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ELCDismissedEnvironment & Land Case 1140 of 2016· [2023] KEELC 18442 (KLR)

Okayo & another v Okindo & 6 others

Environment and Land Court of Kenya
29 June 2023
JOJ.M. Onyango
9,677 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~39 min to read original · ~4 min brief

The bottom line

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A Kenyan land fraud claim collapsed because the plaintiffs failed to substitute two deceased defendants within one year, losing critical evidence.

What this practically means

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Executive summary

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The 1st and 2nd plaintiffs sued over Kisii Town Block 11/23, alleging that the 1st, 2nd and 3rd defendants, being officials of the 2nd plaintiff cooperative, fraudulently sold the society's land in 2001 to interests of the 4th defendant without members' authority, whereafter the property passed through companies associated with the 4th defendant to the 6th defendant, which charged it to the 7th defendant bank for Kshs.15 million. The plaintiffs sought declarations nullifying the sale and the charges, reversion of the property, injunction and eviction. The 1st and 4th defendants died during the pendency of the suit and were never substituted, so the case against them abated. The court framed six issues, beginning with the effect of the abatement. Relying on Order 24 rule 4 of the Civil Procedure Rules and authorities on abatement, it held that the claims against the deceased defendants were extinguished and evidence against them could not be relied upon. Because the 4th defendant was central to the alleged scheme, being a director of the companies in the transfer chain, the fraud allegations against the surviving defendants could not be proved to the required standard - fraud must be distinctly pleaded and proved above a balance of probabilities. The court declined to determine whether the transfers were procedural, whether the 5th, 6th and 8th defendants were innocent purchasers, or whether the 7th defendant's charge was valid, as those questions could not be answered without impugning the deceased's role. The suit was dismissed, not for lack of merit but because the deaths robbed the plaintiffs of critical evidence, with each party bearing their own costs.

Key legal issues

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01

Effect of abatement of suit against deceased defendants

Holding

The suit against the 1st and 4th defendants abated one year after the 4th defendant's death (18 February 2017); the case against them was extinguished and the allegations of collusion and fraud against the surviving defendants could not be proved.

Reasoning

Order 24 rule 4 CPR requires substitution of a deceased defendant's legal representative within one year, failing which the suit abates. Abatement extinguishes the claim against the deceased defendant. Since the 4th defendant was central to the alleged fraudulent scheme (director of the 8th and 5th defendants), his death and abatement deprived the plaintiffs of the evidence needed to prove fraud against the remaining defendants.

p. 16
02

Proof of fraud

Holding

The plaintiffs failed to prove fraud to the required standard; the Inquiry Report alone could not establish fraud against the surviving defendants in the absence of the deceased 1st and 4th defendants.

Reasoning

The court restated the authorities that fraud must be distinctly alleged and distinctly proved, and cannot be left to inference. The Inquiry Report showed the Management Committee sold the property without members' authority, but with the central actors deceased and their claims abated, the fraud allegations against the surviving transferees and chargee could not be sustained.

p. 14
03

Validity of subsequent transfers and the 7th defendant's charge

Holding

The court declined to rule on whether the transfers to the 5th and 6th defendants were procedural, whether they were innocent purchasers, and whether the 7th defendant's charge was valid, because these questions could not be answered without impugning the role of the deceased 4th defendant.

Reasoning

The 4th defendant was a director of both the 8th and 5th defendants and was pivotal to the chain of transfers. With the case against him abated, the transfers stood unchallenged by default, and the innocent purchaser and charge validity questions became academic.

p. 16

Legal principles established

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  • Fraud must be pleaded, particularised and proved to a standard higher than a balance of probabilities but not beyond reasonable doubt.
  • Where a suit against a defendant abates for failure to substitute the deceased defendant within one year, the claim against that defendant is extinguished and evidence adduced against them cannot be relied upon.
  • A claim founded on personal fraud does not survive the demise of the alleged fraudster, so substitution of a legal representative may not assist the plaintiff.

Court orders

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  1. 1.The plaintiffs' case is dismissed.
  2. 2.Each party shall bear their own costs.

Authorities

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Legislation

  • Civil Procedure RulesOrder 24 rule 4(1), (2), (3)
  • Limitation of Actions Act (Cap 22)section 4(2); section 26(c)
  • Land Registration Actsection 26(1)(a) and (b)
  • Cooperative Societies Act

Cases cited (19)

  • Daudi Kiptugen v Commissioner of Lands & 4 Others
    (2015) eKLR

    Acquisition of title cannot be construed only in the end result; the process of acquisition is material.

  • Arthi Highway Developers Limited v West End Butchery Limited & 6 Others
    (2015) eKLR

    Due diligence beyond official search; fraud must be pleaded and proved above balance of probabilities.

  • Daniel Kipruto Metto v Chase Bank Limited
    (2018) eKLR

    Purchasers must ascertain the status and history/root of title beyond an official search.

  • Esther Ndegi Niiru & Another v Leonard Gatei
    (2014) eKLR

    Due diligence beyond Certificate of Official Search in land transactions.

  • Katende v Haridar & Company Limited
    (2008) 2 E.A 173

    Definition of a bona fide purchaser for value without notice.

  • Zachary Omondi Odongo v Bernard Stephen Omondi & 2 Others
    (2022) eKLR

    Title obtained illegally, unprocedurally or through corruption is impeachable even if holder did not contribute.

  • Kampala Bottlers Limited v Damanico (U) Limited

    Fraud must be specifically pleaded with particulars (as cited in John Mbugua Gitae).

  • John Mbugua Gitae v Simon Parkoyiet Mokare & 6 Others
    (2014) eKLR

    Pleading of fraud and burden of proving fraud to a higher standard.

  • aws Ltd v Othaya Farmers Cooperative Society Ltd
    (1977) eKLR

    Society rules concern internal management and do not protect against maladministration against innocent third parties.

  • Nicholas Kombe Pembe v Kenga Kombe & 3 others
    (2017) eKLR

    Orders against deceased defendants not substituted may be set aside; abatement.

  • Gathoni v Cooperative Creameries Ltd
    (1882) KLR

    Court cannot grant remedy or relief in a time-barred suit.

  • Moses Parantai & Peris Wanjiku Mukuru suing as the legal representative of the estate of Sospeter Mukuru Mbeere (Deceased) v Stephen Njoroge Macharia
    (2020) eKLR

    Test for determining whether fraud has been proved.

  • Mary Wacigi Kiarie v Samson Muiruri Gathingu & Another
    (2021) eKLR

    Abatement means the suit is extinguished; serious ramifications for the plaintiff's case.

  • Lawrence Muriithi M'thika v Munyi Murwanthika & 3 others
    (2021) eKLR

    Consequences of failing to substitute a deceased defendant; abatement is fatal.

  • Fredrick Muroko Gituku v Josephine W. Kirika
    (2013) eKLR

    A claim founded on personal fraud does not survive the demise of the alleged fraudster.

  • Koinange & 13 Others v Charles Karuga Koinange
    1986 KLR at page 23

    Onus on plaintiff to prove fraud strictly; standard above balance of probabilities (citing Ratilal Patel Makanji).

  • Ratilal Patel Makanji
    (1957) EA 314

    Allegations of fraud must be strictly proved.

  • Vijay Morjaria v Nansingh Madhusingh Darbar & another
    [2000] eKLR (Civil Appeal No. 106 of 2000)

    Fraud must be specifically pleaded with particulars; cannot be inferred from facts.

  • Kinyanjui Kamau v George Kamau Njoroge
    [2015] eKLR (Civil Appeal No 132 of 2005)

    Fraud must be pleaded, particularized and supported by evidence.

Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over disputes relating to title to land (Article 162(2)(b) Constitution / ELC Act)

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, "Okayo & another v Okindo & 6 others", Case Analysis (2023). Environment & Land Case 1140 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18442/eng@2023-06-29

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