Masto Holdings Limited v Njenga & 4 others (Environment & Land Case 226 of 2016) [2019] KEELC 1954 (KLR)
The bottom line
#The court threw out a company's claim to prime Nairobi land because it could not prove the auction that supposedly gave it title ever happened.
What this practically means
#Executive summary
#Key legal issues
#Whether the Plaintiff proved purchase of the Suit Property at the alleged auction of 10/2/2004
The Plaintiff failed to prove the auction or its purchase of the Suit Property; it produced no notification of sale, advertisement, memorandum of sale or proof of payment of the purchase price
The Plaintiff's managing director could not recall the auction date, did not attend it, and had no documents evidencing it. The purchase price was contradicted - Kshs. 4,000,000/= in oral evidence against Kshs. 13,000,000/= on the transfer by chargee. No bank witness was called, no bank statements produced, and the copy of title had discrepant entries. The inconsistencies and the missing lands file cast doubt on the claimed purchase.
Whether a valid charge existed over the Suit Property securing Kshs. 10,000,000/= and whether the statutory power of sale was exercisable
The registration of the charge was challenged and no loan or default documentation was produced; the 1st Defendant conceded she had no evidence of repayment, but the Plaintiff equally failed to prove the charge, its registration or the loan
The Attorney General relied on section 46 of the repealed Registration of Titles Act requiring registration of a charge, arguing no valid charge existed over the Suit Property. The 1st Defendant's search did not reflect the charge, and her provisional certificate of title showed none. The Plaintiff relied only on the charge document and transfer by chargee without bank statements showing the loan advanced or the sale proceeds received.
Whether the Plaintiff was registered as proprietor of the Suit Property in 2006 as it claimed
The Plaintiff failed to prove registration in 2006; the transfer by chargee dated 16/11/2004 was only registered on 24/3/2010, so registration as proprietor could only have occurred after that date
The Plaintiff's claim that it was registered in 2006 was inconsistent with the registration of the transfer by chargee as I.R. 3254/33 on 24/3/2010. Had the Plaintiff been registered in 2006, it would not have needed the mandamus orders in Misc. Application No. 467 of 2008 compelling the Registrar of Titles to register it, nor to file this suit.
The 1st Defendant's counterclaim to ownership of the Suit Property
Allowed on a balance of probabilities, the court finding that the auction on which the Plaintiff's title rests never took place
The 1st Defendant proved her interest as the widow and personal representative of the late Andrew Njenga, the registered proprietor, who purchased the land in 1974 and built the matrimonial home on it. The Plaintiff failed to prove the auction and the sale transaction from which its title derived, and the anomalies in the Plaintiff's copy of title and the conduct of the parties supported the counterclaim.
Legal principles established
#- A purchaser claiming title under a chargee's statutory power of sale must prove the statutory notification of sale, the advertisement of the auction, the memorandum of sale and payment of the purchase price
- A party alleging loss from the exercise of a statutory power of sale must prove the claim to the requisite standard; where the sale is not proved, the party claiming under it fails
- A charge must be registered against the land to be valid; an unregistered charge confers no power of sale (as urged by the Attorney General relying on section 46 of the repealed Registration of Titles Act)
Court orders
#- 1.The Plaintiff's suit is dismissed for failure to prove its claim on a balance of probabilities
- 2.The 1st Defendant's counterclaim is allowed, the court finding on a balance of probabilities that the auction of the Suit Property did not take place
- 3.Each party will bear its own costs
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over ownership, title and rectification of the land register in respect of L.R. No. 209/522/2 (I.R. No. 3255/1), Upper Hill, Nairobi
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Masto Holdings Limited v Njenga & 4 others (Environment & Land Case 226 of 2016) [2019] KEELC 1954 (KLR)", Case Analysis (2019). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/1954/eng@2019-08-08
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.