Igwe Geeral Stores Ltd & 2 others v Board of Trustees, National Social Security Fund & 3 others (Environment & Land Petition E008 of 2020) [2022] KEELC 3191 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Locus standi of the 2nd and 3rd petitioners (directors/shareholders)
The 2nd and 3rd petitioners lack locus standi; only the 1st petitioner company could sue for wrongs done to it; their claim was struck out
The lease and sale agreements were entered into by the 1st petitioner company, a separate legal entity distinct from its directors and shareholders. Relying on Foss v Harbottle principles and Salomon v Salomon, the court held that only the company can sue for wrongs occasioned to it. Locus standi is a prerequisite to civil and constitutional proceedings; absent it, proceedings are void.
Whether the 1st petitioner's property rights under Article 40 were violated
No violation; the 1st petitioner was never registered as proprietor and her rights had not crystalized at revocation
The gazettement and revocation occurred before transfer and registration of the suit property to the 1st petitioner. Under sections 24 and 25 of the Land Registration Act, proprietary rights vest upon registration. Notices, if any, were properly due to the 1st Respondent as registered owner, and it was the 1st Respondent that filed the review before NLC.
Entitlement to compensation and against whom
The 1st petitioner is entitled to compensation of Kshs.100,000,000/= from the 1st Respondent for breach of the sale agreement, the 1st Respondent having held the land in trust for her
The revocation of the 1st Respondent's title meant it had no land to convey, breaching the sale agreement. The loss flowed from breach of contract, not compulsory acquisition. The unchallenged valuation report fixed the value at Kshs.100,000,000/=. Compensation is chargeable against the 1st Respondent, not public bodies.
Mesne profits, exemplary and aggravated damages
None awardable; mesne profits require ownership, and the revocation was a lawful constitutional process
Mesne profits presuppose wrongful deprivation of property owned by the claimant; the 1st petitioner was never registered owner. Exemplary and aggravated damages require proof of violation of the claimant's constitutional rights, but the revocation recovered unlawfully acquired public land under Article 40(6). Damages for mental distress cannot lie for a company.
Legal principles established
#- A company is a separate legal entity; only the company, not its directors or shareholders, may sue for wrongs done to it
- Property rights under Article 40 accrue only upon issuance of a certificate of title; a purchaser under an uncompleted sale has no registered proprietary rights
- Where land is transferred in breach of a sale agreement, compensation is founded on breach of contract, not compulsory acquisition
- Sanctity of title is not a vehicle for fraud or illegality or unjust enrichment at public expense
- A company cannot be awarded damages for mental anguish and psychological distress
Court orders
#- 1.The 1st petitioner be and is hereby awarded the sum of Kshs.100,000,000/= only as against the 1st Respondent, on account of compensation for the loss of L.R No 209/21246 (Original No. 209/11314/3)
- 2.The Petition on behalf of the 2nd and 3rd petitioners be and is hereby struck out
- 3.The petitioners' claim against the 2nd, 3rd and 4th Respondent be and is hereby dismissed
- 4.The 1st petitioner shall be entitled to interest at court rates in respect of the award
- 5.The 1st petitioner be and is hereby awarded costs as against the 1st Respondent only, to be taxed and certified by the Taxing Officer of the Court
- Jurisdiction invoked
- Articles 40, 47 and 23(3) of the Constitution, 2010 (petition for violation of fundamental rights over land)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Igwe Geeral Stores Ltd & 2 others v Board of Trustees, National Social Security Fund & 3 others (Environment & Land Petition E008 of 2020) [2022] KEELC 3191 (KLR)", Case Analysis (2022). Petition dated August 10, 2020 (Nairobi ELC). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3191/eng@2022-07-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.