Stelco Properties Limited & another v Njugi Ventures Limited & anothers [2021] KEELC 3756 (KLR)
The bottom line
#A Nairobi court cancelled a fraudulent land transfer, evicted the would-be owner, and awarded Kshs 12 million because forged documents cannot transfer land.
What this practically means
#Executive summary
#Key legal issues
#Validity of the transfer of the suit property to the 1st defendant
The partial re-conveyance of mortgage and the instrument of transfer dated 2nd August 2016 were forgeries; the 1st defendant acquired no proprietary interest
Both plaintiffs disowned the documents. The 2nd plaintiff proved it had changed its name from Delphis Bank, never employed advocate Ramesh Patel, and that signatory C.J.B Larby had died 10 years earlier. The 1st plaintiff proved by CR12 and annual returns that the purported transferors were never its directors. The 1st defendant filed no defence and adduced no evidence. Fraud vitiates title and a void document needs no court order to set it aside.
Whether the 1st defendant committed trespass
Having no lawful interest, the 1st defendant's entry, demolition of structures and construction of a perimeter wall amounted to trespass
Trespass is entry on land in possession of another without justifiable cause; title carries legal possession. The court found the 1st plaintiff the lawful owner entitled to possession, and that the 1st defendant entered through agents without permission, destroyed structures and began building a perimeter wall. Its entry being without lawful cause, it was trespass.
Reliefs and damages against the defendants
Declaratory, injunctive and rectification reliefs granted; Kshs. 2,000,000 general and Kshs. 10,000,000 exemplary damages awarded against the 1st defendant
The 2nd defendant's conduct in registering the transfer without the original indenture smacked of fraud and collusion, entitling plaintiffs to declaratory and injunctive relief against both defendants. General damages were assessed despite no proved specific loss, and exemplary damages were appropriate because the 1st defendant's arbitrary, oppressive entry aimed at pecuniary benefit fits the Rookes v Barnard profit category.
Costs
The 1st defendant, as architect of the fraud, bears the plaintiffs' costs
Under section 27 of the Civil Procedure Act costs follow the event at the court's discretion. The plaintiffs succeeded and the 1st defendant's fraud occasioned the suit, so it was ordered to pay the costs.
Legal principles established
#- A forged or fraudulent instrument of transfer is a nullity and cannot pass any interest in land
- The process of acquisition of title is material; title not acquired through a proper process is not a good title
- Registration of title is absolute and indefeasible only where creation of the title accorded with the law and was not procured by fraud
Court orders
#- 1.Declaration that L.R No. 21/1/37 measuring approximately 6.5 acres is legally owned by the 1st plaintiff
- 2.Declaration that the 1st defendant's impugned instrument of transfer/conveyance dated 2nd August 2016 was fraudulent and illegal and is null and void
- 3.Order for rectification of the indenture and/or register by cancellation of the impugned conveyance in the name of the 1st defendant and restoration of the 1st plaintiff as duly registered owner
- 4.Declaration that the eviction of the 1st plaintiff's employees, agents, officers and/or directors, the demolition of developments and construction of a perimeter wall by the 1st defendant was unlawful and amounted to trespass
- 5.Permanent injunction restraining the 1st defendant from trespassing, encroaching, selling, alienating, charging, entering, constructing, evicting, demolishing or interfering with the 1st plaintiff's quiet possession of the suit property
- 6.Order nullifying the partial re-conveyance of mortgage dated 2nd August 2016 and reinstating the mortgage dated 12th September 1988 over L.R No. 336/11 and L.R No. 21/1/37
- 7.Declaration that the partial re-conveyance dated 2nd August 2016 is null and void and of no legal effect and should be deregistered by the 2nd defendant forthwith
- 8.Kshs. 2,000,000/- general damages for trespass payable by the 1st defendant to the 1st plaintiff
- 9.Kshs. 10,000,000/- exemplary damages payable by the 1st defendant to the 1st plaintiff
- 10.Costs of the suit to be paid by the 1st defendant to the plaintiffs
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under Article 162(2)(b) of the Constitution over disputes relating to land (suit filed by plaint)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Stelco Properties Limited & another v Njugi Ventures Limited & anothers [2021] KEELC 3756 (KLR)", Case Analysis (2021). Environment and Land Court Civil Suit (Nairobi), plaint dated 14th September 2017, amended 26th July 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3756/eng@2021-04-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.