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ELCDismissedELC Judicial Review No. 31 of 2018· [2020] KEELC 2876 (KLR)

Republic v Official Receiver and Liquidator & another Ex parte Transmatter Kenya Company Limited [2020] KEELC 2876 (KLR)

Environment and Land Court of Kenya
7 May 2020
JMJ M Mutungi
3,216 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court threw out a landowner's challenge because it skipped the Land Registrar's own process for removing land restrictions and sued a company in liquidation without permission.

What this practically means

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Executive summary

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Transmatter Kenya Company Limited sought judicial review orders of certiorari, mandamus and prohibition to quash and undo a restriction registered by the Sub County Land Registrar Naivasha over land parcels Naivasha/Maraigushu Block 2/184 and 185 (now amalgamated as Block 2/3987 Nyondia), contending the restriction infringed its property rights and breached Articles 47 and 50 of the Constitution as it was imposed without a hearing. The Official Receiver opposed, asserting Agrarian Building Society had always owned the parcels; that a winding-up order was made against it on 30th September 1996; and that the applicant's titles were fraudulently obtained, a matter reported to investigative agencies. The Land Registrar said she registered the restriction at the Official Receiver's request in the face of an ownership tussle. The court first found the suit against the Official Receiver fatally defective and incompetent because the applicant lacked the leave required under section 432(2) of the Insolvency Act to sue a society in liquidation; judicial review leave did not suffice. On the merits against the Registrar, the court held that under section 76 of the Land Registration Act the Registrar properly registered the restriction to prevent fraud and preserve the parcels pending resolution of ownership. The applicant should instead have invoked section 78 to seek removal or variation of the restriction; section 9 of the Fair Administrative Actions Act and the Karume principle required exhaustion of that remedy. The judicial review application was dismissed with costs to the Respondents.

Key legal issues

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01

Incompetence of suit against a party in liquidation for want of leave

Holding

The suit as against the 1st Respondent was totally defective for want of leave under section 432(2) of the Insolvency Act and was dismissed

Reasoning

A winding-up order had been made against Agrarian Building Society on 30th September 1996 and gazetted. The restriction challenged was registered at the Official Receiver's request on behalf of the society in liquidation. Judicial review leave under Order 53 did not satisfy the distinct leave required under the Insolvency Act to institute proceedings against a party in liquidation.

p. 3
02

Validity of the Land Registrar's restriction under section 76 of the Land Registration Act

Holding

The Land Registrar properly exercised her statutory mandate in registering the restriction pending resolution of the ownership dispute

Reasoning

Section 76 empowers the Registrar to restrict dealings to prevent fraud or improper dealing or for any other sufficient cause, on her own volition or on application. Fraud was alleged against the applicant's title and ownership was in dispute, placing the matter squarely within the Registrar's mandate.

p. 4
03

Exhaustion of alternative remedies before judicial review

Holding

Judicial review was premature and an abuse of process as the applicant never invoked section 78 of the Land Registration Act to seek removal or variation of the restriction

Reasoning

Section 78 provides a mechanism for removal or variation of restrictions, and section 9(2) and (3) of the Fair Administrative Actions Act requires exhaustion of all remedies under other written law before judicial review. The applicant did not apply to the Registrar for removal of the restriction, so the proceedings were premature.

p. 4

Legal principles established

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  • Leave required for judicial review under Order 53 does not substitute the leave required under the Insolvency Act to sue a company in liquidation
  • A suit commenced against a party in liquidation without leave is fatally defective and incompetent
  • The Land Registrar may register a restriction under section 76 of the Land Registration Act where fraud is alleged or ownership is in issue
  • Exhaustion of statutory remedies is a precondition to judicial review

Court orders

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  1. 1.Suit against the 1st Respondent dismissed with costs to the 1st Respondent
  2. 2.Judicial review application against the 2nd Respondent dismissed with costs to the Respondents

Authorities

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Legislation

  • Insolvency Actsection 432(2)
  • Companies Act, Cap 486 (now repealed)section 228
  • Civil Procedure RulesOrder 53 Rules 1 and 2
  • Land Registration Act, 2012section 76
  • Land Registration Act, 2012section 78
  • Fair Administrative Actions Act, 2015section 9(2) & (3)

Cases cited (2)

  • Speaker of the National Assembly -Vs- James Njengs Karume
    (1992) eKLR
  • Godfrey Mwangi Runo -vs- The Official Receiver of Agrarian Building Society
    Mombasa CMCC No. 79 of 1993
Jurisdiction invoked
Judicial review jurisdiction under Order 53 Rules 1 and 2 of the Civil Procedure Rules; Environment and Land Court Act

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Republic v Official Receiver and Liquidator & another Ex parte Transmatter Kenya Company Limited [2020] KEELC 2876 (KLR)", Case Analysis (2020). ELC Judicial Review No. 31 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2876/eng@2020-05-07

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