Kango Enterprises Limited & another v Unsworth (Sued as the administrator the Estate of John Fraser Unsworth) & 7 others (Suing as the administrator ad litem of the Estate of the Late Morris Ngole Machache) (Environment and Land Case Civil Suit 41 of 2012 & E11 of 2020 (Consolidated)) [2022] KEELC 3959 (KLR)
The bottom line
#A Malindi court cancelled a fraud-tainted land title and ordered the State to pay Kshs 105 million, showing Kenya's courts will look past a title deed when fraud is proven.
What this practically means
#Executive summary
#Key legal issues
#Whether the 2nd Plaintiff's suit was time barred under the Limitation of Actions Act
Not time barred; the claim is for relief from the consequences of a mistake/fraud, so limitation runs from discovery under Section 26 of the Limitation of Actions Act
Although the title was cancelled in 1986, the 2nd Plaintiff pleaded she was unaware of the cancellation. The claim is grounded in the illegality of the Commissioner of Lands' acts and falls under Section 26(a) and (c). Further, the subject land has been continuously litigated in criminal, succession and civil proceedings, and the husband was convicted of fraud in 2009, complicating discovery. The court found the action was for relief from a mistake that could not have been discovered with reasonable diligence.
Whether the 1st Defendant is a bona fide purchaser for value without notice
No; the 1st Defendant failed the bona fide purchaser test
The 1st Defendant paid Kshs 13,440,000 to purported directors Kazungu and Oduor without searching the Companies Registry for the real directors (Ida Betty Odinga and Raila Odinga); upon learning the property belonged to the Mwambo Kai Family he paid a further Kshs 14,000,000, showing knowledge of the fraud. He was also a complainant in a criminal case where a refund of the purchase price was ordered. He therefore cannot be protected as a bona fide purchaser.
Who is the rightful owner of the suit land
Kango Enterprises Limited is the rightful owner
The 1st Plaintiff's title dated May 6, 1999 tallied with the Green Card, whereas the 1st Defendant's title dated September 8, 1999 had an entry absent from the Green Card, indicating forgery. The perpetrators of the fraud were convicted in criminal proceedings. The consent between the 1st Plaintiff and 2nd Plaintiff recognized Kango as bona fide purchaser. Under Sections 26 and 80 of the Land Registration Act, the fraudulent title is impeachable and the register may be rectified.
Whether the 2nd Plaintiff is entitled to compensation from the State defendants
Yes; the 1986 cancellation by the Commissioner of Lands was unconstitutional and void, entitling the estate to compensation
Relying on Helena Kithinji v Attorney General (Rawal J) and Regina Ngaku v Commissioner of Lands, courts had already declared the 1986 cancellation of titles in the Chembe/Kibabamshe scheme unconstitutional and void for breach of natural justice. Although the deceased surrendered the title and was later convicted of fraud, this did not legalize the cancellation. The court awarded Kshs 100,000,000 market value plus 5% exemplary damages, following Rose Kavita Mwivithi.
Legal principles established
#- A court faced with two or more competing titles over the same land must investigate the root of each title and uphold the one that conforms to procedure and traces its root without a break in the chain
- Under Section 26(1)(b) of the Land Registration Act, a title may be impeached where it was acquired illegally, unprocedurally or through a corrupt scheme even if the title holder was not personally party to the fraud
- A purchaser who fails to conduct due diligence, including a search of company records to verify directorship, cannot qualify as a bona fide purchaser for value without notice
- Entries in a Green Card must tally with the title deed; an entry absent from the Green Card indicates forgery or an anomaly
- Where a claim is based on fraud or relief from the consequences of a mistake, limitation does not begin to run until the plaintiff discovered or could with reasonable diligence have discovered the fraud or mistake
Court orders
#- 1.A declaration that the Plaintiff (Kango Enterprises Limited) is the lawful proprietor of all that parcel of land known as Chembe/kibabamshe/327 and is entitled to legal and actual possession thereof
- 2.A declaration that the processing and issuance by the Commissioner of Lands and the Registrar of Titles of the title deed in the 1st Defendant's possession in respect of Chembe/kibabamshe/327 was fraudulent and/or erroneous and thus unlawful and a nullity
- 3.An order directing the Register of Titles to rectify the register
- 4.The 1st Defendant to give vacant possession within the next 45 days to the Plaintiff failing which eviction order to issue
- 5.A permanent injunction restraining the 1st Defendant, their agents, servants or otherwise howsoever from trespassing, encroaching, alienating, transferring, selling, leasing, charging or in any other way dealing with Chembe/kibabamshe/327
- 6.Costs of the suit with interest thereon at court rates to be paid by the Defendants (as against Kango's claim)
- 7.In ELC No E11 of 2020: the 3rd, 4th and 5th Defendants, or their successors in office, to pay to the 2nd Plaintiff compensation of Kshs 100,000,000 being the market value of the suit land
- 8.The 3rd, 4th and 5th Defendants, or their successors in office, to pay to the 2nd Plaintiff exemplary damages of Kshs 5,000,000, being 5% of Kshs 100,000,000
- 9.The 3rd, 4th and 5th Defendants, or their successors in office, to pay the 2nd Plaintiff's costs of the suit
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over land disputes (Environment and Land Court Act); consolidated suits heard and determined in the first instance
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kango Enterprises Limited & another v Unsworth (Sued as the administrator the Estate of John Fraser Unsworth) & 7 others (Suing as the administrator ad litem of the Estate of the Late Morris Ngole Machache) (Environment and Land Case Civil Suit 41 of 2012 & E11 of 2020 (Consolidated)) [2022] KEELC 3959 (KLR)", Case Analysis (2022). ELC No 41 of 2012 (lead file, consolidated with ELC No E11 of 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3959/eng@2022-08-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.