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ELCDismissed· [2021] KEELC 4208 (KLR)

Erick Geke Nyagarama & 2 others v Diamond Property Merchant Ltd & 4 others [2021] KEELC 4208 (KLR)

Environment and Land Court of Kenya
26 February 2021
1,593 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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This ruling of the Environment and Land Court at Machakos dealt with the Plaintiffs' application dated 23rd June 2020 seeking an order that the Registrar, Machakos County place a caveat on land parcel Mavoko Town Block 3/7260, that the 5th Defendant (a bank) be restrained from releasing the title to the 1st to 4th Defendants, and that the title be deposited in court pending determination of the suit. The Plaintiffs, claiming to be purchasers for value who had fully paid the 1st to 4th Defendants and developed the land, alleged the Defendants had used the title to procure a loan from the 5th Defendant. Ex parte orders had been issued on 7th July 2020, which the 5th Defendant sought to set aside, arguing the court lacked jurisdiction because Section 71 of the Land Registration Act vests the caution power in the Land Registrar, that mandatory injunction orders were granted without audience and on speculation, and that the Plaintiffs had a registered charge in favour of the bank to contend with. The court found the Plaintiffs' claim of purchase unsupported by evidence, as no sale agreements were annexed. It held that the power to lodge a caution rests with the Land Registrar under the Land Registration Act, that the Plaintiffs showed no prior application to the Registrar, and that since the property is already encumbered by a registered charge whose interest takes precedence, the court could not compel the chargee to deposit the title. The Plaintiffs' application was dismissed with costs and the 5th Defendant's application dated 28th July 2020 was allowed as prayed.

Key legal issues

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01

Whether the court could direct the Registrar to lodge a caveat/caution on the suit property

Holding

No; the statutory procedure under Section 71 of the Land Registration Act must first be invoked before the Registrar

Reasoning

Section 71 of the Land Registration Act vests the caution power in the Registrar, exercisable in the prescribed form and potentially supported by a statutory declaration. The court held the Plaintiffs bypassed this statutory scheme without showing any prior application to the Registrar, so the court could not be asked to assume a jurisdiction exercisable by the Registrar.

p. 3
02

Whether the Plaintiffs demonstrated a legal or beneficial interest entitling them to relief

Holding

No; the claim of full payment as purchasers was unsupported by any evidence such as sale agreements

Reasoning

The Plaintiffs asserted they had fully paid the purchase price and developed the land, but annexed no sale agreements to their supporting affidavit. On that basis alone their claim to be purchasers for value with an enforceable interest failed, undermining any basis for injunctive or cautionary relief against the Defendants or the chargee bank.

p. 2
03

Whether the court could compel the chargee bank to deposit the original title in court

Holding

No; the property is encumbered by a registered charge and the bank lawfully holds the title as chargee

Reasoning

The suit property is already encumbered by a registered charge in favour of the 5th Defendant, which takes precedence over other entries, and the original title is in the chargee's possession. The court found no legal basis for the drastic order sought directing the bank to surrender or deposit the title document in court.

p. 3
04

Whether the ex-parte orders of 7th July 2020 should be set aside

Holding

Yes; the 5th Defendant's application to set aside those orders was allowed as prayed

Reasoning

The 5th Defendant contended, unchallenged successfully, that the mandatory injunction orders were issued without affording it audience, were based on speculation, and that the Plaintiffs had not met the threshold for a mandatory injunction. The court allowed that application as prayed when dismissing the Plaintiffs' application.

p. 2

Legal principles established

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  • The power to lodge a caution on a title is bestowed on the Land Registrar, is discretionary, and must be exercised after due process
  • Where a special procedure for redress is prescribed by statute, that procedure must be strictly followed (as held in Speaker of the National Assembly v James Njenga Karume)

Court orders

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  1. 1.Dismissal of the Plaintiffs' Application dated 23rd June, 2020 with costs
  2. 2.Allowance of the 5th Defendant's Application dated 28th July, 2020 as prayed

Authorities

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Legislation

  • Land Registration ActSection 71(2), (3) and (4)
  • Land ActSection 71 (as submitted by counsel)

Cases cited (2)

  • Alice Chemutai Too vs Nickson Kipkirui Korir & 2 Others
    [2015] eKLR
  • Speaker of the National Assembly vs. James Njenga Karume
    [1992] eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over land disputes (not expressly cited in the ruling)

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, "Erick Geke Nyagarama & 2 others v Diamond Property Merchant Ltd & 4 others [2021] KEELC 4208 (KLR)", Case Analysis (2021). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/4208/eng@2021-02-26

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