Nyakundi & 2 others v National Social Security Fund & another [2024] KEELC 1012 (KLR)

Nyakundi & 2 others v National Social Security Fund & another (Environment & Land Case 74 of 2018) [2024] KEELC 1012 (KLR) (20 February 2024) (Judgment)

Neutral citation: [2024] KEELC 1012 (KLR)

Republic of Kenya

In the Environment and Land Court at Nairobi

Environment & Land Case 74 of 2018

MD Mwangi, J

February 20, 2024

Between

Felix Mecha Nyakundi

1st Plaintiff

Stella Nyaboke Otwori

2nd Plaintiff

Festemagra Investment Limited

3rd Plaintiff

and

National Social Security Fund

1st Defendant

Morara Ngisa & Co Advocates

2nd Defendant

Judgment

1. The Plaintiffs in this matter instituted this suit vide the plaint dated 18th July, 2016. In the Plaint, the Plaintiffs pleaded that they were the absolute and registered owners of Title No. Nairobi Block 140/561/31, Nairobi Block 140/571/34, Nairobi Block 140/263/70 and Nairobi Block 140/516/76 (hereinafter referred to as ‘the suit properties’). The Plaintiffs stated that the suit properties were previously owned by the 1st Defendant, National Social Security Fund (NSSF), who sold them to tenants under the tenant-purchase scheme. The Plaintiffs alleged that they purchased the properties under a sale and paid as instructed by the 1st Defendant and that any amount in surplus of the money payable to the 1st Defendant was to be paid to the original allottees.

2. The Plaintiffs stated that they paid a total of Kshs 25. 6 million under the tripartite arrangement. Out of the total amount paid, Kshs. 21. 3 million was paid to the 1st Defendant, whereas the balance was paid to the original allottees. The 2nd Defendant who was the Advocate representing the Plaintiffs processed the titles for all the 4 plots in favour of the Plaintiffs.

3. It is the Plaintiffs’ case that on or about the 4th July, 2016, the 1st Defendant without any lawful justification and or notice trespassed into, cramped and locked houses No. 031 and 034, two of the properties/houses of the 2nd and 3rd Plaintiffs and which were occupied by tenants. The 1st Defendant further threatened to take similar action in respect to the other two houses No. 070 and 076, unless they received (purchase) money from the Plaintiffs.

4. The Plaintiffs aver that after the above illegal action by the 1st Defendant, they contacted and notified the 2nd Defendant, who was their Advocate, who allegedly confirmed having released the full purchase price to the 1st Defendant in accordance with the terms and conditions of professional undertakings given to the 1st Defendant. Arising from the foregoing, the 2nd and 3rd Plaintiffs’ tenants in houses No. 031 and 034, issued the Plaintiffs a two months’ notice to vacate the houses. The Plaintiffs plead that they stand to suffer immense financial losses as a consequence of the illegal actions by the 1st Defendant.

5. The Plaintiffs seek orders of a permanent injunction against the Defendants barring them from interfering, locking, harassing and or trespassing into the suit properties. Further, the Plaintiffs seek general damages for trespass and costs of the suit against the Defendants.

Response by the Defendants 6. The 1st Defendant responded to the Plaintiffs’ claim by way of a statement of Defence and Counter-Claim dated 8th August, 2016, filed in court on the same date.

7. The 1st Defendant asserted that it entered into agreements (Tenant – Purchase agreements) with George Ondari Ontere, Joseph Kimari M’Mwarania, Mercy Mildred Awour and Philomena Morara Apiemi (jointly with Wilkister Kemuma Nyangito) for houses No. 76, 34, 31 and 70, respectively. The tenant-purchasers however defaulted in the payment of the purchase price by instalments in accordance with their agreements with the 1st Defendant and the 1st Defendant exercised its right of rescission and revoked the agreements accordingly.

8. The 1st Defendant asserted that the 2nd Defendant purporting to act for Equity Bank Ltd, as a financier for the 1st Plaintiff, gave professional undertakings in respect to the suit properties upon which undertakings, the 1st Defendant signed transfer documents and released them and other completion documents to the 2nd Defendant on diverse dates.

9. In spite of the release of the transfer documents and other completion documents, the 2nd Defendant did not pay and has never paid the amounts outstanding and payable to the 1st Defendant in accordance with the said undertakings. As at the date of filing the statement of Defence and Counter-claim, the outstanding amounts were as follows:a.House No. 76 – Kshs 3,317,676. 61, as at 31st July, 2016;b.House No. 34 – Kshs 6,090,149. 31, as at 31st July, 2016;c.House No. 31 – Kshs 5,523,986. 68, as at 31st July, 2016; andd.House No. 70 – Kshs 1,700,173. 55, as at 31st July, 2016.

10. The 1st Defendant asserted that it rescinded the agreements with the tenant-purchasers and on expiry of the rescission notices moved to repossess the suit properties as stipulated in the agreements. It was then that the 1st Defendant was shown titles in the names of the Plaintiffs. The 1st Defendant avers that the purported transfer and issuance of the titles to the Plaintiffs was fraudulent and unlawful and the same should be cancelled. The particulars of fraud are tabulated at paragraph 11 of the 1st Defendant’s Statement of Defence and Counter-Claim.

11. The 1st Defendant counter-claimed against the Plaintiffs jointly and severally for:i.Payment of Kshs 16,631,986. 15 with interest at the rate of 15% P.A. from the dates when the professional undertakings were furnished to NSSF until payment in full.ii.In the alternative and without prejudice to (a) above, cancellation of the titles in the names of the Plaintiffs and vacant possession of the properties.iii.Costs with interest.

Response by the 2nd Defendant 12. The 2nd Defendant too filed a statement of Defence in response to the Plaintiffs’ claim. It is dated 11th October, 2016. The 2nd Defendant while denying the Plaintiffs’ claim against him averred that he had paid all the funds to the 1st Defendant as agreed. He denied any collusion with the 1st Defendant as alleged by the Plaintiffs in the plaint putting the Plaintiffs to strict proof.

13. Subsequently, the 1st Defendant joined the 4 tenant-purchasers as Defendants to its Counter-Claim pursuant to leave granted by the court on 18th September, 2019. It filed an amended Statement of Defence and Counter-Claim naming Fredrick George Ondari Ontere, Joseph Kimao M’warania, Mildred Mercy Owuor and Winfrida Nyahudu Muhalia as the 5th, 6th, 7th and 8th Defendants in the Counter-claim, respectively.

14. The 1st Defendant sought judgment against the 8 Defendants jointly and severally for:a.Payment of Kshs 16,631,986. 15 with interest at the rate of 15% per annum from 31st July, 2016 until payment in full.b.Aggravated damages for trespass together with interest.c.In the alternative and without prejudice to the foregoing, cancellation of Title Deeds in the names of the 1st, 2nd and 3rd Defendants in the Counter-claim and vacant possession of the suit properties.d.Costs with interest.

15. From the Court’s record, the 6th and 8th Defendants filed a Statement of Defence to the 1st Defendant’s Counter-Claim. They denied the 1st Defendant’s claim against them asserting that it did not disclose any cause of action against them. They denied any collusion or fraud on their part.

Evidence adduced at the hearing. 16. This matter proceeded to full hearing. The Plaintiffs in this case called 2 witnesses. The 1st Defendant on its part called one witness. The 2nd Defendant in the main suit and the 5th – 8th Defendants in the Counter-claim did not call any witnesses. The witnesses testified in support of the parties’ respective positions, adopting their witness statements which form part of the record of this court.

17. The 1st Plaintiff testified in this case as the 1st witness – PW1. He adopted his witness statement of 18th July, 2016 as his evidence in chief. He further produced the documents in his bundle which were marked as exhibits accordingly.

18. PW1 stated that he bought the 4 houses from NSSF on cash basis through electronic cash transfers to his Advocates, Morara Ngisa & Co. Advocates, the 2nd Defendant in this matter. In total, he asserted that he paid Kshs. 25. 6 million. He confirmed that he had no direct contact with the 1st Defendant, NSSF, at any one time.

19. The executed transfer documents were presented to PW1 by his Advocate. PW1 however was categorical that he was not privy to the arrangements in form of the professional undertakings allegedly issued on his behalf by the 2nd Defendant to the 2nd Defendant.

20. PW1 averred that he moved to court when the 1st Defendant through his agents locked and cramped two of his houses yet he had the original titles. This was one year after the transactions. It was then that he was informed that no monies had been paid to NSSF as stipulated in the agreements he had signed for purchase of the houses.

21. Under Cross-examination by the Advocate for the 1st Defendant, PW1 confirmed that he was a Principal Land Registrar based at Kerugoya. When the transactions were going on, he was based at Thika in the same capacity.

22. PW1 stated that although he had bought 3 of the properties in his name, he had subsequently transferred them into the name of the 3rd Plaintiff company where he was a shareholder/director with his wife the 2nd Plaintiff in this case. None of the properties was in his name at the time of filing this suit. He had no proprietary rights in any of the properties as an individual yet he had sworn the verifying affidavit in support of the Plaint with authority of the 2nd and 3rd Plaintiffs though he had not attached or produced the same.

23. PW1 was a director of the 3rd Plaintiff company but had no evidence before the Court to prove it.

24. At the time of purchasing the suit properties, they were owned by third parties. His Advocate, the 2nd Defendant though had told him that he was buying them from NSSF. He was not sure of the contents of the agreements he had signed. Everything was done for him by his Lawyer, the 2nd Defendant.

25. The 2nd Plaintiff was the wife of PW1. She had not personally bought any of the properties. The 1st Plaintiff had nonetheless registered one of the houses in her name.

26. Shown the agreements between him and the 5th – 8th Defendants in the Counter-claim, PW1 confirmed that he indeed signed the agreements with them. NSSF, the 1st Defendant was not a party to the said agreements.

27. PW1 reiterated that he was not aware of the purported professional undertakings issued by his Advocates, the 2nd Defendants. He only came to learn about the undertakings after he collected his files and documents from the 2nd Defendant’s offices. He affirmed that he was not borrowing any monies from Equity Bank Ltd or at all to purchase the suit properties. He had trusted his Advocate with the transactions.

28. PW1 confirmed that the agreements between NSSF and the tenant-purchasers, under clause 7(b) thereof, the tenant –purchaser had given an undertaking not to sell or charge the suit properties or any part thereof until full payment of the purchase price.

29. Before signing the agreement with the tenant purchasers, PW1 confirmed that he was not shown by his Advocate any consents authorizing the sales by NSSF. There was also nothing notifying NSSF about the proposed change of ownership.

30. In responding to questions by Mr. Makori, Advocate for the 2nd Defendant, PW1 confirmed that he had no retainer agreement with the 2nd Defendant. Though he alleged to have paid him legal fees of Kshs 150,000/=, he had no receipt or an acknowledgement of any kind to confirm the payment. It was his claim that he was not issued with one upon making the payments.

31. The 2nd Plaintiff testified as PW2. She affirmed that she too was a director of the 3rd Plaintiff Company alongside the 1st Plaintiff. She adopted her witness statement dated 1st July, 2016 as her evidence in chief.

32. PW2 averred that she was not involved in the purchase transactions of the suit properties. The 1st Plaintiff had done it on her behalf and on behalf of the 3rd Plaintiff Company.

33. In response to questions by the Advocate for the 1st Defendant, PW2 stated that she did not pay any money towards the purchase of House No. 70 which was registered in her name. The title in her name was brought to her by her husband, the 1st Plaintiff. She was not even aware of the amount of rent paid by the tenants in occupation of the houses. She could not remember signing any agreement with NSSF.

34. In responding to the questions by the Advocate for the 2nd Defendant’s, PW2 stated that she did not know the 2nd Defendant personally. She had not met him at any one time. She had not visited his office to sign either the agreements or the transfers.

35. On its part, the 1st Defendant called one witness by the name of Caroline Esendi Rakama (DW1), its acting Corporate Secretary. She adopted her witness statement dated 26th September, 2019 as her evidence in chief. she further produced as exhibits the 7 documents on the 1st Defendant’s list of documents.

36. Responding to questions from the Advocate for the Plaintiffs, DW1 asserted that the Plaintiffs were strangers to NSSF. She however confirmed receiving the 4 professional undertakings from Morara Ngisa & Co. Advocates. They had executed transfer documents in favour of the 1st Plaintiff on the strength of the undertakings. They however had no agreements for sale with the Plaintiffs. They believed that the professional undertaking was legitimate at the time it was issued and presented to them.

37. In spite of the undertakings, DW1 insisted that the 1st Plaintiff was a stranger to her and to NSSF.

38. The 1st Defendant, according to the witness released the completion documents to the 2nd Defendant on diverse dates. The accounts for the 4 houses were however in the names of the original tenant-purchasers, all along. Even at the time of her testimony, they were still in the names of the original tenant-purchasers.

39. DW1 asserted that she was duped into releasing the completion documents on the strength of a fraudulent undertaking.

40. Responding to the Advocate for the 2nd Defendant, DW1 stated that prior to the issuance of the professional undertaking, the 1st Defendant had not issued the 2nd Defendant with ‘preferred terms of a letter of undertaking’ specifying the terms of the undertaking they were willing to accept from the 2nd Defendant.

41. There were variances of the prices indicated as the purchase price for the suit properties in the letters of undertaking and the transfer documents.

42. In re-examination, DW1 confirmed that none of the Plaintiffs in this case was a tenant-purchaser. NSSF had no agreement with either of the Plaintiffs. It was the original tenant-purchasers who purportedly sold the suit properties to the Plaintiffs without the knowledge and consent of NSSF.

43. DW1 in referring to the professional undertakings noted that the 2nd Defendant was to present for registration, the transfer (document) and the charge (document) simultaneously. She affirmed that they had not, to the date of her testimony, been notified of the successful registration of the transfer and the charge. As per their records, the units were still in the names of the original tenant-purchasers. NSSF was yet to receive the full purchase price for the 4 units.

44. DW1 asserted that once they discovered that the professional undertakings were dubious, they concluded that it would have been an exercise in futility attempting to enforce them against the 2nd Defendant who was no longer in practice anyway. The 1st Defendant had not received any money either from the Plaintiffs or the 2nd Defendant.

45. The 2nd Defendant did not call any witness. The 5th-8th Defendants in the counter-claim too did not call any witnesses.

Directions by the court 46. Upon close of the hearing, the court directed parties to file written submissions. The Plaintiffs and the 1st Defendant complied and filed their respective submissions. I have had the opportunity to read and consider the submissions for purposes of this judgement.

Issues for Determination 47. From my reading of the submissions filed by the Plaintiffs and the 1st Defendant, both sides are in agreement that the main issue for determination in this case is whether the 1st Plaintiff lawfully purchased the 4 units from the 1st Defendant. The other issues will flow from the finding on that main issue. The issues then for determination are:-a.Whether the 1st Plaintiff and 2nd Plaintiff lawfully purchased the suit properties from the 1st Defendant.b.Whether the subsequent transfer to the 3rd Plaintiff or other third parties is lawful.c.Whether the Plaintiffs are entitled to the orders sought.d.Whether the 1st Defendant is entitled to the orders sought against the Defendants in the counter-claim and if so, against which party.e.What orders should be made with regard to the costs of the suit and the counter-claim.

Analysis and Determination 48. The Plaintiffs in their plaint alleged that they purchased the suit properties under a sale and paid as instructed by the 1st Defendant and that any amounts in surplus were to be paid to the original allottees. In their submissions, the Plaintiffs submitted that the purchase transactions were carried out on behalf of the 1st and 2nd Plaintiffs by the 2nd Defendant, as an Advocate. As it clearly emerged during the hearing, none of the Plaintiffs directly negotiated or engaged with the 1st Defendant. They did not sign any sale agreement with the 1st Defendant either. At no point in time did they agree on the purchase price or terms of the sale of the houses with the 1st Defendant.

49. The 1st and 2nd Plaintiffs confirmed that they executed the documents of transfer that were presented to them by the 2nd Defendant, their Advocate, in respect of all the 4 units. The consideration/purchase price was allegedly forwarded through the 2nd Defendant for onward transmission to the 1st Defendant. The 1st Plaintiff insisted that he paid the purchase price in full for each of the 4 units in one instalment and not through any other arrangements to the 2nd Defendant. He was categorical that he was not being financed by Equity Bank Ltd or any other financier for that matter.

50. The 1st Plaintiff denies giving the 2nd Defendant any instructions to issue any undertaking on his behalf since he was purchasing the units in cash. There was clearly no need for such undertakings. The 1st Plaintiff in his testimony stated that he came to learn about the purported undertakings when he obtained his files/documents from the 2nd Defendant’s former offices.

51. From the evidence adduced before the court, the undertakings were purportedly issued on behalf of the Financier, Equity Bank Limited. The 1st Plaintiff was named as the borrower. In the undertakings, the 2nd Defendant, gave an unconditional, unequivocal and irrevocable professional undertaking to pay the amounts stated therein within 14 days of successful registration of the transfer and the charge (in favour of Equity Bank Ltd).

52. The Plaintiffs, despite their denial of the undertaking, submit that the 1st Defendant was agreeable to the undertakings or rather accepted the undertakings and on that basis proceeded to dispatch all the necessary documents to transfer the units to them i.e. the duly sealed and executed transfer of lease in triplicate; copy of the Managing Trustee’s PIN & ID; Copy of the Fund Chairman’s PIN and ID; Minister’s consent to transfer; NSSF’s Pin Certificate; Consent to transfer; certified copy of Land Rent Certificate, and Council’s offset letter. That is how comes the titles were transferred and issued to the 1st and 2nd Plaintiffs.

53. The Plaintiffs despite the evidence of the 1st Plaintiff under oath, denying issuing instructions for the undertaking and insisting that he paid in cash, insists that the 1st Plaintiff acquired the title to the 4 units lawfully and therefore had the right to transfer to the 2nd and 3rd Plaintiff.

54. This is the true meaning of the phrase, ‘approbating and reprobating’ at the same time.

55. The 1st Defendant’s position was that the transfer of the titles to the Plaintiffs was not lawfully obtained. The 1st Defendant submits that there was no sale agreement between the 1st Defendant and Plaintiffs in respect to the suit properties in the first place.

56. The 1st Defendant referred to Section 3(3) of the Law of Contract Act as read together with Section 38 of the Land Act. It cited 2 decided cases in support of its position. The Case of Lucy Wangui Mwaura –vs- Linet Achieng Amala [2019] eKLR, & the case of Moses Njaramba Kamau – vs – Mary Muthoni Njaramba (2017) eKLR, where it was held that a valid transfer of land must be preceded by a Sale agreement and a transfer document duly executed by the parties.

57. In the latter case, the court was emphatic that Section 3(3) of the Law of Contract Act sets out the requirements for a valid contract for sale of Land. Being a prerequisite anchored under the Law, nothing valid would come out of an invalid contract.

58. The 1st Defendant emphatically submitted that though the Plaintiffs pleaded in their plaint that they purchased the suit property under a sale and paid the full purchase price, no such evidence was adduced before the court. Again, the allegation of a tripartite arrangement pleaded at paragraph 9 of the plaint was not also proved.

59. The 1st Plaintiff indeed admitted during cross-examination that there were no agreements for sale between him and the 1st Defendant in respect to all the 4 units the subject matter of this suit. Neither was there any evidence of direct payment to the 1st Defendant.

60. It was the 1st Defendant who had the transferrable interest in respect to all the four units at the material time by virtue of being the registered proprietor of the suit properties.

61. The 1st Defendant pointed out that the sale agreements produced by the Plaintiffs in relation to the suit properties and to which the Plaintiffs were parties are the sale agreements between the 1st Defendant’s tenant purchasers and the. These agreements are invalid since the 1st Defendant was not a party to them neither had the 1st Defendant consented to them. The tenant purchasers could only sell the suit properties upon the prior written consent of the 1st Defendant. According to the 1st Defendant, no such prior consent was sought and none was given prior to the purported agreements. Again, it is pointed out that the tenant purchasers did not have transferrable titles to the suit properties which they could pass to the 1st and 3rd Plaintiffs.

62. The 1st Defendant referring to the decision by the Supreme Court of Kenya in the case of Torino Enterprises ltd v A.G (Petition 5 (E006) of 2022) [2023] KESC 79 (KLR) (22 September, 2023) (Judgment), submitted that one cannot pass a good title to a third party unless and until he acquires a valid title to the land through registration under the applicable Law.

63. For starters, I entirely agree with the submissions by the 1st Defendant that there were no sale agreements between the 1st plaintiff and the 1st Defendant. The 1st Plaintiff purportedly entered into agreements with the tenant purchasers which he is attempting to enforce against the 1st Defendant in this case.

64. The tenant purchasers had not acquired proprietary rights on the suit properties at the time of the purported agreements with the 1st Plaintiff. The tenant purchasers as expressly stated in their agreements with the 1st Defendant could not lawfully sell or charge the suit properties or any part thereof until they had made full payment of the purchase price. They could not assign their rights to a third party without the express authority/consent of the 1st Defendant. They could therefore not pass a good title to the 1st Plaintiff. Consequently, the 1st Plaintiff could not pass a good title to third parties.

65. At this juncture I need to address the purported undertakings issued by the 2nd Defendant on behalf of a supposed financier, Equity Bank Ltd. The 1st Plaintiff in his testimony and submissions is categorical that he had not approached Equity Bank Ltd or any other financier for that matter, to finance him to purchase the 4 units, the subject matter of this suit. He was buying in cash and did not therefore need any financing. He did not instruct the 2nd Defendant to issue any undertaking as he purported to.

66. I must call the purported undertakings for what they are. They were fictitious creations of the 2nd Defendant to perpetrate fraud; they were instruments of fraud. They were meant to dupe NSSF that Equity Bank Ltd was financing the purchase of the four units on behalf of “the borrower”. That way, NSSF would release the completion documents to the 2nd Defendant confident that their monies would be paid by the bank. That was indeed how the 2nd Defendant was able to secure the completion documents from the 1st Defendant and transfer them into the name of the 1st Plaintiff (and the 3rd Plaintiff) without paying a dime to the 1st Defendant.

67. Certainly, the 2nd Defendant must have been working in cahoots with some officers of the 1st Defendant who 'accepted' the fraudulent undertakings in spite of the fact that the 1st Defendant had not signed any agreements with the purported purchasers.

68. Under 'the undertakings', the 2nd Defendant was expected to have simultaneously transferred the titles into the name of the 1st Plaintiff and charged them in favour of Equity Bank Ltd. However, as is now apparent from the evidence before the court, Equity Bank Ltd was just a decoy. Equity Bank Ltd was not involved in any way whatsoever in the transactions herein. The 1st Defendant had not borrowed any money from Equity Bank Ltd.

69. In spite of transferring the suit properties into the name of the 1st Plaintiff, the 2nd Defendant did not pay the monies under 'the undertakings' to the 1st Defendant. In his statement of Defence, he has alleged that he paid the monies received from the 1st Plaintiff to the 1st Defendant. This is categorically denied by the 1st Defendant.

70. The burden of proof then was upon the 2nd Defendant to prove payment of the monies to the 1st Defendant as alleged in his statement of Defence.

71. In an adversarial system like ours, the burden of proof is always on he who alleges to prove. This position is well captured under Section 107 of the Evidence Act which provides that: -‘‘Whoever desires any court to give judgement as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.’’

72. Halsbury’s Law of England 4th Edition, Volume 17 puts it so well that:-‘‘The legal burden of proof 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 to a particular allegation, the burden lies upon the party for whom substantiation of that particular allegation is an essential of his case.’’

73. The legal burden is discharged by way of evidence. No such evidence was adduced by the 2nd Defendant before the court. The 2nd Defendant did not testify in this case. The allegations in his statement of Defence therefore remain just that, allegations.

74. The import of the failure by the 2nd Defendant to call evidence is best summarized by the holding in the case of Janet Kaphiphe Ouma & v. Marie Stopes International(Kenya) Limited (Kisumu HCCC No. 68 of 2009) where Lady Justice Ali Aroni J. (as she then was), cited with approval the holding in the case of Edward Muriga v Nathaniel D. Schulter (Civil Appeal No. 23 of 1997) where the court stated that:-“Apart from filing its statement of defence, the Defendant did not adduce any evidence in support of the assertion made therein. The evidence of the 1st Plaintiff and that of the witness remain uncontroverted and the statement in the defence therefore remain a mere assertion.”

75. Undoubtedly therefore, the transfer of the suit properties to the first Plaintiff was obtained by deception and fraud.

76. Secondly, and without prejudice to the above finding, the tenant purchasers had not acquired good titles to the suit properties for the reason that they had defaulted and the 1st Defendant had rescinded their agreements. In any event they were under the agreements with the 1st Defendant barred from selling or parting with the titles to the suit properties until and unless they had paid the full purchase price; otherwise any such assignment was to be with the consent of the 1st Defendant. No such consent was obtained to sell to the 1st Plaintiff or to any other person. The subsequent agreements between the tenant purchasers and the 1st Plaintiff were for all intents and purposes void, ab initio.

77. In the old English case of Macfoy v United Africa Co. Ltd. [1961] 3 All ER, 1169, it was well stated that:“If an act is void, then it is in law a nullity. It is not only bad, but incurably bad. There is no need for an order of the court to set it aside. It is automatically null and void without more ado, though it is sometimes convenient to have the court declare it to be so. And every proceeding which is founded on it is also bad and incurably bad. You cannot put something on nothing and expect it to stay there. It will collapse…”

78. Finally, under section 3(3) of the law of contract Act it is mandatory that a valid transfer of land must be preceded by a written Sale agreement in writing signed by all the parties and attested.

79. Being a prerequisite anchored under the law, no suit then would be sustainable based upon a contract for disposition of land unless the prerequisites had been met.

80. Section 3(3) of the Law of Contract Act Chapter 23 which came into force on 1st June, 2003 states in part, as follows:-“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 writingii.is signed by all the parties thereto; andb).the signature of each party signing has been attested by a witness who is present when the contract was signed by such party.”

81. The 1st Plaintiff who is a Principal Land Registrar feigns ignorance of all the foregoing. I am not persuaded that the 1st Plaintiff was an innocent bystander who was unaware of what his Advocate, the 2nd Defendant was up to. The 2nd Defendant was his duly authorized agent for purposes of the transactions involving the suit properties.

82. Whereas the 1st Plaintiff signed the sale agreements with the tenant-purchasers, the transfer documents that followed and which he also personally signed were executed on behalf of NSSF, as the transferee. He nevertheless signed the same without raising any queries.

83. Secondly, the action of the 1st Plaintiff of transferring all the titles to the suit properties to the 2nd and 3rd Plaintiffs immediately after acquiring them and for no apparent reason raises a lot of suspicions. He was cagey when asked about the reasons for the transfers to the 2nd and 3rd Plaintiffs by the Advocate for the 1st Defendant.

84. From whatever angle one looks at it, the 1st Plaintiff couldn't have lawfully acquired titles to the suit properties. The subsequent transfers to the 2nd and 3rd Plaintiffs were consequently unlawful. That means that the Plaintiffs' case cannot succeed. It is premised on fraud and illegalities.

85. The law has long been established that the courts will not enforce illegalities.

86. In the case of Royal Media Services v Independent Electoral and Boundaries Commission and 3 others [2019] eKLR, the court pronounced itself in the following words:-“Judicial tradition in this Country is to frown upon illegal contracts. Regard must be given to the doctrine of Ex turpi causa non oritur action, that is from a dishonorable cause an action does not arise.”

87. In the case of Kenya Airways Ltd v Satwant Singh Flora [2013] eKLR, the court stated that,“No court ought to enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of the contract or transaction which is illegal, if the illegality is duly brought to the notice of the court, and if the person invoking the aid of the court is himself implicated in the illegality. It matters not whether the Defendant has pleaded the illegality or whether he has not. If the evidence adduced by the Plaintiff proves the illegality, the court ought not to assist him.”

88. In the case of Kenya Pipeline Company Ltd v Glencore Energy (UK) Ltd (supra) the court the upheld and endorsed the case of Holmanv Johnson[1775-1803] ALLER 98, where Chief Justice Mansfield stated: -“The principle of public policy is this;Ex dolo malo no ovitur citor. No court will lend its aid to a man who found his cause of action on an immoral or an illegal act. If, from the plaintiff’s own stating or otherwise, the cause appears to arise ex turpi causa, or the transgression of a positive law of the country, then the court says that he has no right to be assisted. It is on that ground the court goes, not for the sake of the defendant, but because they will not lend their aid to such a plaintiff.”

89. This court being a court of law will not lender its aid to the Plaintiffs whose claim is founded on illegalities and fraud. The Plaintiffs’ claim must fail in its entirety.

90. Turning to the 1st Defendant’s counter-claim, I note that the counter-claim is against the Plaintiffs, the 2nd Defendant in the main suit and the tenant purchasers who were joined as the 5th – 8th Defendants in the counter-claim.

91. One question that comes to mind is whether a Defendant can file a counter-claim against a co-defendant?

92. The Black’s Law Dictionary, 11th Edition defines a counter-claim as,“a claim for relief asserted against an opposing party after an original claim has been made; especially a Defendant’s claim in opposition to or as a set off against the Plaintiff’s claim.”

93. Halsbury’s Laws of England, 4th Edition, vol. 42 on its part explains a Counter-claim by giving a case scenario as follows: -“When A has a claim of any kind against B and brings an action to enforce that claim, and B has a cross-claim of any kind against A which by law he is entitled to raise and have disposed of in the action brought by A, then B is said to have a right of counterclaim.”

94. It goes further to elaborate that,“any claim in respect of which the Defendant could bring an independent action against the Plaintiff may be enforced by a Counter-claim subject only to the limitation that it must be such as can conveniently be tried with the Plaintiff’s claim. Thus not only claims for money but also other claims such as a claim for injunction or for specific performance or for declaration may be the subject of a counter-claim.”

95. A counter-claim can only be filed by a Defendant(s) as against a Plaintiff(s). It is a ‘cross-suit’ by the Defendant against the Plaintiff. It is a ‘Counter-action’ or a ‘Counter-suit’. The 1st Defendant cannot therefore purport to counter-claim against the 2nd Defendant (a co-defendant). It ought to have instead, filed ‘a claim against a co-defendant’ to enable the co - Defendant respond appropriately.

96. The 1st Defendant ought to have lodged a claim against a co-defendant under Order 1 rule 24 of the Civil Procedure Rules not a counter - claim. The counter-claim against the co-Defendants is therefore improper and is hereby struck out.

97. In respect to the 5th – 8th Defendants in the Counter-claim, the 1st Defendant has not established any claim against them. The 1st Defendant had already rescinded the agreements with them. There was no reason to join them as parties in this case. The counter-claim against them too is struck out.

98. Having found that the transfer to the 1st Plaintiff was obtained by fraud and or illegalities, this court would be sanitizing fraud/illegalities if it allowed prayer 1 of the counter-claim as framed by allowing the Plaintiffs to benefit from the fraud/illegality. The alternative prayer in the counter-claim is the appropriate remedy in this case in view of the findings of the court.

99. Section 26 of the Land Registration Act is explicit that a title of a proprietor may be challenged where the certificate of title has been acquired illegally, unprocedurally or through a corrupt scheme.

100. In the case of Elijah Makeri Nyangw’ra –vs- Stephen Mungai Njuguna & Another (2013) eKLR, the court elaborating on the provisions of section 26 held that:-“…..the law is extremely protective of title and provides only two instances for challenge of title. The first is where the title is obtained by fraud or misrepresentation to which the person must be proved to be a party. The second is where the certificate of title has been acquired through a corrupt scheme.”

101. The court’s finding in this case is that the Plaintiffs’ titles to the suit properties were obtained illegally and by fraud. The court will exercise its authority under section 80 of the Land Registration Act and order that the register be rectified and the entries in favour of the Plaintiffs or any other third party be cancelled and the titles be reinstated to the 1st Defendant.

102. Further the Plaintiffs and or their agents and anyone claiming under them must handover vacant possession of the suit properties to the 1st Defendant in the next 90 days from the date thereof failing which the 1st Defendant will be at liberty to evict the Plaintiffs from the suit properties without any further reference to this court.

103. In regard to the 1st Defendant’s claim for aggravated Damages for trespass, the court’s finding is that the 1st Defendant is not entitled to the same. As the court has observed, the 1st defendant’s officers must have worked in cahoots with the 2nd Defendant to “sell’ and “grant the 1st Plaintiff possession” of the suit properties to the 1st Plaintiff.

104. The 1st Defendant should carry out internal investigations and surcharge its officers who are found culpable.

105. The 1st Plaintiff is at liberty to sue for his monies paid to the 2nd Defendant.

106. In respect to costs, the court’s direction is that, considering the overall conduct of the parties in this matter, it is appropriate that each party bears its own costs.

Conclusion 107. The conclusion is that: -A.The Plaintiffs’ case against the Defendants is dismissed in its entirety.B.The 1st Defendant’s Counter-claim is allowed in the following terms;i.The court orders the cancellation of the title No. Nairobi Block 140/561/31, Nairobi Block 140/571/34, Nairobi Block 140/263/70 and Nairobi Block 140/516/76 in the names of the 1st, 2nd and or 3rd Plaintiffs and directs that the same be reinstated to the 1st Defendant.ii.The Plaintiffs and or their agents and anyone claiming under them are ordered to handover vacant possession of the suit properties, title No. Nairobi Block 140/561/31, Nairobi Block 140/571/34, Nairobi Block 140/263/70 and Nairobi Block 140/516/76 to the 1st Defendant in the next 90 days from the date thereof failing which the 1st Defendant will be at liberty to evict the Plaintiffs from the suit properties without any further reference to this court.C.Each party shall bear its own costs.It is so ordered.

JUDGEMENT DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 20TH DAY OF FEBRUARY, 2024. M.D. MWANGIJUDGE.In the virtual presence of:Mr. Ayora for the PlaintiffsMr. Muuo h/b for Mrs. Mbabu for the 1st DefendantN/A for the 2nd DefendantN/A for the 4th-8th Defendants in the counter-claimCourt Assistant: YvetteM.D. MWANGIJUDGE.