Beatrice Wambui Muturi v Lubumbula Kwatemba & another [2018] KEELC 3014 (KLR)
The bottom line
#A Kenyan court ruled that an auction buyer held valid title, ordered a rival buyer's caveat lifted and the former owner evicted with back-payments owed.
What this practically means
#Executive summary
#Key legal issues
#Whether the caveat placed by the 1st Respondent should be lifted
The caveat should not have been registered while the charge and further charge were still in existence; the 1st Respondent paid the purchase price to the 2nd Respondent despite knowing the property was charged, and a caveat cannot confer title.
The 1st Respondent paid Kshs. 2 million to the 2nd Respondent rather than the Central Bank which held the title as security. No evidence showed he attempted to pay the Bank. Without discharge of the charge, the property could not pass to him, so his caveat protecting a purchaser's interest was unsustainable and the court ordered it lifted.
Whether the 2nd Respondent's right to redeem survived the auction sale to the Applicant
The right to redeem was extinguished when the Applicant bought the property at public auction and entered a binding contract of sale with the Bank, so the 2nd Respondent could not validly sell it to the 1st Respondent.
Applying Section 60 of the Transfer of Property Act as discussed in Captain Patrick Kanyagia, the court found the Applicant bought at a public auction and entered a binding contract of sale, extinguishing the right to redeem. The 2nd Respondent therefore had no capacity to pass title to the 1st Respondent by private treaty before discharging the charge.
Whether the statutory notice of auction was duly served on the 2nd Respondent
The Court of Appeal had already found the statutory notice duly served, and the Applicant therefore acquired a valid title at the auction.
The Court of Appeal in Nairobi Civil Appeal No. 81 of 2000 found that the 2nd Respondent admitted service of the statutory notice and non-compliance, leaving the High Court no basis to interfere with the statutory power of sale. That finding bound the parties here, defeating the 2nd Respondent's challenge to the validity of the auction.
Whether the Applicant is entitled to mesne profits
The Applicant is entitled to mesne profits, assessed at Kshs. 20,000/= per month from 27/4/2005 until eviction, because the 2nd Respondent remained in possession without paying the rent she offered.
By the letter dated 27/4/2005 the Applicant's advocates indicated the 2nd Respondent could stay if he paid monthly rent of Kshs. 20,000/=. He remained in possession but did not pay. Having proved her title as auction purchaser, the Applicant was awarded mesne profits at that rate from that date until eviction.
Legal principles established
#- A caveat lodged by a purchaser does not confer title where the property remains charged and un-transferred.
- An intending purchaser at a properly advertised auction is not bound to inquire into the rights of the mortgagee to sell.
- The mortgagor's right to redeem can be extinguished where the mortgagor had entered into a binding contract for sale of the mortgaged property either by public auction or private contract.
Court orders
#- 1.The Registrar of Lands is directed to lift the caveat placed by the 1st Respondent against the Suit Property
- 2.An eviction order is issued against the 2nd Respondent from the Suit Property to be effected within 45 days of the date of the judgment
- 3.The 2nd Respondent will pay mesne profits to the Applicant assessed at Kshs. 20,000/= per month from 27/4/2005 until the date of the eviction
- 4.The Applicant is awarded the costs of the suit to be borne by the 2nd Respondent
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court at Nairobi under the Originating Summons procedure (ELC. Case No. 2267 of 2007 (O.S.))
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Beatrice Wambui Muturi v Lubumbula Kwatemba & another [2018] KEELC 3014 (KLR)", Case Analysis (2018). ELC. Case No. 2267 of 2007 (O.S.). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3014/eng@2018-05-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.