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ELCDismissedConstitutional Petition No 2 of 2016· [2016] KEELC 36 (KLR)

Kitui Ole Yiamboi & another v Agricultural Finance Corporation & 102 others [2016] KEELC 36 (KLR)

Environment and Land Court
25 November 2016
6,840 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~27 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court dismissed the Murumbi estate's land petition, ruling a lender lawfully bought the property at auction and the claim was already decided.

What this practically means

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Executive summary

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The petitioners, administrators ad litem of the Estate of Joseph Murumbi, sought declarations that the sale of LR No. Transmara/Intona/2 by the Agricultural Finance Corporation (AFC) under a charge was fraudulent and unconstitutional, nullification of the resulting subdivisions (parcels 33 and 34), cancellation of titles, transfer of the property to themselves, or alternatively constitutional damages under Articles 40 and 47. AFC held a charge registered in 1985 over land owned by Intona Ranch Ltd, the 2nd respondent, which defaulted on a loan of Kshs 8,633,500. After indulgences sought by the directors went unfulfilled, AFC auctioned the land in November 1998 and bought it itself, relying on section 33 of the Agricultural Finance Corporation Act, Cap 323, then subdivided and sold parcel 34 to North Mogor Holdings Ltd, the 1st interested party. Parcel 33 had been transferred to the 2nd interested parties under the judgment of W. Ouko, J. in Nakuru HCCC No. 104 of 2004 (OS) awarding them 1,089 acres by adverse possession, an appeal settled by consent. The court held the petitioners' claim that the land was communal and ancestral was baffling given they claimed as private beneficiaries of the estate; disbelieved their assertion of ignorance of the prior litigation; found no fraud proved to the required standard; held the 1st interested party a bona fide purchaser for value without notice; found the petition imprecise and failing the Anarita Karimi Njeru threshold; and held the petition res judicata under section 7 of the Civil Procedure Act. The petition was dismissed with costs to the 1st respondent and the 1st and 2nd interested parties.

Key legal issues

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01

Validity of the power of sale and purchase by the chargee at auction

Holding

The AFC lawfully exercised its power of sale and was entitled under section 33 of the Agricultural Finance Corporation Act, Cap 323 to bid for and purchase the land and transfer it to itself

Reasoning

The 2nd respondent was advanced a loan of Kshs 8,633,500 secured by a charge over the suit land, defaulted, and its own directors sought indulgences to repay. No instalments were paid. Section 33(2) permits the Corporation to bid at the public auction and section 33(3) permits it to transfer the land to itself and give good title. The transfer took effect on execution in 1999.

p. 7
02

Bona fide purchaser for value without notice

Holding

The 1st interested party was a bona fide purchaser whose title cannot be impeached

Reasoning

The 1st interested party made an offer accepted by the AFC, executed a formal agreement of sale, paid value, and obtained title on 17th November 2015. The petitioners did not demonstrate any fraudulent dealing; the sale was regular and procedural, satisfying the Katende v Haridas criteria for a bona fide purchaser.

p. 9
03

Precision in framing constitutional petitions

Holding

The petition failed the Anarita Karimi Njeru threshold; the petitioners' claim was imprecise and inconsistent, claiming both private rights as heirs and communal rights

Reasoning

It was unclear whether the petitioners claimed as beneficiaries of the estate of Joseph Murumbi or on behalf of the Maasai community. The court held a party cannot claim a private right and a public interest right on the same facts, and that without demonstrating entitlement to property there can be no breach of Article 40.

p. 9
04

Res judicata

Holding

The petition is res judicata as it seeks to re-litigate ownership of the suit property already conclusively determined in Nakuru HCCC No. 104 of 2004 (OS)

Reasoning

The same subject matter was determined in the Nakuru suit after a full hearing; the AFC appeal was settled by consent on terms the judgment be implemented. The petitioners, claiming through Intona Ranch Ltd which was a party, never sought joinder or review. Parties cannot evade res judicata by adding new parties or causes of action.

p. 11

Legal principles established

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  • Fraud must be specifically pleaded and proved to a standard higher than balance of probability to impugn a registered title under section 26 of the Land Registration Act
  • A court of concurrent jurisdiction cannot sit on appeal over or annul the judgment of a coordinate court of competent jurisdiction
  • The Anarita Karimi Njeru precision threshold applies to constitutional petitions

Court orders

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  1. 1.The petition is dismissed with costs to the 1st respondent, the 1st and 2nd interested parties

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 40(1)(a)(b) and (3)
  • Constitution of Kenya, 2010Article 47
  • Agricultural Finance Corporation Act, Cap 323Section 33(2) and (3)
  • Land Registration Act, No. 3 of 2012Section 26(1)(a) and (b)
  • Civil Procedure ActSection 7

Cases cited (11)

  • Arthi Highway Developers Ltd v West End Butchery Ltd & 6 Others
    [2015] eKLR
  • Elijah Makeri Nyangwara v Stephen Mungai Njuguna & Another
    [2013] eKLR
  • Zebak Limited v Nadem Enterprises Ltd
    [2016] eKLR
  • Katende v Haridas & Company Ltd
    [2008] 2 EA 174
  • Anarita Karimi Njeru v The Republic
    [1976-1980] KLR 1272
  • Trusted Society of Human Rights Alliance v Attorney General & 2 Others
    [2012] eKLR
  • Suleiman Said Shabhal v IEBC & 3 Others
    [2014] eKLR
  • Okiya Omtatah Okoiti v Communications Authority of Kenya & 14 Others
    [2015] eKLR
  • E. T v Attorney General & Another
    [2012] eKLR
  • Omondi v National Bank of Kenya Ltd and Others
    [2001] EA 177
  • Njangu v Wambungu and Another, Nairobi HCCC No. 2340 of 1991
Jurisdiction invoked
Constitutional petition invoking Articles 40 and 47 of the Constitution; jurisdiction of the Environment and Land Court over land disputes

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "Kitui Ole Yiamboi & another v Agricultural Finance Corporation & 102 others [2016] KEELC 36 (KLR)", Case Analysis (2016). Constitutional Petition No 2 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/36/eng@2016-11-25

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