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Court of AppealDismissedCourt of Appeal at Malindi (appeal against Mombasa ELC Cases No. 215, 216, 217, 218, 219, 220, 221, 222, 223 and 224 of 2009 (Consolidated))

Frann Investment Limited v Kenya Anti-Corruption Commission & 6 others (Civil Appeal E038 of 2021) [2024] KECA 714 (KLR)

Court of Appeal of Kenya
21 June 2024
PNP NyamweyaKLDr. K. I. LaibutaGOG. V. Odunga
8,085 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~32 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal confirmed that land reserved for public use can never be privately allocated, and a title built on such an allocation is void.

What this practically means

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Executive summary

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The Court of Appeal at Malindi (Nyamweya, Laibuta and Odunga, JJAA) dismissed an appeal by Frann Ltd against the judgment of Munyao Sila J of the Environment and Land Court at Mombasa delivered on 12th November 2020 in ten consolidated suits brought by the Kenya Anti-Corruption Commission. The trial Court had declared null and void the alienation, renumbering, grant and transfer of LR No. MN/III/293 (later MN/III/2974 and its ten sub-divisions), ordered rectification of the register, vacant possession, and general damages of Kshs 1,000,000 against the former Commissioner of Lands. The Court of Appeal framed two principal issues: whether the suit property was available for alienation, and whether the Appellant was an innocent purchaser for value. Applying the Supreme Court's decision in Dina Management Limited v County Government of Mombasa, the Court held that land planned and reserved for use by the customs department was not unalienated Government land and could not be allocated to a private individual; the mandatory allocation procedure under the Government Lands Act, including a Part Development Plan and auction of township plots, was never followed. On the second issue, the Court held that the Appellant could not claim bona fide purchaser protection because its root of title was defective, and that the 2nd Respondent, a customs employee, had imputed knowledge, the transfer being a scheme to obfuscate fraud. The Court also held that joinder of the original allottee's estate was unnecessary, declined to entertain the limitation ground raised for the first time on appeal, and treated the Macro Insurance Brokers point as abandoned. The appeal was dismissed in its entirety with no order as to costs given the public interest, and the trial Court's orders were affirmed.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the suit property, having been planned and reserved for use by the customs department, was unalienated Government land available for allocation and alienation
  2. 2.Whether the Appellant was an innocent purchaser for value without notice
  3. 3.Whether the estate of the original allottee, Kenny Mohammed Sheikh Ali, was a necessary party to the suit
  4. 4.(Raised but abandoned) The effect of the judgment in Macro Insurance Brokers Limited vs Francis Githui Wahome
  5. 5.(Raised for the first time on appeal) Whether the 1st Respondent's suit was barred by the Limitation of Actions Act

Key legal issues

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01

Whether the suit property was unalienated Government land available for alienation

Holding

Having been planned, surveyed and reserved for use by the customs department, the suit property was not unalienated Government land and was not available for allocation to a private individual.

Reasoning

KACC produced evidence including a 1922 survey plan and a 1994 postal search response showing an old customs house on the plot. Land reserved for a public purpose, following Dina Management, is rendered a public utility and cannot be described as unalienated public land. The fact that buildings became derelict did not revive its availability; the mandatory procedure for allocating unalienated land under sections 9, 10 and 12 of the Government Lands Act, including auction of township plots, was never followed.

p. 9
02

Whether the Appellant was an innocent purchaser for value without notice

Holding

The Appellant was not a bona fide purchaser for value; its title derived from an allotment letter that conveyed no interest, and the transfer was a scheme to obfuscate the fraudulent acquisition by the 2nd and 3rd Respondents.

Reasoning

The 2nd Respondent, an employee of the Customs Department and later KRA and a supervisor of the suit property, purchased the allottee's purported interest and caused the company to be formed with family members. Knowledge of the customs reservation was imputed to the company. Since the root of title was defective, the doctrine of indefeasibility could not protect the Appellant, and registration could not sanitise a null and void title.

p. 13
03

Whether the estate of the original allottee was a necessary party

Holding

Joinder of Kenny Mohammed Sheikh Ali or his estate was not necessary; no order was sought or made against the estate and its interests were not affected.

Reasoning

Applying Departed Asians Property Custodian Board v Jaffer Brothers Ltd, a party need only be joined where the orders sought would legally affect its interests or where a defendant cannot effectually set up a defence without the joinder. The allocation to the deceased was not in issue and KACC produced evidence of it; the Appellant could have applied to join the estate had it wished.

p. 11
04

Whether limitation and the Macro Insurance Brokers judgment barred the suit

Holding

The Macro Insurance point was abandoned as no submissions were made on it; the limitation ground was raised for the first time on appeal and was not a ground in the Memorandum of Appeal.

Reasoning

A party is bound by its pleadings and barred from introducing new issues on appeal. The Memorandum of Appeal dated 9th July 2021 did not raise limitation of time as a ground, so it could not be the subject of the judgment.

p. 5

Legal principles established

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  • Land planned and reserved for a public purpose is not unalienated Government land and is not available for alienation to a private individual
  • A registered proprietor acquires an indefeasible title only if the underlying allocation was legal, proper and regular; a title founded on an illegal or irregular allocation cannot be sanitised by registration
  • A bona fide purchaser must establish a good root of title; the title or lease is an end product of a lawful process, and one whose chain of title is tainted cannot claim protection as an innocent purchaser for value
  • An allotment letter does not confer a registrable interest in land; it is only registration that confers transferable title

Court orders

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  1. 1.The appeal is dismissed in its entirety with no order as to costs
  2. 2.The orders given by the trial Court in the judgment delivered on 12th November 2020 in Mombasa ELC Cases No. 215-224 of 2009 (Consolidated) are affirmed

The bench

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One judgment of the whole court — no separate or dissenting opinions.

PN
majority
KL
majority
GO
majority
On appeal from
Environment and Land Court at Mombasa
Mombasa ELC Cases No. 215, 216, 217, 218, 219, 220, 221, 222, 223 and 224 of 2009 (Consolidated)
Jurisdiction invoked
First appellate jurisdiction under Article 164 of the Constitution over an appeal from the Environment and Land Court
Consolidated with
Mombasa ELC Cases No. 216, 217, 218, 219, 220, 221, 222, 223 and 224 of 2009

Relief refused

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The Appellant's appeal against the trial Court's findings that the suit property was not available for alienation and that the Appellant was not an innocent purchaser for value

The appeal had no merit; the trial Court did not err in its findings

p. 13

Costs

No order as to costs, given the nature of the public interest in the matter

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

We are bound by this decision and have no hesitation in finding that, having been planned and reserved for use by the customs department, and this being a public purpose, the suit property was not unalienated land and was therefore not available for alienation.
p. 9Availability of reserved public land for alienation
It is the act of registration that confers a transferable title to the registered proprietor, and not the possession of an allotment letter
p. 11Allotment letters do not confer title
We therefore find that the transfer of the suit property to the Appellant was not made in good faith, as it was meant to obfuscate the fraudulent and illegal acquisition of the property by the 2nd and 3rd Respondents.
p. 13Bona fide purchaser doctrine defeated by imputed knowledge and fraudulent purpose
It is thus our conclusion that this appeal has no merit, and we hereby dismiss it in its entirety with no order as to costs, given the nature of its public interest. Consequently, we hereby afirm the orders given by the trial Court in the judgment delivered on 12th November 2020 in Mombasa ELC Cases No. 215, 216, 217, 218, 219, 220, 221, 222, 223 and 224 of 2009 (Consolidated).
p. 13Disposition - dismissal and affirmation of trial Court orders

Issues in the judgment

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minor

The citation for African Line Transport Co Ltd v Attorney General appears inconsistently as HCCC No 276 of 2013 in one passage and HCCC No 276 of 2003 in another within the same judgment

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (7)

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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, "Frann Investment Limited v Kenya Anti-Corruption Commission & 6 others (Civil Appeal E038 of 2021) [2024] KECA 714 (KLR)", Case Analysis (2024). Court of Appeal at Malindi (appeal against Mombasa ELC Cases No. 215, 216, 217, 218, 219, 220, 221, 222, 223 and 224 of 2009 (Consolidated)). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/714/eng@2024-06-21

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