Pauline Njoki Mogwanja & another v Roskan Investments Limited & 3 others [2018] KEELC 261 (KLR)
The bottom line
#Kenya's Environment and Land Court ruled that family land can be held on an unwritten trust, and transferring it after the owner died was fraudulent.
What this practically means
#Executive summary
#Key legal issues
#Whether the late James Mirie held the Suit Property on trust for his sisters
Yes. He held it on a constructive trust for the Plaintiffs and the 2nd Defendant on the conditions that the land would not be sold and that the sisters would have the first option to purchase it
The 1997 family minutes, though informally drafted, showed the sisters relinquished their interest on condition the farm would not be sold and they would get the first offer. James paid no consideration and the intention was to keep the land in the family. Even though the intention could not be precisely ascertained, equity imposed a trust on the legal owner despite no registered encumbrance.
Whether the Memorandum of Agreement dated 12/8/2009 amounted to a sale of the Suit Property
Yes. The transfer was a sale notwithstanding the nominal consideration of Kshs. 10 million and the fact that James Mirie held 74% of the transferee company's shares
Applying the four elements of a sale (competent parties, mutual assent, transferable thing, and a price), the court found the ingredients met. The property passed to the 1st Defendant, a separate legal person, and the sisters were not given the first offer as agreed in the 1997 minutes, breaching the trust.
Whether the transfer of the Suit Property to the 1st Defendant was fraudulent
Yes. The transfer was registered on 30/3/2010, after James Mirie died on 13/2/2010, and the 2nd and 3rd Defendants intermeddled with the estate before a grant was obtained
Section 45 of the Law of Succession Act prohibits intermeddling with a deceased's free property; section 79 vests property in the legal representative. Under sections 61 and 62 of the Land Registration Act, the land ought to have been registered by transmission to a personal representative. No plausible explanation was given for the delayed registration of the transfer.
Whether the Defendants' counterclaim for damages stood
No. The counterclaim was dismissed as it did not lie once the trust was established, and no evidence showed the property had been developed
The projected profits of an unbuilt development were speculative and depended on assumptions about funding and market stability. The only quantifiable loss was the Kshs. 5 million each that the Plaintiffs had declined to contribute. Having found a trust and a fraudulent transfer, the Defendants could not claim damages for interference with the project.
Legal principles established
#- Where the intention of the parties cannot be ascertained and the circumstances demand it, equity will treat the legal owner of land as a constructive trustee even where no trust is registered against the title
- A transfer of land effected and registered after the death of the registered proprietor, before a grant of representation, is fraudulent and illegal; the date a transfer takes effect is the date of registration
- Directors who transfer a deceased registered proprietor's land before grant of representation intermeddle with the free property of the deceased contrary to section 45 of the Law of Succession Act
Court orders
#- 1.The court allows prayers I, II, II (b), III, IV, V, VI, and VII of the Amended Plaint dated 21/7/2017
- 2.The Defendants' Amended Counterclaim dated 14/8/2017 is dismissed
- 3.The Plaintiffs are awarded the costs of the suit and of the Amended Counterclaim
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under the Environment and Land Court Act over disputes relating to title and interest in land
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Pauline Njoki Mogwanja & another v Roskan Investments Limited & 3 others [2018] KEELC 261 (KLR)", Case Analysis (2018). ELC. Civil Case No. 234 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/261/eng@2018-11-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.