Carlisle Development Company v National Land Commission [2025] KELAT 75 (KLR)

Carlisle Development Company v National Land Commission (Land Acquisition Petition E044 of 2024) [2025] KELAT 75 (KLR) (7 February 2025) (Judgment)

Neutral citation: [2025] KELAT 75 (KLR)

Republic of Kenya

In the Land Acquisition Tribunal

Land Acquisition Petition E044 of 2024

NM Orina, Chair & G Supeyo, Member

February 7, 2025

Between

Carlisle Development Company

Complainant

and

National Land Commission

Respondent

Judgment

1. The Complainant, through a formal application, was allocated an unsurveyed industrial plot measuring 7. 29 hectares by way of an allotment letter dated 27th August 1998, for a lease term of 99 years commencing on 1st September 1998. This allotment was later accepted by the Complainant through a letter dated 8th December 2009. Thereafter, following the preparation and official approval of Survey Plan FR. No. 350/133, the property was duly assigned L.R. No. 209/13761, with its total acreage established at 7. 596 hectares. The Complainant remained the registered proprietor of the parcel of land known as L.R. No. 209/13761 (hereinafter “the suit property”) until the events that prompted this suit.

2. Vide Gazette Notice Number 7090 of 10th October 2014, the Respondent published a notice of intention to acquire certain parcels of land for the Kenya Raiways Corporation for the construction of the Mombasa – Nairobi Standard Gauge Railway in Nairobi and Machakos Counties. This was pursuant to the transitional provisions contained in Section 162 (2) of the Land Act and Section 6 (2) of the Land Acquisition Act cap 295 of the laws of Kenya (now repealed). This notice included the suit property as part of those parcels of land that were to be acquired. This initial notice identified the area to be acquired as 2. 7946 hectares.

3. Thereafter, vide Gazette Notice No. 1180 of 20th February 2015, the Respondent issued a notice of inquiry, directing all persons with an interest in the affected parcels of land to appear at the designated venue for the inquiry and to present the requisite documentation. The suit property was among the parcels of land listed therein.

4. Subsequently, in Addendum Gazette Notice Number 5486 of 15th July 2016, an additional acreage of 4. 805 hectares of the suit property was earmarked for acquisition for the purposes of construction of the Commuter Rail System. These notices raised the cumulative acreage of the acquisition of the suit property to 7. 569 hectares.

5. The Respondent proceeded with the acquisition of the suit property on behalf of Kenya Railways Corporation, the entity which has established a fully operational inland container depot (ICD) on the suit property.

The Complainant’s Case 6. Through a Complaint dated 25th September 2024, the Complainant has invoked this Tribunal’s jurisdiction under Section 133C (8) in alleging that the suit property was acquired without compensation. It is the Complainant’s case that it has not received an award or any compensation to date.

7. The Complainant asserts that Kenya Railways Corporation (the acquiring authority) took up the whole parcel of land belonging to the Complainant measuring 7. 569 hectares, fencing it off and without ever being compensated for the same by the Respondent.

8. It is the Complainant’s case that its rights and interests over the suit property have never been impugned in any court proceedings. In this regard, the Complainant presented in evidence a letter of allotment dated 27th August 1998, a Letter of Acceptance dated 8th December 2009, a receipt evidencing payment of stand premium, a Lease for L.R. No. 209/1376 and a Certificate of Title for the parcel of land measuring 7. 569 hectares.

9. In regard to the alleged compulsory acquisition of the suit property, the Complainant avers that it was never notified nor served with the Gazette Notices and had no knowledge of the inquiry or the acquisition of its property. Furthermore, it was never issued nor served with a letter of award, as required by law. It was only when the Complainant’s directors visited the suit property with the intention of constructing a perimeter wall that they were met with utter shock upon discovering that the land had been fully occupied by the acquiring entity.

10. The Complainant further avers that upon this discovery, it issued a formal demand and notice of intention to institute legal proceedings against the Respondent for failure to provide just compensation. Despite this demand, the Complainant states, the Respondent has wilfully refused, neglected, and/or otherwise failed to remit the requisite compensation. Consequently, the Complainant engaged professional valuers who, upon conducting an assessment, appraised the suit property at Kenya Shillings 2,250,000,000. 00, inclusive of a 15% disturbance compensation.

11. Based on these events, the Complainant asserts that the Respondent has violated its rights under the Constitution of Kenya, 2010 and Part VIII of the Land Act, by failing to follow due process in compulsorily acquiring the suit property and additionally failing to pay promptly, just and full compensation as required.

12. The Complainant, therefore, seeks from this Tribunal:a.A declaration that the constitutional and statutory rights of the complaintant guaranteed under Article 40, and 47of the Consitution and Sections 111,112,113,122 qnd 123 of the Land Act have been violated.b.An order compelling the Respondents to pay the sum of Kenya Shillings 2,250,000,000. 00 as fair and just compensation for the compulsory aqcuisition the suit property.c.Interest on the compensation amount from the date of taking posession i.e. from 2016 to date of payment.d.Mesne Profits and loss of income as a percentage of the compensation amount payablee.Any other relief the Tribunal deems just and proper in the circumstances.f.Costs of the complaint.

The Respondent’s Case 13. The Respondent has opposed this suit through a Replying Affidavit sworn on 9th December 2024 by Mariko Kaliamoi – the Respondent’s Principal Valuation and Taxation Officer.

14. Mr. Kaliamoi acknowledges that during the construction of the Mombasa- Nairobi Standard Gauge Railway, a number of properties were identified by the acquiring authority for compulsory acquisition, the suit property herein having been one of them.

15. Mr. Kaliamoi further reiterates the sequence of events which is uncontested between the parties as follows:a.The Respondent, through Gazette Notice No. 7090 of 10th October 2014, initially announced its intention to acquire 2. 7946 hectares of L.R. No. 209/13761- the suit property.b.Gazette Notice No. 1180 of 20th February 2015 summoned interested parties to an inquiry regarding the acquisition.c.Subsequently, Gazette Notice No. 5486 of 15th July 2016 designated an additional 4. 805 hectares of the suit property for the Commuter Rail System, bringing the total acquired land to 7. 569 hectares.

16. Despite generally agreeing with the Complainant on the above sequence of events, the Respondent distances itself from the alleged violations by stating that the Complainant's delay and failure to attend the inquiry, during which the Complainant would have been expected to present their bank details, led to non-compliance with the provisions of Part VIII of the Land Act. Consequently, Mr. Kaliamoi avers, the funds initially allocated for compensation were reallocated to other projects.

17. Howbeit, Mr. Kaliamoi states that the Respondent proceeded to value the suit property in 2015 through a valuation report that returned the value at Kenya Shillings 712,380,000. 00 which was the current market value at the time of acquisition. It is this value which Mr. Kaliamoi asserts the Complainant is entitled to rather than the current market value that is prayed for.

Analysis and Determination 18. On 11th December 2024, parties agreed, by consent to rely on affidavit evidence and submissions to be filed. Subsequently, the Complainant’s counsel filed their submissions on 7th January 2025 and the Respondent’s submissions were filed on 29th January 2025.

19. The Complainant in its submissions has adopted the following issues for resolution by the Tribunal; (i) Whether the acquisition of the subject land was proper, and (ii) Whether the Complainant is entitled to the prayers sought and to what extent.

20. On its part, the Respondent, through its submissions, has impugned this Tribunal’s jurisdiction to entertain the complaint as framed. Nevertheless, the Respondent has also invited us to determine whether the orders sought by the Complainant can issue.

21. Taking into consideration the submissions of the parties, there are three main issues for our determination. First, as is procedurally prudent, the question of our jurisdiction will be addressed before we delve into any other issue. If we are satisfied that we are properly seized of the matter before us, we will then proceed to interrogate the complaint before us with a view to determining whether the procedure for compulsory acquisition of land was adhered to in regard to the suit property, and lastly, what remedies are available in this case, if any.

22. In regard to the question of jurisdiction, the Respondent contends that the Tribunal's jurisdiction is invoked solely upon the Commission rendering a decision, as stipulated under Section 133C of the Land Act. It asserts that no such determination has been made concerning the suit property; therefore, any exercise of authority by the Tribunal at this stage would be premature.

23. The Tribunal’s establishing Statute – the Land Act states as follows in Section 133C in regard to the Tribunal’s jurisdiction:Jurisdiction of the Tribunal1. The Tribunal has jurisdiction to hear and determine appeals from the decision of the Commission in matters relating to the process of compulsory acquisition of land.2. A person dissatisfied with the decision of the Commission may, within thirty days, apply to the Tribunal in the prescribed manner.3. Within sixty days after the filing of an application under this Part, the Tribunal shall hear and determine the application.4. Despite subsection (3), the Tribunal may, for sufficient cause shown, extend the time prescribed for doing any act or taking any proceedings before it upon such terms and conditions, if any, as may appear just and expedient.5. If, on an application to the Tribunal, the form or sum which in the opinion of the Tribunal ought to have been awarded as compensation is greater than the sum which the Commission did award, the Tribunal may direct that the Commission shall pay interest on the excess at the prescribed rate.6. Despite the provisions of sections 127, 128 and 148 (5), a matter relating to compulsory acquisition of land or creation of wayleaves, easements and public right of way shall, in the first instance, be referred to the Tribunal.7. Subject to this Act, the Tribunal has power to confirm, vary or quash the decision of the Commission.8. The Tribunal may, in matters relating to compulsory acquisition of land, hear and determine a complaint before it arising under Articles 23 (2) and 47 (3) of the Constitution, using the framework set out under the Fair Administrative Act or any other law. Emphasis added.

24. In addition to the Tribunal’s primary jurisdiction on appeals arising out of the decision of the Respondent in matters of compulsory acquisition, this Tribunal is clothed with jurisdiction under Section 133C (8) to hear and determine complaints arising under articles 23(2) and 47(3) of the Constitution of Kenya 2010, in matters relating to compulsory acquisition of land. As we stated in Tom Mwachiti Mwero (Suing as a representative of the Estate of Fredrick Johnson Mwachiti (Deceased) vs. Kenya Railwas Corporation and National land Commission (Ruling):The language used in the Land Act is a “matter relating to” compulsory acquisition of land in relation to the Tribunal’s jurisdiction under Sections 133C (6) and (8). The Oxford Learner’s Dictionary (online edition) defines “related” as “connected with something.” This Tribunal’s jurisdiction, therefore, extends to any matter that is connected to the process of compulsory acquisition.11Para. 16

25. Besides an appeal from a decision of the National Land Commission, a party may have other grievances on any connected matters which may need redress before a court of law. That jurisdiction is vested on the Tribunal and the Complaint before us is one such case. We therefore find that this Tribunal’s jurisdiction has been correctly invoked.

26. The second matter for our attention requires us to closely examine the complaint before us as against the process of compulsory acquisition of land. The question requires an examination of whether the compulsory acquisition in respect of the suit property complied with the provisions of the Constitution as well as Part VIII of the Land Act, 2012.

27. Relevant to the process of compulsory acquisition is Article 40(3) of the Constitution which provides as follows:The State shall not deprive a person of property of any description, or of any interest in, or right over, property of any description, unless the deprivation-a.results from an acquisition of land or an interest in land or a conversion of an interest in land, or title to land, in accordance with Chapter Five; orb.is for a public purpose or in the public interest and is carried out in accordance with this Constitution and any Act of Parliament that-i.requires prompt payment in full, of just compensation to the person; andii.allows any person who has an interest in, or right over, that property a right of access to a court of law.

28. Article 47 (1) of the Constitution, on the other hand, is to the effect that, “every person has a right to administrative action that is expeditious, efficient, lawful, reasonable and procedurally fair.”

29. On the specific procedure for compulsory acquisition of land, Part VIII of the Land Act provides a comprehensive step-by-step approach which the respondent is required to follow. The process commences with the issuance of a preliminary notice by the Respondent signalling an intention to acquire the subject property. This notice sets in motion a sequence of actions, including the assessment of the land's value, the issuance of an award, compensation and the eventual taking of possession of the acquired land. This comprehensive procedure has been summarized as follows in the case of Patrick Musimba vs. National Land Commission & 4 others [2016] eKLR:“85. In summary, the process of compulsory acquisition now runs as follows.86. Under Section 107 of the Land Act, the National Land Commission (the 1st Respondent herein) is ordinarily prompted by the national or county government through the Cabinet Secretary or County Executive member respectively. The land must be acquired for a public purpose or in public interest as dictated by Article 40(3) of the Constitution. In our view, the threshold must be met: the reason for the acquisition must not be remote or fanciful. The National Land Commission needs to be satisfied in these respects and this it can do by undertaking the necessary diligent inquiries including interviewing the body intending to acquire the property.87. Under Sections 107 and 110 of the Land Act, the National Land Commission must then publish in the gazette a notice of the intention to acquire the land. The notice is also to be delivered to the Registrar as well as every person who appears to have an interest in the land.88. As part of the National Land Commission’s due diligence strategy, the National Land Commission must also ensure that the land to be acquired is authenticated by the survey department for the rather obvious reason that the owner be identified. In the course of such inquiries, the National Land Commission is also to inspect the land and do all things as may be necessary to ascertain whether the land is suitable for the intended purpose: see Section 108 of the Land Act.89. The foregoing process constitutes the preliminary or pre-inquiry stage of the acquisition.90. The burden at this stage is then cast upon the National Land Commission and as can be apparent from a methodical reading of Sections 107 through 110 of the Land Act, the landowner’s role is limited to that of a distant bystander with substantial interest.91. Section 112 of the Land Act then involves the landowner directly for purposes of determining proprietary interest and compensation. The section has an elaborate procedure with the National Land Commission enjoined to gazette an intended inquiry and the service of the notice of inquiry on every person attached. The inquiry hearing determines the persons interested and who are to be compensated. The National Land Commission exercises quasi-judicial powers at this stage.92. On completion of the inquiry the National Land Commission makes a separate award of compensation for every person determined to be interested in the land and then offers compensation. The compensation may take either of the two forms prescribed. It could be a monetary award. It could also be land in lieu of the monetary award, if land of equivalent value, is available. Once the award is accepted, it must be promptly paid by the National Land Commission. Where it is not accepted then the payment is to be made into a special compensation account held by the National Land Commission: see Sections 113- 119 of the Land Act.93. The process is completed by the possession of the land in question being taken by the National Land Commission once payment is made even though the possession may actually be taken before all the procedures are followed through and no compensation has been made. The property is then deemed to have vested in the National or County Government as the case may be with both the proprietor and the land registrar being duly notified: see Sections 120-122 of the Land Act.”

30. In this process, and a relevant issue in this case, is a statutory obligation that the notice of acquisition be delivered not only to the relevant Registrar but also to every person with an apparent interest in the land. Even though the Respondent attributes the failure to compensate the Complainant to the Complainant’s failure to turn up for the enquiry, the Respondent has not provided any evidence that the Complainant was served with any of the notices that were published as required.

31. It is noteworthy that the notice of intention to acquire, the notice of inquiry and the subsequent addendum – all of which should ordinarily identify the parcel of land, the portion being acquired, and the ownership details, omitted the owner's information. It may be the case that sometimes the Respondent publishes a notice of intention to acquire certain properties while in the process of verifying the ownership details of such properties. In this case, we have in evidence three notices published in the Kenya Gazette over a period of one year without identifying the owner of the suit property.

32. The importance of serving a notice of intention to acquire and subsequently a notice of inquiry upon the project affected persons cannot be gainsaid. We reiterate our position in Republic v National Land Commission & another; Barua Estate Limited (Exparte); Chief Land Registrar & 2 others (Interested Parties) (Tribunal Case 1 of 2024) [2024] KELAT 508 (KLR), where we stated as follows:“26. It, therefore, goes without saying that the notice so published must be brought to the attention of the project affected persons. The clear language of the Land Act and the regulations therein, especially Regulation 23(1) of the Land Regulations, 2017 is that the notice must be issued at least thirty days before an intended acquisition can take place. The deliberate moratorium period between the issuance of the notice and the acquisition process is intended to provide an opportunity for the project affected persons to be duly notified of the intended acquisition and to be engaged in the process. The project affected persons, even though seen allegorically as “distant bystanders,” have substantial interests, that must be protected. Hence the strict requirement that they must be notified of such an intended acquisition.

33. Further, it is important for the Respondent to take the earliest opportunity to verify the ownership details of land which has been earmarked for acquisition. As we underscored in Barua Estate Limited, supra:30. We are cognizant of the fact that the 1st Respondent may not have verified the proprietor details of the suit property at the time of issuing a notice of intention to acquire but that does not stop the 1st Respondent from making all possible efforts to comply with Section 131(1)(d). Even where the ownership of the property is yet to be ascertained, the 1st Respondent may affix the notice upon some prominent part of the land if the land is not in occupation. The Respondents have also not offered an explanation why the verification of the proprietorship of the suit property had not been done by the time the second notice was issued in October 2020, having issued the first notice in June. Verification of proprietorship of land sought to be compulsorily acquired is a high priority matter in order to afford such project affected persons a chance to take part in the process…”

34. From the analysis of evidence, it is clear to us that the Complainant was not served with the notices issued in the compulsory acquisition process for the suit property. That notwithstanding, it is also not disputed that the Respondent did not issue any award or make any payment as compensation for the compulsory acquisition of the suit property. For the failure to notify the Complainant of the acquisition of its property and the failure to compensate the Complainant, the Respondent violated the Complainant’s rights under Article 40(3) and Article 47(1) of the Constitution of Kenya as read with Part VIII of the land Act. This violation is a continuing violation as the Complainant has not been compensated.

35. It is also clear to us that the Respondent has failed to ameliorate this situation despite being prompted by the Complainant through correspondences. Our task then is to determine what the appropriate remedy is for the Complainant.

36. In order to ascertain the most appropriate remedy, it is instructive to consider the words of the Supreme Court in the case of Attorney General v. Zinj Limited (Petition 1 of 2020) [2021].Under article 22(1) of the Constitution, every person has the right to institute court proceedings claiming that a right or fundamental freedom in the Bill of Rights has been denied, violated, infringed, or is threatened. Among the reliefs that a court may grant upon proof of violation of a fundamental right, is an order for compensation (article 23 (3)(e)). The quantum of damages to be awarded, depends on the nature of the right that is proven to have been violated, the extent of the violation, and the gravity of the injury caused.

37. In this case, it is apparent that the Complainant’s rights have been violated through deprivation of its property. Such deprivation requires, first and foremost, compensation. Section 125(1) of the Land Act obligates the National Land Commission to pay full and just compensation to all persons interested in land subject of compulsory acquisition. To provide clarity on the amount of compensation due to a project affected person, the National Land Commission issued the Land (Assessment of Just Compensation) Rules, 2017. In the said rules, “The Commission shall consider the following factors when assessing compensation:a.the market value of the land;b.damage sustained or likely to be sustained by persons interested at the time of the Commission's taking possession of the land by reason of severing the land from his or her other land;c.damage sustained or likely to be sustained by persons interested at the time of the Commission's taking possession of the land by reason of the acquisition injuriously affecting his or her other property, whether moveable or immovable , in any other manner or his or her actual earnings;d.reasonable expenses incidental to the relocation any of the persons interested or who will be compelled to change residence or place of business as a consequence of the acquisition; ande.damage genuinely resulting from diminution of the profits of the land between the date of publication in the Gazette of the notice of intention to acquire the land and the date the Commission takes possession of the land.”22Rule 3, Land (Assessment of Just Compensation) Rules, 2017. Emphasis added

38. The Supreme Court in Zinj Limited, supra, reiterated this legal position as follows:30. The main basis upon which special damages can be granted for the deprivation of property, is the market value of the said property. In case of general damages, a court of law exercises discretion guided by the circumstances of each case.

39. The rules have also provided further clarity on what amounts to market value in Rule 2 as “the value of the land at the date of publication in the Gazette of the notice of intention to acquire the land.” It is, therefore, our finding that where the process of compulsory acquisition had been commenced but not completed; to wit – the notices were published and the property was valued, the correct value to be paid to a project affected person is the value of the property at the time the acquisition was commenced. This is the value that should be paid to a project affected person plus an additional 15% disturbance allowance in accordance with Rule 6.

40. In this case, Mr. Kaliamoi’s evidence is to the effect that even though an award was not issued to the Complainant, the suit property had been valued at Kshs. 712,380,000. 00 at the time of the acquisition. The Complainant on its part has not offered a counter valuation of the property at the time of acquisition. Instead, the Complainant has urged the Tribunal to adopt the current valuation of the property as the correct figure for compensation being the sum of Kshs. 2,250,000,000. 00. Going by the provisions of Section 125(1) of the Land Act, 2012 and Rule 2 of the Land (Assessment of Just Compensation) Rules, 2017, the correct compensation due to the Complainant is Kshs. 712,380,000. 00. The Complainant shall also be entitled to interest until the full amount is paid as shall be stipulated in our final orders below.

41. Further, the Complainant has prayed for mesne profits. However, it is a well-established rule that, mesne profits must be pleaded and proved. In the case Peter Mwangi Mbuthia & Another vs Samow Edin Osman [2014] eKLR, the Court of Appeal held as follows:“As regards the payment of mesne profit, we think the applicant has an arguable appeal. No specific sum was claimed in the Plaint as mesne profit and it appears to us prima facie, that there was no evidence to support the actual figure awarded...”

42. Despite the Complainant averring that it suffered a loss of profits from the go-downs it intended to establish on the suit property, it did not present before this Tribunal any evidence to facilitate a determination on the claim for mesne profits. However, we are inclined to award general damages for the violation of the Complainant’s right to property.

Final orders 43. Considering the above analysis, we find that the Complaint is merited and Judgement is hereby entered in favour of the Complainant against the Respondent as follows:A.A declaration be and is hereby issued that the Complainant’s rights as enshrined in Articles 40 and 47 of the constitution of Kenya 2010 have been violated by the Respondent;B.An order be and is hereby issued directing the Respondent to pay the Complainant, within 45 days hereof, the sum of Kshs. 712,380,000. 00 being compensation for the compulsory acquisition of property known as L.R. No. 209/13761 measuring 7. 596ha.C.An order be and is hereby issued directing the Respondent to pay the Complainant the interest earned on (b) above at court rates with effect from 10th October 2014, the date of acquisition, until payment in full;D.General damages to be computed at the rate of Kshs. 1,000,000 per acre translating to Kshs. 18,755,000. 00E.Costs shall be borne by the Respondent.F.Interest on (d) and (e) above shall accrue at court rates from the date of this judgement until payment in full.

44. Orders accordingly.

DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 7TH DAY OF FEBRUARY 2025DR. NABIL M. ORINA - CHAIRPERSONGEORGE SUPEYO -MEMBERBefore: -Mr. Thuita for the ComplainantN/A for the RespondentBuluma – Court Assistant