Paul Gatete Wangai & 13 others v Capital Realty Limited & another [2020] KEELC 2717 (KLR)
The bottom line
#Kenya's Environment and Land Court confirmed it can hear cases where a property buyer's claim to land clashes with a bank's power to sell charged property.
What this practically means
#Executive summary
#Key legal issues
#Whether the ELC has jurisdiction over a suit where a chargee's Statutory Power of Sale is challenged by third-party purchasers
The ELC has jurisdiction because the predominant issue is the validity of the Sale Agreements and title to land, not merely the chargor-chargee contractual relationship
The court accepted the ratio in Co-operative Bank v Njuguna that pure chargor-chargee accounting disputes belong to the High Court. However, on a perusal of the Plaint, the Plaintiffs are third parties who claim valid purchase of the maisonettes and seek specific performance. The 2nd Defendant will still have to address the validity of the Sale Agreements. Where a third party claims entitlement to charged land, the dispute concerns use, occupation and title to land, within Article 162(2)(b) and section 13 of the ELC Act.
The source and limits of the ELC's jurisdiction
The court's jurisdiction derives from Article 162(2)(b) of the Constitution and section 13 of the ELC Act, and the High Court is divested of such matters by Article 165(5)
The court restated the constitutional framework: Parliament established the ELC to hear disputes relating to the environment and the use and occupation of, and title to, land. Citing Lillian 'S' v Caltex and Republic v Karisa Chengo, it emphasised that jurisdiction is everything and that the ELC is a sui generis court of equal hierarchical stature to the High Court but with distinct jurisdiction.
Legal principles established
#- Where a third party claims entitlement to land charged to a bank, the dispute ceases to be purely commercial and falls within the ELC's jurisdiction over use, occupation and title to land
- In cross-cutting jurisdictional questions the court must identify the predominant issue to determine jurisdiction
- A preliminary objection on jurisdiction must be determined by confining the court to the plaint, not affidavits in support of unheard applications
Court orders
#- 1.The 2nd Defendant's Notice of Preliminary Objection dated 17th December, 2019 is dismissed with costs
- Jurisdiction invoked
- Article 162(2)(b) of the Constitution as read with section 13 of the Environment and Land Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Paul Gatete Wangai & 13 others v Capital Realty Limited & another [2020] KEELC 2717 (KLR)", Case Analysis (2020). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2717/eng@2020-05-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.