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ELCDismissedNot stated in excerpt· [2021] KEELC 792 (KLR)

Key Microfinance Bank Ltd & another v Frankline Bundi Muriithi & 3 others [2021] KEELC 792 (KLR)

Environment and Land Court
24 November 2021
CNC.K. Nzili
1,627 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~7 min to read original · ~4 min brief

The bottom line

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What this practically means

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Executive summary

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The appellants appealed against a trial court ruling of 1 December 2020 which dismissed their preliminary objection dated 28.9.2020 and granted the respondents' application for a temporary injunction restraining sale of L.R No. Abothuguchi/Katheri/4882. The respondents, children of the late Samuel Mureithi Magambo (the registered owner and chargor), sued alleging overriding customary and beneficial rights over the family homestead after the 2nd appellant charged the land to secure a Kshs. 500,000/= loan from the 1st appellant, which fell into arrears and was advertised for auction. The appellants argued the respondents lacked locus standi without letters of administration, disclosed no cause of action, that customary trust cannot be raised against a lender, and that the trial court wrongly allowed submissions on an unpleaded insurance issue. On appeal, and guided by the duty to re-appraise the lower court proceedings, the court held that the trust claim under Section 28 of the Land Registration Act 2012 was a question of fact requiring viva voce evidence and could not be determined on a preliminary objection. The appellants having filed no defence, the trial court was right to direct the matter to full hearing and to preserve the property under the overriding objective. The submissions on the credit life insurance were proper as the policy formed part of the record. The appeal was found to lack merit and was dismissed with costs.

Key legal issues

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01

Locus standi of the respondents to sue without letters of administration

Holding

The trial court was right to allow the matter to proceed to full hearing so the respondents could prove their beneficial/overriding rights; absence of a defence justified preserving the property

Reasoning

The appellants filed no defence or counterclaim denying the pleaded facts. The trust claim raised under Section 28 of the Land Registration Act is a question of fact requiring viva voce evidence, and the court, guided by Sections 1A, 1B of the Civil Procedure Act and Article 159 of the Constitution, sought to preserve the property pending determination of the suit.

p. 2
02

Submissions on the unpleaded issue of credit life insurance

Holding

Not improper; the credit life insurance formed part of the court record via the attached loan offer and the respondents were entitled to submit on it

Reasoning

The replying affidavit sworn by Rebecca Kamau attached the loan offer containing a credit life insurance clause. Since it formed part of the proceedings, the respondents could properly address it. Such a policy crystallises on the death of the insured, and the 1st appellant did not explain what became of the loan protection cover upon the deceased's death.

p. 2
03

Customary trust against a lender

Holding

The appellants' submission that a customary claim can only be sustained against a registered proprietor did not justify disturbing the interlocutory orders; the trust claim required evidence

Reasoning

While the appellants relied on authority that customary trust lies against a registered proprietor and not a lender, the court found the trust question was one of fact to be proved by evidence and could not be resolved on a preliminary objection. With no defence filed, the trial court rightly directed the matter to full hearing.

p. 2

Legal principles established

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  • A trust claim is a question of fact to be proved through evidence and cannot be determined on a preliminary objection
  • Registered land is subject to trusts including customary trust which need not be noted in the register
  • On a first appeal the court must re-assess and re-appraise the lower court proceedings and reach its own findings

Court orders

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  1. 1.The appeal is dismissed with costs

Authorities

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Legislation

  • Land Registration ActSection 28 (and 28(b))
  • Evidence ActSections 107 and 108
  • Civil Procedure RulesOrder 2 rule 15; Order 2 rule 5; Order 40
  • Constitution of KenyaArticle 40; Article 159; Sections 1A & 1B (as cited, in reference to Civil Procedure Act provisions)

Cases cited (12)

  • Isack Kieba M'Inanga –vs- Isaaya Theuri M'Lintari
    [2018] eKLR
  • Mrao Ltd. –vs- First American Bank of Kenya & 2 Others
    [2003] eKLR
  • Paul Kirinya –vs- Delfina Kathiri
    [2019] eKLR
  • Jemutai Tanui –vs- Juliana Jeptepkeny & 5 Others
    [2013] eKLR
  • Elijah Kipng'eno Arap Bii –vs- Kenya Commercial Bank Ltd
    [2001] eKLR
  • Raila Amolo Odinga & Another –vs- IEBC & 2 Others
    [2017] eKLR
  • Alfred Njau & 5 Others –vs- City Council of Nairobi
    [1983] eKLR
  • Ragui –vs- Barclays Bank of Kenya Ltd
    [2002] eKLR 647
  • Mumo –vs- Makau
    (2002) 1EA 170
  • Susan Mumbi Waititu –vs- Mukuru Nduta & 4 Others
    [2007] eKLR
  • Ann N. Parmena –vs- Housing Finance Co. of Kenya Ltd.
    [2015] eKLR
  • Housing Finance Company Ltd. –vs- Mary Wambui Muturi
    [2018] eKLR
On appeal from
Chief Magistrate's Court (trial court)
Not stated
Jurisdiction invoked
First appeal from the lower court; court re-assesses and re-appraises the lower court proceedings

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Key Microfinance Bank Ltd & another v Frankline Bundi Muriithi & 3 others [2021] KEELC 792 (KLR)", Case Analysis (2021). Not stated in excerpt. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/792/eng@2021-11-24

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