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ELCPartially AllowedEnvironment and Land Case Civil Suit 64 of 2019· [2023] KEELC 20270 (KLR)

Waweru v Buruburu Farmers Company Limited

Environment and Land Court
21 September 2023
OAO. A. Angote
3,931 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ruled a 2019 land fraud suit was not time-barred, awarding the buyer a refund with interest because fraud delays the limitation clock.

What this practically means

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Executive summary

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The plaintiff sued Buruburu Farmers Company Limited over a sale agreement dated January 3, 2001 for Nairobi/Block 102/242, for which he paid Kshs. 100,000 and obtained a Certificate of Lease in 2001. In 2009 a restriction was registered over the title by the Estate of Muiruri Njoroge (Deceased). The Defendant's directors were convicted in Criminal Case No. 25411 of 2003 of obtaining money from the plaintiff by false pretense, a conviction upheld on appeal in 2014. The plaintiff sought declarations that the Defendant lacked capacity and did not pass good title, an alternative parcel of land or compensation at market value, refund of land rates and valuation costs, mesne profits, costs and interest. The Defendant filed a preliminary objection claiming the suit was time-barred under section 4(1) of the Limitation of Actions Act and did not call any witness. The court framed two issues: limitation and entitlement to remedies. Holding that the action was founded on fraud, it applied section 26(a) of the Limitation of Actions Act and found time began to run in 2009 when the criminal court convicted the directors; as a land dispute, the 12-year period under section 7 applied, so the suit was not time-barred. The court held the company liable through its directors and awarded refund of the Kshs. 100,000 purchase price with interest from January 3, 2001, plus Kshs. 15,000 valuation costs. The prayer for an alternative parcel of land was refused for want of a written agreement under section 3(3) of the Law of Contract Act, and the rates refund failed for lack of evidence. The Defendant was ordered to pay the costs of the suit.

Key legal issues

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01

Whether the suit, filed in 2019 over a 2001 sale agreement, was time-barred

Holding

The suit was not time-barred; time began to run in 2009 when the criminal court convicted the Defendant's directors of fraud, and the 12-year limitation under section 7 of the Limitation of Actions Act applied to land disputes

Reasoning

The court accepted that fraud attended the sale, as the Defendant's directors were convicted of obtaining money by false pretense. Under section 26(a) of the Limitation of Actions Act, limitation in fraud-based actions runs from discovery of the fraud. The plaintiff could only be sure of the directors' culpability after the criminal determination in 2009 (upheld on appeal in 2014). As the dispute concerns land, the 12-year period under section 7 applied, so the 2019 suit was filed in time.

p. 7
02

What remedies the plaintiff was entitled to

Holding

Refund of the Kshs. 100,000 purchase price with interest from 2001 and Kshs. 15,000 valuation costs; alternative relief of an equivalent parcel of land refused for want of a valid written agreement

Reasoning

The court held the plaintiff entitled to damages against the company for its directors' fraud, in the form of a refund of the purchase price with interest from the date of payment. However, the prayer for an alternative or equivalent parcel of land failed because section 3(3) of the Law of Contract Act requires a valid executed and attested written agreement for any transfer of land, and no such agreement for compensation was before the court. The rates refund claim failed for want of evidence.

p. 7

Legal principles established

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  • Where an action is based on fraud, limitation does not begin to run until the plaintiff discovers the fraud or could with reasonable diligence have discovered it
  • A company acts through its directors, so a company whose directors fraudulently sold land is liable in damages to the purchaser
  • Under section 3(3) of the Law of Contract Act, land can only be transferred after a valid executed and attested sale agreement

Court orders

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  1. 1.The Defendant to pay the Plaintiff Kshs. 100,000 together with interest at court rates from January 3, 2001 until payment in full.
  2. 2.The Defendant to reimburse the Plaintiff Kshs 15,000 being the payment of the valuation report.
  3. 3.The Defendant to pay the costs of the suit.

Authorities

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Legislation

  • Limitation of Actions ActSection 4(1)
  • Limitation of Actions ActSection 4(1)(a)
  • Limitation of Actions ActSection 26
  • Limitation of Actions ActSection 26(a)
  • Limitation of Actions ActSection 7
  • Land Registration Act, 2012Section 26
  • Law of Contract ActSection 3(3)
  • Criminal Procedure CodeSection 193A

Cases cited (9)

  • Alice Chemutai Too v Nickson Kipkurui Korir & 2 Others
    (2015) eKLR

    Upon a finding that title was acquired fraudulently, the onus shifts to the opposite party to challenge the claim that a title is tainted with fraud

  • Central Bank of Kenya Limited v Trust Bank Limited & 4 Others
    [1996] eKLR
  • Alba Petroleum Limited v Total Marketing Kenya Limited
    [2019] eKLR

    Quoted Gathoni v Kenya Co-Operative Creameries on the purpose of limitation law

  • Gathoni v Kenya Co-Operative Creameries Ltd
    [1982] KLR 104

    Limitation law protects defendants against unreasonable delay; plaintiffs must exercise reasonable diligence

  • Iga v Makerere University
    [1972] EA

    A plaint barred by limitation is barred by law; limitation bars the remedy, not the suit itself

  • Bosire Ogero v Royal Media Services
    [2015] eKLR

    Limitation goes to jurisdiction; a statute-barred matter cannot be entertained

  • Justus Tureti Obara v Peter Koipetai Nengisoi
    (2014) eKLR

    Under section 26(a), limitation in fraud-based actions runs from discovery of the fraud, a matter ascertained at trial

  • Commissioner of Police and Director of Criminal Investigations Department v Kenya Commercial Bank and Others
    [2013] eKLR

    Concurrent civil and criminal proceedings are allowed, but criminal process must not be used as a pawn in civil disputes

  • Republic v Waweru Nginya & 5 Others
    Criminal Case No. 25411 of 2003

    Conviction of the Defendant's directors for obtaining money by false pretense from the Plaintiff

Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over disputes relating to land (sale of Nairobi/Block 102/242)

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, "Waweru v Buruburu Farmers Company Limited", Case Analysis (2023). Environment and Land Case Civil Suit 64 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20270/eng@2023-09-21

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