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ELCDismissedELC No. (not stated in judgment)· [2015] KEELC 565 (KLR)

Phoebe Njoki Githae v Francis Owino Rao & 2 other [2015] KEELC 565 (KLR)

Environment and Land Court
9 March 2015
LGL.N. GACHERU
2,443 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court refused to stop a bank from selling a charged flat, ruling Kenya's 2012 spousal-consent law doesn't cover pre-2012 property transfers.

What this practically means

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Executive summary

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The Plaintiff, wife of the 1st Defendant, sought a temporary injunction restraining the Defendants from selling, transferring or interfering with her possession of Flat No. 3, L.R. No. 205/62, and an order compelling the Defendants to supply documents relating to the sale and charge of the property. She claimed a 2008 co-ownership agreement under which the 1st Defendant held the property in trust for her and their children, and alleged the transfer to the 2nd Defendant and subsequent charge to the 3rd Defendant were fraudulent for want of her consent. The 1st Defendant admitted transferring the property under a 'gentleman's arrangement' with the 2nd Defendant to secure a Kshs. 9.9 million loan from the 3rd Defendant for a joint business venture. The 3rd Defendant denied any threat of sale and noted it was not privy to the 1st and 2nd Defendants' dealings. Applying the Giella v Cassman Brown test, the court held that Section 93 of the Land Registration Act, 2012 (spousal consent) did not apply because the transfer and charge predated the Act's commencement on 2nd May 2012, and neither the 2nd nor 3rd Defendant had any duty to inquire about spousal consent. The Plaintiff's fraud allegation failed given the 1st Defendant's admission. No injunction could issue against the chargee as it would curtail the statutory power of sale. The prayer for documents was overtaken by events, having been filed with the 3rd Defendant's Replying Affidavit. The application was dismissed, the interim injunction discharged, and costs awarded in the cause.

Key legal issues

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01

Applicability of Section 93 of the Land Registration Act, 2012 to pre-2012 transactions

Holding

Section 93 does not apply to transfers and charges effected before the Act commenced on 2nd May 2012; the 2nd and 3rd Defendants had no duty to inquire whether the spouse consented

Reasoning

The property was transferred to the 2nd Defendant before 13th January 2010 and charged thereafter, all before the Land Registration Act came into operation on 2nd May 2012. The court held the Act could not govern those transactions and relied on Elizabeth Nthenya Wambua v Philip Wambua Masila for the proposition that a purchaser/chargee had no duty to inquire into spousal consent for alienations predating the Act. The Plaintiff's claim premised on spousal consent therefore failed.

p. 4
02

Alleged fraud in the transfer of the suit property

Holding

The Plaintiff failed to establish fraud since the 1st Defendant admitted transferring the property to the 2nd Defendant, who charged it to the 3rd Defendant

Reasoning

The 1st Defendant's own affidavit admitted the transfer under a 'gentleman's arrangement' with the 2nd Defendant to secure a loan for a joint business venture. Given that admission, the court found no fraud had been established against the 2nd or 3rd Defendants. The 3rd Defendant held the property as security and was not privy to the dealings between the 1st and 2nd Defendants, so no fraudulent transaction tainted the charge.

p. 4
03

Whether an interlocutory injunction should issue against the chargee

Holding

No injunction could issue; it would curtail the 3rd Defendant's statutory power of sale upon default

Reasoning

Applying Giella v Cassman Brown, the court found no prima facie case because the spousal-consent and fraud claims failed. There was no connection between the Plaintiff and the 3rd Defendant, which held the property as security. Damages would be adequate, and an injunction would improperly curtail the chargee's option of sale in the event of default. The interim injunction was discharged and the application dismissed with costs in the cause.

p. 4

Legal principles established

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  • An injunction will not issue where the property was transferred and charged before the Land Registration Act, 2012 came into force; the purchaser/chargee had no duty to inquire about spousal consent

Court orders

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  1. 1.The Plaintiff's application dated 14th February 2014 is disallowed
  2. 2.The interim injunction issued on 14th February 2014 is discharged
  3. 3.Costs of the application shall be in the cause

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 159(2)(c)
  • Land Registration Act, 2012Section 28; Section 93
  • Matrimonial Property Act, 2013(definition of matrimonial property, cited by counsel)
  • Land Act(cited by counsel)
  • Registration of Titles Act (Repealed)(under which the suit property was registered)

Cases cited (2)

  • Giella Vs Cassman Brown & Co. Ltd
    (1973) E.A 358
  • Elizabeth Nthenya Wambua Vs. Philip Wambua Masila & 3 Others
    ELC No. 240 of 2012 [2013] eKLR
Jurisdiction invoked
Environment and Land Court jurisdiction over disputes relating to land (Land Registration Act and Environment and Land Court Act)

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, "Phoebe Njoki Githae v Francis Owino Rao & 2 other [2015] KEELC 565 (KLR)", Case Analysis (2015). ELC No. (not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2015/565/eng@2015-03-09

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