Jayesh Autospares Ltd v Kapterit Rapid Co. Ltd, John Wepukhuku Waliaula & Attorney General [2020] KEELC 3207 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT

AT KITALE

LAND CASE NO. 73 OF 2013

JAYESH AUTOSPARES LTD........................PLAINTIFF

VERSUS

KAPTERIT RAPID CO. LTD...............1ST DEFENDANT

JOHN WEPUKHUKU WALIAULA....2ND DEFENDANT

THE ATTORNEY GENERAL.............3RD DEFENDANT

JUDGMENT

INTRODUCTION

1. Vide a further amended plaint dated 11/2/2015 and filed in court on the same date the plaintiff sought the following orders:

a. An order that the registration of the 1st defendant as proprietor of Plot No. Kitale Municipality Block 11/52 was     acquired fraudulently.

b. An order directing the subsequent (sic) transfer to the 2nd defendant was also fraudulent and meant to defeat the course of justice.

c. An order directing the District Land Registrar to cancel the said registration and issue a title deed in favour of the plaintiff.

d. Costs of the suit.

e. Any other relief the court may deem  just and fit to grant.

f. General and exemplary damages from  the 3rd defendant.

PLEADINGS

The Plaint

2. According to the plaint the plaintiff is the owner of a plot formerly known as Kitale Municipality UNS plot No. XVID measuring 0. 045 Ha. It is alleged that that plot is now registered as Kitale Municipality Block II/52. The plaintiff alleges that he paid all the requisite fees to the Commissioner of Land as well as yearly land rates to the municipality on a regular basis; however on 17/5/2013 the plaintiff learnt that the plot had been registered in the defendants’ names, which registration it asserts it was fraudulent. The particulars of fraud levelled against the 1st defendant are set out in paragraph 7and7(C)of the plaint. It is also averred that during the pendency of this suit the 1st defendant fraudulently transferred the suit land to the 2nd defendant. The plaintiff maintains that the 3rd defendant acted negligently in issuing another letter of allotment to the 1st defendant without cancelling the plaintiff’s letter of allotment and prior notice to the plaintiff hence the claim for general and exemplary damages against him.

The Defence of the 1st Defendant

3. The 1st defendant retained its statement of defence filed on 10/7/2013after amendments were effected on the plaint.

4. In its defence it denied the plaintiff’s claim and averred that it was allocated plot No. Kitale Municipality Block II/152 vide a letter of allotment dated 4/2/1997. It asserts that after issuance of a letter of allotment it undertook all the requisite steps which led to issuance of a certificate of lease over the suit land in its name on 24/10/2012 and that it has been in continuous possession of the suit land since 1997.

The 2nd Defendant’s Defence

5. The 2nd defendant filed a statement of defence on 11/5/2017 denying the claim. He avers that he is an innocent purchaser for value of Kitale Municipality Block II/152, having purchased the same from the 1st defendant on 5/1/2007 and that he has been utilizing the land since 2007 to date. He maintains that the plaintiff’s letter of allotment refers to a different plot and not Kitale Municipality Block II/152. He stated that he has also paid rates regularly for the suit land. He denies fraud and alleges that the plaintiff forged documents in order to lay claim to the suit land.

6. After the further amendment of the plaint, the 3rd defendant filed a memorandum of appearance on 11/3/2015 through one K. Onyiso, Principal Litigation Counsel.

The Plaintiff’s Reply to Defence

7. In his reply to the 1st and 3rd defendants’ defence the plaintiff reiterates the averments in the plaint and denies the allegations in the defendants’ statement of defence.

THE EVIDENCE OF THE PARTIES

The Plaintiff’s Evidence

8. PW1, Priteshkumar Jayantilal Patel, the Operations Manager of the plaintiff, testified on 11/7/2018and on12/7/2018. His evidence is that the plaintiff was issued with letter of allotment on 20/12/1985 in respect of unsurveyed plot and that the original of the letter was forwarded to the Lands Office for processing of title; that he paid Kshs.9,460/= on 6/1/1987 and took up possession of the suit land which he has retained to date and he has paid rates to the local authority. PW1conducted a search in respect of the suit property in 2013 whereupon he discovered that title had been issued in favour of the 1st defendant and thereafter this case was filed. While this suit was pending the suit land was transferred to the 2nd defendant and the 2nd defendant was therefore enjoined as a party. PW1 asserted that the defendants’ documents were acquired fraudulently since the land was allocated as far back as 1995. According to him when he conducted a check in the Municipality records on 25/1/2012 those records reflected that the suit land was still owned by the plaintiff and that the plaintiff had paid rates from 1986 to 2011. The local government also confirmed that the plaintiff had been issued with a letter of allotment.

9. While under cross-examination by Mr. Teti PW1 averred that he is not a director of the plaintiff and neither did he have authority of the plaintiff’s directors by way of resolution to give evidence in the suit. He admitted that no deed plan was attached to P. Exhibit 1, that is, the letter of allotment. He also admitted that he did not have evidence of the acceptance of the conditions of allotment set out in P. Exhibit 1 yet the 30 day period within which payment set out in P. Exhibit 1 was long gone by the date of the alleged payment reflected in his receipt P. Exhibit 2, that is, 6/1/1987. Under further cross-examination by Mr. Teti he admitted that the plot reflected in the letter of allotment he produced is not the same as Kitale Municipality Block 2/152 registered in the name of the 1st defendant now registered in the name of the 2nd defendant and that he has no proof by way of surveyor’s report that plot No. “D” reflected on P. Exhibit 1 had mutated into plot No. Kitale Municipality Block II/152 or a ground report. He also admitted that there is no signature of the Commissioner of Lands affixed to P. Exhibit 1. Upon further cross-examination PW1 admitted that the size of the plaintiff’s plot and that of the 2nd defendant’s plot differed. However he maintained that he has been on the suit land and he has been growing maize thereof in total contravention of terms and conditions of the purported letter of allotment P. Exhibit 1.

10. Under cross-examination by Mr. Wabwire, Learned Senior State Counsel, he reiterated that he does not have authority from the plaintiff’s company to appear in court and that no resolution had been given to the plaintiff’s advocate to file the suit. He did not know whether the plaintiff company applied for allocation of the suit land since he joined the plaintiff’s company in 1991 after the letter of allotment P. Exhibit 1had purportedly been issued. He was not also sure that plot No. “D” and plot No. Kitale Municipality Block II/152 were one and the same. When referred to PMFI- No. 8 dated 29/11/2012 he admitted that it reflects that plot No. “D” was yet to be surveyed as at that date.

Evidence for the Defence Case

11. DW1,theLand Registrar, Nelson Otieno Odhiambotestified on 19/9/2019. His evidence is that his official records reflects that parcel No. Kitale Municipality Block II/152 measuring 0. 0538 Ha was first registered in the name of the 1st defendant and a certificate of lease issued. He admitted a caution was lodged in favour of the 2nd defendant which was later withdrawn and that the current owner is the 2nd defendant. According to DW1 the lease over the suit land was forwarded to his office for registration vide a letter dated 18/10/2012. The lease was executed on 24/10/2012. Subsequently a transfer of lease to the 2nd defendant was registered; consent for that transfer was issued on 23/7/2013, all relevant payments were made. Stamp duty was paid on 23/7/2013; rent clearance certificate was issued on 28/6/2013; registration fees were paid on 23/7/2013. He produced certified copies of documents in evidence of those payments. He stated that he issued a certificate of lease to the 2nd defendant on 31/7/2013. According to him no complaint has ever been received from any other person regarding the registration of the suit land or the transfer to the 2nd defendant and only the 2nd defendant has ever registered a restriction on the suit land; all relevant requisite steps were followed in registering the 2nd defendant as a proprietor of plot No. Kitale Municipality Block II/152. In his cross-examination by Mr. Teti he stated that plot No.Kitale Municipality Block II/52 is not the same as plot No.  Kitale Municipality Block II/152.  He also stated that he did not find any fraud in the transactions relating to plot No. Kitale Municipality Block II/152 and added that the plaintiff’s claim is unfounded. When cross-examined by Ms. Arunga he was not sure that by 20/12/1995 survey had been done in Kitale Municipality. However he maintained that before survey is done a parcel number cannot be issued. Asked for an explanation for why D. Exhibit 3 (lease) and D. Exhibit 4 (transfer) were signed by different persons, his answer was that a company can have different directors and that he never concerned himself with confirmation from the Registrar of Companied as to who the Directors of the 1st defendant were. While under cross-examination by Mr. Wabwire on this point he indicated that no complaint as to the identity of the signatories to those documents had been raised by any persons. According to him plot No. Kitale Municipality Block 11/152 is surveyed and it cannot be the same as plot No. “D” claimed by the plaintiff.

12. DW2, Isaac Macharia,testified on19/9/2019. His evidence is that he is the Directorof 1st defendant; that the 1st defendant was allocated Plot No. Kitale Municipality Block II/152 in 1997 whereupon the company paid all the dues required and was issued with a certificate of lease; that the company had occupied the said land since 1987 and no adverse claim had been raised against it. His further evidence was that the land was later on transferred to the 2nd defendant on 5/1/2007. He denied having acquired the plot fraudulently and maintained that he had applied for allocation of the land. Upon cross-examination by Ms. Arunga he stated that he and Samuel Mwaura Mukora were directors of the 1st defendant and Patricia Waithera was the company secretary.

13. DW3, John Wepukhulu Waliaulatestified on19/9/2019. His evidence is that he purchasedKitale Municipality Block II/152 vide an agreement dated 5/1/2007 and took possession of the same in the same month. He maintained that no other person has ever claimed the plot. He denied that he is in occupation of Kitale Municipality Block II/52.

SUBMISSIONS

14. Submissions were filed on behalf of the plaintiff on 28/10/2019. The 3rd defendant filed its on 12/11/2019 while the 1st and 2nd defendants filed theirs on 26/11/2019. I have considered the pleadings, the evidence and the filed submissions.

DETERMINATION

Issues for Determination

15. The main issues for determination in this matter are identified as follows:

a. Whether the registration of the 1st defendant as the proprietor of the plot No. Kitale Municipality Block II /152 was procured fraudulently.

b. Whether the transfer of the suit land to the 2nd defendant was fraudulent.

c. Whether the registration should be cancelled and a title issued in the name of the plaintiff.

d.   Who should bear the costs of the suit?

16. The issues are discussed as hereunder.

(a)  Whether the registration of the 1st defendant as the proprietor of the plot No. Kitale Municipality Block II/152 was procured fraudulently

17. The greatest hurdle the plaintiff faces in the instant suit is the proof of fraud in respect of the acquisition of title on the part of the 1st defendant and the perceived fraud in respect of the transfer pendent lite of the suit land to the 2nd defendant.

18. The legal burden of proof lies on a party who wishes the court to find in its favour in an issue. This is in accordance with the provisions of Section 107 of the Evidence Act.

19. Section 107(1)of theEvidence Act (Chapter 80 of the Laws of Kenya),provides as follows:

107. (1) Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.

20. In the case of Civil Appeal No 297 Of 2015Mbuthia Macharia v Annah Mutua Ndwiga & Another [2017] eKLRthe Court of Appeal (Visram, Karanja & Koome, JJ.A)stated as follows:

“This is known as the legal burden and we need not repeat, save to emphasize the same principle of law is amplified by the learned authors of the leading Text Book;- The Halsbury’s Laws of England, 4th Edition, Volume 17, at paras 13 and 14: describes it thus:

“The legal burden is the burden of proof which remains constant throughout a trial; it is the burden of establishing the facts and contentions which will support a party’s case. If at the conclusion of the trial he has failed to establish these to the appropriate standard, he will lose.

The legal burden of proof normally rests upon the party desiring the court to take action; thus a claimant must satisfy the court or tribunal that the conditions which entitle him to an award have been satisfied. In respect of a particular allegation, the burden lies upon the party for whom substantiation of that particular allegation is an essential of his case. There may therefore be separate burdens in a case with separate issues.”

[16] The legal burden is discharged by way of evidence, with the opposing party having a corresponding duty of adducing evidence in rebuttal…”

21. It therefore follows that the plaintiff must establish fraud and particularly against the 1st and 2nd defendants. I would borrow from the case of Abiero -vs- Thabiti Finance Company Ltd & Another [2001] eKLRin which Mulwa J stated as follows:

“Fraud can clearly be inferred from the defendant’ acts. (In) Black’s Law Dictionary, fraud is defined as:

“A generic term, embracing all multifarious means which human urgently and devise, and which are resorted to by one individual to get advantage over another by false suggestions, or by suppression of truth, and includes all surprise, trick, winning, dissembling and any unfair way by which another is cleared.”

22. The sole evidence of PW1 was relied on by the plaintiff. However PW1’s evidence was not satisfactory. Notably PW1 admitted he does not have the authority of the plaintiff to appear in court and testify an issue that was raised by defence in cross-examination. Apart from failing to establish authority to represent the plaintiff, he failed to demonstrate by way of expert evidence from a surveyor that the unsurveyed plot referred to in the plaintiff’s letter of allotment (P. Exhibit 1) was the same as plot No.Kitale Municipality Block II/152now owned by the 2nd defendant. In my view that evidence was the most crucial part of the plaintiff’s case and without it the plaintiff’s claim cannot succeed.

23. Though the PW1 indicated that he had the rates clearance certificate from the local authority as well as rates demand notices, a perusal of P. Exhibit 3(rates demand notice dated 22/2/2012) and P. Exhibit 4 (rates clearance certificate dated 24/1/2012) shows that the same were issued in respect of properties whose numbers are different from Kitale Municipality Block II/152; these plots are 2116/XV1 (also referred to as UNS D) and 2116/UNS D respectively. This court never found any expert evidence from the plaintiff to suggest that these plots were the same as Kitale Municipality Block II/152.

24. I have also examined the defendants’ evidence in this matter, DW1 the Land Registrar Trans Nzoia County confirmed that of the land parcels referred to in this suit, the only records he has are in respect of Kitale Municipality Block II/152. He produced a copy of the register opened on 24/10/2012 showing that the first registered proprietor was the 1st defendant and that subsequently the title was transferred to the 2nd defendant on 31/7/2013. He confirmed that the letter forwarding the lease in respect of the suit land Kitale Municipality Block II/152 was received in his office and the lease was executed on 24/10/2012.

25. When cross-examined by Mr. Teti for the plaintiff, he stated that the acreage of 0. 45 Ha in P. Exhibit 1 (plaintiff’s letter of allotment) differs with the acreage of 0. 053 Ha which is the size of the suit land as registered in favour of the 2nd defendant. According to him there is nothing to suggest there was any fraud in the transactions that gave registration to the 1st and 2nd defendants.

26. The burden of proving fraud in respect of a registration of title lies on the alleger who in this case is the plaintiff.  Fraud can only be established by way of evidence which the plaintiff has failed to adduce. I therefore find that the plaintiff’s claim of fraud is baseless.

(b) Whether the transfer of the suit land to the 2nd  defendant was fraudulent; and:

(c) Whether the registration should be cancelled and a title issued in the name of the plaintiff

28. It is fit that the two issues above be dealt with together as they are intricately intertwined. This court has already found that the plaintiff never established that the 1st defendant obtained registration fraudulently.

28. Evidence of fraud on the 1st and 2nd defendant’s part, independent of the fact of transfer of the suit land while this suit was still pending, is required if the plaintiff is to be deemed as successful in this claim.

29. DW1 testified that a formal transfer of lease, effectively transferring the suit land from the 1st defendant to the 2nd defendant was registered. In his evidence he confirmed that all relevant payments, that is, stamp duty, rent, registration fees, and transfer fees were paid. He also stated that the consent for transfer (D. Exhibit 5) and rent clearance certificate (D. Exhibit 7) were procured before the transfer and he issued a certificate of lease to the 2nd defendant on 31/7/2013 after all the formalities were concluded. He also confirmed that a copy of certificate of incorporation (D. Exhibit 10) of the 1st defendant was availed to his office. According to him no complaints have ever been received in his office from any person regarding the said registration.

30. Evidence from the DW1 as analysed above is crucial in establishing whether the transfer of the suit land was fraudulent. The plaintiff’s claim is that the suit land was fraudulently transferred from the 1st defendant to the 2nd defendant during the pendency of this suit.

31. The lis pendens doctrine is still applicable in our law today. It is the correct position that parties and third parties should await the determination of a suit before dealing with any property that is the subject thereof.

32. However at the end of the litigation, the lis pendens doctrine only adversely affects the parties whose rights have been negated by the findings of a court of law in the suit. Mere transfer pendent lite per se though a great risk for the transferee, is not proof of fraud.

33. In the current suit the court has found there was no fraud in the registration of the suit land in favour of the 1st defendant. This court therefore find no good grounds to order the cancellation of the 2nd defendant’s title or its registration in the name of the plaintiff for the mere reason that the transfer was effected while the suit was still pending.

d. Who should bear the costs of the suit?

34. This suit was brought by the plaintiff and he has failed to established his claim of fraud against the defendants he shall therefore bear the costs of the suit.

35. In the final analysis I find that the plaintiff has not established his claim against all the defendants on a balance of probabilities and I hereby dismiss his claim and enter judgment in favour of the defendants. The plaintiff shall bear the costs of the suit.

Dated, signedanddelivered at Kitale on this 3rdday of  March, 2020.

MWANGI NJOROGE

JUDGE

3/3/2020

Coram:

Before - Mwangi Njoroge, Judge

Court Assistant - Picoty

Ms. Temba holding brief for Arunga for plaintiff

Mr. Teti for defendant

COURT

Judgment read in open court.

MWANGI NJOROGE

JUDGE

3/3/2020