Ramadhani Musumba Chemieti v Jamin Wasike Chemieti [2015] KECA 237 (KLR)

IN THE COURT OF APPEAL

AT ELDORET

(CORAM: MARAGA, MUSINGA & GATEMBU, JJ.A)

CIVIL APPEAL NO. 234 OF 2011

BETWEEN

RAMADHANI MUSUMBA CHEMIETI…...APPELLANT

AND

JAMIN WASIKE CHEMIETI ……………… RESPONDENT

(Appeal from Judgment of the High Court of Kenya at Bungoma (Muchemi, J.) dated 13th day of July, 2011

in

H.C.C. SUIT NO. 91 OF 2005)

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JUDGMENT OF THE COURT

This is an appeal from the judgment of the High Court at Bungoma (Muchemi, J.) delivered on 13th July, 2011  declaring that two properties known as title number East Bukusu/South Kanduyi/ 489 and title number  Bungoma Township/228 (the properties) belonging      to     Sila Chemiati, deceased, were illegally,  fraudulently and unlawfully sold to third parties after  his death but that the same could not “be taken back to   form part of the estate of the deceased and be distributed    in the pending succession cause.”

The appellant faults the learned judge for holding that title number Bungoma Township/228 cannot be  restored to form part of the estate of the deceased to be distributed to bona fide beneficiaries. She also  complains that the learned judge’s finding prejudiced  her pending suit against the respondent and against the   purchaser seeking rectification of the register in    respect of title number Bungoma Township/228 with a    view to restoring the name of the deceased as the  proprietor of that property.

Background

Sila Chemiati (the deceased) died on 26th August 1980.  He was survived by one of his wives, Hadija Nanjala  Chemiati (the appellant) and their children. The     deceased’s first wife predeceased him, leaving behind  their only child, Jamin Wasike Chemiati (the        respondent), who also survived the deceased.

The appellant and the respondent are in agreement  that at the time of his death, the deceased owned the  properties. Title number East Bukusu/South Kanduyi/ 489 was described as an undeveloped plot while title number Bungoma Township/228 was described as a     developed commercial plot with three shops and four residential rooms.

On 6th June 1983 the appellant entered into an    agreement for sale with one Ramadhan Machio  Tabuche under which she purported to sell the  deceased’s property, East Bukusu/South Kanduyi/ 489,  for Kshs. 17,000. 00. She did so without first obtaining a     grant of letters of administration with respect to the    estate of the deceased. She stated that she was  compelled to do so in order to raise money to redeem   title number Bungoma Township/228 that was under threat of auction due to an outstanding mortgage.

On 31st January 1986, without the knowledge or concurrence of the appellant, the respondent obtained     a grant of letters of administration for the estate of the      deceased from the Senior Resident Magistrate’s Court in Bungoma in Probate and Administration cause     number 25 of 1985.

By an agreement dated 26th June 1986, the respondent   purported to sell the deceased’s property, Bungoma  Township/228, to George Muroki Njuguna for Kshs.  115,000. 00. The respondent stated that he was also  compelled to sell that property in order to liquidate     the deceased’s debt with ICDC.

By an application presented to the High Court of    Kenya at Kakamega in Succession Misc. Application   No. 25 of 1992, the appellant applied for the revocation or annulment of the grant of letters of    administration    issued to the respondent by the Magistrate’s Court in Bungoma contending that the    respondent obtained it fraudulently.

By an order given on 16th January 1997 by the High  Court  of Kenya  at  Bungoma  in  Civil Misc. No. 38 of   1994, the court allowed the appellant’s application and revoked the grant issued to the respondent on the  grounds that the same had been obtained without the  consent of the appellant and that under section 66 of     the Law of Succession Act, a surviving spouse takes   preference, as an administrator, over all other  beneficiaries.

Subsequently on 28th October 1998, the parties recorded a consent order in the High Court of Kenya   at Bungoma in Civil Misc. No. 38 of 1994, for their    appointment as “joint administrators of the    deceased’s estate.” They also agreed, and an order  was made, that “leave to apply for confirmation before the lapse of six months hereby granted.”

When the appellant applied for the confirmation of the  grant by a chamber summons dated 30th November     1998, the respondent disputed the appellant’s  identification of the assets of the estate and the    schedule of distribution in a replying affidavit filed in      response to that application. The parties then agreed   to have the application for confirmation of grant    determined through oral evidence.

The task of hearing and determining that application     fell upon Sergon, J. who heard witnesses from both sides, received submissions from the advocates for the  parties, after which he reserved   judgment. However,   for reasons that are not apparent from the record, the   learned judge did not determine that application. In his   ruling dated and delivered on 16th September 2005 the   learned judge had the following to say, and it is    necessary to quote him at length:

“Thesum total of the dispute here revolves(sic)around the identification and distribution of the assets of the estate of Sila Chemiati (deceased).  The main issue which was thrown to this Court to decide is whether or not there are still property (sic) available for distribution.  This issue is so pertinent that the grant cannot be confirmed before it is determined.  I have intentionally refused to make a conclusion over these issues because I am of the view that it is not convenient to determine at this stage.  Consequently I direct the parties to this dispute to cause the matter to be determined(sic)as per the provisions of Order XXXVI rule 1 of the Civil Procedure rules. It is further directed that the application for confirmation of grant be postponed pending the outcome of the determination of the matter under Order XXXVI rule 1 of the Civil Procedure rules.

To enable the parties move with expediency, it is further directed that the exhibits produced in evidence before this Court be released to the parties.”

The result was that the appellant instituted suit by way of originating summons in the High Court at Bungoma   in Civil Suit No. 91 of 2005(OS) in order to have the    very question of the extent of the deceased’s estate   determined.

Meanwhile, the appellant had also commenced suit by a   plaint dated 24th August 1999in the High Court of Kenya at Bungoma, being High Court Civil Suit No. 96  of 1999 against the respondent and George Njuguna  Ng’ang’a and Joseph Ng’ang’a as defendants seeking    nullification of the transfer to them of the deceased’s property Bungoma Township/228. That suit was yet to   be heard and determined by the time Muchemi, J.  delivered   the impugned judgment on 13th July 2011 in  which she  determined and declared that:

“a)   That the deceased left behind   two assets for distribution namely  Bungoma township/228     and East Bukusu/South     Kanduyi/489;

b)       That plot No. 489 was illegally disposed of by the Plaintiff while plot No.228 was fraudulently and    unlawfully disposed of by the Defendant;

c)       That in the interests of justice the   two plots cannot be taken back to form part of the estate of the deceased and be distributed in the pending succession cause;

d)    That saves for the proceeds of sale for plot No. 228, there are no other assets for distribution to the heirs of the deceased’s estate;

e)      That the Plaintiff as a beneficiary  should benefit from the sale  proceeds of plot No. 228 or alternatively be compensated for the loss of her beneficial share taking into consideration the   inflation rate or interests on her  share since 31/6/1986;

f)     That the Defendant instituted the   succession cause for his own  benefit and with the intention of  fraudulently denying the other  heirs their rightful inheritance;

g)    That due to the fraudulent act of    the    Defendant, he is hereby  condemned to pay costs of this     suit.”

As already mentioned, the appellant is aggrieved by that decision hence the present appeal.

The appeal and submissions by counsel

Based on the memorandum of appeal, the appellant’s  specific complaints against impugned judgment are that:

“(a) The learned trial judge erred in   law and fact when she held that Land Parcel No. Bungoma    Township/228 cannot be recovered to form part of the  estate of the deceased for  distribution to bona fide beneficiaries.

(b) The learned trial judge erred in   law and fact when she made a  finding that prejudiced and/or disposed of the appellant’s suit  against the 3rd parties, without    the same being heard and  determined on merit.”

The appellant has accordingly urged us to set aside the   judgment of the High Court to that extent and order     that property Bungoma Township/228 is recoverable      to form part of the estate of the deceased for   distribution to bona fide beneficiaries of the estate of   the deceased and that the same is “recoverable from the   3rd parties, upon the plaintiff successfully prosecuting her    case against them.”

At the hearing of the appeal before us learned counsel for the appellant Mr. Ocharo Kebira submitted that  having correctly found that the property Bungoma Township/228 was fraudulently transferred, the    learned judge erred in holding that the property could       not be traced so as to form part of the deceased’s estate; that if the property was transferred in breach of   trust by the administrator of the estate of the   deceased or if the purchaser was privy to the fraud by  the administrator then, and in those circumstances the    property is traceable. Counsel further submitted that   the observations by the learned judge to the effect that she believed the buyers took possession of the  properties immediately upon purchase and that the  buyers may have developed the properties extensively   over the years considering the transactions relating to  the properties took place in 1983 and 1986   respectively were not based on any evidence and amounted to surmise; that the findings by the judge   prejudiced and compromised Bungoma High Court  Civil Suit No. 96 of 1999 that is still pending   determination.

Counsel urged us to allow the appeal and to declare that there is an estate of the deceased remaining and   capable of being distributed after property Bungoma     Township/228 is traced up to the hands of the third   parties and the same should be restored to the estate.

Opposing the appeal, Mr. Elvis Majani, learned counsel for the respondent, submitted that the plea that we   should direct that Bungoma High Court Civil Suit No.  96 of 1999 to proceed is not part of the prayers by the    appellant in this appeal; that there are innocent    purchasers for value who should not be affected and against whom there was no evidence of fraud; that the   appellant’s remedy lies in damages under section 24 of Registration of Titles Act and the High Court duly    provided the appellant with relief by ordering payment  of compensation for the loss of her beneficial share   thereby satisfying her claim.

In his brief reply Mr. Kebira urged that the appellant  did not seek damages and maintained that the  impugned decision is prejudicial to the pending  proceedings in Bungoma High Court Civil Suit No. 96 of 1999.

Determination

We have considered the appeal and the submissions by   counsel. The issue that arises for our determination is     whether the learned judge of the High Court erred in   declining to grant the order that had been sought by    the appellant for the tracing of the property.

In a recent decision in the case of Musa NyaribariGekone and others vs. Peter Miyienda andAnother, Civil Appeal No. 2 of 2014, this Court   reaffirmed that estate property transferred by an administrator may in   certain circumstances be traced. We cited, with approval a decision of the High Court  in Meru in Adrian Nyamu Kiugu vs ElizabethKarimi Kiugu  and Anor [2014] eKLRwhere the   court stated:

“Whereas the above section states that a transfer by person to whom representation has been granted shall be valid notwithstanding any subsequent revocation or variation of the grant either before or after the commencement of this Act, I am of the considered view that such transaction can only be relied upon where the legal representative is entitled to grant of representation but not where one is not and where one has obtained the grant fraudulently.  The purchaser in this cause came from the neighborhood of the objector and it is not possible that he did not know of the objector herein.  I therefore find and hold the sale to be invalid. “

In Jecinta Wanja Kamau vs. Rosemary WanjiruWanyoike and Another [2013] eKLRthis Court    sitting at Nyeri stated that it would be illegal for an    administrator to purport to sell and transfer estate land before confirmation of grant. In Jane GachokiGathecha vs. Priscilla Nyawira Gitungu andanother [2008] eKLR where a  purchaser claimed  that he was not aware of, and was not a party to, the   fraudulent dealings with the title in issue and was     therefore not only protected under section 93 (1) of   the Law of Succession Act (Cap 60) but also section    143   of the Registered Land Act, this Court stated  this:

”We think, with respect, that there is a fallacy in invoking and applying the provisions of section 93(1) of the Law of Succession Act and the superior court fell into error in reliance of it.  The section would only be applicable where, firstly, there is a “transfer of any interest in immoveable or moveable property”.Kabitau had no interest in plot 321 or any part thereof and therefore he could not transfer any.  A thief acquires no right or interest which is transferable in stolen property. The transaction would be void ab initioand the property is traceable.”

Based on those authorities, there are circumstances when estate property    transferred by an administrator may be   traced.

In the present case, however, it would be necessary to grant all persons who may be affected by a determination  regarding the question whether the properties should be traced, an opportunity to be heard. The lower court was  made aware that one of the properties, Bungoma  Township/228, was the subject of litigation in Bungoma High   Court Civil Suit No. 96 of 1999 initiated by the appellant as plaintiff against the respondent and George Njuguna Nganga         and Joseph Nganga as defendants, seeking to nullify the   transfer of that property to them.

To the extent that the determination by the learned judge    that properties left behind by the deceased were illegally, fraudulently and unlawfully disposed of by the appellant and     the respondent respectively had ramifications beyond the  two parties, it was necessary to accord the parties affected by that determination an opportunity to be heard before   reaching that conclusion and before determining whether    the properties could be traced.

We accordingly allow this appeal and hereby set aside the   judgment and decree of the High Court given on 13th July 2011 in its entirety and substitute therewith an order     dismissing the originating summons dated 3rd November,  2005.

We further direct that the application for confirmation of   grant pending before the High Court in Bungoma be fixed   for hearing and be heard together with Bungoma High Court Civil Suit No. 96 of 1999( before a judge other than  Muchemi, J. or Sergon, J.)  upon giving all parties affected or who may be affected by the decision of the court an   opportunity to be heard.

Each party shall bear its own costs of the originating  summons and of the appeal.

Dated and delivered at Eldoret this 29th day of October, 2015.

D. K. MARAGA

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JUDGE OF APPEAL

D. K. MUSINGA

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JUDGE OF APPEAL

S. GATEMBU KAIRU, FCIArb

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JUDGE OF APPEAL

I certify that this is a true

copy of the original.

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DEPUTY REGISTRAR