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Court of AppealDismissedCivil Appeal No. E290 of 2023 (consolidated with Civil Appeal No. E328 of 2023)

Five Star Agencies Ltd & another v National Land Commission & 2 others (Civil Appeal E290 & 328 of 2023 (Consolidated)) [2024] KECA 439 (KLR)

Court of Appeal of Kenya
12 April 2024
14,342 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~57 min to read original · ~4 min brief

The bottom line

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You cannot seize money from a Kenyan State organ like the NLC; you must follow the Government Proceedings Act route and obtain a Certificate of Order first.

What this practically means

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Executive summary

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Two consolidated first appeals, by Five Star Agencies Limited (Civil Appeal No. E290 of 2023) and KENHA (Civil Appeal No. E328 of 2023), challenged a consolidated ELC ruling (Angote, J, 28th March 2023) that dismissed Five Star's garnishee application against the NLC, dismissed KENHA's applications seeking to set aside the garnishee order nisi and the 2014 compensation judgment, and allowed the NLC's application setting aside the garnishee order nisi. Five Star had obtained a judgment of Kshs.413,192,500 as just compensation for compulsorily acquired land forming part of the Nairobi Southern Bypass, and a mandamus order (Obaga, J, 2018) which the NLC ignored. It then instituted garnishee proceedings against funds in the NLC's special compensation account at NBK. The Court of Appeal framed three issues: whether garnishee proceedings lie against the NLC; whether KENHA was a necessary party; and whether KENHA had locus standi for its applications. The Court held that the NLC, as a State organ, is part of government, and that Order 29 rule 2(c) of the Civil Procedure Rules bars garnishee execution against the Government; the exclusive route is section 21 of the Government Proceedings Act culminating in mandamus. It further held that Five Star never obtained the mandatory Certificate of Order against the Government, a condition precedent to mandamus, so the earlier mandamus was improperly issued. KENHA's statutory role in acquisition being limited (notification, deposit of funds under section 111(1A), and inquiry participation), it was not a necessary party and lacked the necessary locus standi. Both appeals were dismissed, with each party bearing its own costs. The Court affirmed Five Star's constitutional right to prompt, full compensation but held the wrong enforcement procedure was adopted.

Key legal issues

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01

Whether garnishee proceedings lie against the NLC as a State organ

Holding

No. The NLC is a State organ and part of government; Order 23 garnishee proceedings do not apply, and the section 21 Government Proceedings Act procedure (certificate of order against the government plus mandamus) is the exclusive mode of execution.

Reasoning

The court read Order 23 rule 1 together with Order 29 Rule 2(c) of the Civil Procedure Rules, which bars attachment of debts orders against the Government. Section 21(4) of the Government Proceedings Act prohibits execution against the Government. The rationale, drawn from Kisya Investments Ltd, is parliamentary control over public expenditure. The NLC's governmental character was uncontested. Five Star's right to prompt compensation under Article 40(3)(b)(i) is affirmed, but the remedy lies through the statutory procedure, not garnishee.

p. 14
02

Validity of the earlier mandamus order of 13th December 2018

Holding

The mandamus order was issued without the condition precedent being met, as Five Star never obtained a Certificate of Order against the Government as required by section 21 of the Government Proceedings Act.

Reasoning

Before issuing mandamus compelling satisfaction of a decree against the Government, the court must satisfy itself that the section 21 procedure was followed: a certificate of order (and costs) against the Government issued after 21 days and served on the relevant entity, followed by a demand for payment. Five Star served only the decree, not the certificate. The trial court did not verify compliance with this condition precedent, so the mandamus ought not to have issued.

p. 19
03

Whether KENHA was a necessary party and whether the 2014 judgment should be set aside ex debito justitiae

Holding

KENHA was not a necessary party. Five Star sought no relief against it, its statutory role is limited, and it made no inquiry-stage reservations and did not deposit compensation funds as required by section 111(1A) of the Land Act.

Reasoning

Applying Order 1 rule 10(2) and the necessary/proper party distinction in Kingori v Chege and Deported Asians Custodian Board v Jaffer Brothers, the court examined each party's statutory role under the Kenya Roads Act and the Land Act. The NLC alone conducts acquisition, valuation and payment. KENHA's awareness of the decree since 2017 and six-year delay in applying further weighed against setting aside. Its Article 50 fair-hearing claim therefore had no basis.

p. 22
04

Whether KENHA had locus standi to file the applications of 21st and 28th February 2023

Holding

KENHA had no necessary locus standi; its applications were competent only in form (as to the 28th February application) but failed on the merits since joinder was unnecessary.

Reasoning

Having found KENHA was not a necessary party and that its role in the acquisition was limited by sections 107, 111(1A) and 113 of the Land Act, the court concluded that the acquiring entity lacked standing to intervene to protect funds in the NLC's special compensation account. The dispute was primarily between the NLC, the entity mandated to acquire land, and Five Star, whose land was acquired on KENHA's behalf.

p. 23

Legal principles established

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  • Execution against the Government and State organs, including garnishee proceedings under Order 23, is barred; decrees against the Government may only be enforced through the procedure in section 21 of the Government Proceedings Act, culminating in an order of mandamus.
  • A Certificate of Order against the Government under section 21 of the Government Proceedings Act is a mandatory condition precedent to an order of mandamus compelling the Government to settle a decree.
  • The acquiring authority's role in compulsory acquisition is limited to notifying the NLC, depositing compensation funds under section 111(1A) of the Land Act, and participation in the inquiry; it is not a necessary party to a PAP's challenge to compensation.

Court orders

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  1. 1.The consolidated appeals by Five Star Agencies Limited and KENHA are dismissed
  2. 2.Each party to bear its own costs
On appeal from
Environment and Land Court at Nairobi
ELC Suit No. 445 of 2014
Jurisdiction invoked
First appellate jurisdiction over appeals from the Environment and Land Court (Environment and Land Court Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (21)

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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, "Five Star Agencies Ltd & another v National Land Commission & 2 others (Civil Appeal E290 & 328 of 2023 (Consolidated)) [2024] KECA 439 (KLR)", Case Analysis (2024). Civil Appeal No. E290 of 2023 (consolidated with Civil Appeal No. E328 of 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/439/eng@2024-04-12

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