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ELCPartially AllowedNot stated in the judgment (originating pleadings of 4th September 2009)· [2018] KEELC 1777 (KLR)

Muchangi Nduati Ngingo t/a Muchangi Nduati and Co Advocates v Commissioner of Lands & 2 others [2018] KEELC 1777 (KLR)

Environment and Land Court
27 September 2018
SOS. Okong'o
4,271 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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A Kenyan court cancelled land titles bought by a third party because it failed to prove it was an innocent buyer for value.

What this practically means

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Executive summary

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The plaintiff, an advocate practising as Muchangi Nduati & Co. Advocates, sued the Land Registrar (1st defendant) and, after amendment, the 2nd defendant (his former client) and the 3rd defendant (a subsequent registered owner), seeking inhibition/prohibition orders, a declaration that fifteen parcels in Ruiru/Kiu Block 4 belonged to him, and revocation of transfers to third parties. His claim arose from an agreement of 15th June 2007 under which the cash-strapped 2nd defendant transferred the parcels to him in part settlement of fees of Kshs.11,362,342, and executed instruments of transfer, but the leases were never issued; instead the parcels were transferred to third parties in unexplained circumstances while documents were lodged with the 1st defendant. Interlocutory orders directing the 1st defendant to process and release the leases were not obeyed, prompting contempt proceedings and a warrant of arrest. At the hearing only the plaintiff testified; the 1st and 3rd defendants closed their cases without calling evidence. The court framed six issues, held the agreement and executed transfers proved, and found that the burden shifted to the 3rd defendant, who could not establish bona fide purchase for value without notice since a challenged root of title cannot rest on the title instrument alone. Relying on Mbiti Kieba and section 28 of the repealed Registered Land Act, the court held the 2nd defendant held the properties in trust for the plaintiff and that the transfers were unlawful. Judgment was entered for the plaintiff: the plaintiff's beneficial interest was declared, the 3rd defendant's titles over seven parcels were declared null and void and cancelled, the 1st and 2nd defendants were ordered to process and issue titles, no orders were made over three parcels registered to non-parties, and costs were awarded to the plaintiff.

Key legal issues

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01

Whether an agreement to transfer land in part settlement of advocates' fees and execution of transfer instruments established the plaintiff's beneficial interest

Holding

Yes - the advocate/client relationship, board resolution, sale agreement and executed instruments of transfer were uncontroverted and established the agreement and allocation

Reasoning

The court relied on the letter of instruction, the fee note acknowledgement, the board minutes allocating fifteen plots as part payment of fees, the sale agreement of 15th June 2007 and the duly executed instruments of transfer of leases. None of this evidence was controverted by any defendant, and the 2nd defendant never entered appearance or filed a defence.

p. 4
02

Whether the 3rd defendant proved it was a bona fide purchaser for value without notice

Holding

No - the 3rd defendant called no evidence and, once the plaintiff traced the properties to the 2nd defendant and showed lodgment of transfer documents, the burden shifted to the 3rd defendant to prove good faith acquisition

Reasoning

The plaintiff proved prior ownership by the 2nd defendant, allocation to himself, execution of transfers and lodgment of documents with the 1st defendant. The court applied Mbiti Kieba and section 112 of the Evidence Act: how the 3rd defendant was registered was a fact especially within its knowledge. Since it produced only searches and registers and gave no evidence, the bona fide purchaser defence failed and fraud could not be ruled out.

p. 5
03

Whether the transfer of the disputed properties by the 2nd defendant to the 3rd defendant was lawful

Holding

No - having executed transfers in favour of the plaintiff, the 2nd defendant held the properties in trust for the plaintiff and had no interest it could transfer to third parties; the subsequent transfer was unlawful and in the circumstances fraudulent

Reasoning

Under section 28 of the repealed Registered Land Act (Cap 300), rights of a proprietor for value are not liable to be defeated except as provided in the Act, but the proviso does not relieve a proprietor of trustee duties. Having divested itself by the agreement and executed transfers, the 2nd defendant could not confer title on the 3rd defendant, and in the absence of any explanation of the transactions, fraud involving all defendants could not be ruled out.

p. 5

Legal principles established

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  • Where a registered proprietor's root of title is under challenge, it is not sufficient to dangle the instrument of title as proof of ownership; the proprietor must go beyond the instrument and rebut the challenge
  • A party alleging facts especially within its own knowledge bears the burden of proving them under section 112 of the Evidence Act
  • A person claiming to be a bona fide purchaser for value without notice must bring himself within that definition by tendering evidence; in the absence of evidence the court cannot make such a finding
  • A vendor who has agreed to transfer land and executed instruments of transfer in favour of a purchaser holds the property in trust for the purchaser and cannot deal with it contrary to that trust

Court orders

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  1. 1.Declared that the plaintiff had lawful beneficial interest in LR Nos. Ruiru/Kiu Block 4/2006, 2008, 2009, 2010, 2011, 2012, 2041, 2042, 2043, 2044, 1723 and 1726
  2. 2.Declared that the transfer of LR Nos. Ruiru/Kiu Block 4/2006, 2008, 2009, 2010, 2011, 2012 and 2041 to the 3rd defendant was illegal, null and void
  3. 3.Cancelled the titles in the name of the 3rd defendant in respect of LR Nos. Ruiru/Kiu Block 4/2006, 2008, 2009, 2010, 2011, 2012 and 2041
  4. 4.Directed the 1st and 2nd defendants to process and issue titles in respect of LR Nos. Ruiru/Kiu Block 4/2006, 2008, 2009, 2010, 2011, 2012, 2041, 2042, 2043, 2044, 1723 and 1726 in accordance with the agreement dated 15th June 2007
  5. 5.Made no orders in respect of LR Nos. Ruiru/Kiu Block 4/2038, 2039 and 2045 which are registered in the names of persons who are not parties to the suit
  6. 6.Defendants to pay the plaintiff's costs of the suit

Authorities

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Legislation

  • Evidence Act (implied from the quoted judgment in Mbiti Kieba)Section 112
  • Registered Land Act, Chapter 300 Laws of Kenya (now repealed)Section 28 and its proviso

Cases cited (1)

  • Mbiti Kieba & Another v Isaya Theuri M'lintari & Another
    [2014] eKLR
Jurisdiction invoked
Original civil jurisdiction of the High Court/Environment and Land Court under the land legislation (suit commenced by plaint; no specific constitutional or statutory provision cited for jurisdiction)

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, "Muchangi Nduati Ngingo t/a Muchangi Nduati and Co Advocates v Commissioner of Lands & 2 others [2018] KEELC 1777 (KLR)", Case Analysis (2018). Not stated in the judgment (originating pleadings of 4th September 2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/1777/eng@2018-09-27

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