Suraya loses case on prime land title caveats

By Wahome Thuku

Property developers Suraya Group have been engaged in court battles with an aged couple over a multi-million shillings housing scheme in Nairobi.

The dispute whose origin was an agreement muted in 2006 revolves around 108 acres of prime land in Gigiri near the Village Market, owned by retired civil servant, Isaac Kamau Ndirangu, 82.

On October 9, 2006, Kamau and Mr Peter Muraya, the Suraya Group’s chief executive officer, struck a lucrative deal to construct an estate on part of the land, comprising a five-star hotel, shopping mall, two office parks, an exclusive country club and 105 residential homes.

Suraya then wrote to Kamau and his wife Elvin Wambui, 76, in August 2007 confirming that “a proper detailed agreement will be prepared by the advocates and executed.”

That formal agreement was executed between Suraya Property Group and W&K Estates owned by Kamau and his wife on December 1, 2007 for development of the first phase of 20 houses on 11.5 acres of the land.

Suraya Group was to contribute Sh138 million for this phase and also pay Kamau monthly access fees of Sh1 million.

Kamau and Muraya registered a separate company W&K Developers Ltd to undertake the sourcing of contractors, consultants, advertise and collect all the proceeds from the sale of the houses.

A dispute arose along the way when some houses had already been put up and sold at Sh28 million each. Kamau wrote to Suraya saying the contract had been nullified. Suraya Group took the matter to court.

On May 5, 2010, they got interim injunction stopping Kamau, his wife and W&K Estate from dealing in any way with all the 120 acres of land pending the determination of the main application for injunction.

property injunction

 On June 29, same year, Suraya lodged caveats on two titles of Kamau’s land – LR No. 12239 and LR No. 12240. They also registered two orders of the interim injunction against the property.

The main application was fully argued before High Court judge Alfred Mabeya and dismissed on January 25, this year. Kamau tried in vain to have the caveats lifted.

On May 12, Kamau filed an application under Section 64 of the Registration of Titles Act (repealed) and Article 40 of the Constitution seeking to have the Principal Registrar of Titles ordered to cancel or lift the caveats.

Alternatively, Kamau asked that if the caveats were to remain in force, Suraya Properties and W&K Developers be compelled to deposit Sh430 million in an interest earning account in joint names of the lawyers for all the parties.

In an affidavit, Kamau argued that he was the registered owner of all the 108 acres of land that was the subject of the suit. He said the subject of the suit was the joint venture between him and the Suraya Property Group, which related to 11.5 acres only. He said the interim order issued on the matter had lapsed with a ruling of January 25, 2012, dismissing Suraya’s application for injunction.

Kamau told the court that since the application for injunction was dismissed, he had requested the registrar to remove the caveats and lift the order but nothing had been done. He said he had received an offer to sell 10 acres of the land for Sh430 million but the transaction could not proceed due to the force of the caveats.

“A request to the plaintiffs (Suraya Group) to remove the caveats has fallen on deaf years,” his lawyer submitted.

Suraya Group and W&K Developers filed their reply on May 14, this year. In an affidavit sworn by Mr Muraya, they denied that the subject matter of the suit was only 11.5 acres of the land.

Muraya claimed the agreement dated October 9, 2006, covered 108 acres. He said the programme of work and approval by the National Environmental Management Authority (Nema) was for the entire suit property.

They argued that since the entire suit property was under dispute, Kamau could not enter into a sale agreement for any 10 acres of the property. They further contended that the Registrar of Titles had not been enjoined in the application hence the orders sought against him could not be granted.

no agreement on transfer

On June 20, they filed their written submissions and asked that the application be dismissed with costs.

Justice Mabeya had no difficulties dealing with the application as well. First, he observed that the Registration of Titles Act, which Kamau had quoted, had been repealed and could thus not apply in the proceedings. But there was still Article 40 of the Constitution to work with.

Mabeya observed that the formal agreement executed in December 2007 did not indicate that the land owner would transfer any portion to W&K Estate Ltd or Suraya Group.

“It’s doubtful that the agreement as it stands can be enforced against the registered proprietor of the suit property. Accordingly, I am doubtful that the agreement did create any licence in favour of the first plaintiff, in favour of whom the caveats were lodged,” the judge said.

The judge ruled that the caveats had no basis and could not stand against Kamau as the proprietor of the property.

Regarding the order registered against the property, Justice Mabeya ruled that they were superfluous as it was to last until the main application for injunction had been heard and determined. That application had been dismissed hence the order had gone with the dismissal.

Justice Mabeya said it was not necessary to have the registrar enjoined as a party in the application before the orders sought could be granted.

“I’m satisfied that the second defendant’s (Kamau) application is meritorious and I grant the same and direct that the Registrar of Titles to forthwith cancel and /or lift the caveat entered and registered as entry Nos. 18 and 19 on LR No. 12239 and entry Nos. 14 and 15 on LR No. 12240,” the court ruled on June 25, this year. The judge also awarded costs of the application to Kamau.

Kamau’s land is now clean and cleared for sale or other transactions unless Suraya Group files an appeal or seek interim order to suspend the ruling of the High Court.

The writer is a court reporter with the Standard Group

iwahome@standardmedia.co.ke