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Court of AppealDismissedCivil Appeal No. 91 of 2016

Filipo Fedrini v Ibrahim Mohamed Omar [2018] KECA 723 (KLR)

Court of Appeal
8 February 2018
2,900 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal dismissed Fedrini's appeal, holding that a verbal land deal with profit-sharing is enforceable and trusts cannot be assumed without clear intent.

What this practically means

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Executive summary

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The Court of Appeal at Mombasa (Waki, Karanja and Koome, JJ.A) dismissed an appeal by Filipo Fedrini against the judgment of Angote, J. of the Environment and Land Court at Malindi, which had dismissed his claim for a declaration that Ibrahim Mohamed Omar held six Malindi plots in trust for him and had instead allowed Omar's counter-claim for specific enforcement of an oral agreement. The dispute arose from an oral contract under which Fedrini advanced €368,000 towards purchase of the plots, which were registered in Omar's name. The appellant argued the respondent had misrepresented the purchase price, retained some €21,800,000 equivalent, given no consideration, and should be treated as a resulting trustee. The Court, acting as a first appellate court, re-evaluated the evidence and affirmed the trial judge's findings. It held that the oral contract was for purchase and resale at a profit to be shared equally, with registration in the respondent's name to facilitate that resale; that Omar's identification of the properties and undertaking to find a buyer was valid consideration, adequacy being irrelevant; and that no resulting trust could arise absent a clearly determined intention to create one. The fraud and misrepresentation allegations failed because fraud was never pleaded or particularised and could not be inferred from the facts, and the respondent's account of applying the entire sum was unshaken. The appeal was dismissed with costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the terms of the oral contract were that the suit properties were purchased for resale at a profit to be shared equally
  2. 2.Whether the respondent gave consideration sufficient to sustain the oral contract
  3. 3.Whether a resulting trust arose in favour of the appellant
  4. 4.Whether the oral contract was vitiated by fraud or misrepresentation
  5. 5.Whether the learned Judge erred in enforcing the oral contract by allowing the respondent's counter-claim

Key legal issues

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01

Terms of the oral contract and resulting trust

Holding

The oral contract was for purchase and resale at a profit shared equally, with the properties registered in the respondent's name; no resulting trust arose in favour of the appellant

Reasoning

The court re-evaluated the evidence as first appellate court and agreed with the trial judge that the parties intended the properties be registered in the respondent's name to facilitate the resale agreement. Since intention to create a trust must be clearly determined before one is implied, the appellant's resulting-trust claim failed.

p. 3
02

Consideration supplied by the respondent

Holding

The respondent's identification of the properties and obligation to scout for a buyer constituted valid consideration; adequacy is irrelevant

Reasoning

While the appellant paid the entire purchase price, the respondent contributed by identifying the properties and undertaking to find a buyer. Courts do not audit the bargain; consideration need only be of some value, not adequate. The contract was therefore enforceable.

p. 3
03

Fraud and misrepresentation

Holding

Fraud was never pleaded or particularised and could not be inferred from the facts; the misrepresentation claim was unproved

Reasoning

Appellant's counsel conceded fraud was not pleaded. Citing Vijay Morjaria, the court held fraudulent conduct must be distinctly alleged and proved. The respondent's evidence that he utilised the entire amount sent by the appellant was unshaken, so the misrepresentation allegation failed.

p. 3

Legal principles established

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  • An appellate court will not interfere with findings of fact by the trial court unless they are based on no evidence, on a misapprehension of the evidence, or on wrong principles
  • Fraud must be specifically pleaded with particulars on the face of the pleading, distinctly alleged and distinctly proved, and cannot be inferred from the facts
  • A court is not concerned with the adequacy of consideration, only that consideration exists
  • The intention of the parties to create a trust must be clearly determined before a trust is implied

Court orders

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  1. 1.The appeal is dismissed with costs

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority
majority
Martha Karambu Koome
M. K. KoomeJA
Currently serving
majority
On appeal from
Environment and Land Court at Malindi
ELC No. 107 of 2009
Jurisdiction invoked
First appellate jurisdiction under the Court of Appeal Rules (appeal as of right from the Environment and Land Court); no specific constitutional or statutory provision is cited in the judgment

Relief refused

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Appellant's prayer to set aside the trial judgment and find a resulting trust in his favour

The parties' oral agreement was for resale at a profit shared equally, with registration in the respondent's name; no trust was implied and the contract was valid and enforceable

p. 3

Finding of fraud/misrepresentation against the respondent

Fraud was never pleaded or particularised; allegations were not proved

p. 4

Costs

The appeal was dismissed with costs to the respondent

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the end, we see no reason for interfering with the learned Judge's decision. Accordingly, the appeal lacks merit and is hereby dismissed with costs.
p. 4Final orders - dismissal of appeal
It is also settled law that fraudulent conduct must be distinctly alleged and as distinctly proved, and it is not allowable to leave fraud to be inferred from the facts.
p. 4Pleading and proof of fraud
we ordinarily ought not to interfere with findings of fact by the trial court unless they are based on no evidence, or on a misapprehension of it or the trial court is shown demonstrably to have acted on wrong principles in reaching the findings
p. 3First appellate court's approach to findings of fact
It is trite law that the intention of the parties to create a trust must be clearly determined before a trust is implied.
p. 3Implied/resulting trusts

Issues in the judgment

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minor

The appellant is rendered 'Filipo Fedrini' in the case heading but 'Filippo Fedrini' in the body of the judgment - inconsistent spelling of the party's name

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, "Filipo Fedrini v Ibrahim Mohamed Omar [2018] KECA 723 (KLR)", Case Analysis (2018). Civil Appeal No. 91 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/723/eng@2018-02-08

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