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Court of AppealPartially AllowedCivil Appeal 260 of 2018· [2022] KECA 631 (KLR)

Munguti & 6 others v Zibu & 9 others

Court of Appeal
8 July 2022
WKW. KaranjaAMA. K. MurgorJMJ. Mohammed
5,607 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~22 min to read original · ~4 min brief

The bottom line

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If someone else's money bought land registered in your name, Kenyan courts can impose a trust in their favour despite your title.

What this practically means

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Executive summary

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The appellants challenged a judgment of the Environment and Land Court at Makueni (Mbogo, J.) which held that a resulting trust was created over Plot No. 3792, registered in the name of the 1st appellant, who was found to hold it in trust for the 2nd respondent, a German missionary who had remitted donor funds for a children's home and rehabilitation centre. The Court of Appeal, in a first appeal, re-evaluated the evidence and framed four issues: the source of the remitted funds, whether the 7th appellant had independent donors, whether a resulting trust arose, and whether the trial court had jurisdiction over the orders made. The court found the record replete with remittance advices and email instructions evidencing funds sent by the 2nd respondent, which the 1st appellant admitted receiving; the 1st appellant failed to identify any independent donor or to show he purchased the plot with his own means. Applying the principle that a resulting trust automatically arises in favour of the person who advanced the purchase money, the court upheld the finding of a resulting trust over the subject plot. On jurisdiction, it held that save for prayer c) concerning the 7th appellant's bank accounts, the declaratory orders concerned land and fell within Article 162(2)(b). The appeal was dismissed in substantial part, save for the order on prayer c), with costs to the respondents.

Key legal issues

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01

Source of the funds remitted for the project

Holding

The evidence overwhelmingly showed the 2nd respondent regularly remitted funds to the 1st appellant, who admitted receiving them; the funds were donor funds connected to the 2nd respondent.

Reasoning

Remittance advices, bank transfers and email instructions evidenced transmission of funds to the 1st appellant for purchase of properties for the children's home and rehabilitation centre. The 1st appellant's defence admitted receiving money from the 2nd respondent as a donor. He could not show the funds came from any other source.

p. 7
02

Whether the 7th appellant had independent donors

Holding

There was no evidence of donor funds independent of the 2nd respondent; IFBC was connected to the 2nd respondent and central to his project.

Reasoning

The 1st appellant was unable to particularise or identify any independent donor. Though he admitted funds came from IFBC, that donor was connected to the 2nd respondent, who chaired it, and donations were made through him. The 2nd respondent produced a list of German donors unknown to the appellants.

p. 8
03

Whether a resulting trust was created over the subject plot

Holding

A resulting/implied trust was created over Plot No. 3792 in favour of the 2nd respondent and the community at large, because it was purchased with funds remitted by the 2nd respondent but wrongfully registered in the 1st appellant's name.

Reasoning

The court discerned whether a nexus existed between the funds received from the 2nd respondent and the purchase of the subject plot. The 1st appellant did not demonstrate purchase from his own means. Registration in his name instead of the 7th appellant's automatically created a resulting trust in favour of the source of the funds.

p. 10
04

Jurisdiction of the Environment and Land Court

Holding

Save for prayer c) concerning the 7th appellant's bank accounts, the declaratory orders were concerned with land and the trust over the subject plot, and were within the court's jurisdiction under Article 162(2)(b).

Reasoning

The court noted no objection to the specific orders was raised at trial. The orders were mainly declaratory and concerned the subject plot and related assets. Article 162(2)(b) vests the Environment and Land Court with jurisdiction over matters relating to the use and occupation of land.

Legal principles established

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  • On a first appeal, the Court of Appeal is duty bound to re-evaluate the evidence and arrive at its own independent conclusions, bearing in mind it did not see or hear the witnesses.
  • Where property purchased with funds advanced by another is registered in the name of a person other than the person advancing the funds, a resulting trust automatically arises in favour of the person who advanced the purchase money.
  • A registered proprietor who claims to have purchased property with his own funds bears the burden of proving the legality of the acquisition; where funds from another are shown to have been received, the burden shifts to him to identify the source of the purchase funds.

Court orders

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  1. 1.Appeal dismissed in substantial part, save for the order concerning prayer c) relating to the 7th appellant's bank accounts
  2. 2.Costs of the appeal awarded to the respondents
On appeal from
Environment and Land Court at Makueni
ELC No. 78 of 2017 (formally Machakos Civil Case No. 13 of 2014)
Jurisdiction invoked
Article 163(4) of the Constitution (first appeal to the Court of Appeal); trial court jurisdiction under Article 162(2)(b) of the Constitution

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, "Munguti & 6 others v Zibu & 9 others", Case Analysis (2022). Civil Appeal 260 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/631/eng@2022-07-08

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