Captain Patrick Kanyagia & another v Damaris Wangechi & 2 others [1995] KECA 100 (KLR)

The court relied on El Subhi v El Miskinia and Privy Council authority holding the equity of Walsh v Lonsdale excluded by statutory registration requirements. Under s.54 T.P.A. a contract of sale creates no interest; under s.99 G.L.A. transactions conferring rights or interests in land must be registered. Wangechi's prudent course was to register a caveat; absent that, the Kanyagias as bona fide purchasers for value without notice took free of her claim. No trust or equitable obligation was pleaded.

The 1985 amendment to s.60 T.P.A. provides that the right of redemption must be exercised before the mortgagee, by public auction or private contract, enters into a binding contract for sale. Prior to amendment the equity of redemption lasted until registration. The three judges in Mbuthia v Jimba were ad idem that the equity of redemption is extinguished upon execution of a valid contract of sale in exercise of the statutory power of sale. Muchemi's equity of redemption therefore ended when the Kanyagias signed the contract on the auction date.

The court held it could see how a right of redemption peculiar to a mortgagor could not vest in a purchaser of the property, since such right can only be extinguished by the mortgagor himself. It is a right in personam, not in rem. Absent a proper registered transfer of the right agreed tripartite, Wangechi acquired no such right. No authority was produced suggesting otherwise.

Section 69B(2) T.P.A. provides that a title acquired under the mortgagee's statutory power of sale is not impeachable on the ground that no case had arisen to authorise the sale, that due notice was not given, or that the power was otherwise improperly or irregularly exercised, and the purchaser is not concerned to inquire into these matters. The purchaser buys subject to the rights of sitting tenants or occupants and must come to court if the law allows him to obtain vacant possession. Wangechi's remedy, if any, lies in damages against Savings & Loan and/or Muchemi.

The court found that had the judge properly applied the principles of law involved he would not have granted the stay of the eviction order he had correctly made earlier, and that he arrived at a wrong decision by not properly considering the effect of sections 54, 60 and 69B of the T.P.A. The judge also erred in holding that the vendor must give vacant possession of property sold at auction unless expressly absolved, since the purchaser buys subject to occupants' rights and may come to court for possession. There was a miscarriage of justice so far as the Kanyagias were concerned.