INTRODUCTION
Kenya Electricity Transmission Company Limited (hereinafter referred to as the plaintiff), a State Corporation duly incorporated and registered under the Companies Act and pursuant to Sessional Paper No.4 of 2004 on Energy has come to this court against Marula Estates Ltd (hereinafter referred to as the defendant), a limited liability company incorporated in the Republic of Kenya under the provision of the companies Act (Cap 486) Laws of Kenya claiming that pursuant to her mandate, the plaintiff is currently underway with the construction of the Olkaria-Lessos-Kisumu Transmission line (TL) project which projects aim to evacuate cheaper Geothermal power from Olkaria to the Western Region of Kenya in an effort to meet the Kenya Vision 2030 on universal access to electricity in Kenya households. That the project is funded and supported by concessional loans from the World Bank and the International Finance Corporation and any stoppage by the Defendant shall have serious financial implications to the Country and the citizenry by denying them the much needed cheaper, cleaner and renewable power that is supposed to reach the inhabitants of Western Kenya.
The plaintiff contends that at all material times relevant to this suit, the Defendant is the registered proprietor of all parcel of Land known as L.R 11367(hereinafter referred to as the suit property) which traverses Naivasha and Nakuru, in Nakuru county and has been identified by the plaintiff`s agents/employees as affected by the way-leave trace.
The plaintiff conducted a valuation on the suit property through an independent valuer who valued the suit land at Kshs. 3,500,000.00 per acre. The Plaintiff subsequently offered the Defendant compensation in the sum of Kshs. 267,781,500.00 for the acreage traversed of 255.03 acres being 30% value of the wayleave trace.
The Plaintiff contends that the Defendant agents` have turned down the Plaintiff`s offer for the compensation for limited loss of land use amounting to Kshs 267,781,500.00 and demanded a valuation of Kshs. 4,000,000.00 per acre with compensation payable at 40%value of the wayleave trace. This is contrary to the Plaintiff`s compensation policy and has the effect of being burden-some to the tax-payer.
The Plaintiff on diverse dates has attempted to negotiate on compensation and access on land parcel L.R 11367 through its agent for right of way over the land, for construction of electricity transmission line in return of monies/compensation calculated based on the value of land affected by the limited loss of use but the Defendant/their agents/employees have denied the Plaintiff and its contractor access to the said parcel by making unsubstantiated demands for payment.
The Defendant has declined to engage an independent valuer provide or to provide a valuation report or a basis for these claims thereby interfering with the Plaintiff`s work, as well as blocking the Plaintiff`s servants and agents from carrying out the Plaintiff`s works on the suit properties.
The Plaintiff has therefore been forced to stall the construction of an electricity transmission line on the suit properties, an action which has led to the Plaintiff`s contractor demanding to be paid huge amounts of money as idling charges for the period that construction of the transmission project has been stalled and any subsequent day that the construction will be stalled.
According to the plaintiff, the Defendant`s actions has the resultant effect of the Plaintiff being in breach of the contractual obligations between the Plaintiff and its contractor which breach has far reaching consequences on the completion of the project.
The Plaintiff is apprehensive that if this Honourable Court does not intervene, The Plaintiff is likely to countinue losing substantial amount of money in idling charges from the contractor for machinery and personnel on site but not being utilized. Moreover, the construction of an electricity transmission line that is critical to the energy security of the nation of Kenya will stall and be frustrate and that the action of the Defendant is likely to cause the Plaintiff irreparable loss and damage which the Defendants cannot compensate. Further, the delay in completion of the project may lead to lapse of the concessional loan agreement and any re-negotiation on those agreements have huge financially implications which the Defendant cannot compensate.
The plaintiff prays for Judgment against the Defendant for an assessment of just compensation payable to the Defendants. Permanent Injunction against the Defendants either by themselves, their agents, employees from interfering with the work of the Plaintiff and attacking the servants and agent of the Plaintiff on the suit properties. The plaintiff further prays for an order that an Easement in favour of KETRACO measuring 55-meters-wide and covering 255.03 acres be registered against the parcel known as L.R. 11367. In the alternative, the plaintiff prays for Judgment against the Defendants for losses incurred by the Plaintiff due to the disruption of the construction of the power lines. Last but not least the plaintiff prays for costs of this suit.
In response, the defendant states that she was not aware of any valuation carried out by the plaintiff on its property and that the valuation report dated 18th December 2007, was carried out without the Defendant’s knowledge or approval. The Defendant states that the plaintiff`s offer of compensation of Kshs. 3,500,000/= per acre amounting to a sum of Kshs. 267,781,500/= being 30% value of the way leave trace is not the true value of the property and does not take into consideration the property as well as the ongoing development thereto. The defendant conducted its own independent valuation of the suit property which was done by Kenya Valuers & Estate Agents Limited who determined the true valuation of the Defendant`s property to be at the rate of Kshs. 4,200,000/= per acre.
The defendant states that the plaintiff restricted their final compensation amount to Kshs. 3,500,000/= per acre on the basis that its compensation policy does not permit a higher figure and in effect dismissing any positive prospect of negotiation by the defendant.
The Defendant contends that the suggested compensation of Kshs. 3,500,000/= per acre is unjustifiably inadequate and does not amount to just compensation and is in effect the unconstitutional deprivation by the state of property belonging to the Defendant on a whim and arbitrarily.
In the counter claim, the Defendant reiterates that she is the registered proprietor of the parcel of land known as L.R. NO. 11367 Naivasha, Nakuru County and which parcel measures 25,706 acres with 335 acres of road reserve. The plaintiff in the construction of the Olkaria-Lessos-Kisumu Transmission line project, compulsorily acquired a total of 103.21 hectares (255.03 Acres) on the parcel of land known as L.R. NO. 11367 (PART) Naivasha, Nakuru County,
The defendant avers that it conducted its own independent valuation of the suit property acquired and determined the true valuation of the property to be at the rate of Kshs. 4,200,000/= per acre at 50% value. The total sum payable as compensation for the land acquired would therefore be Kshs. 535,563,000.00 and not the offer made Kshs. 3,500,000/= per acre amounting to a sum of Kshs 267,781,500 at 30% value.
According to the defendant, the plaintiff in its determination of the compensation due to the defendant further failed to take into account aspect of loss and damage occasioned to the defendant as a direct result of the construction of the transmission line, and which aspects are material to the determination of the fair and just value for the suit property and which should be considered in making a determination of the total compensation due to be awarded.
There was already an existing way leave traversing across the suit property whose existence was not considered. The construction of the second line caused a permanent obstacle to the Defendant on any ongoing irrigation development (pivot irrigation systems and greenhouses) with a permanent loss of 255 acres. Accounting for the existing easement would result in the loss of 440 acres due to this and not solely the proposed 255 acres whereby compensation should be reconsidered at 50% of land value and not the proposed 30%. The sum payable would be Kshs. 416,250,000.00.
The defendant contends that during construction of the transmission line, the plaintiff through its agent and or servants was responsible for the removal of around 17.611 indegenous tree such as acacia and leleshwa. The area affected corresponded to 171 acres (11.400mts× 60mts). The plaintiff failed to account for the same and that during the construction of the transmission line, the plaintiff through its agent and or servant, destroyed natural pasture to facilitate construction of roads and foundation to erect their towers. The total length of the road created by the plaintiff amounted to 65:275sq meters (18,650mts × 3.5 width) which must be added to the foundations for each of the four legs for each tower totaling 100sq. mts and the area involved for the construction of towers totaling 2025sq. meters equivalent to half an acre per tower. The county Government of Nakuru, Department of Agriculture, Livestock and Fisheries valued such damage at the rate of 600 bales per acre at the cost of Kshs 250 per bale. Using the same valuation the total damage for roads and tower construction (foundations and working area) total to 40.1 acres and is equivalent to Ksh 6,015,000.
During the construction of the transmission line, the plaintiff through its agent and or servant failed to clear waste arising from the construction and which waste was left buried within the remainder of the suit property and some disposed at cost by the Defendant.
In reply to amended defence and counter-claim, the plaintiff states that it negotiated with landowners to grant right of way over their land but the Defendant`s rejected the offer which offer was based on the valuation dated 18th December 2017
The plaintiff reiterates that the extent that she caused a valuation of the Defendant`s property on 22nd August 2017 and prepared a report dated 18th December 2017 and that there is no provision that requires the plaintiff seek consent of landowners in order to conduct valuation of the affected properties. The Plaintiff states that based on the size of the suit property 25,707 Acres and the wayleave corridor 255.03 Acres the impact is approximately 9.9% which is way below the 30% impact offer by the Plaintiff and that the plaintiff requested the National Land Commission to undertake a valuation which posited a valuation of Kshs. 3,750,000/- per acre as per valuation report dated 15.5.209.
TESTIMONIAL EVIDENCE
Matilda Mwamburi testified as PW1 and stated that she signed a statement that was filed on 14th November 2018. According to the witness, valuation was done by an external valuer in 2017. Notice was done on 27th May 2015. The plaintiff did not acquire the land compulsorily but created a right of way on the property as provided for by the land Act 2012. Compensation of loss was based on the limited loss of land use as there are two restrictions on the use of land under the way leaves trace purely for safety reasons. The restrictions are no planting of trees or crops that at maturity will exceed 12ft in height and no construction of buildings under the trace. The plaintiff testified that compensation for the limited loss of land use is determined by the impact the trace line has on the land. The impact is the acreage traversed by the trace line divided by the total acreage of the land as a percentage. The minimum percentage impact used to calculate compensation is 30% of value of the acreage affected by the transmission line. That the plaintiff pursuant to the valuation of Ksh 3,500, 000 per acre and the acreage of 255.03 traversed by the trace line offered compensation of ksh 267,781,500 being 30% value of the way leave trace . The defendant turned down the plaintiffs offer and denied him access to the suit parcel hence this case .On cross examination by Dr Fred Ojiambo, Senior Counsel, she agreed that she was not involved in the actual valuation of the property but was involved in the computation after receiving the information from the valuer. She visited the land but not the whole of it. The report was done in 2017 after visiting the way leave corridor. He insisted that there was no irrigation on the land and that the land was not damaged. She did not consider the variables and comparables.
PW2, Martin Cheboror, a registered licensed gazetted valuer who has practiced for 11 years testified that he is a full member of the institution of surveyors of Kenya. He prepared a report dated 18th December 2017. He valued the property at Ksh 3,750,000 per acre. The comparables were the various properties surrounding the land. The corridor was not developed hence they did not look at developments. The land was bushy and full of shrubs.
On cross examination, he states that he looked at the entire land before the report was prepared and that he looked at the comparables and variables but did not list them. The instruction was to value 44 properties and that LR NO 11367 was one of them. He looked at the current prices as per the ministry of lands. He did not put in consideration the value of the nearby parcels of land such as the Morendeti Farm LR NO 5212/18. He stated that the Morendeti land is near Naivasha town compared to the marula land. He states that the two properties could not be of the same value because they were in different locations. He states that there was irrigation lines but not within the corridor of the way leave and that at the time of inspection, there were no trees. On re-examination by Mr Ochieng learned counsel for the plaintiff, he states that there was no development in the corridor measuring 255 acres.
PW3, Danson Ngugi Njenga, an employee of the National Land Commission testified that he prepared the valuation report dated 15th May 2019 and that he has worked for the Commission since 2017 and that he has been a valuer since 2013.He inspected the land in 2019 with the officers of the commission but did not remember their names. There were other way leaves on the land but he did not see any pylon or corridor on the land. There were machinery but outside the corridor. On re-examination he states that there were no developments in the corridor. That marked the close of the plaintiff’s case.
The defence called one witness thus Michael Otieno who testified as DW1,that he valued the property according to the land Act and land assessment and just compensation rules. He relied on rule 3 that provides for the market value of the land and the damage sustained inter alia. He inspected the land and found that there was a power line on the land and that a caveat had been registered. He testified that Marula relied on pivot irrigation system on the parcel of land. He observed tree cutting, loss of pasture and heritage. In his report he showed the comparable to the suit property such as 5212/2018 valued at 5,000,000 per acre which land is a flower farm. Other variables were an eighth of an acre valued at 1,000,000 and another eighth valued at 700, 000. They came up with a value of Ksh 4, 200,000. He inspected the property on 3/4/2019. He gave a list of the properties he has valued in his practice to demonstrate that he has a vast experience. On Cross examination by Mr Ochieng he states that he is a registered and practicing valuer but was not a registered valuer at the time of inspection, he was an estate agent. Trees and grass were not in the terms of reference. He visited the way leaves corridor accompanied by the director of the defendant. He saw the pivot irrigation system but the same was movable. The whole property was measuring 25,0000 acres.
RIVAL SUBMISSIONS
(a) Plaintiffs Submissions
The plaintiff contends that the law has been passed to govern issues of valuation and this is Land Value (Ammendment) Act 2019 which establishes the criteria for assessing value for compulsorily acquired freehold land. Even though, they take the view that compensation for limited loss of land use cannot be equated with compulsory acquisition of land which requires compensation to be at 100% just as in the case of an outright purchase of land. According to the plaintiff the courts have held times without number that just compensation ought to be paid promptly but that does not mean that public institutions such as the Plaintiff ought to let public treasury be riddled with improvidence.
The plaintiff relies on the ratio decindedi in the case of Patrick Musimba Vs National Land Commission & 4 others (2016) KLR which was restated in the case of Ravaspaul Kyalo Mutisya vs. National Land Commission LEC Appeal No.E004 of 2021 at paragraph 38 thus:-
“In our view, a closer reading of Article 40(3) of the constitution would reveal that the constitution did not only intend to have the land owner who is divested of his property compensated or restituted for the loss of his property but sought to ensure that the public treasury from which compensation money is drawn is protected against improvidence.”
The plaintiff urges this court to take judicial notice that the courts have adopted the assessment of impact at thirty percent for limited loss of land use. The plaintiff relies on the decision in Kenya Electricity Transmission Co. ltd. vs Lpeton Lengidi & 3 other Nyahururu ELC case No.474 of 2017 at paragraph 86:
“That compensation for way leave acquisition was normally limited to loss of use of land since there was no transfer of title or an outright purchase. As per the letter of offer given to the Defendants, only 60 metres of the property would be affected by the way leave. Which would have translated to 30% of the affected area as stated by the Defense witness”
The plaintiff further submits that there cannot be any other claim by the Defendant since they did not provide any assessment report from a forest officer to claim for any cut trees and lead any evidence to that effect. Further, that any report prepared internally by the Defendant was an afterthought since such reports only emanated in 2019 approximately one year after construction of the power line was concluded. In view of the foregoing, the plaintiff prays that the suit be allowed with costs and the Defendant’s counterclaim be dismissed with costs.
(b) Defendant’s submissions
The defendant submits that the core issue for determination in this matter is whether, in making the offer for compensation for the land compulsorily acquired for the development of the way leave trace, the Plaintiff took into account all the necessary and material factors and, thus whether the sum of Kshs.267, 781,500 offered constituted a fair and just compensation for the land acquired by and for the Plaintiff. If the answer to that issue is in the negative, then whether the claim made by the Defendant is a fair and just compensation for the acquisition of the suit property by the Plaintiff.
The defendant contends that in making the offer for compensation for the loss of use of the Defendant’s land, the Plaintiff paid scant attention to the market value of the same, as defined in Rule 2 of the Land (Assessment of Just Compensation) Rules. “Market Value” is defined as the value of the land at the date of publication in the Gazette of the Notice of intention to acquire the land.
The relevant Gazette Notice in this case was Gazette Notice No.1717 of 2019. There was no earlier Gazette Notice and, accordingly, any reliance upon any calculations based on an alleged earlier notice is manifestly false and without legal authority or justification. The Plaintiff sought to rely on a notice allegedly issued in the year 2015. But no such notice was even produced in evidence.
The plaintiff completely ignored and did not mention the physical damage caused to the properly and Contiguous land in question. Pursuant to section 107 A(7) of the Land act, matters to be taken into consideration in assessing the value of land for the purposes of compensation[ under the Act include inter alia (a) any damage sustained or likely to be sustained by persons interested at the time of taking possession of the subject land by reason of severing the land from other land; (b) any damage sustained or like1y to be sustained by persons interested at the time of taking possession is taken injuriously affecting other property, whether moveable or immoveable or any other manner affecting the person’s actual earnings, or (c) any damage genuinely resulting from diminution of the profits of the land between the date of the publication in the Gazette of the notice of intention to acquire the land and the date of the commission takes possession of the land. The defendant argues that Section 107 A (7) is in pari-materia with Rule of the Land (Assessment of Just Compensation) Rules (No.6 of 2012).
The defendant considered the evidence adduced in this matter, both by the Plaintiff and the Defendant, and submits that it proves beyond doubt that, in arriving at the offer which it made to the Defendant, the Plaintiff did not meet the threshold of the price equal to the actual pecuniary detriment caused to the Defendant by the acquisition. While the Plaintiff acknowledged that the total area acquired for purposes of the way leave trace stood at 55 metres wide and covered a total of 255.03 acres, it failed to note the additional area, totaling to approximately 185 acres. Which was lost to the Defendant due to the existence of another way leave it favour of Kenya Power and Lighting Company. This was notwithstanding a confirmation by Pw3 Martin Cheborir that he had seen an existing way leave, on the land.
The defendant contends that the compensation offered by the Plaintiff in this case further failed to take into account the damage in the course of the construction of the line and which was recorded pictorially by the photographs and the narrative of the DW1 Michael Otieno’s report all of which were produced in evidence.
PW1 Matilda Mwamburi denied any knowledge of damage, yet the subject was raised by the Defendant in her presence at a meeting which she attended and apparently chaired, the minutes of which were adduced in evidence by the Plaintiff itself, as Exhibit 5.
PW-2 Martin Cheborir admitted having seen another existing way leave on the suit property but did not bother to assess the cumulative impact of the Plaintiff’s way leave trace to be erected so close to that previous wayleave. The plaintiff did not pay attention to the destruction of trees which were catalogued and photographed. The photographic evidence was never challenged by the Plaintiff and that the Plaintiff further ignored the fact that there were permanent fixtures along the corridor of the way leave trace. There were irrigation pivots, a cattle dip and pasture land which were negatively affected by the erection of the pylons. The construction of the Plaintiff’s transmission line at the site in question effectively amounted to a secondary line whose effect was the creation of a permanent obstacle to the Defendant’s ongoing irrigation development through the use of pivot irrigation systems and greenhouse. The evidence by the Defendant showed that accounting for the existing assessment resulted in a total impact and loss of 440 acres and not solely the acknowledged 255 acres.
It was submitted for the Defendant that the compensation should be reconsidered at 50% of land value and not the proposed 30%. The way leave created substantial limits the use of the area occupied by the pylons and the environs. The estimation that the loss suffered only amounts to 30% of the value has not been substantiated. The Defendant submits that the estimation of loss has to be determined and relied on the case of Kenya Electricity Transmission Company v Lpeton Lengidi & 3 others (2018) eKLR where the merely made a determination of the percentage of loss in relation to the evidence that had been tendered before the Court and clearly stated so. No basis for adoption of 30% of the value in this case has been presented before the Court by the Plaintiff. The determination of this loss has to be based on empirical data presented before the Court. The Defendant submits that the actual loss on its operations is in fact 50%, as justified by the evidence of DW1 Michael Otieno.
According to the defendant, the determination and payment of compensation ought to be guided by the principles laid down in Article 40(3) of the Constitution and as stipulated under Sections 111 and 148 of the Land Act, as well as Regulation 26 of the Land Regulations, 2017.
In principle, all these provisions require the timely payment of full and just compensation. Article 40 of the constitution is very clear in the protection of every person’s right to property. Where one’s property is acquired by the state, the Constitution mandates the prompt payment in full, of just compensation to the person. The suit property was acquired by the Plaintiff in the year 2018 but to date no compensation has been paid for the sole reason that the Plaintiff in a discriminatory manner, undervalued the suit property and refused to acknowledge the actual market value of the suit property as well as consider compensation for damage caused. The Defendant submits that Plaintiff violated both their constitutional and statutory mandate by failing to adhere to the law on the issue of payment of full and just compensation. The Plaintiff has treated the Defendant’s claim with utter contempt stating that it could only compensate the Defendant in accordance with the Plaintiff’s unilateral policy, notwithstanding what the law provided. In the premises, it is prayed that the Plaintiff’s suit be dismissed in full and judgment as prayed in the counterclaim be entered in favour of the Defendant. Accordingly costs should be awarded to the Defendant.
ANALYISIS AND DETERMINATION
I have considered the evidence on record and rival submissions and do find the following issues ripe for consideration:-
(1) Whether the defendants land was compulsorily acquired?
(2) Whether the compensation by the plaintiff was adequate?
WHETHER THE DEFENDANTS LAND WAS COMPULSORILY ACQUIRED?
The process of compulsory land acquisition is provided for under Section 107 of the Land Act. The said section provides an elaborate and detailed process that commences with submission of a request from the National or county governments to the Commission for acquisition of land on its behalf. Under subsection 4 if the Commission is satisfied that the request meets the requirements of Section 107 (2) and Article 40 (3) of the Constitution the Commission shall;
a) cause the affected land to be mapped out and valued by the Commission using the valuation criteria set out under this Act; and
b) establish that the acquiring authority has identified the number and maintains a register of persons in actual occupation of the land, confirming for each such occupation how much time they have been in uninterrupted occupation or ownership of interest in the land prior to the date of the request for acquisition of the land, and the improvements thereon.
Subsection 5 provides that;
“Upon approval of a request under subsection (1), the Commission shall publish a notice to that effect in the Gazette and the county Gazette, and shall deliver a copy of the notice to the Registrar and every person who appears to the Commission to be interested in the land”
However, the law provides under Section 120 (2) of the Land Act (2012) for situations where land can be acquired before the process of compensation is completed. The court in African Gas and Oil Company Limited v Attorney General & 3 others [2016] eKLR asserted this as it held that:
“First, it is correct that section 120 (2) of the Land Act empowers the 3rd Respondent, in cases where there is an urgent necessity for the acquisition of land, and it would be contrary to the public interest for the acquisition to be delayed by following the normal procedures of compulsory acquisition under the Land Act, to take possession of land upon the expiration of fifteen days from the date of publication of the notice of intention to acquire.”
In Kenya, Private land can be acquired compulsorily by the government where the land is needed for public benefit or where it is in the interest of the public. In this regard, an individual can be deprived of his right to private land on condition that he is promptly compensated in full and the acquisition is for a public. In this regard, an individual can be deprived of his right to private land on condition that he is promptly compensated in full and the acquisition is for a public purpose or in public interest. Compulsory acquisition is an administrative process, and the persons with an interest in land targeted for acquisition must be given a chance to air their views or opposition to that process. The National Land Commission (NLC) is mandated under section 107 of the Land Act to acquire land compulsorily on behalf of both the national and county governments. The process starts when a cabinet secretary or a county executive committee member submits a request for compulsory acquisition of land to the NLC. The NLC has the powers to reject an application for compulsory acquisition if the request does not meet the requirements of Article 40(3) of the Constitution namely acquisition for a public purpose or in public interest. Once the NLC is satisfied that the conditions for compulsory acquisition are met it publishes a notice in the Kenya Gazzette, the land Registry and to everybody who appears to be interested in the land. After getting the notice, a person interested in the land can challenge all or some aspect of the intended compulsory acquisition. Interested persons include people whose interests appear in the land register, their spouse(s) together with the persons occupying the land targeted for the acquisition.
This court finds that this is not a case of compulsory acquisition under Article 40 of the Constitution of Kenya 2010 and section 107 of the Land Act.
This was a case of acquisition of way leave. A way leave establishes a legal right for a utility company, such as Kenya Power or telecommunication providers, to install, maintain, repair, and replace their infrastructure on a specific portion of private land. This infrastructure could include: Power lines (overhead and underground), Water pipelines, Sewerage lines, Communication cables (fiber optic, copper).
The argument by the defendant that the annexation of the land by the plaintiff amounted to compulsory acquisition is a misconception because the plaintiff did not obtain any title to the land and that the defendant is allowed some limited use of the land. The defendants use of the land is only restricted from planting of trees or crops that at maturity will exceed 12ft in height and no construction of buildings under the trace. In compulsory acquisition, the owner of the land is deprived of the whole interest in the land.
WHETHER THE COMPENSATION OFFERED BY THE PLAINTIFF WAS JUST AND ADEQUATE?
When calculating the compensation to a land owner in such situations the court should balance between the rights of the land owner and the public interest because the money to pay the land owner emanates from the taxes paid by the members of public.
While dealing with compensation for compulsory acquisition of land the court in the case of Patrick Musimba v National Land Commission & 4 others [2016] eKLR where the Learned Judges held that:
“In our view, a closer reading of Article 40(3) of the Constitution would reveal that the Constitution did not only intend to have the land owner who is divested of his property compensated or restituted for the loss of his property but sought to ensure that the public treasury from which compensation money is drawn is protected against improvidence. Just as the owner must be compensated so too must the public coffers not be looted. It is that line of thought that, under Article 40(3), forms the basis for “prompt payment in full, of just compensation to the person” deprived of his property though compulsory acquisition. As was stated by Scott L.J, in relation to compulsory acquisition, in the case of Horn-v- Sunderland Corporation [1941] 2 KB 26,40: “The word “compensation” almost of itself carries the corollary that the loss to the seller must be completely made up to him, on the ground that unless he receives a price that fully equaled his pecuniary detriment, the compensation would not be equivalent to the compulsory sacrifice”. Effectively Lord Scott’s statement gave rise to the unabated proposition that the compensation of compulsorily acquired property be quantified in accordance with the principle of equivalence. A person is entitled to compensation for losses fairly attributed to the taking of his land but not to any greater amount as “fair compensation requires that he should be paid for the value of the land to him, not its value generally or its value to the acquiring authority”: see Director of Buildings and Lands –v- Shun Fung Wouworks Ltd [1995] AC 111,125. We see no reason why the same approach should not be adopted locally. The Constitution decrees “just compensation” which must be paid promptly and in full. The Constitution dictates that the compensation be equitable and lawful when the word “just” is applied as according to Black’s Law Dictionary 9th Ed page 881 the word “just” means “legally right; lawful; equitable”. In our view, the only equitable compensation for compulsory acquisition of land should be one which equates restitution. Once the property is acquired and there is direct loss by reason of the acquisition the owner is entitled to be paid the equivalent. One must receive a price equal to his pecuniary detriment; he is not to receive less or more. This can be achieved to the satisfaction of the owner of land by Appeal to the market value of the land.’
The plaintiff undertook the project to construct the Olkaria –Lessos-Kisimau electricity transmission line over the defendants land known as L,R No 11367 in Nakuru County. The plaintiff engaged a valuer to value the property. The value was given as 3,500,000 per acre for 255.03 acres traversed by the line. The plaintiff applied 30% of the value of the land to give the loss of user to Ksh 267,781,500/= and offered the said amount to the defendant but the latter declined to take the offer. The reasons the plaintiff declined the offer were that the just and fair compensation to which the defendant is entitled should not only take into account the value of the land that was compulsorily acquired but must consider the resultant land lost through obstruction caused by the creation of the second way leave and the destroyed 17,611 Acacia and leleshwa trees and loss of pasture totaling 40.1 acres. The defendant claims cost of waste disposal on the land caused by the plaintiff. The defendant counter claims for a full compensation not just for land compulsorily acquired but for damage caused on the land.
This court finds that the counter claim based on compulsory acquisition is misconceived as this was not a case of compulsory acquisition but acquisition of way leave rights on the defendants land and therefore the defendant was only entitled to compensation for loss of user to land according to the company practices. PW1, Mrs. Matilda Mwamburi produced a valuation report as evidence that the property was valued at Ksh 3,500,000 per acre for the 255.03 acres and that as per the company policy the lowest percentage for calculation of impact on affected parcel is 30% which takes care of all land owners whose parcels of land may have an impact below thirty percent but still have the property assessed at 30%. PW2 Valued the property at 3,750,000 but this was more than one year after the plaintiff had valued the property. Michael Otieno valued the property at Ksh 4,200,000 after a period of more than 1 year after the valuation undertaken by the plaintiff. This court finds that the report by Mr Martin Cheboror to be a fair assessment of the value of the transmission corridor. The report produced by PW1 did not have variables and comparable whereas the report by DW1 had comparable and variables that were smaller in size compared to the suit property.
AWARD
This court comes to conclusion that the fair value of an acre in the transmission corridor is Ksh 3,750,000. Thus, the fair compensation to the defendant is Ksh 3,750,000 x 255.03x30%=286,908750. I do enter judgment that the plaintiff pays the defendant Ksh 286,908, 750.
I do grant a permanent Injunction against the Defendants either by themselves, their agents, employees from interfering with the work of the Plaintiff and attacking the servants and agent of the Plaintiff on the suit properties. Moreover, I do grant an order that an Easement in favour of KETRACO measuring 55-meters-wide and covering 255.03 acres be registered against the parcel known as L.R. 11367. Costs of this suit to the plaintiff.
The defendant has not proved in the counterclaim that she lost land to obstruction through creation of the second way leave. There is no tangible evidence from a forest assessment expert that the plaintiff cut down 17,611 trees of acacia and Leleshwa species. The defendant has not satisfied this court that there was loss of pasture. No evidence of waste disposed on the land by the plaintiff. In a nutshell, the defendant has not proved her claim and the same is dismissed with costs.
DATED, SIGNED AND DELIVERED ELECTRONICALLY THIS 13TH DAY SEPTEMBER 2024.
Kenya Electricity Transmission Company Limited (hereinafter referred to as the plaintiff), a State Corporation duly incorporated and registered under the Companies Act and pursuant to Sessional Paper No.4 of 2004 on Energy has come to this court against Marula Estates Ltd (hereinafter referred to as the defendant), a limited liability company incorporated in the Republic of Kenya under the provision of the companies Act (Cap 486) Laws of Kenya claiming that pursuant to her mandate, the plaintiff is currently underway with the construction of the Olkaria-Lessos-Kisumu Transmission line (TL) project which projects aim to evacuate cheaper Geothermal power from Olkaria to the Western Region of Kenya in an effort to meet the Kenya Vision 2030 on universal access to electricity in Kenya households. That the project is funded and supported by concessional loans from the World Bank and the International Finance Corporation and any stoppage by the Defendant shall have serious financial implications to the Country and the citizenry by denying them the much needed cheaper, cleaner and renewable power that is supposed to reach the inhabitants of Western Kenya.
The plaintiff contends that at all material times relevant to this suit, the Defendant is the registered proprietor of all parcel of Land known as L.R 11367(hereinafter referred to as the suit property) which traverses Naivasha and Nakuru, in Nakuru county and has been identified by the plaintiff`s agents/employees as affected by the way-leave trace.
The plaintiff conducted a valuation on the suit property through an independent valuer who valued the suit land at Kshs. 3,500,000.00 per acre. The Plaintiff subsequently offered the Defendant compensation in the sum of Kshs. 267,781,500.00 for the acreage traversed of 255.03 acres being 30% value of the wayleave trace.
The Plaintiff contends that the Defendant agents` have turned down the Plaintiff`s offer for the compensation for limited loss of land use amounting to Kshs 267,781,500.00 and demanded a valuation of Kshs. 4,000,000.00 per acre with compensation payable at 40%value of the wayleave trace. This is contrary to the Plaintiff`s compensation policy and has the effect of being burden-some to the tax-payer.
The Plaintiff on diverse dates has attempted to negotiate on compensation and access on land parcel L.R 11367 through its agent for right of way over the land, for construction of electricity transmission line in return of monies/compensation calculated based on the value of land affected by the limited loss of use but the Defendant/their agents/employees have denied the Plaintiff and its contractor access to the said parcel by making unsubstantiated demands for payment.
The Defendant has declined to engage an independent valuer provide or to provide a valuation report or a basis for these claims thereby interfering with the Plaintiff`s work, as well as blocking the Plaintiff`s servants and agents from carrying out the Plaintiff`s works on the suit properties.
The Plaintiff has therefore been forced to stall the construction of an electricity transmission line on the suit properties, an action which has led to the Plaintiff`s contractor demanding to be paid huge amounts of money as idling charges for the period that construction of the transmission project has been stalled and any subsequent day that the construction will be stalled.
According to the plaintiff, the Defendant`s actions has the resultant effect of the Plaintiff being in breach of the contractual obligations between the Plaintiff and its contractor which breach has far reaching consequences on the completion of the project.
The Plaintiff is apprehensive that if this Honourable Court does not intervene, The Plaintiff is likely to countinue losing substantial amount of money in idling charges from the contractor for machinery and personnel on site but not being utilized. Moreover, the construction of an electricity transmission line that is critical to the energy security of the nation of Kenya will stall and be frustrate and that the action of the Defendant is likely to cause the Plaintiff irreparable loss and damage which the Defendants cannot compensate. Further, the delay in completion of the project may lead to lapse of the concessional loan agreement and any re-negotiation on those agreements have huge financially implications which the Defendant cannot compensate.
The plaintiff prays for Judgment against the Defendant for an assessment of just compensation payable to the Defendants. Permanent Injunction against the Defendants either by themselves, their agents, employees from interfering with the work of the Plaintiff and attacking the servants and agent of the Plaintiff on the suit properties. The plaintiff further prays for an order that an Easement in favour of KETRACO measuring 55-meters-wide and covering 255.03 acres be registered against the parcel known as L.R. 11367. In the alternative, the plaintiff prays for Judgment against the Defendants for losses incurred by the Plaintiff due to the disruption of the construction of the power lines. Last but not least the plaintiff prays for costs of this suit.
In response, the defendant states that she was not aware of any valuation carried out by the plaintiff on its property and that the valuation report dated 18th December 2007, was carried out without the Defendant’s knowledge or approval. The Defendant states that the plaintiff`s offer of compensation of Kshs. 3,500,000/= per acre amounting to a sum of Kshs. 267,781,500/= being 30% value of the way leave trace is not the true value of the property and does not take into consideration the property as well as the ongoing development thereto. The defendant conducted its own independent valuation of the suit property which was done by Kenya Valuers & Estate Agents Limited who determined the true valuation of the Defendant`s property to be at the rate of Kshs. 4,200,000/= per acre.
The defendant states that the plaintiff restricted their final compensation amount to Kshs. 3,500,000/= per acre on the basis that its compensation policy does not permit a higher figure and in effect dismissing any positive prospect of negotiation by the defendant.
The Defendant contends that the suggested compensation of Kshs. 3,500,000/= per acre is unjustifiably inadequate and does not amount to just compensation and is in effect the unconstitutional deprivation by the state of property belonging to the Defendant on a whim and arbitrarily.
In the counter claim, the Defendant reiterates that she is the registered proprietor of the parcel of land known as L.R. NO. 11367 Naivasha, Nakuru County and which parcel measures 25,706 acres with 335 acres of road reserve. The plaintiff in the construction of the Olkaria-Lessos-Kisumu Transmission line project, compulsorily acquired a total of 103.21 hectares (255.03 Acres) on the parcel of land known as L.R. NO. 11367 (PART) Naivasha, Nakuru County,
The defendant avers that it conducted its own independent valuation of the suit property acquired and determined the true valuation of the property to be at the rate of Kshs. 4,200,000/= per acre at 50% value. The total sum payable as compensation for the land acquired would therefore be Kshs. 535,563,000.00 and not the offer made Kshs. 3,500,000/= per acre amounting to a sum of Kshs 267,781,500 at 30% value.
According to the defendant, the plaintiff in its determination of the compensation due to the defendant further failed to take into account aspect of loss and damage occasioned to the defendant as a direct result of the construction of the transmission line, and which aspects are material to the determination of the fair and just value for the suit property and which should be considered in making a determination of the total compensation due to be awarded.
There was already an existing way leave traversing across the suit property whose existence was not considered. The construction of the second line caused a permanent obstacle to the Defendant on any ongoing irrigation development (pivot irrigation systems and greenhouses) with a permanent loss of 255 acres. Accounting for the existing easement would result in the loss of 440 acres due to this and not solely the proposed 255 acres whereby compensation should be reconsidered at 50% of land value and not the proposed 30%. The sum payable would be Kshs. 416,250,000.00.
The defendant contends that during construction of the transmission line, the plaintiff through its agent and or servants was responsible for the removal of around 17.611 indegenous tree such as acacia and leleshwa. The area affected corresponded to 171 acres (11.400mts× 60mts). The plaintiff failed to account for the same and that during the construction of the transmission line, the plaintiff through its agent and or servant, destroyed natural pasture to facilitate construction of roads and foundation to erect their towers. The total length of the road created by the plaintiff amounted to 65:275sq meters (18,650mts × 3.5 width) which must be added to the foundations for each of the four legs for each tower totaling 100sq. mts and the area involved for the construction of towers totaling 2025sq. meters equivalent to half an acre per tower. The county Government of Nakuru, Department of Agriculture, Livestock and Fisheries valued such damage at the rate of 600 bales per acre at the cost of Kshs 250 per bale. Using the same valuation the total damage for roads and tower construction (foundations and working area) total to 40.1 acres and is equivalent to Ksh 6,015,000.
During the construction of the transmission line, the plaintiff through its agent and or servant failed to clear waste arising from the construction and which waste was left buried within the remainder of the suit property and some disposed at cost by the Defendant.
In reply to amended defence and counter-claim, the plaintiff states that it negotiated with landowners to grant right of way over their land but the Defendant`s rejected the offer which offer was based on the valuation dated 18th December 2017
The plaintiff reiterates that the extent that she caused a valuation of the Defendant`s property on 22nd August 2017 and prepared a report dated 18th December 2017 and that there is no provision that requires the plaintiff seek consent of landowners in order to conduct valuation of the affected properties. The Plaintiff states that based on the size of the suit property 25,707 Acres and the wayleave corridor 255.03 Acres the impact is approximately 9.9% which is way below the 30% impact offer by the Plaintiff and that the plaintiff requested the National Land Commission to undertake a valuation which posited a valuation of Kshs. 3,750,000/- per acre as per valuation report dated 15.5.209.
TESTIMONIAL EVIDENCE
Matilda Mwamburi testified as PW1 and stated that she signed a statement that was filed on 14th November 2018. According to the witness, valuation was done by an external valuer in 2017. Notice was done on 27th May 2015. The plaintiff did not acquire the land compulsorily but created a right of way on the property as provided for by the land Act 2012. Compensation of loss was based on the limited loss of land use as there are two restrictions on the use of land under the way leaves trace purely for safety reasons. The restrictions are no planting of trees or crops that at maturity will exceed 12ft in height and no construction of buildings under the trace. The plaintiff testified that compensation for the limited loss of land use is determined by the impact the trace line has on the land. The impact is the acreage traversed by the trace line divided by the total acreage of the land as a percentage. The minimum percentage impact used to calculate compensation is 30% of value of the acreage affected by the transmission line. That the plaintiff pursuant to the valuation of Ksh 3,500, 000 per acre and the acreage of 255.03 traversed by the trace line offered compensation of ksh 267,781,500 being 30% value of the way leave trace . The defendant turned down the plaintiffs offer and denied him access to the suit parcel hence this case .On cross examination by Dr Fred Ojiambo, Senior Counsel, she agreed that she was not involved in the actual valuation of the property but was involved in the computation after receiving the information from the valuer. She visited the land but not the whole of it. The report was done in 2017 after visiting the way leave corridor. He insisted that there was no irrigation on the land and that the land was not damaged. She did not consider the variables and comparables.
PW2, Martin Cheboror, a registered licensed gazetted valuer who has practiced for 11 years testified that he is a full member of the institution of surveyors of Kenya. He prepared a report dated 18th December 2017. He valued the property at Ksh 3,750,000 per acre. The comparables were the various properties surrounding the land. The corridor was not developed hence they did not look at developments. The land was bushy and full of shrubs.
On cross examination, he states that he looked at the entire land before the report was prepared and that he looked at the comparables and variables but did not list them. The instruction was to value 44 properties and that LR NO 11367 was one of them. He looked at the current prices as per the ministry of lands. He did not put in consideration the value of the nearby parcels of land such as the Morendeti Farm LR NO 5212/18. He stated that the Morendeti land is near Naivasha town compared to the marula land. He states that the two properties could not be of the same value because they were in different locations. He states that there was irrigation lines but not within the corridor of the way leave and that at the time of inspection, there were no trees. On re-examination by Mr Ochieng learned counsel for the plaintiff, he states that there was no development in the corridor measuring 255 acres.
PW3, Danson Ngugi Njenga, an employee of the National Land Commission testified that he prepared the valuation report dated 15th May 2019 and that he has worked for the Commission since 2017 and that he has been a valuer since 2013.He inspected the land in 2019 with the officers of the commission but did not remember their names. There were other way leaves on the land but he did not see any pylon or corridor on the land. There were machinery but outside the corridor. On re-examination he states that there were no developments in the corridor. That marked the close of the plaintiff’s case.
The defence called one witness thus Michael Otieno who testified as DW1,that he valued the property according to the land Act and land assessment and just compensation rules. He relied on rule 3 that provides for the market value of the land and the damage sustained inter alia. He inspected the land and found that there was a power line on the land and that a caveat had been registered. He testified that Marula relied on pivot irrigation system on the parcel of land. He observed tree cutting, loss of pasture and heritage. In his report he showed the comparable to the suit property such as 5212/2018 valued at 5,000,000 per acre which land is a flower farm. Other variables were an eighth of an acre valued at 1,000,000 and another eighth valued at 700, 000. They came up with a value of Ksh 4, 200,000. He inspected the property on 3/4/2019. He gave a list of the properties he has valued in his practice to demonstrate that he has a vast experience. On Cross examination by Mr Ochieng he states that he is a registered and practicing valuer but was not a registered valuer at the time of inspection, he was an estate agent. Trees and grass were not in the terms of reference. He visited the way leaves corridor accompanied by the director of the defendant. He saw the pivot irrigation system but the same was movable. The whole property was measuring 25,0000 acres.
RIVAL SUBMISSIONS
(a) Plaintiffs Submissions
The plaintiff contends that the law has been passed to govern issues of valuation and this is Land Value (Ammendment) Act 2019 which establishes the criteria for assessing value for compulsorily acquired freehold land. Even though, they take the view that compensation for limited loss of land use cannot be equated with compulsory acquisition of land which requires compensation to be at 100% just as in the case of an outright purchase of land. According to the plaintiff the courts have held times without number that just compensation ought to be paid promptly but that does not mean that public institutions such as the Plaintiff ought to let public treasury be riddled with improvidence.
The plaintiff relies on the ratio decindedi in the case of Patrick Musimba Vs National Land Commission & 4 others (2016) KLR which was restated in the case of Ravaspaul Kyalo Mutisya vs. National Land Commission LEC Appeal No.E004 of 2021 at paragraph 38 thus:-
“In our view, a closer reading of Article 40(3) of the constitution would reveal that the constitution did not only intend to have the land owner who is divested of his property compensated or restituted for the loss of his property but sought to ensure that the public treasury from which compensation money is drawn is protected against improvidence.”
The plaintiff urges this court to take judicial notice that the courts have adopted the assessment of impact at thirty percent for limited loss of land use. The plaintiff relies on the decision in Kenya Electricity Transmission Co. ltd. vs Lpeton Lengidi & 3 other Nyahururu ELC case No.474 of 2017 at paragraph 86:
“That compensation for way leave acquisition was normally limited to loss of use of land since there was no transfer of title or an outright purchase. As per the letter of offer given to the Defendants, only 60 metres of the property would be affected by the way leave. Which would have translated to 30% of the affected area as stated by the Defense witness”
The plaintiff further submits that there cannot be any other claim by the Defendant since they did not provide any assessment report from a forest officer to claim for any cut trees and lead any evidence to that effect. Further, that any report prepared internally by the Defendant was an afterthought since such reports only emanated in 2019 approximately one year after construction of the power line was concluded. In view of the foregoing, the plaintiff prays that the suit be allowed with costs and the Defendant’s counterclaim be dismissed with costs.
(b) Defendant’s submissions
The defendant submits that the core issue for determination in this matter is whether, in making the offer for compensation for the land compulsorily acquired for the development of the way leave trace, the Plaintiff took into account all the necessary and material factors and, thus whether the sum of Kshs.267, 781,500 offered constituted a fair and just compensation for the land acquired by and for the Plaintiff. If the answer to that issue is in the negative, then whether the claim made by the Defendant is a fair and just compensation for the acquisition of the suit property by the Plaintiff.
The defendant contends that in making the offer for compensation for the loss of use of the Defendant’s land, the Plaintiff paid scant attention to the market value of the same, as defined in Rule 2 of the Land (Assessment of Just Compensation) Rules. “Market Value” is defined as the value of the land at the date of publication in the Gazette of the Notice of intention to acquire the land.
The relevant Gazette Notice in this case was Gazette Notice No.1717 of 2019. There was no earlier Gazette Notice and, accordingly, any reliance upon any calculations based on an alleged earlier notice is manifestly false and without legal authority or justification. The Plaintiff sought to rely on a notice allegedly issued in the year 2015. But no such notice was even produced in evidence.
The plaintiff completely ignored and did not mention the physical damage caused to the properly and Contiguous land in question. Pursuant to section 107 A(7) of the Land act, matters to be taken into consideration in assessing the value of land for the purposes of compensation[ under the Act include inter alia (a) any damage sustained or likely to be sustained by persons interested at the time of taking possession of the subject land by reason of severing the land from other land; (b) any damage sustained or like1y to be sustained by persons interested at the time of taking possession is taken injuriously affecting other property, whether moveable or immoveable or any other manner affecting the person’s actual earnings, or (c) any damage genuinely resulting from diminution of the profits of the land between the date of the publication in the Gazette of the notice of intention to acquire the land and the date of the commission takes possession of the land. The defendant argues that Section 107 A (7) is in pari-materia with Rule of the Land (Assessment of Just Compensation) Rules (No.6 of 2012).
The defendant considered the evidence adduced in this matter, both by the Plaintiff and the Defendant, and submits that it proves beyond doubt that, in arriving at the offer which it made to the Defendant, the Plaintiff did not meet the threshold of the price equal to the actual pecuniary detriment caused to the Defendant by the acquisition. While the Plaintiff acknowledged that the total area acquired for purposes of the way leave trace stood at 55 metres wide and covered a total of 255.03 acres, it failed to note the additional area, totaling to approximately 185 acres. Which was lost to the Defendant due to the existence of another way leave it favour of Kenya Power and Lighting Company. This was notwithstanding a confirmation by Pw3 Martin Cheborir that he had seen an existing way leave, on the land.
The defendant contends that the compensation offered by the Plaintiff in this case further failed to take into account the damage in the course of the construction of the line and which was recorded pictorially by the photographs and the narrative of the DW1 Michael Otieno’s report all of which were produced in evidence.
PW1 Matilda Mwamburi denied any knowledge of damage, yet the subject was raised by the Defendant in her presence at a meeting which she attended and apparently chaired, the minutes of which were adduced in evidence by the Plaintiff itself, as Exhibit 5.
PW-2 Martin Cheborir admitted having seen another existing way leave on the suit property but did not bother to assess the cumulative impact of the Plaintiff’s way leave trace to be erected so close to that previous wayleave. The plaintiff did not pay attention to the destruction of trees which were catalogued and photographed. The photographic evidence was never challenged by the Plaintiff and that the Plaintiff further ignored the fact that there were permanent fixtures along the corridor of the way leave trace. There were irrigation pivots, a cattle dip and pasture land which were negatively affected by the erection of the pylons. The construction of the Plaintiff’s transmission line at the site in question effectively amounted to a secondary line whose effect was the creation of a permanent obstacle to the Defendant’s ongoing irrigation development through the use of pivot irrigation systems and greenhouse. The evidence by the Defendant showed that accounting for the existing assessment resulted in a total impact and loss of 440 acres and not solely the acknowledged 255 acres.
It was submitted for the Defendant that the compensation should be reconsidered at 50% of land value and not the proposed 30%. The way leave created substantial limits the use of the area occupied by the pylons and the environs. The estimation that the loss suffered only amounts to 30% of the value has not been substantiated. The Defendant submits that the estimation of loss has to be determined and relied on the case of Kenya Electricity Transmission Company v Lpeton Lengidi & 3 others (2018) eKLR where the merely made a determination of the percentage of loss in relation to the evidence that had been tendered before the Court and clearly stated so. No basis for adoption of 30% of the value in this case has been presented before the Court by the Plaintiff. The determination of this loss has to be based on empirical data presented before the Court. The Defendant submits that the actual loss on its operations is in fact 50%, as justified by the evidence of DW1 Michael Otieno.
According to the defendant, the determination and payment of compensation ought to be guided by the principles laid down in Article 40(3) of the Constitution and as stipulated under Sections 111 and 148 of the Land Act, as well as Regulation 26 of the Land Regulations, 2017.
In principle, all these provisions require the timely payment of full and just compensation. Article 40 of the constitution is very clear in the protection of every person’s right to property. Where one’s property is acquired by the state, the Constitution mandates the prompt payment in full, of just compensation to the person. The suit property was acquired by the Plaintiff in the year 2018 but to date no compensation has been paid for the sole reason that the Plaintiff in a discriminatory manner, undervalued the suit property and refused to acknowledge the actual market value of the suit property as well as consider compensation for damage caused. The Defendant submits that Plaintiff violated both their constitutional and statutory mandate by failing to adhere to the law on the issue of payment of full and just compensation. The Plaintiff has treated the Defendant’s claim with utter contempt stating that it could only compensate the Defendant in accordance with the Plaintiff’s unilateral policy, notwithstanding what the law provided. In the premises, it is prayed that the Plaintiff’s suit be dismissed in full and judgment as prayed in the counterclaim be entered in favour of the Defendant. Accordingly costs should be awarded to the Defendant.
ANALYISIS AND DETERMINATION
I have considered the evidence on record and rival submissions and do find the following issues ripe for consideration:-
(1) Whether the defendants land was compulsorily acquired?
(2) Whether the compensation by the plaintiff was adequate?
WHETHER THE DEFENDANTS LAND WAS COMPULSORILY ACQUIRED?
The process of compulsory land acquisition is provided for under Section 107 of the Land Act. The said section provides an elaborate and detailed process that commences with submission of a request from the National or county governments to the Commission for acquisition of land on its behalf. Under subsection 4 if the Commission is satisfied that the request meets the requirements of Section 107 (2) and Article 40 (3) of the Constitution the Commission shall;
a) cause the affected land to be mapped out and valued by the Commission using the valuation criteria set out under this Act; and
b) establish that the acquiring authority has identified the number and maintains a register of persons in actual occupation of the land, confirming for each such occupation how much time they have been in uninterrupted occupation or ownership of interest in the land prior to the date of the request for acquisition of the land, and the improvements thereon.
Subsection 5 provides that;
“Upon approval of a request under subsection (1), the Commission shall publish a notice to that effect in the Gazette and the county Gazette, and shall deliver a copy of the notice to the Registrar and every person who appears to the Commission to be interested in the land”
However, the law provides under Section 120 (2) of the Land Act (2012) for situations where land can be acquired before the process of compensation is completed. The court in African Gas and Oil Company Limited v Attorney General & 3 others [2016] eKLR asserted this as it held that:
“First, it is correct that section 120 (2) of the Land Act empowers the 3rd Respondent, in cases where there is an urgent necessity for the acquisition of land, and it would be contrary to the public interest for the acquisition to be delayed by following the normal procedures of compulsory acquisition under the Land Act, to take possession of land upon the expiration of fifteen days from the date of publication of the notice of intention to acquire.”
In Kenya, Private land can be acquired compulsorily by the government where the land is needed for public benefit or where it is in the interest of the public. In this regard, an individual can be deprived of his right to private land on condition that he is promptly compensated in full and the acquisition is for a public. In this regard, an individual can be deprived of his right to private land on condition that he is promptly compensated in full and the acquisition is for a public purpose or in public interest. Compulsory acquisition is an administrative process, and the persons with an interest in land targeted for acquisition must be given a chance to air their views or opposition to that process. The National Land Commission (NLC) is mandated under section 107 of the Land Act to acquire land compulsorily on behalf of both the national and county governments. The process starts when a cabinet secretary or a county executive committee member submits a request for compulsory acquisition of land to the NLC. The NLC has the powers to reject an application for compulsory acquisition if the request does not meet the requirements of Article 40(3) of the Constitution namely acquisition for a public purpose or in public interest. Once the NLC is satisfied that the conditions for compulsory acquisition are met it publishes a notice in the Kenya Gazzette, the land Registry and to everybody who appears to be interested in the land. After getting the notice, a person interested in the land can challenge all or some aspect of the intended compulsory acquisition. Interested persons include people whose interests appear in the land register, their spouse(s) together with the persons occupying the land targeted for the acquisition.
This court finds that this is not a case of compulsory acquisition under Article 40 of the Constitution of Kenya 2010 and section 107 of the Land Act.
This was a case of acquisition of way leave. A way leave establishes a legal right for a utility company, such as Kenya Power or telecommunication providers, to install, maintain, repair, and replace their infrastructure on a specific portion of private land. This infrastructure could include: Power lines (overhead and underground), Water pipelines, Sewerage lines, Communication cables (fiber optic, copper).
The argument by the defendant that the annexation of the land by the plaintiff amounted to compulsory acquisition is a misconception because the plaintiff did not obtain any title to the land and that the defendant is allowed some limited use of the land. The defendants use of the land is only restricted from planting of trees or crops that at maturity will exceed 12ft in height and no construction of buildings under the trace. In compulsory acquisition, the owner of the land is deprived of the whole interest in the land.
WHETHER THE COMPENSATION OFFERED BY THE PLAINTIFF WAS JUST AND ADEQUATE?
When calculating the compensation to a land owner in such situations the court should balance between the rights of the land owner and the public interest because the money to pay the land owner emanates from the taxes paid by the members of public.
While dealing with compensation for compulsory acquisition of land the court in the case of Patrick Musimba v National Land Commission & 4 others [2016] eKLR where the Learned Judges held that:
“In our view, a closer reading of Article 40(3) of the Constitution would reveal that the Constitution did not only intend to have the land owner who is divested of his property compensated or restituted for the loss of his property but sought to ensure that the public treasury from which compensation money is drawn is protected against improvidence. Just as the owner must be compensated so too must the public coffers not be looted. It is that line of thought that, under Article 40(3), forms the basis for “prompt payment in full, of just compensation to the person” deprived of his property though compulsory acquisition. As was stated by Scott L.J, in relation to compulsory acquisition, in the case of Horn-v- Sunderland Corporation [1941] 2 KB 26,40: “The word “compensation” almost of itself carries the corollary that the loss to the seller must be completely made up to him, on the ground that unless he receives a price that fully equaled his pecuniary detriment, the compensation would not be equivalent to the compulsory sacrifice”. Effectively Lord Scott’s statement gave rise to the unabated proposition that the compensation of compulsorily acquired property be quantified in accordance with the principle of equivalence. A person is entitled to compensation for losses fairly attributed to the taking of his land but not to any greater amount as “fair compensation requires that he should be paid for the value of the land to him, not its value generally or its value to the acquiring authority”: see Director of Buildings and Lands –v- Shun Fung Wouworks Ltd [1995] AC 111,125. We see no reason why the same approach should not be adopted locally. The Constitution decrees “just compensation” which must be paid promptly and in full. The Constitution dictates that the compensation be equitable and lawful when the word “just” is applied as according to Black’s Law Dictionary 9th Ed page 881 the word “just” means “legally right; lawful; equitable”. In our view, the only equitable compensation for compulsory acquisition of land should be one which equates restitution. Once the property is acquired and there is direct loss by reason of the acquisition the owner is entitled to be paid the equivalent. One must receive a price equal to his pecuniary detriment; he is not to receive less or more. This can be achieved to the satisfaction of the owner of land by Appeal to the market value of the land.’
The plaintiff undertook the project to construct the Olkaria –Lessos-Kisimau electricity transmission line over the defendants land known as L,R No 11367 in Nakuru County. The plaintiff engaged a valuer to value the property. The value was given as 3,500,000 per acre for 255.03 acres traversed by the line. The plaintiff applied 30% of the value of the land to give the loss of user to Ksh 267,781,500/= and offered the said amount to the defendant but the latter declined to take the offer. The reasons the plaintiff declined the offer were that the just and fair compensation to which the defendant is entitled should not only take into account the value of the land that was compulsorily acquired but must consider the resultant land lost through obstruction caused by the creation of the second way leave and the destroyed 17,611 Acacia and leleshwa trees and loss of pasture totaling 40.1 acres. The defendant claims cost of waste disposal on the land caused by the plaintiff. The defendant counter claims for a full compensation not just for land compulsorily acquired but for damage caused on the land.
This court finds that the counter claim based on compulsory acquisition is misconceived as this was not a case of compulsory acquisition but acquisition of way leave rights on the defendants land and therefore the defendant was only entitled to compensation for loss of user to land according to the company practices. PW1, Mrs. Matilda Mwamburi produced a valuation report as evidence that the property was valued at Ksh 3,500,000 per acre for the 255.03 acres and that as per the company policy the lowest percentage for calculation of impact on affected parcel is 30% which takes care of all land owners whose parcels of land may have an impact below thirty percent but still have the property assessed at 30%. PW2 Valued the property at 3,750,000 but this was more than one year after the plaintiff had valued the property. Michael Otieno valued the property at Ksh 4,200,000 after a period of more than 1 year after the valuation undertaken by the plaintiff. This court finds that the report by Mr Martin Cheboror to be a fair assessment of the value of the transmission corridor. The report produced by PW1 did not have variables and comparable whereas the report by DW1 had comparable and variables that were smaller in size compared to the suit property.
AWARD
This court comes to conclusion that the fair value of an acre in the transmission corridor is Ksh 3,750,000. Thus, the fair compensation to the defendant is Ksh 3,750,000 x 255.03x30%=286,908750. I do enter judgment that the plaintiff pays the defendant Ksh 286,908, 750.
I do grant a permanent Injunction against the Defendants either by themselves, their agents, employees from interfering with the work of the Plaintiff and attacking the servants and agent of the Plaintiff on the suit properties. Moreover, I do grant an order that an Easement in favour of KETRACO measuring 55-meters-wide and covering 255.03 acres be registered against the parcel known as L.R. 11367. Costs of this suit to the plaintiff.
The defendant has not proved in the counterclaim that she lost land to obstruction through creation of the second way leave. There is no tangible evidence from a forest assessment expert that the plaintiff cut down 17,611 trees of acacia and Leleshwa species. The defendant has not satisfied this court that there was loss of pasture. No evidence of waste disposed on the land by the plaintiff. In a nutshell, the defendant has not proved her claim and the same is dismissed with costs.
DATED, SIGNED AND DELIVERED ELECTRONICALLY THIS 13TH DAY SEPTEMBER 2024.