Dina Management Limited v County Government of Mombasa & 5 others (Petition 8 (E010) of 2021) [2023] KESC 30 (KLR)

Background of facts

The first respondent, the County Government of Mombasa, was accused by the appellant, Dina Management Limited, of forcibly entering the suit property registered to them on several times in September 2017 without giving prior notice and further demolishing the perimeter wall facing the beach. The first respondent argued that since the suit property was public land rather than private, the entrance and demolition were an enforcement action intended to construct a highway to the beach.

Earlier on a lawsuit had been filed cited as Elizabeth Karangari Githunguri v. Dina Management Limited, HCCC No. 131 of 2011 which was decided in favor of the appellant. The appellant argued that this case resolved the questions of who owned the suit property, and whether there was a public road through the suit property.

The appellant filed a petition against the first respondent, seeking declarations of violation of its rights under Kenya’s Constitution and a permanent injunction to prevent interference with the suit property. The first respondent also filed a separate petition, asserting that the property was public land and the subsequent acquisition was void.

Trial court’s findings:

The trial Court held that:

• There was an access road through the open space to the sea, which was later blocked by the suit property’s allotment;
• The first respondent acted within the law in removing the wall which blocked the access road;
• The first respondent’s suit was not res judicata;
• The first respondent’s suit was not time barred as it related to constitutional violations of a continuing nature; and
• The appellant could not be protected as an innocent purchaser without notice.

The appellant was dissatisfied and they filed an appeal in the Court of Appeal. The appellate Court dismissed the appeal and a cross appeal filed by some of the Respondents and upheld the trial court’s decision. Aggrieved, the appellant filed the instant appeal.

 ISSUES FOR DETERMINATION

1. Whether the right to property (art 40 C.O.K) extended to property which was unlawfully acquired;
2. Whether being in possession of the instrument of title was sufficient proof of ownership of land where the registered proprietor’s root title was under challenge.
3. What was the procedure for the allocation of un-alienated land?
4. What were the factors to consider in determining what amounted to an intergovernmental dispute?
5. What were the limits of the Supreme Court’s jurisdiction under article 163(4)(a) of the Constitution on appeals as of right in a matter involving the interpretation or application of the Constitution?
6. Whether the Supreme Court had the jurisdiction to determine an issue which was not articulated at the trial court but only at the appellate court.
7. What was the nature of the doctrine of res judicata?
8. What were the elements to be proven before a court could determine that a matter was res judicata?
9. Whether decisions made by courts of concurrent jurisdiction made in rem were binding on courts of equal jurisdiction.

At the Supreme court appeal, not all the grounds set out by the appellant satisfied the court’s jurisdictional threshold under article 163(4)(a) of the Constitution. The appeal correctly invoked the court’s jurisdiction to the extent of determining only three questions:

1. Whether the appellant’s rights under article 27(1) and 50 (1) of the Constitution were violated by the court’s application of the doctrine of res judicata or in the alternative, issue estoppel;
2. Whether the appellate court’s interpretation of bona fide purchaser amounted to a violation of the appellant’s right to property under article 40 of the Constitution;
3. Whether the suit amounted to an inter-governmental dispute under article 189(3) of the Constitution, and the Inter-governmental relations Act.

HOLDING

The Supreme Court held as follows:

1. Whether the appellant’s rights under article 27(1) and 50(1) of the Constitution were violated by the court’s application of the doctrine of res judicata or in the alternative issue estoppel;

The theory of res judicata is based on public policy and aims to ensure that litigation is objective and that individuals are not harassed again for the same case. Estoppel can be used to assert the doctrine of res judicata, which states that once a judgment is rendered, subsequent processes are barred. If res judicata was pleaded as an estoppel to an entire cause of action, rather than a specific issue, it implied that the earlier judgment resolved all legal rights and obligations of the parties, including questions of law and factual findings. This was a type of action estoppel. Res judicata was included in section 7 of the Civil Procedure Act.

HCCC No. 131 of 2011 did not significantly address the issues raised in ELC Petition 12 of 2017. The court’s findings in HCCC No. 131 of 2011 were inconclusive due to the unavailability of State organs, specifically the Registrar of Titles, to make a determination. The second to sixth respondents were not parties in the case. The parties in ELC Petition 12 of 2017 differed from those in HCCC No. 131 of 2011, with the exception of the appellant. Therefore, ELC Petition 12 of 2017 was not res judicata since the necessary components were not met. The appellant’s constitutional rights to equal protection under Article 27(1) and fair hearing under Article 50(1) were not breached by the appellate court’s interpretation of res judicata in this case.

b. Whether the appellate court’s interpretation of bona fide purchaser amounted to a violation of the appellant’s right to property under article 40 of the Constitution.

Article 40(6) limited the right to property as not extending them to any property that had been found to have been unlawfully acquired hence appellant’s title was not protected under article 40 the Constitution and the suit property, by its very nature being a beach property, was always bound to be attractive and lucrative. The appellant ought to have been more cautious in undertaking its due diligence. Moreover, the root of the title having been challenged, the appellant could not benefit from the doctrine of bona fide purchaser. The registered proprietor in order to prove ownership ought to prove the legitimacy of their root title to show that it is legal, formal and free of encumbrances, including unregistered interests, beyond the instrument of title as proof of ownership.

c. Whether the suit amounted to an inter-governmental dispute under article 189(3) of the Constitution, and the Inter-Governmental Relations Act.

The court determined that the main question was whether the suit property was owned by the County Government or the National Government, rather than a dispute between the two. The suit property was fundamental to the conflict, leading to the combination of Petition 8 of 2017 and Petition 12 of 2017. The intergovernmental nature of the debate was secondary to the main issue at hand. The fact that the first respondent initiated separate proceedings in response to the appellants did not modify the character of the proceedings. The suit property’s ownership concerns and challenges would have been addressed in response to the petition, even if by way of cross-petition.

CONCLUSION

The hearing of the appeal and its subsequent dismissal raised critical considerations that parties should take into account when acquiring property. They are as follows:

1. Where the registered proprietor’s root title is under challenge, the registered proprietor must prove the legality of the title and show that the acquisition was legal, formal and free from any encumbrance;
2. Proprietors should ensure that if the property being acquired was initially unalienated Government Land, the correct procedure for allocation was followed;
3. If the 1^st registered owner of a property did not acquire property regularly, the ownership of such property cannot be protected under article 40 of the Constitution and such a party cannot benefit from the doctrine of bonafide purchaser.

The Property and Conveyancing team is always available to provide more insight on the implication of this case to due diligence investigation prior to property acquisition. Should you have any queries or need clarifications on the contents of this alert, please contact us via info@agoadvocates.com.