Deposit Sh30m in land case or else no stay pending trial

Republic of Kenya

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL CASE NUMBER 36 OF 2007

SAFI PETROLEUM LIMITED............. APPLICANT

ABDIRAHIMAN ABDI & SEVEN OTHERS... DEFENDANTS

BENCH: LADY JUSTICE K H RAWAL

RULING: 22.12.2009

By Nyakundi Nyamboga

Both Safi Petroleum Products Limited and Abdirahiman Abdi claim to be bona fide owners of a prime property, valued at over Sh300 million, in Nairobi South.

Safi claims it bought the disputed property — LR No 209/10772 — in 1998 from Chemech Laboratories (Kenya) Limited for Sh5 million.

Chemech Laboratories (Kenya) Ltd, the fifth defendant, acknowledges Safi’s claim.

However, on December 11, 2006, Safi alleges it discovered that another grant for the suit property had been issued to Kanu through its trustees some of whom, in turn, transferred it to Abdi.

The letter of allotment of the property to Kanu was not shown to the court. The date of the letter of allotment was also not mentioned in court during the hearing of an application in the suit.

The alleged grant to Kanu — IR 96752 — was allegedly issued on January 14, 2004, when the date of grant is shown as December 10, 2002.

Abdi, too, has not shown that the two trustees of Kanu — Noah Katana Ngala and Julius Leakakeny ole Sunkuli — had authority to sell the suit property as per Kanu’s trust deed.

Kanu, named as the sixth defendant in this suit, in its statement of defence dated July 9, 2007, categorically denied it was ever allotted the suit property and that Ngala and Sunkuli acted as its trustees in the alleged transfer of the suit property to Abdi.

No response

William Ruto, named as the seventh defendant, has not filed any response.

And what did Abdi tell the Court? He became a registered proprietor of the suit property on February 16, 2005. Five months later, he moved a subordinate court to evict trespassers — Safi — on the suit property. The court was not told the status of the case filed in the subordinate case.

A grant relied on by Safi was allegedly a forgery. A letter by the Criminal Investigation Department informed Abdi’s assertion.

The letter referred to an investigation the CID carried out on the grant after which they had resolved to call witnesses from the Lands office as prosecution witnesses.

However, in the judge’s view, that statement itself establishes that the assertion of forgery by the CID officer is premature.

Abdi also faulted documents Safi relied on in their application, among them the deed plan, deed of transfer, transfer and title deed. He concluded that the authenticity of the title in favour of Safi and that issued to Chemchem Laboratories (Kenya) Limited are suspect and cannot be relied on.

party to saga

Mr Vasant Jasani, who claimed he was a director of Chemchem Laboratories (Kenya) Ltd and who asked to be made a party to the saga, disowned Abdi Mohammed Issa and Mohammed Jama Noor, who have signed documents produced before court on behalf of that company, as his fellow directors.

However, the letter he produced from Registrar of Companies mentions the company’s name as Chemchem Laboratories Limited.

The judge noted, too, that "apart from that, I do not have any documents like the Memorandum and Articles of Association, or Annual returns of the said company".

It was further stressed that Safi had failed to show that Abdi committed fraud.

On obtaining the transfer and registration, Abdi took over the possession and did not waste time to sub-divide the suit property so that the original title ceases to be in existence.

Abdi posited that the suit property was initially subdivided into two sub-plots, which in turn are divided into 100 plots.

Disputed land

During submissions, Safi urged the court to issue temporary orders stopping any dealing with the property until the dispute between the parties is determined on merits.

Alternatively, the court should order the demolition of all alleged illegal structures Abdi may have built on the disputed land.

Its arguments in support of the temporary orders include: the Court of Appeal’s wisdom that a trespasser should give way pending determination of the dispute and that it is no answer that the alleged acts of trespass are compensable in damages. A wrongdoer cannot keep what he has taken because he can pay for it.

The court was also urged to find that only because there is a title in the name of Abdi, it should not hesitate to grant the order as the court has power to set aside the transfer, which is shown to have been fraudulently acquired.

In a 22-page ruling, Justice Kalpana Rawal had this to say: "From the facts shown in brief, it is apparent that the case is a riddle with intrigues and puzzles. None of the parties has produced full facts and appropriate documents that could prove their title over the suit property without any doubt. The plaintiff who has taken the transfer in the year 1998 has not taken possession of the suit property though it has at least shown the history of the suit property. Abdi has only shown the title deed although Kanu, allegedly issued with the grant in the names of some of its trustees, had told the court it had nothing to do with the grant".

She went on: "There are question marks on the titles of the two parties before court. To give any party unrestricted right over the property shall definitely result in great hardship to the other. In the circumstances very peculiar to this case, I shall have to resort to the court’s inherent power to make an order which is necessary to meet the end of justice, or to prevent abuse of the process of court".

If the court fails to grant any kind of conservatory orders, Safi shall lose its right to claim damages on transfer by Abdi.

The judge proceeded to restrain Abdi from selling, charging or transferring any part of the subdivisions of LR No 209/16432 and L R No 209/16433 (originally LR 209/10772) on condition that Safi shall furnish security and or a guarantee from a bank or financial institution in the sum of Sh30 million.

　

MY TAKE

I agree with the orders preserving the status quo even as consumers of justice look forward to the court’s determination on whether the titles issued to Abdi and Safi are tainted with fraud.

However, I have difficulty with the conditions attendant to that temporary order of injunction that effectively stalls any dealing on the suit property.

When a litigant is asked to deposit Sh30 million as security for costs if the other disputant is to be stopped from dealing with a suit property, is this not a tall order? From the court record the legal person who has been asked to deposit such a colossal sum of money is a limited liability company with a share capital of only Sh50,000. From the grapevine, Safi has not raised the security for costs ordered 40 days today since the order was made. Luckily for the plaintiff, the judge did not fix the time frame; at least I do not see any from in a copy of the ruling in my possession. However, I suspect the plaintiff must be sitting on the edge waiting for a time bomb to explode. Granted, courts strive to secure the interests of all parties, but some of the conditions they sometimes impose can be too stringent, thereby easily leading to denial of justice.

The writer is Standard Group Associate Editor—Legal

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