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ELCPartially AllowedPlaint dated 11th January, 2022 (ELC, Mombasa - number not stated in judgment)· [2024] KEELC 4718 (KLR)

Bamoto Distributors Limited v Mohamedali (Environment & Land Case E003 of 2022) [2024] KEELC 4718 (KLR)

Environment and Land Court of Kenya
5 June 2024
15,046 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~60 min to read original · ~4 min brief

The bottom line

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A Mombasa court confirmed that buyers at properly advertised property auctions get strong legal protection, and awarded Kshs. 7 million damages for trespass against the former owner who refused to vacate.

What this practically means

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Executive summary

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This was a first-instance claim by Bamoto Distributors Limited, which bought godown No.1 on plot MOMBASA/BLOCK XV/47 at a public auction on 16th September 2021 conducted by I & M Bank in exercise of its statutory power of sale over the Defendant's charged property, and obtained a Certificate of Lease on 19th November 2021. The Defendant, who had guaranteed his brother-in-law's business (Hatimi Service Station) for an overdraft secured by a charge over the property, claimed the auction never took place or was a sham conducted in breach of court orders in his separate suits against the bank, and sought dismissal of the suit. The court framed four issues. It held the Plaintiff was a bona fide purchaser for value: under Sections 97 and 99 of the Land Act a purchaser is not obliged to inquire into the regularity of the sale and is protected absent fraud attributable to him; the Defendant never implicated the Plaintiff in fraud nor obtained an order impeaching the auction. Trespass was proved, as the Defendant admitted continuing in occupation without consent after registration. Judgment was entered for the Plaintiff, with declarations of ownership and trespass, an eviction order under Section 152E of the Land Act, a permanent injunction, and general damages of Kshs. 7,000,000 for trespass. However, the claims for detinue and mesne profits were refused because the Plaintiff led no probative evidence of the basis for the mesne profits claim. Costs were awarded to the Plaintiff.

Key legal issues

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01

Whether the Plaintiff was a bona fide purchaser for value with a valid title

Holding

Yes - the Plaintiff bought at a duly advertised public auction, was issued a Certificate of Lease on 19th November 2021, and the Defendant proved no fraud attributable to the Plaintiff; the sale was not impeached by any court order

Reasoning

The court applied Sections 97 and 99 of the Land Act and Section 26 of the Land Registration Act. Section 99 protects a purchaser who is not obliged to inquire into the regularity of the sale, unless fraud of which he had notice exists. The Defendant alleged the auction was irregular but never implicated the Plaintiff in fraud nor obtained any order declaring the auction illegal. The Plaintiff therefore emerged as a bona fide purchaser for value entitled to registration.

p. 19
02

Whether the Defendant trespassed on the suit property

Holding

Yes - the Defendant admitted remaining in occupation, knowing the property had been sold and registered in the Plaintiff's name, without the Plaintiff's consent

Reasoning

Relying on the Trespass Act, Cap 294 and Sections 24, 25 and 26 of the Land Registration Act, the court held the Plaintiff as registered proprietor has absolute ownership. The Defendant admitted in cross-examination that he was in occupation and did not pay rates, and there was no communication with the Plaintiff permitting his stay. Trespass was proved on a balance of probabilities.

p. 21
03

Whether the Plaintiff was entitled to the reliefs sought, including damages and mesne profits

Holding

Declarations, eviction, permanent injunction and general damages of Kshs. 7,000,000 were granted; detinue and mesne profits were refused for want of proof

Reasoning

The court distinguished permanent from mandatory injunctions and granted the injunction since trespass was established. For damages it followed Nakuru Industries Ltd and Willesden Investments, awarding Kshs. 7,000,000 given the Defendant's occupation since 2021 in a prime urban area. Mesne profits required pleading and proof under Order 21 Rule 13, and the Plaintiff's unparticularised estimate of monthly rent was insufficient.

p. 22

Legal principles established

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  • A purchaser at a duly advertised public auction is protected under Section 99 of the Land Act and is not obliged to inquire whether the sale is necessary, proper or regular, except where there is fraud of which he had notice
  • There is no duty cast in law on an intending purchaser at a properly advertised auction sale to inquire into the rights of the mortgagee to sell
  • A chargee's statutory duty is to obtain the best price reasonably obtainable at the time of sale, and a purchaser is protected notwithstanding irregularities unless the purchaser was party to fraud
  • Damages for trespass may be awarded without proof of specific damage or loss

Court orders

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  1. 1.Judgment entered in favour of the Plaintiff as pleaded in the Plaint dated 11th January, 2022
  2. 2.Declaration that the Plaintiff is the legal registered owner of godown No.1 on plot No. MOMBASA/BLOCK XV/47 purchased at the public auction of 16th September 2021
  3. 3.Declaration that the Defendant is a trespasser in godown No.1 on plot No. MOMBASA/BLOCK XV/47
  4. 4.Order under Section 152E of the Land Act that the Defendant vacate or be evicted from the suit property under supervision of the nearest police station
  5. 5.No orders as to detinue and mesne profits
  6. 6.Permanent injunction restraining the Defendant from remaining on, disposing of, further trespassing on or interfering with the suit property
  7. 7.General damages of Kshs. 7,000,000 for trespass
  8. 8.Costs of the suit awarded to the Plaintiff, to be borne by the Defendant

Authorities

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Legislation

  • Companies ActCap 486
  • Civil Procedure Rules 2010Order 11
  • Civil Procedure Rules 2010Order 21 Rule 13
  • Land Registration ActSections 24, 25, 26, 99(2), 99(4)
  • Land ActSections 96(2), 97, 98(4), 99, 152E
  • Auctioneers RulesRules 11(b)(x), 15(d)
  • Auctioneers ActSection 26
  • Evidence ActSection 107(1)
  • Trespass ActSection 3(1)
  • Civil Procedure ActSections 1A, 2, 3, 3A, 27(1)
  • Registered Land ActSection 74(1)
  • Constitution of Kenya, 2010Article 46

Cases cited (31)

  • David Situma Wekesa & Another v I & M Bank Limited & Two Others
  • Erick O. Odindo v National Bank of Kenya & 2 Others
    (2008) eKLR
  • Jacob Ochieng Muganda v Housing Finance Company of Kenya Limited
    (2003) eKLR
  • Joyce Wairimu Karanja v James Mburu Ngure & 3 others
    (2018) eKLR
  • Simon Njoroge Mburu v Consolidated Bank of Kenya Limited
    (2014) eKLR
  • Park Towers Limited v John Mithamo Njika & 7 others
    (2014) eKLR
  • Joseph Kipchirchir Koech v Philip Cheruiyot Sang
    [2018] eKLR
  • East Africa in Rioki Estate Co. (1970) Limited v Kinuthia Njoroge
    (1977) KLR
  • Harrogate Limited & another v Mwananchi Credit Limited & another
    HCC Civil Case No. E834 of 2021, [2021] eKLR
  • NCBA Bank PLC v Cyrus Ndung'u Njeri t/a Digital Tours and Logistics
    [2021] eKLR
  • Stephen Boro Gitiha v Nicholas Ruthiru Gatoto & 2 others
    [2017] eKLR
  • Lawrence Mukiri v Attorney General and 4 Others
    [2013] eKLR
  • Katende v Haridar and Company Limited
  • Abdi Adan Hussein & 2 others v Attorney General & 2 others
    [2017] eKLR
  • Captain Patrick Kanyagia and Another v Damaris Wangeci and others
    NBI Civil Appeal No. 150 of 1993 (unreported)
  • David Katana Ngomba v Shafi Grewal Kaka
    [2014] eKLR
  • Priscilla Krobought Grant v Kenya Commercial Finance Company Ltd and others
    Civil Appeal No. 227 of 1995 (unreported)
  • Marteve Guest House Limited v Njenga & 3 others
    [2022] KECA 539 (KLR)
  • Muhani and Another v National Bank of Kenya Limited
    [1990] eKLR
  • Giella v Cassman Brown
    1973 E.A. Page 358
  • Shepard Homes v Sandham
    (1970) 3 WLR Pg. 356
  • Nakuru Industries Limited v S S Mehta & Sons
    [2016] eKLR
  • Willesden Investments Limited v Kenya Hotel Properties Limited
    NBI H.C.C. No. 367 of 2000
  • Attorney General v Halal Meat Products Limited
    [2016] eKLR
  • Rajan Shah T/A Rajan S. Shah & Partners v Bipin P. Shah
    [2016] eKLR
  • Karanja Mbugua & another v Marybin Holding Co. Ltd
    [2014] eKLR
  • Harun Mutwiri v Nairobi City County Government
    [2018] eKLR
  • Kenya Union of Commercial, Food and Allied Workers v Bidco Africa Limited & Another
    [2015] eKLR
  • Hussein Muhumed Sirat v Attorney General & Another
    [2017] eKLR
  • Party of Independent Candidate of Kenya & another v Mutula Kilonzo & 2 others
    Machakos ELC Pet No. 6 of 2013, [2013] eKLR
  • Levben Products v Alexander Films (SA) (PTY) Ltd
    1957 (4) SA 225 (SR) at 227
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over land disputes in Mombasa (cause of action arose in Mombasa)

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, "Bamoto Distributors Limited v Mohamedali (Environment & Land Case E003 of 2022) [2024] KEELC 4718 (KLR)", Case Analysis (2024). Plaint dated 11th January, 2022 (ELC, Mombasa - number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4718/eng@2024-06-05

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