Eva Kimea & Joseph Mbaluka v Nawal Abdulrahman Adballa [2015] KECA 410 (KLR)

IN THE COURT OF APPEAL

AT MOMBASA

(CORAM: MAKHANDIA, OUKO & M’INOTI, JJ.A.)

CIVIL APPEAL NO. 52 OF 2014

BETWEEN

EVA KIMEA…………………………1ST APPELLANT

JOSEPH MBALUKA………………2ND APPELLANT

AND

NAWAL ABDULRAHMAN ADBALLA……..RESPONDENT

(Being an appeal from the Judgment of the Environment and Land Court at Malindi (Angote, J.)  dated the 5th September, 2014

in

Malindi ELCL. Case No. 176 of 2012)

*********************

JUDGMENT OF THE COURT

At the centre of this controversy is land parcel number 9339 (original number 8622/27) (“the suit premises”) situate in Kijiwetanga, Malindi, within Kilifi County and measuring 2 ½ acres or thereabouts.  The suit premises was originally part of a larger parcel known as land parcel number 244/82 measuring 154 acres which after subdivisions gave rise to several land portions including the suit premises.  The proprietor of the original land parcel was one, Eric Edward Barallon (“Barallon”) who passed on in 2007.

The genesis of the controversy is the plaint dated 6th December 2012, filed in the High Court of Kenya at Malindi by Nawal Abdulrahman Abdalla (“the respondent”) against Eva Kimea (“the 1st appellant”) that was subsequently amended to bring on board, Joseph Mbaluka (“the 2nd appellant”) following an application for joinder.  In the plaint, the respondent sought as against the appellants in the main, a permanent injunction to restrain them from trespassing on the suit premises or dealing with the suit premises and further, a declaration that she was the registered proprietor of the suit premises.

In her suit the respondent alleged that she was the registered proprietor of the suit premises having bought the same from Omar Edward Barallon (“Omar”) a son to Barallon and one of the administrators to his Estate.  The other two co-administrators were Rene Edward Barallon (“Rene”) and Fatma Eric Edward (“Fatma”), who are the deceased’s children.  Pursuant to an Indenture dated 5th November, 2012 executed by her and Omar all the rights, title and interest in the suit premises were conveyed to her for a consideration of Kshs.1,000,000/-  that she duly paid.   According to Rashid Karib Omar (PW1) who testified on her behalf pursuant to a power of attorney donated to him by the respondent, the wife,   the suit premises were duly registered in the respondent’s name on 7th November, 2012.  Towards this end, he produced two search certificates dated 7th November and 13th November, 2012 respectively showing that the suit premises were indeed registered in her favour.  There was however, an earlier Indenture registered on 18th September, 2012 wherein the administrators of the Estate of Barallon aforesaid sold and transferred the suit premises to Omar for a consideration of Kshs.500,000/- prior to him selling and transferring the same to the respondent.  The respondent’s attempt to take possession and develop the suit premises were however thwarted by the appellants, who also claimed ownership, hence the suit.

The appellants on the other hand in their respective defences and counterclaims disputed the respondent’s ownership of the suit premises and averred that they were the lawful registered owners of the suit premises in equal shares having earlier purchased the same from Barallon at a consideration of Kshs.120,000/-.  In the premises, it was the respondent who had encroached on the suit premises by undertaking illegal activities thereon.  That much as the respondent had title to the suit premises, the same had been fraudulently acquired.  They proceeded to give particulars of fraud and in the end, sought by way of counterclaim, a declaration that the suit premises belonged to them, eviction of the respondent therefrom, an injunction against her, as well as an order for the cancellation or revocation of her title.  In evidence, they tendered a sale agreement dated 16th July, 1997 entered into between the 2nd appellant and Barallon, documents evidencing payment of the purchase price by way of instalments over a long period of time.

The appellants and Rene testified during the trial.  Their evidence was further that, upon payment of the whole consideration aforesaid, Barallon later informed them that a title in their name could not be processed since he had lost the deed plan to the suit premises. Accordingly, he took the 1st appellant before a magistrate at Malindi Law Courts who commissioned an affidavit to that effect.  They further testified that they fenced the suit premises and specifically for the 1st appellant, sunk a borehole, dug a septic tank and constructed a gate.  It was also her evidence that her late husband’s remains were interred on the suit premises in 2006.  However, Barallon passed on before transferring the suit premises to them.  That the title documents in favour of the respondent in her possession were in the circumstances forgeries as the other co-administrators of Barallon’s estate had never sold the suit premises to the respondent.  Their evidence was buttressed by that of Rene who confirmed that Barallon received the purchase price from the appellants.  However, he was unable to effect the transfer of the suit premises to them for want of a deed plan.  That it was his step brother, Omar who had instead sold the suit premises to the respondent.  He denied that his sister Fatma or himself ever signed the Indenture that transferred the suit premises to the respondent.

Angote, J. heard the suit and in a judgment dated 5th September 2014, found in favour of the respondent and granted the prayers she had sought in the plaint.  Aggrieved by the decision, the appellants filed ten grounds of appeal in this Court.  In summary, they accused the Judge of erring in: finding that the respondent was rightfully the registered owner of the suit premises;  failing to appreciate that the suit premises were bought by the appellants jointly;  failing to find that the transfer and registration of the suit premises to the respondent was fraudulent;  holding that the respondent had proved her case despite the fact that the person  alleged to have sold the suit premises to her did not testify; finding that the respondent was a bona fide purchaser for value without notice when the evidence was to the contrary; upholding the title when it had actually been cancelled by the Registrar of Titles on account of fraud;  refusing to accept the affidavit sworn in court to show that the deed plan was lost by the time the appellants were buying the suit premises;  dismissing the counterclaim despite the weighty evidence  in favour, and lastly;  holding that the 1st appellant had not proved the size of the suit premises when there was such evidence.

At the hearing of the appeal, Mr. Muthami, learned counsel appeared for the appellants and opted to argue the grounds of appeal globally. He submitted that the appellants had purchased the suit premises from the original owner, Barallon and had paid the whole purchase price though by instalments.  Further, that the appellants had bought the suit premises before subdivision and before it was curved out of the bigger parcel but they were to register the suit premises after subdivision was undertaken and completed.  However, after the subdivision, the appellants could not register the suit premises in their favour since the owner claimed to have lost the original deed plan.  To enable the appellants register the suit premises in their favour, counsel submitted that Barallon swore an affidavit before a magistrate, explaining the loss of the deed plan and in support of an application for a new deed plan.  Counsel explained that the appellants however did not pursue the deed plan but instead commenced the process of subdivision.

Counsel further submitted that one of the sons of Barallon and also an administrator to his Estate, Omar, forged an Indenture dated 13th September 2012, by which he transferred the suit premises from the administrators of the Estate to himself.  That immediately thereafter he sold and transferred the suit premises to the respondent through a second Indenture dated 5th November 2012. Counsel therefore submitted that the second transfer of the suit premises in favour of the respondent was a nullity for want of authority from the other co-administrators.  Accordingly, both Indentures were null and void. To counsel, the learned trial Judge therefore erred in holding that the transfer was legal especially in the absence of the evidence of Omar.  Counsel further submitted that one of the co-administrators, Rene (DW2) complained to the Registrar of Titles that the Indenture transferring the suit premises to Omar was fraudulent as his signature was forged.  On that basis, the Indenture was accordingly cancelled. Counsel submitted that despite the Registrar having cancelled the Indenture, Angote, J. still held that the transfer of the suit premises to the respondent was proper.  That since the respondent knew all along of the fraud, she could not therefore be said to have been a bona fide purchaser for value without notice.  To counsel and in totality, the transaction was a nullity from the very beginning and the appeal ought to be allowed on that basis.

Mr. Aziz,learned counsel appeared for the respondent and submitted that the respondent had conducted a search on the suit premises on 7th November 2012, which she tendered in evidence and which proved that she was the registered proprietor thereof. As such, the appellants could not allege that they were the registered owners of the suit premises in their pleadings and neither had they tendered any evidence to show themselves as such registered proprietors. Counsel submitted that the letter from the Registrar of Titles cancelling the Indenture was dated 30th January 2013, and was written after the filing of the suit.  Counsel submitted that in any event the respondent had replied to the Registrar’s letter which settled the issue of the cancellation of the Indenture.  The Indenture was never cancelled in the first place, counsel asserted.

On the issue that the deed plan had been lost by the original owner, counsel submitted that there was a letter on record from the Ministry of Lands, Housing & Urban Development dated 12th November 2013, confirming that the suit premises were registered in the name of the respondent who had purchased the same from Omar and that there had never been a report of loss of a deed plan in respect of the suit premises. In reply to the appellants’ allegation that Barallon had sworn an affidavit before a magistrate to the effect that the deed plan was lost, Mr. Aziz submitted that the authenticity of the affidavit was contested and queried.  Counsel further stated that the evidence of the vendor was not necessary; and hastened to add that the appellants could as well have summoned him or even the advocate who attested to the indenture. Counsel denied that there was any evidence on forgery of the signatures on the Indentures as alleged and that in any event no report was made or evidence of a document examiner tendered to support that contention. He urged that the appeal be dismissed with costs.

This being a first appeal from the trial court, this Court has an obligation to consider and evaluate afresh the evidence which was adduced in the trial court and come to its own conclusion bearing in mind however, that the trial Judge unlike it had the singular advantage of seeing and assessing the demeanor of witnesses (see Selle & Another v Associated Motor Boats Co. Ltd [1968] EA 123).In undertaking that obligation, this Court is guided by the principle that as an appellate court, we should not interfere with findings of fact by the trial court unless they are based on no evidence or on the misapprehension of the evidence or the Judge is shown to have acted plainly on wrong principles in reaching the findings he did.

Essentially, two broad issues arise for determination in this appeal:-

Whether the respondent proved her case as required and,

Whether the appellants discharged the burden of proof that the respondent acquired the suit premises fraudulently?

It is an uncontested and uncontroverted fact that the suit premises are registered in favour of the respondent. This is through an Indenture registered on 7th November 2012.  Indeed the respondent carried out a search on the suit premises on the same day of registration and again on the 13th November 2012, for reasons that she wanted to be sure and be certain of the registration.  Both searches tendered in evidence confirmed that the suit premises were registered in her favour. This suit was commenced on 6th December 2012, when the respondent filed her claim against the appellants. The applicable law therefore is the Land Registration Act 2012which came into effect on 2nd May 2012.  Section 26 (1) (a) of the said Act provides inter alia:-

“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 asprima facieevidence 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-

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,or through a corrupt scheme.

It therefore becomes clear that the only way the appellants can successfully impeach the respondent’s title is by proving that the same was acquired fraudulently and or by misrepresentation and that she was party to such fraud and misrepresentation.  Secondly, and in the alternative, they must demonstrate that she acquired the title illegally, unprocedurally or through a corrupt scheme.  Looking at the entire evidence on record in this regard tendered by the appellant, it falls far too short in proving any of the above improprieties.

This Court, constituted differently, in the case; Malindi C.A No. 26 of 2013 Kalume Karisa Mbithe & Another v Bromine Investment Ltd (UR) delivered itself thus on the burden of proof in an allegation of fraud and misrepresentation:-

“We note from the pleadings that the respondent claimed to be the owner and registered proprietor of the suit property, whilst the appellant sought rectification of the register claiming to have lawfully purchased the suit property, and contending that the respondent’s title to the suit property was procured through fraud. The main issue therefore was ownership of the suit property which both the appellants and the respondent claimed and which the appellants alleged was registered in the respondent’s name through fraud or misrepresentation.  Thereforethe appellants were the ones having the burden of establishing the fraud and it was not for the court to establish the legality or authenticity of the respondent’s title generally, but only in relation to the alleged fraud particulars of which had to be proved.” (Emphasis ours)

Further, it is settled law that allegations of fraud require a standard of proof higher than is ordinarily in other civil matters, that is, higher than on a balance of probabilities (See Urmila w/o Mahendra Shah v Barclays Bank International Ltd & Another [1979] KLR 76 and RatilalGordhanbhai Patel Gordhanbhai Patel v Lalji Makanji [1957] EA 317).  Indeed, in the case of Koinange & 13 Others v Koinange [1986] KLR 23, this Court reiterated the above by holding that allegations of fraud must be specifically pleaded and strictly proved on a standard beyond the usual standard in civil proceedings of balance of probabilities. Thus although the appellants had pleaded the particulars of fraud against the respondent, in order to succeed in their defence and counterclaim, the appellants had to discharge that burden of proof.  The learned trial Judge was also alive to this fact when in his judgement he stated as follows:-

“Where a party alleges fraud on the acquisition of title, then such a party has to prove that allegation to the required standards, that is, more than just on a balance of probabilities.”

No evidence at all was led by the appellants to support their claim that the respondent in acquiring the suit premises was fraudulent as pleaded and particularized in their defences and counterclaims.  There was absolutely no evidence at all that the respondent secretly and dubiously had herself registered as the proprietor of the suit premises, without due regard to the succession cause or in consultation with the estate of Barallon.  The evidence on record and which is uncontested is that by the time she showed interest in the suit premises and indeed proceeded with the purchase, the suit premises had already been sold, transferred and registered in the name of Omar.  If at all there was any fraud, then it could only have been perpetrated by Omar on Rene and Fatma.

Although Rene testified that a report was made to the CID in regard to the alleged forgery on the suit premises, there is no evidence that the complaint was ever investigated or what became of it.   The co-administrators have left the purported fraud to rest.  To the appellants having known of the purported fraud committed by Omar, one would have expected that perhaps they would have had Omar enjoined in the proceedings for appropriate remedy against him.  They did not.  The issue of the missing deed plan and the affidavit sworn in support thereof by Barallon does not therefore arise.   In any event the lost deed plan referred to a totally different land parcel.  There is no way therefore that the respondent would have known about the succession cause of the deceased’s estate, the missing deed plan if at all and the alleged affidavit.  Even the authenticity of the alleged affidavit is in doubt as the alleged magistrate who is alleged to have attested to it, disowned it.

The respondent is also accused of getting documentation of the suit premises, whilst she knew that they belonged to the appellants.  First, the appellants have not disclosed the alleged documents.  In any event, if there were such documents they could only have been in the custody of the administrators of the estate of Barallon and not the respondent. Further, the documentation of the suit premises was left to the respondent’s counsel and Omar. A search, as part of due diligence on the part of the respondent was carried out that showed the suit premises were registered in the name of Omar.  What else was expected of the respondent and or his counsel?  We cannot detect foul play that the responded is accused of in the transaction. The respondent is also accused of committing acts of forgery.  There is no elaboration of the acts complained of.  We shall leave it all that.  Further, the respondent is accused of forging a deed plan. How would this have been possible when by the time she commenced the transaction, the suit premises were already transferred and registered in the name of Omar?  The final accusation was that the respondent wrongfully and or illegally acquired the appellants’ suit premises. This cannot possibly be true as at the time, the appellants were not and have never been the registered proprietors of the suit premises. In a nutshell therefore, the appellants did not prove their allegations of fraud or misrepresentation against the respondent and even if they had done, they never tendered the evidence that the respondent was a party to the same.  Further, the evidence tendered by the appellants also did not demonstrate that the title was acquired illegally, unprocedurally or through a corrupt scheme.  Based on the foregoing, we cannot fault the Judge for reaching the conclusion that the allegations of fraud were not proved.

Rene (DW2) was a son of Barallon and also one of the administrators to his Estate.  He testified on behalf of the appellants that his signature on the Indenture dated 5th September 2012 transferring the suit premises to Omar was forged and that he had reported the incident to the Registrar of Titles.  He also testified that Fatma’s signature was forged as well as she was away in Italy on the purported date of the signing of the Indenture.  Angote, J. duly considered this evidence and came to the conclusion and rightly so in our view again that no evidence from the document examiner was placed before court to prove that allegation. On the allegation that Fatma was in Italy when the Indenture was executed, Angote, J. found too that a copy of her passport was not availed to support that allegation.  On the whole, Angote, J. found that no evidence had been produced by the appellants to show that Omar had procured his title fraudulently and therefore could not pass legal title to the respondent.  These are findings of fact that this Court is bound to pay homage to.   We may add that, land is such a sensitive matter and we find it rather strange that Omar would forge signatures of his siblings and effect a transfer, and though his siblings became aware of the fact, they elected to do nothing, more so when this was a criminal act that should have invited criminal sanctions.

Counsel for the appellants also submitted that there were two letters from the Ministry of Lands, one that had purported to cancel the Indenture transferring the suit premises to Omar and another confirming that the suit premises were in fact registered and owned by the respondent. In our view, a careful reading of the first letter to the respondent cannot be said to have cancelled the Indenture registered in her favour.  That letter called for the Indenture to be produced as part of investigations by the Land Registrar to establish its legality and authenticity after the respondents replied to the Ministry contesting the Registrar’s powers to cancel their client’s Indenture. It would appear thereafter, the Ministry never further pursued the matter. Yet in another letter from the said Ministry and from the same officer, the Senior Land Registrar, R.M. Ingonga, confirmed that the suit premises were registered in the name of the respondent.  An inference can be drawn therefore that the latter letter superceded the earlier one and was therefore a true reflection of the ownership status of the suit premises. The said letter also denied that there had been any report of loss of a deed plan in respect of the suit premises.

The factual position then is that contrary to the assertion by the appellants that the respondent’s title was cancelled, that is far from the case.  The Indenture was never cancelled at all.  The appellants having failed to adduce sufficient evidence to impugn the respondent’s title, they cannot be heard to claim that the Judge denied them a judgment when the evidence on record was not in their favour.  Their evidence with regard to the missing deed plan and the alleged affidavit sworn by Barallon attesting to the same could not stand up to scrutiny.  As for the 2nd appellant, he even disclaimed all the affidavits he had sworn in the case and more particularly the verifying affidavit to his counterclaim.  That being the case, how could his counterclaim stand? With all these missteps, how could the court have believed the testimonies of the appellants and their star witness, Rene?  We are satisfied that the learned Judge was right in upholding the respondent’s suit and dismissing the appellants’ defence and counterclaim on account of insufficient evidence.  There is no doubt at all that the respondent was a bona fide purchaser for value without any notice of infractions or encumbrances to the title.  Her evidence as to how she came into possession of the suit premises was certainly credible and believable.  It is for that reason that she carried the day.

It is our considered view in the light of the foregoing that, this appeal ought to fail.  It is dismissed with costs to the respondent.

Dated and delivered at Malindi this 30th day of September 2015.

ASIKE-MAKHANDIA

JUDGE OF APPEAL

W.OUKO

JUDGE OF APPEAL

K. M’INOTI

JUDGE OF APPEAL

I certify that this is a

true copy of the original.

DEPUTY REGISTRAR