Patrick Chege Githuka v Peter Maina Kanene, Nancy Njeri Kanene, Equity Bank Limited, Land Registrar Thika District & Attorney General [2021] KEELC 3662 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT

AT NAIROBI

ELC SUIT NO. 1126 OF 2015

PATRICK CHEGE GITHUKA.........................................................................PLAINTIFF

- VERSUS -

PETER MAINA KANENE.....................................................................1ST DEFENDANT

NANCY NJERI KANENE.....................................................................2ND DEFENDANT

EQUITY BANK LIMITED....................................................................3RD DEFENDANT

THE LAND REGISTRAR THIKA DISTRICT....................................4TH DEFENDANT

THE HON. ATTORNEY GENERAL....................................................5TH DEFENDANT

RULING

The plaintiff brought this suit on 5th November, 2015 against the defendants seeking the following reliefs:

i. A declaration that the plaintiff was the registered proprietor of all that parcel of land known as Thika Municipality Block 24/1298 (“the suit property”).

ii. A declaration that the charge registered against the suit property was illegal and fraudulent.

iii. An order directing the 4th defendant to cancel the charge registered against the suit property in favour of the 3rd defendant.

iv. An order restraining the 1st, 2nd and 3rd defendants from interfering with the suit property in any manner whatsoever.

The plaintiff averred that at all material times, he was the registered proprietor of the suit property.  The plaintiff averred that he moved to the United States of America in 1987 and left the 1st defendant who was his nephew to look after his economic interests in Kenya which included various investments.  The plaintiff averred that the 1st defendant handled on his behalf the transaction through which he acquired the suit property and for that reason the 1st defendant had in his possession the title deed for the suit property.

The plaintiff averred that he came back to Kenya in 2015 and wanted to sell the suit property. The plaintiff averred that when he carried out a search on the title of the suit property at the Land Registry, he discovered that the suit property had been charged to the 3rd defendant to secure a sum of Kshs. 1,406,25/= that was lent to the 2nd defendant by the 3rd defendant.  The plaintiff averred that the act of charging the suit property in favour of the 3rd defendant to secure the 2nd defendant’s indebtedness was illegal and fraudulent in that the 2nd defendant was not the owner of the suit property and the plaintiff did not consent to the charge.

Together with the plaint, the plaintiff brought an application by way of Notice of Motion dated 5th November, 2015 seeking among others, a temporary injunction to restrain the defendants from selling, disposing of or in any manner interfering with the suit property pending the hearing and determination of the suit.  The 3rd defendant responded to the application through a replying affidavit sworn on 10th March, 2017 by its Credit Manager, Njenga Ndung’u.  The 3rd defendant averred that it advanced a loan facility of Kshs. 4,500,000/= to the 2nd defendant which was secured by among others, a charge over the suit property and a personal guarantee and indemnity of the plaintiff.  The 3rd defendant annexed to its affidavit a copy of a charge over the suit property dated 5th February, 2015 and a copy of a deed of guarantee and Indemnity of the same date said to have been executed by the plaintiff in favour of the 3rd defendant.  The 3rd defendant averred that it acted in the transaction in good faith and that the 2nd defendant had agreed to provide it with an alternative security after which it would discharge the charge over the suit property.

The 2nd defendant responded to the application through a replying affidavit sworn on 9th February, 2017. The 2nd defendant contended that the plaintiff’s claim was baseless because the plaintiff was his uncle and had voluntarily given the 1st defendant who was her brother the title deed for the suit property.  The 2nd defendant averred that the title deed for the suit property was handed over to the plaintiff’s advocates on 21st April, 2016 and as such the plaintiff’s application for injunction had been overtaken by events.

When the matter came up on 17th December, 2018, the parties informed the court that they had compromised the suit and that the only issue that was outstanding and on which the parties could not agree was that of costs of the suit.  The court marked the suit as having been compromised save for costs and directed the parties to address the court on the issue of costs to enable the court determine the same.  The parties were directed to file written submissions on the issue. Only the advocates for the plaintiff filed submissions pursuant to the said court order.

I have considered the plaintiff’s submissions dated 27th February, 2020 on the issue of costs. Under section 27 of the Civil Procedure Act, Chapter 21 Laws of Kenya, the costs of and incidental to a suit is at the discretion of the court. I have at the beginning of this ruling set out the plaintiff’s case and the defendants’ response to the same.  It is not disputed by the defendants that the suit property was at all material times owned by the plaintiff and that the same was charged to the 3rd defendant on 5th February, 2015 to secure a loan that was advanced to the 2nd defendant.  It is also not disputed that the property was charged to the 3rd defendant while the plaintiff was out of the country and without his consent.  It follows therefore that the charge and personal guarantee and indemnity that was purportedly given by the plaintiff to the 3rd defendant to secure the loan advanced to the 2nd defendant were forged.

This explains why the charge was discharged and the title for the suit property returned to the plaintiff soon after the suit herein was filed. The suit was therefore brought as a result of the 1st and 2nd defendants’ acts of fraud and forgery. In the circumstances, justice would demand that the 1st and 2nd defendants pay the plaintiff’s costs of the suit; the 1st defendant as the person in whose custody the plaintiff had entrusted the title for the suit property and the 2nd defendant as the beneficiary of the fraudulent charge over the suit property in favour of the 3rd defendant.

I have noted that none of the defendants filed a defence and that the suit was compromised early in the proceedings even before the application for interlocutory injunction was heard.  Due to the foregoing, I will assess the costs payable to the plaintiff by the 1st and 2nd defendants. Taking all factors into account including the nature of the claim and the fact that the suit was settled by the parties out of court, I have assessed the costs payable by the 1st and 2nd defendants jointly and severally to the plaintiff at Kenya Shillings Fifty Thousand (Kshs. 50,000/=) all inclusive.  The said amount shall be paid within 45 days from the date hereof in default of which the plaintiff shall be at liberty to apply for execution for the recovery thereof.

DELIVERED AND DATED AT NAIROBI  THIS  15TH DAY OF APRIL, 2021

S. OKONG’O

JUDGE

Ruling delivered virtually through Microsoft Teams Video Conferencing Platform in the presence of;

N/A for the Plaintiff

N/A for the 1st and 2nd Defendants

N/A for the 3rd Defendant

Ms. C. Nyokabi-Court Assistant