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ELCPartially AllowedEnvironment & Land Case 005 of 2022· [2023] KEELC 18975 (KLR)

Tonini Holdings Limited v Kenya Urban Roads Authority & another

Environment and Land Court
25 July 2023
JMJA Mogeni
3,706 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A landowner whose property was taken for the Northern Bypass won over KES 110 million in delayed compensation and development costs from the State.

What this practically means

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Executive summary

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Tonini Holdings Limited sued the Kenya Urban Roads Authority and the National Land Commission claiming that its land, LR No 11088/3, compulsorily acquired for the Northern Bypass under the repealed Land Acquisition Act, Cap 295, was not fully compensated. The plaintiff, awarded Kshs 111,731,300 on 20/07/2011 and paid on 27/03/2012 after a 251-day delay, sought Kshs 4,610,064 as statutory interest, plus Kshs 105,463,367 being costs incurred on a proposed USIU hostels development, with interest and costs. The defendants maintained the acquisition followed the law, the award was accepted in full and final settlement, and any claims should have been raised at the inquiry stage; the 2nd defendant denied any role in the acquisition. The court found the delay uncontroverted and, applying Section 16(1) of the repealed Act, held the plaintiff entitled to interest since possession was taken before payment. On the professional fees, the court found the plaintiff's unrebutted evidence of the consultancy agreement and approvals, and applying the Schedule to the repealed Act and the principle of equivalence, held that the development preparation expenses ought to have been considered in the award. Judgment was entered against the defendants jointly and severally for both amounts, with interest at court rates, but the court declined to award costs against the defendants to protect public coffers, ordering each party to bear their own costs.

Key legal issues

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01

Entitlement to interest for delayed payment of the compensation award

Holding

The plaintiff is entitled to interest as claimed since possession was taken before payment and the 251-day delay was not controverted

Reasoning

Section 16(1) of the repealed Land Acquisition Act provides that where possession is taken before payment of the award, interest at not less than 6% per annum accrues from taking of possession until payment in full. The 1st defendant did not deny taking possession before payment, and the 251-day delay was uncontroverted. The plaintiff's advocate had raised the claim by letter dated 12.06.2013 which was not honoured.

02

Whether the costs of the proposed USIU hostels development were compensable

Holding

The expenses incurred in preparation for the hostels development ought to have been considered in the award

Reasoning

The Schedule to the repealed Land Acquisition Act lists matters to be considered in assessing compensation, including market value and injurious affection of other property and earnings. The plaintiff's evidence of the consultancy agreement and approvals was unrebutted, and the approvals predated the notices of intended acquisition. Compensation follows the principle of equivalence, so losses fairly attributed to the taking must be paid.

Legal principles established

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  • Where an acquiring entity takes possession before full payment of compensation, interest at not less than 6% per annum accrues from the time possession was taken until payment in full
  • Where a statute prescribes a manner of doing a thing, it must be done in that manner and no other
  • Compensation for compulsory acquisition is quantified on the principle of equivalence - losses fairly attributed to the taking, no more
  • Expenses incurred in preparation for a development on land compulsorily acquired ought to have been considered in the award

Court orders

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  1. 1.Judgment for the plaintiff against the defendants jointly and severally for Kshs 4,610,064
  2. 2.Judgment for the plaintiff against the defendants jointly and severally for Kshs 105,463,367
  3. 3.Interest on Kshs 4,610,064 at court rates from 27.3.2012 until payment in full
  4. 4.Interest on Kshs 105,463,367 at court rates from the date of judgment until payment in full
  5. 5.Each party to bear their own costs of the suit

Authorities

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Legislation

  • Land Acquisition Act, Cap 295 (Repealed)Section 16; Section 16(1); Section 19(1),(3) and (4); Schedule paragraphs 1 and 4
  • Interpretation and General Provisions Act, Cap 2Section 23
  • Land Act, 2012not specified
  • Land Value (Amendment) Act, 2019Section 107A(1)

Cases cited (7)

  • Fivestar Agencies Ltd v National Land Commission
    (2014) eKLR

    Relied on by the 2nd defendant quoting Section 23 of the Interpretation and General Provisions Act and the repealed Land Acquisition Act

  • State of Jharkhard & others v Ambay Cements & another

    Cardinal rule of interpretation that a thing prescribed by statute must be done in the prescribed manner

  • Republic v Attorney General & another Exparte Ongata Works Ltd
    [2016] eKLR

    That the interest sum due shall accrue interest at court rates

  • Shah v Attorney General (No 3)
    Kampala HCC Miscellaneous 31/1969 [1970] EA 543

    Cited within Ongata Works on interest accruing at court rates

  • Kanini Farm Ltd v Commissioner of Lands
    (1986) KLR 310

    Market value as basis of compensation; comparable sales and awards to be considered

  • Limo v Commissioner of Lands
    KLR (E&L) 175

    Courts consider nearness to town and road access in assessing compensation

  • Katra Jama Issa v Attorney General & 3 others
    [2018] eKLR

    Principle of equivalence in compensation for compulsorily acquired property

Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over compulsory acquisition of land and compensation

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Tonini Holdings Limited v Kenya Urban Roads Authority & another", Case Analysis (2023). Environment & Land Case 005 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18975/eng@2023-07-25

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