Pauline Mutee Makumu & another v Ursula Kreszenntia & 3 others [2019] KEELC 102 (KLR)
The bottom line
#A Kenyan court ruled that property sold while a court case was pending was sold illegally, awarding buyers Kshs.53 million for demolished buildings.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.What rights were conferred upon the plaintiffs by the Deed of Agreement dated 27th October 2003?
- 2.Did the 1st and 2nd defendants have capacity to transfer plot No. 2444/1/MN to the 3rd defendant?
- 3.Was the 3rd defendant a bonafide purchaser for value without notice of the complaints by the plaintiffs?
- 4.Whether the 4th defendant was properly joined to this suit
- 5.Whether this court can determine the question of jurisdiction of the Magistrate's court in granting eviction orders in CMCC 1141 of 2012
- 6.Did the plaintiffs suffer damages as a result of the evictions and demolitions for which they should be compensated?
- 7.Who bears the costs of the suit?
Key legal issues
#Effect of the Deed of Agreement dated 27th October 2003
The deed transferred the business interests absolutely to the plaintiffs and, upon payment of Kshs.6.5 million, the plaintiffs were to be registered as joint owners of the plot; the plaintiffs proved payment of the consideration, which was uncontroverted
The court read clauses 1, 2 and 4 of the deed: the business interests passed absolutely and clause 4 evidenced a sale of the 1st and 2nd defendants' interest in the plot for Kshs.6.5 million. The plaintiffs' evidence on payment from compensation proceeds and an RTGS deposit of Kshs.12 million plus cash of Kshs.2 million was not challenged because the 1st and 2nd defendants adduced no evidence, so payment of the purchase price stood uncontroverted.
Capacity of the 1st and 2nd defendants to transfer the suit property pending suit
The 1st and 2nd defendants had no capacity to sell and transfer the suit property to the 3rd defendant, the sale being illegal, unlawful and fraudulent, owing to lis pendens and the subsisting order of injunction/status quo
An order of maintenance of status quo was made on 4/11/2010 in the presence of the 1st and 2nd defendants' counsel, and the defendants themselves acknowledged the injunction in their application of 27th November 2010. The doctrine of lis pendens and the injunction barred disposal of the property pending determination; the sale of 23/3/2012 and transfer of 26/4/2012 were therefore invalid and intended to defeat the suit.
Whether the 3rd defendant was a bonafide purchaser for value without notice
The 3rd defendant lost the right to plead innocent purchaser for value without notice
The 3rd defendant was aware of the Deed of Agreement, was represented by an advocate in the transaction who should have explained its meaning, and due diligence would have revealed the termination letter and the plaintiffs' relationship with the property. His claim of innocence could only lie against the 1st and 2nd defendants for non-disclosure.
Jurisdiction of the magistrates' court in CMCC 1141 of 2012 and this court's power to determine it
This court, exercising original jurisdiction, had power to determine the magistrates' court's jurisdiction; the magistrates' court lacked jurisdiction and its orders were null and void ab initio
The jurisdictional issue was raised as part of the illegality of the eviction within the plaint, not as an appeal or review, equating to a collateral challenge akin to judicial review, distinguishing the Ann Waiguru case. The title was registered under the Registration of Titles Act, which defines 'court' as the High Court, and the pecuniary value exceeded the magistrates' court limit under Section 5 of the Magistrates' Court Act.
Liability and damages for the eviction and demolition
The 3rd defendant was solely liable for the demolitions and the plaintiffs were entitled to compensation of Kshs.53 million per the unrebutted valuation
The court order in CMCC 1141 of 2012 was for eviction only, not demolition; the 3rd defendant obtained a council demolition licence without legal basis and carried out the demolitions with his own employees, not a court bailiff. The plaintiffs' valuation through PW3 was uncontradicted, entitling them to Kshs.53 million for the demolished improvements.
Limitation of actions
The claim was not statute barred; time was not of the essence of the agreement, and the land claim fell within the twelve-year limitation period while the claim for demolished developments arose during the pendency of the suit
The deed set no time limit for performance, so time could only run from the default, marked by the termination letter of 13th October 2010. In any event, a claim for land is valid within twelve years under the Limitation of Actions Act, and the claim for the developments demolished in 2012 arose after the suit was filed.
Joinder of the 4th defendant
The 4th defendant, though an agent of a disclosed principal, was properly joined to the suit
The joinder foreclosed any argument by the 3rd defendant that he was not involved in the service and execution of the court process, avoiding open-ended blame over responsibility for the plaintiffs' loss, consistent with Order 1 rule 7 of the Civil Procedure Rules.
Legal principles established
#- The doctrine of lis pendens overrides Section 23 of the Registration of Titles Act and prohibits a party from giving to others pending the litigation rights to the property in dispute
- A third party's claim of innocence cannot cure the illegality of a vendor who disposes of property contrary to a subsisting order of injunction or lis pendens
- A court lacks jurisdiction where the defining statute defines 'court' as the High Court and the pecuniary value exceeds the magistrates' court limit, rendering such orders null and void ab initio
- A claim for land under the Limitation of Actions Act must be brought within twelve years from when the right accrued
Court orders
#- 1.Judgment entered for the plaintiffs as prayed in the amended plaint as against the 1st, 2nd and 3rd defendants jointly and severally
- 2.Compensation for the demolished improvements awarded at Kshs.53 million as per the valuation report of PW3
- 3.Costs of the suit awarded to the plaintiffs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under Article 162(2) of the Constitution (land and environment disputes); jurisdiction to examine validity of subordinate court orders invoked in original proceedings
Relief refused
#Liability and compensation as against the 4th defendant (Oscar Juma)
The court found the 4th defendant properly joined but judgment was entered only against the 1st, 2nd and 3rd defendants
Portion of damages claimed beyond the assessed value of demolished structures
Damages limited to the unrebutted valuation report figure of Kshs.53 million rather than the higher figures asserted
Costs
The costs of the suit are awarded to the plaintiffs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
In summary, I enter judgment for the plaintiffs as prayed in the amended plaint as against the 1 st, 2nd and 3rd defendants jointly and severally. The costs of the suit is also awarded to the plaintiffs.
Given that the valuation presented by plaintiffs through the evidence of Mr. Paul Wambua (PW3) has not been contradicted/controverted by any other valuation report, I find that the plaintiffs are entitled to compensation for the demolished improvements at Kshs.53 million as stated in that report (as prayed in paragraph (h) of the plaint).
Therefore the magistrate's court lacked jurisdiction to entertain the claim filed before it as same contravened both Section 2 cap 281 and Section 5 of the Magistrates' Court Act. The orders issued in the case CMCC 1142 OF 2012 were thus null and void ab inito for want of jurisdiction.
It therefore overrides Section 23 of the Registration of Titles Act and prohibits a party from giving to others pending the litigation rights to the property in dispute so as to prejudice the other.
I find the agreement entered into between the 1 st & 2nd defendants on one part and the 3rd defendant on the second part was illegal, unlawful and fraudulent intended to defeat this suit and/or the interests of the plaintiffs.
The averment that the 1st & 2nd defendants were fully paid the sum of Kshs.6.5 million has thus not been controverted.
Issues in the judgment
#The judgment refers inconsistently to the case number of the compensation suit, variously HCCC 202 of 2005 and HCC 102 of 2006/HCC 205 of 2005
The judgment cites the lower court file as CMCC 1141 of 2012 in most passages but as CMCC 1142 OF 2012 when nullifying the orders
The judgment refers to a lis pendens quotation attributed to Section 52 of TPA within a Kenyan law context via a cited Court of Appeal decision
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Pauline Mutee Makumu & another v Ursula Kreszenntia & 3 others [2019] KEELC 102 (KLR)", Case Analysis (2019). ELC CIV. CASE NO. 388 OF 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/102/eng@2019-10-07
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.