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ELCStruck OutNot stated in judgment (Environment & Land Case, Malindi)· [2024] KEELC 6394 (KLR)

Nzai v Maitha & 2 others (Environment & Land Case E019 of 2024) [2024] KEELC 6394 (KLR)

Environment and Land Court
2 October 2024
EME. K. Makori
2,786 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court struck out a landowner's suit over a bank charge, ruling mortgage and loan disputes belong to the High Court, not the ELC.

What this practically means

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Executive summary

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The Plaintiff, registered owner of Ngomeni Squatter Settlement Scheme/1824 in Magarini Sub-County, Kilifi County, sued seeking a permanent injunction restraining the 3rd Defendant from selling or dealing with the suit property, declarations that the property was his and that the loan facility advanced to the 2nd Defendant and the charge registered over the suit property were fraudulently procured, null and void, and orders compelling the 2nd Defendant to furnish alternative security and repay the loan. Together with the plaint, the Plaintiff filed a Notice of Motion seeking injunctive orders. The 3rd Defendant filed a Notice of Preliminary Objection contending that the court lacked jurisdiction, arguing that the dispute was essentially a commercial one over a charge and loan, falling under Article 165(3)(a) of the Constitution and outside the ELC's jurisdiction under Article 162(2)(b) and Section 13 of the ELC Act. The court directed that the objection and application be heard simultaneously by written submissions. Relying principally on the Court of Appeal's binding decision in Co-operative Bank of Kenya Ltd v Kangethe Njuguna, and subsequent authorities including Bank of Africa Kenya Ltd v TSS Investment Ltd, the court held that a charge is a disposition of land and not a use of land, and that the ELC has no jurisdiction over mortgages, charges, collection of dues and rents. The alleged fraud was held to be premature and unproven, with nothing from investigative agencies supporting it. Allowing the Preliminary Objection in its entirety, the court struck out the entire suit and application with costs to the Defendants, noting the matter belonged to the High Court or, subject to pecuniary jurisdiction, the Magistrates' Court, and that the Plaintiff may raise the alleged fraud in the appropriate court if a sale proceeds.

Key legal issues

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01

Whether the ELC has jurisdiction over a dispute whose substratum is a charge over land securing a loan facility

Holding

The ELC lacks jurisdiction; the dispute falls within the unlimited original civil jurisdiction of the High Court

Reasoning

Relying on the Court of Appeal's binding decision in Co-operative Bank of Kenya Ltd v Kangethe Njuguna, a charge is an interest in land securing repayment of money - a disposition, not a use of land. Contracts within the ELC's jurisdiction under Section 13 of the ELC Act must be incidental to the use of land; mortgages and charges are not. The plaintiff's grievance centred on the charging document and intended statutory sale, not ownership or land use.

p. 6
02

Whether the alleged fraud in the creation of the charge confers jurisdiction on the ELC

Holding

No - it is premature to find fraud, and any fraud claim should be raised in the appropriate court

Reasoning

The court found there was nothing from investigation agencies to suggest the charge was fraudulently procured, and the alleged scheme to sell the land had not materialised. If a sale proceeds, the plaintiff may raise the alleged fraud in the appropriate court. The pleaded fraud did not transform a charge dispute into a land-use dispute within ELC jurisdiction.

p. 6

Legal principles established

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  • The ELC has no jurisdiction over disputes concerning mortgages, charges, collection of dues and rents, which fall within the civil jurisdiction of the High Court
  • The creation of a charge is a disposition of land, not a use of land, and does not fall within the ELC's jurisdiction under Article 162
  • A court without jurisdiction must down tools immediately

Court orders

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  1. 1.The Preliminary Objection is allowed in its entirety
  2. 2.The entire suit and application are struck out
  3. 3.Costs of the suit to the Defendants

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)(b), 162(3), 165(3)(a), 260
  • Environment and Land Court Act, No. 19 of 2011Section 13(2)(d)
  • Land ActSections 2 and 80

Cases cited (7)

  • Bank of Africa Kenya Limited & another v TSS Investment Limited & 2 others
    (Civil Appeal E055 of 2022) [2024] KECA 410 (KLR)
  • Co-operative Bank of Kenya Limited v Patrick Kangethe Njuguna & 5 others
    [2017] eKLR
  • Joel Kyatha Mbaluka t/a Mbaluka & Associates Advocates v Daniel Ochieng Ogola t/a Ogola Okello & Co Advocates
    [2019] eKLR
  • Owners of the Motor Vessel M.V Lillian S. v Caltex Oil (K) Limited
    [1989] KLR 1
  • Phoenix of E.A. Assurance Company Limited v S. M. Thiga t/a Newspaper Service
    [2019] eKLR
  • Kinuthia v Kanyi & another
    (Environment & Land Case E007 of 2023) [2024] KEELC 1625 (KLR)
  • Thomas Mutuku Kasue v Housing Finance Company Ltd (HFC) & another
    [2021] eKLR
Jurisdiction invoked
Article 162(2)(b) and Article 165(3)(a) of the Constitution; Section 13 of the Environment and Land Court Act, No. 19 of 2011

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, "Nzai v Maitha & 2 others (Environment & Land Case E019 of 2024) [2024] KEELC 6394 (KLR)", Case Analysis (2024). Not stated in judgment (Environment & Land Case, Malindi). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/6394/eng@2024-10-02

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