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Court of AppealDismissedCivil Appeal No. 316 of 2014· [2017] KECA 448 (KLR)

Ashit Patani & 2 others v Dhirajlal V. Patani & 2 others [2017] KECA 448 (KLR)

Court of Appeal
30 June 2017
PWP. N. WakiRNR. N. NambuyePKP. O. Kiage
6,180 words in judgment
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The bottom line

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Kenya's Court of Appeal confirmed that an unregistered 1985 family land agreement still gave Dhiraj valid ownership, and the buyer Aziz Developers kept its title.

What this practically means

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Executive summary

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The Patanis, executors and beneficiaries of Ramniklal Patani (deceased 2006), sued his brother Dhiraj, Dhiraj's wife Vijya, and Aziz Developers Limited (ADL) over LR No. 1/167 (subdivided into 1/681 and 1/682), which the three Patani brothers had held as tenants in common since 1970. They alleged fraud and illegality in a conveyance purportedly executed in 2008 (after the deceased's death) and Dhiraj's 2009 sale to ADL for Sh. 100 million, seeking cancellation of the transfers, accounts and a share of the sale proceeds. Nyamweya, J dismissed the suit, holding the 1985 sharing agreement valid, Dhiraj the sole beneficial owner, the 2008 conveyance merely irregular, and ADL an innocent purchaser for value. On appeal, the Court of Appeal first resolved the applicable statute: the Land Registration Act, 2012 does not operate retrospectively, so the Registration of Titles Act and the Indian Transfer of Property Act governed. It rejected the submission that the unregistered 1985 agreement conferred no interest, holding that under the then Law of Contract Act a written memorandum, reinforced by possession and part performance, sufficed. The irregular conveyance was voidable, not void ab initio, and stood absent relief against it. On fraud, the court held it must be specifically pleaded and strictly proved, doubted any doctrine of constructive fraud, and found no pleading or proof against ADL, whose indefeasible title was protected. The appeal was dismissed with costs. The decision affirms the trial judgment and binds lower courts on non-retroactivity of the 2012 Act, the void/voidable distinction, and the pleading and proof of fraud.

Key legal issues

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01

Whether an unregistered partition/sharing agreement could confer a beneficial interest in land

Holding

The 1985 agreement, being a memorandum in writing sufficient under the then-applicable Law of Contract Act, coupled with part performance and possession, validly conferred sole beneficial ownership of the disputed property on Dhiraj; no registration was required under the law then in force.

Reasoning

The court held the Land Registration Act, 2012 did not apply because the transactions predated it, invoking section 23(3) of the Interpretation and General Provisions Act, section 107 of the new Act, and the Supreme Court's retrospectivity principles. Under the Law of Contract Act as then amended, a written memorandum sufficed; the agreement's intention was reinforced by possession and the deceased's 1994 affidavit confirming the sharing. The deceased could not revoke the completed disposition by Will.

p. 8
02

Whether the irregular conveyance of 25th April 2008 was void ab initio

Holding

The conveyance, though irregularly dated and registered after the executants' deaths, was voidable, not void ab initio; no relief was sought against it and the Patanis implicitly acknowledged its validity by claiming a share of the sale proceeds.

Reasoning

The court deferred to the trial court's credibility finding that the conveyance was genuinely executed in the deceased's lifetime but not presented for registration owing to an undischarged charge. Relying on the fuller Macfoy dictum, it distinguished void from voidable acts: an irregularity is waivable and the act remains good until set aside by a court. Since no relief was sought against the conveyance, everything flowing from it stood.

p. 8
03

Whether ADL was a bona fide purchaser for value without notice

Holding

ADL was protected as a bona fide purchaser: no fraud was specifically pleaded against it, and the appellant's witness conceded he had no evidence of fraud; its title under the Registration of Titles Act was indefeasible.

Reasoning

The court reiterated that fraud must be distinctly alleged and strictly proved to a standard above balance of probabilities. The further amended plaint contained no specific pleading against ADL, and Ashit conceded he had no evidence of fraud. The court doubted the doctrine of constructive fraud urged by counsel. Searches showed no encumbrance. The final ground of appeal was therefore rejected.

p. 10

Legal principles established

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  • The Land Registration Act, 2012 does not apply retroactively to rights, interests and transactions that vested before its commencement; such transactions remain governed by the repealed statutes (Registration of Titles Act and Indian Transfer of Property Act)
  • An irregular (voidable) conveyance remains valid until set aside by a court; it is not void ab initio, and dealings founded on it are not automatically invalidated
  • Fraud must be specifically pleaded and strictly proved to a standard above a balance of probabilities; it is a matter of evidence and not inference, and a so-called doctrine of constructive fraud is doubted
  • A bona fide purchaser for value without notice of defect of title who is not privy to fraud or misrepresentation acquires an indefeasible title under section 23 of the Registration of Titles Act
  • Under the Law of Contract Act as it then stood, a memorandum in writing signed by the party to be charged, or part performance or taking of possession, was sufficient to found a disposition of an interest in land without registration

Court orders

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  1. 1.The appeal is dismissed
  2. 2.The appellants shall pay the costs of the appeal

Authorities

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Legislation

  • Land Registration Actsection 43(2)
  • Land Registration Actsection 61(1)
  • Land Registration Actsection 80
  • Land Registration Actsection 107(1) and (2)
  • Interpretation and General Provisions Actsection 23(3)
  • Government Lands Act (repealed)section 99
  • Transfer of Property Act (repealed)sections 44 and 47
  • Registration of Titles Act (repealed)sections 2 and 23
  • Law of Contract Actas amended by Act No. 68 of 1968
  • Court of Appeal RulesRule 29(1)(a)

Cases cited (9)

  • Chon Jeuk Suk Kim & Another vs E. J. Austin & 2 Others
    [2013] eKLR
  • Souza Figuerido vs Moorings Hotel Co. Ltd
    [1960] E A 926
  • Mcfoy vs United Africa Co. Ltd
    [1961] 3 All E.R
  • Suleiman Rahemtulla Omar & Another vs Musa Hersi Fahiye & 5 Others
    [2014] eKLR
  • Epaphrus Muturi Kigoro vs William Mukui Nyaga
    [2015] eKLR
  • Macharia Mwangi Maina & 87 Others vs Davidson Mwangi Kagiri
    [2014] eKLR
  • Richard Oduol Opole vs Commissioner of Lands & 2 Others
    [2015] eKLR
  • Mwangi vs Wambugu
    [1984] KLR 453
  • Samuel Kamau Macharia & Another vs Kenya Commercial Bank Limited & 2 Others
    [2012] eKLR
On appeal from
High Court of Kenya at Nairobi, Milimani Law Courts
H.C. ELC No. 613 of 2009
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (Rule 29(1)(a) of the Court of Appeal Rules invoked for rehearing of evidence)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Ashit Patani & 2 others v Dhirajlal V. Patani & 2 others [2017] KECA 448 (KLR)", Case Analysis (2017). Civil Appeal No. 316 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2017/448/eng@2017-06-30

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.