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Court of AppealDismissedCivil Appeal No 82 of 2018· [2019] KECA 79 (KLR)

Caroget Investment Limited v Aster Holdings Limited & 4 others [2019] KECA 79 (KLR)

Court of Appeal
6 December 2019
William OukoW. OukoFSF. SichaleSKS. ole Kantai
10,021 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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Kenya's Court of Appeal confirmed that a fraudulent land title passes no ownership and awarded a genuine owner Kshs 100 million for trespass.

What this practically means

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Executive summary

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This is a first appeal from the Environment and Land Court at Nairobi (Obaga, J), which had declared Aster Holdings Limited the lawful proprietor of LR No. 1870/V/6, voided the second grant, lease and allotment creating a parallel title in favour of Caroget Investment Limited through the City Council of Nairobi, ordered rectification of the register, vacant possession, a permanent injunction, and general damages of Kshs. 100,000,000 for trespass, with costs against Caroget and the Council. Caroget appealed on 14 grounds, principally that the limitation issue was never determined on its merits, that Aster's title and the alleged amalgamation were irregular, that this was a case of double allocation, and that the damages award had no legal basis. The Commissioner of Lands cross-appealed against liability and costs. The Court of Appeal conducted its own independent assessment, as a first appeal is by way of retrial. It held that the limitation issue had been determined on a preliminary objection by P.M. Mwilu, J in 2011 and could not be re-opened, applying the doctrine of res judicata. On the merits, it found an unbroken chain of private ownership since 1946, lawful purchase, amalgamation and lease extension by Aster, and a forged deed plan and fraudulent scheme behind Caroget's title. No title could pass from a party holding none - ex nihilo nihil fit - and this was land grabbing, not double allocation. The damages award fell within the trial judge's discretion under the Butt v Khan standard. Both the appeal and the cross-appeal were dismissed with costs of the appeal borne by Caroget and the 2nd to 5th respondents, and no costs on the cross-appeal. The judgment binds lower courts on the finality of successful preliminary objections, the requirement that a claimant rely on the strength of its own title, and the rebuttability of indefeasibility only by proved fraud.

Key legal issues

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01

Whether the issue of limitation, having been determined on a preliminary objection, could be re-litigated at trial

Holding

It could not; the determination was final and res judicata barred its revival. The learned Judge properly declined to determine it twice.

Reasoning

The limitation issue was raised in a notice of preliminary objection and directly determined by P.M. Mwilu, J on 26th September 2011. A preliminary objection is a point of law which, if successful, disposes of the suit; a successful interlocutory determination cannot be reopened at trial. The appellant neither appealed nor sought review of that ruling. The doctrine of res judicata, legislated in section 7 of the Civil Procedure Act and articulated in Henderson v Henderson, requires finality and prevents parties from re-opening issues properly belonging to earlier determinations.

p. 6
02

Whether the 1st respondent lawfully acquired title to the suit property and whether the appellant acquired a valid title

Holding

The 1st respondent's acquisition, amalgamation and lease extension were lawful and its title was conclusive and indefeasible; the appellant's second grant was a product of a fraudulent scheme and passed no title.

Reasoning

The two indentures of 1993 were on record and never challenged; the change of user, amalgamation approval and extension to 99 years were all documented. The Council had no interest to transfer, having admitted in writing it held no formal title, and the deed plan underlying the appellant's grant was forged. From the Council to the appellant, no title could pass because ex nihilo nihil fit - out of nothing comes nothing. This was not double allocation but outright land grabbing of already-alienated private land.

p. 8
03

Whether the award of Kshs. 100,000,000 general damages for trespass should be disturbed

Holding

The award was properly exercised judicial discretion and was not disturbed.

Reasoning

In an action for trespass, the plaintiff need only prove damage and loss; no mathematical formula governs assessment. The Judge considered the appellant's own valuation of Kshs. 1,800,000,000, the period of over 10 years the owner was kept off the property, the size and location of the land, and lost investment opportunities. Under the Butt v Khan standard, an appellate court will not disturb an award unless it is inordinately high or low as to represent an entirely erroneous estimate, which was not shown here.

p. 10
04

Whether the Commissioner of Lands should be exonerated from liability and costs on cross-appeal

Holding

The cross-appeal was dismissed; the Commissioner's role in issuing the allotment and registering the appellant could not be excused.

Reasoning

The judgment against the respondents, including the Commissioner, was specific. The genesis of the dispute was the Council's baseless claim of ownership, on whose strength the Commissioner issued the allotment letter and registered the appellant as proprietor of a parcel that, to his knowledge, ought not to have existed at that time. His belated revocation of the appellant's title could not absolve him of blame or liability for costs.

p. 10

Legal principles established

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  • A successful determination of a preliminary objection on limitation at the interlocutory stage is final and cannot be reopened at the trial by virtue of res judicata
  • In a contest over competing proprietary interests in one parcel, a claimant must succeed on the strength of his own title, not on the weakness of the opponent's title
  • Once land has been alienated, it is not available for allocation to a third party; a title fraudulently resurrected over already-alienated land cannot defeat the prior registered title
  • Indefeasibility of title under section 23 of the repealed Registration of Titles Act is rebuttable only by proof of fraud or misrepresentation to which the proprietor is a party; the burden of proving fraud lies on the allegor and the standard is more than a mere balance of probabilities
  • A first appeal is by way of retrial and the appellate court is not bound by the trial judge's findings of fact

Court orders

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  1. 1.Both the appeal and the cross-appeal are dismissed
  2. 2.Costs of the appeal to be borne by the appellant and the 2nd to the 5th respondents
  3. 3.No costs awarded on the cross-appeal

Authorities

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Legislation

  • Civil Procedure RulesOrder 21 rule 5
  • Public Authorities Limitation ActSection 3(1)
  • Government Proceedings ActSection 26
  • Government Lands Act (repealed)Section 136(1)
  • Limitation of Actions ActSection 4
  • Civil Procedure ActSection 7
  • Registration of Titles Act (repealed)Section 20
  • Registration of Titles Act (repealed)Section 22
  • Registration of Titles Act (repealed)Section 23(1)
  • Registration of Titles Act (repealed)Section 2 (definition of fraud)

Cases cited (14)

  • Uhuru Highway Development Limited v. Central Bank of Kenya & 2 Others
    [1996] eKLR
  • Loise M. Wambua v. Kenyatta University & another
    [2015] eKLR
  • Mukisa Biscuit Manufacturing Co. Ltd V. West End Distributors Ltd
    (1969) EA 696
  • Henderson V. Henderson
    [1843-67] All ER 378
  • Thomas Owen Ondiek & another V. National Bank of Kenya Limited & another
    (2015) eKLR
  • Okiya Omtatah Okoiti & another V. Attorney General & 6 others
    (2014) eKLR
  • Selle and Another V. Associated Motor Boat Co. Ltd & Others
    (1968) EA 123
  • Gitwany Investment Limited V. Tajmal Limited & 3 others
    (2006) eKLR
  • West End Butchery Limited V. Arthi Highway Developers Limited & 6 others
    (2015) eKLR
  • James Henry Mundiar t/a Kabarak Development Services V. Tradewheel Kenya Ltd
    (1987) eKLR
  • Samuel Otieno Otieno v Municipal Council of Malindi & another
    [2015] eKLR
  • Wreck Motors Enterprises V. Commissioner of Lands & 3 others
    (1997) eKLR
  • Moya Drift Farm Ltd V. Theuri
    [1973] EA 114
  • Butt V. Khan
    [1981] KLR 349
On appeal from
Environment and Land Court at Nairobi
ELC No. 175 of 2015
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (Criminal/Civil appellate statute; judgment does not cite the specific provision)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (5)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Caroget Investment Limited v Aster Holdings Limited & 4 others [2019] KECA 79 (KLR)", Case Analysis (2019). Civil Appeal No 82 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/79/eng@2019-12-06

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.