Export Milling (EPZ) Ltd v H. Young & Co. (EA) Limited & 2 others (Environment & Land Case 85 of 2018) [2024] KEELC 1355 (KLR)
The bottom line
#Kenya's land court ordered KPA to pay over Kshs 740 million for taking land for Kipevu Road without following the compulsory acquisition procedure.
What this practically means
#Executive summary
#Key legal issues
#Whether the plaintiff was the bona fide owner of the suit land entitled to the orders sought
Yes. The 3rd Defendant failed to prove its allegations of fraud and illegality; the plaintiff's lease was bona fide, first in time, and indefeasible under Sections 24, 25 and 26 of the Land Registration Act.
The court held that allegations of fraud must be pleaded and strictly proved on a standard higher than balance of probabilities. The 3rd Defendant's claim that the plot was leased to Olsa (EPZ) Ltd was contradicted by its own witness, who confirmed the Olsa lease had been terminated/surrendered. The letter of offer was accepted on 25th July 2013 within its validity period. Applying Munyu Maina and the first-in-time principle (Wreck Motors, Gitwany Investment), the court found the plaintiff's lease registered on 9th May 2018 was legal and bona fide, vesting indefeasible title.
Whether the government could lawfully deprive a person of property via a grant of lease to another and the lawful procedure for compulsory acquisition
No. Deprivation is lawful only through compulsory acquisition in conformity with Article 40(3) of the Constitution and Sections 107 to 120 of the Land Act. The 2nd Defendant did not follow the law: no notice of intention to acquire under Section 107(5) was issued to the plaintiff.
The court traced the constitutional and statutory scheme for compulsory acquisition under Article 40(3) and Part VIII of the Land Act, citing Fort Properties, Patrick Musimba and African Gas and Oil. Section 120(2) permits early possession only in urgent necessity after fifteen days from publication of the notice of intention to acquire. Here, no notice of intention to acquire was ever issued to the plaintiff, who had not seen any such notice. Taking possession without payment of compensation and without notice violated Article 40(3)(a) and (b) of the Constitution.
Whether the 3rd Defendant's Counter-Claim is sustainable
Yes. The court found merit in the 3rd Defendant's claim, granting its declarations and the mandatory injunction compelling the 2nd Defendant to pay compensation for the acquisition to the 3rd Defendant as landlord.
The court noted that the 3rd Defendant had joined issues with the plaintiff over the land and the compensation. The plaintiff was held to be the bona fide lessee for the 50-year term, with the 3rd Defendant remaining landlord with a reversionary interest. Consequently the court found merit in the 3rd Defendant's counter-claim and granted the declarations it sought and the mandatory order compelling payment of the landlord's reversionary interest of Kshs. 202,606,039.55.
Whether damages/compensation should be awarded for the unlawful compulsory acquisition
Yes. The plaintiff and the 3rd Defendant were awarded the NLC-assessed sums: Kshs. 537,858,236.46 to the plaintiff as tenants' sublease interest and Kshs. 202,606,039.55 to the 3rd Defendant as landlord's reversionary interest, plus a mandatory injunction compelling payment within 30 days.
The court applied Article 23 of the Constitution on remedies and the principle of equivalence from Katra Jama Issa. It found that at the time of gazettement the parties had agreed to have the valuation determined by the National Land Commission, which had constitutional and statutory mandate to assess just compensation for compulsory acquisition. It therefore preferred the NLC valuation over the other commissioned reports (Knight Frank and the Government Valuer) and awarded full, just and adequate compensation based on the NLC assessment to both the plaintiff and the 3rd Defendant.
Legal principles established
#- When a registered proprietor's root of title is under challenge, the proprietor must go beyond the instrument of title and prove the legality of how the title was acquired
- Fraud must be specifically pleaded and distinctly proved; it is not allowable to leave fraud to be inferred from the facts
- Under Article 40(3) of the Constitution, the State may not deprive a person of property unless for a public purpose with prompt payment in full of just compensation and a right of access to court
- The preliminary notice under Section 107(5) of the Land Act is a mandatory requirement in compulsory acquisition and must be served on every person who appears to be interested in the land
- Possession of land before payment of compensation under Section 120(2) of the Land Act is only permissible where there is urgent necessity and it would be contrary to the public interest to follow normal procedures, and only upon expiry of fifteen days from publication of the notice of intention to acquire
- Where there are two competing titles, the first in time prevails
Court orders
#- 1.A declaration that the 1st Defendant had no proprietary interest in Plot No. MN/VI/4785 when the plaintiff and the 2nd Defendant commenced the process to acquire the same for expansion of Kipevu Road, Mombasa
- 2.A declaration that the 1st Defendant's claim for compensation submitted to the 2nd Defendant through the plaintiff's Chief Executive Officer vide a letter dated 13th November, 2015 is null and void ab initio
- 3.An award to the plaintiff and the 3rd Defendant of Kshs. 537,858,236.46 (tenants' sublease interest) and Kshs. 202,606,039.55 (Landlord's reversionary interest) respectively
- 4.A mandatory order of injunction compelling the 2nd Defendant to pay the sum of money payable as compensation for acquisition of land Plot No. MN/VI/4785 to the plaintiff within 30 days
- 5.Costs of the suit against the 1st and 2nd Defendants and the Counter-Claim by the 3rd Defendant awarded to the plaintiff and the 3rd Defendant, to be paid by the 1st and 2nd Defendants jointly and severally
- Jurisdiction invoked
- Environment and Land Court Act, No. 19 of 2011 (Sections 3 and 13), and Article 40(3)(b)(ii) of the Constitution (right of access to court for disputes on compulsory acquisition), Section 128 of the Land Act, 2012
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Export Milling (EPZ) Ltd v H. Young & Co. (EA) Limited & 2 others (Environment & Land Case 85 of 2018) [2024] KEELC 1355 (KLR)", Case Analysis (2024). Not stated in the judgment text. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/1355/eng@2024-02-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.