Dorothy Wacera Macharia v Mboi Kamiti Farmers Company Limited & 2 others [2020] KEELC 3626 (KLR)
The bottom line
#A Kenyan court cancelled fraudulently obtained land titles, ruling a company that took full payment held the land in trust for the buyer's family.
What this practically means
#Executive summary
#Key legal issues
#Limitation
The suit is not statute barred because the claim is founded on fraud and the Plaintiff discovered the fraud in 2014 and sued in 2015
Section 26 of the Limitation of Actions Act provides that where a claim is based on fraud, time does not run until discovery or constructive discovery. The Plaintiff testified she discovered the fraudulent registration in 2014 and filed suit in 2015, within time. Although the objection was raised only by the 3rd Defendant, which did not prosecute its defence, the court inquired into it as it touches jurisdiction.
Locus standi
The Plaintiff, named in the confirmed grant to hold the suit land in trust for beneficiaries, has capacity to sue; the objection is res judicata of an earlier ruling
The court held the confirmation of grant clothed the Plaintiff with legal capacity as trustee of the suit land. The same issue had been decided in a ruling of 2/5/19 dismissing a preliminary objection, so the point was in substance res judicata. Further, Mboi-Kamiti was enjoined by consent not set aside or appealed.
Fraud and illegality
Mboi-Kamiti, having sold to Thogo, received full payment and executed transfer documents, held the title in trust and fraudulently conferred a title it did not own on Patrick Gachanja; the derivative titles are nullities impeachable under section 26(1)(b) LRA
The documentary evidence showed Thogo paid Kshs 400,000, the transfer and LCB consent were executed, and Mboi-Kamiti never rescinded or refunded. It therefore had nothing to pass to Gachanja. The court found the individual particulars of fraud as pleaded against each Defendant not tenable due to inelegant drafting, but the illegality falls under section 26(1)(b) of the Land Registration Act. Gachanja passed nothing to the 2nd Defendant.
Bona fide purchaser for value without notice
The 2nd Defendant failed to establish the defence: LCB consent preceded the sale agreement, no executed transfer or official search was produced, stamp duty payment unproven, and visible occupation should have raised suspicion
The court found the 2nd Defendant conducted no due diligence, produced no certificate of search or executed transfer, could not prove payment of the purchase price or stamp duty, and ignored a farmhouse, fence, grave and the Plaintiff's occupation. Without apparent valid title in the vendor and without valuable consideration proved, the bona fide purchaser plea fails.
Legal principles established
#- A seller who has received the full purchase price and executed the transfer holds the title in trust for the purchaser and cannot convey the land to a third party
- One cannot confer title that one does not own; a nullity of title cannot pass a valid derivative title
- Fraud must be specifically pleaded and distinctly proved; it cannot be left to be inferred from facts
- A proprietor relying on the bona fide purchaser defence bears the burden of proving good faith, due diligence and valuable consideration
- A proprietor whose title is under challenge must prove the legality of how the title was acquired, not merely produce the title instrument
Court orders
#- 1.A declaration that the registration in the name of the 1st Defendant and subsequent transfer to the 2nd Defendant was unprocedurally unlawful null and void and of no legal consequence
- 2.The 3rd Defendant is ordered to rectify the title of the suit land by cancelling entries Nos. 4-9 to revert the title to the 1st registered owner Mboi-Kamiti Farmers Limited
- 3.The 1st Defendant is ordered to transfer the suit land to the Plaintiff pursuant to the further amended confirmed grant issued in Nairobi High Court Succession No 2619 of 1998 on 13/5/2014 within 14 days
- 4.In default the Deputy Registrar of the Court is mandated to execute all requisite documents to effect the transfer to the Plaintiff
- 5.The Land Registrar may dispense with the production of the original title in the name of the 2nd Defendant
- 6.General, punitive and exemplary damages declined
- 7.A permanent injunction restraining the Defendants from selling, disposing of, encumbering or otherwise dealing with NGINDA/SAMAR/BLOCK 2/316
- 8.The costs of the suit payable by the 2nd Defendant in favour of the Plaintiff
- Jurisdiction invoked
- Original jurisdiction under the Environment and Land Court Act and Article 162(2) of the Constitution (not expressly cited in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Dorothy Wacera Macharia v Mboi Kamiti Farmers Company Limited & 2 others [2020] KEELC 3626 (KLR)", Case Analysis (2020). Not stated in the judgment text (Murang'a ELC suit filed 16/6/2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3626/eng@2020-01-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.