MNN v DNK & 2 others [2020] KEELC 2794 (KLR)
The bottom line
#A Kenyan court ruled that paying half the purchase price of land creates a trust protecting your share, even when the title is registered in someone else's name.
What this practically means
#Executive summary
#Key legal issues
#Whether the plaintiff contributed to the purchase of the suit property
The court found she contributed Kshs. 450,000/-, being half of the Kshs. 900,000/- purchase price, borrowed from Barclays Bank and handed to the 1st defendant
The plaintiff applied for the loan on 13th October 2008, it was credited on 21st October 2008 and withdrawn on 31st October 2008, shortly before the sale agreement of 7th November 2008 under which Kshs. 900,000/- was paid in cash. The 1st defendant, unemployed, gave no evidence of the alleged sale of Kitale land or remittance from his daughter to raise the purchase price.
Whether a trust in favour of the plaintiff arose despite registration of the property in the 1st defendant's name
A resulting trust arose in favour of the plaintiff for a half portion of the suit property, and the 1st defendant's subdivision and sale breached that trust
Relying on the proviso to section 28 of the Registered Land Act and resulting trust principles, the court held that advancing purchase money creates a resulting trust notwithstanding registration in another's name. The 1st defendant registered the property in his sole name and sold the subdivisions without the plaintiff's consent, amounting to breach of trust.
Whether the 2nd and 3rd defendants were innocent purchasers without notice
They were not innocent purchasers for value without notice, having been aware of and proceeding despite the plaintiff's objection
The evidence of PW2 and PW3 that the plaintiff objected before the Land Control Board at Lari was uncontroverted, and the 1st defendant admitted the objection in cross-examination. Unnoted trust interests are still enforceable against third parties, and the purchasers appeared before the board on the same day, so the objection could not have escaped them.
Whether the plaintiff was entitled to the reliefs sought
She was granted the declarations and half the proceeds of sale (prayers (a), (b), (c), (d) and (g)) but not an order for transfer of the plots
The plots were registered in the names of the 2nd and 3rd defendants, so the 1st defendant could not transfer them; the plaintiff should have sought cancellation of the transfers. Half the proceeds of sale was held sufficient compensation for the breach of trust.
Legal principles established
#- The rights of a registered proprietor under the land registration statutes are subject to any duty or obligation the proprietor may have as a trustee
- A resulting trust automatically arises in favour of the person who advances purchase money, whether or not the property is registered in his name
- A purchaser of land who proceeds despite a claimant's objection before the Land Control Board does so at their own risk and cannot claim to be an innocent purchaser without notice
Court orders
#- 1.Judgment entered for the plaintiff against the defendants jointly and severally in terms of prayers (a), (b), (c), (d) and (g) of the amended plaint dated 29th April, 2013
- 2.Declarations that the plaintiff contributed to the purchase of the suit property; that registration in the 1st defendant's name did not confer absolute rights; that a portion was held in trust for the plaintiff; and that the sale of the two plots was illegal, null and void ab initio
- 3.The defendants shall pay the plaintiff Kshs. 700,000/- being half the proceeds of sale of Plot No. xxx and Plot No. xxx together with interest at court rates from the date of judgment until payment in full
- 4.The plaintiff shall have the costs of the suit
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the land dispute (no specific provision cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "MNN v DNK & 2 others [2020] KEELC 2794 (KLR)", Case Analysis (2020). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2794/eng@2020-05-05
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.