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ELCPartially AllowedELC Case No. 348 of 2008 (Consolidated with ELC Case No. 1018 of 2014)· [2020] KEELC 3915 (KLR)

Rift Valley Machinery Services Limited v Agro Complex (K) Limited & 11 others; Agro Complex Kenya Limited & 2 others (Third Parties) [2020] KEELC 3915 (KLR)

Environment and Land Court
17 January 2020
16,849 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~67 min to read original · ~4 min brief

The bottom line

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The Environment and Land Court ruled that the first title in time prevails when rival titles cover the same Nairobi land, dismissing two competing owners' claims.

What this practically means

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Executive summary

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Three competing claims converged on L.R. No. 22140, Embakasi, Nairobi. The Plaintiff claimed it purchased the land from Agro Complex Kenya Limited (1st Third Party) in 2001 and was registered in 2002. The 1st Defendant, Agro Complex (K) Limited, claimed the allotment of 1990 and obtained a second title in 2007 using a certified copy of the same deed plan. The 6th Defendant claimed ownership of L.R. No. 29609 created by amalgamation of parcels bought from the 7th to 12th Defendants. The court framed seven issues including lawful incorporation, identity of the parcels, superior title, indemnity, compensation and costs. It held both companies were lawfully incorporated, with deregistration a matter for the Registrar under the Companies Act. All three titles referred to the same land. Preferring the evidence of the investigating lands officer, Mr. Silas Mburugu, the court found the 1st Defendant had the better claim, the allotment having been made in 1990 so the land was unavailable for later alienation. The Plaintiff failed to prove it was an innocent purchaser for value, its director having known of Mr. Mingi's claim. The 6th Defendant's compensation claim for the demolished wall failed for want of proof. The Third Parties owed no indemnity since the missing records and double registration were attributable to the 4th and 5th Defendants. The court granted prayers (a), (b) and (c) of the 1st to 3rd Defendants' counterclaim, dismissed the Plaintiff's claim, the 6th Defendant's counterclaim and the indemnity claim, and directed each party to bear its own costs of the two suits.

Key legal issues

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01

Lawful incorporation of the two similarly named companies

Holding

Both the 1st Third Party (Agro Complex Kenya Limited, 1986) and the 1st Defendant (Agro Complex (K) Limited, 1998) were lawfully incorporated; deregistration is a matter for the Registrar under the Companies Act

Reasoning

The Registrar of Companies registered both companies; the directive of 2008 to change the 1st Defendant's name came ten years after registration. The court found no evidence the 1st Third Party traded under its name, while the 1st Defendant wrote letters and obtained a tax PIN. Fraud in the incorporation was not proved to the court's satisfaction.

p. 12
02

Whether the three titles refer to the same parcel

Holding

The land claimed by the Plaintiff, the 1st Defendant and the 6th Defendant is the same piece of land

Reasoning

The Plaintiff's and 1st Defendant's titles were both processed from the same deed plan 207399 - the former from the original, the latter from a certified copy. The 6th Defendant's title arose from amalgamation of parcels created out of the same land, and the parties' physical confrontation on the land and the 2014 orders confirmed identity.

p. 12
03

Superior claim to the Suit Property

Holding

The 1st Defendant has the better claim; the Plaintiff and 6th Defendant's claims were dismissed

Reasoning

The court preferred the evidence of Mr. Silas Mburugu, the investigating officer, that Mr. Mingi was most probably the allottee and pursued the title relentlessly. The 1st Third Party delayed eight years in accepting the allotment, gave no proof of consideration, land rent or rates, and the Plaintiff was aware of Mingi's claim before purchasing. The land, allocated in 1990, was not available for alienation in 2000 to the 7th–12th Defendants.

p. 14
04

Indemnity and contribution by the Third Parties to the 4th and 5th Defendants

Holding

The Third Parties are not liable to indemnify or contribute

Reasoning

The missing lands records and the double registration were attributable to the negligence and laxity of the lands office and the Registrar of Companies, which registered two deceptively similar companies. Since the 4th and 5th Defendants were themselves at fault, they could not shift liability to the Third Parties.

p. 14
05

Admissibility of the late Mr. Mingi's affidavit under Section 34 of the Evidence Act

Holding

The affidavit sworn by the deceased Mr. Mingi in these proceedings was admitted

Reasoning

Section 34 permits evidence given by a deceased witness in a judicial proceeding to be admitted where the subsequent proceeding is between the same parties and there was opportunity to cross-examine. The affidavit was sworn in these very proceedings, the Plaintiff could cross-examine, and it touched only the Plaintiff without prejudicing the 6th Defendant.

p. 8

Legal principles established

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  • Where competing titles over the same land arise, the first title in time prevails and land already allocated is not available for later alienation
  • Both companies with deceptively similar names were lawfully incorporated and only the Registrar of Companies may deregister a company under the Companies Act

Court orders

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  1. 1.Prayers (a), (b) and (c) of the 1st to 3rd Defendants' counterclaim dated 31/1/2018 granted
  2. 2.The Plaintiff's claim dismissed
  3. 3.The counterclaim filed by the 6th Defendant in ELC Case No. 1018 of 2014 dismissed
  4. 4.The 4th and 5th Defendants' claim for indemnity and contribution against the Third Parties dismissed
  5. 5.Each party to bear its own costs of the two suits

Authorities

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Legislation

  • Evidence ActSection 34
  • Evidence ActSection 35(1)
  • Companies Act (repealed)Section 3
  • Companies Act (repealed)Section 20
  • Companies Act (repealed)Section 20(2)
  • Companies Act (repealed)Section 57
  • Registration of Titles Act (repealed)Section 23
  • Registration of Titles Act (repealed)Sections 60 and 61
  • Registration of Titles Act (repealed)Section 28
  • Constitution of KenyaArticle 40
  • Land Registration Act

Cases cited (2)

  • Charles Karathe and 2 others v the Administrators of the Estate of John Wallace Mathare (Deceased) and others
    [2013] eKLR
  • Gitwany Investments Limited v Tajmal Limited and 3 others
    [2006] eKLR
Jurisdiction invoked
Original jurisdiction under the Environment and Land Court Act over disputes relating to title to land (L.R. No. 22140, Embakasi, Nairobi)

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, "Rift Valley Machinery Services Limited v Agro Complex (K) Limited & 11 others; Agro Complex Kenya Limited & 2 others (Third Parties) [2020] KEELC 3915 (KLR)", Case Analysis (2020). ELC Case No. 348 of 2008 (Consolidated with ELC Case No. 1018 of 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3915/eng@2020-01-17

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