Ruheni v Ruheni [2023] KEELC 18444 (KLR) | Fraudulent Registration | Esheria

Ruheni v Ruheni [2023] KEELC 18444 (KLR)

Full Case Text

Ruheni v Ruheni (Environment and Land Appeal E008 of 2021) [2023] KEELC 18444 (KLR) (29 June 2023) (Judgment)

Neutral citation: [2023] KEELC 18444 (KLR)

Republic of Kenya

In the Environment and Land Court at Nyahururu

Environment and Land Appeal E008 of 2021

YM Angima, J

June 29, 2023

Between

Jane Wairimu Ruheni

Appellant

and

Stephen Munuhe Ruheni

Respondent

Judgment

A. Introduction 1. This is an appeal against the judgment and decree of Hon. S.N. Mwangi (SRM) dated March 24, 2021 in Nyahururu CM ELC No. 385 of 2018 – Stephen Munuhe Ruheni -vs- Jane Wairimu Ruheni. By the said judgment, the trial court allowed the respondent’s suit with costs and dismissed the Appellant’s counterclaim with costs.

B. Background 2. The record shows that vide a plaint dated 22. 06. 2017 the respondent sued the appellant before the trial court seeking the following reliefs:a.A declaration that the plaintiff is the sole and absolute proprietor of L.R. Rumuruti Township Block 2/172 and for cancellation of the defendants as its joint proprietor.b.The defendant be ordered to deliver vacant possession of L.R. Township Block 2/172, and in default an order for forceful eviction be issued against her.c.A permanent injunction be issued restraining the defendant, members of her family, staff, employees, servants, agents and all persons claiming through or under her from entering, possessing, occupying, using and from in any manner interfering with the plaintiff’s exclusive use and possession of L.R. Rumuruti Township Block 2/172. d.Costs of this suit.e.Any other or further relief that the court may deem fit and just to grant.

3. Therespondent pleaded that in the years 1986 the parties herein jointly bought Plot No. 3671/12/VIII – Rumuruti (Plot 3671) at a consideration of Kshs.40,000/=. It was further pleaded that in view of the Appellant’s contribution to other attendant expenses it was agreed vide an agreement made in 1995 that she would take 2/3 of the plot whereas the responded would get 1/3.

4. The respondent asserted that Plot 3671 was consequently subdivided into LR. Rumuruti Township Block 2/171 (Parcel 171) comprising 2/3 of the Plot and LR No. Rumuruti Township Block 2/172 (Parcel 172) comprising of 1/3 of the plot. It was asserted that whereas the Appellant was registered as the sole owner of Parcel 171 she also fraudulently caused herself to be registered as a co-owner of Parcel 172 without the knowledge or consent of the respondent. The respondent enumerated at least 4 particulars of fraud in the plaint against the appellant.

5. Therespondent further pleaded that after obtaining such a fraudulent registration, the appellant entered Parcel 172 and started constructing thereon without his consent as a consequence whereof he had suffered inconvenience and loss. It was contended that despite issuance of a demand and notice of intention to sue the appellant had failed to remedy the situation hence the suit.

6. The appellant filed a defence and counterclaim dated October 13, 2017 in response to the action. By her defence, she denied liability for the respondent’s claim. She stated that although she purchased Plot 3671 on her own in order to own it absolutely she was persuaded by her father to incorporate therespondent who was to reimburse her 50% of the purchase price. It was asserted that the respondent had failed or neglected to make the reimbursement in consequence whereof the parties agreed to share the plot in the ratio of 2/3 to 1/3 as between the appellant and the respondent subject to the Respondent paying the sum of Kshs. 828,292/= as at March 23, 2017being his contribution towards rates, sub-division costs, lease renewal charges and other incidental costs. It was pleaded that therespondent had never paid the latter amount too.

7. The appellant denied having obtained co-ownership of Parcel 172 fraudulently and denied all the particulars of fraud pleaded against her in the plaint. The appellant further pleaded that she deliberately undertook construction on Parcel 172 because therespondent had failed to make reimbursement of the monies owed to her and as such the respondent was the author of his own misfortune.

8. By her counterclaim, theappellant reiterated the contents of her defence and pleaded that on 30. 06. 1998 she had lent the Respondent Kshs. 20,000/= to enable him expand his “soda business” but had failed to refund the same completely. It was pleaded that despite the parties’ agreement that the respondent was to shoulder 1/3 of all the expenses incurred towards acquisition and sub-division of the 3671 the respondent had failed to pay his share.

9. As a result, the appellant sought the following reliefs against the respondent in her counterclaim.a.A declaration that the plaintiff is the sole lessee over LR. Rumuruti Township Block 2/172 to the exclusion of the whole world and for an order that the defendant do deliver vacant possession of the same or he be forcefully evicted therefrom at own costs; he executes all relevant documents of transfer of the plot in favor of the plaintiff and in default the court’s Deputy Registrar to execute all documents Alternatively, the defendant do reimburse the plaintiff the total sum of Kshs. 1,340,942/= being sums aforesaid whereby the plaintiff shall be ready and willing to transfer the whole of LR. Rumuruti Township Block 2/172 to the defendant at own cost.b.A permanent injunction do issue restraining the defendant by himself or members of his family, staff, employees, servants, agents, relatives, tenants and all persons claiming through or under him from entering, possessing, occupying, using and/or in any other manner interfering with the defendant’s exclusive use, possession and enjoyment of LR. Rumuruti Township Block 2/172. c.Costs of the suit and counter claim.d.Any other relief that the court may deem fit and just to grant.

10. The respondent filed a reply to defence and defence to counterclaim dated October 31, 2017. By his reply to defence, the Respondent joined issue with the appellant on her defence and reiterated the contents of his plaint. He denied the allegations of default in making his contributions towards the purchase price for Plot 3671 or the other disbursements pleaded in the defence.

11. In his defence to counterclaim, the respondent denied the appellant’s counterclaimin its entirety. He denied the alleged default and pleaded that that appellant’s registration as co-owner of Parcel 172 was fraudulent. It was pleaded that the sharing of Plot 3671 in the ratio of 2/3 to 1/3 was mutually agreed upon based on the respective contributions of the parties hence the Appellant was entitled only to Parcel 171 whereas the respondent was entitled to Parcel 172 absolutely. The respondent, therefore, sought dismissal of the appellant’s counterclaim with costs.

C. Trial Court’s Decision 12. Upon a full trial of the suit and counterclaim the trial court allowed the respondent’s suit and consequently dismissed the appellant’s counterclaim. The trial court found and held that the appellant’s registration as a co-owner of Parcel 172 was fraudulent hence the same was liable to be cancelled. The trial court was also not satisfied that the appellant had adequately proved her claim for the special damages of Kshs. 1,340,942/= sought and the claim was consequently dismissed. The respondent was awarded costs of both the suit and counterclaim.

D. Grounds of appeal 13. Being aggrieved by the said judgment and decree the appellant filed a memorandum of appeal dated April 20, 2021raising the following 8 grounds of appeal:a.That the learned magistrate erred in law and in fact by failing to take into consideration the admission by respondent that at the time of purchase of the suit land he did not have his share of the purchase price.b.That the learned magistrate erred in law and in fact by failing to consider that the sum of KES.61,000/- admittedly paid by the Respondent was payment towards his share for various services and the plaintiff was liable to pay the defendant the amounts set out in the Counterclaim.c.That the learned magistrate erred in law and in fact by failing to appreciate that the respondent herein failed to produce any evidence of payment for the purchase price of the suit land.d.That the learned magistrate erred in law and in fact by failing to appreciate and recognize that the Certificate of Lease for Rumuruti Township Block 2/172 was processed in both in the names of the appellant and respondent because monies owing from the respondent to the appellant had not been paid.e.That the learned Magistrate erred in law and in fact in ordering the appellant to deliver vacant possession of the suit land without taking into consideration the defendant's ownership rights and the lawful developments put up therein.f.That the learned Magistrate erred in law and in fact in finding that the Plaintiff had proved his case whilst there was no evidence to prove the Plaintiffs case as required by the Law.g.That the learned Magistrate erred in law and in fact in cancelling the Defendant’s Title for Township Block 2/172 whilst no evidence of fraud was produced as required by the Law.h.That the teamed Magistrate erred in law and failing to find that the defendant had proved her to the required standards under the Law and it should have been allowed as prayed.

14. As a result, the appellant sought the following reliefs in the appeal:a.That the appeal be allowed.b.That the judgment of the lower court be set aside and be substituted with an order dismissing the plaintiff’s suit with costs to the defendant and allowing the defendant’s counterclaim with costs.c.That alternatively the court do make such orders as it deems just to grant.

E. Directions on Submissions 15. When the appeal was listed for directions, it was directed that the appeal shall be canvassed through written submissions. The parties were consequently granted timelines within which to file and exchange their respective submissions. The record shows that the appellant’s submissions were filed on March 22, 2023whereas therespondent’s submissions were filed on January 27, 2023.

F. Issues for Determination 16. Although the appellant raised eight (8) grounds of appeal in her memorandum of appeal, the court is of the opinion that those grounds may be summarized into the following 3 main issues:a.Whether the trial court erred in law and fact in allowing the respondent’s claim.b.Whether the trial court erred in law and fact in dismissing theappellant’s counterclaim.c.Who shall bear costs of the appeal and the suit before the trial court.

G. Applicable Legal Principles 17. This court as a first appellate court has a duty to analyze, reconsider and re-evaluate the entire evidence on record so as to satisfy itself as to the correctness or otherwise of the decision of the trial court. The principles which guide a first appellate court were summarized in the case of Selle &another v Associated Motor Boat Co. Ltd &others[1968] EA 123 at P126 as follows:“…Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in that respect. In particular, this court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression on the demeanor of a witness is inconsistent with the evidence in the case generally.”

18. Similarly, in the case of Peters v Sunday Post Ltd[1958] EA 424 Sir Kenneth O’ Connor, P. rendered the applicable principles as follows:“...it is strong thing for an appellate court to differ from the finding, on a question of fact, of the judge who tried the case, and who had the advantage of seeing and hearing the witnesses. An appellate court has, indeed, jurisdiction to review the evidence in order to determine whether the conclusion originally reached upon the evidence should stand. But this is a jurisdiction which should be exercised with caution. It is not enough that the appellate court might itself have come to a different conclusion...”

19. In the same case, Sir Kenneth O’Connor quoted Viscount Simon, LC in Watt v Thomas [1947] AC 424 at page 429 – 430 as follows:“My Lords, before entering upon an examination of the testimony at the trial, I desire to make some observations as to the circumstances in which an appellate court may be justified in taking a different view on facts from that of a trial judge. For convenience, I use English terms, but the same principles apply to appeals in Scotland. Apart from the class of cases in which the powers of the Court of Appeal are limited to deciding a question of law (for example, on a case stated or on an appeal under the County Courts Acts) an appellate court has, of court, jurisdiction to review the record of the evidence in order to determine whether the conclusion originally reached upon that evidence should stand; but this jurisdiction has to be exercised with caution. If there is no evidence to support a particular conclusion (and this is really a question of law) the appellate court will not hesitate so to decide. But if the evidence as a whole can reasonably be regarded as justifying the conclusion arrived at the trial and especially if that conclusion has been arrived at on conflicting testimony by a Tribunal which saw and heard the witnesses, the appellate court will bear in mind that it has not enjoyed this opportunity and that the view of the trial judge as to where credibility lies is entitled to great weight. This is not to say that the judge of first instance can be treated as infallible in determining which side is telling the truth or is refraining from exaggeration. Like other Tribunals, he may go wrong on a question of fact, but it is a cogent circumstance that a judge of first instance, when estimating the value of verbal testimony, has the advantage (which is denied to courts of appeal) of having the witnesses before him and observing the manner in which their evidence is given.”

20. In the case of Kapsiran Clan v Kasagur Clan [2018] eKLR Obwayo J summarized the applicable principles as follows:a.First, on first appeal, the court is under a duty to reconsider and re-evaluate the evidence on record and draw its own conclusions;b.In reconsidering and re-evaluating the evidence, the first appellate court must bear in mind and give due allowance to the fact that the trial court had the advantage of seeing and hearing the witnesses testify before her; andc.It is not open to the first appellate court to review the findings of a trial court simply because it would have reached different results if it were hearing the matter for the first time.

H. Analysis and Determinationa.Whether the trial court erred in law and fact in allowing the respondent’s claim

21. The court has considered the material and submissions on record on this issue. The appellant faulted the trial court for finding for therespondent because he did not demonstrate payment of his share of the purchase price for Plot 3671, the legal fees, survey fee, land rates and the fee for processing the lease. It must be appreciated that when the vendor of Plot 3671 transferred the same, he transferred it jointly to the parties as co-owners under the Registration of Titles Act (cap.281) which was then in force for a consideration of Kshs. 20,000/=. The vendor was not concerned with how the purchase price was contributed or how the plot was to be ultimately apportioned between the purchasers.

22. The court is of the opinion that in the absence of a demonstrated trust, once the transfer instrument of 1988 was registered under the Registration of Titles Act, the respondent acquired a bundle of rights which could only be altered or extinguished in the manner prescribed by law, or by consent of the parties, or by virtue of a decree or order of a court of competent jurisdiction. The appellant could not unilaterally alter or diminish the respondent’s property rights over Plot 3671. It must be in recognition of that legal position that the parties entered into the agreement dated May 27, 1995 for the apportionment of acreage.

23. The court is further of the opinion that the respondent’s proprietary rights could not be lightly interfered with an account of his alleged failure to make reimbursement of his contribution of the purchase price of Kshs. 20,000/= or the alleged failure to refund the loan of Kshs. 20,000/= he was given for expansion of his “soda business”. The issue of reimbursement or refund of the amounts owed to the appellant could only form the subject of an action for recovery of the same as a debt as was pleaded in the appellant’s counter-claim.

24. The court has considered the material and submissions on record on the issue of fraud which was pleaded by the Respondent against the appellant. The trial court duly considered this issue and came to the conclusion that the appellant had fraudulently caused herself to be registered as a co-proprietor of Parcel 172 in the absence of an agreement to that effect between the parties. The trial court found as a fact that neither the agreement of apportionment dated May 27, 1995 nor the partition agreement dated May 24, 2004authorized the Appellant to be a co-owner of Parcel 172. The appellant too conceded at the trial that those two agreements did not permit her to become a co-owner of Parcel 172 and that there was no further agreement between the parties on such co-ownership.

25. The trial court held as follows on the issue of fraud pleaded against the appellant:“This court therefore finds that the defendant failed to establish that she was so entitled to be a joint owner of the suit land and that she had her name registered as a co-owner or joint owner of the suit land by improper means thus causing fraud in the said registration and she did all that so that she could be refunded the alleged money that she spent. This therefore entitles her name to be cancelled as a proprietor of the suit land assection 26(1) of the Land Registration Act of 2012. ”

26. The court finds that no fault in the finding and holding of the trial court that the appellant had obtained registration as a co-owner of Parcel 172 through fraudulent means. The court’s own evaluation of the evidence on record leaves no doubt that the fraud alleged on the part of theappellant was quite deliberate and intentional. The appellant was apprehensive that the respondent may never be in a position to reimburse her whatever money he may have owed her hence she wanted to retain a proprietary interest in Parcel 172. The court is thus satisfied that on the totality of the evidence on record the trial court was right in holding that the respondent had proved his claim against the appellant to the required standard.b.Whether the trial court erred in law and fact in dismissing theappellant’s counterclaim

27. The court has considered the material and submissions on record on this issue. Theappellant faulted the trial court for finding and holding that she had failed to prove her counterclaim to the required standard. It was submitted that the trial court erred in failing to recognize theappellant’s proprietary interest or lien over Parcel 172 over her unpaid expenses. It was further submitted that the trial court erred in law and fact in failing to take into account that the Appellant had already constructed 3 houses on Parcel 172 and that by ordering delivery of possession thereof, therespondent was thereby unjustly enriched.

28. As indicated before, theappellant had no lawful justification or excuse for causing herself to be registered as a co-owner of Parcel 172 on account of a debt owing by the respondent. If the appellant’s interest was to secure the payment of whatever amount she was owed by the respondent, it was upon her to take legal steps to create either a legal or equitable charge over Parcel 172. The evidence on record shows that she did not take that option. In the premises, sneaking in her name into the lease and certificate of lease as a co-owner was not a lawful option.

29. The court has anxiously considered the appellant’s submission on unjust enrichment. There is no doubt from the material on record that it was the respondent who constructed the 3 houses on Parcel 172 at her cost. She did that without any consultation with the respondent who was legally entitled to ownership of Parcel 172. During theappellant’s cross examination at the trial, she stated as follows:“I constructed structures in the year 2017 and he lives on the same Plot No. 172 but I never consulted Stephen as my co-owner. Stephen has constructed one kiosk on the front side of the road, and he has a house where he lives. On my part I have constructed 4 kiosks. He has 3 kiosks. From May 24, 2004up to March, 2017, no one used to construct in Plot No. 172 and I was the one who started the construction in the year 2017. I got into Plot No. 172 so that I could be refunded for my money. We never recorded down that I become a co-owner in Plot No. 172 but we used to talk. I solely own Plot No. 171 and all the constructions therein are mine.”

30. The court is not satisfied that the appellant was entitled to compensation for the structures which were constructed on Parcel 172 after fraudulently procuring her registration as a co-owner thereof. Theappellant’s actions were merely a perpetuation of her fraudulent activities in relation to Parcel 172. The material on record shows that when the Respondent moved to court in 2017 he obtained some interim orders to stop theappellant’s construction activities on Parcel 172. The record shows that theappellant defied the interim orders despite service and she was consequently convicted of contempt of court and fined Kshs. 100,000/= by Hon. Justice M.C. Oundo.

31. In view of the foregoing, the court is of the opinion that the trial court was right in not rewarding the appellant for her fraudulent conduct and in not rewarding her for structures constructed in flagrant contempt of a court order. The appellant’s structures were constructed at her own peril since there was no agreement with therespondent for the latter to compensate her for the structures at a later date.

32. The last aspect on the counterclaim was an alternative claim for reimbursement of Kshs. 1,340,942/= on account of various expenses allegedly incurred in procuring the lease for Parcel 172. It was pleaded that the said amount represented the Respondent’s 1/3 contribution towards rates, legal fees, lease renewal fees, survey fees, developments on Parcel 172 and other costs in relation to processing of title documents.

33. It is evident from the appellant’s counterclaim that the said amount was made up as follows:a.Reimbursement of initial consideration – Kshs. 12,006/=(b)Loan for soda business - Kshs. 20,000/=(c)Value of buildings and structures on Parcel 172 - Kshs. 400,650/=d.Lease processing and relatedexpenses - Kshs. 828,292/=Total - Kshs. 1,340,942/=

34. As indicated before, the value of buildings and structures constructed by the appellant on Parcel 172 is not recoverable. The court is of the opinion that the claim for the loan advanced to the respondent to expand his soda business is not within the jurisdiction of the court as set out inarticle 162(2) (b) of the Constitution of Kenya and section 13(1) of the Environment and Land Court Act.

35. The court is further of the opinion that the lump sum of Kshs. 828,292/= which was said to have been 1/3 of the expenses incurred in payment of rates, survey fee, renewal of lease and related expenses was not pleaded with particularity as required by law. The court is of the view that the Appellant was obligated to plead particulars of the claim by properly itemizing the various elements of the claim which made up the lump sum of Kshs. 828,292/= claimed.

36. The importance of pleading a claim for special damages with particularity was underscored by the High Court in the case of Ouma v Nairobi City Council [1976] eKLR whereby it was held as follows:“Thus for a Plaintiff to succeed on a claim for special damages he must plead it with sufficient particularity and must also prove it by evidence. As to the particularity necessary for pleading and the evidence in proof of special damage the court’s view is as laid down in the English leading case on pleading and proof of damage, Ratcliffe v Evans(1892) 2 QB 524 where Bowen L J said at pages 532, 533:“The character of the acts themselves which produce the damage, and the circumstances under which these acts are done, must regulate the degree of certainty and particularity with which the damage done ought to be stated and proved. As much certainty and particularity must be insisted on, both in pleading and proof of damage, as is reasonable, having regard to the circumstances and to the nature of the acts themselves by which the damage is done. To insist upon less would be to relax old and intelligible principles. To insist upon more would be the vainest pedantry.”

37. That leaves the appellant’s claim for reimbursement of 12,006. 20 being the respondent’s 50% contribution towards the purchase price for the original Parcel 3671. The material on record shows that the respondent gave contradictory evidence on this issue. At some point he claimed that he paid his share of Kshs. 20,000/= (and not Kshs. 10,006. 20) for the transaction but during cross-examination he claimed that he simply gave the money for the transaction to his father. The appellant, on the other hand, was categorical that she was the one who paid the entire purchase price and that the respondent had never reimbursed her one half of the purchase price plus initial rates payment in the sum of Kshs. 12,006. 20.

38. Although the trial court did not specifically address this claim for Kshs. 12,006. 20, it is doubtful from the material on record whether the respondent ever paid the same. The appellant clearly tendered evidence on how the claim arose and testified that the respondent had never paid the money. In those circumstances, it was upon the Respondent to prove the payment of the amount and to demonstrate when, where, how and to whom the reimbursement was made. The court takes the view that the aspect of payment was a matter peculiarly within the knowledge of the Respondent within the meaning of section 112 of the Evidence Act (cap. 80) hence the burden was upon him to prove such payment. The court is of the view that the Respondent clearly failed in discharging that duty.

39. It was submitted by the respondent that the appellant’s claim for reimbursement was statute-barred under the Limitations of Actions Act (cap. 22). It is noteworthy that in his defence to counterclaim the Respondent never pleaded that the Appellant’s claim for reimbursement was time-barred. The court is thus of the opinion that the respondent is deemed to have waived the defence of limitation and as such he is liable to reimburse the appellant the sum of Kshs. 12,006. 20 as claimed in the counterclaim.c.Who shall bear costs of the appeal and the suit before the trial court

40. Although costs of an action or proceeding are at the discretion of the court, the general rule is that costs shall follow the event in accordance with the proviso to section 27 of the Civil Procedure Act (cap 21). A successful party should ordinarily be awarded costs of an action unless the court, for good reason, directs otherwise. See Hussein Janmohamed & Sons v Twentsche Overseas Trading Co Ltd [1967] EA 287. Since the Appellant has partly succeeded and partly failed, the court is of the opinion that each party should bear his own costs especially in view of the fact that the parties are siblings. Accordingly, the court shall order that each party shall bear his own costs of the appeal and the suit before the trial court.

I. Conclusion and Disposal Order 41. The upshot of the foregoing is that the court finds merit in part of the appeal relating to the counterclaim as more particularly set out hereunder. However, the court finds no merit in the appeal relating to the Respondent’s claim before the trial court. Accordingly, the court makes the following orders for disposal of the appeal:(a)The appellant’s appeal against the judgment of the trial court on the respondent’s claim is hereby dismissed.(b)The trial court’s judgment dismissing the appellant’s counterclaim in its entirety is hereby varied by allowing the appellant’s claim for Kshs. 12,006. 20 only together with interest thereon at court rates from the date of the counterclaim until payment in full. The rest of the prayers in the counterclaim shall remain dismissed.(c)Each party shall bear his own costs of the appeal and of the proceedings before the trial court.

It is so decided.

JUDGMENT DATED AND SIGNED AT NYAHURURU AND DELIVERED VIA MICROSOFT TEAMS PLATFORM THIS 29TH DAY OF JUNE, 2023. In the presence of:Mr. Gaita for the AppellantMr. Nderitu Komu for the RespondentC/A - Carol..........................Y. M. ANGIMAJUDGE