Industrial & Commercial Development Corporation v Kariuki & Gatheca Resources Ltd [1977] KECA 21 (KLR)

Section 54 of the Transfer of Property Act provides that a contract of sale of immovable property creates no interest in or charge on the property, and a sale of property above Shs 100 requires a registered instrument. Section 60 preserves the equity of redemption until extinguished by act of the parties or court order. Since no registered instrument existed and only the mortgagee had acted, the contract was merely personal and the mortgagor's right to redeem persisted until completion and registration of the sale.

The court held that conditional contracts of sale are common in Kenya and that section 6(1) and 6(2) of the Land Control Act, governing the suit land, make a sale void for all purposes absent Board consent within the prescribed time. This reinforces that a mortgagee's contract of sale, unconsented, could not affect the mortgagor's rights.

The appellant had obtained the full benefit of the judgment by receiving payment and retransferring the property. Approbation occurs after judgment; the appellant's letter of 19th August 1975 asking its advocates to forward the sum due in full and final settlement showed affirmation of the decree, not mere passive compliance, precluding an attack on the judgment.

Both Mustafa JA and Law V-P considered that the respondent was duly warned of its default on several occasions before the appellant exercised its power of sale, and the price had been set on the advice of an independent qualified valuer, so the imputation of bad faith was unjustified. However, this finding did not affect the outcome.

The court held that the appellant's conduct in denying the respondent's right to redeem after full payment was tendered placed costs in the trial judge's discretion, and no misdirection warranted interference by the appellate court.