J.N. WAFUBWA v HOUSING FINANCE CO. OF KENYA [2011] KECA 405 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that once the auction hammer falls on a validly sold charged property, the owner's right to redeem it is gone.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the appellant's right of redemption over the charged property was extinguished upon the fall of the hammer at the auction sale
- 2.Whether the charge instrument under the Registration of Titles Act and the applied Indian Transfer of Property Act provisions remained applicable to the charged property
- 3.Whether the charge was tainted with fraud or misrepresentation such as to warrant an order of re-conveyance
- 4.Whether the High Court's dismissal of the originating summons and award of costs to the respondent should stand
Key legal issues
#Extinguishment of the right of redemption on the fall of the hammer
The appellant's right of redemption was extinguished when the charged property was knocked down at the auction held in exercise of the statutory power of sale, following his admitted failure to keep up loan repayments after due statutory notice.
The court found as a fact that the appellant acknowledged his failure to redeem, statutory notice was served and admitted, and the auction was validly held. Once the statutory power of sale was properly exercised and the hammer fell, the chargor's equity of redemption was gone, and the High Court correctly refused re-conveyance.
Applicability of the Registration of Titles Act and Indian Transfer of Property Act to the charge
The charge of 16 October 1989 was made under the Registration of Titles Act, incorporating sections 69 and 100A of the Indian Transfer of Property Act as applied in Kenya, and those provisions bound the appellant who signed the charge.
The charge was signed by the appellant with an advocate's certificate confirming the statutory provisions were explained to him. The court rejected the appellant's ground that these statutes had ceased to apply to a chargee that was a mortgage finance institution, holding he had willingly accepted their application.
Alleged fraud or misrepresentation tainting the charge
No justification existed on the facts for any aspersion of fraud or misrepresentation against the respondent, and therefore no basis for ordering re-conveyance.
The appellant's grounds alleged the charge instrument was tainted with fraud or misrepresentation, but the court, on the pleadings and evidence summarised, found no material supporting such allegations; the sale proceeded from the appellant's own default after service of statutory notice which he admitted.
Whether the right of redemption survives an incomplete and disputed sale (dissent)
Nyamu, JA dissented: the right of redemption is only extinguished by a valid contract of sale, and where the sale's validity is under challenge in a pending suit between the chargee and purchaser, extinguishment cannot be conclusively declared.
The dissent noted the purchaser never completed, the deposit was in dispute, and a suit between the respondent and the purchaser was pending. Applying the overriding objective, he would have remitted the matter for accounts and determination of whether redemption was extinguished, especially as the appellant remained in possession.
Legal principles established
#- A mortgagor/chargor's right of redemption is extinguished upon the fall of the hammer at a validly conducted auction sale under a statutory power of sale, and re-conveyance can only be ordered where the sale is vitiated, for example by fraud or misrepresentation.
- A party who signs a charge instrument containing a certificate that the statutory provisions were explained to him cannot later contend that those provisions have ceased to apply to his charge.
Court orders
#- 1.Appeal dismissed with costs to the respondent
- 2.Decree of the High Court (Njagi, J) dated 23 September 2003 dismissing the originating summons with costs affirmed
The bench
#Judges wrote separately. A dissent does not bind; a concurrence may narrow the ratio.
Wrote the judgment
Wrote the lead judgment. Found the charged property was sold in exercise of the statutory power of sale after the appellant failed to redeem; no fraud or misrepresentation was established; right of redemption was extinguished on the fall of the hammer; dismissed the appeal with costs.
we dismiss the appeal with costs and it is so ordered.p. 3
Wrote the judgment
Respectfully dissented. Since the sale transaction was not finalized and completion was in dispute in a pending suit between the chargee and the purchaser, the right of redemption could not conclusively be held extinguished. Would have remitted the matter to the superior court for accounts and determination of the redemption question, with no order as to costs.
the order which commends itself to me is to remit the matter to the superior court which I hereby do for the court to take accounts as between the two partiesp. 4
- On appeal from
- High Court of Kenya at Nairobi
- H.C. Misc. C. No. 660 of 1997
- Jurisdiction invoked
- First appellate jurisdiction under the Constitution of Kenya and the Appellate Jurisdiction Act, over the decree of the High Court; no specific provision quoted in the judgment
Relief refused
#Declaration that the charge over land parcel 109/20481/85 has been fully redeemed and order for re-conveyance of the property
The property was sold in exercise of the statutory power of sale after the appellant failed to redeem; no fraud or misrepresentation was established to justify re-conveyance
Costs
Appeal dismissed with costs to the respondent; costs follow the event. The High Court had likewise dismissed the suit with costs.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The same was sold in the exercise of a statutory power of sale, and his right of redemption was extinguished upon the fall of the hammer at the auction sale.
There is accordingly no ground upon which we could order the respondent to re-convey the charged property to the appellant.
costs usually follow the event and nothing has been shown to persuade us to depart from that well established principle. In which event, we dismiss the appeal with costs and it is so ordered.
My understanding of the law on the point is that the right of redemption is only extinguished by the existence of a valid contract of sale.
Issues in the judgment
#The bench coram names 'TUNOI, KEIWUA & NYAMU, JJA' but the judgment contains no majority authorship attributed in the coram; the lead judgment is headed 'JUDGMENT OF OLE KEIWUA, J.A.' while the signature block reads only 'M. OLE KEIWUA', and Tunoi's signature block appears after the words 'Dated and delivered this 11th day of February,' with the date split by the signature - a formatting irregularity in the certified copy.
The certified copy is internally inconsistent as to the disposition: the lead judgment dismisses the appeal with costs, while Nyamu, JA's separate judgment states he remits the matter to the superior court and would give no order as to costs; the operative order of the Court is the majority's dismissal with costs.
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kilwake v Republic (Criminal Appeal 129 of 2014) [2019] KECA 5 (KLR)[2019] KECA 5 (KLR)28 Mar 2019
Cite this brief
#Cite this brief
Caselaw, "J.N. WAFUBWA v HOUSING FINANCE CO. OF KENYA [2011] KECA 405 (KLR)", Case Analysis (2011). Civil Appeal No 253 of 2004. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2011/405/eng@2011-02-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.