The enactment of the Land Control Act in 1967 was informed by the noble and deliberate public policy considerations. The Act seeks to regulate transactions in agricultural land, to among other things avoid sub-division of land holdings into uneconomical units, to control land holding by non-Kenyans etc.
It is for these reasons that in considering whether to grant or refuse consent regarding dealings in agricultural land, the land control board is obliged under the Act to consider among other things whether the subdivision of the land in question would reduce the productivity of the land; the agricultural land already owned by the proposed transferee; the possibility of maintenance or improvement of standards of good husbandry.
The need to apply for the LCB consent in controlled land transaction is fundamental in furthering the land policy principles as provided for under Article 60 of the Constitution as well as protecting the right to property under Article 40 of the Constitution.
Section 6 of the Land Control Act Chapter 302 of the Laws of Kenya makes it mandatory for parties to obtain the Land Control Board consent in relation to land transactions in agricultural Land. Agricultural Land transactions under the said Act is referred as controlled transaction in that one has to obtain the consent of the Land Control Board of the area where the land is situate for one to be able to transact in that land whether it is a Sale, Transfer, Subdivision.
Land Control Board Consent
The Land Control Board (LCB) is a body established under Section 5 of the Land Control Act in a land control area. Under Section 2 of the Act, land control; are is defined as any area which the minister by a Gazette notice applies the Land Control Act, if he considers it expedient to do so. Controlled transactions are defined under Section 6(1)(a) of the Act as 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.
The procedure for application of the LCB consent is stipulated under Section 8 of the Act and parties have to apply for the said consents within six months of making of the agreement relating to a controlled transaction. In some instances, where the high court considers that there are sufficient reasons, it may extend the period of applying for the LCB consent, upon such conditions as it deems fit.
It is the duty of all transacting parties to apply for the LCB consent within the stipulated period of time. In the case of Ezekiel Kisorio Tanui v. Jacinta Ekai Nasak (Civil Suit No.76 of 2012 (2014) eKLR it was held that section 8 of the LCA places the duty to apply for the consent on both parties. In this case, the defendant pleaded with the Court to extend the time within which to apply for the LCB consent after failing to do so arguing that the Plaintiff had not subdivided his land to pave way for registration of her plot. The Court, quoting S.8 of the Act refused to grant the extension and held that:
It is clear from the above provision that any party to the agreement can apply for consent of the land control board. There is nowhere where it is indicated that the application should as of necessity be made by the person seeking to sub divide or sale of land…. It is therefore not correct for the defendant to claim that she was waiting for the plaintiff to make a first move.
- Does failure to obtain LCB consent render a transaction void?
In interpreting Section 6(1) of the LCA, Courts have consistently held in the case of Kahia V. Nganga (2004) that failure to obtain LCB Consent renders any agreement void and unenforceable for all intents and purposes. Section 6 of the Act provides that if consent of the land control board is not granted for a transaction that requires such consent, then such transaction is void for all purposes and in the case of Onyango and another v. Luwayi (1980) the Court held that the phrase ‘void for all purposes’ must be interpreted to mean what it means.The Courts have further held that no specific performance of a contract can be ordered by the court where by law such a contract has been declared null and void.
- Remedies for a voided agreement
In case a controlled transaction has been voided by virtue of Section 6(1) of the LCA, the courts have been categorical that the only remedy that the statute provides is a refund of the consideration which is recoverable as a debt and not damages. Section 7 of the Act provides that, “if any money or other valuable consideration has been paid in the course of a controlled transaction that becomes void under this Act, that money or consideration shall be recoverable as a debt by the person who paid it from the person to whom it was paid, but without prejudice to Section 22”The recoverable debt is subject to section 22 of the LCA which makes it an offence to pay or receive any money, or enter into or remain in possession of any land voided as a result of Section 6(1) of the LCA.
- Can the Equitable Doctrine of constructive Trust Legalize a Controlled Land Transaction voided by Operation of Transaction of the Land Control act?
A constructive trust is set up by a court as an “equitable remedy.” An equitable remedy is something done by the discretion of the court and not in accordance with a statute. A constructive trust can either be express or implied. A constructive trust can arise in fiduciary relationships, as a direct consequence of lawful transaction or from the rule that no person should benefit from his own crime. The concept of remedial constructive trust grants the courts the discretion to deliver justice tailored on the facts of the case where the rules are strict.Invoking constructive trust as a remedy where a transaction has been voided by operation of law has remained a subject of litigation leading to conflicting decisions. Kenyan courts have in a number of decisions been called upon to adjudicate on whether the doctrine of constrictive trust can be invoked to make a controlled transaction enforceable in the absence of the LCB consent as required by law.
The question then that one would ask is whether the consideration paid as debt after an agreement has been voided is a sufficient remedy. Should the courts be invited to impose the doctrine of constructive trust as it would be unconscionable for the vendor to unjustly enrich himself to the detriment of the Purchaser?
The question of whether the equitable doctrine of constructive trust or proprietary estoppel can be invoked to defeat the provision of Section 6 of the LCA has come into play recently in the Court of appeal in the decision in Willy Kimutai Kitilit v. Micheal Kibet. This decision is peculiar because it was made after the promulgation of the Constitution. In the suit, the Court was called upon to determine whether the equitable doctrine of constructive trust could be invoked and render a controlled transaction enforceable despite contravening Section 6 (1) and 6(2) of the LCA.
In Willy Kimutai Kitilit v. Micheal Kibet the judges agreed with the Macharia Mwangi Maina decision that the equitable doctrines of constructive trust and proprietary estoppel are applicable and enforceable to land subject to the Land Control Act, though this is subject to the circumstances of the particular case. Upon the application of the equitable doctrines, the court in its discretion may award damages and where damages are an inadequate remedy grant the equitable remedy of specific performance. In essence, the Court held that, the lack of the consent of Land Control Board does not preclude the court from giving effect to equitable principles, in particular the doctrine of constructive trust.
- Doctrine of Adverse Possession in relation to Land Control Board Consent.
Adverse possession is the process by which a person can acquire a title to someone else’s land by continuously occupying it in a way that is inconsistent with the right of the owner. For one to claim adverse possession of land they must be in physical occupation of that land for a statutory period of 12 years. And such a person is allowed by virtue of the provisions of section 38 of the Limitation of Actions Act to apply to the High Court for order that he be registered as the proprietor. The doctrine of adverse possession and section 37 of the Limitation of Action Act recognizes that the registered owner holds the title to the land as the legal owner but the occupier as the cestui que trust whose legal ownership only passes to him upon registration after issuance of a court order in his favour.When it comes to adverse possession in regard to land transaction voided by Section 6 of the Land Control Act, the question that arises is when does time start running for the purposes of adverse possession. The courts have varied in their decision on when the time starts to run where some courts have held that time will start to run at the time when the transaction becomes void as a result of not applying for the LCB consent meaning at the lapse of the six months when the parties fail to apply for the consent in accordance to Section 8 of the Land Control Act. In the case of Samuel Miki Waweru v. Jane Njeri Richu, the court held that adverse possession starts running ‘where the sale agreement being subject to the Land Control Act become void under Section 6(1) (c), for lack of consent’
On the other hand, in Mbugua Njuguna v. Elijah Mburu Wanyoike & another, the court held that, where the transaction for sale of land terminates by reason of failure to acquire the consent of the Land Control Board, then for purposes of adverse possession, time starts running on the day the claimant is put in possession of the land.
In the case of Public Trustees v. Wanduru the court stated that adverse possession should be calculated from the date of payment of the purchase price to the full span of 12 years if the purchaser takes possession of the property because from this date, the true owner is disposed off possession.
While the requirement of the land control board consent was informed by policy considerations, it should not be used as a tool to deprive a purchaser in good faith the title to the land. How then can an occupation be said to be unlawful in a situation where the vendor enters into an agreement to sell his land, receives the full purchase price from the purchaser and puts the purchaser in possession of the land?
Parties in a controlled transaction must ensure that they apply for the LCB consent to avoid such transaction being voided in accordance with the law. It is prudent that parties involved in land transactions secure the services of lawyers to advise them on the implications of Section 6 of the LCA. This will avoid disputes that arise by failure to seek the consent of LCB making the Agreement unenforceable to the detriment of a purchaser who may have paid the full purchase price.