Benedictor Makani Bahati – Chairman & 4 others v Ben Muneria Wesonga & 5 others [2018] KEELC 1873 (KLR)
The bottom line
#A church that bought land without the bank's consent lost ownership claims, but won compensation from the county for demolishing its buildings.
What this practically means
#Executive summary
#Key legal issues
#Validity of the sale agreements in light of the chargee's consent requirement
Both agreements were voidable because they were entered into without the consent of National Bank of Kenya contrary to the charge instrument
The charge instrument (clauses 2(h) and (i)) prohibited the chargor from leasing, selling or transferring the property without the bank's prior written consent. Neither the plaintiff nor the 2nd defendant involved the bank or read the charge document. Section 87 of the Land Act bars registration of such transfers without the chargee's written consent. The 1st defendant therefore lacked capacity to sell, but nothing stopped him from having the loan repaid by a third party and discharging the property.
Whether the plaintiff's contractual interest outranks the 2nd defendant's registered title
No - the 2nd defendant's registered absolute interest prevails; the plaintiff had no overriding interest under section 28 and no constructive trust arose
Under sections 24, 25 and 26 of the Land Registration Act, the registered proprietor's title is absolute and indefeasible absent fraud or misrepresentation to which the proprietor is party. The 2nd defendant did a search, paid the bank balance and obtained a discharge of charge; it was unaware of the plaintiff's agreement. The plaintiff's interest was merely contractual, the land was charged, and the plaintiff failed to demonstrate any overriding interest under section 28.
Whether fraud was proved against the 1st, 2nd, 4th and 5th defendants
Fraud was not proved to the required standard; the alleged stamp duty/valuation irregularities did not amount to fraud
Applying Vijay Morjaria, Ndolo v Ndolo and Kinyanjui Kamau, fraud must be specifically pleaded and distinctly proved to a standard higher than balance of probabilities. The plaintiff's case rested on failure to obtain a government valuer's report and possible undervaluation of the declared value, which the court held to be mere irregularities whose remedy is payment of the difference in duty, not nullification of the transaction.
Liability of the 3rd defendant (Municipal Council) for the demolition of 13th May 2011
The 3rd defendant demolished the church premises without legal justification and is liable for the proved loss of Kshs.1,229,240 with interest
The council revoked the building authority and demolished the structures on 13th May 2011 despite the DC's letter requesting a stay and notwithstanding a registered temporary injunction. PW1, PW2 (valuer) and PW3 proved structures and loss of Kshs.1,229,240. The plaintiff thus established the 3rd defendant's liability for the destruction even though its ownership claim failed.
Legal principles established
#- Where a charge prohibits transfer of charged land without the chargee's written consent, no such transfer shall be registered until that consent is produced to the Registrar
- Fraud must be specifically pleaded, its particulars stated on the face of the pleading, and distinctly proved; it cannot be inferred from facts
- A charge of fraud requires a higher standard of proof than ordinary civil cases, though not beyond reasonable doubt
- Not all irregularities amount to fraud; undervaluation of property warrants an order to pay the difference, not nullification of the agreement
Court orders
#- 1.The plaintiff is not entitled to the permanent injunction and declarations as prayed
- 2.The 3rd defendant is ordered to pay the plaintiff Kshs.1,229,240 with interest from the time of filing suit
- Jurisdiction invoked
- Original civil jurisdiction of the High Court/Environment and Land Court over land disputes (jurisdiction admitted by 2nd defendant; denied by 3rd defendant)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Barrack Odhiambo Odero (Suing on behalf of the Estate of Isaya Odero Obongo) v Ezekiah Kinyangi Busaka [2020] KEELC 737 (KLR)[2020] KEELC 737 (KLR)27 Oct 2020
Cite this brief
#Cite this brief
Caselaw, "Benedictor Makani Bahati – Chairman & 4 others v Ben Muneria Wesonga & 5 others [2018] KEELC 1873 (KLR)", Case Analysis (2018). Eldoret High Court Environment and Land Case (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/1873/eng@2018-08-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.