Charles Nakulo Osallo v Barclays Bank of Kenya Limited & 2 others [2020] KEELC 1325 (KLR)
The bottom line
#A Kenyan bank illegally auctioned land while a boundary dispute was unresolved, and the auction buyer couldn't evict the homeowner because he knew of the defect.
What this practically means
#Executive summary
#Key legal issues
#Legality of the 1st Defendant's exercise of statutory power of sale
The sale was illegal because the bank sold the charged property knowing of the dispute over its location, size and boundary before the Land Registrar determined it.
The bank knew the Plaintiff's storeyed maisonette stood on the charged parcel yet auctioned it before the boundary dispute summoned for 25th July 2011 was determined. The charge was perfected in May 2009 but the valuation was only done in October 2009; no building plans or stage valuations were produced, and the Chargor was the bank's own employee. The court found negligence, imprudence and bad faith, and held equitable principles required substantive justice.
Bona fide purchaser status of the 2nd Defendant
The 2nd Defendant was not a bona fide purchaser for value without notice; his title is defective.
Before the auction the 2nd Defendant knew of the dispute, having seen the first auction called off, and was shown valuation reports indicating that a non-owner occupied and had built on the charged parcel. Applying indefeasibility principles, a purchaser who acquires with notice of defects in the root of title cannot invoke section 26 of the Land Registration Act; his remedy lies in indemnity against the bank.
Plaintiff's entitlement to the reliefs sought
The Plaintiff proved his case on a balance of probability and was granted the injunction and declaration, with a further direction to correct the RIM.
Surveyors' reports confirmed the Plaintiff had built on parcel 3587 instead of 19734 due to confusion from an unprocedural reparcellation by Kenyuco Cooperative Society Ltd. Relying on the Odd Jobs principle as endorsed by the Court of Appeal, the court based its decision on the course of the trial and directed the Land Registrar and District Surveyor to amend the RIM to reflect actual ground occupation.
Legal principles established
#- A party cannot invoke indefeasibility of title where the process of acquisition of the title is irregular.
- Where a registered proprietor's root of title is challenged, the instrument of title alone is insufficient; the proprietor must prove the legality of the acquisition.
- A chargee that exercises statutory power of sale while a dispute over the location and boundary of the charged land is pending before the Land Registrar acts negligently, imprudently and in bad faith, rendering the exercise illegal.
Court orders
#- 1.A permanent injunction restraining the Defendants, their agents, servants or workmen from evicting, attempting to evict, levying distress, trespassing into, encroaching into, asserting ownership, laying claim or interfering with the Plaintiff's quiet use, possession, occupation and enjoyment of parcel KAJIADO/KAPUTIEI NORTH/19734.
- 2.A declaration that parcel KAJIADO/KAPUTIEI NORTH/19734 is not and does not lie within parcel KAJIADO/KAPUTIEI NORTH/3587 and that the 1st Defendant had no right to sell the same.
- 3.The District Land Registrar, Kajiado and District Surveyor directed to intervene and correct the error on location of the disputed parcels by amending the RIM (Cadastral Map) to reflect the actual ground occupation within 90 days.
- 4.Costs of the suit awarded to the Plaintiff to be borne by the 1st Defendant.
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court under the Environment and Land Court Act (dispute concerning title, boundaries and sale of registered land)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Charles Nakulo Osallo v Barclays Bank of Kenya Limited & 2 others [2020] KEELC 1325 (KLR)", Case Analysis (2020). ELC Case No. 717 of 2017 (Formerly Machakos ELC No. 380 of 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/1325/eng@2020-09-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.