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ELCDismissedEnvironment and Land Appeal 10 of 2020· [2023] KEELC 19275 (KLR)

Mathu & 22 others v Inkom Investment Limited & 2 others

Environment and Land Court
25 July 2023
6,851 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~27 min to read original · ~4 min brief

The bottom line

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A Kenyan court dismissed 23 land buyers' appeal, confirming that share certificates without registered titles do not make you a lawful landowner.

What this practically means

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Executive summary

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This was a first appeal to the Environment and Land Court at Thika against the judgment of Hon M.W Mutuku, Senior Principal Magistrate, in Thika CMCC Civil Case No. 36 of 2011, delivered on 26/7/2015. The 1st respondent, Inkom Investment Limited, had sued the 2nd respondent, a surveyor engaged in 2003 to subdivide a 10-acre portion of L.R 61/16 into 105 plots, together with the appellants as purchasers, claiming injunction, eviction, mesne profits and accounts, alleging the surveyor sold plots without authority. The trial court found the appellants were trespassers with no legal rights, granted a permanent injunction and eviction orders, alternatively directed occupants to purchase their plots at market value, and ordered transfer of four plots to the 3rd respondent as bona fide purchaser. The appellants appealed five years later, limitation having been enlarged by Okongo J. The appeal was canvassed on five issues: failure to determine all issues; validity of the suit absent a board resolution; validity of the appointment of the 1st respondent's advocates; estoppel by conduct; and bona fide purchaser status. The court held the board resolution issue was unpleaded and could not be introduced on appeal; that failure to exhibit a board resolution does not render a suit incompetent; that estoppel was not specially pleaded and was unsupported by any unequivocal representation; and that none of the appellants, who held only share certificates, conducted no searches and ignored section 3(3) of the Law of Contract Act, qualified as innocent purchasers for value. The appeal was dismissed with costs to the appellants.

Key legal issues

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01

Whether the trial court failed to determine all issues raised

Holding

The board resolution issue was never pleaded, framed or canvassed at trial, so the trial court was not obliged to determine it

Reasoning

Issues flow from pleadings; parties who elect not to plead or frame an issue before or during trial cannot introduce it on appeal or blame the trial court for not determining it. A director of the 1st respondent testified as PW1 and deposed that the other directors allowed him to sue on their behalf, so the point was also evidentially answered.

p. 9
02

Validity of the suit and of counsel's appointment absent a board resolution

Holding

Failure to exhibit a board resolution did not render the suit incompetent nor invalidate the appointment of the advocates

Reasoning

Kenya's Court of Appeal has held that failure to file a board resolution does not render a suit incompetent; the burden lay on the appellants to show by evidence that the verifying deponent was unauthorised, which they did not do. The Ugandan decision in Bugerere Coffee Growers was overruled by the Ugandan Supreme Court and re-affirmed in Kenya in Arthi Highway Developers.

p. 11
03

Estoppel by conduct against the 1st respondent

Holding

Estoppel was not available; it was not specially pleaded with particularity and there was no unequivocal representation by the 1st respondent

Reasoning

Section 120 of the Evidence Act requires an intentional declaration, act or omission causing another to believe and act on a thing. The appellants did not plead the doctrine with the required particularity, and there was no evidence of any unequivocal representation by the 1st respondent permitting the appellants to enter or develop the suit land.

p. 11
04

Whether the appellants were innocent purchasers for value without notice

Holding

None of the appellants qualified as bona fide purchasers for value

Reasoning

The doctrine applies only where the purchaser is registered as proprietor of titled land. The appellants held only share certificates issued by the 2nd respondent, conducted no searches, failed the due diligence requirement, and ignored section 3(3) of the Law of Contract Act; the purported vendor had no title to pass.

p. 13

Legal principles established

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  • Failure to exhibit a board resolution authorising institution of a suit does not in itself render the suit incompetent
  • The doctrine of innocent purchaser for value applies only where there is a title to land and the purchaser has been registered as proprietor
  • A first appellate court must re-evaluate the evidence and reach its own independent conclusions
  • Parties cannot introduce unpleaded issues at the appellate stage

Court orders

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  1. 1.The appeal is dismissed
  2. 2.The appellants shall bear costs of the appeal

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 159(1)(d)
  • Evidence ActSection 120
  • Law of Contract ActSection 3(3)
  • Land Registration Act
  • Civil Procedure Rules (Order 4 rule 1(4))Order 4 rule 1(4)

Cases cited (20)

  • Chandaria v Njeri (1982) KLR
    (1982) KLR

    Trial court's duty to determine all issues raised

  • Appollo Insurance Company Limited v East African Development Bank & Another (2016) eKLR
    (2016) eKLR

    Trial court's duty to determine all issues raised

  • East African Portland Cement Ltd v The Capital Markets Authority & 5 Others
    [2014] eKLR

    Necessity of board resolution for instituting suit and instructing counsel

  • Mcllkenny v Chief Constable of West Midlands (1980) All ER 227
    (1980) All ER 227

    Estoppel by conduct

  • 748 Air Services Limited v Theuri Munyi (2017) eKLR
    (2017) eKLR

    Estoppel by conduct

  • Serah Njeri Mwobi v John Kimani Njoroge (2013) eKLR
    (2013) eKLR

    Estoppel by conduct

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

    Definition and requirements of a bona fide purchaser for value

  • Kenya Ports Authority v Kenya Power & Lighting Co. Limited (2012) eKLR
    (2012) eKLR

    Company resolutions and internal management

  • Anchor Limited v Sports Kenya (2017) eKLR
    (2017) eKLR

    Company resolutions and internal management

  • Susan Munyi v Keshar Shiani (2013) eKLR
    (2013) eKLR

    Duty of a first appellate court to re-evaluate evidence

  • Abok James Odera t/a A. J Odera & Associates v John Patrick Machira t/a Machira & Co Advocates [2013] eKLR
    [2013] eKLR

    Duty of a first appellate court to re-evaluate, re-assess and re-analyse evidence

  • Farrah v Kenya Ports Authority [1992] eKLR
    [1992] eKLR

    Centrality of pleadings in giving fair notice of the case to be met

  • Makupa Transit Shade Limited & another v Kenya Ports Authority & another [2015] eKLR
    [2015] eKLR

    Sufficiency of a statement that a deponent was duly authorised

  • Spire Bank Limited v Land Registrar & 2 others [2019] eKLR
    [2019] eKLR

    Order 4 rule 1(4) not intended as a procedural technicality to strike out suits

  • Bugerere Coffee Growers Limited v Sebaduka & Another (1970) EA 147
    (1970) EA 147

    Requirement of board resolution to instruct counsel; held overruled

  • United Assurance Company Limited v Attorney General SCCA No 1 of 1998
    SCCA No 1 of 1998

    An authorised director has the powers of the board to act for the company

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

    Re-affirmation of the law on board resolutions; due diligence by land buyers

  • Diamond Trust Bank Kenya Ltd v Said Hamad Shamiyi & 2 others (2015) eKLR
    (2015) eKLR

    Estoppel must be specially pleaded with particularity

  • D & C Builders v Sidney Rees (1966) 2QB 617
    (1966) 2QB 617

    Equitable principle underlying estoppel

  • Weston Gitonga & 10 others v Peter Rugu Gikanga & another (2017) eKLR
    (2017) eKLR

    Black's Law Dictionary definition of a bona fide purchaser

On appeal from
Chief Magistrate's Court at Thika
Thika Chief Magistrate Court Civil Case No. 36 of 2011
Jurisdiction invoked
First appellate jurisdiction over the Chief Magistrate's Court under the Environment and Land Court Act; limitation for filing enlarged by Okongo J in Milimani ELC Misc Application No 273 of 2015

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, "Mathu & 22 others v Inkom Investment Limited & 2 others", Case Analysis (2023). Environment and Land Appeal 10 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/19275/eng@2023-07-25

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