Embakasi Properties Ltd & another v Commissioner of Lands & another (Civil Appeal 276 of 2008 & 6 of 2009 (Consolidated)) [2019] KECA 1001 (KLR)

Under section 77 of the repealed Government Lands Act, the Commissioner was required to serve notice on the lessee and commence an action in the High Court, which alone could declare the lease forfeited, before re-entering the land. This procedure was consonant with constitutional protection of property. The procedure was not followed: Embakasi Properties was given no notice and the land was never forfeited. The Commissioner's subsequent excision and grant to Safe Cargo therefore had no legal foundation.

The trial judge did not specify how the alleged fraud was committed or how Safe Cargo participated. Applying Ratilal Gordhanbhai Patel v Lalji Makanji, allegations of fraud must be strictly proved to a standard higher than a mere balance of probabilities. In the absence of proved fraud, the grant to Safe Cargo was issued in error and irregularly, not fraudulently. This finding removed the principal basis on which the trial court dismissed the Third Party Notice.

First, Safe Cargo substantially contributed to its own loss by failing to conduct any due diligence or official search before acquiring the property, relying on a flawed private survey. Section 81 of the Land Registration Act, 2012 denies indemnity to persons who substantially contributed to the damage by fraud or negligence. Secondly, compensation claims under section 146 of the Government Lands Act should have been referred to arbitration, as where a statute provides a special procedure it must be strictly followed. Thirdly, the allocation was a nullity and Safe Cargo had received substantial rent, roughly Kshs.132,000,000 over 22 years, from godowns on the land.

Section 2 of the Civil Procedure Act defines mesne profits as profits the person in wrongful possession actually received or might with ordinary diligence have received, excluding profits due to improvements made by the person in wrongful possession. Embakasi Properties admitted it had no immediate use for the land and stayed away for lack of funds and because its director resided in Mombasa. A landlord-tenant relationship need not be proved, but the figures claimed were rents from Safe Cargo's own developments and so excluded.

Safe Cargo privately engaged M/s Geometre Surveyors whose misleading survey underlay the double allocation. Although survey plans must be deposited with the Director of Surveys and the Director authenticates them, authentication or acceptance for registration cannot assign liability to the Commissioner. The Director may cancel authentication of an inaccurate plan. The licensed surveyor nonetheless bears a duty to survey with due diligence, competence and professional skill.

Following Macfoy v United Africa Ltd, everything founded on the null grant collapses. The trial Judge's order that the Commissioner bear the cost of removing the structures was not faulted, but the Court added that Safe Cargo, having substantially contributed to the error by its negligence, should share responsibility. Removal was ordered within 90 days unless the parties mutually agree otherwise, guided by section 71 of the Government Lands Act.