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ELCDismissedELC Case (Eldama Ravine Township Block 111/30) - Eldoret· [2018] KEELC 783 (KLR)

Falcon Global Logistics Co. Limited v Management Committee of Eldama Ravine Boarding Primary School [2018] KEELC 783 (KLR)

Environment and Land Court
11 October 2018
MOM.A Odeny
6,743 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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A company suing over Kenyan land lost everything because it had no board resolution and couldn't prove its title was properly acquired.

What this practically means

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Executive summary

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The plaintiff company, Falcon Global Logistics Co. Ltd, sued the defendant school seeking a permanent injunction, damages, interest and costs over land parcel Eldama Ravine Township Block 111/30, alleging the defendant, aided by the Sub-County Commissioner and police, invaded the property on 9 April 2014, demolished structures and confiscated building materials. The plaintiff claimed it purchased the land from Musa Maiyo (enjoined as interested party) in 2013 for Kshs 5 million and was issued a certificate of lease. The defendant, in occupation since 1987, counterclaimed, relying on an allotment letter attributed to retired President Moi, a PDP, gazettement, no-objection letters and payments in an acquisition process running from 2008. The court first found the suit incompetent because the company produced no board resolution under seal authorizing the suit nor an authority for the filing advocates; it nonetheless proceeded to determine the counterclaim. On the merits, the court found the plaintiff failed to discharge the burden of proving due diligence: the vendor was never called, the common seal was not affixed, payment of the balance was unacknowledged, and the same advocate witnessed the sale and conducted the suit. Invoking sections 26 and 80 of the Land Registration Act, the court held a title acquired illegally or unprocedurally may be cancelled. The plaintiff's suit was dismissed with costs, the plaintiff's title was found not to be entitled to stand and to warrant cancellation, and judgment was entered for the defendant on its counterclaim with costs.

Key legal issues

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01

Institution of suit by a company without a board resolution

Holding

The suit is incompetent; the verifying affidavit lacked a company resolution under seal and no authority to file suit was produced by the advocates

Reasoning

The court held the requirement of a resolution is not a technicality but goes to the core of company management. The plaintiff did not seek ratification when the issue was raised during cross-examination. The court acknowledged Article 159(2)(d) and sections 1A and 1B of the Civil Procedure Act but declined to accommodate parties who disregard procedure.

p. 7
02

Whether the plaintiff proved title as a bona fide purchaser for value

Holding

The plaintiff failed to prove due diligence and the legality of the acquisition process; the seller was not called to explain how he acquired the title

Reasoning

The court noted discrepancies: the vendor never showed the allotment letter, the common seal was not affixed to the agreement, no acknowledgement of payment of the balance was produced, the same advocate witnessed the sale and acted for the plaintiff, and no lands registry official was called to authenticate the title. The court found the plaintiff was likely sold land by a vendor without good title to pass.

p. 8
03

Whether an allotment letter can defeat a registered certificate of lease

Holding

The court preferred the defendant's elaborate documented acquisition process over the plaintiff's unproven title and permitted cancellation of the plaintiff's title under section 80 of the Land Registration Act

Reasoning

The defendant produced an allotment letter, PDP, gazettement, no-objection letters and payment records dating from 2008 showing an elaborate process. The court reasoned that parallel processes cannot subsist on the same parcel where one lacks requisite steps, and under section 26 of the Land Registration Act a title procured irregularly or by fraud may be impeached.

p. 8

Legal principles established

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  • A suit instituted on behalf of a company requires a company resolution authorizing the filing; a director cannot institute suit without such authority
  • A title acquired illegally, unprocedurally or through a corrupt scheme can be cancelled notwithstanding registration under section 26 of the Land Registration Act
  • Rectification of the register may be ordered where a registration was obtained by fraud or mistake, subject to protection of a bona fide possessor for value under section 80 of the Land Registration Act

Court orders

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  1. 1.The plaintiff's suit is dismissed with costs to the defendant
  2. 2.The plaintiff's title to the suit property cannot stand and the only remedy is to have it cancelled
  3. 3.Judgment is entered as per the counterclaim for the defendant with costs

Authorities

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Legislation

  • Constitution of KenyaArticle 159(2)(d)
  • Constitution of KenyaArticle 40
  • Civil Procedure ActSections 1A and 1B
  • Civil Procedure RulesOrder 4 rule 1(4)
  • Land Registration ActSection 26(1)
  • Land Registration ActSection 80(1) and (2)

Cases cited (12)

  • Eunice Grace Njambi Kamau and another v The Hon. Attorney General and 5 others
    ELC Civil Suit No. 976 of 2012
  • Vijav Morjaria v Nansingh Madhusingh Darbar & another
    [2000] eKLR
  • Central Bank of Kenya Limited v Trust Bank Limited & 4 Others
    [1996] eKLR
  • Fletcher v Peck
    10 U.S 87 (1810)
  • Lawrence Mukiri v Attorney General & 4 Others
    [2013] eKLR
  • Shadrack Kuria Kiman v Stephen Gitau Nganga and Another
    ELC Case No. 439 of 2017 (Formerly Machakos ELC No. 202 of 2015)
  • Affordable Homes Africa Limited vs Ian Henderson & 2 Others
    HCCC No. 524 of 2004
  • Philomena Ndanga Karanja & 2 Others vs Edward Kamau Maina
    ELC No. 1411 of 2014
  • Bugerere Coffee Growers Ltd v Seraduka & Anor
    (1970) EA 147
  • Suleiman Rahemtulla Omar & another v Musa Hersi Fahiye & 5 others
    [2014] eKLR
  • Daudi Kiptugen vs Commissioner of Lands & 4 Others
    (2015) eKLR
  • Assia Pharmaceuticals v Nairobi Veterinary Centre Ltd
    HCCC No. 391 of 2000
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a land dispute and counterclaim

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (25)

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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, "Falcon Global Logistics Co. Limited v Management Committee of Eldama Ravine Boarding Primary School [2018] KEELC 783 (KLR)", Case Analysis (2018). ELC Case (Eldama Ravine Township Block 111/30) - Eldoret. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/783/eng@2018-10-11

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