Failure to Obtain the Consent of the Land Control Board Within The Stipulated Time Merely Rendered a Controlled Dealing Voidable as Opposed to Being Void.

Isaac Ngatia Kihagi v Paul Kaiga Githui [2017] eKLR

ELCA 56 of 2014

Environment and Land Court at Nyeri

L. N. Waithaka, J

December 19, 2017

Reported by Ribia John

Land Law – controlled dealings - Land Control Board (LCB) – consent from the LCB – effect of not obtaining a consent from the LCB within the stipulated statutory time lines - whether the import of failure to obtain the consent of the Land Control Board within the stipulated time as required under section 6(1) of the Land Control Act was to render the controlled dealing void – Land Control Act section 6(1).

Jurisdiction – jurisdiction of the Magistrate’s Court – jurisdiction of the Magistrate Court over matters touching on land – jurisdiction to interpret sale agreements - where the claimant had entered into a void sale agreement - whether the Magistrates Courts had the jurisdiction to evict a Plaintiff; who inter alia approached the Court for the completion of a sale agreement so as to validate his occupation of the land; where it found that the sale agreement was void. 

Brief Facts

The Appellant had entered into a sale agreement in which the Respondent was to sell to him a portion of the Respondent’s parcel of land. The agreement provided that the buyer would take possession of the portion sold immediately after paying the deposit, which the buyer subsequently paid.

It was the Appellant’s case that despite having met his obligations under the sale agreement and being ready and willing to fulfil other obligations under the agreement, the Respondent failed, refused and neglected to divide the suit property. For those reasons the Appellant filed the instant suit at the Subordinate Court seeking orders of specific performance to enforce the agreement or to order reimbursement of the monies paid due to the agreement.

The Subordinate Court heard the matter and held that the transaction was void; as a result the Plaintiff was evicted from the suit land. However the Subordinate Court held that the Plaintiff was entitled to a refund of the deposit. Aggrieved by the decision the Appellant filed the instant appeal in which he claimed that the Court had no jurisdiction to entertain a claim of eviction and that the Subordinate Court erred by shifting the burden of proof.

Issues

         i.            Whether the import of failure to obtain the consent of the Land Control Board within the stipulated time as required under section 6(1) of the Land Control Act was to render the controlled dealing void.

       ii.            Whether the Magistrates Courts had the jurisdiction to evict a Plaintiff; who inter alia approached the Court for the completion of a sale agreement so as to validate his occupation of the land; where it found that the sale agreement was void. 

Relevant Provisions of the Law

Land Control Act

Section 6(1)

6.         Transactions affecting agricultural land

(1)       Each of the following transactions that is to say—

(a)      the sale, transfer, lease, mortgage, exchange, partition or other disposal of or dealing with any agricultural land which is situated within a land control area;

(b)      the division of any such agricultural land into two or more parcels to be held under separate titles, other than the division of an area of less than twenty acres into plots in an area to which the Development and Use of Land (Planning) Regulations, 1961 (L.N. 516/1961) for the time being apply;

(c)       the issue, sale, transfer, mortgage or any other disposal of or dealing with any share in a private company or co-operative society which for the time being owns 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 that transaction in accordance with this Act.

Section 8(1)

8.         Application for consent

(1)       An application for consent in respect of a controlled transaction shall be made in the prescribed form to the appropriate land control board within six months of the making of the agreement for the controlled transaction by any party thereto:

Provided that the High Court may, notwithstanding that the period of six months may have expired, extend that period where it considers that there is sufficient reason so to do, upon such conditions, if any, as it may think fit.

Section 9(2)(a)

9.         Granting or refusal of consent

(2)       Where an application for the consent of a land control board has been refused, then the agreement for a controlled transaction shall become void—

(a)      on the expiry of the time limited for appeal under section 11; or

Held

1.      The duty of the first Appellate Court is to evaluate afresh the evidence adduced before the Subordinate Court in order to arrive at its own independent conclusion but bearing in mind that it neither saw nor heard the witnesses testify.

2.      The order for eviction was incidental to the issue raised in the suit. That being the case, the Subordinate Court had the power to order for eviction of the Appellant once it found his occupation of the suit property was unlawful. The cases cited in support of the Appellant’s contention that the Court had no jurisdiction to grant an order for eviction were distinguishable from the circumstances obtaining in the instant case in that the claim herein was not merely for eviction of the Appellant but for determination of the rights of the parties to the suit property. Once the Court found that the Appellant’s right to the suit property was limited to refund of the consideration that passed between the parties, in line with the Court’s overriding objective under Section 1A of the Civil Procedure Rules, the Court was justified in entering judgment for the Respondent as dictated by the circumstances of the case.

3.      It beat logic for the Appellant who had moved the Court either for an order of specific performance or refund of the consideration he had paid in respect of the sale agreement to argue that he would still be entitled to occupy the suit property even after having received a refund of his consideration. If the Court were to do such a thing, it would be tantamount to telling the Appellant that he could eat his cake and still have it; an impossibility.

4.      Whilst the Court had reservations as to whether failure to obtain the Consent of the Land Control Board (LCB) within the time stipulated in law for doing so, owing to existence of many Court of Appeal decisions to the effect that failure to obtain consent within the time stipulated in section 6(1) of the Land Control Act and that either party in a controlled transaction could apply for the consent of the LCB, the Trial Court did not misconstrue the provisions of the Land Control Act and the rules made thereunder but it instead made a proper interpretation of the law.

5.      Although both the High Court and the Court of Appeal had in many decisions held that the import of failure to obtain the consent required under section 6(1) of the Land Control Act was to render the controlled dealing void, the instant Court was of the view, which view owing to the binding nature of decisions of the Court of Appeal had to bow to the decisions of the Court of Appeal, was that the failure of obtain the consent of the LCB within the stipulated time merely rendered a controlled dealing voidable as opposed to being void. A reading of the provisions of the said section 6(1) with the provisions of sections 8 and 9 of the Act made it improbable that it was the failure to obtain the consent of the LCB within 6 months of entering into the controlled dealing which made the dealing void.

6.      Section 6(1) did not provide that the otherwise voided controlled dealing would become void by dint of the provisions of that section but by dint of the provisions of the Act. 

7.      Whereas section 8(1) of the Land Control Act required that the application for the consent be made in the prescribed form to the relevant land control board within 6 months of the making of the agreement for the controlled transaction by a party thereto, the proviso under that subsection of the law provided an avenue for breathing life into an otherwise dead transaction; that was not possible.

8.      Since section 8(1) of the Land Control Act recognised that it was possible to breathe life to the otherwise voided transaction, the only reasonable construction that could flow from section 8 of the law giving the High Court power to revive the otherwise voided transaction was that the transaction did not become void but voidable at the lapse of the time provided in section 6(1) of the Land Control Act.

9.      Section 9 appeared to amplify the above interpretation of the law by inter alia providing that where an application for consent of a LCB had been refused, then the agreement for a controlled transaction shall become void on the expiry of the time limited for appeal.

10. The foregoing notwithstanding, the Court having determined that the position held by the Court of Appeal on the matter was binding on the instant matter, the Court’s interpretation of those provisions of the law was just but food for thought in prospective considerations of the import and purport of section 6 of the Land Control Act as read with section 8 and 9 of the Act by the Courts, especially the Court of Appeal.

11. An appellate court would not differ with the Subordinate Court on a question of fact unless such finding was based on no evidence or on a misapprehension of the evidence or the Court was shown demonstrably to have acted on  wrong principle in reaching the finding; and an appellate court was not bound to accept the Subordinate Court’s finding of fact if it appeared either that the Court had clearly failed on some material point to take account of particular circumstances or probabilities material to an estimate of the evidence, or if the impression based on the demeanour of a witness was inconsistent with the evidence in the case generally.

12. The finding of the Subordinate Court was not based on any evidence or misapprehension of the evidence presented before it to warrant interference by the instant Court. A review of the pleadings filed in the instant Court showed that the Respondent had on the onset denied having received the said amount of money and put the Appellant to strict proof of the allegation that he had paid the said amount and that the payment was acknowledged by the Defendant before his advocate. The evidence adduced before the Subordinate Court showed that despite having been given an opportunity to prove that the Defendant indeed received the said amount, the Plaintiff failed to do so by failing to call the advocate who allegedly endorsed the document through which the Respondent allegedly acknowledged having received the said amount, he was unable to name any person who witnessed payment of the money or any instalment in respect thereof. He also gave contradictory evidence concerning payment of that amount of money.

13. It was expected that the Appellant would at least produce some document(s) concerning its alleged payment of the Kshs. 200,000/- to the Respondent and even name or avail some people who witnessed the payment of the money. The Subordinate Court was justified in holding that failure by the Plaintiff to call the advocate in whose presence the acknowledgement note relied on by the Appellant was signed by the Respondent left the Court with the evidence of the Appellant and the Respondent. The Subordinate Court was also justified in holding that the burden of proving that the Respondent received the Kshs. 200,000/= lay with the Appellant, which burden he failed to satisfy to the satisfaction of the Court.

14. The burden to proof that the document was forged would only have shifted to the Respondent if and only if the Appellant had discharged the burden of proving that the Respondent indeed placed his signature on the document. Since neither the Appellant nor the Respondent adduced evidence capable of proving the issue raised concerning that acknowledgement note, the matter was left unproven.

15. The Appellant’s case did not turn on the existence or non-existence of the encumbrance but on the question as to whether parties to the suit fulfilled their respective obligation under the agreement they had entered into.

Appeal dismissed, costs to the Respondent.