Private Development Co. LTD v Rebecca Ngonyo & 2 other [2019] KEELC 4409 (KLR)
The bottom line
#Kenya's Environment and Land Court confirmed it can hear land disputes involving charges or mortgages, and a company cannot ignore a hearing date its director knew about.
What this practically means
#Executive summary
#Key legal issues
#Whether the ELC lacks jurisdiction over matters relating to mortgages and charges
The ELC has jurisdiction over mortgage and charge disputes; the Land Act and Land Registration Act confer jurisdiction on the ELC over land transactions including charges, and the Co-operative Bank case did not hold that the ELC must down its tools whenever a charge or mortgage is pleaded
Section 13(2) of the ELC Act gives wide jurisdiction over land disputes, including instruments granting enforceable interests in land. The Land Act and Land Registration Act address charges and point to the ELC. The Court of Appeal in Co-operative Bank upheld High Court jurisdiction only because the dispute was over accounts. Even where accounts are intertwined with issues like the validity of a charge or exercise of statutory power of sale, the ELC retains jurisdiction.
Whether the disputes in the two consolidated suits fall outside ELC jurisdiction
The suits concern ownership, occupation, possession, injunction and mesne profits over land - squarely ELC matters with no mortgage or charge issue, so the court has jurisdiction and transfer to the High Court would be futile
The prayers in the two pending plaints seek special damages, a declaration over entitlement to income from buildings on the land, injunctions, mesne profits and vacant possession. None raises a mortgage, charge or loan account issue. These are matters of occupation, possession and ownership of land reserved to the ELC, and by Article 165(5) the High Court is barred from them.
Whether the proceedings of 20 November 2018 should be set aside and the case re-opened
No - the proceedings were inter partes, not ex parte; counsel attended, and a director of the applicant knew of the hearing date, so the applicant chose to absent itself and cannot claim denial of the right to be heard
Both counsel for the applicant and the 2nd plaintiff were present on the hearing date but their clients failed to appear to give evidence. The Registrar of Companies confirmed Lucy Mwihaki Macharia and James Gachiengo Macharia as directors. Lucy Mwihaki deposed in a prior application that she knew the matter was set for hearing on 20 November 2018. The company is therefore deemed to have known of the date, and its absence was a choice with consequences.
Legal principles established
#- The ELC has jurisdiction over disputes relating to mortgages and charges; the Co-operative Bank decision did not hold otherwise, and the High Court's jurisdiction in that case rested on the dispute being over accounts
- So long as a dispute involves an issue over land or the environment, the ELC has jurisdiction under section 13(2) of the ELC Act
- A limited liability company is deemed to know what its directors know; awareness of a hearing date by one director binds the company
Court orders
#- 1.The application dated 29 November 2018 is dismissed with costs
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution and Section 13(2) of the Environment and Land Court Act, 2011
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Private Development Co. LTD v Rebecca Ngonyo & 2 other [2019] KEELC 4409 (KLR)", Case Analysis (2019). Notice of Motion dated 29 November 2018 in consolidated suits (Nairobi HCCC No. 1082 of 2006 and Nakuru CMCC No. 2019 of 2006). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4409/eng@2019-02-15
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.