Application of the rule according to Ryland vs Fletcher in Kenya

by: Agak R. R. Scott 

Introduction

The Rylands v Fletcher rule, established by the English courts in 1868, is a cornerstone of tort law, particularly in matters concerning strict liability. This rule posits that a person who brings something onto their property that is likely to cause harm if it escapes is responsible for any resultant damage, irrespective of negligence. This doctrine has found its way into Kenyan jurisprudence, shaping the landscape of liability in various contexts.

Notable Applications in Kenya

One of the most significant cases demonstrating the application of the Rylands v Fletcher rule in Kenya is Kenya Power and Lighting Company Limited v Patel [2009] eKLR. In this case, the plaintiff’s property was destroyed by a fire emanating from an electric transformer owned and maintained by the defendant, Kenya Power and Lighting Company Limited. The plaintiff sought compensation under the principle of strict liability as enshrined in Rylands v Fletcher.

Judicial Reasoning and Decision

The court in this case reaffirmed the applicability of the Rylands v Fletcher rule, holding the defendant strictly liable for the damage caused by the transformer. The court’s reasoning was grounded in the principle that the transformer, being a potentially hazardous entity, posed a significant risk if it were to escape or malfunction. The fact that the transformer did indeed cause harm by initiating a fire was sufficient to invoke strict liability under the Rylands v Fletcher doctrine.

The court emphasized that the plaintiff was not required to demonstrate negligence on the part of the defendant. This aligns with the essence of the Rylands v Fletcher rule, which circumvents the need to prove fault, focusing instead on the inherent dangers of the substance or thing brought onto the property and the resultant escape and damage.

Broader Implications

The application of the Rylands v Fletcher rule in Kenya underscores a broader commitment to strict liability in cases involving inherently dangerous activities or substances. The principle serves to protect individuals from the risks posed by hazardous operations conducted by others, ensuring that those who introduce potential dangers bear the responsibility for any adverse outcomes.

Other Relevant Cases

Beyond the Patel case, Kenyan courts have consistently applied the Rylands v Fletcher rule in various contexts. For instance, in Transami (Kenya) Limited v Kenya Railways Corporation [2002] eKLR, the court held the defendant liable for damage caused by escaped railway cargo, reaffirming the strict liability principle.

Legislative Context

The Kenyan legal framework supports the judicial application of the Rylands v Fletcher rule through statutes that emphasize environmental protection and public safety. For example, the Environmental Management and Co-ordination Act (EMCA) of 1999 imposes strict liability on entities whose activities result in environmental degradation, reflecting the broader principles of Rylands v Fletcher.

Conclusion

The Rylands v Fletcher rule remains a pivotal doctrine in Kenyan tort law, ensuring that individuals and entities are held strictly liable for harm caused by hazardous activities or substances they introduce onto their properties. This legal principle not only promotes accountability but also incentivizes the careful management of potentially dangerous operations, ultimately safeguarding public and private interests. The precedent set by cases such as Kenya Power and Lighting Company Limited v Patel highlights the enduring relevance and application of this rule within the Kenyan judicial system.

IN-DUPLUM RULE EXCLUSION

The in-duplum rule, derived from Roman-Dutch law and embedded in Kenyan law, limits the amount of interest that can accrue on a debt to no more than the principal sum. This rule is codified in Section 44A of the Banking Act of Kenya. The rule has significant implications for financial institutions, especially deposit-taking entities. However, its application to non-deposit taking microfinance businesses (NDT-MFIs) remains a nuanced area.

Key Aspects of the In-Duplum Rule in Kenya

1. Banking Act, Section 44A:

   Section 44A of the Banking Act specifically states that the in-duplum rule applies to institutions licensed under the Banking Act and the Microfinance Act, which includes deposit-taking microfinance institutions (DT-MFIs). The rule aims to protect borrowers from excessively high interest rates by capping the total recoverable interest at the level of the principal amount.

2. Non-Deposit Taking Microfinance Institutions (NDT-MFIs):

   NDT-MFIs are generally regulated under different legislative frameworks, primarily the Microfinance Act, but their exact regulatory environment can vary. They do not accept deposits from the public and thus are subject to a distinct set of financial regulations compared to deposit-taking entities.

Case Law and Judicial Interpretation

There have been notable cases in Kenya where the application of the in-duplum rule to NDT-MFIs was discussed. Below are key cases and their interpretations:

1. Margaret Njeri Muiruri v. Bank of Baroda (Kenya) Limited [2014] eKLR:

   Although this case involved a banking institution, the court underscored the broad principles of the in-duplum rule, emphasizing consumer protection against exorbitant interest rates. The judgment reaffirmed that Section 44A applies strictly to entities licensed under the Banking Act.

2. Richard Ndubai v. Cooperative Bank of Kenya Limited & Another [2018] eKLR:

   This case extended the interpretation of the in-duplum rule, discussing its applicability to financial institutions broadly defined. However, it reaffirmed that the rule’s statutory grounding applies explicitly to deposit-taking institutions under the Banking Act.

3. Microhouse Africa Limited v. Mabati Rolling Mills Limited & 2 Others [2016] eKLR:

   In this case, Microhouse Africa Limited, a non-deposit taking microfinance institution, sought to enforce a debt that included substantial interest. The court evaluated the applicability of the in-duplum rule and concluded that since the entity was not a deposit-taking institution, the specific provisions of Section 44A did not apply.

Legislative and Regulatory Framework

- Microfinance Act:

  The Microfinance Act, 2006, regulates microfinance institutions in Kenya. However, it distinguishes between DT-MFIs and NDT-MFIs, with specific provisions for each type. The Act does not extend the in-duplum rule to NDT-MFIs explicitly.

- Central Bank of Kenya (CBK) Regulations:

  The CBK, which oversees the financial sector, including microfinance institutions, has regulations that apply to DT-MFIs. For NDT-MFIs, the regulatory scope is less stringent, primarily focusing on licensing and operational guidelines without the direct imposition of the in-duplum rule.

Conclusion

The in-duplum rule as enshrined in Section 44A of the Banking Act does not explicitly apply to non-deposit taking microfinance institutions in Kenya. Judicial interpretations and existing case law reinforce this position, distinguishing between deposit-taking and non-deposit taking entities. Consequently, NDT-MFIs are not legally bound by the in-duplum rule, although they remain subject to other consumer protection regulations and oversight mechanisms.

For specific legal advice or case handling, it is advisable to consult with a legal expert who can provide detailed guidance tailored to the unique circumstances of the case.

by: Agak R. R. Scott

MAREVA COMPANIA NAVIERA SA vs. INTERNATIONAL BULKCARRIERS LTD CASE BRIEF

By: Okinyo Ronald Makonjio

MAREVA COMPANIA NAVIERA SA vs. INTERNATIONAL BULKCARRIERS LTD (The Mareva case)

Facts

The applicant, Mareva Compania Naviera S.A. vide a writ on 25^th June 1975 claimed against the respondent, International Bulkcarriers S.A., for unpaid hire and damages for repudiation of a charter party. Through an ex-parte application, Donaldson J granted an injunction in favour of the applicants until 17.00 hours on 23^rd June restraining International Bulkcarriers (the charterers) from removing or disposing out of the jurisdiction moneys standing to the credit of the charterers, account at a London bank. Mareva Compania Naviera (the ship-owners) appealed against Donaldson J’s refusal to extend the injunction beyond 17.00 Hrs. on 23^rd June 1975.

Issue: Whether the court should grant an ex-parte order sought by the plaintiff to restrain the defendant dispersing/ disposing his assets.

Holding: The court granted the ad personam order/ injunction pursuant to the 1925 Act which stated: ‘A mandamus or an injunction may be granted or a receiver appointed by an interlocutory order of the court in all cases in which it shall appear to the court to be just or convenient.’

Rationale: The order could be made even though it dealt with assets in which the plaintiff claimed no direct right.

Judgment: Appeal allowed. Injunction continued.

TRANSFORMATION OF THE LONG TERM LEASES IN LIGHT OF THE NEW SECTIONAL PROPERTIES ACT, 2020

By: Okinyo Ronald Makonjio

 LONG TERM LEASES TRANSFORMATIONS IN LIGHT OF THE NEW SECTIONAL PROPERTIES ACT, 2020

Introduction

Leases as a tenure has been adequately defined and captured in the Kenyan land laws. It has also further been undeniably facing transformations for a while now. It can be stated that the transitions as required by the current land laws more particularly the Sectional Properties Act, 2020 of Kenya is taking slow progress but eventually will get there. This paper thus is an assessment of some of the changes introduced by the Sectional Properties Act, 2020 but with key emphasis on the long term leases.

The long term periodical requirement

The new Sectional Properties Act of 2020 brought a shift in the long-term leasehold tenure in relation to converting the units to sectional units. The Act introduces a 21-year period as a minimum for the conversion of property into sectional units contrasted to the repealed period of 45 years, this therefore maintains the long term lease status.

Long terms leases is one of the types of leases that is now having a migration to align itself with the current laws. The detailed analysis in this paper is majorly going to focus on the changes that are currently in place or anticipated to.

Pursuant to the recent resolution adopted by the Law Society of Kenya (LSK) dated 18^th May, 2021, the major points of discussion touched on the new migration requirements on the existing titles under the long-term leases in sectional properties, the already ongoing transactions, partial registered developments and those new developments where no lease has been registered.

Periodical ultimatum for conversion of long-term leases/ sub leases in sectional properties

With the recent enactment of the Sectional Properties Act 2020 repealing that of 1987, property holders including those on a long-term lease/ sublease period have been given a two-year ultimatum to ensure that they get to register their title to conform with the current Sectional Properties Act, 2020. Further, the title requirements will need to comply with the Land Registration Act, 2012 which was not necessarily the case with the 1987 statute. The other changes brought about in connection with leasehold interest is that of the requirement for Geo-referencing which has now been put as a mandatory requirement to make use of the topographical technology in the current dispensation.

The Ministry of Lands and Physical Planning (MOLPP) recently launched National Lands Information Management System (NLIMS) which is going to be the main platform for the digitization of land entries and records, from searches to registration of transactions, its going to be the major player in this field.

The following steps shall be taken for land parcels within Nairobi which has taken the immediate steps to ensure the fruition of the new regulations:

-       Upon presenting the registration instrument, the MOLPP shall ensure that the land is Geo-referenced with costs borne by them;

-         The sectional plan as it was shall then be registered and units opened for each unit;

-        The records as opened shall then be uploaded to the NLIMS platform for its data keeping and digitization purposes and eventually continue with the registration process to the final steps of issuance of certificate of lease or title.

As for the lands outside Nairobi falling within the repealed land registration regimes, a transition period is given as they shall continue applying the old methods as per the repealed act but shall have a transition period to upgrade and update the same to meet the current laws threshold as stated above. This requirement has been captured under section 13(2) of the Sectional Properties Act, 2020.

The ongoing or pending transactions

This generally relate to the documents that had been lodged in the registry pending registration, those which stamp duty had already been paid for or presented for stamp duty assessment.

The documents that had been presented in the registry but not dealt with will now be completed using the new registration system.  The same applies for those to which stamp duty had already been paid for or presented for stamp duty assessment. The registrar shall however be at liberty to ensure that the documents are compliant with the current requirements and can therefore summon the parties doing the registration and seek for further particulars or requirements.

Where no lease has been presented for registration

With the NLIMS platform being a fully fledged program hinted to ease the registration process, the need to ensure conformity from the word go is of essence, therefore the leases that have not yet been lodged will therefore be lodged pursuant to the current system as introduced in the 2020 Sectional properties Act.

 

Conclusion

The long-term leases requirement for sectional units conversion has retained but never the less the prescribed period changing drastically, this is to ease the burden and open up the opportunities of doing or converting properties into sectional properties but still maintaining the long term leasehold requirement. The recent launch of NLIMS platform is going to be of much probative value considering the prevailing COVID situation. Weaknesses and challenges are bound to happen as it is a technological platform but the future looks brighter with this program as the merits seem to outdo ant anticipated demerits. Further, the new changes on the long term leases are going to conform with the substantive and procedural land laws legislation being the Land registration Act, 2012 and the Land Act, 2012 which thus assures more harmony and assuredness for the system.

ACQUIRING LAND THROUGH ADVERSE POSSESSION IN KENYA

By: Okinyo Ronald Makonjio

 

The doctrine of adverse possession is one that grants rights or title to land owned by a person to the adverse possessor subject to the satisfaction of the common law requirements.

The common law requirements have been adopted and principally recognized by courts in Kenya to confer the rights to the adverse possessor.

The common law requirements

The following are the universally applicable requirements:

• That the possession and utilization of the land was open and notorious meaning that it should be obvious and open to the registered owner.
• That the possession and utilization should be exclusive to the person claiming the accumulated rights over the land.
• That the occupation ought to be hostile and adverse to the registered proprietor of the land.
• The statutory period of 12 years should be satisfied and
• The statutory period should have been continuous and uninterrupted.

Statutory connotations of adverse possession in Kenya

The main governing statutes are the Limitation of Actions Act Cap 22 and the different laws on land and its administration

Under section 6 of the Limitation of Actions Act, an action to recover land is capped at 12 years. Meaning that one has 12 years to recover land with which an adverse possessor is in possession and utilisation failure to which the ownership rights may or shall accrue to the adverse possessor.

In addition to the above, section 17 of the Limitation of Actions Act does provide for the title getting extinguished upon the lapse of 12 years. See also sections 13, 37 and 38.

Further, adverse possession has been acknowledged under section 28(h) of the Land Registration Act, 2012 as an overriding interest in and thus has the capability of extinguishing the registered owners rights in the subject land.

Jurisprudence in Kenya on Adverse Possession

For purposes of this article, I will highlight one case being Wilson Njoroge Kamau v Nganga Muceru Kamau [2020] eKLR, in this case, the plaintiff instituted a suit in the form of Originating Summons against the defendant for purposes of declaring him (plaintiff) to being the legal owner of suit property land parcel Number LOC2/KANGARI/506. He claimed to have been in possession and utilisation of the suit property since 1971-2005 and thus had acquired rights over the suit property. The appellate court went further to deny the defendant an injunctive relief since as at the time of seeking the injunction, the plaintiff was the one in possession of the land and granting the injunction would have resulted in the eviction of the plaintiff as a consequence. The court granted the plaintiff the rights over the land on account of adverse possession.

The court relied on the following cases which are worth having a look at of Wanyoike v Kahiri [1979] KLR, Joseph Gahumi Kiritu Vs Lawrence Munyambu Kabura CA No 20 OF 1993 and Kweyu v Omuto, C A Civ Appeal 8 of 1990.

Conclusion

Having a certificate to title is the indefeasible proof of ownership as it is well stated under the Land Registration Act, 2012. However, this is not absolute as it is subject to some limitations, principles and doctrines which in this case include the doctrine of adverse possession.