. 510 of 2014. The Respondents were the Defendants in the above stated suit. The Plaintiff via a Plaint dated 7th July 2014, sought for the following orders against the Defendants;

a) A mandatory  injunction  restraining the Defendants, their agents, servants, family and or other person acting on their   behalf  from interfering, building, construction, trespassing  upon, occupying  or in  whatever  way dealing  with the Plaintiff’s land, the suit property.

b) An order for the rectification of the Land Register  to cancel the names of the 2nd Defendant and substitute  with that of the Plaintiff.

c) General Damages.

d)  Cost of the suit and interest on cost.

e)Any other relief that the Court may deem fit and just to grant.

In her statement of Claim, the Plaintiff (Appellant) averred that  on 5th November  1987, one Veronica  Wambui Wakabawho was the original shareholder with the  1st  Defendant(1st Respondent) sold her shares  to the Plaintiff’s (Appellant’s) husband one John Muema Mulle, who later transferred the shares to the Plaintiff (Appellant) and the  Plaintiff was issued  with the share certificate No. 0835, indicating her plot to be409 in Farm No. 1 situate at Witeithie  Estate Thika.  The Plaintiff (Appellant) and her husband have been in possession for the last 27 years.That the Plaintiff visited the site of her Plot and found the 2nd Defendant (2ND Respondent) constructing a permanent house on her plot  and upon inquiry she was told  that the 2nd Defendant is the registered owner of the plot

The Plaintiff (Appellant) further contended that since she did not   transfer the plot to the 2nd Defendant, the acquisition of the land by the 2nd Defendant (Respondent) was by fraud. She particularized fraud as transferring her land by 1st Defendant(Respondent)  to the 2nd Defendant (Respondent)  without her knowledge or consent, acquiring a title  deed  to her  property without her consent or participation, giving  title deed  to the 2nd Defendant (Respondent) when she was in possession  without due process.  She sought for orders to stop the Defendants from further interfering with her land by way of continued occupation, construction, alienation entry or re-entry.

The suit was opposed by the 1st Defendant( 1st Respondent ) who filed a Defence dated  15th August 2014, and denied all the allegations made in the Plaint  and further denied that on 5th November  1987, the  said Veronica Wambui  Wakaba  was a shareholder in the said Company  original or otherwise. It was its contention that the only proof of membership in the 1st Defendant (Respondent)   is a share certificate and that none in the name of Veronica Wambui Wakabahas been annexed in the Plaintiff’s documents. Further, that there is no proof of the sale of the said shares by the said Veronica Wambui Wakaba to the Plaintiff’s husband and that there is no share certificate to that effect. That the purported sale agreement between the parties is a sham as the said Veronica Wambui had no capacity to transfer shares.

It was further contended that the purported transfer of the shares climaxing to the purposed issuance of the share certificate is fraught with and wafting of skullduggery.  That the mode of ownership of properties of the 1st Defendant (Respondent) is first through membership vide share certificate, followed up by balloting, and devoid of balloting, a member cannot be allotted property. The 1st Defendant denied any monies were ever received on its behalf and urged the Court to dismiss the suit.

The 2nd Defendant (2nd Respondent) also filed a Statement of Defence dated 10th September 2014, and denied all the allegations made in the Plaint.  He averred that he is the duly registered owner of Parcel No. Juja Kalimoni Block 10/409,having purchased the suit property on 26th March 2012, from one Daniel  Njue Njoroge,   who was in possession and he took possession and has been in occupation for the past 3 years  and has developed the suit property. He contended that the Plaintiff had nothing to sell/offer since the land did not belong to her and it was the Plaintiff’s acts that were tainted with fraud. He particularized fraud by the Plaintiff(Appellant); as falsely claiming to be in possession,  forging share certificate and purporting to fraudulently  obtain land whilst  no documents to prove the same.

The 2nd  Defendant(Respondent) further averred that the  suit property was first registered to the 1st Defendant  on 22nd February 2008, who in turn transferred the same to Kennedy  Kanyi Gatoro  and a title deed issued to that effect . That the said Kennedy  sold the same to Daniel Njue  Njoroge on23rd November 2011,who in turn sold it to him.  He contended that his documents are genuine and therefore superior.

After Close of pleadings, the matter proceeded by way of viva voce evidence wherein the Plaintiff called five witnesses and the Defendants called 3 witnesses.

PLAINTIFF’S CASE

PW1 Benedetta Mbatha Muema testified that her husband John Muema Mullehad a share at Witeithie  Gwaka Investment  for plot No. 409.  That she requested him to transfer the property to her for her to secure a loan. She produced a copy of the share certificate as Exhibit 1, a copy of the transfer fees receipt as Exhibit 2. That initially there was a man rearing pigs on the ground but they asked him to move out. That her husband was told to wait for the title deed but when they later went to the plot, they realized that there was construction ongoing.

That her husband bought the property from Veronicaand he had a share certificate.  That Veronica Wakaba sold the land to her husband and therefore the land was in her husband’s name and she transferred it to them. That she went with her husband to transfer the land and the share certificate is dated 26th August 2005 though it has been interfered with.  That they had been given the documents with the said interference.  That the plot is in her name, but it was her husband who was to follow up with the title deed. She acknowledged that the share certificate did not have her husband’s name and she did not have any document to show that the land had been transferred to her. That she paid Kshs.9400/=as transfer fees, and though she  was not present when her husband bought the land from  Veronica, she saw the documents.  However, she has never gone to the plot with a surveyor though her husband took  her to the plot.

That she had neither used nor stayed on the plot and she did not know a title deed had been taken in 2008,but only learnt that the 2nd Defendant had constructed on the said plot. She told the Court that she did not do the alterations and denied selling the suit property to Charles Mwaura.

PW2 John Muema Mule testified that Veronica sold to him the suit property in 1987 after they had visited Witeithieand  seen it.  That they went to Weitethie officeand Veronicawas asked to avail the ballot paper, but alleged that she had lost them. However, she was advised to get an Affidavit which was prepared in a Law Firm.   That the land was transferred to him and he was issued with a share certificate No. 1397.   That in 2005, his wife wanted to take a loan and use the land as security.  That they went to Witeithie Investment Company Limited and  paid for the transfer.

That  when he bought the suit property , Veronica’shusband  took him to the ground.  That  when he transferred the suit property to his wife, he surrendered his share certificate  to the Company and his wife was issued  with a fresh one.   That  he had not obtained title deed. That there was a man rearing pigs on the plot and he had asked him to move out. That the said plot was No. 409.

He acknowledged that he did not seeVeronica’sshare certificate though she was an original owner.  That he wrote the agreement though the documents did not show the agreement was written on behalf of Veronica. That he had bought the land forKshs.11,200/=and he never took a title deed.  That though he has had the land for 27 years, he never utilized it due financial limitations.  That he was present when his wife was issued with a share certificate and he thought the alterations from the 1st Defendant (Respondent) were normal. Further that the 1st Defendant (Respondent) must have given a share certificate to a person who sold the land to the 2nd Defendant(Respondent).  That he went to Witeithie Investment Company and talked to Wachira and the Chairman who proposed he be given another plot at Ngoigwa.That Veronica’sWakaba’s name was in  the register and it was cancelled and as he was issued with a share certificate. He further testified that he transferred the land in 2005 and that they used a printed share certificate was used.

PW3 Mary Wambui  King’ombe  testified that Veronica Wambui is her mother. It was her testimony that her mother had a plot with  Witeithie Company  and she saw the agreement  for  sale  for the land and when she inquired, her mother told her  that she had sold it to Muema to pay school fess. She testified that she was then 10 years.

PW4 Veronica Wambui  testified that she knew  John Muema and she used to work with him.  That she had a plot atWiteithie  Investment Companyand she sold it to a Mkamba who had walked out.  However, the Court later held that the said witness was an incompetent witness and she was therefore stood down.

PW5 Margaret Nyagambi testified that  Veronica is her mother and that in1987 she was 21 years old. It was her evidence that her mother had a share withWiteithie Company,which she sold to enable her go  for a teaching course . She further testified that she was not present when the sale was conducted but that she knew the buyer who used to work with her mother.

DEFENCE CASE

DW1 Anthony Kagamba  Haho, the Chairman of the 1st Defendant as at  November 2002, stated that from their Register, plot No. 358, did not show  any transfer of the plot  to Muema. That the Plaintiff (Appellant) share certificate No. 0835 is dated 26th August, but the year is not clear as it had been altered.  That he would not accept such a document in his office and from the Company seal, the impression of the stamp was not clear. It was his testimony that they did not stamp their certificate. He denied that the 1st signature which was apparently his was signed by him  and the 2nd signature  belonged to a  Robert Kungu, who had   made forgeries  in their Company’s  certificates  and had cases pending in Court.

It was his further testimony that  the suit deals with Farm No. 1  and that all owners of the  land  got into the land before he was  the Chairman.  That if the Plaintiff was a member, she must have bought her shares from an existing member  and if a member sells a share Certificate, the Company holds the original share Certificate  and it does not issue any new certificate to a new person.  That the Register did not contain the name of John Mule and therefore he could not have transferred his share to the Plaintiff (Appellant) who is his wife  as it is not recorded anywhere. That the share Certificate is evidence of ownership of shares in the Company.

That Witethie Company was founded in 1972, and in the Register, entry 358 shows the names of Wambui Wakaba. That for Karanjathe certificate is indicated as 359 which is missing in their records. That from the Register there is a359, which shows  it was transferred to 1401,which he could not completely comment on. That Wambui Wakaba had not balloted for share CertificateNo.358, which had some information deleted, though he did not know who deleted the information. That the Original share certificate No. 0835, indicates the year 2000, but the month and date was not indicated. That the Certificate could not qualify one  to own a plot  and the Company issues certificates to new members.

Futher that the signature on the certificate which he had indicated was not his, resembled his signature.  That  Robert Mwangi Irungu, who was a Co-Director between 2002 to 2003 at the Company was voted out  and the share certificate was allegedly signed by him, He testified that he was however not Director at the time of  the certificate was issued.

Further that they issued new shares to buyers who had bought the shares and they have a time frame for destruction the certificates from old members.  That if the Company had  a share Certificate from John Mule, the Company would not be holding it by now. That if someone lost their documents, the Company would accept a Police Abstract and an Affidavit,  though he had never seen any Affidavits of loss of certificates. It was his testimony that when there is loss, the Company confirms from the Register and a duplicate certificate is issued before a person transfers the land.

Further that he could not confirm what the practice was before he became a Chairman. That the secretary was the one who issues certificates and the Chairman only confirms if the member who transfers  his certificates  was a member.   That  though the core business of the Company is to buy and sell plots,  they have members who do not have plots. It was his testimony that a person ought  to buy shares, pays for the survey fees and then ballot.

It was his evidence that he issued a title for plot No. 409  and that he was the first person to  issue  for the said plot. That he cannot tell who balloted for Plot No. 409  and he was not aware of when the balloting was done. Further that all balloting were done between 1975and he only knows of the last person who was holding the plot and he did not know where the plot was.  That in 2008, the 1st title deed was issued  for the land to Kennedy  Kanyi  Gatoro   and  he had to have a   share certificate  and ballot which appears on page 36  member No. 1089, Certificate No.0827 which he returned before the title deed was issued.

He produced the original register and testified that page 1 of the Original Register was missing.   That on page 10 of the photocopies, page 283 corresponds with certificate number  358and it reads  the names Wambui Wakaba, who was an original member  of the Company   as per the original register and she had one share  which was valued at  Kshs.300. Further that on page  10, the  transfer on page 283shows the share was transferred,  but that it is rubbed out  on the column of the nominee’s name and particulars. He further testified that Kennedy Kanyi  is listed as No. 1089 in Farm No. 2.   That Kennedy Kanyi joined the Company on 21st June 2003 and that Wambui  Wakaba  joined in 1976. It was his evidence that in 2003,the Company was  not admitting new members  unless one bought shares from an old member  and that Kennedyseems to have bought his share  from member No. 0827.   That it was not possible for him to tell where Kanyi bought  his plot from .

That a former Director was suspected to have committed forgeries and he was charged and convicted. That  Robert Mwangi was alive in2006and2007 and was working from the office.  That even if one had a share, that did not mean one had a plot, as  a person must ballot and that  Wakaba Wambui  having 300 shares  meant she had a share worthKshs.300/=. That the register did not show she owned  a plot as she may not have paid for survey  for her to get a ballot. That as per page 36 of the Register,  the owner of plot no. 409 was Kennedy  Kanyi Gatoro  as the plot was transferred to him and that no irregulars dealings were done.  That once a title deed is issued the Company’s mandate ends. That as per page 36, Kennedy Kanyi owned land in Farm No. 1, in respect of properties  10845, 1084 and 1085, which may  have been transferred  from Farm No. 2 to Farm No. 1 and therefor there is no anomaly in their Register.  It was his evidence that if Veronicawas their member, he would urge her to add more money as there is land for her.

2ND DEFENDANT’ S CASE

DW2 Charles Mwaura  Kara  testified that  one Daniel  Njue Njoroge had made an  advertisement in the Newspaper   to which he responded  and they entered into an agreement  dated 26th March 2012, for a consideration of Kshs.880,000/=. He produced the agreement as Exhibit 1. That he was issued with a title deed  on 6th July 2012, which he produced as Exhibit 2. Further that upon conducting a search he confirmed that the suit property belonged to Daniel Njue who had bought the same from  Kennedy Kanyi and he had seen a sale agreement  between Kennedy and Njue dated 3rd November 2011, in which Njue bought the suit property for a consideration of Kshs. 600,000/=.

That the first initial owner was  Witeithie Gwaka Investment  Group  and the land was first owned by Kennedy Kanyi  and then transferred to Daniel Njue  on 23rd November 2011 and finally to him.  He produced  Mr. Njue’s title deed as Exhibit MFI 4 and the green card as Exhibit 5.  That when he bought the land, the ground was empty and upon getting necessary approvals, he started construction, but that the same   was stopped.  He produced the plans approval as Exhibit 6.  That there was a consent  dated 3rd  November 2011, between him and Daniel  and he produced the consent and transfer as  Exhibits 8 and 9 respectively.

He told the Court that he was not a member of the Company and  on page 36 of the Register, the name of Kennedy Gatoro appears as the owner of plot 409  and the said plot was initially a dumpsite. That he bought the suit property from the registered owner  and that he  never evicted the Plaintiff.  That Kanyi owned the plot in Farm 2 and the register states that the said Kanyi was from Farm No. 2 and the plots were owned even in 1987. It was his testimony that  the title deed is  not charged and that it was not uncommon for someone  to buy land and sell it the following day.

DW3  Daniel Njue Njoroge  adopted his witness statement dated  6th October 2014,and testified that the suit property was his and he sold it  to Charles Kahara and that he had bought the land  fromKennedy Kanyiin  the year 2011 forKshs. 600,000/=. That they attended the Land Control Board and got consent to transfer  on 3rd November 2011, and he got his title deed on 5th December 2011. He produced his title deed as Exhibit 4  and the sale agreement as Exhibit 3. He further produced a letter of allotment as Exhibit 8 and the transfer as Exhibit 9. That he was a member of the 1st Defendant, but in another land and that he sold the suit property in the year he bought it as he had financial constraints.  That the land was vacant when he bought it.

It was his testimony that the said Kanyi   did not show him his share certificate and   he obtained a green card and learnt thatKanyi had become an owner in 2008. That between 1987and2000, he could not tell who the owner was. That he learnt of Kanyi’s death when the case came up. He further testified that when he bought the land, it was vacant and he did not put any boundary to show that he was the owner.  That when the 2nd Defendant started constructing on the suit property, he learnt that it had another owner.   That he never entered into any transaction over the suit property with the  1st Defendant.

The parties filed written submissions and thereafter  the trial Magistrate  delivered her determination  on 9th April 2019,and dismissed the plaintiff’s (Appellant’s ) suit  and held that ;

“The Plaintiff’s prayers against the 2nd Defendant  are well set out in the Plaint . Having found that the 2nd Defendant is the absolute and indefeasible owner of the suit land then prayer (a)  of the Plaint fails  and cannot be issued against him. The same prayer cannot be issued against the 1st Defendant because it is not in possession of the land neither did it transfer the land to the 2nd  Defendant.

It therefore follows that prayer (b) cannot be issued, following the above mentioned findings. The Plaintiff did not testify of any general damages and he who alleges must prove, prayer (c)of the Plaint consequently fails. Having considered all the above mentioned , I find that the Plaintiff  has failed to prove her  claim against  the 2nd Defendant  and I proceed to dismiss the same with costs  to the Defendant.”

The Appellant was aggrieved by the said decision of the trial magistrate  and by a Memorandum of Appeal  dated  8th May 2019, sought for orders that;

a) The  Appeal be allowed.

b) The Judgment  in favour of the Respondents  be set aside.

c) The Order made  by the Learned Magistrate  in the Subordinate  Court as  to interest and costs be set aside.

d) The Applicant be awarded  the costs of this Appeal  and in the subordinate Court.

The Appeal is based in the grounds that;

1. That the learned Magistrate erred in Law and in fact  by finding the  Appellant’s case  numerations  and dismissing the same with costs.

2.  The Learned Magistrate  erred in finding  that the Plaintiff through PW2 had established that she had  bought shares  from PW4 and further went on to dismiss the Plaintiff’s case.

3.  The Learned Magistrate  erred in Law  and in fact  by finding for the  Respondents  when there was clear indication  that the Appellant  was a shareholder  of the 1st respondent  and that the 1t respondent register  had been altered for which  the 1st Respondent did not  tender an   explanation  before the Court.

4. The learned Magistrate  erred in Law and in fact in dismissing  the plaintiff’s claim  as against the 1st Defendant  despite finding  that the Plaintiff has a case against the  1st Defendant.

5. That the Learned Magistrate erred in law by failing to have due regard and to take into account the various issues raised in the pleadings, witness statement and evidence produced by the Appellant.

6. The Learned Magistrate erred in fact by failing to take into account and to consider the evidence adduced on behalf of the Appellant.

7. The Learned Magistrate failed to appreciate the submissions of the Learned Counsel for the Appellant by finding in favour of the Respondent herein.

8.  The Learned Magistrate  erred in Law  and in fact  by finding  that the Plaintiff  has failed to prove her claim  against the 2nd Defendant  and proceeded to ward costs to both  the 1st and 2nd Defendants  rather than the 2nd Defendant only.

9. The Learned Magistrate erred in law and in fact  by finding that the Plaintiff had a claim against  the 1st defendant  yet failed to exercise her discretion  in allowing the Plaintiff’s prayer  for any other relief the   Court deemed fit.

10. That  in all  the circumstances  of the case , the learned  Judge failed  to do justice  before her based  on the pleadings  and the findings  of the learned magistrate  are insupportable  in law or  on the basis of the evidence adduced.

The Appeal was canvassed by way of written submissions. . The Appellant   through the Law Firm of  Kiarie, Joshua & Co Advocates  filed her written submissions on  6th July 2020,and submitted that  it is evident that the  trial Court  failed to consider  the Plaintiff’s (Appellant’s) evidence on record  and misapplied this as against the law. It was further submitted that the trial Magistrate misapplied Section 26  of the Land Registration Act  as she found that the 1st Respondent’s Register was clearly altered which alteration the 1st Respondent was at pains to explain.

It was further submitted that the 1st Respondent deliberately presented before Court an incomplete and altered Register and it was not for the Appellant to table these documents. It was their submission that the trial Court dismissed the Appellant’s case when there was evidence   to impeach the 2nd Respondent’s title. Further that the Court failed to pronounce itself on the issue of the Appellant’s claim against the 1st Respondent, yet it had found that the Appellant had a claims against the 1st Respondent. The Appellant relied on the case  of Odds jobs…Vs…Mubia (1970) C.A 476  cited with approval in Richard Nchapi Leiyagu….Vs…IEBC & 2 Others (2014)  where the Court held that;

“A court may base its decision on an unpleaded issue if it  appears  from the course followed at the trial that the issue has been left out to the Court for decision”

Further that the Court is bound by the parties pleadings, but justice must not be denied by a mere technicality.   Further that the trial Court awarded costs to the 1st and 2nd Respondents, despite finding that the Appellant had a case as against the 1st Respondent. The Court was urged to allow the Appeal.

The 1st Respondent filed its written submission through the Law Firm of  Mwihia & Mutai  Company  Advocates  on 26th  August 2020and submitted that the Appellant had not taken out a Decree hence the Appeal is fatally defective.  That failure to enjoin  the District Land Registrar  as  party to the suit made the suit  incompetent and fatally defective as the Appellant had sought for the rectification of the  land Registrar. Further that PW4  was found to be an incompetent witness  and therefore lacked capacity to testify.  Further that  it was not enough for the Appellant  to merely cite fraud, devoid of proving the same  as fraud must be specifically pleaded ad proved. The 1st Respondent relied on the case of  Kinyanjui  Kamau…Vs… George Kamau  Njoroge  C.A 132  OF 2005 at Nairobi.

Further that  the sale agreement between the  vendor and the Appellant’s husband  was void ab ibinitio, if at the time of sale  PW4 lacked capacity  by not being  able to demonstrate that PW4 was a shareholder  of the 1st Respondent.  By showing the share certificate as if it was lost, it was incumbent upon  PW4 to take out a share certificate .It was further submitted that PW2  did not produce a share certificate in his name  as that the Appellant’s  whose claim  to the suit property was entirely premised  on the sanctity of PW4’s and PW2’S  title.

The 2nd Respondent through the Law Firm of Kanyi Kiruchi & Company Advocates,filed his written submissions  on 16th July 2020,  and submitted that no share certificate was produced  to show that Veronica was a shareholder of the 1st Respondent  and further  that the learned trial magistrate was  right in holding  that there is no evidence  that Veronica  Wambui  Wakaba, had balloted  and allocated a parcel of land with the 1st Respondent  as DW1 had  affirmed to Court that there were  members with share certificates  but who did not own land.

It was further submitted that  the trial magistrate  appreciated the provisions of section 3(3) of the Law of Contract  in finding that the sale agreement was null and void  as it failed to comply  with the said provisions as the said sale agreement is unsigned,  does not bear the names of the  persons who purported  to witness the said agreement. Further that the Court did not err  in finding that parties are bound by their pleadings and that a Court cannot grant what was not prayed for. The 2nd Respondent relied on the case of Caltex Oil ( Kenya) Limited …Vs… Rono Limited (2016) eklr where the Court held that;

“This appeal raises two important issues. The first relates to the jurisdiction of this Court as to whether the court has powers to grant an order not specifically pleaded in the plaint, pleadings are a shield and a sword for both sides. They have the potential of informing each party what they expect in the trial before the court. If a party wishes the court to determine or grant a prayer it must be specifically pleaded and proved. The pleadings are a precursor for a party to lead evidence in satisfaction of the prayers he seeks to be granted in his favour. Where no such prayer is pleaded in a specific and somewhat particularized manner, the party is not entitled to benefit and the court has no jurisdiction to whimsically grant those orders.”

That since only the 2nd Respondent  has a title  the only way to determine ownership  is to investigate the root of the title   and that the 2nd Respondent has been able to demonstrate to the Court  how he acquired the suit property. It was further submitted that the Appeal lacks merit  as the appellant has failed to establish that Veronica Wambui Wakaba, owed the suit property  with the 1st Respondent  as the documents purported to be  emanating from the 1st Respondent has been denied.

The Court has now carefully read and considered the Pleadings by the parties in the subordinate court, the Memorandum of Appeal and the  written submissions by the  parties in this Appeal.

The Appellant has alleged that the suit property belongs to her having been transferred to her by her husband who had bought the said property from Veronica Wambui Wakaba. It is the Appellant’s contention that her husband transferred the suit property to her and she was issued with a share certificate and clearance certificate. PW2, who is the Appellant’s husband testified that he bought the suit property from Veronica Wambui Wakaba and during the time of transfer, the said Veronica Wambui Wakaba  swore an Affidavit that she had lost her share and  clearance  certificates.  That on the strength of the said Affidavit, the suit property was transferred to him.  That the said Veronica Wambui Wakaba’s husband took him to  the suit property.  Though PW4 who was the said Veronica Wambui Wakaba,was declared an incompetent witnesses, her daughters testified and in  their testimonies, they acknowledged that their mother  told them that she had sold the suit property to PW2 who was her workmate and that they both identified PW2.

However it is the 1st Respondent’s case that the suit property was never balloted by the said Veronica Wambui Wakaba, and that the  owner of the suit property   as per their Register was one Kennedy Kanyi Gatoro in whose favour the title deed was issued. It was the 1st Respondent’s case that there are instances wherein a party is shareholder and if that party had not balloted for a property, then  there is no way one could be  the owner of such a property. The 1st Respondent’s witness acknowledged that there was interference with their Register. Further that the said Kennedy Kanyi  Gatoro  became a member of the said Company in 2003, and must have bought his shares  from someone else as the  suit property was part of properties that had been balloted for  in the 1980’s . He also acknowledged that he could not tell from whom the said Kennedy Kanyi Gatoro had bought the shares from.

The 2nd Respondent on the other hand reiterated that the suit property belonged to him and that he bought the suit property from  Daniel Njue Njoroge, who had bought the suit property from  Kennedy Kanyi Gatoro who was the registered owner  of the suit property . He produced in evidence a sale agreement showing the said sale of land.

The trial Court in its Judgment found that the Appellant had not proved her case.  The trial Court further found that the sale agreement between PW2 and DW4 did not meet the requirements as set out under Section 3 (3) of the Contract Act. The Court also found that the 2nd Respondent was an absolute and indefeasible owner of the suit property  and that the Appellant had failed  to prove there was  fraud . The Court also found   Veronica Wakaba was a member of the 1st Respondent and was a shareholder vide certificateNo. 358.  That from the Register, it was not clear who she transferred her shares to  as there is a  clear alteration of the records in the register. The Court further found that the Appellant had a case against the 1st Respondent.

It is not in doubt that when a person’s   title to a property has been challenged, it is incumbent upon the person to prove the  root of  the title. Further the  1st Respondent submitted that the  Appellant  did not take out a Decree hence the  Appeal is fatally defective.

The above analysis summarizes the pleadings and evidence before the trial court. Further it captures the grounds of Appeal and submissions by the parties herein. Therefore, this court is called upon to make a determination of this Appeal filed by the Appellant as provided by Section 78 of the Civil Procedure Act, wherein the court is called upon to analyze the whole evidence, evaluate, assess, weigh, investigate and scrutinize it and give its own independent conclusion.

However, the court will be alive to the fact that it neither saw nor heard the witnesses. Therefore, it must give allowance for that  and the findings of the trial Court must be given due deference, unless it falls foul of proper evaluation of the evidence on record and that the trial Magistrate acted on a wrong principle in arriving at the findings. See the case of Selle –vs- Associated Mobi Boat Co (1968) EA 123:-

An appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. 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 this 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 based on the demeanor of a witness is inconsistent with the evidence in the case generally (Abdul Hameed Saif vs. Ali Mohamed Sholan(1955), 22 E. A. C. A. 270).

Further the court will only interfere with the decision  of the trial court only where it is shown that the trial court misapprehended the applicable law and failed to take into account the relevant facts or took into account an irrelevant fact or that on the facts and law as are known, the decision is plainly wrong. See case of Ocean Freight Shipping Company Ltd –vs- Oakdale Commodities Ltd, Civil Appeal No. 198 of 1995):-where the Court held that;

“…..and for a full bench to interfere with the exercise of the discretion, it must be shown that the discretion was exercised contrary to law, i.e. that the single Judge misapprehended the applicable law, or that he failed to take into account a relevant factor, or took into account an irrelevant one or that on the facts and the law as they are known, the decision is plainly wrong”

After considering the Grounds of Appeal, the proceedings at the lower Court and the written submissions, the Court finds the issues for

determination are:-

1. Whether the Appeal is fatally defective for failure  to attach a Decree.

2. Whether the  Appellant proved the root of her title as against that of the 2nd Respondent

3.  Whether the trial  Court arrived at a wrong decision

4. Whether the Appeal is merited

5. Who should bear the costs of the suit

1. Whether the Appeal is fatally defective for failure  to attach a Decree.

The  1st Respondent has submitted that the  Appeal  is fatally defective for failure  by the Appellant to attach  a Decree on the Record of Appeal, which renders the Appeal  incurable defective. It is however, the Court’s considered view that the  Appellant having attached a Judgment to the said Record of Appeal,  the failure to attach the Decree is a technicality, which in the Court’ view ought not to  invalidate the Appeal.

Further the Appeal had already been admitted and since the lower Court’s Record is before the Court, no prejudice will be occasioned to the Respondents. See the case of  South Nyanza Sugar Co. Ltd v. Daniel Obara Nyandoro (2010) eKLR,  where the Court held that;

"In my view, it will amount to miscarriage of justice for this court to strike out the appeal for the reason as advanced by Mr. Ogweno when the appeal had already been admitted and directions taken in the presence of counsel for both parties. In any event, the lower court record is before this court and no prejudice will be occasioned to the Respondent by reference to the same. In addition, it will be against the spirit of overriding objectives of the Civil Procedure Act as stated under Section 1A and 1B for this court to summarily reject the appeal for want of decree."

Further the Court of Appeal in the case of Emmanuel Ngade Nyoka …Vs…Kitheka Mutisya Ngata [2017] eKLRheld that;

“According to the Judge, the record of appeal before him had a certified copy of the judgment of the trial court.  Consequently, he reasoned, the record of appeal was competent notwithstanding the fact that a formal decree had not been included in the record.

We entirely agree with the reasoning of the learned Judge on this aspect. In any event, this was a mere technicality that could not have sat well with the current constitutional dispensation that calls upon courts to go for substantive justice as opposed to technicalities. Further holding otherwise would have run counter to the overriding objective as captured insections 1Aand1Bof the Civil Procedure Act.  Finally, one would ask what prejudice did the appellant suffer with the omission of the certified copy of the decree in the record of appeal. We do not discern any.”

The Court therefore finds and holds that the  Appeal herein is not fatally defective for failure to attach a Decree.

2. Whether the  Appellant proved the root of her title as against that of the 2nd Respondent

In her Judgment, the trial Court held that  the  title held by the 2nd Respondent is absolute and indefeasible by the  fact that the Appellant failed to prove that  the same was acquired by fraud. However,  a title can also be impeached if the same was acquired illegally , unprocedurally or through a corrupt scheme.  See the case of Elijah Makeri Nyangwara …Vs… Stephen Mungai Njuguna & Another(2013)eKLRwhere the Court held that;

"…it needs to be appreciated that for Section 26(1) (b) to be operative, it is not necessary that the title holder be a party to the vitiating factors noted therein which are that the title was obtained illegally, unprocedurally or through a corrupt scheme. The heavy import of Section 26 (1) (b) is to remove protection from an innocent purchaser or innocent title holder. It means that the title of an innocent person is impeachable so long as that title was obtained illegally, unprocedurally or through a corrupt scheme. The title holder need not have contributed to these vitiating factors. The purpose of Section 26 (1) (b) in my view is to protect the real title holders from being deprived of their titles by subsequent transactions. "I stand by the above words and I am unable to put it better that I did in the said dictum.”

It is not in doubt that the  title of the 2nd  Respondent was questioned. It then became incumbent upon the 2nd Respondent to prove the root of his title  as well as the Appellant. See the case of  Munyu Maina..Vs..Hiram Gathiha Maina, Civil Appeal No.239 of 2009, where the Court of Appeal held that:-

“We have stated that when a registered proprietor root of title is challenged, it is not sufficient to dangle the instrument of title as proof of ownership.  It is that instrument of title that is challenged and the registered proprietor must go beyond the instrument to prove the legality of how he acquired the title to show that the acquisition was legal, formal and free from any encumbrances including any and all interests which would not be noted in the register.”

It was the Appellant’s contention that her husband who had bought the suit property from Veronica Wambui Wakaba transferred the suit property to her. The  trial Court held that the said Veronica Wambui Wakaba was a shareholder of the  1st Respondent  vide certificate  No. 358and that from the  1st Respondent’s Register  it was not clear who she transferred her shares to.

This court having analyzed the evidence produced before the trial Court  notes that the Appellant produced in evidence  an Affidavitsworn by the said  Veronica Wambui Wakaba, on 5th November 1987,  which has not been rebutted nor controverted.  In the said Affidavit, she deposed that  she is also referred to as Wambui Wakaba. Further she depones that  she was a member of the 1st Respondent and holder of  share Certificate  no. 358 Farm No/ 1 plot No. 409, which she stated that she lost them and has been unable to locate the same.

Though the 1st Respondent vide their witnesses had indicated that the said Wambui Wakaba, was not a shareholder, it is not in doubt that they have not Appealed against the finding of the trial Court that she indeed was a shareholder. The 1st Respondent has also  stated that the  suit property belonged to Kennedy Kanyi  Gatoro. However, it is not in doubt that the said Kennedy Kanyibecame a shareholder in the said Company in 2003. The  1st  Respondent’s witness testified that in 2003, the said Kennedy could only have become a member  if he had bought the shares from someone else. There is no evidence that the said Kennedy  Kanyi Gatoro  ever bought the shares from anybody else. Further there is no evidence of how he acquired ownership of property that was balloted in the 60’s.

The Court has gone through the Register that was produced in evidence by the 1st Respondent. It is clear that the said Kanyi Gatoro was issued with Certificate No. 0827.  From the said Register, the owner of Certificate No. 827is one Anna Wanjiku P. Kubai, who from the Register never balloted nor transferred her shares to anyone. Therefore, it is the Court’s considered view that the root of ownership of Kennedy Kanyi Gatoro is not justifiable as having  allegedly balloted for  Plot No. 409. The share Certificate issued  in 2003,and it is not clear where he got the shares from as the Company was not issuing shares in2003. See the case of Daudi Kiptugen…Vs…Commissioner of Lands & 4 Others [2015] eKLR where the Court  held that:

“…the acquisition of title cannot be construed only in the end result; the process of acquisition is material. It follows that if a document of title was not acquired through a proper process, the title itself cannot be a good title. If this were not the position then all one would need to do is to manufacture a Lease or a Certificate of title at a backyard or the corner of a dingy street, and by virtue thereof, claim to be the rightful proprietor of the land indicated therein.”

On the other hand, Veronica Wambui Wakaba who was the owner of share certificate 358, indicated that she balloted for plot 409,and transferred it to PW2.

Having carefully gone through the Register, the Court notes that it was indeed indicated that the said  Wambui Wakaba had  transferred  her shares to someone. However, the indication on who it was transferred to and which plot number she balloted for, has clearly been interfered with.

The  1st Respondent is the custodian of the said Registerand it would not be in the interest of Justice  to seek to have the Appellant prove that  there was an alteration, while clearly from the said Register, there were interferences which could only be done by the 1st Respondent’s officers’,  actions which the Appellant has no control over. There is no evidence that  Plot No.  409 was ever balloted by any other person  other than allegedly by Kennedy Gatoro, who the Court has already held  did not show how he acquired the said property.

Therefore it is the Court’s considered view that  the evidence clearly points to the fact that the  said Wambui Wakaba  was the owner of  Plot No. 409as per her Affidavit which has not been rebutted.  From the analysis of the evidence by this Court,  it does not find any reason why the above evidence should be doubted or not found truthful.

The trial Court further held that   it could not ascertain who the said Wambui Wakaba  transferred her shares to.   The Appellant together with her husband did testify that the said Wambui Wakaba  transferred her shares to them and that  they were issued with the share certificate. This evidence was corroborated by the evidence of Wambui wakaba’s daughters who confirmed that their mother told them of the transfer.

The 1st Respondent acknowledged that  a Robert,who was a Director in the said Company had been forging documents in the said Company and duping people and those were the documents that may have been issued  to the Appellant. As already noted by the Court, these were actions done by the officers of the 1st Respondent and the Appellant cannot be held accountable for the said actions. This is more so given that  the Appellant and her husband’s root of title stems from the lawful owner and the original allotee.

The trial Court further held that  the sale agreement between PW2 and PW4  did not  meet the threshold as required by Section 3 (3) of the Contract Act. It is this Court’s considered view that the validity  or otherwise of the Contract of sale between  PW2 and PW4 was never in contention and whether it was valid or not, was not an issue for determination  in the said suit as  neither party to the contract had contested the same. Further the Respondents were not parties to the same and do not have any locus standi to challenge it.

Therefore, the Court finds and holds that  the Appellant did establish that Wambui Wakaba was the owner of plot no. 409, and she transferred the said plot to her husband who later transferred it to her.   Consequently, the Court further finds and holds that the Appellant had established the root of her title.

On the other hand, the  2nd Respondent though he  established that he was a bonafide purchaser  for value without Notice, his root of title was tainted with illegalities and  procedural failure as the person whom he had bought from the suit property could not clearly establish the root of his title.  Consequently, this Court finds and holds that the Appellant’s root of her title had been established and is found to be valid.

3.  Whether the trial  Court arrived at a wrong decision

The trial Court held that the Appellant did not prove that there was fraud. From the Register it is clear that alterations were made to the said Register in order to conceal the proper information that  had been  entered.  InBlacks Law Dictionary 9th Edition, Fraudhas been defined as:-

“A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment…”

In the same text, fraudulent act has been defined as:-

“Conduct involving bad faith, dishonesty, a lack of integrity or moral turpitude.”

It is thus clear that the actions of the 1st Respondent and its officers were conducts of bad faith and they did concealthe material facts. The  Court therefore finds and holds that indeed the Appellant proved that there was fraud.

The trial Court further held that as per section 26 of the Land Registration Act, the 2nd Respondent’s title was absoluteand indefeasible and therefore could not be impeached.   However, this Court having held that  the root  of the 2nd Respondent was tainted with  fraud on the  part of the 1st Respondent and procedural deficiencies, it is this Court’s considered view that the said title held by 2nd Respondent is not absolutes and can be impeached.

Further though the  trial Court held that the  Appellant had  a claim against the 1st Respondent,  the court further held that the parties are bound by their pleadings and the  Court could not  grant  what was not  prayed for . Section 3A of the Civil Procedure Act provides

“Saving of inherent powers of court.Nothing in this Act shall limit or otherwise affect the inherent power of the court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the court.”

It is therefore not in doubt that the Court can exercise its inherent  powers to make any  findings that  would be necessary for the  ends of Justice.  The prayers by the  Appellant seeking for the Court to make any orders its deems fit may have covered the inherent powers of the Court for the saving of Judicial time.

Therefore, this Court finds and holds that the trial Court did arrive at a wrong decision by misapprehending the law and  facts.

4. Whether the Appeal is merited

From the above analysis, it is the Court’s considered view that the Appeal herein is merited as the Appellant proved the root of her title and that the title by the 2nd Respondent is impeachable.

However, the Court in the same  spirit of exercising its inherent power, notes that the 2nd Respondent is an innocent purchaser for value having bought the suit property from  Daniel Njue, who had bought the property from Kennedy Kanyi  Gatoro.

The definition of a bonafide purchaser, has been defined by the Cour in the case of  Lawrence Mukiri …Vs… Attorney General & 4 Others [2013] eKLRas

“... a bona fide purchaser for value is a person who honestly intends to purchase the property offered for sale and does not intend to acquire it wrongly. For a purchaser to successfully rely on the bona fide doctrine, he must prove the following:

a. He holds a certificate of Title.

b. He purchased the Property in good faith;

c. He had no knowledge of the fraud;

d. The vendors had apparent valid title;

e. He purchased without notice of any fraud;”

In the instant case, the Court finds that the 2nd Respondent was a bonafide purchaser for value.  Further the Court notes that the witnesses testified that the 2nd Respondent had developed the land, and the  Appellant had not developed the land.  However, the  1st Respondent did indicate that there was land   that could be given to the  Appellant.

Therefore, it is the Court considered view that the interest of Justice dictates that the 2nd Respondent’s title to the suit property should not be cancelled.  However, the Appellant should be given a property that is equivalent to the value of the instant suit property so that the rights of 2nd Respondent as a bonafide purchaser,  not be disregarded.

Consequently, this Court finds and holds that the Appeal is  merited, but in the interest of Justice, the Court exercises it’s inherent powers by ensuring that the right of the 2nd Respondent who was the bonafide purchaser for value are not disregarded. See the case of Beth Kaari & another …Vs… M’nyeri M’rimunya [2013] eKLR where the Court of Appeal in quoting itself in the case of Douglas  Mbugua  Mungai Vs.Harrison Munyi, Civil Application No. Nai167 OF 2010, observed that:

“We are as a matter of statute law required to take a broad view of justice and take into account all the necessary circumstances, factors, and principles and be satisfied at the end of the exercise that we have acted justly” As was stated in Stephen Boro Gitiha vs. Family Finance Building Society & 3 Others, Civil Application No. Nai. 263 of 2009.

“The overriding objective overshadows all technicalities, precedents, rules and actions … and whatever is in conflict with it must give way.”

5. Who should bear the costs of the suit

It is trite that costs follow the event. In this case, the Appellant being the successful party is therefore entitled to the costs of the instant Appeal and the costs at the lower Court as against the 1st Respondent.

Having now carefully considered the available evidence, having evaluated it and coming to its own independent decision, this court finds and holds that the trial Magistrate did err and misapprehended the facts and evidence on record and thus arrived at a wrong finding.

Consequently, the court finds that the Appeal is merited and it is allowed in the following terms;

1. That the Judgment of the lower Court dated 9th April 2019 be and is hereby set aside.

2. This Court Upholds the title of the 2nd Respondent for being a bonafide purchaser for value without Notice.

3. The Court further orders the 1st Respondent to compensate the Appellant herein with land of equal value to the suit Property.

4. The 1st Respondent to pay costs of the Appeal and the suit at the lower Court.

5. The 1st Respondent should compensate the appellant with the said land within a period of 90 days from the date hereof.

It is so ordered.

Dated, signed andDelivered atThikathis14thday ofDecember, 2020.

L. GACHERU

JUDGE

14/12/2020

Court Assistant - Lucy

ORDER

In view of the declaration of measures restricting court operations due to theCOVID-19 Pandemic, and in light of the directions issued by His Lordship, the Chief Justice on 15th March 2020, this Judgment has been delivered to the parties online with their consents. They have waived compliance with Order 21 rule 1 of theCivil Procedure Rules which requires that all judgments and rulings be pronounced in open Court.

With Consent of and virtual appearance via video conference – Microsoft Teams Platform

No appearance for the Appellant

No appearance for the 1st RespondentThough notices had been send out.

No appearance for the  2nd Respondent

L. GACHERU

JUDGE

14/12/2020