Salome Wambui Wachira v Golden Tea Traders Limited & 4 others [2020] KEELC 3381 (KLR)
The bottom line
#A Kenyan court cancelled a forged bank charge on a Kilifi landowner's property and awarded her Kshs 1 million per year in damages.
What this practically means
#Executive summary
#Key legal issues
#Execution and authenticity of the Charge and guarantee documents
The signatures on the Charge, Guarantee and Deed of Indemnity were forgeries that could not divest the Plaintiff of her interest.
The Plaintiff produced a Swedish passport with no exit or entry stamps between its issue on 3rd June 2014 and her entry on 20th October 2014, corroborating her evidence that she was abroad on 23rd September 2014. The purported introducing director, Ezekiel Besa, was not called to confirm the introduction. The Bank retained a title deed not matching the Plaintiff's original, which she still held, and the ID number differed. The court found the documents forged.
Due diligence by the chargee
Neither the Bank nor its advocates carried out reasonable due diligence before registration.
Despite claiming to have conducted a valuation, no valuation report was produced. The only official search produced by the Bank was dated 23rd October 2014, a month after the charge was registered. The company resolution relied on was dated after registration and referred to Kshs 6,200,000, not Kshs 4,200,000, and made no mention of the Plaintiff. These failures left the Bank unable to prove a valid charge.
Protection of the Plaintiff's registered title
The Plaintiff's title is indefeasible under Section 26 of the Land Registration Act and Article 40 of the Constitution.
As bona fide registered proprietor, the Plaintiff's title could not be defeated by the fraudulent and illegal charge. The Bank was left to pursue the directors of the 1st Defendant whom it alleged guaranteed the facility, the court noting there was an existing remedy against them.
Damages for loss of user
Damages of Kshs 1 million per year were awarded from the date of registration of the charge.
The court accepted that the Plaintiff was restricted from developing her property from the moment the charge was registered on 23rd September 2014 and that several years had elapsed. It considered Kshs 1 million per year sufficient compensation for loss of user.
Legal principles established
#- A registered proprietor's title is protected by Section 26 of the Land Registration Act, 2012 and Article 40 of the Constitution and cannot be defeated by an illegal and fraudulent charge.
- Where a party asserts non-execution of a charge and produces a passport supporting absence from the country, the evidential burden shifts to those asserting she was present and signed.
- A chargee must carry out reasonable due diligence on the suit property before registration of a charge.
Court orders
#- 1.A permanent injunction restraining the Defendants, their servants, employees, and/or agents from exercising any right/interest/benefit purportedly conferred by the Charge document dated 23rd September 2014 against Kilifi/Kijipwa/132
- 2.An order directing the 5th Defendant to cancel the Charge dated 23rd September 2014 registered against Kilifi/Kijipwa/132 and to nullify the same
- 3.A declaration that the purported Charge dated 23rd September 2014 against Kilifi/Kijipwa/132 is fraudulent, illegal, null and void
- 4.Damages for loss of user awarded to the Plaintiff in the sum of Kshs 1 million per year effective 23rd September 2014 until payment in full
- 5.The Plaintiff to have the costs of the suit
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a dispute relating to title to and encumbrances on land (Kilifi/Kijipwa/132); no specific constitutional or statutory provision invoking jurisdiction is cited
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Salome Wambui Wachira v Golden Tea Traders Limited & 4 others [2020] KEELC 3381 (KLR)", Case Analysis (2020). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3381/eng@2020-02-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.