The government cannot lawfully deprive a person of part or all of their property via a grant of lease to another person.
The appellant challenged the decision of the Court of Appeal which partly allowed an appeal against the decision of the Environment and Land Court on the award of damages. The respondent was the registered owner of the suit property measuring 425.7 hectares situate in the Coastal Region pursuant to a grant issued under the Registration of Titles Act, Cap 281 Laws of Kenya (repealed). The respondent claimed that in 2007, the appellant, without reference to or concurrence of the former, unilaterally issued duplicate title deeds over portions of the suit property in favour of third parties under the Registered Lands Act, Cap 300 Laws of Kenya (now repealed). It was the respondent’s claim that the duplicate title deeds were issued during the 2007 election period, at the behest of the politicians in the area, with a view to winning votes in favour of the respective candidates. The respondent further claimed that the decision by the appellant to issue duplicate titles to third parties encouraged more squatters to encroach and settle on the suit property. It was the respondent’s further claim that among other groups of people, the Department of Defence through the then Permanent Secretary to the Treasury, was granted a duplicate title over a parcel of land L.R. No. 24853 which was part of the suit property.
Aggrieved, the appellants filed a petition at the trial court and claimed that the duplicate titles were issued to trespassers who had encroached on its suit property. The appellant’s case was that the respondent’s act of issuing titles over the suit property was illegal and amounted to unlawful compulsory acquisition and deprivation of its property. It further claimed that the respondent’s actions amounted to a violation of its rights under Article 40 (1) and (3) of the Constitution, and sought two declarations to that effect, and a consequential award of damages. The Environment and Land Court held that the issuance of duplicate titles over the appellant’s land, in favour of third parties, amounted to unlawful compulsory acquisition, and a violation of its right to property under article 40(3) of the Constitution. The learned Judge determined that the acreage unlawfully acquired was 51.129 ha and awarded the respondent a sum total of Kshs. 413,844,248.70/- as compensation for the land encroached and Kshs. 51,129,000/- as general damages for breach of the respondent’s right to property under article 40 of the Constitution. The Court of Appeal upheld the trial court’s finding that the respondent’s right to property was violated, and determined that the appellant’s acts amounted to compulsory acquisition of portions of the suit property. Further, the appellate court held that the respondent was entitled to compensation under article 40(3) of the Constitution, on account of the compulsory acquisition. Additionally, the court faulted the trial Judge for failing to properly exercise his discretion in the computation of damages and determined that the respondent was entitled to compensation for the entire suit property. It found that upon payment of the compensation, the respondent would be deemed to have relinquished its title to the suit property. Finally, the Court of Appeal awarded damages of Kshs. 449, 434, 800/- for the compulsory acquisition of the suit property and Kshs. 42, 570, 000/- as damages for violation of the appellant’s right to property. Aggrieved, the petitioner filed the instant appeal before the Supreme Court.
- Whether the government could lawfully deprive a person of part or all of their property via a grant of lease to another person.
- What was the lawful procedure for the government to compulsorily acquire land?
- What did the court consider in awarding damages for unlawful compulsory acquisition of land?
- Whether the unlawful acquisition of a portion of its land which resulted in the diminution of the value of the whole of the suit property amounted to constructive compulsory acquisition.
Relevant provisions of the law
Constitution of Kenya, 2010
40. Protection of right to property
(3) The State shall not deprive a person of property of any description, or of any interest in, or right over, property of any description, unless the deprivation--
(a) results from an acquisition of land or an interest in land or a conversion of an interest in land, or title to land, in accordance with Chapter Five; or
(b) is for a public purpose or in the public interest and is carried out in accordance with this Constitution and any Act of Parliament that--
(i) requires prompt payment in full, of just compensation to the person; and
(ii) allows any person who has an interest in, or right over, that property a right of access to a court of law.
- The fact that the respondent was the registered proprietor of the suit property had never been called into question, or challenged by the appellant. During the proceedings at both the trial and appellate courts, the ownership status of the suit property was never in doubt. It remained an uncontroverted fact that the respondent acquired the suit property pursuant to a grant of lease by the government. By the time the cause of action arose, the lease in favour of the respondent was intact.
- The only way the government could lawfully deprive the respondent of part or all of its property, was through a compulsory acquisition, in conformity with the provisions of article 40(3) of the Constitution, and the procedure stipulated in the Land Acquisition Act (repealed) which was the applicable law at the time. The government did not acquire the portion of the suit property compulsorily. The facts on record did not point towards compulsory acquisition. Being the custodian of the Land Register, and the guarantor of titles emanating there-from, the government was acutely aware that the suit property was privately owned by the respondent.
- Any compulsory acquisition process, ought to have commenced with a requisite notice to the respondent, and any other persons claiming an interest in the land. The public purpose for which the land was to be acquired, ought to have been clearly stated. Most critically, the resultant acquisition ought to have been attended with prompt payment in full, of a just compensation to the respondent. There was nothing on the record to show, that any of those mandatory processes, was followed before a portion of the suit property was acquired. The issuance of titles over a portion of the suit property, in favour of third parties was unlawful, un-procedural, and an egregious violation of the respondent’s right to property. The issuance of titles to third parties over a portion of the suit property, amounted to a violation of article 40(3)(a) and (b) of the Constitution.
- Any injury or loss suffered by a person either through a tortious act, omission or breach of contract, attracted redress in a court of law. The redress included an award of damages to the extent possible as may be determined by the court. The question regarding the type, extent, and quantum of damages to be awarded, had long been settled through a long line of decisions from the courts. Under article 22(1) of the Constitution, every person had the right to institute court proceedings claiming that a right or fundamental freedom in the Bill of Rights had been denied, violated, infringed, or was threatened. Among the reliefs that a court could grant upon proof of violation of a fundamental right, was an order for compensation (article 23 (3)(e)). The quantum of damages to be awarded, depended on the nature of the right that was proven to have been violated, the extent of the violation, and the gravity of the injury caused.
- Both courts granted special and general damages. There was no reason to interfere with the findings of the two superior courts in that regard. In arriving at the quantum of special damages, the trial court placed reliance upon a valuation report by a private valuer. The main basis upon which special damages could be granted for the deprivation of property, was the market value of the suit property. In case of general damages, a court of law exercised discretion guided by the circumstances of each case. In granting special damages, the trial court was guided by the valuation report tabled by the respondent. In the absence of a contrary report on record, there was no basis upon which to interfere with the award. Even if there had been one such other report, the Supreme Court’s jurisdiction to interfere would have been largely circumscribed, unless the award had clearly ignored the fundamental principles of valuation as demonstrated by the counter-report.
- The principles governing compensation for compulsorily acquired land, could not be applicable to the suit land, as the same had not been so acquired. The most appropriate remedy was an award of damages, as held by the trial court and partially upheld by the Court of Appeal. The Supreme Court’s approved of the Court of Appeal’s decision to award compensation in difficulty, not just with regard to a portion of the land, but for the whole of the suit property including the un-acquired portion. Nor could the Supreme Court justify an award of damages that extended to that part of the land that had neither been compulsorily, nor unlawfully acquired. The respondent’s contention that the unlawful acquisition of a portion of its land had resulted in the diminution of the value of the whole of the suit property was a matter of fact, which ought to have been authoritatively established at the trial court. But even if the said fact had been established at the trial court, the same would not have constituted a constructive compulsory acquisition, a legal tenet unknown to Kenyan law.