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ELCPartially AllowedELC No 242 of 2013· [2019] KEELC 5113 (KLR)

MWK v PKM; Equity Bank (Kenya) Limited (Interested Party) (Environment and Land Case 319 of 2017) [2019] KEELC 5113 (KLR)

Environment and Land Court
24 June 2019
JKJ G Kemei
5,956 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court confirmed a wife's unregistered interest in her matrimonial land binds everyone, but cancelled only the bank's irregularly reinstated charge, leaving the original loan intact.

What this practically means

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Executive summary

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The plaintiff sued the defendant, her customary-law husband, and Equity Bank (joined as an Interested Party) over land LOC12/Gakira/xxx registered in the defendant's name, on which the bank held a charge of Kshs 1.1m securing a loan of Kshs 960,000/-. She sought declarations that the matrimonial home was held in trust for both spouses, that the reinstated charge was null and void, and that the charge be reopened, plus registration as joint tenant. The defendant admitted the marriage but denied her contribution; the bank defended the discharge and reinstatement of the charge under section 79(2) of the Land Registration Act and asserted its statutory power of sale. The court found the plaintiff was a spouse with a beneficial, overriding interest, evidenced by joint tailoring income, her signature on the bank's micro-credit appraisal form, her repayments of about Kshs 67,000/- and occupation confirmed by the Chief's letter. The Matrimonial Property Act could not apply retrospectively to the 2011 charge, but pre-2012 equitable principles protected her interest. The court held that the discharge of charge of 13/7/13 and its cancellation/reinstatement on 4/2/14 were procured while a restraining court order was registered on the title, and that the rectification was unlawful, null and void for want of notice, contrary to Articles 47 and 50. However, the plaintiff's claims for spousal consent breaches and reopening of the charge failed: spousal consent was introduced in 2012 and no evidence of unconscionability was led. The court declared the plaintiff's beneficial interest, nullified the discharge entries, ordered rectification cancelling entries 4 and 5, left the 2011 charge subsisting with the bank free to exercise its statutory power of sale, and awarded costs against the Interested Party.

Key legal issues

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01

Whether the plaintiff was a spouse with an interest in the suit land

Holding

Yes - the plaintiff was the wife of the defendant and acquired a beneficial interest, an overriding interest in common law and equity, through the tailoring business, occupation and repayments made towards the loan

Reasoning

The defendant's own pleading admitted the customary marriage; the bank did not dispute it. The plaintiff testified the land was bought from joint tailoring income, signed the bank's micro-credit appraisal form as a partner, and made repayments of about Kshs 67,000/-. The Chief's letter confirmed she resided on the land. The Matrimonial Property Act could not apply retrospectively to a 2011 charge, but pre-2012 equitable principles gave her an overriding interest.

p. 7
02

Whether the rectification of the register reinstating the charge was lawful

Holding

The rectification was unlawful, null and void because it was effected on the register while a subsisting court order restraining dealings was registered, and without notice to the proprietor or the plaintiff

Reasoning

The bank procured the discharge of 13/7/13 to enable a transfer to a third party, then procured cancellation of the discharge on 4/2/14 while the injunction of 25/11/13, registered on the title on 27/11/13, subsisted. Applying Clark v Chadbourn and the doctrine of lis pendens, the fruits of defiance of a prohibitory order are tainted. Article 50 and fair administrative action principles required notice and a hearing before rectification under section 79 of the Land Registration Act.

p. 9
03

Whether the charge should be reopened

Holding

No - the plaintiff did not establish the statutory circumstances for reopening the charge under sections 105 and 106 of the Land Act

Reasoning

The plaintiff acknowledged the outstanding liability to the bank and took steps to repay it herself. She never pleaded or proved unconscionability, unfair dealing, financial pressure or other statutory factors. The original 2011 charge therefore subsists.

p. 10

Legal principles established

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  • The equitable beneficial interest of a spouse in a matrimonial home is an overriding interest binding even on purchasers, whether or not it appears on the register
  • A discharge or reinstatement of a charge is a disposition of an interest in land that cannot be casually entered in the register; affected persons, including those with overriding interests, must be heard
  • The doctrine of lis pendens prohibits parties from creating pending litigation rights over disputed property that prejudice the other party

Court orders

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  1. 1.A declaration that the plaintiff has a beneficial interest in the suit land LOC.12/Gakira/xxx registered in the name of the Defendant
  2. 2.A declaration that the discharge of charge registered on 17/7/13 and the subsequent discharge entry No 4 registered on 4/2/14 are null and void
  3. 3.The Land Registrar is ordered to rectify the register by cancelling entries Nos. 4 and 5 in the green card
  4. 4.The costs of the suit are payable by the Interested Party

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 50
  • Constitution of Kenya, 2010Article 47
  • Constitution of Kenya, 2010Article 232
  • Land Registration Actsections 28, 73(3), 79(1), 79(2), 93
  • Land Act, 2012sections 2, 90, 105, 106
  • Matrimonial Property Act, No 49 of 2013section 6
  • Married Women Property Act 1882not specified
  • Registration of Titles Act (repealed)section 23
  • Transfer of Property Actsection 52
  • Civil Procedure RulesOrder 40 Rule 6; Order 15 Rule 1; Order 38

Cases cited (4)

  • Adonijah Oginga Otieno & Anor vs Kisumu East District Land Registrar & Anor
    (2017)
  • Mugo Muiru Investments Limited v E W B & 2 Others
    [2017] eKLR
  • Clark and Others versus Chadbourn & Others
    [1985] 1 All E R (PC) 211
  • Mawji v. US International University & Another
    [1976] KLR 185
Jurisdiction invoked
Original jurisdiction under Article 162(2)(b) of the Constitution (Environment and Land Court); not expressly stated in the judgment

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "MWK v PKM; Equity Bank (Kenya) Limited (Interested Party) (Environment and Land Case 319 of 2017) [2019] KEELC 5113 (KLR)", Case Analysis (2019). ELC No 242 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/5113/eng@2019-06-24

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