Stantech Motors Limited v Syokimau Farm Limited & 4 others [2024] KEELC 3263 (KLR) | Land Title Fraud | Esheria

Stantech Motors Limited v Syokimau Farm Limited & 4 others [2024] KEELC 3263 (KLR)

Full Case Text

Stantech Motors Limited v Syokimau Farm Limited & 4 others (Environment & Land Case E005 of 2022) [2024] KEELC 3263 (KLR) (3 April 2024) (Judgment)

Neutral citation: [2024] KEELC 3263 (KLR)

Republic of Kenya

In the Environment and Land Court at Machakos

Environment & Land Case E005 of 2022

A Nyukuri, J

April 3, 2024

Between

Stantech Motors Limited

Plaintiff

and

Syokimau Farm Limited

1st Defendant

Paul Masila Kimeu

2nd Defendant

Benedict Mackenzie Mutuku

3rd Defendant

Samuel Nderitu

4th Defendant

Chief Land Registrar

5th Defendant

Judgment

Introduction 1. By a plaint dated 26th January 2022, the plaintiff sought against the defendants, the following orders;a.A permanent injunction restraining the 1st, 2nd, 3rd and 4th defendants together with their servants and agents jointly and severally from trespassing, entering, constructing or interfering in whatsoever manner with the property known as Grant No. 46936. and Land Reference No. 12715/616 Syokimau in Machakos County.b.A declaration that the 3rd title I.R. No. 224390 Land Reference No. 12715/ 616 is null and void.c.An order compelling the 5th defendant to cancel the certificate of title I.R No. 224390 Land Reference No. 12715/616. d.General and exemplary damages for loss of use of the property and trespass.e.Costs of this suit with interest.

2. The plaintiff averred that since the year 2008, the plaintiff was the registered owner of all that property known as Land Reference Number 12715/ 616, (suit property) having purchased the same from the original owner one Peter Nzuki Ndeti. It stated that the suit property was transferred to the plaintiff on 2nd April 2009 and that the same is still registered in the plaintiff's name. It further stated that it had come to the knowledge of the plaintiff that the 1st defendant, through the 2nd defendant, had fraudulently secured a certificate of title for the suit property on 14th January 2020. It also stated that the 2nd and 3rd defendants represent themselves as administrator and former director of the 1st defendant respectively, and claimed that the first defendant was wound up voluntarily, yet it can own a title. It stated the particulars of the 1st, 2nd, 3rd and 4th defendants’ fraud as securing a certificate of title in the name of a wound up company; colluding with the officials at the lands registry to secure a fraudulent certificate of title; and representing themselves as acting on behalf of a wound- up company.

3. It further stated that its directors visited the suit property upon being informed that there were strangers who had trespassed on the suit property and began constructing a perimeter wall thereon. That when they went to the suit property they found the 4th defendant who represented himself as the contractor of the 3rd defendant and gave them title in the name of the 3rd defendant. That it reported the matter to the police and the Deputy County Commissioner Athi River, whereof the defendants were ordered to stop the construction, but they declined.

4. The suit was opposed. The 1st to 4th defendants filed a joint statement of defence dated 10th February 2022. They denied the plaintiffs claim and stated that the suit property is registered in the name of the 3rd defendant, who purchased the same from one Peter Ndetei in terms of shares, as the latter was a shareholder of Syokimau Farm Limited having been issued with shares numbered 1081-1090 in respect of share certificate No. 109. They stated that Peter Ndetei had been allocated plot beacon number 268 and issued a letter of allotment dated 11th April 1982 in respect of share certificate number 109 dated 3rd November 1980. That at the time of purchase by the 3rd defendant, the suit property did not have title and was only known as plot beacon No. 268 and what was transferred to the 3rd defendant was the shares. That it was upon purchase that Peter Ndetei handed over the original share certificate, original letter of allotment, and original subscription receipts for the processing of the title to the 3rd defendant. They maintained that there is a difference between Peter Ndetei and Peter Nzuki Ndeti, as the latter has never been a shareholder of Syokimau Farm Limited and he could not process title in respect of the suit property. They further alleged that when Syokimau Farm Limited was wound up in 2013, the 2nd defendant was mandated to be the administrator thereof and that he is the only one authorised to transact on behalf of the 1st defendant until the latter’s dissolution.

5. They maintained that the 1st defendant’s winding up was still ongoing and that the 2nd defendant’s mandate was to ensure that members and bona fide purchasers had been facilitated to process their titles. Further that the title is first processed in the name of Syokimau Farm Limited and thereafter transferred to the bona fide member or purchaser and that, that is why the suit property was processed in the name of Syokimau Farm Limited and transferred to the 3rd defendant. They denied the plaintiff’s allegation of being in actual possession of the suit property and insisted that the same was occupied by the 3rd defendant.

6. The 5th defendant neither entered appearance nor filed defence. The suit proceeded by way of viva voce evidence. The plaintiff presented three witnesses while the 1st to 4th defendants presented two witnesses.

Plaintiffs Evidence 7. PW1 was Patrick Mweti Kailikia, a shareholder and director of the plaintiff. He adopted the averments contained in his witness statement dated 3rd March 2022 as his evidence in chief. His testimony was that the plaintiff was incorporated in 1997 and on 16th May 2008, it entered into a land sale agreement with one Peter Nzuki Ndeti, the registered owner thereof in respect of the suit property at a consideration of Kshs. 30,000,000/= (Thirty Million). He stated that at the time of purchase, the registered owner Mr. Peter Nzuki Ndeti had charged the suit property with African Banking Corporation Limited, and that, that charge was discharged and transfer done in his favour before a subsequent charge in favour of Savings and Loans Kenya Limited for a loan of Kshs. 18,000,000/= (Eighteen Million) was registered in respect of a loan granted to the plaintiff.

8. He further stated that they were in the process of subdividing the suit property into three portions. He alleged that on 23rd January 2022 he was called by the plaintiff’s caretaker one Elizabeth Mutuku Kathae who told him that some people were constructing on the suit property. That when he went to the suit property he found the 4th defendant who alleged that he had been contracted by the 3rd defendant to construct a perimeter wall on the suit property. That the 4th defendant gave him a copy of title registered in the name of the 1st defendant on 14th January 2020 and transferred to one Benedict Mackenzie Mutuku, the 3rd defendant on 15th December 2021 at a consideration of Kshs. 2,000,000/= (Two Million).

9. He stated that he noted that the title had the same L.R number as that of the plaintiff but with a different I.R number, being I.R. number 224390, while the plaintiffs I.R number is 46936. He stated that this prompted him to report to Mlolongo police station vide OB No. 59/23/1/22 and thereafter filed this case. That they learned from their advocate that another similar case involving other parties had been filed against the 1st and 4th defendants vide ELC No. E044 of 2021, where the two defendants had constructed on the property of the plaintiff in that matter on the basis of a similar title.

10. The witness maintained that as the 1st defendant was wound up in 2013, then it does not exist and could not have been issued with a title in 2020. He insisted that the acquisition of title by the defendants was fraudulent and done in cahoots as the value given is Kshs. 2,000,000/= (Two Million) when the property was valued at over Kshs. 300,000,000/= (Three hundred Million). He stated that the 3rd defendant failed to produce a transfer executed in his favor or evidence of payment of stamp duty. That the Plaintiff had exhibited ownership of the suit property by documents produced, including payment of rates, correspondence with the office of Inspector General, DCI, ODPP, Business Registration Bureau and Lands Office.

11. PW 1 produced the following 30 documents in support of their case;1. Copy of plaintiff’s incorporation certificate.2. Copy of company resolution dated 24th January 2022. 3.i.Copy of Title Deed for L.R. No. 12715/616. ii.Copy of letter dated 9th April 2008 from A. M. Mbindyo & Co. Advocates forwarding copies of Identity Card of Peter Nzuki Ndeti to A. F. Gross & Co. Advocates.iii.Copy of letter dated 20th May 2008 from A. F. Gross & Co. Advocates forwarding copy of Identity Card for Peter Nzuki Ndeti for due diligence and copy letter of allotment from Syokimau Farm Ltd.iv.Copy of letter from Director of National Registration dated 26th May 2008 confirming Identity Card Number belongs to Peter Nzuki Ndeti.4. Copy of Sale Agreement dated 16th May 2008 between plaintiff and Peter Nzuki Ndeti.5. Transfer dated 16th December 2008 of L.R. No. 12715/616 from Peter Nzuki Ndeti to plaintiff.6. Copy of letter dated 30th April 2008 from A. F. Gross & Co. Advocate to plaintiff asking for deposit of purchase price.7. Copy of letter dated 12th September 2008 from Saving & Loans to Louis Onguto & Co. Advocates confirming mortgage facility of Kshs. 18 Million to the plaintiff together with the letter of offer to the plaintiff dated 30th August 2008. 8.Copy of letter dated 19th September 2008 from J. Louis Onguto Advocate to the plaintiff forwarding charge, guarantee and indemnity documents for execution.9. Copy of professional undertaking from J. Louis Onguto Advocate to Kipkenda Lilan & Koech Advocates dated 23rd September 2008. 10. Copy of letter dated 24th September 2008 from J. Louis Onguto forwarding charge documents to Savings & Loans (K) Ltd.11. Copy of letter dated 4th November 2008 from A. F. Gross to J. Louis Onguto Advocate forwarding bankers cheque for stamp duty.12. Copies of invoices and payment receipt for Land Rates from Mavoko Sub County from the year 2017 to 2022. 13. Copies of clearance certificates from Mavoko Sub County for the years 2017 to 2022. 14. Copies of Deed Plans for sub division of the suit property into three sub titles L.R. Nos. 12715/13915, 12715/13916 and 12715/13917. 15. Copy of valuation report.16. Copy of letter from the plaintiff’s advocates to Official Receiver requesting for information and record of correspondence regarding Syokimau Farm Limited dated 8th February 2022. 17. Copy of letter dated 11th February 2022 from Official Receiver to plaintiff’s advocates and copies of correspondences requested:a.Copy of letter dated 6th October 2021 from Official Receiver to 2nd defendant warning him to stop acting as the Administrator of Syokimau Farm Limited.b.Copy of letter dated 15th November 2011 from Official Receiver to ODPP requesting for investigations of the conduct of the 2nd defendant.c.Copy of letter dated 29th November 2021 from ODPP to Inspector General directing the office to undertake comprehensive and thorough investigations.d.Copy of letter from DCI addressed to Official Receiver requesting for documents to assist investigations dated 7th December 2021. e.Copy of letter dated 21st December 2021 from Official Receiver to DCI forwarding documents requested.f.Copy of letter from Ahmednasir Abdullah Advocates LLP dated 31st January 2022 addressed to Business Registration Services requesting confirmation of authenticity of a letter dated 6th September 2021 from Business Registration Service authorizing the 2nd defendant to transact business of the 1st defendant.g.Copy of letter dated 31st January 2021 from Business Registration Services addressed to Ahmednasir Advocates Abdullahi LLP denying the contents of the letter in question.h.Copy of letter from Malonza & Co. Advocates dated 19th August 2013 addressed to Registrar of Companies confirming the voluntarily winding up of Syokimau Farm Limited and requesting the company’s name to be removed from the Register of Companies.18. Copy of letter from plaintiff’s advocates dated 22nd February 2022 addressed to Chief Land Registrar attaching a letter dated 12th March 2021 addressed to the Director Survey by C. K. Ngetich requesting for authenticity and response thereto dated 23rd February 2022. 19. Copy of witness statement of Registrar of Lands Benson L. Longolenyang.

12. On cross examination, he stated that before purchasing the suit property, the plaintiff did due diligence. Further that the vendor had an allotment letter and title. He also averred that the share certificate was unnecessary because the vendor had title. He stated that there was the plaintiff’s construction on the suit property for the caretaker. In re-examination, he stated that the title had been charged to ABC Bank and it was in the vendor’s name. He further stated that their title was with the KCB Bank and that they are still the registered proprietors of the suit property since 2009 and that if the 1st defendant was wound up in 2013, it cannot be holding title thereafter.

13. PW2 was Raymond Korir, the Assistant Official Receiver in the office of the Official Receiver. He stated that the plaintiff’s lawyer wrote to them requesting information concerning the 1st defendant and that they responded to the request vide their letter of 11th February 2022. He stated that his office was aware that the 1st defendant was wound up pursuant to a special resolution of the members of the company, although the gazette notice does not show that a liquidator was appointed. He stated that the office of the Official Receiver deals with insolvency matters and also license insolvency practitioners. That his office is not aware of any appointment of a liquidator regarding the 1st defendant.

14. It was his testimony that when he found out that the 2nd defendant was referring to himself as administrator of the 1st defendant, he cautioned him to cease and desist from acting as such and asked him to surrender to the Official Receiver all documents on the 1st defendant’s affairs. He took the position that the 2nd defendant was not a licensed insolvency practitioner and therefore he cannot act as a liquidator or administrator of a company as he has no capacity to do so.

15. This witness disowned the letter dated 6th September 2021 which the defendants relied on as authorizing the 2nd defendant to act for the 1st defendant. He referred to the letter from his office of 31st January 2022 as a confirmation that the letter dated 6th September 2021 does not emanate from the Registrar of Companies. He stated that as per their office, there is no Official Receiver for the 1st defendant.

16. In cross examination, he stated that a company may be wound up voluntarily by its members or by creditors or through court. That in the circumstances of this case, the members did not appoint a liquidator and therefore the official receiver becomes the default liquidator by operation of the law. His position was that the 2nd defendant had violated section 5 of the Insolvency Act and that he had been reported to the DCI for further investigation. He also stated that the 2nd defendant is not qualified to act as official receiver and that even if he were to be appointed by the members, he could not act as such under the law. He stated that the gazette notice of 26th July 2013, on record, showed voluntary winding up of the 1st defendant. Further that before 2015, the official receiver had no control of who could be appointed as liquidator as there were no qualifications. He stated that he could not confirm if the 1st defendant had been dissolved and that it is the liquidator who can transact on behalf of the company including transfer of shares. He averred that he was not aware that the appointment of the 2nd defendant was never challenged.

17. In re-examination he stated that a liquidator can only hold office for a year and thereafter he must seek authority of the court to continue and must inform the office of the official receiver and that failure to get authority, the liquidation is transitioned into the provisions of the Insolvency Act. That the 2nd defendant having not had authority from court cannot purport to act as liquidator.

18. PW3 was Charles Kipkirui Ngetich, the Deputy Chief Land Registrar in the Ministry of Lands, Public Works, Housing and Urban Development. He stated that he has worked in the ministry of lands for 20 years and he is a qualified advocate of the High Court of Kenya. He stated that he attended court pursuant to court summons to provide evidence in respect of the suit property. According to the witness, the parcel I.R. No. 46936 L.R. No. 12715/616 was originally registered in the name of Syokimau Farm Limited, but is currently registered in the name of Stantech Motors Limited and also currently charged to Savings and Loan Kenya Limited for a sum of Kshs. 18,000,000/= (Eighteen Million). That the title is currently under the process of subdivision at Survey of Kenya and currently awaiting geospatial data capturing.

19. He stated that the title by the defendants relating to I.R. No. 224390 was a forgery as that title is not in the official Government lands system. He stated that although the title by the defendants was purported to have been signed by him, that was not true as he denied signing the same. He maintained that his office was in possession of the transfer instrument transferring the suit property from Peter Nzuki Ndeti to the plaintiff, which is dated 16th December 2008 and registered on 2nd April 2009. He stated that it is not possible that the suit property would be valued at Kshs. 2,000,000/= (Two Million) in 2021 and it should be over Kshs. 40,000,000/= (Forty Million).

20. He denied authoring the letter dated 12th March 2021 at page 75 of the plaintiff’s documents and alleged that the same was a forgery and that the signature on that letter and the one on the letter dated 23rd February 2022 at page 76, thereof are different. That his response at page 76 clarified that issue and stated that he was did not author the former. He stated that he does not know the 2nd and 3rd defendants. He insisted that the defendants’ documents were forgeries.

21. In cross examination, he stated that the 1st defendant was a private company. He stated further that he registers interest in land and does not process titles. He maintained that Syokimau Farm Limited was no longer in existence. He stated that each title has a history. He stated that the suit property was originally registered in 1989 and underwent subdivisions. That the Plaintiff title was genuine having been signed by a former Commissioner of Lands. He stated that the officer who is alleged to have written the letter dated 9th February 2022, at page 58 of the defendants’ documents, was a junior officer with no authority to write such letter and has no authority to write on behalf of the Chief Land Registrar. That marked the close of the plaintiff’s case.

1st, 2nd, 3rd and 4th Defendant’s evidence 22. DW1 was Benedict Mackenzie Mutuku who adopted his witness statement dated 10th February 2022 as his evidence in chief. It was his testimony that he is the registered proprietor of parcel L.R. Number 12715/616 which he purchased from Peter Ndetei on 12th November 1989. He further stated that Peter Ndetei was a shareholder and member of the 1st defendant with shares numbered 1081 to 1090 with a share certificate number 109. He stated that Peter Ndetei was allocated plot beacon number 268 and issued with allotment letter dated 11th April 1982 and that his share certificate number 109 was issued to him on 3rd November 1980. According to this witness, when he purchased the suit property the title deed had not been processed and that what was transferred to him were the vendor’s shares which were to enable him to process his title deed. He stated that at the time of the purchase Peter Ndetei handed him original share certificates, original letter of allotment and original share subscription receipts which he is in possession of. He stated that he has always been in possession of the suit property and that he authorized the 4th defendant to construct a perimeter wall thereon.

23. This witness alleged that the plaintiff’s title was obtained by fraud which included colluding with the ministry of lands officials. He further alleged that the plaintiff’s report to the DCI had been investigated and a letter dated 25th January 2022 had been written by DCI Mlolongo. He stated that the Ministry of Lands in their letter dated 9th February 2022 confirmed that the suit property belongs to him. Further that the 2nd defendant is the administrator of the 1st defendant and his role was to ensure that members and bona fide purchasers had their title deeds processed. He produced 12 exhibits being;1. Sale agreement dated 12th November 1989. 2.Copy of Title Deed.3. Copy of list of shareholders.4. Company resolution dated 26th June 2013. 5.Copy of letter of allotment.6. Copy of share certificate.7. Copy of share subscription receipts.8. Copy of transfer of shares.9. Letter dated 25th January 2022. 10. Copy of letter dated 9th February 2022. 11. Winding up Gazette Notice dated 8th August 2013. 12. Lands rates clearance certificate.

24. On cross examination he stated that his highest education level was form four which he attained in 1978. That in 1996 he worked as a board member of Syokimau Farm Limited up to 2013 and that the suit property is his as he bought it from a member of the 1st defendant in 1989. He stated that he did not know that after the sale he was to get the share certificate. He stated that his agreement showed that the land was registered as L.R 12715/616 instead of plot No. 268. He stated that when he purchased the land it had not been registered and was only known as plot No. 268 which was the beacon number and that he blamed the advocate who wrote the agreement for indicating the L.R. number of the land.

25. He stated that the title was transferred to him in 2021 by the 1st defendant and it is the 2nd defendant who transferred the land to him. He stated that he had no transfer instrument. He stated that from the list of the 1st defendant’s members, Peter Ndetei is shown as member no. 109. He stated that he did not have Peter Ndetei’s identity card. He stated that the 1st defendant was wound up in June 2013 as per the minutes filed by the defendants. He stated that the meeting held for winding up the 1st defendant was held on 26th June 2013. He stated that the gazette notice referred to minutes of 26th July 2013 but that that did not mean that their minutes of 26th June 2013 were forged. He confirmed that in the letter dated 19th August 2014 by Malonza & Co. Advocates, the Registrar was being asked to remove the 1st defendant from the company register but he is not aware if that was done. In re-examination he stated that the minutes herein were investigated and found to be valid.

26. He stated that survey at the 1st defendant was done in 1984 and that is when shareholders were given letters of allotment.

27. PW2 was Paul Masila Kimeu. He adopted his witness statement dated 10th February 2022 as his testimony in chief. It was his testimony that he was appointed caretaker/administrator of Syokimau Farm Limited in a resolution of the company dated 26th June 2014 where 665 shareholders were present and that he continues in that office pursuant to provisions of section 734(2) and (3) of the Insolvency Act. He stated that he was appointed to appear in court proceedings and process titles to shareholders and members among other responsibilities. He stated that the suit property originally belonged to the 1st defendant which was originally L.R No. 7149/11/R.

28. He also alleged that the 1st defendant’s shares were acquired by 31st December 1984 and shareholders were required to have share certificate, letter of allotment and share subscription receipts and a title would not be issued without those documents. That Peter Ndetei was a member and shareholder of the 1st defendant having shares numbered 1081 to 1090 with share certificate 109 dated 3rd November 1980 and that he was allotted plot beacon No. 268 with allotment letter dated 11th April 1982. He stated that Peter Ndetei and Peter Nzuki Ndeti were different persons.

29. In cross examination, he stated that he joined the 1st defendant in 1967 and was caretaker of the 1st defendant’s property up to 1984, when he was elected a board member up to 1996. He stated that he kept the 1st defendant’s records and that he was the office manager up to 1998. He stated that from 2013 up to now he was still winding up the 1st defendant company. He stated that he did not have the list of members who attended the meeting of 26th June 2013. He stated that he did not have the original register of the 1st defendant’s members and had no evidence to show Ndetei paid for the shares stated. That he was given the mandate to clarify in court who owns parcels originally owned by the 1st defendant.

30. He stated that his highest level of education was form two. He confirmed that he did not comply with the conditions set by the official receiver in his letter dated 6th October 2021 at page 64 of the plaintiff’s documents which cautioned him to cease and desist from acting as administrator and surrender to Official Receiver assets and documents of 1st defendant. He stated that he does not agree with the position taken by the Official Receiver in that letter. He further stated that the 1st defendant has no directors. He confirmed that he had no transfer forms between the 1st and 3rd defendants regarding the suit property although it was him who signed the transfer.

31. He stated that he knows parcel Nos. L.R 12715/307 and 308 as it belongs to the 1st defendant. He stated that one Mr. Mwakio wrote a letter denying a letter attributed to him. He stated that his documents showed that MacKenzie Mutuku appears to have paid rates for the suit property in 2017, although at that time he was not the registered proprietor. He stated that he cannot tell the value of the land but declared it at Kshs. 2,000,000/= (Two Million). He stated that the 4th defendant was hired by the 3rd defendant to put up the perimeter wall. He stated that he could not remember which day of the week it was when they had the meeting of 26th June 2013. He stated that he had more than 20 cases before this court which relate to fake documents. That marked the close of the defence case.

32. Parties were granted the liberty to file written submissions in support of their respective cases and on record are the plaintiff’s submissions filed on 6th October 2023.

Plaintiff’s submissions 33. Counsel for the plaintiff submitted that there were nine issues for the court’s determination, namely;1. Whether there was a valid AGM on the 26th June 2013 or the meeting was held on 27th July 2013. 2.Whether the completion documents mentioned in the sale agreement of the 3rd defendant can confer title.3. Whether the administrator is a legal administrator in law.4. Whether the administrator can execute documents on behalf of a wound-up company.5. Whether the plaintiff’s certificate of title is a genuine certificate of title.6. Whether the 3rd defendant’s certificate of title is a genuine certificate of title.7. Whether Syokimau Farm Limited was capable of registering a title in its name when it is already wound up.8. Whether the orders sought by the plaintiff can be granted.9. Who should bear the costs of the suit.

34. Counsel submitted that the 2nd defendant failed to avail the register of members who attended the meeting of 26th June 2013 yet the gazette notice referred to an AGM held on 26th July 2013 as confirmed by the letter of the 1st defendant’s advocates, Malonza & Company Advocates dated 19th August 2013, forwarding the resolution for winding up to the Registrar of companies. Counsel argued that the 2nd defendant’s evidence that he was appointed administrator of the 1st defendant in a meeting of 26th June 2013 was false.

35. Counsel referred to the evidence of PW2 that even if DW2 were to be appointed as the 1st defendant’s liquidator, he cannot be such liquidator due to provisions of the Insolvency Act because a liquidator must be an advocate of the High Court of Kenya or holder of CPA and that the 2nd defendant was in violation of section 5 of the Act.

36. Counsel submitted that the fact that the 1st defendant was wound up was not in dispute and that once a company is wound up, it ceases to exist and that the certificate of title could not be registered in such company’s name. Further that the 2nd defendant had no capacity to transfer the suit property. Counsel argued that it was clear that the 3rd defendant’s title was procured by fraud.

37. It was further contended for the plaintiff that the plaintiff had exhibited the entire process of how it acquired the suit property by providing the agreement, identity card of the vendor, search, and the charge to ABC Bank. Counsel argued that failure by the 4th defendant to testify in court clearly indicate his unlawful acts.

38. Reliance was placed on the cases of Alice Chemutai Too v. Nickson Kipkirui Korir & 2 Others [2015] eKLR and Dina Management Limited v. County Government of Mombasa [2023] eKLR for the proposition that registration is proof of indefeasibility unless the title was unlawfully obtained.

39. On trespass, counsel relied on the case of Park Towers Limited v. John Mithamo Njika & 7 Others [2014] eKLR to submit that where trespass is proved, a party need not prove specific loss.

Analysis and determination 40. The court has carefully considered the pleadings, evidence and submissions filed. The issues arising in this matter are as follows;a.Whether Syokimau Farm Limited is in existence as a juridical person.b.Whether Paul Masila Kimeu is the lawful administrator of Syokimau Farm Limited, the 1st defendantc.Who between the plaintiff and the 3rd defendant hold a valid title to the suit property.

41. The Black’s Law Dictionary 11th Edition, defines “winding up” as “the process of settling accounts and liquidating assets in anticipation of a partnership’s or a corporation’s dissolution”. It also defines “members voluntary winding up” as “the liquidation procedure begun after a company’s owners vote to dissolve the business”.

42. It is not disputed that on 26th July 2013, Syokimau Farm Limited, the 1st defendant herein was voluntarily wound up by members as per the Gazette Notice No. 11485. In the said Gazette Notice, no one was appointed as liquidator or administrator of the wound up company. It is also not disputed that the law firm of Malonza & Company Advocates forwarded to the Registrar of Companies, the newspaper advertisement; and gazette notice of the winding up of the 1st defendant and sought that the 1st defendant be removed from the register of companies. The face of that letter shows that it was received in the office of the Registrar of Companies on 6th September 2013. To date the 2nd, 3rd and 4th defendants have never produced any search (CR12) in respect of the 1st defendant to suggest that for whatever reasons, the 1st defendant is still in existence. It is my view that Syokimau Farm Limited having been voluntarily wound up on 26th July 2013, with no appointment of receiver, liquidator, administrator, or similar official, it became a dead and buried company. I say so because, there is no record of assets or accounts of that company which was presented in evidence before this court, as all that the 2nd Defendant stated was that his role was to appear in court and ensure members get their title deeds.

43. In this case as the 1st defendant was wound up voluntarily on 26th July 2013, leaving no liquidator or similar official, or assets and accounts, it ceased being in existence from that date. Therefore a non-existent company is not capable of being registered as holder of any property in its name. I therefore find and hold that Syokimau Farm Limited does not exist and is therefore not capable of owning property in its name or in any other way.

44. On whether Paul Masila Kimeu is the administrator of Syokimau Farm Limited, it is noted that Syokimau Farm Limited was wound up in 2013 before the enactment of the Insolvency Act. Section 6 of the Insolvency Act provides for qualifications of an insolvency practitioner as follows;1. Subject to subsection (2) and (3), a person is qualified to act as an insolvency practitioner only if the person—a.satisfies the requirements of the insolvency regulations with respect to education, practical training and experience;b.is a member of a professional body recognized under section 7; andc.satisfies the requirements (if any) of the rules governing the body.2. A natural person is disqualified from being or acting as an insolvency practitioner if the person—a.has been adjudged bankrupt, or the person's estate has been sequestrated and, in either case, the person has not been discharged;b.is subject to a disqualification order made under the law relating to companies; orc.is unable to perform the functions of an insolvency practitioner because of physical or mental infirmity.3. A body corporate is not eligible to be an insolvency practitioner, but this subsection does not extend to an employee of a body corporate.4. A natural person who, during the two years immediately preceding the commencement of this Part, was carrying on any of the activities referred to in section 4(1) or (2) is, unless disqualified under subsection (2), taken to be qualified to be and to act as an insolvency practitioner on and after that commencement, but ceases to be so qualified unless the person has, within the twelve months after that commencement, complied with the requirements of subsection (1).

45. Therefore, to act as an insolvency practitioner, a person must meet the qualifications in section 6 of the Insolvency Act. The 2nd defendant having testified that his highest academic qualification being high school upto form two, it is clear that he is not qualified to act as administrator of the 1st defendant or any other company in Kenya, that has been wound up.

46. As Syokimau Farm Limited was wound up in 2013 before the enactment of the Insolvency Act, the transitional provisions in Regulation 141 of the Insolvency Regulations, 2016 apply in the circumstances of this case and the same provides as follows;1. A practitioner carrying on any assignment under the repealed companies Act after the one year after the commencement of the Insolvency Act shall declare to the official receiver any such pending assignment and whether he wishes to carry on under the repealed companies Act until the assignment is completed.2. If an insolvency practitioner wishes to carry on any existing assignments under the repealed companies act after the one year, the party concerned shall make an application to the High Court, requesting for an extension of time and the court on hearing such an application may extend the time as the court may consider just and expedient.

47. If the 2nd defendant was an administrator as alleged then he would still be required to exhibit a declaration to the Official Receiver of his intention to continue as such or an order of extension of time from the High Court. These documents were not produced by the 2nd defendant, and he confirmed not having them.

48. The only document relied upon by the 2nd defendant to support his claim of being an administrator of the 1st defendant are the purported minutes of the 1st defendant dated 26th June 2013. I have considered those minutes together with the evidence of the 1st to 4th defendants. While the record shows by evidence of the 1st to 4th defendants that Gazette Notice dated 8th August 2013, in Gazette Notice No. 11485, the Board of Directors of Syokimau Farm Limited gazetted the voluntary winding up of that company which was pursuant to a Special Resolution passed on 26th July 2013 by shareholders, clearly, that Gazette Notice, is materially inconsistent with the evidence of the said defendants and the minutes of 26th June 2013. To begin with, the Gazette Notice shows that the resolution to wind up the 1st defendant was in a special general meeting held on 26th July 2013 and not in an Annual General Meeting held on 26th June 2013 as maintained by the 1st to 4th defendants’ witnesses. In addition, the resolution for winding up, referred to in the Gazette Notice did not appoint any person as liquidator or administrator or similar official of the 1st defendant, contrary to the claim made by the 2nd defendant that he was appointed the 1st defendant’s administrator in the Annual General Meeting of 26th June 2013.

49. The defendant’s witness PW2 who confirmed being in custody of the 1st defendant’s records confirmed that he had no record of the list of members who attended the alleged meeting of 26th June 2013, and there is no official gazette notice by the 1st defendant’s board of directors referring to the meeting of 26th June 2013. I have considered the minutes dated 26th June 2013, which are titled “Minutes of the Annual General Meeting of Syokimau Farm Limited held on the farm office on Saturday, 26th June, 2013 at 10 a.m.” While the minutes state that 26th June 2013, was a Saturday, that is not correct and as pointed out by the plaintiff’s counsel, that day was a Wednesday. Besides, the letter dated 6th September 2021 purportedly written by the Registrar of Companies regarding the 2nd defendant being authorized to act as administrator of the 1st defendant was referred to as a forgery and the Official Receiver who was PW3 denied the claim that the same originated from the Registrar’s office. In view of the above, I find and hold that the evidence that there was a meeting of the 1st defendant’s members on 26th June 2013 is not credible and the minutes dated 26th June 2013 are a forgery of Paul Masila Kimeu and Makenzie Mutuku the 2nd and 3rd defendants herein. In view of the fact that the Gazette Notice dated 26th July 2013, only wound up Syokimau Farm Limited and did not appoint anyone as administrator, liquidator or similar official, I also find and hold that there is no evidence that Paul Masila Kimeu, the 2nd defendant was appointed as administrator of the 1st defendant. Consequently, I find and hold that Paul Masila Kimeu has never been and is not the administrator of Syokimau Farm Limited, the 1st defendant and therefore all transactions made by him in such capacity are null and void with no legal consequence, and he is personally liable for the same.

50. I now turn to the last issue on who between the plaintiff and the 3rd defendant has a valid title of the suit property. It is not in dispute that both the plaintiff and 3rd defendant have presented titles of L.R No. 12715/616, although the plaintiff’s I.R. Number is 46936 while the 3rd defendant’s I.R number is 224390.

51. Article 40 (1) and (6) of the Constitution provides legal protection for ownership and acquisition of property only to the extend of property lawfully acquired.

52. Section 26 of the Land Registration Act provides as follows;1. The certificate of title issued by the Registrar upon registration, or to a purchaser of land upon a transfer or transmission by the proprietor shall be taken by all courts as prima facie evidence that the person named as proprietor of the land is the absolute and indefeasible owner, subject to the encumbrances, easements, restrictions and conditions contained or endorsed in the certificate, and the title of that proprietor shall not be subject to challenge, except—a.on the ground of fraud or misrepresentation to which the person is proved to be a party; orb.where the certificate of title has been acquired illegally, unprocedurally or through a corrupt scheme.2. A certified copy of any registered instrument, signed by the Registrar and sealed with the Seal of the Registrar, shall be received in evidence in the same manner as the original.

53. It therefore follows that a certificate of title or lease is confirmation of indefeasibility of title unless it is proved that such title was obtained by fraud, misrepresentation, improper procedure or through a corrupt scheme.

54. In the case of Dina Management Limited v. County Government of Mombasa & 5 others [2023] eKLR, the Supreme Court of Kenya held that the legal protection given to a registered proprietor for absolute and indefeasible title is only present where the acquisition was legal, proper and regular, because a court cannot sanction or approve an irregularly or illegally acquired title.

55. Similarly, in the case of Alice Wambui Gichuru (Suing as the administrator of the estate of Samuel Gichuru George (Deceased) v Gathoni Chege as the personal representative of the estate of Geoffrey Chege (Deceased) & 2 Others [2021] eKLR, the court cited with approval the decision in the case of Munyu Maina v Hiram Gathiha Maina [2013] eKLR, where the court held as follows;We state that when a registered proprietor’s root of title is under challenge, it is not sufficient to dangle the instrument of title as proof of ownership. It is this instrument of title that is in challenge and the registered proprietor must go beyond the instrument and prove the legality of how he acquired the title and show that the acquisition was legal, formal, and free from any encumbrance including any and all interests which need not be noted on the register.

56. In the instant suit, the plaintiff gave evidence on how it acquired the suit property. It stated that in 2008, at a consideration of Kshs. 30,000,000/= (Thirty million), it purchased the suit property from one Peter Nzuki Ndeti, who was then the registered proprietor thereof. That at the time of purchase, the vendor was still indebted to ABC Bank and that the charge was discharged, the suit property registered in the plaintiff’s name and subsequently charged to Savings and Loan Kenya Limited at the behest of the plaintiff for a sum of Kshs. 18,000,000/= (Eighteen million). PW1 testified that since purchase the plaintiff has been in possession until the defendants’ trespass in 2021. The plaintiff produced a copy of title, showing that the plaintiff was registered on 2nd April 2009, which date a charge in favour of Savings and Loan Kenya Limited was also registered. It also produced a search certificate, a sale agreement dated 16th May 2008 between itself and Peter Nzuki Ndeti, confirmation from the registrar of persons that Serial Number 209xxxx61 and Identity Card Number 29xxx79 was issued in the name of Peter Nzuki Ndeti. He further produced a letter of allotment showing that Peter Ndeti was owner of plot Number 268, a transfer executed by the plaintiff and Peter Nzuki Ndeti; rates payment receipts and clearance certificates from 2017 to 2022; documents regarding the charge on the suit property and valuation report dated 30th June 2015, among other documents.

57. On the other hand, the 1st to 4th defendants’ version is that the suit property was allocated to Peter Ndetei in 1980 and later sold to the 3rd defendant on 12th November 1989. That at the time of sale, there was no title for the suit property but it was known as plot beacon No 268. That the 2nd defendant was appointed as administrator of the 1st defendant vide minutes of the 1st defendant members’ meeting held on 26th June 2013, with the mandate to clarify and testify in court on who owns parcels which formerly belonged to the 1st defendant. That in his capacity as administrator of the 1st defendant, he processed the title in the name of the 1st defendant and subsequently transferred it to the 3rd defendant. The defendants insisted that the plaintiff’s title was a forgery and that Peter Nzuki Ndeti and Peter Ndetei were different people.

58. The plaintiff challenged documents presented by the defendants starting from the minutes of 26th June 2013, the sale agreement, register of shareholders, allotment letters, share certificate and other documents.

59. I have considered the competing evidence presented on both sides. My assessment of the same is that the plaintiff’s evidence and account on how it acquired the suit property is quite straight forward, as his title shows that the former owner one Peter Nzuki Ndeti whose identification documents were verified by the registrar of persons, lawfully owned the suit property before selling and transferring the same to the plaintiff. The search shows the I.R No. as 46936 and L.R No. 12715/616 and the transfer documents show the transferor’s and transferee’s details and execution. The plaintiff has also shown to have been paying rates for the suit property, with receipts from 2017 to date. In view of the above evidence, it is clear that the plaintiff has given a clear account demonstrating that the root of its title is clean and hence deserving protection of the law.

60. Reverting to the documents forming the basis of the 3rd defendant’s title, the first document relied upon is the sale agreement. The vendor in the sale agreement is referred to as Peter Ndetei. This person’s identity document is not disclosed, as no identity card number is stated anywhere in the sale agreement or in the letter of allotment or in any other documents produced by the defendants. This is despite the fact that the plaintiff’s letter of allotment referred to Peter Ndeti citing his identity card number and as having plot No. 268 and share certificate No. 109. The defendants’ alleged vendor/shareholder is referred to as Peter Ndetei, while the plaintiff’s is Peter Ndeti. The defendant’s shareholder has no identification documents, and this court notes the fact that the difference is their names that is Ndetei vis a vis Ndeti and the fact that Ndetei has no identification document. As no effort was made by the 1st to 4th defendants to avail any identification document for their Peter Ndetei, it is clear that they only corrupted the lawful owner Peter Ndeti’s name and forged all the other documents to make it look like there is a Peter Ndetei. It is strange that this person’s identity card number is not disclosed in any of the defendant’s documents. The 2nd defendant who is in custody of the 1st defendant’s records was unable to avail the original register of members of the 1st defendant, or obtain any copy of an identification document for this Peter Ndetei. My conclusions from the above evidence is that there was no shareholder in Syokimau Farm Limited called Peter Ndetei and that this name is fictitious and a creation of the fertile imagination of the 2nd to 4th Defendants who corrupted the name of Peter Ndeti, the real shareholder of share certificate No. 109 and plot No. 268, which is the suit property.

61. The evidence of the 3rd defendant was that when he purchased the suit property it was not titled but was only known as plot beacon Number 268. However, he produced a sale agreement showing that the land he purchased in 1989 was registered as L.R No. 12715/616. Therefore this material inconsistency in his evidence shows that his evidence has no credibility. He produced a title showing that the suit property was on 14th January 2020 registered in the name of Syokimau Farm Limited and on 15th December 2021 transferred to him. Therefore if the suit property was first registered in the 1st defendant’s name in 2020, and was said to be unregistered in 1989, what was the source of the L.R. Number stated in the sale agreement of 1989? The 3rd defendant’s allegation that, that was a mistake of his advocate, only shows that everything the defendants did in regard to L.R No. 12715/616, was a badly thought out, poorly planned and terribly executed forgery. The Chief Land Registrar who testified in this matter confirmed that there is no record of the 3rd defendant’s title in their system. All the letters the defendants produced as having emanated from the ministry of lands were denied by the Chief Land Registrar who stated that they were all forged. As noted earlier in this judgment, the letters from the Business Registration Service were also confirmed as being forgeries. The 1st Defendant being non existent could not properly hold property in its name and be able to transfer it to the 3rd defendant; and the 2nd Defendant had no capacity to transact on behalf of the 1st defendant in purporting to transfer the suit property to the 3rd defendant. In addition, the 2nd and 3rd defendants had no transfer instrument to show the conveyancing process between themselves. And to show that the defendants’ actions were dubious, unscrupulous and predicated on forgery, the 1st to 4th defendants have no search certificate to support their certificate of title to show that the same emanated from the Ministry of Lands; confirming the evidence of the Chief Land Registrar that the 3rd defendant’s title does not exist in their system and or records. The totality of the evidence on record shows that the 1st to 4th defendants’ evidence is premised on forgeries and demonstrates a criminal enterprise hellbent on creating fake documents and purporting them to have emanated from government offices, for the sole purpose of grabbing property. For the above reasons I find and hold that the 3rd defendant’s title I.R. No. 224390 L.R No. 12715/616 is the work of forgery by the 2nd, 3rd and 4th defendants herein and the same is null and void.

62. The plaintiff herein having clearly shown that it acquired the suit property lawfully by way of purchase from the lawful owner thereof, and subsequently obtaining transfer and registration in its name, it is my finding that the plaintiff has demonstrated the chain of transactions showing that the root of its title is clean and deserving legal protection.

63. On whether the plaintiff is entitled to the orders sought, the plaint shows that it sought for a permanent injunction against the defendants; declaratory order that title IR No. 224390 LR 12715/616 is null and void and cancellation of the same; and general and exemplary damages for trespass. The plaintiff having shown that it lawfully acquired the suit property, is entitled to enjoy the rights and interests conferred on registration as provided for in sections 24 and 25 of the Land Registration Act and therefore the defendants’ trespass thereon is unjustified and must be stopped and punished. Therefore, the plaintiff deserves orders of permanent injunction in the terms sought.

64. It is trite that trespass is actionable in law per se, notwithstanding failure to prove actual loss (See Sebastian Otieno Omari & 4 Others v. Derek Otieno Oluoch [2018] eKLR). In the instant case, the plaintiff has shown by a valuation report that its property measures 2. 037 hectares and is valued in 2015 at Kshs. 300,000,000/= (Three hundred million). The 2nd, 3rd and 4th defendants have trespassed thereon by constructing a perimeter wall. Considering the value of the suit property, and the fact that the trespass began in January 2022, I award general damages for trespass against the 2nd, 3rd and 4th defendants jointly and severally in the sum of Kshs. 30,000,000/= (Thirty Million).

65. The plaintiff sought exemplary damages. Exemplary damages are granted to deter wrongful behavior where the actions of the defendants are oppressive, unnecessary, unconstitutional and malicious. In the case of James Orengo v. Attorney General, Nairobi HCC No. 207 of 2002, the court held as follows;The case law is clear that damages are designed not only to compensate the plaintiff but also to deter wrongful behavior. In Rooks v Bernard (supra) the court elaborated on the use and importance of exemplary damages: Ít serves a valuable purpose in restraining the arbitrary and outrageous use of executive power: The court emphasizes the use of exemplary damages in cases such as this one:There are certain categories of cases in which an award of exemplary damages can serve a useful purpose in vindicating the strength of the law and thus affording practical justification for admitting into the civil law a principle which ought logically to belong to the criminal law. …The first category is oppressive, arbitrary or unconstitutional action by the servant of government… where one man is powerful it is inevitable that he will try to use his power to gain his ends.”

66. Taking into account the callousness of the 2nd, 3rd and 4th defendants and the forgeries done in this case and the fact that despite recommendations by the office of the Official Receiver and that of the Director of Public Prosecutions for action to be taken against them within the criminal justice system, and noting that as at the time the evidence in this case was closed, there was no indication that any action had been taken against the three persons, I take the view that this is a case where an award of exemplary damages is justified. Because, where like in this case, persons forge official documents without a care and without being confronted with the criminal justice system, for reasons this court cannot fathom, such persons should be penalized to pay exemplary damages as a deterrent measure. For that reason and in view of all the circumstances of this case, I order the 2nd, 3rd and 4th defendants to pay the plaintiff exemplary damages in the sum of Kshs. 30,000,000/= (Thirty million).

67. As the 3rd defendant’s title is merely a forgery by the 2nd, 3rd and 4th defendants and not a reflection of the records held by the 5th defendant, the prayer that the 5th defendant be compelled to cancel the same, cannot be granted as the same was not issued by the 5th defendant. I therefore declare the title held by the 3rd defendant regarding the suit property as null and void.

68. In the premises, I find and hold that the plaintiff has proved its case on the required standard against the 2nd, 3rd and 4th defendants as sought in the plaint. The suit against Syokimau Farm Limited the 1st defendant is hereby dismissed with no order as to costs, as that entity does not exist, being a dead and buried company having been wound up in 2013 without appointment of liquidator or administrator or similar official, and there being no residual assets or accounts pending. As the forged title held by the 3rd defendant did not emanate from the office of the 5th defendant, the suit against the 5th defendant is dismissed with no order as to costs. I therefore enter judgment for the plaintiff against the 2nd, 3rd and 4th defendants jointly and severally in the following terms;a.A permanent injunction be and is hereby granted restraining the 2nd, 3rd and 4th defendants together with their servants and agents jointly and severally from trespassing, entering, constructing or interfering in whatsoever manner with the property known as Grant No. 46936 and Land Reference No. 12715/616 Syokimau in Machakos County.b.A declaration be and is hereby made that the 3rd defendant’s Title I.R. No. 224390 Land Reference No. 12715/ 616 is null and void.c.General damages for loss of use of the property and trespass are hereby awarded to the plaintiff against the 2nd, 3rd and 4th defendants jointly and severally in the sum of Kshs. 30,000,000/= (Thirty million).d.Exemplary damages are awarded to the plaintiff against the 2nd, 3rd and 4th defendants jointly and severally in the sum of Kshs. 30,000,000/= (Thirty million).e.The plaintiff is awarded costs of this suit plus interest thereon, to be borne by the 2nd, 3rd and 4th defendants.

69. It is so ordered.

DATED, SIGNED AND DELIVERED AT MACHAKOS VIRTUALLY THIS 3RDDAY OF APRIL, 2024 THROUGH MICROSOFT TEAMS VIDEO CONFERENCING PLATFORMA. NYUKURIJUDGEIn the Presence of;Mr. Mutinda for plaintiffMr. Mulelu for defendantsCourt Assistant – Josephine