By a sale agreement dated August 6, 1990, Kiambu billionaire Joseph Kiarie Mbugua sold his five-acre land at Garden Estate in Nairobi to Italian Rosiello Bruno for Sh4 million.
Mr Bruno executed the deal as a director of Timber Manufacturers & Dealers Ltd. He deposited Sh1 million to kick-start the process. The balance was paid in two instalments of Sh1 million and Sh2 million, upon the registration of title documents.
It later emerged that Mr Mbugua, who is the owner of the Emani Business Centre building in Pangani, which hosted Jubilee Party headquarters, did not have the title although he had received half of the purchase price.
The agreement provided that Timber Manufacturers & Dealers Ltd would take possession of the property immediately upon payment of the second instalment.
To unlock the final instalment, Mr Mbugua presented Mr Bruno with a title deed. He had acquired it from Consolidated Bank under unclear circumstances since the document had been used as collateral for another loan in 1985.
Mr Bruno paid the balance, took over the property and built a magnificent Italian style mansion. He also built rental houses.
Mr Bruno paid the first two instalments through advocates who handled the land transaction, but he made the final Sh2 million payment to Mr Mbugua directly, and the title was released to Timber Manufacturers & Dealers Ltd.
However, the transfer of the property could not be effected because in the course of the valuation it was discovered that the title deed had been registered on September 26, 1985 in favour of Home Savings and Mortgages Ltd for a loan of Sh500,000 advanced to Mr Mbugua for another property of his situated along Murang'a Road in Nairobi.
The bank had not discharged the Garden Estate land title deed due to an outstanding loan balance of Sh1.7 million. It was unclear how the title deed had been acquired from the bank and presented to Mr Bruno. Although the Home Savings and Mortgages still existed as a company, it was under statutory management by the bank.
Long and tedious litigation
One thread that ran through the long and tedious litigation was Mr Mbugua's conduct and the delay to transfer the property, which has been haunting his widows since his death in December 2006.
The widows, Florence Wairimu, and Grace Wanjiku have been left to handle the mess.
Mr Bruno's family has demanded the completion of the transfer process, but on the other hand, the widows are adamant that that the deal with Mr Mbugua did not materialise.
Mr Bruno realised that Mr Mbugua would never transfer the ownership of the land to him because of the bank loan. Consequently, the Italian approached the bank to have the title discharged. He even offered to pay the balance of the outstanding Sh1.7 million loan in September 1993 through monthly instalments of Sh100,000. However, that offer was not accepted.
The bank ultimately threatened to sell the property, precipitating a suit initiated by Timber Manufacturers & Dealers Ltd on March 11, 1994, which is still underway and has intensified 30 years later at the Court of Appeal.
The crux of the dispute is whether Mr Mbugua refunded Timber Manufacturers the purchase price as alleged by his widow, Ms Wairimu, at the High Court last year. Timber Manufacturers denied receiving a refund. The firm wants the Court of Appeal to find the truth and the legitimate owner of the property.
After Timber Manufacturers sued Mr Mbugua and the bank in 1994, the lender filed a counterclaim, stating that Mr Mbugua obtained the title documents, which were handed to Mr Bruno, by deceit and fraud. The bank sought judgment against Timber Manufacturers for the return of the title documents.
Through a judgement on March 5, 2005 the High Court declined to order specific performance of the sale agreement between Mr Mbugua and Timber Manufacturers on account of the prior charge over the suit property in favour of the bank.
However, the court ordered Mbugua to refund Mr Bruno’s firm Sh4 million and to pay general damages of Sh1 million. Mr Mbugua was also ordered to refund Sh75,157 which Timber Manufacturers had paid as rates.
As regards the bank's counterclaim, the court allowed the same and directed that the title documents of the suit property be returned to the bank.
At the time of his death , Mr Mbugua had not honoured the court judgment to refund Mr Bruno the money. Mr Bruno, too, was still in possession of the property.
The bank claimed that Mr Mbugua had fraudulently acquired the title deed and presented it to Mr Bruno. Mr Mbugua had filed a case in 2006 seeking to prevent the bank from attaching his other property, including the plot along Murang'a Road on account of an unpaid secured debt.
After his death, his family took over the court dispute and Timber Manufacturers also joined to secure its interest in the Garden Estate land. Mr Bruno’s firm had been aggrieved by the decision of the High Court to decline its case against the bank. On July 15, 2005 the Court of Appeal suspended execution of the verdict pending determination of the appeal, which the judges said was not frivolous because without a stay order, the bank would have sold the land to recover the debt.
Ultimately, in a bid to resolve the dispute between the bank and the estate of Mr Mbugua once and for all, the parties initiated negotiations, where Timber Manufacturers also participated.
On June 29, 2011 there was a breakthrough and the parties recorded and filed a consent judgment in one of the suits. But matters took a dramatic twist when two of the administrators of the estate, Ms Wairimu and Ms Sylvia Murugi, in an application in the High Court dated April 26, 2012 sought to set aside the consent judgment. Justice Eric Ogolla rejected the application on May 19, 2014. In 2017 administrators filed fresh applications for Timber Manufactures to be evicted. On January 23, 2025, Justice Mboya found that Timber Manufacturers were trespassers and should vacate the property in 90 days. The firm appealed.
Justice Eric Ogola during a past court session
Photo credit: File I Nation Media Group.
The case is awaiting the hearing of the application for stay of execution of Justice Mboya’s verdict pending the hearing and determination of the appeal to the High Court via an application dated April 26, 2012 to set aside the entire consent judgment.
The consent was that Mr Mbugua's estate would pay the bank Sh47.5 million in full and final settlement of his loan account. It was also agreed that upon payment of the bank loan, the two properties used as security for loans would be unconditionally discharged by the bank.
The consent judgment also provided that the title document for Murang’a Road property would be released to Mbugua's family while the title for the Garden estate land would be handed to Timber Manufacturers. In default of payment of the sums owed to the loan account, the bank was to sell the Murang’a Road plot.
For its part, Timber was to drop an intended appeal challenging the High Court decision that dismissed its case against the bank. At those negotiations, Mbugua's estate was represented by Judy Thongori & Company Advocates.
Matters then took a dramatic twist when two of the administrators of the estate, Florence Wairimu and Sylvia Murugi, applied to the High Court via an application dated April 26, 2012 to set aside the entire consent judgment.
The basis for the application was that the firm of Judy Thongori & Company Advocates had acted without instructions from the estate and to that extent they were not bound by the consent judgment.
The other two administrators of the estate, Grace Wanjiku and Peter Chege, as well as the bank and Timber Manufacturers vigorously opposed the application.
The house of Ms Wairimu stated that they were the ones entitled to inherit this Garden estate property.
Their application to invalidate the consent judgment was rejected by Justice Eric Ogolla on May 19, 2014 who found that the fact that a consent is entered into without full instructions of one or more of the parties does not of itself invalidate the consent. They unsuccessfully challenged the consent judgement to the Court of Appeal.
In 2017 Ms Wairimu and Ms Murugi, as administrators of the estate, instituted fresh court proceedings for eviction of Timber Manufacturers from the land. They also pleaded that the said eviction be carried out by the court bailiff with the assistance of the Officer Commanding Police Division (OCPD) Kasarani Division.
Timber Manufacturers filed their defence and counterclaim stating that they were the rightful owners of the property by virtue of their 34-year possession of the suit property having paid the full purchase price to Mbugua, who failed to transfer the ownership in their favour.
However, in a verdict delivered on January 23, 2025, Justice Oguttu Mboya found that Timber Manufacturers were trespassers who ought to pay the estate of Mbugua Sh10 million as damages for their trespass and vacate the suit premises within 90 days.
"There is no gainsaying that the suit property remains registered in the name of Joseph Kiarie Mbugua and baring any order impeaching the registration in question, the suit property lawfully belongs to the estate of Mbugua and by extension the plaintiffs, who are the legal administrators of the estate," said the judge.
Timber Manufacturers has since appealed this decision and is seeking for an order of transfer of the suit property.
"The judge erred in law and in fact by finding that plaintiff's suit seeking eviction of the Timber Manufacturers from the suit property was merited. The judge erred in in disregarding the issue of refund of purchase price as claimed by the respondents and denied by the appellant," reads the appeal lodged through Kibatia & Company Advocates.
The case is awaiting the hearing of the application for stay of execution of Justice Mboya's verdict pending the hearing and determination of the appeal.
