Kenya Commercial Bank Limited & another v Municipal Council of Mombasa & 2 others (Environment & Land Case 289 of 2007) [2024] KEELC 1659 (KLR)
The bottom line
#A Mombasa court ordered the Municipal Council of Mombasa to pay KShs. 35.4 million after fraudulently selling a deceased man's land over a small rates debt.
What this practically means
#Executive summary
#Key legal issues
#Whether suit and execution against a deceased person and the resulting sale were fraudulent and void
The court held the entire subordinate court proceedings, judgment and sale of the suit land were tainted by fraud and irregularity: the suit was filed and prosecuted against a deceased person, service was not proved, and the auction sale lacked valuation, proper notification and the statutory 45-day redemption notice.
The 1st Defendant's own defence disowned the filing of CMCC (Mombasa) No. 2813 of 2006 and stated the verifying affidavit signature was forged. DW-1 admitted serving documents by leaving them with a guard and by registered post without receipts, never ascertaining the owner was deceased, and producing no valuation. Fraud must be strictly proved; on the evidence the standard was met, rendering the decree and the sale founded on it nullities.
Whether the default judgment in the subordinate court was irregular and liable to be set aside
The judgment entered in favour of the 1st Defendant in CMCC No. 2813 of 2006 was irregular because there was no effective service of summons, and such a judgment must be set aside ex debito justiciae as of right, without regard to triable issues or delay.
Relying on Order 10 of the Civil Procedure Rules and the James Kanyita Nderitu line of authority, the court distinguished regular from irregular default judgments. DW-1 admitted the intended party was never personally served and documents were left with a guard. An affidavit of service alone is not evidence of service; condemnation unheard violates natural justice, so the judgment was set aside on that ground alone.
Whether the Plaintiffs were entitled to the reliefs sought
The Plaintiffs were entitled to the alternative monetary relief (prayer d) of Kshs. 35,400,000, the equivalent of the market value of the suit property, but not to reconveyance.
Though Section 80 of the Land Registration Act empowers rectification, the suit property had already been sold to the 2nd Defendant through the fraudulent process. On the valuation commissioned in 2007 the court found the claim for the market value proved, entering partial judgment on that prayer only.
Costs of the suit
Costs followed the event under Section 27 of the Civil Procedure Act; the Plaintiffs, having proved their claim, were awarded costs against all Defendants jointly and severally.
The court reviewed Section 27 of the Civil Procedure Act and authority that costs follow the event subject to discretion. Having found for the Plaintiffs against all three Defendants, it exercised its discretion to award the Plaintiffs the costs of the suit, payable jointly and severally by the Defendants.
Legal principles established
#- Allegations of fraud must be specifically pleaded and strictly proved to a standard higher than the balance of probabilities but below the criminal standard.
- A default judgment entered against a party who was never served or not properly served is an irregular judgment which must be set aside ex debito justiciae, as of right.
- A decree founded on fraud is a nullity and every transaction rooted on it is equally null and void ab initio.
Court orders
#- 1.Judgment partially entered in favour of the Plaintiffs against the Defendants as per the Plaint dated 22nd October, 2007.
- 2.The 1st Defendant compelled to pay Kenya Shillings Thirty-Five Million Four Hundred Thousand (Kshs. 35,400,000/-), being the equivalent of the current market value of Subdivision Number 2525 Section I Mainland North, within 60 days of the judgment.
- 3.Plaintiffs awarded the costs of the suit, to be paid jointly and severally by the Defendants.
- 4.Interest on the decretal sum and costs at court rates.
- Jurisdiction invoked
- First-instance civil suit instituted by Plaint under the Civil Procedure Act (Cap 21); court also invoked Section 80 of the Land Registration Act No. 3 of 2012 empowering it to order rectification of the register
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Commercial Bank Limited & another v Municipal Council of Mombasa & 2 others (Environment & Land Case 289 of 2007) [2024] KEELC 1659 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/1659/eng@2024-02-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.