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THE ABSENCE OF A LAND CONTROL BOARD CONSENT DO NOT NECESSARILY VOID LAND AGREEMENTS

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THE ABSENCE OF A LAND CONTROL BOARD CONSENT DO NOT NECESSARILY VOID LAND AGREEMENTS

THE ABSENCE OF A LAND CONTROL BOARD CONSENT DO NOT NECESSARILY VOID LAND AGREEMENTS

Mike Mutonyi (LLM, LLB- Hons, PGD-KSL)

INTRODUCTION

Ordinarily, when transacting an agricultural land, the absence of consent from the Land Control Board is deemed a fatal flaw in agricultural land transactions and has often resulted in their outright invalidation. Procedural adherence has always been paramount as any misstep could jeopardize the entire agreement. However, the landmark decision of profound jurisprudential significance handed down in the Aliaza v Saul Case, challenges this long-held notion, suggesting a shift-away from rigid interpretations.

Through this article, I endeavour to shed light on the aforementioned issue as presented before the court. Ultimately, I will expound on the ramifications and significance of this decision for real-estate stakeholders, particularly vendors and purchasers.

SUMMARY OF THE FACTS & ISSUES

George Aliaza and Zephania Saul were embroiled in a legal dispute over land parcel number Kakamega/Mabusi/416, measuring 3.11 hectares. Saul, the registered owner, had agreements with Aliaza in 2002 and 2004 to sell portions of the land totalling 1.3 acres. Aliaza paid the full purchase price of Kshs. 217,000, but completion of the transactions was hindered due to lack of Land Control Board consent. Despite this, Saul allowed Aliaza possession of the land parcels. In 2009, Saul filed a lawsuit seeking eviction and damages, alleging the transactions were null and void.

Aliaza filed a defence and raised a counterclaim in which he sought orders for specific performance of the agreements or a refund of the purchase price, among other damages. He claimed to have bought 1.5 acres from Saul in 1999, with proper consent, and later acquired additional parcels in 2002 and 2004. Aliaza contended that Saul did not seek Land Control Board consent for the latter transactions. He also alleged that Saul closed an access road in 2008, prompting Aliaza to file a claim with the Land Disputes Tribunal, which ruled in his favour.

Aliaza testified that a surveyor excised the 1.3 acres from the land, after which he developed it extensively with a permanent house, borehole, store, ablution block, cowshed, and trees, along with piped water connections. A valuation report valued the improvements at Kshs. 3.4 million. Aliaza prayed for either specific performance of the contracts or a refund of the purchase price, citing his substantial investments and improvements on the land. He presented evidence to support his claims, including sale agreements and witness testimony.

Saul, on the other hand, testified that he had sold 1.5 acres to Aliaza in 1999, with proper consent, and was now seeking possession of the remaining 1.3 acres sold between 2002 and 2004. He acknowledged Aliaza’s possession and developments on the land but argued that the transactions lacked proper consent. Saul’s main contention revolved around the absence of Land Control Board approval/consent. The case was marked by conflicting claims over land ownership, consent procedures, and the extent of improvements made by Aliaza, underscoring the complexity of the dispute before the Court of Appeal.

The main issue for determination was whether the trial court was correct in finding that the transaction between the parties was void for lack of consent from the Land Control Board.

COURT’S DETERMINATION

The court began by noting the relevant provisions of the Land Control Act which provides that: –

Section 6 (1) (a) Each of the following transactions that is to say 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) 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.

Under section 7 of the Land Control Act, consideration paid for a transaction which becomes void is recoverable as a debt subject to section 22 of the Act. An application for consent is made under section 8 (1), which requires that the application for consent should be made in the prescribed form within six months of the making of the agreement. The proviso thereto gives the High Court power to extend the period if it considers that there are sufficient reasons to do so upon such conditions, if any, as it may think fit.

Section 9 (2) stipulates that where an application for the consent of a land control board has been refused, then the agreement for a controlled transaction shall become void.

The court drew a distinction between situations in which the Land Control Board in a particular area refuses to give consent for good public policy reasons, and those situations where a seller fails or refuses to apply for such consent. It emphasized that the provisions of the Land Control Act cannot continue to be read as though the circumstances prevailing at its enactment are still in place. There will be situations in which an application for consent under section 6 will be made but refused for good reasons as articulated in the Act. Then there will be situation in which the seller, as in this case, enters into a sale agreement with a purchaser, receives the full purchase price and gives vacant possession of the land to the purchaser, yet declines to apply for Land Control Board consent. As the prescribed form for applying for Land Control Board consent, Form 1 in the Schedule to the Land Control Regulations, 1967, indicates, both the proposed seller and purchaser must sign the application for consent. If the seller decides not to apply for consent, then such consent has not been ‘refused’ within the meaning of section 9(2) of the Act, for the appropriate authority under the Act, the area Land Control Board, has not had an opportunity to consider and grant or refuse consent on the grounds set out in the Act.

Of courts reference to this determination was Apaloo, JA. in Gabriel Makokha Wamukota v Sylvester Nyongesa Donati [1987] where he unequivocally stated that “…In a contest of title between Machio and the respondent, if the latter sought to rely on the Land Control Act to defeat the sale he himself made, it would seem to me perfectly legitimate to reply that it would be contrary to good conscience for him to be permitted to do that. He ought not to be allowed to use an Act of parliament as a vehicle for fraud. If that argument could properly be made against Machio, it can, in like manner be made against the appellant, who as the judge found colluded with Machio to purchase the land.” This finding was regarded by Mumbi Ngugi, JA, as a proper interpretation of the provisions of the Land Control Act. It was the position of the 3-judge bench that under the new constitutional dispensation, the Land Control Act must be read in a manner that does not give succour to a party, such as the respondent who wishes to renege on his contractual obligations in order to steal a match on the purchaser.

Kiage, JA, while in agreement with Mumbi Ngugi, JA, had this to say “It seems ill that the respondent, having freely sold his land to the appellant, and having received full payment therefor, and put the appellant in possession where the latter proceeded to carry out developments, should now argue before a court of law and, emboldened by a statutory provision, confidently assert a right to resile from his contractual obligations on the spurious reason that no consent to the transaction was given by the Land Control Board. Under that statute, it is required that both the vendor and the purchaser must sign the relevant application for consent. The appellant made no effort to obtain that consent. He basically tries to benefit from his own default to defeat the appellant’s rights and escape from his contractual obligations. And that is how a once well-intentioned provision of law as set out by my sister Judge, now gets twisted, taken advantage of, and abused to divest a seller of his duty under contract. That is using the statute as a cloak and an alibi for fraud and dishonesty. It flies in the face of all that is right and just and honourable. And courts which are just and honourable, should put the matter right by requiring him to meet his just obligations and denying him the benefits of default and deceit.”

CONCLUSION/SIGNIFICANCE OF THE JUDGMENT

The judgment rendered in the Aliaza v Saul Case holds significant ramifications, particularly in the realm of real estate transactions and the interpretation of the Land Control Act. By challenging the conventional understanding that the absence of Land Control Board consent invariably renders transactions void, the Court of Appeal at Eldoret introduced a nuanced perspective that emphasizes equitable considerations and the prevention of abuse of statutory provisions. Out of it, we get to see the importance of honouring contractual obligations and preventing parties from exploiting legal technicalities to evade their responsibilities.

I agree with the court’s finding on this issue. The Land Control Act was never intended to be an instrument or statute for unjust enrichment. In court’s words, it was never meant to exempt a mala fide vendor from his contractual obligations. The statute comes to aid of persons who act in good faith without taking undue advantage of the other party. It is not a statute aimed at aiding unconscionable conduct between the parties. The court’s rejection of Saul’s attempt to invalidate the transaction due to lack of consent, despite having received full payment and allowing Aliaza possession of the land, reflects a commitment to fairness and justice in contractual dealings.

Of more importance is that this judgement highlights the need for a contextual interpretation of statutory provisions, recognizing that rigid adherence to legal formalities may sometimes lead to unjust outcomes. By distinguishing between situations where the Land Control Board refuses consent for valid reasons and cases where sellers fail to apply for consent, the 3-Judge bench promoted a more balanced approach that considers the practical realities of transactions. To wrap it up, the significance of this judgment lies in its reaffirmation of the principles of equity and fair dealing in contractual relationships, as well as its contribution to the evolving jurisprudence surrounding land transactions. Real estate stakeholders, particularly vendors and purchasers, stand to benefit from a clearer understanding of their rights and obligations in light of this landmark decision.

Mr. Mutonyi advises clients on conveyancing and land transactions issues. To consult further on this and other conveyancing matters, send him an email on Mike@mutonyimulama-advocates.com

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