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ELCDismissedNot stated in the judgment as provided· [2016] KEELC 1066 (KLR)

Albert Kanake Kariuki v Winnie Karimi Njuguna [2016] KEELC 1066 (KLR)

Environment and Land Court
4 March 2016
OAO. A. Angote
3,536 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 ruled that property bought and paid for during a romantic relationship is presumed a gift, not a shared investment.

What this practically means

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Executive summary

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The Plaintiff sued for a declaration that the Defendant holds Nairobi Block 97/1641, Fedha Estate, in trust for them in the ratio 80:20, an order for sale and sharing of proceeds, and an account of rents collected since January 2009. He alleged a business partnership, that he paid the Kshs.150,000 deposit, guaranteed and serviced the mortgage (Kshs.4,321,083) and incurred improvement costs, thereby acquiring an equitable/constructive trust interest. The Defendant, who cohabited with the Plaintiff between 1985 and 2007, denied the partnership, asserted she gave the Plaintiff the deposit money, that the mortgage was repaid from rental income, and that she cleared the outstanding loan with Kshs.1,700,000 from her retirement benefits; she counterclaimed for a permanent injunction. The court framed four issues: joint ownership, trust, entitlement to reliefs, and costs. On the evidence, the court found the Defendant was the registered purchaser and chargor; the Plaintiff's cheque for the deposit was accepted, but no evidence supported the Defendant's claim that she reimbursed him. Critically, the tenancy agreements and cheques showed the mortgage was repaid largely from rents collected by the Plaintiff on the property's behalf, not from his personal resources, and the Defendant personally paid over Kshs.1.7 million to discharge it. Applying the principles in Gissing v Gissing, the court held there was no express or implied understanding that the Plaintiff would acquire a beneficial interest; the deposit payment, made within a loving relationship, was a gift invoking the presumption of advancement. The Plaintiff's Plaint was dismissed with costs and the Defendant's counterclaim allowed as prayed.

Key legal issues

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01

Whether the Defendant holds the suit property in trust for the Plaintiff

Holding

No trust established; the Plaintiff's contribution of the deposit was a gift and the mortgage was repaid from rental income and the Defendant's own funds

Reasoning

The court found the Plaintiff paid only the Kshs.150,000 deposit. The mortgage repayments came from rents collected by the Plaintiff on behalf of the property, and the Defendant personally paid over Kshs.1.7 million to discharge the charge. No evidence showed an intention, express or implied, that the Plaintiff's payment was to acquire a beneficial interest; the parties' intimate relationship gave rise to a presumption of advancement (gift).

p. 5
02

Whether the Plaintiff is entitled to a declaration and sharing of proceeds at 80:20

Holding

Claim dismissed; the Plaintiff failed to prove his claim to an 80% share

Reasoning

Having found no trust and no unjust enrichment, and noting the Plaintiff's own affidavit of 23rd November 2007 admitted the Defendant owned the property, the court concluded the Plaintiff could not, after parting ways, claim a share of the property.

p. 6
03

The Defendant's counterclaim for a permanent injunction

Holding

Allowed as prayed

Reasoning

With the Plaintiff's claim dismissed, the court allowed the Defendant's counterclaim dated 7th January 2010 as prayed, which included a permanent injunction restraining the Plaintiff from interfering with the suit property.

p. 6

Legal principles established

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  • Resulting and constructive trusts arise to reverse unjust enrichment or to correct a wrong
  • Where property passes between individuals in a love relationship, the law presumes an outright gift, not a resulting trust
  • A person claiming a beneficial interest must prove an understanding, express or implied, that payment of the purchase price would confer such an interest
  • The presumption of advancement is available as a defence where property is gifted due to the relationship between the parties, unless made under mistake or compulsion

Court orders

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  1. 1.The Plaintiff's Plaint dated 23rd September 2009 is dismissed with costs
  2. 2.The Defendant's counterclaim dated 7th January, 2010 is allowed as prayed
Jurisdiction invoked
Original civil jurisdiction (Environment and Land Court) over a dispute relating to land, including a claim of constructive/resulting trust

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, "Albert Kanake Kariuki v Winnie Karimi Njuguna [2016] KEELC 1066 (KLR)", Case Analysis (2016). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/1066/eng@2016-03-04

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