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ELCAllowedNyahururu ELC Appeal (appeal against Nyahururu MCE&L Case No. 249 of 2018)· [2021] KEELC 2181 (KLR)

Malewa Farmers Co-operative Society Ltd v Settlement Fund Trustees & 4 others [2021] KEELC 2181 (KLR)

Environment and Land Court
22 July 2021
4,050 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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A Kenyan court cancelled land titles obtained fraudulently, confirming that a discharge of charge ends a lender's claim and the first lawful allocation of land wins.

What this practically means

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Executive summary

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This is a first appeal to the Environment and Land Court at Naivasha (Y. M. Angima, ELC Judge) from the judgment of S. N. Mwangi (SRM) in Nyahururu MCE&L Case No. 249 of 2018, which dismissed the Appellant's suit seeking recovery of Title No. Nya/Malewa/173. The Appellant pleaded that the Settlement Fund Trustees (SFT) allocated it the suit property in 1969, issued a discharge of charge in 1994, and that the 3rd to 5th Respondents fraudulently obtained registration in collusion with the 1st Respondent. Guided by the Selle and Peters principles on the duty of a first appellate court, the court framed three issues: proof of fraud, proof of the claim generally, and costs. On the first, the court held that although the Respondents' motive of protecting the land from sale may have been noble, they knowingly employed unlawful and fraudulent means to obtain registration as trustees of Munyaka (Gordon) Cattle Dip; the particulars of fraud pleaded were proved. On the second, the court held that SFT, having allocated the land in 1969 and issued a discharge of charge in 1994, had no legal interest left to pass; the subsequent allocation was patently illegal and irregular, and impeachable under Section 26 of the Land Registration Act, 2012 on grounds of both fraud and illegality. Allowing the appeal, the court set aside the trial judgment in its entirety, allowed the Appellant's suit in terms of prayers (a) to (e) of the amended plaint (declaration of ownership, cancellation of the Respondents' title, registration in the Appellant's name and injunction), and awarded the Appellant costs of the appeal against the 3rd to 5th Respondents jointly and severally. Judgment delivered on 22nd July 2021 via Microsoft Teams.

Key legal issues

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01

Proof of fraud in land registration

Holding

Fraud was proved; the 3rd-5th Respondents knowingly employed deceitful means to obtain registration of land they knew belonged to the Appellant

Reasoning

The court re-evaluated the evidence as a first appellate court. It found the Respondents knew the Appellant's claim, having protested its 1992 sale, yet procured registration as trustees of a cattle dip. Though their motives may have been protective, the means were unlawful and the particulars of fraud pleaded were proved on the material on record.

p. 4
02

Indefeasibility of title under Section 26 of the Land Registration Act, 2012

Holding

The Respondents' title was impeachable because it was obtained by fraud and issued illegally and unprocedurally, SFT having no legal interest left to pass

Reasoning

SFT allocated the land to the Appellant in 1969, charged it, and issued a discharge of charge in 1994, extinguishing its interest. Its later allocation to the Respondents was illegal and irregular. Section 26(1) permits challenge on grounds of fraud or acquisition that is illegal, unprocedurally or through a corrupt scheme.

p. 5
03

Duty of a first appellate court

Holding

The first appellate court must re-evaluate the evidence and draw its own conclusions while making allowance for not having seen or heard the witnesses

Reasoning

The court adopted the principles in Selle v Associated Motor Boat Co and Peters v Sunday Post, reconsidering and re-evaluating the entire record before reversing the trial court's findings of fact on fraud and ownership.

p. 3

Legal principles established

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  • A discharge of charge is conclusive evidence that the chargee has no further claim and cannot later re-allocate the land
  • A title acquired illegally, unprocedurally or by fraud is impeachable under Section 26 of the Land Registration Act, 2012
  • Where there is a double allocation of land, the first allotment prevails

Court orders

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  1. 1.The appeal is hereby allowed
  2. 2.The judgment and decree of the trial court dated 3rd July 2019 is set aside in its entirety
  3. 3.The Appellant's suit in Nyahururu MCE&L No. 249 of 2018 is allowed in terms of prayers (a), (b), (c), (d) and (e) of the amended plaint
  4. 4.The Appellant is awarded costs of the appeal to be borne by the 3rd to 5th Respondents jointly and severally

Authorities

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Legislation

  • Registered Land Act (repealed), Cap 300Section 39(1)(c)
  • Land Registration Act, 2012Sections 26 and 26(1)
  • Civil Procedure Act, Cap 21Section 27 (proviso)

Cases cited (10)

  • Selle & Another v Associated Motor Boat Co. Ltd & Others
    [1968] EA 123
  • Peters v Sunday Post Ltd
    [1958] EA 424
  • Watt v Thomas
    [1947] A.C 424
  • Kibiro Wagoro Makumi v Francis Nduati Macharia and Another
    [2018] eKLR
  • Cecilia Nyambura Ndungu v Ol Kalou Farmers Co-operative Society
    [2018] eKLR
  • M’Rinkanya v M’Mbijewe
    [1984] KLR 761
  • M’Ikiara M’Rinkanya & Another v Gilbert Kabeere M’Mbijiwe
    (1982-1988) 1 KAR 196
  • Lilian Waithera Gachuhi v David Shikuku Mzee
    [2005] eKLR
  • Margaret Njeri Wachira v Eliud Waweru Njenga
    [2018] eKLR
  • Hussein Janmohamed & Sons v Twentsche Overseas Trading Co. Ltd
    [1967] EA 287
On appeal from
Senior Resident Magistrate's Court, Nyahururu
Nyahururu MCE&L Case No. 249 of 2018
Jurisdiction invoked
First appellate jurisdiction under the Environment and Land Court Act over appeals from the magistrates' court

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Malewa Farmers Co-operative Society Ltd v Settlement Fund Trustees & 4 others [2021] KEELC 2181 (KLR)", Case Analysis (2021). Nyahururu ELC Appeal (appeal against Nyahururu MCE&L Case No. 249 of 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/2181/eng@2021-07-22

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