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ELCPartially AllowedCivil Case No 37 of 2002· [2021] KEELC 2823 (KLR)

Ali Mohamed Ali v Abdulhamid Mohammed Ali Said & 5 others [2021] KEELC 2823 (KLR)

Environment and Land Court of Kenya
10 June 2021
6,059 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Kenyan court cancelled land titles bought through a revoked power of attorney, ruling that a registered revocation binds everyone, including buyers.

What this practically means

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Executive summary

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The plaintiff and the 1st defendant, brothers and co-proprietors of fifteen subdivisions of Plot No. 453/I/MN Section I Mainland North, executed mutual powers of attorney in 1996 to enable either to sell plots and account for proceeds. While the plaintiff was in Yemen, the 1st defendant sold plots using the power of attorney but allegedly kept the proceeds. The plaintiff revoked the power of attorney on 17 September 1997 and registered the revocation on 22 September 1997. He sued the 1st defendant for accounts, sought cancellation of titles of the 2nd and 3rd defendants (purchasers of Plot 9084) and the 4th and 5th defendants (purchasers of Plot 9086) as fraudulently obtained after the revocation, and sought an injunction over Plot 9087 and alternative transfer orders. The court held that the plaintiff failed on accounts because the plaint and evidence never specified the plots sold or the prices, and parties are bound by their pleadings. However, the transfer instruments showed registration in March and July 1998, after the registered revocation. Section 51 of the Registration of Titles Act (repealed) bars the registrar from giving effect to instruments signed under a revoked power, and is self-executing. The Registrar's registration of the transfers was therefore a clear act of fraud. The purchasers failed the bona fide purchaser test, as due diligence at the registry would have revealed the revocation, evidenced by a Registrar's endorsement refusing registration of the Plot 9086 transfer. The court granted rectification of the register, cancelling the 2nd to 5th defendants' registrations over Plots 9084 and 9086 and restoring title to the plaintiff and 1st defendant, with vacant possession within 30 days. Injunction, alternative transfer, and mesne profits were refused for want of pleading and evidence. Costs were awarded to the plaintiff against all defendants jointly and/or severally.

Key legal issues

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01

Effect of registration of revocation of a power of attorney on subsequent transfers

Holding

Once a power of attorney is revoked and the revocation registered, the registrar cannot register any transfer or instrument signed pursuant to that power; Section 51 of the Registration of Titles Act is self-executing and no court order is needed to bar registration

Reasoning

The power of attorney was revoked on 17 September 1997 and the revocation registered on 22 September 1997. Both impugned transfers were registered in 1998, after revocation. The Registrar registered them regardless, in clear breach of Section 51 of the Registration of Titles Act (repealed), and that act of registering instruments based on a revoked power of attorney was itself a clear act of fraud. Due diligence at the registry would have disclosed the revocation to any purchaser.

p. 5
02

Whether the 2nd to 5th defendants are innocent purchasers for value without notice

Holding

They are not bona fide purchasers for value; due diligence would have disclosed the revocation of the power of attorney, and their titles are impeachable for fraud

Reasoning

The defendants produced no title, sale agreement, transfer instrument or proof of payment showing their transactions predated the revocation; the transfers were registered in March and July 1998. A Registrar's endorsement on the transfer of Plot 9086 expressly noted the power of attorney had been revoked. Applying the Samuel Kamere test, due diligence was not carried out, so the innocent purchaser doctrine offers no protection, and under Section 23 of the Registration of Titles Act their titles are challengeable for fraud.

p. 5
03

Whether the plaintiff proved the claim for accounts against the 1st defendant

Holding

No; the plaintiff failed on prayer (a) for want of particulars and evidence

Reasoning

Paragraph 8 of the further amended plaint did not specify the plots allegedly sold for an undisclosed amount, and no evidence was led of sales other than of Plots 9084 and 9086. The court cannot speculate on amounts lost or appoint arbitrary figures. The plaintiff needed to state what was sold, for how much, and then seek accounts on that basis.

p. 3
04

Whether fraud was proved to the required standard against the defendants and the Registrar

Holding

Yes; the transfers were effected after revocation of the power of attorney and the Registrar registered them in breach of Section 51, amounting to fraud

Reasoning

Although counsel for the 2nd and 3rd defendants invoked the strict standard of proof of fraud, the court was persuaded that fraud was duly proved: the transfer of Plot 9084 was dated and registered in March 1998 and that of Plot 9086 registered on 11 March 1998 with the title showing registration on 6 July 1998, all after the registered revocation of 22 September 1997, with evidence of attempts to back-date documents.

p. 5

Legal principles established

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  • After registration of a revocation of a power of attorney, the registrar shall not give effect to any transfer or other instrument signed pursuant to that power; the provision is self-executing and requires no court order
  • Registration of revocation of a power of attorney binds the whole world; any person exercising due diligence would discover the revocation
  • A bona fide purchaser for value must prove valid and legal title, due diligence to determine the lawful owner, and payment of valuable consideration
  • A registered title, though conclusive and indefeasible, is subject to challenge on the ground of fraud or misrepresentation to which the proprietor is a party
  • Parties are bound by their pleadings and a court cannot fill gaps for a litigant or make orders in a vacuum
  • An instrument of transfer registered in the register speaks for itself and overrides inconsistent oral evidence of when a transfer was effected

Court orders

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  1. 1.Rectification of the register of the titles to Plots No. 9084 and 9086 by cancelling the registration of the 2nd and 3rd, and 4th and 5th defendants as proprietors thereof
  2. 2.Title to Plots No. 9084 and 9086 to be restored into the names of the plaintiff and the 1st defendant as the position was before the impugned registrations
  3. 3.The 2nd and 3rd, and 4th and 5th defendants to forthwith vacate and give vacant possession of the two properties to the plaintiff within 30 days from the date of judgment
  4. 4.Costs of the suit awarded to the plaintiff against all defendants jointly and/or severally

Authorities

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Legislation

  • Registration of Titles Act (repealed), Cap 281Section 51
  • Registration of Titles Act (repealed), Cap 281Section 23(1)

Cases cited (3)

  • Benson Wandera Okuku vs Israel Were Wakho
    (2020) eKLR
  • Francis Mburu Kamau vs Methi & Swani Farmers Cooperative Society Limited & 5 Others
    (2019) eKLR
  • Samuel Kamere vs Land Registrar
    (2015) eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over disputes relating to title to land (registered proprietors of subdivisions of Plot No. 453/I/MN Section I Mainland North)

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, "Ali Mohamed Ali v Abdulhamid Mohammed Ali Said & 5 others [2021] KEELC 2823 (KLR)", Case Analysis (2021). Civil Case No 37 of 2002. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/2823/eng@2021-06-10

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