Galana Oil Kenya Ltd v David Gikaria, Attorney General & Land Registrar, Nakuru County [2021] KEELC 4614 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT NAKURU

ELCC NO. 192 OF 2014

GALANA OIL KENYA LTD........................................................PLAINTIFF

VERSUS

DAVID GIKARIA..............................................................1ST DEFENDANT

ATTORNEY GENERAL....................................................2ND DEFENDANT

LAND REGISTRAR, NAKURU COUNTY......................3RD DEFENDANT

JUDGMENT

1. Proceedings herein commenced through plaint filed on 1st July 2014. The plaintiff averred therein that it purchased the parcel of land known as Nakuru Municipality Block 22/629 (Muguga) on 7th August 2009, took possession of it and was later issued with a title in respect thereof on 26th July 2010. It added that the 1st defendant trespassed on the suit property sometime in March 2014 and that upon conducting a search, it discovered that the 1st defendant had fraudulently been issued with a parallel title to the suit property. The plaintiff accused both the 1st and 3rd defendants of fraud and sought judgment against all defendants jointly and severally for:

a) A declaration that the Plaintiff is he (sic) legal owner of land Parcel No. Nakuru/Municipality Block 22/629 (Muguga).

b) A permanent injunction restraining the 1st Defendant by himself, his agents, servants, employees from entering disposing, selling, dealing or in any other way interfering with the Plaintiff’s peaceful possession and occupation of Land Parcel Number Nakuru/Municipality Block 22/629 (Muguga).

c)  Cancellation of title held by the 1st Respondent in respect to the suit property.

d) Costs of this suit.

2. The 2nd and 3rd defendants filed a statement of defence in which they denied the allegations of fraud. The 1st defendant did not initially file any defence. He later sought through Notice of Motion dated 19th August 2019 to set aside proceedings and to defend the claim. Through ruling delivered on 11th June 2020, this court granted him conditional setting aside and leave to defend the suit. He however failed to satisfy the conditions set by the court and his Notice of Motion dated 19th August 2019 stood dismissed with costs to the plaintiff.

3. At the hearing George Ngige Kahira, a director of the plaintiff company, testified as PW1. He produced authority dated 30th April 2014 (PExb 1) from the plaintiff empowering him to testify on its behalf.  He stated that the plaintiff is the owner of land parcel No. Nakuru Municipality Block 22/629 (Muguga) measuring approximately 0. 101hectares.  The title deed for the plot was issued to plaintiff on 26th July 2010.  He produced a certified copy of the title deed (PExb 2) and added that the plaintiff bought the plot from Mid Oil Africa Ltd through a sale agreement dated 7th August 2009 for a consideration of KShs 800,000. He produced a copy of the agreement (PExb 3).

4. He further stated that the plaintiff conducted a search before executing the sale agreement and that the results showed that the plot was owned by Mid Oil Africa Ltd.  He produced a copy of Certificate of Search dated 12th June 2009 (PExb 4). Mid Oil Africa acquired the plot from Paraffina Investments Ltd through transfer dated 8th February 2000 (PExb 5). Parafina Investments Ltd had bought the property from Mr Chege Mbatia who was the first registered owner.  He produced a copy of a title deed in the name of Mr Chege Mbatia (PExb 6) and added that entry number 1 in the proprietorship section shows that Mr Chege Mbatia obtained title deed on 13th March 1996. The plot originated from Nakuru Municipality Block 22/81 which measured 1. 012 hectares which was subdivided into several parcels including parcel No. 629 through mutation dated 13th March 1996 (PExb 7).

5. PW1 further testified that Mid Oil Africa which was then under liquidation executed a transfer dated 26th November 2009 (PExb 8) through its liquidator to convey the property to the plaintiff.  Prior to the transfer to the plaintiff and Mid Oil Africa applied for consent of land control board (PExb 9A) and were issued with consent (PExb 9B). Stamp duty was assessed at KShs 32,010 which the plaintiff paid through Gadhia & Mucheru Advocates.  He produced a copy of a deposit slip, a receipt, Stamp Duty Declaration Assessment & Pay in Slip, Valuation Request for Stamp Duty, Bank Slip and Stamp Duty Payment Slip (PExb 10A, B, C and D). He added that although rates demands for the property are still coming in the name of Mid Oil Africa Ltd the plaintiff has been paying the rates. He produced a rates clearance certificate (PExb 11A) and a rates demand dated 13th March 2014 (PExb 11B). He also stated that sometime in the year 2014, somebody went to harass their staff. The plaintiff conducted a search and discovered that the 1st defendant had obtained title for the suit property.  He produced a copy of green card (PExb 12) which shows that on 28th August 1997 title was issued to Mary Wambui Kiarie and that on 17th September 2003, title was issued to the 1st defendant.  He urged the court to cancel the 1st defendant’s title and added that the plaintiff is in possession of the suit property.

6. Under cross-examination by counsel for the 2nd and 3rd defendants, he stated that the plaintiff always received help from the lands office, that PExb 12 was given to the plaintiff by the 3rd defendant following investigations by the plaintiff’s lawyers and that the plaintiff never made any report to the police about any fraud by the 3rd defendant.  That the plaintiff still has its title and has never sold the suit property.

7. Next on the stand was Njeri Mucheru advocate (PW2). She stated that she acted for the plaintiff during purchase of the suit property from Mid Oil. At that time, she was practicing as Gadhia & Mucheru Advocates.  She checked the sale agreement (PExb 3) which was drafted by the vendor’s advocates.  Upon signing of the agreement and payment of deposit, her firm received completion documents from vendor’s advocates. She conducted a search (PExb 4) and it showed that the registered owner was Mid Oil Africa Ltd pursuant to entry made on 8th March 2000.  She attested the signatures of the two directors of the plaintiff.  Stamp duty was assessed at KShs 32, 010 and was paid.  She later registered the transfer. Title was later issued in plaintiff’s name and she delivered it to the plaintiff.  She added that she never had any indication that the suit property was owned by anybody other than Mid Oil Africa.  That at the time she handled the transaction, the documents were intact at the lands office and that’s why she was issued with a Certificate of Search and the transfer was successfully registered.

8. The plaintiff’s case was closed at that point. The 2nd and 3rd defendants also closed their case at that stage without calling any evidence. The plaintiff and the 2nd and 3rd defendants then filed submissions.

9. For the plaintiff, it is argued that there exist two parallel titles in respect of the suit property and that since the plaintiff’s title traces its roots way back to 13th March 1996, its title is first in time and should prevail. It is further argued that the 1st defendant did not defend the case and that its title which traces back to the latter date of 28th August 1997 ought to be cancelled as prayed. Reliance is placed on the cases of Benja Properties Limited v Syedna Mohammed Burhannudin Sahed & 4 others [2015] eKLRand Elijah Makeri Nyangw’ra v Stephen Mungai Njuguna & another [2013] eKLR. The plaintiff therefore urged the court to enter judgment in its favour as prayed together with costs.

10. The 2nd and 3rd defendants in their submissions concede that there are indeed two parallel titles in respect of the suit property but add that the plaintiff has failed to establish fraud against the defendants to the required standard. Reliance is placed inter alia on R.G. Patel v Lalji Makanji [1957] EA 314. The 2nd and 3rd defendants therefore urge the court not to grant the plaintiff any relief or costs as against them.

11. I have carefully considered the pleadings, the evidence and the submissions herein. The issues that arise for determination are whether there exist two parallel titles in respect of the suit property, whether the plaintiff has established fraud and finally whether the reliefs sought should issue.

12. From the material on record, the plaintiff herein was issued with a title deed in respect of the parcel of land known as Nakuru Municipality Block 22/629 (Muguga), the suit property, on 26th July 2010. Entry number 7 in the proprietorship section of the said title shows that the plaintiff became the registered proprietor on 22nd July 2010. The plaintiff also produced a certified copy of green card which shows that the 1st defendant was registered as proprietor of the suit property and issued with title in respect thereof on 17th September 2003. Thus, it is clear that the plaintiff and the 1st defendant have parallel titles in respect of the suit property. Indeed, the land registrar confirmed as much in submissions filed on his behalf. In such a scenario, the determination of which title prevails will depend on the root of each title. SeeRichard Kipkemei Limo v Hassan Kipkemboi Ngeny & 4 others [2019] eKLR.

13. The plaintiff’s case is that its title was first in time and that the 1st defendant’s title was obtained through fraud. None of the defendants tendered any evidence to controvert the plaintiff’s case.

14. Any allegation of fraud is a serious matter. Besides pleading and particularising it, the party alleging it is required to strictly prove it. SeeKuria Kiarie & 2 others v Sammy Magera [2018] eKLR. The burden of proof facing such a party is higher than the usual one in civil cases of proof on a balance of probabilities but lower than the criminal law standard of proof beyond reasonable doubt. SeeJohn Mbogua Getao v Simon Parkoyiet Mokare & 4 others [2017] eKLR.

15. Where an allegation of fraud concerns registered proprietorship of land, the provisions of Section 26of the Land Registration Act come into play.  The section provides as follows:

26. Certificate of title to be held as conclusive evidence of proprietorship

(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. …

16. The plaintiff’s ownership is supported by certificate of search dated 12th June 2009 which shows that Mid-Oil Africa Limited became registered owner of the property on 8th March 2000 through entry number 5 in the register, sale agreement dated 7th August 2009 between Mid-Oil Africa Limited as vendor and the plaintiff as purchaser and the transfer dated 26th November 2009 duly executed by Mid-Oil Africa Limited to transfer the property to the plaintiff. Additionally, the plaintiff produced a transfer dated 8th February 2000 showing that Mid-Oil Africa Limited acquired the property from Paraffina Investments Limited. The plaintiff has therefore demonstrated the root of its title and the process through which it came to be registered as proprietor.

17. As the Court of Appeal stated in Richard Kipkemei Limo v Hassan Kipkemboi Ngeny & 4 others (supra):

…whereas the legal burden of proof is on he who asserts that a property comes within the provisions of Article 40 (6) of the Constitution, the evidential burden is on a registered proprietor to rebut an assertion that his property was unlawfully acquired and demonstrate that the property does not come within the provisions of Article 40 (6) of the Constitution.

61. This Court has often times stated that when a certificate of title is under challenge, the root of title must be proved. The lawfulness of the acquisition of title must be demonstrated to oust the provisions of Article 40 (6) of the Constitution.  In the instant matter, the appellant never led convincing evidence to establish the root of his title. …

18. Thus, in view of the evidence adduced by the plaintiff, the 1st defendant had the evidential burden to rebut the assertion that his title was unlawfully and fraudulently acquired.  Instead, the 1st defendant has not adduced any evidence to show how it acquired title to the suit property on 17th September 2003 when Mid-Oil Africa Limited which sold it to the plaintiff was already the registered owner from as far back as 8th March 2000. Among the particulars of fraud pleaded by the plaintiff in the plaint are that the 1st defendant acquired the suit property when it was already owned by another person and that the defendants knowingly issued parallel titles. None of those allegations have been discounted by the defendants. The land registrar has not explained how he ended up issuing a parallel title to the 1st defendant. In the circumstances, I am satisfied that the plaintiff has established that the 1st defendant’s title was obtained unlawfully and through fraud.

19. In view of the foregoing, I am satisfied that the reliefs sought by the plaintiff should issue.

20. I therefore enter judgment in favour of the plaintiff and against the defendants jointly and severally as follows:

a) A declaration is hereby issued that as between the plaintiff and the 1st defendant, the plaintiff is the legal owner of land parcel number Nakuru/Municipality Block 22/629 (Muguga).

b) The title held by the 1st defendant in respect of land parcel number Nakuru/Municipality Block 22/629 (Muguga) is hereby cancelled.

c) A permanent injunction is hereby issued restraining the 1st defendant by himself, his agents, servants, employees from entering, disposing, selling, dealing with or in any other way interfering with the plaintiff’s peaceful possession and occupation of land parcel number Nakuru/Municipality Block 22/629 (Muguga).

d) Costs of this suit are awarded to the plaintiff.

Dated, signed and delivered at Nakuru this 28th day of January 2021.

D. O. OHUNGO

JUDGE

In the presence of:

Mr Koome for the plaintiff

No appearance for the 1st defendant

No appearance for the 2nd and 3rd defendants

Court Assistants: B. Jelimo & J. Lotkomoi