Kamuthi Farmers Co-operative Society Ltd v Nairobi City County; Archdioces of Nairobi (Kahawa West Catholic Church) & 18 others (Interested Parties) (Civil Appeal E047 of 2021) [2025] KECA 87 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed that land sold and handed over to a buyer is held in trust for them, voiding later resale of the same land.
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 sale agreement dated 2nd January 1973 between Kahawa Farmers Co-operative Society Limited and the City Council of Nairobi (respondent) was valid and enforceable
- 2.Whether the sale of 21.238 acres for the sewerage treatment works was a valid and enforceable transaction
- 3.Whether the appellant was an innocent purchaser for value without notice when it acquired the whole parcel in 1989 from the liquidator of Kahawa Farmers
- 4.Whether Kahawa Farmers held the parcels of 154.5 acres and 21.238 acres in trust for the respondent, rendering the 1989 conveyance to the appellant void
- 5.Whether the respondent's counterclaim was time barred under the Limitation of Actions Act
- 6.Whether the transactions were invalid for want of members' resolutions, Commissioner of Co-operatives' consent, or Land Control Board consent
Key legal issues
#Validity of the 1973 sale agreement and the sale of 21.238 acres
Both transactions were valid, properly executed, fully paid for, and exempted from Land Control Act consent requirements by presidential exemption under section 24 of that Act.
The 1973 agreement was signed and sealed by the parties; the president's gazette exemption (Legal Notice No. 260 of 1974) under section 24 of the Land Control Act was never challenged; full purchase price for both parcels was acknowledged and paid. The respondent's conduct, correspondence, minutes, and the consent order before Aluoch, J. all corroborated the transactions, so the appeal grounds attacking validity failed.
Constructive trust and the appellant's status as innocent purchaser
Kahawa Farmers held the two parcels in trust for the respondent upon giving possession; the 1989 conveyance of the whole parcel to the appellant was void for all purposes, and the appellant could not claim innocence given the extensive developments on the ground.
Once the respondent was put in possession and openly developed 600 housing units, a school, church, market and sewerage works, the appellant could not claim to be a purchaser for value without notice. Equitable principles preclude a legal owner from acting unconscionably to defeat the common intention of the parties.
Limitation defence against the counterclaim
The limitation argument failed: it was not pleaded in the reply to the defence/defence to counterclaim nor raised as an issue at trial, and in any event it was displaced by the constructive trust arising when the respondent was permitted to possess and develop the land.
A party cannot raise an issue for the first time on appeal if it was not pleaded or made an issue for the trial court (citing Odd Jobs v Mubea). Further, a constructive trust arising from open possession and development displaced any claim that the counterclaim was time-barred.
Legal principles established
#- Where a vendor receives the purchase price and puts the purchaser in possession, a constructive trust arises in the purchaser's favour, and any subsequent conveyance of the same land by the vendor's successor or liquidator is void to the extent of that interest.
- A constructive trust operates on the conscience of the legal owner; a party who stands by while the other incurs expense on the faith of an agreement cannot later assert it is unenforceable.
Court orders
#- 1.The appeal is dismissed in its entirety
- 2.The judgment of Komingoi, J. of 4th June 2020 dismissing the appellant's claim and declaring the respondent entitled to registration of 154.5 acres and 21.238 acres is upheld
- 3.Costs of the appeal awarded to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- Environment and Land Court, Nairobi
- Not stated in judgment
- Jurisdiction invoked
- First appellate appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction (statutory appeal from the ELC); no specific provision cited in the judgment.
Relief refused
#Setting aside of the trial judgment and entry of judgment for the appellant as prayed in the plaint (eviction, mesne profits)
The court found valid sale agreements and a constructive trust in favour of the respondent; the innocent purchaser argument had no basis
Costs
Appeal dismissed with costs to the respondent.
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.
We find no merit in this appeal and hereby dismiss it with costs to the respondent.
We find, like the Judge, that Kahawa Farmers held the two parcels of land in trust for the respondent and the conveyance of the whole parcel of land to the appellant in 1989 was void for all purposes.
The complaint by the appellant that it was an innocent purchaser for value without notice has no basis at all and is dismissed.
once the respondent had been put in possession by Kahawa Farmers a constructive trust had been created in favour of the respondent
Constructive trust is an equitable concept which acts on the conscience of the legal owner to prevent him from acting in an unconscionable manner by defeating the common intention.
Issues in the judgment
#Acres of the sewerage parcel are inconsistently stated in the judgment (21.238, 21.97, 21.3 and 21.358 acres appear at different points).
The Memorandum of Appeal is described as containing 7 grounds but the judgment itself notes there are actually 6.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kamuthi Farmers Co-operative Society Ltd v Nairobi City County; Archdioces of Nairobi (Kahawa West Catholic Church) & 18 others (Interested Parties) (Civil Appeal E047 of 2021) [2025] KECA 87 (KLR)", Case Analysis (2025). Court of Appeal appeal from ELC, Nairobi (Komingoi, J.). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2025/87/eng@2025-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.