REPUBLIC OF KENYA
IN THE ENVIRONMENT AND LAND COURT AT VIHIGA
ELCL APPEAL NO.E004 OF 2023
SAMWEL MWANGA INGATI…………………………………. APPELLANT
VERSUS
SISILIAH AMAKOBE ABUTI……………...………….. 1ST RESPONDENT
ROBERT INATSWA………………………………..……. 2ND RESPONDENT
(Being an appeal from the judgement of the Senior Principal Magistrate’s Court at Hamisi in HAMISI PMC ELC NO 33 OF 2020 delivered on 21st June 2023.)
JUDGEMENT
Introduction
- The Appeal herein arises from the judgement in HAMISI PMC EL CASE NO. 33 OF 2020 dated 21st June 2023 (the suit). Two key and uncontested facts that emerged from the suit were that the Respondents herein are husband and wife and that the appellant bought land parcel known as KAKAMEGA/BULUKHOBA/1244 measuring approximately 0.34 Hectares (the suit land) from the 2nd Respondent. The suit was filed by the 1st Respondent vide the plaint dated 16th November, 2020 against the 2nd Respondent and the appellant. The 1st Respondent (Plaintiff in the suit) claimed that the 2nd Respondent sold their matrimonial home being the suit land wrongfully to the appellant. She sought for orders of nullification of the sale agreement and an order compelling the 2nd Respondent to refund the purchase price, an order lifting a caution placed by the Appellant on the suit land, permanent injunction, eviction and costs.
- The record of appeal shows that the Appellant in response to the 1st Respondent’s claim in the suit, filed a defence and counterclaim dated 24th February, 2021 denying the 1st Respondent’s claim and claiming for a declaration that the suit land belonged to him, an order compelling the 2nd Respondent to execute the requisite transfer and registration documents so as to cause the suit land to be registered in his (appellant’s) name. In the alternative, an order that he had acquired title by adverse possession, special damages, general damages and costs.
- The record further shows that the 2nd Respondent in response to the 1st Respondent’s claim filed a statement of admission admitting the 1st Respondent’s claim.
- The record shows that the suit was heard by the trial court which, vide its judgement delivered on 21st June, 2023, found in favour of the 1st Respondent and granted her claim and in addition made order that the Appellant be refunded the purchase price of Kshs.155,000 together with interest thereon at Central Bank of Kenya rates from the date of the judgement and that costs of the suit be borne by the 2nd Respondent.
- Aggrieved by the judgement, the Appellant filed the present appeal vide the Memorandum of Appeal dated 18th July, 2023. He seeks for orders that the appeal be allowed, that the Judgement and decree against him and consequential orders made therefrom be set aside and that he be granted the costs of the appeal.
- The grounds of appeal as itemized in the Memorandum of Appeal are that: -
- That the learned Magistrate erred in fact and in law in entertaining prayers from a third party, a spouse, on nullification and compelling the 1st Defendant (spouse) to refund the purchase price of a valid sale agreement at the current market price, contrary to the doctrine of privity of contract that postulates that a contract cannot confer rights or impose obligations on any person other than the parties to the contract.
- The learned Magistrate erred and misdirected herself in fact and law and considered extraneous circumstances in her judgement that led her to find frustration that was not pleaded by the Appellant nor proven by the Plaintiff which finding in essence erroneously meant that the contract between the Appellant and 2nd Respondent was capable of being nullified by a spouse, a third party to a contract whose cumulative effect was thus that the then Plaintiff’s claim succeeded in all the terms as prayed, since the findings first provided an avenue that validated the 2nd Respondent’s action and then acted as a fulcrum upon which the rest of the claim was hinged on to success.
- That the learned Magistrate erred in fact and in finding that it could go beyond the scope of the pleadings of the parties and grant relief not founded on pleadings.
- The learned trial Magistrate erred in law and in fact when she failed to appreciate that the effect of frustration of a contract was to kill the contract, bring the contract to an end forthwith, without more and automatically, and discharge the parties from further liability under it and that the doctrine is not to be lightly invoked, must be kept within very narrow limits and ought not to be extended, otherwise there will a frequent termination of contracts.
- The learned trial Magistrate erred in law and in fact in finding that the 2nd Respondent even after publicly announcing the sale through the Chief and sold, taking money with him engaged in a disappearing act whenever it suited him only to re-appear, then failed to find that he could not plead accident then invoke section 7 of the Land Control Act.
- The learned trial Magistrate erred in law and in fact when she failed to appreciate the fact that the essence of frustration is that it should not be due to the act or election of the party seeking to rely on it, a frustrating event must be some outside event or extraneous change of situation and a frustrating event must take place without blame or fault on the side of the party seeking to rely on it.
- The learned trial Magistrate erred in law and in fact when she failed to find that Section 27, 28 and 30 of the repealed Registered Land Act, Chapter 300, Laws of Kenya (repealed) under which the transaction took place provided exceptions to indefeasibility of title and that the Appellant’s rights are protected by the saving and transitional section of the Land Act, 2012 which is very clear on transitional provisions on rights, liabilities and remedies of parties over land.
- The learned trial Magistrate erred in law and in fact when she ordered eviction and failed to find that, the lack of the consent of Land Control Board does not preclude the court from giving effect to equitable principles, in particular, the doctrine of constructive trust and proprietary estopped which applied to the agreement between the Appellant and the 2nd Respondent.
- The learned trial Magistrate erred in law and in fact when she ordered eviction and failed to find that by section 22 of the Land Control Act, possession is only illegal if it is in furtherance of the avoided transaction or agreement.
- The learned Magistrate erred in law and in fact when she ordered eviction and failed to find that since trust are overriding interest to which land is subject and since by section 10(2) of the Land Act, all laws have to be construed in conformity with the Land Act, a person put in possession by the proprietor and claiming an equitable interest cannot be in occupation of land illegally pending the determination of the nature of extent of the equitable rights by a court.
- The learned trial Magistrate erred in law and in fact when she ordered eviction and indeed all prayers on account of numerous contradictions and falsehoods on place of abode, purported eviction by the Appellant, value of the land on valuation, who was using land and worse, the admission by the 1st Respondent (PW1) that she had been tilling on “the suit property” since 1996 until 2018 yet PW3 confirmed that in the years 2012, his other uncle called Bonface Akumonyi (where the sale took place) decided to give the Respondents’ family a portion of his land to live in and further DW.6, a village elder confirmed that in year 2013 there was land sold by the Respondent, all supposing that the Respondent were living and had at their disposal places to live in this case three.
- The finding of the learned trial Magistrate was manifestly unjust and oppressive by failing to find that even where the relevant consent was not obtained as in the position in this case but the purchaser is in possession of the land, such purchaser would be entitled to the land by virtue of the equitable doctrines of Constructive trust and Estoppel.
- The learned Magistrate erred in fact and law in after finding a valid contract that signified the common intention of the parties at making of the agreement in relation to parcel of land and the possession of Appellant into the land but failed to find that it was apparent the doctrine of constructive trust was created by the fact of the case and the Appellant could not renege.
- The learned Magistrate erred in fact and law in failing to find that the Respondents’ conduct in cohort and failing to obtain consent and dodging to sign the requisite documents, then seeking to nullify the transaction was pretentious, conniving, mischievous, oppressive, highhanded, outrageous, callous and underhanded, to say the least and bordered a fraud.
- The learned trial Magistrate erred in law and in fact in failing to consider all the substantial issues raised by the Appellant, his witnesses in their evidence and submissions particularly as regards all the Respondents’ presence, habit and conduct of buying and selling other parcels of land thus in essence has sanctioned the unacceptable conduct of the Respondents and allowed them to benefit from their own mischief.
- The learned Magistrate erred in fact and law in failing to find that the 2nd Respondent having placed himself under a contractual obligation to execute all the necessary documents and obtain all required consents, including consent of the Land Control Board 2nd Respondent and by extension his beneficiary the 1st Respondent are estopped from using their own breach of the agreement as a ground to seek to nullify the transaction.
- The learned Magistrate erred in fact and law in failing to find that despite the lack of consent of the Land Control Board, the doctrine of constructive trust applied to the agreement between the Appellant in the circumstances of the case, the equitable doctrine of constructive trust and proprietary estoppel were applicable and enforceable in regard to land subject to the Land Control Act.
- That the learned Magistrate erred in fact and in law by arriving at a finding that the caution placed on the said property by the 2nd Defendant should be lifted forthwith since the Sale Agreement between the 1st Defendant and the 2nd Defendant had been frustrated and the land belonged to the 2nd Respondent herein, the caution placed on ‘the suit property’ cannot stand YET in the circumstances of this case 2nd Respondent herein, received the full purchase price for the property, allowed the Appellant to take possession now 18 years, let him remain on the property undisturbed, then acquired the title documents in his name after the sale, a constructive trust had been created for the Appellant.
- That the entire judgement is oppressive to the Appellant so much so that the learned Magistrate not only failed to find that upon the application of the equitable doctrine, the court in its discretion may award damages and where damages are an inadequate remedy grant the equitable remedy of specific performance but also decreed that the 2nd Defendant i.e. Appellant be refunded only Kshs.155,000/= and more so the same be paid by the Appellant with interest at CBK rates without first specifying whether lending or interest rates, yet also going against the market price prayed by the 1st Respondent and which unfairly would accrue from the date of the judgement until payment in full.
- The learned Magistrate erred in law and in fact in failing to find that after eighteen (18) years, the Appellant had invested on the suit property with the full authority and consent of the Respondent and by failing to order appropriate compensation arrived at an unjust decision.
- The learned trial Magistrate erred in law and in fact in failing to find that the law of contract requires the Respondents to make good the loss which they had occasioned to the Appellant and that the Respondent must make recompense in form of damages since whereas the general legal principle is that courts do not normally award damages for breach of contract, there are exceptions such as when the conduct of the Respondent is shown to the oppressive, high handed outrageous, insolent or vindictive as in this case.
- The learned trial Magistrate erred in law and in fact in failing to find that in the circumstances, general damages would also be tenable, which route when not taken results to be unjust and oppressive to the Appellant.
- The learned Magistrate erred in law and in fact when she wrongly found that the Appellant’s only remedy was a refund of purchase price yet the price was valued at Kshs.700,000 in 2018 and included development thereon as shown on record and hence arrived at a wrong decision.
- The learned trial Magistrate erred in law in fact in failing to find that, there is prima facie evidence that this is not a transaction which is commercially impossible to fulfill and that land has a rather interesting inherent and natural value ordinarily beyond the calculation or every day commerce and thus cannot be linked to a chattel which can be easily purchased.
- The learned trial Magistrate erred in law and in fact that in failing to direct herself that when therefore the dispute is over a transaction, the court ought to treat land more than an ordinary chattel than can be easily found on any commercial street. If it is lost, tracing the same may not be possible.
- The learned trial Magistrate erred in law and in fact when she allowed the Respondents to unjustly enrich themselves through their own wrong-doing and in breach of contract and hence arrived at a wrong decision.
- That the learned Magistrate failed to consider the means of the Respondents even after evidence was adduced by PW1 that the 1st Defendant was unable to refund the Appellant the purchase price before and thus was knowingly sending the Appellant home empty handed.
- The learned trial Magistrate erred in law and fact in failing to appreciate the parties’ and indeed Appellant’s evidence thus holding that it seemed that the then Plaintiff and the 1st Defendant had what they considered their matrimonial home in ‘the suit property’ yet it was clear from the evidence adduced that the property was not at any time occupied or utilized by the spouses as their family home and the Respondents were living elsewhere during the sale. That in fact PW3 confirmed that in the year 2012, his other uncle called Bonface Akumonyi (where the sale took place) decided to give the Respondents’ family a portion of his land to live in.
- The learned Magistrate erred in fact and law by failing to find that the court was not able to enforce the Sale Agreement in the manner suggested by the Appellant in his Counterclaim i.e. the Plaintiff and 1st Defendant be compelled to sign transfer documents for transfer of Land Title Number KAKAMEGA/BULUKHOBA/1244 and provide all documents of title relating to the property.
- The learned Magistrate erred in fact and law by failing to find that it would be unjust and inequitable to allow the Respondents to retain the land that had been sold to the Appellant in the circumstances of the case.
Submissions
- Directions were taken on 9th October, 2023 that the appeal be argued by way of written submissions. Pursuant to the directions, written submissions dated 18th October, 2023 were filed by Linet S. Mayavi Advocate on behalf of the Appellant. Similarly, written submissions dated 8th December, 2023 were filed by the firm of Ben Aduol Nyanga & Company Advocates on behalf of the 1st Respondent. The 2nd Respondent filed written submissions dated 11th December 2023- in person.
Issues for Determination
- Through his written submissions, the Appellant framed the following as the issues for determination in this appeal: -
- constructive trust and proprietary estoppel.
- privity of contract.
- the Appellant’s preserved rights.
- manifestly unjust and oppressive award.
- For the 1st Respondent, the following were framed as the issues for determination in the appeal;
- whether the land sale agreement was valid, not voidable at law and capable of being enforced by a court of law.
- whether the equitable principles of constructive trust and proprietary estoppel ought to have applied in the instant case.
- whether the trial Magistrate ought to have applied privity of contract in reaching her findings
- whether the award by the trial magistrate was unjust and/or oppressive.
- The 2nd Respondent framed similar issues as the 1st Respondent as the issues for determination.
- From these, the court finds that the issues for determination are:
- constructive trust and proprietary estoppel.
- privity of contract.
- manifestly unjust and oppressive award.
- whether the land sale agreement was valid, not voidable at law and capable of being enforced by a court of law.
- costs.
Analysis and Determination
- This being a first appeal, the court reminds itself of the duty to re-examine and analyze the evidence placed before the trial court with a view to arrive at its own independent conclusion. In Selle & another vs Associated Motor Boat Company Ltd & Another (1968) IEA 123) it was held that a court handling a first appeal is not necessarily bound to accept the findings of fact and law by the court below but has a duty to re-examine the evidence placed before the trial court. The court stated; -
“an appeal to this court is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluate it itself and draw its own conclusion though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in that respect.”
- The first issue for determination is constructive trust and proprietary estoppel. It was submitted on behalf of the Appellant that in the case of Willy Kimutai Kitilit –vs- Michael Kibet [2018]eKLR the court made findings on constructive trust and proprietary estoppel namely that;
“thus since the current constitution has by virtue of article 10(2)(a) elevated equity as a principle of justice to a constitutional principle and requires the court in exercising judicial authority to protect and promote that principle amongst others, it follows that the equitable doctrine of constructive trust and proprietary estoppel are applicable to and supersedes the Land Control Act where a transaction relating to an interest in land is void and unenforceable for lack of consent of the Land Control Board.”
- Counsel relied on the case of Mary Akai Lutere –vs- Johnson Kamau Mwangi [2020]eKLR where the court dismissed an appeal and compelled the seller to execute transfer documents for the transfer of the sold property. Counsel submitted that the Respondents by their acts, held the suit land in fiduciary capacity on behalf of the Appellant. That the Respondents should be compelled to execute the transfer documents and all other documents in favour of the Appellant to ensure completion of the transaction comprised in the sale agreement dated 5th August, 2005 and be ordered to pay costs to the Appellant.
- Counsel further relied on the case of Alliza –vs- Saul (Civil Appeal 134 of 2017) [2022]KECA 583 (KLR)(24 June 2022) (Judgement) Neutral Citation: [2022] KECA 583 (KLR) where the court held that;
“it is time I think, this court spoke in unmistakable terms that it would not, in this day and age, rubber stamp fraud and dishonesty by holding as null and void agreements freely entered into by sellers of agricultural land and which have been freely acted upon by the parties thereto, then those sellers often impelled by no higher motives than greed and impunity, seek umbrage under the Land Control Act, an old statute of dubious utility in current time.”
- Counsel submitted that the Respondents’ conduct, in cohort of buying and selling other parcels of land for years using the Appellant’s money and failing to obtain consent and dodging to sign the requisite documents then seeking to nullify the transaction was pretentious, conniving, mischievous, oppressive, highhanded, outrageous and callous. That the 2nd Respondent is estopped from using his own breach of the agreement as a ground to seek to nullify the transaction. That the 2nd Respondent having placed himself under a contractual obligation to execute all the necessary documents and obtain all required consents including consent of the Land Control Board, the 2nd Respondent and by extension his beneficiary should not be allowed to benefit from their own mischief.
- On behalf of the 1st Respondent, it was submitted that the law governing transactions relating to land in the year 2013 was the Land Registration Act, the Land Control Act Cap 23 Laws of Kenya and the Law of Contract Act Cap 23 Laws of Kenya. That section 93 of the Land Registration Act required spousal consent. That if a spouse obtained interest in land during the substances of the marriage for co-ownership and use of both spouses or all spouses, such property shall be deemed to be matrimonial property and shall be dealt with under the Matrimonial Property Act.
- That section 6 of the Land Control Act stipulates that a sale transaction among other transactions mentioned therein in respect of agricultural land situated within a land control area is void for all purposes unless the Land Control Board for the land control area or division in which the land is situated has given its consent in respect of the transaction in accordance with the Act.
- That section 3(3) of the Law of Contracts Act provides that no suit shall be brought upon a contract for the disposition of an interest in land unless;
- The contract upon which the suit is founded is
- is in writing
- is signed by all the parties thereto
- the signature of each party signing has been attested by a witness who is present when the contract was signed by such party.
- That a land sale agreement being a contract is subject to the laws and principles that govern contracts. That given that the agreement the subject matter in the suit was entered into in the year 2013, the law governing the agreement would be the law in force at that time.
- That the land sale agreement does not evidence spousal consent as required by section 93 of the Land Registration Act. That the land sale agreement is therefore void ab initio hence not capable of being enforced. That the agreement in light of the provisions of section 6 of the Land Control Act is clearly void and not capable of being enforced by a court of law for want of consent of the Land Control Board. Counsel relied on the case of Willy Kimutai Kitilit vs Michael Kibet [2018]eKLR.
- Counsel submitted that the appellant also produced another land sale agreement dated 14th January 2016. That the same did not comply with the provisions of section 3 (3) of the Law of Contract Act. That the document was not attested by two witnesses and was marred with fraud whose effect was enough to have the contract set aside.
- It was submitted that regarding the equitable principles of constructive trust and proprietary estoppel, the appellant who seeks refuge in the principles of equity has not come to court with clean hands. That the appellant had not been put into possession of the suit land in this case.
- The 2nd Respondent submitted that although the appellant had paid the entire of the purchase price had not been put into possession of the land.
- I have carefully considered these submissions in light of the evidence placed before the trial court and the law. I find that the principles of constructive trust and proprietary estoppel are applicable in the case. It is clear that the Respondents have been working together to defeat the interest of the appellant. The evidence on record is admit that the 2nd Respondent who is the registered owner of the suit land sold the land to the appellant after publicly advertising it through the area Chief. The appellant paid the entire of the purchase price. The land sale agreement produced as exhibit showed that the sale took place in the year 2005. It was the appellant’s case that he took possession of the land immediately after purchase and had since developed it. I am not convinced by the submissions by the Respondents that the appellant never took possession of the suit land. If that were the position, then there would be no need for the 1st Respondent to seek for orders of eviction against the appellant. The Respondents also submitted that the appellant cannot take refuge in the equitable principles of constructive trust and proprietary estoppel because he had not come to court with clean hands. This was however not demonstrated. In the case of Willy Kimutai Kitilit (supra) relied on by both parties, the court found that lack of consent of the land Control Board for the sale transaction did not preclude the court from giving effect to the equitable principles, in particular the doctrine of constructive trust.
- The next issue is privity of contract. It was submitted on behalf of the appellant that there was no privity of contract between the appellant and the 1st Respondent herein and accordingly, the land sale agreement could not be enforced by the 1st Respondent against the appellant. Counsel relied on the case of Savings & Loan (K) Ltd vs Kanyenje Karangaita Gakombe & another (2015) eKLR where the court held that a contract cannot confer rights or impose obligations on any person other than the parties to the contract. And the case of Stella Mokeira Matara vs Thaddeus Mangenya & Another (2016) eKLR where it was held that spousal consent was not a requirement before the enactment of the Land Act 2012. That hence the trial court erred in fact and in law in entertaining prayers from a third-party contrary to the doctrine of privity of contract.
- Perusal of the plaint shows that the 1st respondent’s claim was based on her relationship with the 1st Respondent and lack of spousal consent. Though there is evidence that the 1st Respondent was aware of the sale she did not sign the sale agreement as a party. There therefore was no privity of contract between her and the appellant. As concerns the issue of spousal consent, the transaction having taken place in the year 2005 there was no requirement for the same. There being no privity of contract there was no basis upon which the 1st Respondent could lawfully enforce the contract of sale against the appellant and force the 2nd Respondent to refund the purchase price. I find that the decision of the trial court to order for refund of the purchase price at the instance of the 1st Respondent was against the principles of privity of contract.
- The next issue is whether the award by the trial court was manifestly oppressive. It was submitted on behalf of the appellant that the court ordered that the appellant be refunded Kshs.155,000, the amount handed in 2005 more so with interest from the date of judgement, disregarding the passage of time and the valuation of the land at Kshs.700,000/= in the year 2018. That the appellant had invested in the suit land with the full knowledge, authority and consent of the 2nd Respondent. That there was evidence adduced by PW1 that the 2nd Respondent was unable to refund the appellant purchase price and thus the court was knowingly sending the appellant home empty handed. That it would be unjust and inequitable to allow the Respondents to retain the land that had been sold to the appellant.
- On behalf of the 1st Respondent it was submitted that on the basis of the decision in the Willy Kitilit case (supra), the remedy available to the appellant was a refund of the money owing on the contract in light of the application of the equitable doctrines as claimed by the appellant.
- The 2nd Respondent in the present case, freely advertised his land for sale, sold it to the appellant and received the full purchase price. He allowed the appellant to take possession. He cannot be allowed to hide behind the provisions of the Land Control Act to collude with his wife, the 1st Respondent, to have the suit land revert to them at minimal or no cost.
- It is clear from the conduct of the Respondents that they were colluding to defeat the interest of the appellant. In reply to the Plaint, the 2nd Defendant (2nd Respondent herein) readily filed a statement of admission and pleaded accident; that he sold the land accidentally. It is not fathomable how the 2nd Respondent could advertise the land for sale, enter into a land sale agreement, receive the purchase price in full, allow the appellant to take possession of and develop the suit land all accidentally.
- In the case of Alliza vs Saul (supra) relied upon by the appellant, the Court of Appeal held inter alia that “equity and fairness, the guiding principles in article 10 of the constitution require that the Land Control Act is read and interpreted in a manner that does not aid a wrongdoer but renders justice to a party.” The Court proceeded to allow the appeal by the purchaser, set aside the judgement that had dismissed the appellant’s counter claim for lack of Land Control Board Consent and entered judgement in favour of the purchaser/appellant for transfer of the sold land in the appellant’s favour.
- Similarly, in the case of Kiplagat Kotut vs rose Jebor Kipngok & another (2019)eKLR the Court of Appeal held that
“we hasten to state that the Land Control Act was never intended to be an instrument of unjust enrichment. It never meant to exempt a mala fides vendor from his contractual obligations.”
- And in Macharia Mwangi Maina & 87 others vs Davidson Mwangi Kagiri (2014)eKLR, the Court of appeal held that the possession of the land by the purchaser was an overriding interest in favour of the purchaser and that the Respondent created a constructive trust in favour of the appellant who had bought the land from him.
- Guided by the above cited authorities and on the basis of the findings herein that the equitable doctrines of equity of constructive trust and proprietary estoppel are applicable in this case, that failure to obtain the Land Control Board consent did not in the circumstances of this case void the land sale agreement, that there was no privity of contract between the 1st Respondent and the appellant and that as at the time the land sale transaction was done there was no requirement for spousal consent as envisaged in the Land Act, I find that the appeal has merit. The appeal is hereby allowed as follows:
- The judgement of the trial court is hereby set aside and substituted with a judgement in the following terms: -
- The suit is dismissed.
- Judgement is entered in favour of the appellant on the counterclaim for transfer of the suit land parcel No. KAKAMEGA/BULUKHOBA/1244 by the 2nd Respondent in favour of the appellant forthwith in default of which the Deputy Registrar of the Court to execute the requisite documents so as to effect transfer and registration of the suit land in favour of the appellant.
- Each party to bear own costs of the suit and counterclaim.
- Each party to bear own costs of the appeal.
Orders accordingly.
Judgement dated and signed at Vihiga and delivered this 20th day of March, 2024 virtually through Microsoft Teams Online Application.
E. ASATI,
JUDGE.
In the presence of:
Ajevi: Court Assistant.
Appellant in person.
Willie Advocate for the 1st Respondent.
No appearance for the 2nd Respondent.