John Kariuki Macharia v Commissioner Of Lands [2014] KEELC 508 (KLR)
The bottom line
#A Kenyan landowner whose property was compulsorily acquired won increased compensation of Kshs 18.2 million, with disability rights factored into the value.
What this practically means
#Executive summary
#Key legal issues
#Market value of the suit property at the date of gazettement
Unimproved site value assessed at approximately Kshs 3,500,000/-, enhanced to Kshs 6,000,000/- to factor in the Appellant's accessibility rights as a person with disability, plus developments valued at Kshs 7,213,200/- (average of the parties' valuations)
The court defined market value as the unimproved site value plus developments at the date of gazettement (28/5/2010), since no comparables with similar developments were provided. It used the Respondent's comparable parcels of 0.45 ha sold for Kshs 2.5M each in a superior, accessible location, scaled up for size and weighted by the Appellant's constitutional and statutory rights of accessibility as a person with disability under Article 54(1)(c) and Section 21 of the Persons with Disabilities Act.
Relevance of the Appellant's disability to compensation
Disability is relevant; compensation must facilitate acquisition of accessible property to qualify as just and full compensation
The court held that Section 21 of the Persons with Disabilities Act (Chapter 133) entitles the Appellant to a barrier-free and disability-friendly environment, and Article 54(1)(c) of the Constitution guarantees reasonable access to places and public transport. The Respondent, as a state organ, must observe, respect, protect, promote and fulfil these rights, so just compensation must enable the Appellant to acquire reasonably accessible replacement property.
Loss of actual earnings/business income
Awarded at Kshs 512,000/- for one year (Respondent's Kshs 350,000/- valuation plus uncontested farming income of Kshs 162,000/-)
Paragraph 2(c) of the Schedule compensates loss of income during the transitional period of acquisition and resettlement, a reasonable period being one year. 'Actual earnings' bears its plain meaning of net profits, not gross profits or projected 20-year earnings. The audited accounts showed net profit of Kshs 273,000/-, the Respondent's valuation of Kshs 350,000/- was fair, and the uncontested farming income of Kshs 162,000/- was added.
Sub-division potential as a comparable
Disallowed under paragraph 3 of the Schedule
The court noted that the entire parcel was being acquired and that the Schedule mandatorily limits the matters for compensation. Paragraph 3 disapplies increases in value likely to accrue from the use to which the land will be put when acquired, and the Appellant was forbidden from using sub-division values of other plots as comparables since that value had not yet accrued to his land.
Expenses incidental to change of residence/place of business
Respondent's uncontested valuation of Kshs 950,000/- awarded
The costs of alternative accommodation and relocation valued at Kshs 950,000/- by the Respondent were not contested by the Appellant and were therefore adopted in full under paragraph 2(d) of the Schedule to the repealed Land Acquisition Act, which mandates payment of reasonable expenses incidental to change of residence or place of business.
Legal principles established
#- The market value of compulsorily acquired land is the price a willing seller might be expected to obtain from a willing purchaser, determined with reference to comparable sales and awards
- 'Actual earnings' under paragraph 2(c) of the Schedule to the repealed Land Acquisition Act means net profits, compensable for a reasonable transitional period of one year
- The rights of a person with disability under Article 54(1)(c) of the Constitution and the Persons with Disabilities Act are relevant to assessing just and full compensation on compulsory acquisition
- Where parties rely on the same construction cost basis but reach divergent valuations, a court may fairly adopt the average of the two valuations
Court orders
#- 1.The Appellant's appeal is allowed and the sum of Kshs 18,223,480/- is awarded as compensation for the compulsory acquisition of land parcel No. Ruiru/Mugutha Block1/T.555
- 2.The said sum of Kshs 18,223,480/- shall be paid to the Appellant by the Respondent with interest at court rates from the date of the judgment until the date of possession by the Respondent of the suit property
- On appeal from
- Land Acquisition Compensation Tribunal
- Not stated
- Jurisdiction invoked
- Jurisdiction of the Environment and Land Court to hear and determine all disputes relating to title to, occupation and use of land and the environment, following repeal of the Land Acquisition Act by the Land Act No. 6 of 2012
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Kariuki Macharia v Commissioner Of Lands [2014] KEELC 508 (KLR)", Case Analysis (2014). Not stated in judgment (appeal from the Land Acquisition Compensation Tribunal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2014/508/eng@2014-01-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.