Meso Multiporpose Society Limited v Luore Nyairo Company Limited, Agricultural Finance Corpoartion, Chief Land Registrar & Attorney General [2020] KEELC 24 (KLR) | Ownership Disputes | Esheria

Meso Multiporpose Society Limited v Luore Nyairo Company Limited, Agricultural Finance Corpoartion, Chief Land Registrar & Attorney General [2020] KEELC 24 (KLR)

Full Case Text

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT

AT KITALE

ELC. NO. 111 of 2008

MESO MULTIPORPOSE SOCIETY LIMITED.......................................PLAINTIFF

VERSUS

1. LUORE NYAIRO COMPANY LIMITED

2. AGRICULTURAL FINANCE CORPOARTION

3. THE CHIEF LAND REGISTRAR

4. ATTORNEY GENERAL.....................................................................DEFENDANTS

JUDGMENT

PLEADINGS

1. The plaintiffs instituted this suit by  a plaint dated 19th December, 2008 which was amended on 20th June, 2009 and re-amended on 12th July 2016.  The plaintiffs are seeking the following orders:

a.A permanent injunction to restrain the defendants herein, their servants, agents, employees or any other person whatsoever acting on their behalf from interfering, selling, evicting and/or demolishing the houses of the plaintiffs herein and their members from LR. NO.7060/2 CURRENTLY LR. NO. 7060/3 and 4 also known as IR NO. 1155 within Trans-Nzoia District.

b.That a declaration be and hereby made declaring that the plaintiffs are the legal and rightful owners of LR. NO.7060/2  currently LR NO.7060/3 and 4 also known as IR. No. 1155 within Trans-Nzoia District and that the 2nd Defendants herein be compelled to transfer the suit land to the plaintiffs herein failure to do so the Deputy Registrar of the High Court be ordered to do so on behalf of the 2nd defendants herein and that accounts be taken and the excess paid to the 2nd defendant by the plaintiff be and is hereby returned to them.

c.That costs be provided for in favour of the plaintiff.

2. The plaintiff’s suit as pleaded is that at all material time relevant to this suit, the plaintiff is and was the legal owner of LR. No. 7060/2, also known as IR No.1155 within the then Trans-Nzoia District having purchased it from one James Omondi Ouko on 29th April 1989 being the first agreement and second agreement on 30th May 1991 and further agreement as stated by the letter of James Omondi Ouko’s Advocates dated 20th June 1993 informing the 2nd defendant of the said purchase of the suit land herein. That the suit land purchased was and is measuring about 600 acres.  The plaintiff stated that they were put in the possession and ownership of the suit land by Dr James Omondi Ouko  (deceased) who had obtained  a loan of Kshs. 5 million from the 2nd defendant and who sold the suit land to the plaintiff with the consent of the 2nd defendant when there was still an outstanding balance of the loan. The plaintiff states that they agreed with the deceased that the plaintiff would pay the sum of Kshs.300,000/= to the deceased and a sum of Kshs.700,000/= to the 2nd defendant which they paid and started liquidating the loan through the 2nd defendant’s Kitale branch with the consent and direction of the 2nd defendant.

3. The plaintiff avers that despite the said payment made to the 2nd defendant, in the year 1994 the 2nd defendant acting in bad faith threatened to sell the suit land but the auction was put off when the plaintiff paid Kshs.198,630 to the 2nd defendant through the auctioneer. That the plaintiff continued to pay monies to the 2nd defendant until they reached a total sum of Kshs. 15, 642, 604/=.

4. It is the plaintiff’s case that despite repaying the outstanding loan in full that was due from the deceased to the 2nd defendant, the 2nd defendant has refused to transfer  the land to the plaintiff. That the matter  has been arbitrated severally and the 2nd defendant prevailed upon to transfer the land to the plaintiff but the 2nd defendant has refused, ignored and or neglected to do so. The plaintiff states that the defendants  have acted fraudulently and have given the particulars of fraud. This includes a claim that the deceased had sold part of the land to the 1st defendant and the 2nd defendant’s claim to have purchased the land in a public auction.  The plaintiff avers that the defendants now want to evict them from the suit land, hence the filing of the suit.

5. In its defence and counter-claim, the 1st defendant denied the plaintiff’s claim. It is the 1st defendant’s case that parcel No.7060/2 was not in existence on 19/7/1991 and further that the plaintiff did not take possession of 600 acres. The 1st defendant denied that the plaintiff bought any land from Dr. James Omondi Ouko.

6. The 1st defendant avers that it is the sole legal owner of 250 acres which is registered in its name. The 1st defendant denies ever having any desire or intention, prior to 25/11/2008 of evicting the plaintiff and states that it acquired a right on 25/11/2008 to evict the plaintiff from land parcel LR. No. 7060/4 when the plaintiff through its members trespassed on the said land. The 1st defendant counter-claims against the plaintiff for orders that the plaintiff is a mere trespasser to land parcel LR. No.7060/4 measuring 250 acres and for their eviction therefrom. The 1st defendant also prays for orders of permanent injunction against the plaintiff.

7. The 1st defendant avers that it has been in occupation of and cultivating and developing LAND PARCEL LR. NO. 7060/4 since 1989 up to 25/11/2008 without any interference whatsoever.  That before the 1st defendant acquired LAND PARCEL LR. NO.7060/4, the said land comprised part of LR NO.7060/2 measuring 600 acres and registered in the name of James Omondi Ouko. That in the year 1984 or thereabout, the said James Omondi Ouko charged LAND PARCEL LR. No. 7060/2 to the 2nd defendant to secure the repayment of a  loan advanced to the  said James Omond Ouko by the 2nd defendant. That during the subsistence of the charge, in the year 1989 or thereabout the said James Omondi Ouko caused LAND PARCEL LR. NO.7060/2 to be sub-divided into two portions, namely LR. NOS.7060/3 and 7060/4 measuring 350 acres and 250 acres respectively.  That the said  James Omondi Ouko then sought and obtained a discharge of LR. NO.7060/4 from the 2nd defendant which discharge was executed on 7/12/1990 allowing the said James Omondi Ouko to transfer LR. NO.7060/4 to the 1st defendant. The 1st defendant states that the  transfer LR. NO. 7060/4 was successfully completed and the 1st defendant was issued with a certificate of title in its name on 12/2/1990.

8. It is the 1st defendant’s case that with effect from 12/2/1990, upon issuance of Certificate of Title in its name, the said James Omondi Ouko and the 2nd defendant ceased to have any rights or interests in LR. NO.7060/4 and were not capable of selling, assigning or conveying any such rights or interests to any party. That indeed the said James Omondi Ouko and the 2nd defendant have never purported to interfere with the 1st  defendant’s rights of ownership and occupation of LR. NON.7060/4. The 1st defendant states that on 25/11/2008, the plaintiff through people who claim to be its members forcefully entered and took possession of LR No.7060/4 without any colour of right and without the 1st defendant’s permission. The 1st defendant avers that it has not sold, leased, charged, assigned or in any other manner disposed of its rights and interests in LR. NO.7060/4 to the plaintiff or any other person or body affiliated to the plaintiff. The 1st defendant states that prior to 25/11/2008 and subsequently, it has not have any relationship with or has it created any relationship with the plaintiff.

9. The 1st defendant further avers that upon taking possession of the 1st defendant’s land, the plaintiff and its members have embarked on wanton destruction of land parcel no.7060/4 by pulling down the entire perimeter fence, cutting down trees and are busy putting up structures on it which actions amount to irreparable waste of the land.  That the plaintiff and its members have also threatened to enter and destroy a homestead on the said land, and the 1st defendant was forced to engage the services of armed policemen to guard the same at great expense. The 1st defendant prays that the court issues an order compelling the plaintiff and its members to vacate its land failing which they be forcefully evicted.

10. The 2nd defendant denied the plaintiff’s claim and averred that on 23 August 1984, it advanced to one Dr. James Omondi Ouko a loan of Kshs.5 million and that the said Dr. Ouko was to be given additional loans by the 2nd defendant amounting to Kshs.1. 97 million between the years 1985 and 1987. That the loan was secured by a charge over LR. NO.7060/2 measuring 600 acres. The 2nd defendant avers that the said Dr. Ouko defaulted in the repayment of the loans and in the year 1988, the 2nd defendant advertised the security for realization. That upon negotiations the 2nd defendant permitted the said Dr. Ouko to excise the security aforesaid  and sell 250 acres to enable him to repay the loan which at the material time was standing at Kshs.9. 8million. That the security was subdivided into LR. No. 7060/3 measuring 350 acres and LR. NO.7060/4 measuring 250 acres. That partial discharge was given and while the 2nd defendant retained the former, the latter was transferred to the 1st defendant that purchased the same for Kshs.3. 75 million.

11. The 2nd defendant states that the sale proceeds from the 250 acres were not sufficient to clear the loan account and therefore Dr. Ouko decide to sell another 150 acres to the plaintiff in 1991 at kshs.6 million. That the plaintiff failed to make lumpsum payment as agreed between it and the seller and paid only Kshs.300, 000/= and subsequently took possession of the land. Meanwhile, the 2nd defendant continued to demand loan repayments from Dr. Ouko who was then unable to meet his loan repayment obligation. The 2nd Defendant states that in the year 1997, the 2nd defendant advertised the parcel, namely LR No. 7060/3 measuring 350 acres for sale and that there were only two serious bidders. That the plaintiff bid at Kshs.13 million and the 2nd defendant bid at the then reserve price of Kshs.16 million and acquired the parcel as a farm property in possession. That by the time the 2nd defendant was auctioning the property, the plaintiff had occupied the whole land.

12. The 2nd defendant avers that when the Plaintiff had entered into a sale agreement with Dr. Ouko, they paid him Kshs.300,000/= and thereafter continued making direct payments into the sellers loan account with the 2nd defendant to the extent that by the time the parcel was auctioned and acquired by the 2nd defendant on 9th October, 1997 the sum of Kshs.2,777, 330 had been paid. It is the 2nd defendant’s contention that the plaintiff is occupying the parcel illegally as the 2nd defendant has not given it possession. That the plaintiff had been showing interest in purchasing the land but this was not possible for long time because the 2nd defendant had not effected the transfer of the parcel into its name. That the transfer was finally effected on 13. 8.2002 and this enabled the 2nd defendant to formally take possession. That the plaintiff offered to purchase the parcel from the 2nd  defendant at kshs.16 million being the reserve price the corporation had acquired the parcel at, and the 2nd  defendant counter offered a purchase price of kshs.17 million.  That the 2nd defendant received Kshs.7,779, 458/= from the plaintiff between 25th May 2001 and 31st May 2005. That the balance of the purchase price was therefore Ksh.9. 22 million. The 2nd defendant states that the plaintiff was to pay Kshs.2. 3million or 25% of the purchase price on acceptance of the offer, and the balance was to be repaid within one year and was to attract an interest rate of 15% p.a. on reducing balance. That between 1st June 2005 and 3rd  September 2008, an additional sum of Kshs.1,504, 465/= was paid, making the total sum received by the 2nd defendant to be kshs.9,283, 923/=. The 2nd defendant avers that a balance of kshs.7,716,017 is outstanding and the same has accrued and continues accruing interest. The 2nd defendant denies the allegations of fraud on its part.

13. In  their joint defence, the 3rd and 4th defendants have denied the contents of the re-amended plaint in toto and aver that the plaintiff’s suit discloses no cause of action, is frivolous, mischievous, scandalous, statute barred and untenable. Further, that the plaintiff has no registrable interest in the suit land and the agreement for sale of land sought to be relied upon by the plaintiff is not only statute barred but also none of the defendants herein, including the 3rd and 4th defendants were parties thereto. The 3rd and 4th defendants further aver that if at all the plaintiff has any claim as alleged or at all, the same lies to the estate of the said Dr. James Omondi Ouko. The 3rd and 4th defendants contend that the dealings and subsequent sub-division of the suit land herein LR. No.7060/2 to create LR. No.7060/3 and LR. NO.7060/4 and the subsequent transfer of the said sub-divisions were done absolutely in good faith and based on genuine and proper documents and the 3rd defendant acted within its constitutional and statutory duty and titles vested to the 1st and 2nd defendants were good and ought to be protected by the court. The 3rd and 4th defendants further contend that they were not privy or party to the alleged fraud.

EVIDENCE

14. The plaintiff called two witnesses while the 1st defendant, the 2nd defendant and the 3rd and 4th defendants called one each. William Murunga Lusweti testified as PW1 and told the court that he is a member of the plaintiff and was its Chairman for the  years 1986 to 2000.  That the plaintiff was formed in 1985 but registered in 1986 and currently has 150 members. He testified that the plaintiff bought parcel of land LR. No.7060/2 measuring 600 acres from James Omondi Ouko. That they were living on the land as squatters when the owner informed them that he wanted to sell it. That they initially bought 250 acres and paid the seller Kshs.700,000. He stated that they entered into another sale agreement for 150 acres in which they paid the sum of Khss.300,000/=.

15. PW1 stated that after they had paid for the land, Dr. Ouko informed them that the land was charged to the 2nd defendant to secure a loan given to Dr. Ouko and the loan had accrued to about Kshs.9 million. That Dr. Ouko took them to the 2nd defendant’s offices in Kitale who asked them to await a report from their headquarters in Nairobi.

16. PW1 stated that after they failed to get a report for about a year, they went to the 2nd defendant’s head office and met the 2nd defendant’s Managing Director whom they showed a letter from the District Commissioner, Trans-Nzoia District confirming that the plaintiff’s members were in occupation of the land. He stated that they raised the sum of Kshs.400,000 which they paid to the 2nd defendant through its Kitale branch and were issued with a receipt which, according to him, was for the whole parcel LR. No.7060/2. That they also paid and cleared the outstanding loan which was over 9 million. That the said letters were confirming that the plaintiff was in occupation of the land and were ready and willing and therefore should be allowed to clear the outstanding liabilities with the 2nd defendant. That acting on those letters, the 2nd defendant allowed the plaintiff to start liquidating the outstanding loan of Kshs.9,355,117. 90 into the account of James Omondi Ouko for the entire parcel LR. No.7060/2. He produced a bundle of receipts as p.exhibits 6 and 7. He stated that they were not aware of any sub-divisions of the land into two and were surprised when the 2nd defendant sold movables and animals on the land, even when the plaintiff was the one paying for the land rates. He produced a demand notice for land rates from the County Council of Nzoia as P.exhibits 9. PW1 also produced a receipt for payment of Land rent as p.exhibit No.10. He stated that he did not know when the land was subdivided into two and one portion transferred adding that any title issued over a portion of the land in 1989 is not genuine as they were already on the land.

17. When cross-examined by Mr. Ambutsi, learned counsel for the  1st and 2nd defendants, PW1 stated that he filed suit over LR. No. 7060/2 and that he was not aware if LR. No.7060/3 and 7060/4 existed. He stated that the plaintiff are the ones in occupation and that he was not aware of a site visit report by the executive Officer of the court on who was on the ground.  He reiterated that they purchased the land from Dr. James Omondi Ouko but did not produce any agreement or receipt for payments made to the 2nd defendant. That they have sued the 2nd defendant because they did not give them the title. That James Omonid Ouko is deceased and he did not know the administrators of his estate.

18. When cross-examined by Mr. Odongo, learned counsel for the 3rd and 4th defendants, PW1 stated that he did not have a letter of authority authorizing the plaintiff’s advocate to act for the plaintiff company. He stated that the first agreement they entered into for the purchase of the land was made on 29/4/1989 for 250 acres while the second agreement was made on 30/5/1990 for 150 acres. He confirmed that after executing the two agreements, the partes did not apply for consent from the Land Control Board and have not done so to date. That the agreements were between the plaintiff and James Omondi Ouko. He stated that after purchasing the land, the plaintiff did not register a caution on it. The witness stated that he was aware that James Omondi Ouko took a loan from the 2nd defendant and had defaulted in repaying the loan.

19. PW2 was Francis Wafula Nyongesa. He told the court that he is the current Chairman of the Plaintiff. He stated that the plaintiff is the lawful owner of LR. No.7060/2 also known as IR No.1115 which it purchased form James Omondi Ouko in 1989. He produced the Agreement for sale dated 29/4/1989 for 250 acres as p.exhibit 1(a) and a subsequent agreement for 150 acres as p.exhibit 1(b). PW2 produced the Certificate of Registration of the plaintiff as P.exhibit 2. He told the court that they initially did not know that the land had been charged and paid the purchase price of Kshs.700,000 for 250 acres and Kshs.300,000 for 150 acres to the purchaser.  He told the court subsequently they discovered that the land they were buying had been charged by James Omondi Ouko to the 2nd defendant to secure a loan.  That since James Omondi Ouko was unable to service the loan of Kshs.9,355,117. 90 he wanted to sell the whole parcel LR. No 7060/2 to the plaintiff and took the plaintiff to the 2nd defendant for negotiations since the plaintiff’s members were on the land and instructed their lawyer, George Wambura who wrote to the 2nd defendant. That the District Commissioner, Trans-Nzoia, also wrote confirming that the plaintiff was in possession. PW1 produced a letter written by their lawyer, George Wambura as p.exhibit No.3 and another Letter written by the District Commissioner, Trans-Nzoia as P.exhibit No.4.  That acting on those letters, the 2nd defendant allowed the plaintiff to start liquidating the outstanding loan of Kshs.9,355, 117. 90 for LR. NO.7960/2 into the account of James Omondi Ouko. PW 1 produced a bundle of receipts in support of payment as p.exhibits 6 (a) – (h) and 7.  He also produced a letter dated 21/11/2008 from the 2nd defendant acknowledging receipt for payment and confirming that the plaintiff was paying Land rates to the County Council of Nzoia for LR 7060/2 and produced a demand notice as p.exhibit 9, and receipt for land rent as p.exhibit 10. PW2 also produced proceedings in criminal case No.1011 of 2011 in which some of the plaintiff’s members were charged with the offence of trespass but were acquitted. He also produced a caveat emptor notice by the 2nd defendant as p.exhbit 12 as well as a notice of waiver dated 31/1/2003 as p.exhibit 13. PW2 also produced as P.exhibit 14 a letter dated 31/10/2000 from the 2nd defendant to Lutta & Eshiwani Advocates indicating that 2nd defendant was in the process of transferring parcel LR. 7060/2 to itself. He further produced as p.exhibit 15 a letter dated 27/2/1998 from the 2nd defendant requesting the Commissioner of Lands to give consent to transfer LR No. 7060/2 and the letter of consent to transfer dated 15. 13. 1997 as p.exhibit 16.

20. DW1 was Raphael Achieng Ololo who testified on behalf of the 1st Defendant. He stated that sometime in or about 1989 the 1st defendant was approached by the then registered owner of LR. No.7060/2 Dr. James Omondi Ouko who offered to sell a portion of the land measuring 101. 18 Hectares or 250 acres. It was his evidence that at the time of purchase, the land was charged to the 2nd defendant to secure a loan of Kshs.500,000/=.  He stated that the agreed purchase price was Kshs.3,750,000/= which amount was paid in full into  the loan account of Dr. James Omondi Ouko at the 2nd defendant. It was the evidence of DW1 that upon full payment of the purchase price, they applied for consent to subdivide and transfer a portion of the original suit parcel known as LR. NO. 7060/2. He stated that consent was granted and the parcel of land known as LR. NO.7060/2 was subdivided into LR. No.7060/3 and LR. No.7060/4 measuring 140. 7 Ha and 101. 18 Ha respectively.  That subsequently there was a partial discharge and LR. NO. 7060/4 was transferred to the 1st Defendant on 12th February, 1990. He stated that by 2008 when the suit herein was filed, land parcel LR. No.7060/4 measuring 250 acres was already in the 1st defendant’s name and that the 1st defendant is in occupation.  It was his evidence that the plaintiff was not in the land but only invaded it when their deal with the late Dr. James Omondi Ouko collapsed.

21. DW1 stated that since purchasing the land in 1990, the 1st defendant had not been able to utilize the same due to hostilities perpetrated by members of the plaintiff. The 1st defendant seeks a declaration that it is the rightful owner of parcel LR. NO.7060/4 and an order of eviction to issue against the plaintiff.

22. Oscar Odhiambo (DW2) testified on behalf of the 2nd defendant.  He adopted his witness statement dated and filed on 5th October 2018. It was his evidence that some time on or about 7th July, 1984,  Dr. James Omondi Ouko applied for an agricultural development loan of Kshs.5,000,000/= from the 2nd defendant. That the loan was advanced on the strength of  charge that was lodged and registered by the 2nd defendant over all that parcel of land known as LR. No.7060/2 measuring 242. 7 hectares. He stated that Dr. James Omondi Ouko defaulted in repaying the loan and the 2nd defendant instituted recovery process in a bid to realize the security property with a sole purpose of clearing the loan account that was in heavy arrears.

23. DW2 stated that there was a partial discharge of charge in respect of LR. NO.7060/4 measuring 101. 18 ha to enable a transfer in favour of Luore Nyairo Company Limited the 1st defendant herein. That the discharge of charge was registered on 12th, February 1990 and on the same date, a transfer was registered in favour of the 1st defendant after a consideration of Kshs. 3,750,000/=  was paid directly to the Agricultural Finance Corporation.

24. It was the evidence of DW2 that upon transferring LR. NO.7060/4 measuring 101. 18 Ha to the 1st defendant, the remaining parcel of land being LR. No.7060/3 measuring approximately 140. 7 Ha was charged in favour of the 2nd defendant to secure the outstanding balance in the loan account of Dr. James Omondi Ouko. He stated that Dr. James Omondi Ouko approached the corporation and pleaded with it to allow him excise approximately 250 acres and have the same sold by private treaty to enable him pay the then outstanding sums. That the 2nd defendant gave its consent whereupon the security parcel was subdivided into two, resulting into LR. No. 7060/3 and LR No. 7060/4 measuring approximately 140. 7 Ha and 101. 18 Ha respectively.   DW2 stated that the proceeds of sale, to wit Kshs. 3,750, 000 were not sufficient to offset the then outstanding loan sums in Dr. James Omondi Ouko’s loan account. That this was communicated to him and he promised to make further arrangement of offsetting the loan balance. DW2 informed  the court that the loan remained outstanding and owing and the borrower had reneged on his promise to clear the balance or was unable and/or refused to clear the outstanding balance. That the 2nd defendant initiated recovery process by service of requisite notices and upon receiving the said notices, the borrower applied for consent from the 2nd defendant to dispose a further 150 acres to offset the balance and that it was stated that the potential buyer was the plaintiff herein.  The deal however, however never went through as the plaintiff wanted to purchase 150 acres out of the remaining 350 acres.

25. It was the evidence of DW2 that after the sale fell through Regent Auctioneers advertised the land for sale..  That the plaintiff placed a bid of Kshs.13,000,000/= while the 2nd defendant placed a bid of Kshs. 16,000,000/=.  That the plaintiff’s bid was rejected since it was below the reserve price and the 2nd defendant was declared the highest bidder in that auction staged on 9th October, 1997.   DW2 stated that on several occasions, the plaintiff made attempts  to purchase LR. No. 7060/3 measuring 140. 7Ha from the 2nd defendant. He stated that the plaintiff was introduced to the 2nd Defendant after the sale and transfer of 250 acres to the 1st defendant which sale  and transfer was registered on 12th February, 1990. DW2 further stated that the balance of the land was 350 acres and denied the plaintiff’s allegation of having bought 600 acres from the original owner. DW2 also informed the court that after bidding in the said auction in 1997,  the whole of parcel LR. No.7060/3 measuring 140. 7 Ha (350 acres) was transferred to the 2nd defendant and a certificate of title issued on 13th August 2002. It was DW2’s evidence that indeed members of the plaintiff have been paying monies in Dr. James Omondi Ouko’s loan account with a purpose to liquidating the same. The witness was however categorical that there was no agreement as purported by the plaintiff. DW2 stated that there was no caution registered by the plaintiff. He stated that the outstanding balance of the loan as at 24th October, 2011 was Kshs.104,853,341/= and that the amount remains outstanding and continues to accrue interest until payment in full.

26. DW3 was the Chief Land Registrar who testified on behalf of the 3rd and 4th defendants whose duties, among others were safe keeping of records and registering titles and charges. He produced the certified copy of title and testified that LR No. 7060/2 IR 34610 measuring 242. 7 Ha was transferred to Nembu Holdings for Kshs.1,400,000/= on 18th April 1980. He confirmed that LR. No. 7060/2 was subdivided resulting to LR. No.7060/3 and LR. No. 7060/4 measuring 140. 7 Ha and 101. 18 Ha respectively and that LR. No. 7060/4 was transferred and registered in the name of the 1st defendant on 12th February, 1990.  He produced copies of the partial discharge and transfer and copy of the Certificate of Title for LR. No.7060/4.

ANALYSIS AND DETERMINATION

27. I have considered the pleadings, the evidence adduced by the parties as well as the submissions on record.  The issues for determination are:

i. Whether the plaintiff purchased land parcel No.7060/2 which on subdivision became LR. No.7060/3 and LR. NO.7060/4

ii. Was the subdivisions of parcel LR. N. 7060/2 into LR No.7060/3 and LR No.7060/4 and the subsequent transfers fraudulent.

iii. Whether or not the plaintiff has any interest in the suit property.

iv. Whether the plaintiff is entitled to the orders sought in the re-amended plaint.

v. Whether the 1st defendant is entitled to the orders sought in the counter-claim.

vi. Who bears the costs of the suit?

28. From the material on record, it is not disputed that parcel of Land LR No. 7060/2 comprised of 242. 7 Ha (approximately 600 acres) was registered in the name of Dr. James Omondi Ouko (deceased). It is also not in dispute that there was a charge that was registered against the said parcel of land LR No. 7060/2 to secure a loan of Kshs.5,000,000/= advanced to the deceased by the Agricultural Finance Corporation, the 2nd defendant herein. The evidence on record indicate that immediately the loan became due and owing, the deceased borrower failed to honour his obligation to repay the loan and his continued  default in repaying the loan prompted the 2nd defendant to institute recovery process in a bid to realize the security.   From the material on record, it appears the deceased approached the 2nd defendant and pleaded with it to allow him to excise approximately 250 acres and have the same sold by private treaty to enable the deceased offset the outstanding loan. The 2nd defendant as chargee gave its consent whereupon the security parcel LR No. 7060/2 was subdivided into LR No. 7060/3 and 7060/4 measuring approximately 350 acres and 250 acres respectively and the security was partially discharged.

29. The evidence on record confirms that LR. No. 7060/4 was sold and transferred to Luore Nyoiro Company Limited the 1st defendant herein on 12th September, 1990.  However, the proceeds of the sale being Kshs.3,750,000/= was not sufficient to offset the outstanding loan amounts in the deceased borrower’s loan account.  From the evidence on record, it is apparent that the remaining portion being parcel LR. No.7060/3 measuring approximately 350 acres remained charged in favour of the 2nd defendant to secure the outstanding balance of the loan in the loan account of the late Dr. James Omondi Ouko.  By his letter dated 3rd April 1991, Dr. James Omondi Ouko requested the 2nd defendant for consent to subdivide a further 150 acres and sell to repay the outstanding loan. In their letter dated 16th July 1991, the Plaintiff through their advocates, Esther Chege & Co. Advocates wrote to the 2nd defendant indicating that the plaintiff had entered into a contract to buy 150 acres out of LR. No. 7060/2 and wanted to know whether the said parcel of land had any encumbrances.

30. The plaintiff relied on an alleged agreement for sale dated 29th April 1989 for 250 acres and another dated 30th May 1990 for 150 acres. It is also the plaintiff’s evidence that thereafter, the late Dr. James Omondi Ouko (deceased) wanted to sell the entire parcel LR. NO.7060/2 as per the proposed sale agreement dated 1994 and which was not executed by any of the parties. That it is on the strength of the said proposed sale agreement that the plaintiff was allowed by the 2nd defendant to continue liquidating the loan for LR No.7060/2 in the account of the late Dr. James Omondi Ouko. The plaintiff also relied on some letters to support its claim that Dr. James Omondi Ouko (deceased) was ready to sell to the plaintiff the entire parcel LR. No. 7060/2 measuring approximately 600 acres.  The plaintiff also relied on some receipts.

31. It is clear that whereas the plaintiff’s case is that Dr. James Omondi Ouko was ready to sell them the entire parcel LR. No.7060/2, the evidence on record show that parcel LR. No. 7060/2 had already been subdivided resulting into LR. NO.7060/3 measuring approximately  350 acres and LR. No. 7060/4 measuring approximately 250 acres. Besides, it is clear from the evidence on record that LR. No. 7060/4 had been sold and transferred to the 1st defendant and the 1st defendant is the registered owner of that parcel. The plaintiff’s claim that they bought 600 acres from the original owner cannot be true.

32. It is also clear from the evidence on record that Dr. James Omondi Ouko (deceased) wanted to sell and the plaintiff had expressed  an interest to purchase 150 acres out of LR. No. 7060/2. However, there was no evidence produced by the plaintiff to show that that transaction was ever concluded.

33. Following the sale and transfer of the LR. No. 7060/4 to the 1st defendant, the only parcel that was left and which was still charged to the 2nd defendant was LR. NO. 7060/3 measuring 350 acres or thereabouts.  From the evidence on record, it is apparent that both the plaintiff and the 2nd defendant expressed interests to purchase this parcel. It is apparent that the land was advertised for sale by public auction and the 2nd defendant’s bid was successful. The land was later transferred to the 2nd defendant on 13th August, 2002. From the evidence on record, I am satisfied that the 1st and 2nd defendants acquired their respective parcels of land procedurally and lawfully. The plaintiff has failed to tender any evidence to demonstrate that the registration and transfer of land parcel LR. No 7060/3 in favour of the 2nd Defendant and LR. No 7060/4 in favour of the 1st defendant were tainted with illegality or breach of statutory provisions. In the absence of any tangible evidence implicating  the defendants in any fraudulent, illegal or corrupt scheme, I am not persuaded that the  1st and 2nd defendants are not holding good tittles. It is therefore my finding that the 1st and 2nd defendants acquired their titles procedurally and their titles are valid. It is trite law that any allegations of fraud must be pleaded and strictly proved. The plaintiff alleged fraud on the part of the defendants. The burden to prove those allegations lay squarely on the plaintiff who failed to discharge that burden. In any case any sale agreement, if any, between the plaintiff and the late Dr. James Omondi Ouko can only be enforced against the said Dr. James Omondi Ouko or his estate, and cannot be enforced against the defendants who were not party to the transaction.

34. It is not in dispute that the plaintiff’s members have been paying money directly to the 2nd defendant to liquidate the loan account of the late Dr.  James Omond Ouko. However, it is my view that this does not confer propriety rights to the plaintiff over the suit property. The plaintiff has not tendered any enforceable agreement for sale, or indeed any document that can be said to be evidence of an enforceable or valid transaction between itself and the original owner, Dr. James Omondi Ouko or even with the 2nd defendant as the then chargee of the property. It is trite law that if one wishes to enforce an agreement over land, then such a transaction must be in writing, signed and attested. This is provided for under Section 3 (3) of Law of Contract Act, Cap 3 Laws of Kenya which provides as follows:

3. No suit shall be  brought upon a contract for the disposition of an interest in land unless –

a. The contract upon which the suit is founded –

i. Is in writing;

ii. Is signed by all the parties thereto; and

b. The signature of each party signing has been attested by a witness who is present  when the contract was signed by such party;

Provided that this subjection shall not apply to a contract made in the course of a public auction by an auctioneer within the meaning of the Auctioneers Act, nor shall anything in it affect the creation of a resulting, implied or constructive trust.

35. The plaintiff principally relied on oral evidence in claiming that it purchased the suit land. The sale agreements tendered, as already stated, were not concluded and were more or less agreement of intention to purchase the suit land. It was incumbent upon the plaintiff to tender a valid and enforceable sale agreement. However the plaintiff failed to do so.

36. It is also doubtful the transaction relied on by the plaintiff was valid without consent from the 2nd defendant, as chargee, and also without consent from the Land Control Board.  So that even if there was a sale between the plaintiff and the late Dr. James Omondi Ouko, such a sale would be void for the reason that no consent of the Land Board was ever obtained. The Land Control Act Cap 302, Laws of Kenya, does require that transaction over agricultural land be subject to grant of consent by the relevant Land Control Board.  The specific provision is Section 6 which provides as follows:

6(1) Each of the following transactions-

(a) the sale, transfer, lease, mortgage, exchange, partition or other disposal of or dealing with any agricultural land which is situated within a land control area;

(b) the division of any such agricultural land into two or more parcels to be held under separate titles, other than the division of an area of less than twenty acres into plots in an area to which the development and use of land (planning) regulations, 1961 for the time being apply;

(c) the issue, sale, transfer, mortgage or any other disposal of or dealing with any share in a private company or co-operative society which for the time being owns agricultural land situated within a land control area, is void for all purposes unless the land control board for the land control area or division in which the land is situated has given its consent in respect of that transaction in accordance with this Act.

37. It will be seen from a reading of section 6 (1) (a) that a sale of agricultural  land is one of the transactions that require consent of the Land Control Board and if not consent is given then the transaction will be rendered void. The remedy given in Section 7 of the Statute for an agreement rendered void for lack of Lack Control Board consent is a refund of the purchase price paid. The plaintiff witness did not tender any evidence to the effect that consent of the Land Control Board was ever applied for and issued in respect of the transaction between the plaintiff and the late Dr. James Omondi Ouko. Given this position, even if there was a sale of the suit land to the plaintiff, such sale is null and void and cannot be given effect. On their other hand, the transactions in favour of the 1st and 2nd defendants were supported by the requisite consents.

38. The plaintiff has also claimed to have been in occupation of the suit property since 1989. I however, wish to point out that the issue of possession was concluded by Ombija, J in his ruling and order dated  28th January 2009 and 17th February 2009 which position was re-affirmed by the Court of Appeal in Civil Appeal No. 145 of 2009  vide its order dated 28th October 2015. The plaintiff is therefore estopped from revisiting the issue and I will not make a finding on it because a finding on the issue was made by courts of competent jurisdiction and is still in force.

39. From the evidence on record, I am satisfied that the 1st defendant is the absolute and indefeasible owner of the parcel LR. No.7060/4. I am also satisfied that the 2nd defendant is the absolute and indefeasible owner of the parcel known as LR. No.7060/3. As the absolute proprietors of those properties, the 1st and 2nd defendants are entitled to enjoy rights and privileges associated with such ownership which include exclusive use, possession and enjoyment thereof without interference by any third party. The 1st defendant has asserted that the plaintiff have entered the 1st defendant’s parcel LR. No.7060/4 without the 1st defendant’s consent.  The plaintiff has admitted occupying the said land. The plaintiff having unlawfully entered the said land without the permission of registered and lawful owner, the plaintiff’s action amounts to trespass.

40. The upshot of this is that this court is not satisfied that the plaintiff has proved its case against the defendants on a balance of probability. On the other hand, this court is satisfied that the 1st defendant has proved its case against the plaintiff.  Accordingly,  I make the following orders:

a. The plaintiff’s suit is dismissed.

b. The 1st defendant’s counter-claim is hereby allowed in terms of prayers (a) and (b) of the 1st Defendant’s counter-claim

c. For the avoidance of doubt, the plaintiff and its members are hereby ordered to vacate and deliver vacant possession of the suit properties being parcels LR. No7060/3 and LR No. 7060/4 within sixty (60) days from the date of delivery of this judgment , in default, they be evicted therefrom and their structures on the suit properties demolished.

d. The defendants shall have the costs of the counter-claim.

It is so ordered.

DATED and SIGNED at MOMBASA this 2ND day of MARCH 2020.

___________________________

C. YANO

JUDGE

Delivered at KITALE this 7TH  day of MAY, 2020

___________________________

Mwangi Njoroge

JUDGE