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ELCPartially AllowedMakueni ELC Case (plaint dated 28th February, 2014)· [2018] KEELC 2764 (KLR)

Cyrus Robbert Sala Zibu & 9 others v Henry Muli Munguti & 10 others [2018] KEELC 2764 (KLR)

Environment and Land Court
20 June 2018
CMC.G Mbogo
5,243 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~21 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that property bought with donated money belongs to a trust, even when registered in someone else's name.

What this practically means

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Executive summary

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The plaintiffs, sued on their own behalf and on behalf of the people of Mtito Andei Area, Makueni County, sought declarations that funds and assets acquired through donations channelled by the second plaintiff (a German psychiatrist and Blue Cross chairman) to the first defendant from 1991 to 2013 were held on an implied and later public trust, and injunctive relief over bank accounts, assets and control of Good Hope Rehabilitation Centre (the 11th defendant). The defendants denied the claim, contending there was no trust deed, that the 1st defendant had other donors, and that the court lacked jurisdiction over the society's management. The court framed two questions: how the properties were acquired, and whether an implied trust arose. Relying on bank transfer documents, email instructions and the first defendant's admission of receiving funds, the court found the purchase money for plots 3762, 3763 and 3792 was advanced by or through the second plaintiff. Applying Dyer v Dyer and Twalib Halayan, it held a resulting trust arose, and that section 25 of the Land Registration Act does not relieve a proprietor of trustee obligations. Judgment was entered for the plaintiffs against the defendants jointly and severally in terms of prayers (a), (b), (c), (d), (h) and (k). However, prayers (e), (f), (g) and (i), concerning control and management of the 11th defendant, were refused as that issue was pending in Nairobi HCCC No. 77 of 2017. The suit therefore partially succeeded, with costs to the plaintiffs.

Key legal issues

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01

Whether an implied/resulting trust was created between the second plaintiff and the first defendant

Holding

Yes. The purchase money for the plots was advanced by the second plaintiff or through his efforts, and the first defendant admitted receiving funding; plot 3792 registered in the first defendant's name is held subject to trust.

Reasoning

The court found bank transfer documents and email instructions showing funds sent by the second plaintiff for specific purposes (construction, fencing, equipment), and the first defendant's admission of receipt. Applying Dyer v Dyer and the Court of Appeal's exposition in Twalib Halayan, a resulting trust arises in favour of the person advancing purchase money regardless of the name in which the property is registered.

p. 7
02

Whether section 25 of the Land Registration Act shields the registered proprietor from the trust claim

Holding

No. Section 25 expressly does not relieve a proprietor of duties or obligations as a trustee.

Reasoning

The court relied on section 25(2) of the Land Registration Act No. 3 of 2012, which preserves trustee obligations notwithstanding the indefeasibility of title conferred by registration, so the first defendant's registration of plot 3792 did not defeat the plaintiffs' beneficial interest.

p. 7
03

Whether the court could grant prayers concerning control and management of the 11th defendant (the society)

Holding

No. That issue is being litigated in Nairobi HCCC No. 77 of 2017, and the court declined prayers (e), (f), (g) and (i).

Reasoning

The court noted that the parties in the Nairobi suit include the 1st to 3rd defendants and that control and management of the society is an issue before another forum. It left the plaintiffs free to file their own suit and held that those prayers could not be granted for lack of jurisdiction/evidence.

p. 7

Legal principles established

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  • A resulting trust automatically arises in favour of the person who advances the purchase money, whether or not the property is registered in his name or that of another
  • Under section 25 of the Land Registration Act, registration does not relieve a proprietor of trustee obligations
  • A defendant who has been unjustly enriched by property acquired with donor funds holds it subject to a trust notwithstanding registration in his name

Court orders

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  1. 1.Judgment entered for the plaintiffs and against the 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 9th, 10th and 11th defendants jointly and severally in terms of prayers (a), (b), (c), (d), (h) and (k) of the plaint
  2. 2.Declaration that the relationship between the 2nd plaintiff and the 1st defendant from 1991 to 2013 resulted in the creation of an implied trust (prayer a)
  3. 3.Declaration that the 1st to 6th defendants are trustees of the 2nd plaintiff and the donor friends of the 2nd plaintiff for all set-ups, systems, documents, entities, funds and movable and immovable assets registered in the name of the 1st defendant and related persons (prayer b)
  4. 4.Declaration that all accounts operated in the name of the 11th defendant and the funds therein are assets of the trust of the 2nd plaintiff and the donors (prayer c)
  5. 5.Declaration that the implied trust graduated to and became a public trust in which the plaintiffs and the people of Makueni County are beneficiaries (prayer d)
  6. 6.Mandatory injunction compelling the 7th defendant to register Plot No. 3292 in the name of the 11th defendant (prayer h)
  7. 7.Costs of the suit (prayer k)

Authorities

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Legislation

  • Trustee Actdefinition of trust and trustee (implied and constructive trusts)
  • Land Registration Act No. 3 of 2012section 25
  • Societies Actgovernance of the 11th defendant society
  • Law of Contract Actrelied on by defence counsel re ownership of plot 3792

Cases cited (2)

  • Dyer Vs Dyer
    [1788] 28 Cox Eq, 92 at 93
  • Twalib Halayan Twalib Hayatan & Another Vs Said Saggas Ahmed Al-Hady & Others
    [2015] eKLR
Jurisdiction invoked
Original civil jurisdiction over land and trust claims (plaint filed in the court; Land Registration Act, No. 3 of 2012 applied)

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, "Cyrus Robbert Sala Zibu & 9 others v Henry Muli Munguti & 10 others [2018] KEELC 2764 (KLR)", Case Analysis (2018). Makueni ELC Case (plaint dated 28th February, 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/2764/eng@2018-06-20

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