Lakeview Developments Limited v Belgo Holdings Limited & another [2021] KEELC 3010 (KLR)
The bottom line
#A Kenyan court refused to strike out a land claim, confirming that registered titles obtained through alleged fraud can still be challenged in a full trial.
What this practically means
#Executive summary
#Key legal issues
#Res judicata
The plea fails because the Plaintiff was not a party to the previous suits and the legality of the transfer of the Suit Property from the Plaintiff to the 1st Defendant was never determined in them.
Section 7 of the Civil Procedure Act requires identity of parties and of the matter directly and substantially in issue. The earlier judgments declared the 1st Defendant proprietor but did not address how the property was acquired from the Plaintiff. The decree in HCCC No. 266 of 2005 was therefore not final on the issue now raised.
Judgments in rem under Section 44 of the Evidence Act
The previous judgments are not conclusive proof of entitlement because none declared the 1st Defendant entitled to the property absolutely as against the whole world including the Plaintiff.
A judgment in rem would be conclusive only if it declared entitlement absolutely. The decree extracted on 21/12/2008 did not address how the 1st Defendant came to be proprietor in 1995 or how the land was transferred from the Plaintiff, and cannot be said to be final. Nor can a judgment in rem confer title where fraud or unlawful acquisition is alleged.
Limitation and fraud
When the Plaintiff discovered the alleged fraud is a matter to be ascertained at trial; the suit is not struck out as time barred at the interlocutory stage.
The Plaintiff pleaded fraud and misrepresentation and asserted discovery in 2018. Under Section 26 of the Limitation of Actions Act, limitation does not run until the fraud is discovered or could with reasonable diligence have been discovered. The court agreed the issue of discovery of fraud is triable.
Challenges to registered title and trust
Protection of property under Article 40 is not absolute and does not extend to unlawfully acquired property; titles can be challenged for fraud, illegality or where the proprietor holds as trustee.
Sections 25, 26 and 28 of the Land Registration Act and, before 2012, Section 23 of the Registration of Titles Act permit challenge of title on grounds of fraud or misrepresentation to which the proprietor was party, and preserve trustee obligations. Whether the 1st Defendant holds the Suit Property in trust for the Plaintiff is a matter for trial.
Legal principles established
#- For res judicata under Section 7 of the Civil Procedure Act the matter must have been directly and substantially in issue in a former suit between the same parties or parties under whom they claim
- A judgment in rem does not by itself confer title where it is alleged the title was obtained through fraud or unlawfully acquired
- A proprietor's title may be challenged on grounds including fraud, misrepresentation, illegality or where the proprietor holds as trustee, under Sections 25, 26 and 28 of the Land Registration Act
- Allegations of fraud and the time of its discovery are matters for trial and cannot be resolved on affidavit evidence in a striking-out application
Court orders
#- 1.The application dated 9/10/2020 is dismissed
- 2.The costs of the application shall be in the cause
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over the suit land; Article 40 of the Constitution considered
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lakeview Developments Limited v Belgo Holdings Limited & another [2021] KEELC 3010 (KLR)", Case Analysis (2021). ELC Suit (application dated 9/10/2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3010/eng@2021-05-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.