Daniel Kabiru Ndungu & Lucy Nyambura Kabiru v Molyn Credit Limited, Wilson Kariuki t/a Wiskam Auctioners, Land Registrar & Attorney General [2021] KEELC 1735 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT NAIROBI

ELC SUIT NO. 658 OF 2016

DANIEL KABIRU NDUNGU.......................................................1ST PLAINTIFF

LUCY NYAMBURA KABIRU.....................................................2ND PLAINTIFF

-VERSUS-

MOLYN CREDIT LIMITED.....................................................1ST DEFENDANT

WILSON KARIUKI T/A WISKAM AUCTIONERS..............2ND DEFENDANT

LAND REGISTRAR..................................................................3RD DEFENDANT

THE ATTORNEY GENERAL..................................................4TH DEFENDANT

JUDGMENT

The Plaintiffs brought this suit by way of a plaint dated 20th June, 2016 seeking the following orders;

a) A permanent injunction restraining the 1st Defendant and his agents, servants or anybody claiming a right through the 1st defendant from entering, cultivating, digging, building, alienating, selling, transferring, charging, licensing or otherwise dealing with Land Title No. NGONG/NGONG/34016(hereinafter referred to as “the suit property”).

b) A declaration that the suit property was illegally and fraudulently transferred to the 1st Defendant’s name and that its rightful owner is the 1st Plaintiff.

c) An order directing the 3rd Defendant to rectify official records relating to the suit property by cancelling the title deed issued to the 1st Defendant and issuing a new title deed in respect of the suit property in the name of the 1st Plaintiff.

d) An order compelling the 1st Defendant to provide the 1st Plaintiff with the Charge document and the statements of account.

e) Costs of the suit.

f) Interest on (e) above.

The Plaintiffs’ case:

The Plaintiffs averred that the 1st Plaintiff entered into an agreement dated 12th March 2015 with the 1st Defendant for a loan facility in the sum of Ksh. 1,000,000/-. The Plaintiffs averred that the said loan facility was to be secured by a legal charge over the suit property. The Plaintiffs averred that the said loan was to be repaid in 72 equal monthly installments of Kshs. 50,000/- with effect from 20th May, 2015 and the same was to attract interest at the rate of 4. 5% per month on a reducing balance basis. The Plaintiffs averred that it was also a term of the agreement that upon registration of the charge against the title of the suit property, the 1st Defendant was to disburse the loan to the 1st Plaintiff which it did on 27th April, 2015 less the legal fees and other payments made to the third parties.

The Plaintiffs averred that on 19th October, 2015, the 1st Plaintiff received a letter from the 1st Defendant demanding that he regularizes his loan account failure to which the 1st Defendant would exercise its statutory power of sale over the suit property. The Plaintiffs averred that on 10th June, 2016, the 1st Defendant acting through the 2nd Defendant proclaimed the goods belonging to the Plaintiffs in their matrimonial home on the suit property in a purported distress for rent. The Plaintiffs averred that the 1st defendant levied the purported distress claiming that the Plaintiffs were tenants on the suit property which belonged to the 1st Defendant. The Plaintiffs averred that upon conducting a search at the Ngong Land Registry, they discovered that the 1st Defendant had illegally, fraudulently and through misrepresentation transferred the suit property to itself on 22nd April, 2015.

The Plaintiffs averred that the transfer of the suit property to the 1st Defendant was illegal since no statutory notice had been served upon the 1st Plaintiff as required by law. The Plaintiffs averred that the 1st Plaintiff did not sell the suit property to the 1st Defendant and that the property was transferred to the 1st Defendant without the consent of the 2nd Plaintiff who is the 1st Plaintiff’s spouse. The Plaintiffs averred that the purported agreement of sale and instrument of transfer that were used by the 1st defendant to transfer the suit property to its name were forged.

The 1st and 2nd Defendants’ case:

The 1st and 2nd Defendants filed a defence and counter claim against the Plaintiffs on 18th June, 2018. In the counter-claim, the 1st Defendant sought the following reliefs against the Plaintiffs;

a) Dismissal of the Plaintiffs’ suit.

b) A mandatory injunction requiring the Plaintiffs to vacate the suit property.

c) Eviction orders.

d) In the alternative to prayer (b) and (c) above, the Plaintiffs do buy back the suit property at market value of Kshs. 4,000,000/-.

e) The Plaintiffs be ordered to pay Kshs. 5,368,933/- being the outstanding loan balance as at 31st October, 2017 together with interest.

f) The Plaintiffs be ordered to pay interest as per the loan agreement on the outstanding amount from 31st October, 2017 to the date of judgment.

g) Costs of this suit and interest thereon at court rates.

h) Any other relief as this Honorable Court may deem just and fit to grant.

In their defence, 1st Defendant averred that the 1st Defendant was the registered owner of the suit property having purchased the same from the 1st Plaintiff through a sale agreement dated 9th April, 2015. The 1st Defendant averred that it made a one-off full payment of the purchase price of Kshs. 1,000,000/- receipt of which was acknowledged by the 1st Plaintiff. The 1st Defendant averred further that the purchase of the suit property was done on a willing buyer willing seller basis and that the 1st Plaintiff signed all the requisite documents for the transfer of the property to the 1st Defendant. The 1st Defendant averred that the 1st Plaintiff also obtained the requisite consents including spousal consent from the 2nd Plaintiff who was his wife.

The 1st Defendant averred that after completion of the transfer, it took possession of the suit property but the 1st Plaintiff requested to be allowed to continue residing on the suit property as a tenant at a monthly rent of Kshs. 30,000/-. The 1st Defendant averred that the Plaintiffs defaulted in rent payment and fell into arrears amounting to Ksh.360, 000/- thereby prompting the levying of distress for rent by the 1st Defendant through the 2nd Defendant.  The 1st Defendant averred further that in addition to the said sale transaction, the 1st Plaintiff sought and was granted a loan of Kshs. 1,000,000/= by the 1st Defendant which loan was disbursed on terms and conditions that were contained in the loan agreement between the parties. The 1st Defendant averred that the 1st Plaintiff had only paid Kshs. 329,850/- in respect of the said loan the balance of which continued to accrue interest and penalties. The 1st Defendant averred that as at 31st October, 2017 the outstanding loan stood at Ksh.5, 368,933/- and that the 1st Plaintiff had failed to pay the same despite demand being made on him to do so.

The Plaintiffs filed a reply to defence and defence to counter-claim on 13th July, 2016. In their reply to defence, the Plaintiffs reiterated the contents of their plaint. In their defence to the counter-claim, the Plaintiffs denied that the 1st defendant was the lawful registered owner of the suit property. On the 1st Defendant’s claim that it paid to the 1st Plaintiff Kshs. 1,000,000/- as purchase price for the suit property, the Plaintiffs averred that the payment received from the 1st Defendant was disbursement of a loan that the 1st Plaintiff had applied for. The Plaintiffs averred further that the consent of the Land Control Board that they had applied for was for charging the suit property and not for the transfer of the same. The Plaintiffs averred that in any event, the consent relied on by the 1st Defendant was issued on 20th April, 2015 long after the date of the purported agreement for sale. The Plaintiffs averred further that the spousal consent that was given by the 2nd Plaintiff was for the charging of the suit property and not for the sale thereof. With regard to the loan balance, the Plaintiffs averred that the 1st Defendant had failed to give the 1st Plaintiff a statement of his loan account. The Plaintiffs denied the loan amount claimed by the 1st Defendant.

The 3rd and 4th Defendants did not enter appearance and as such did not defend the suit.

The evidence:

At the trial, the 1st Plaintiff who gave evidence as PW1 adopted his witness statement dated 20th June, 2016 as his evidence in chief and produced the Plaintiffs’ bundle of documents dated 20th June 2016 and supplementary bundle of documents dated 14th January 2020 as PExh.1 and PExh.2 respectively. In his oral testimony, PW1 reiterated the contents of the plaint that I have highlighted above. PW1 reiterated that he did not sell the suit property to the 1st Defendant. He maintained that what he sought and obtained from the 1st Defendant was a loan that was secured by the suit property. PW1 stated that it was clear from the application for Land Control Board Consent that was made by the 1st Defendant and he, and the demand letter that was written to him by the 1st Defendant to regularize his loan account that the transaction that he entered into with the 1st defendant was a loan transaction and not a sale.

The 2nd Plaintiff gave evidence as PW2. PW2 adopted her witness statement dated 20th June, 2016 as her evidence in chief. PW2 confirmed that the signatures on the spousal consent dated 20th April, 2015 and the letter dated 11th June, 2016 offering to purchase the suit property looked similar to her signature. She however denied signing the same. PW2 stated that her letter to the 1st Defendant offering to purchase the suit property was handwritten and that the same was written under duress. PW2 stated that she was not aware that the 1st Plaintiff had borrowed money from the 1st Defendant until that time when the 1st defendant levied distress against their household goods through the 2nd Defendant.

On their part, the 1st and 2nd Defendants called two witnesses. The 1st and 2nd Defendants’ first witness was the 1st Defendant’s Finance Director, Moses Namayi Anyangu (DW1). DW1 adopted his witness statement dated 18th June, 2018 as his evidence in chief. DW1 produced the 1st and 2nd Defendants’ bundle of documents dated 18th June, 2018 as DExh.1 and further bundle of documents dated 20th May, 2019 as DExh. 2. DW1 stated that the 1st Plaintiff sold the suit property to the 1st Defendant and that the Plaintiffs thereafter lived on the property as tenants. DW1 stated further that the 1st Defendant’s demand letter to the 1st Plaintiff dated 19th October, 2015 erroneously indicated that the suit property would be disposed of if the 1st Plaintiff failed to clear his loan arrears. DW1 stated further that the 2nd Plaintiff had offered to buy the suit property back at Ksh. 3,100,000/= indicating that she was aware that the property had been sold to the 1st Defendant. DW1 stated that after selling the suit property, the 1st Plaintiff borrowed unsecured loan of Ksh. 1,000,000/ from the 1st Defendant and defaulted in his repayment obligations. He stated that the said loan had accrued interest and penalties.

The 1st and 2nd Defendants’ second witness was Emmanuel Karisa Kenga (DW2). DW2 was a forensic document examiner. DW2 was retained by the 1st Defendant to examine and report on the authenticity of the signatures of the 1st and 2nd Plaintiffs on various documents that the plaintiffs had contested namely, agreement for sale dated 9th April, 2015, Transfer of Land dated 20th April, 2015, application for consent dated 5th March, 2015 and spousal consent dated 20th April, 2015. DW2 testified that from his analysis, the 1st Plaintiff signed the first three documents while the 2nd plaintiff signed the last one.

Submissions:

The plaintiffs filed their submissions on 13th January, 2021. In summary, the plaintiffs submitted that the 1st Defendant acquired the suit property fraudulently and as such the title that the 1st Defendant holds in respect of the suit property should be cancelled and a new title issued in favour of the 1st Plaintiff. In support of their submissions, the Plaintiffs relied on a number of cases including Arthi Highway Developers Limited v West End Butchery Limited and 6 Others [2015] eKLR, Samuel Odhiambo Oludhe & 2 Other v Jubilee Jumbo Hardware Limited & Another [2018] eKLR and Mary Ruguru Njoroge v John Samuel Gachuma Mbugua & 4 Others [2014] eKLR.

The 1st and 2nd Defendants filed their submissions on 3rd February, 2021. The 1st and 2nd Defendants submitted that the Plaintiffs had failed to prove that the 1st Defendant had acquired the suit property fraudulently. The 1st and 2nd Defendants submitted further that in the absence of fraud, there was no basis for cancelling the 1st Defendant’s title to the suit property. The 1st and 2nd Defendants submitted further that the 1st Defendant had proved that there was a loan amount of Kshs. 5,368,933/- that was due and owing by the 1st Plaintiff to the 1st Defendant as at 31st October, 2017 together with interest. The 1st and 2nd Defendants submitted that the 1st Defendant had proved its case against the Plaintiffs and as such it was entitled to the reliefs sought in its counter-claim. The 1st and 2nd Defendants submitted that the claim against them was not proved and as such should be dismissed. The 1st and 2nd Defendants submitted that they were entitled to the costs of the suit. The 1st and 2nd Defendants urged the court to consider awarding the 1st Defendant judgment for rent arrears that the 1st Defendant failed to plead due to an oversight.  In support of their submissions, the 1st and 2nd Defendants relied on among others; RG Patel v Lalji Makanji [1957] EA 314, Jenniffer Nyambura Kamau v Humphrey Nandi [2013] eKLR, Koinange & 13 Others v Nyati [1984] EA 425, Gudka v Dodhia C.A No 21 of 1980, Richard Ekwesera Onditi vKenya Commercial Finance Co.Ltd., Nairobi CA No.329 of 2009,and Benson Wandera Okuku v Israel Were Wakho[2020] eKLR.

Analysis and determination:

The following in my view are the issues arising for determination in this suit and counter-claim;

a) Whether the transfer of the suit property to the 1st Defendant was carried out fraudulently and illegally.

b) Whether the Plaintiffs are entitled to the reliefs sought in the plaint.

c) Whether the 1st Defendant is entitled to the reliefs sought in its counter-claim.

d) Who is liable for the cost of the suit and the counter-claim?

Whether the transfer of the suit property to the 1st Defendant was carried out fraudulently and illegally.

The term fraud is defined in Black’s Law Dictionary 9th Editionas follows;

“Fraud consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right, or in some manner to do him an injury. As distinguished from negligence, it is always positive, intentional. As applied to contracts, it is the cause of an error bearing on a material part of the contract, created or continued by artifice, with design to obtain some unjust advantage to the one party, or to cause an inconvenience or loss to the other. Fraud, in the sense of a Court of equity, properly includes all acts, omissions, and concealments which involve a breach of legal or equitable duty, trust, or confidence justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another”.

In Vijay Morjaria vNansingh Madhusingh Darbar & another [2000] eKLR,the court (Tunoi JA) stated as follows:

“It is well established that fraud must be specifically pleaded and that particulars of the fraud alleged must be stated on the face of the pleading. The acts alleged to be fraudulent must of course be set out, and then it should be stated that these acts were done fraudulently. It is also settled law that fraudulent conduct must be distinctly alleged and as distinctly proved, and it is not allowable to leave fraud to be inferred from the facts.”

In Munyi Maina v Hiram Githiha Maina [2013] eKLRthe Court stated that:

“When a registered proprietor’s root of title is under challenge, it is not sufficient to dangle the instrument of title as proof of ownership…and the registered proprietor must go beyond the instrument and prove the legality of how he acquired the title and show that the acquisition was legal, formal and free from any encumbrances.”

From the evidence before the court, I am persuaded that the 1st Plaintiff and the 1st Defendant were involved in only one transaction namely, a loan transaction under which the 1st Plaintiff borrowed a sum of Kshs. 1,000,000/- from the 1st Defendant and gave out the title deed for the suit property to be charged by the 1st Defendant as security for the loan. The 1st Defendant has not convinced me that the 1st Plaintiff sold the suit property to it. As I had observed in my ruling of 6th October, 2017, the evidence that has been tendered by the 1st Defendant does not add up. The evidence placed before the court by the 1st Defendant shows that as at the time when the 1st Plaintiff purportedly sold the suit property to the 1st Defendant, the suit property was valued at Kshs. 3,500,000/-. This is the value that was assessed by a Government valuer for the purposes of Stamp Duty on the transfer. Both Plaintiffs were teachers. It is not disputed that the Plaintiffs had their matrimonial home on the suit property. It is unbelievable that the Plaintiffs would have agreed to sell their matrimonial home valued at Kshs. 3,500,000/- to the 1st Defendant at Kshs. 1,000,000/- and then seek to borrow a further sum of Kshs. 1,000,000/- from the 1st Defendant.  The 1st Defendant has claimed that the 1st Plaintiff applied for a loan through Credit Application and Agreement dated 12th March, 2015 that was approved on 24th April, 2015 and disbursed on the same date. The 1st Defendant has claimed further that after applying for the said loan and before it was disbursed as a foresaid, the 1st Plaintiff sold to the 1st Defendant the suit property on 9th April, 2015 for Kshs. 1,000,000/- and was paid the said amount. The 1st Plaintiff allegedly transferred the suit property to the 1st Defendant on 20th April, 2015 and 1st Defendant was registered as the owner of the suit property on 22nd April, 2015 before the loan that the 1st Plaintiff has applied for was disbursed.

The application for Land Control Board(LCB) consent that was produced by the 1st Defendant in evidence to prove that the parties had applied for consent to transfer the suit property rather than to charge the same as a security shows that the same was signed and stamped by the 1st Defendant on 15th April, 2015 while the 1st Plaintiff signed the same on 5th March, 2015. The LCB consent to transfer the suit property to the 1st Defendant that was produced in evidence by the 1st Defendant is dated 10th March, 2015 and refers to an application dated 5th March, 2015. Several questions arise here. How could a consent to transfer the suit property be issued on 10th March, 2015 while the agreement for sale between the parties was made on 9th April, 2015?  I also wonder how a consent could be issued on 10th March, 2015 while the 1st Defendant signed the application for such consent on 15th April, 2015. I have also noted that when the 1st Defendant defaulted, the 1st Defendant reported him to the Credit Reference Bureau and indicated that he had taken a loan that was secured. The 1st Defendant also wrote a demand letter to the 1st Plaintiff to regularize his loan account in which letter, it indicated that the loan was secured by the suit property. I am not persuaded that reference to the suit property in the report to the Credit Reference Bureau and in the letter of demand were just errors as the 1st Defendant wants this court to believe.

The 1st Defendant has also not given a reasonable explanation as to why it gave to the 1st Plaintiff the alleged unsecured loan of up to Kshs, 1,000,000/-. As at 12th March, 2015 when the 1st Plaintiff applied for a loan, the suit property was registered in his name. It was not until about a month later on 9th April, 2015 when the 1st Plaintiff allegedly sold the suit property to the 1st Defendant. It is inconceivable that the 1st Defendant would give a personal unsecured loan of Kshs. 1,000,000/- to the 1st Plaintiff on the strength only of the fact that the 1st Plaintiff was a good customer. The 1st Defendant did not place any evidence before the court of the 1st Plaintiff’s credit worthiness that would have justified that unsecured loan. The 1st Defendant did not also give a reasonable explanation as to why after allegedly acquiring the suit property on 22nd April, 2015, he allowed the Plaintiffs to remain in occupation without paying rent for a whole year until May, 2016 when it purported to levy distress. The 1st Defendant did not tender any evidence showing that the Plaintiffs remained in occupation of the suit property as its tenants. No tenancy agreement or evidence that the Plaintiffs had paid rent at any time was placed before the court.  Lastly, the 1st Defendant did not place before the court any evidence showing that it paid to the 1st Plaintiff the alleged purchase price of Kshs. 1,000,000/-. The 1st Plaintiff having denied such payment, the 1st Defendant had a duty to place before the court evidence that it indeed made such payment. The alleged acknowledgments of payment in the purported sale agreement and instrument of transfer are not sufficient for that purpose in the circumstances. Like in the case of disbursement of the loan of Kshs. 1,000,000/-, the 1st Defendant should have placed before the court some form of evidence of payment of the alleged purchase price of Kshs. 1,000,000/-.

For the foregoing reasons, it is my finding that the 1st Plaintiff neither sold nor transferred the suit property to the 1st Defendant. What the 1st Plaintiff obtained from the 1st Defendant was a loan of Kshs. 1,000,000/- that was secured by the suit property. However, the 1st Defendant appears to have played with the papers that were supplied to it by the 1st Plaintiff and caused the suit property to be transferred to its name. In the circumstances, the suit property was acquired by the 1st Defendant illegally and fraudulently. The first issue is answered in the affirmative.

Whether the Plaintiffs are entitled to the reliefs sought in the plaint.

The suit property is registered under the Registered Land Act, Chapter 300 Laws of Kenya (now repealed). Sections 27 and 28 of the Registered Land Act provides as follows:

27. Subject to this Act -

(a) the registration of a person as the proprietor of land shall vest in that person the absolute ownership of that land together with all rights and privileges belonging or appurtenant thereto;

(b) the registration of a person as the proprietor of a lease shall vest in that person the leasehold interest described in the lease, together with all implied and expressed rights and privileges belonging or appurtenant thereto and subject to all implied and expressed agreements, liabilities and incidents of the lease.

28. The rights of a proprietor, whether acquired on first registration or whether acquired subsequently for valuable consideration or by an order of court, shall not be liable to be defeated except as provided in this Act, and shall be held by the proprietor, together with all privileges and appurtenances belonging thereto, free from all other interests and claims whatsoever, but subject -

(a) to the leases, charges and other encumbrances and to the conditions and restrictions, if any, shown in the register; and

(b) unless the contrary is expressed in the register, to such liabilities, rights and interests as affect the same and are declared by section 30 not to require noting on the register:

Provided that nothing in this section shall be taken to relieve a proprietor from any duty or obligation to which he is subject as a trustee.

Section 143(1) and (2) of the Registered Land Act provides as follows:

(1) Subject to subsection (2), the court may order rectification of the register by directing that any registration be cancelled or amended where it is satisfied that any registration (other than a first registration) has been obtained, made or omitted by fraud or mistake.

(2) The register shall not be rectified so as to affect the title of a proprietor who is in possession and acquired the land, lease or charge for valuable consideration, unless such proprietor had knowledge of the omission, fraud or mistake in consequence of which the rectification is sought, or caused such omission, fraud or mistake or substantially contributed to it by his act, neglect or default.

Section 24, 25 and 26 of the Land Registration Act, 2012 provides as follows:

24. Subject to this Act—

(a) the registration of a person as the proprietor of land shall vest in that person the absolute ownership of that land together with all rights and privileges belonging or appurtenant thereto; and

(b) the registration of a person as the proprietor of a lease shall vest in that person the leasehold interest described in the lease, together with all implied and expressed rights and privileges belonging or appurtenant thereto and subject to all implied or expressed agreements, liabilities or incidents of the lease.

25. (1) The rights of a proprietor, whether acquired on first registration or subsequently  for valuable consideration or by an order of court, shall not be liable to be defeated except as provided in this Act, and shall be held by the proprietor, together with all  privileges and appurtenances belonging thereto, free from all other interests and claims whatsoever, but subject—

(a) to the leases, charges and other encumbrances and to the conditions and restrictions, if any, shown in the register; and

(b) to such liabilities, rights and interests as affect the same and are declared by section 28 not to require noting on the register, unless the contrary is expressed in the register.

(2) Nothing in this section shall be taken to relieve a proprietor from any duty or obligation to which the person is subject to as a trustee.

26. (1) The certificate of title issued by the Registrar upon registration, or to a purchaser of land upon a transfer or transmission by the proprietor shall be taken by all courts as prima facie evidence that the person named as proprietor of the land is the absolute and indefeasible owner, subject to the encumbrances, easements, restrictions and conditions contained or endorsed in the certificate, and the title of that proprietor shall not be subject to challenge, except—

(a) on the ground of fraud or misrepresentation to which the person is proved to be a party; or

(b) where the certificate of title has been acquired illegally, unprocedurally or through a corrupt scheme.

Under the Registered Land Act and the Land Registration Act, 2012, the registration of a person as the proprietor of land or lease confers upon that person the absolute ownership of the land and in the case of a lease, the leasehold interest in the land. Under the Registered Land Act which is the statute under which the suit property was registered, a register of land may be rectified by the cancellation of any entry therein where such registration has been obtained by fraud or mistake.

I have made a finding that the 1st Defendant acquired the suit property fraudulently and illegally. The 1st Plaintiff is therefore entitled to a declaration that the 1st Defendant acquired the suit property unlawfully and an order cancelling the title held by the 1st Defendant, and the restoration of the property to the 1st Plaintiff’s name.  The 1st Plaintiff is also entitled to an order of injunction restraining the 1st Defendant from dealing with the suit property save as it may be authorized by law. Since there is no evidence that the suit property was charged by the 1st Defendant, the court cannot compel the 1st Defendant to furnish the 1st Plaintiff with a copy of the charge. With regard, to the statement of the loan account, there is no evidence that the 1st Defendant had declined to furnish the 1st Plaintiff with the same. In any event, the 1st Defendant produced the 1st Plaintiff’s statement of loan account in evidence.

Whether the 1st Defendant is entitled to the reliefs sought in its counter-claim.

I have held that the 1st Defendant acquired the suit property unlawfully. In the circumstances, there is no basis upon which the court can grant possession of the suit property to the 1st Defendant. The 1st Defendant sought as an alternative relief, an order for the 1st Plaintiff to buy back the suit property at Kshs. 4,000,0000/-. Since the court has made a finding that the 1st Plaintiff did not sell the suit property to the 1st Defendant, the issue of the 1st Plaintiff buying back the suit property from the 1st Defendant does not arise. With regard to the loan amount balance claimed by the 1st Defendant, I am satisfied that the 1st Plaintiff borrowed Kshs. 1,000,000/- from the 1st Defendant and that he did not service the loan. The 1st Defendant produced a statement of account in evidence showing that as at 31st October, 2017, the outstanding loan payable was Kshs. 5,368,933/-. The 1st Defendant is entitled to that amount together with interest until payment in full. The 1st Defendant had urged the court in its submissions to also enter judgment in its favour for rent arrears. There was no claim for rent arrears in the counter-claim and in any event, there was no landlord and tenant relationship between the 1st Defendant and the Plaintiffs that would entitle the 1st Defendant to recover rent from the Plaintiffs or any of them. The claim is rejected.

Who should bear the costs of the suit and the counter-claim?

Under section 27 of the Civil Procedure Act, Chapter 21 Laws of Kenya, costs of and incidental to a suit is at the discretion of the court. As a general rule, costs follow the event. In the circumstances of this case, I am not certain that there is a clear winner. I would direct that each party bears its own costs of the suit and the counter claim.

Conclusion:

In conclusion, I hereby make the following orders:

1. I declare that land Title No. Ngong/Ngong/34016(the suit property) was illegally and fraudulently transferred to the 1st Defendant.

2. The Land Registrar, Ngong and/or Kajiado shall within a period of 60 days from the date hereof rectify the register of the suit property by cancelling the registration of the 1st Defendant as the owner of the suit property and the title deed that was issued to the 1st Defendant after which the property shall be restored to the name of the 1st Plaintiff.

3. The Land Registrar, Ngong and/or Kajiado shall issue a new title deed for the suit property in the name of the 1st Plaintiff but the same shall be handed over to the 1st Defendant who shall hold the same on the terms on which the same was handed over to it by the 1st Plaintiff.

4. An injunction is issued against the 1st Defendant restraining the 1st Defendant from levying distress against the Plaintiffs or interfering with the Plaintiffs’ occupation of the suit property save as may be authorized by an order of a court of competent jurisdiction.

5. Judgment is entered for the 1st Defendant against the 1st Plaintiff in the sum of Kshs. 5,368,933/- together with interest at court rates from the date hereof until payment in full. 6. Each party shall bear its own costs of the suit and the counter-claim.

DELIVERED AND DATED AT NAIROBI THIS 23RD DAY OF SEPTEMBER, 2021

S. OKONG’O

JUDGE

Judgment delivered virtually through Microsoft Teams Video Conferencing Platform in the presence of:

Mrs. Karanu for the Plaintiff

Mr. Beyo for the 1st and 2nd Defendants

N/A for the 3rd and 4th Defendants

Ms. C.Nyokabi-Court Assistant