Nortis Investments Limited & another v Mary Abondo Achungo & 3 others [2022] KEELC 1781 (KLR)
The bottom line
#Buyers who don't fully pay for Kenyan land, and aren't named in the sale agreement, can lose their claim to the title.
What this practically means
#Executive summary
#Key legal issues
#Whether the certificate of title contained an error
There was no error; the registration of the 2nd plaintiff as nominee of the Achungos was lawful in form but the transfer itself was unlawful for want of contractual basis
The sale agreement between the 1st plaintiff and the Achungos made no provision for the 1st plaintiff to appoint a nominee, and the 2nd plaintiff was not privy to it. The Basil-Achungos agreement permitted re-transfer only to the Achungos or their nominee, and no nomination of the 2nd plaintiff by the Achungos was proved. The words 'as nominee' therefore matched the only lawful route open to Basil, but the registration of the 2nd plaintiff at all was unlawful, not erroneous.
Whether rectification could be compelled from the 1st and 4th defendants
No; the certificate should be cancelled rather than rectified, and neither defendant could be compelled to rectify
Rectification removing the nominee words would confer absolute ownership on a party not privy to the sale contract and would alter the Basil-Achungos agreement. The 1st defendant was not a party to the instrument of re-transfer and the deed of rectification ignored the underlying document. The 4th defendant cannot rectify a title whose defect lies in the conveyancing documents. Anomalies in dates of registration and title issuance also point to cancellation, not rectification.
Whether the agreement of sale was lawfully rescinded
The purported rescission was premature and ineffective because no completion notice was served under condition 4(7) of the Law Society Conditions of Sale
The agreement did not make time of the essence. Completion was due on the seventh day after registration; the balance became payable only on registration in the 1st plaintiff's name, which never occurred. A completion notice giving 21 days was a precondition to rescission; the letter of 18th October 2011 rescinded with immediate effect and could not qualify as a completion notice. However, the court also rejected the plaintiffs' argument that the completed agreement could not be rescinded.
Whether the 1st defendant agreed to sell the suit property to the 2nd and 3rd defendants
Not proved; no agreement or correspondence was produced
No evidence was placed before the court of any agreement between the 1st defendant and the 2nd and 3rd defendants. The property remained registered in the 2nd plaintiff's name with a caveat by the Land Registrar, making the alleged resale improbable. No agreement or correspondence was exhibited.
Legal principles established
#- A transfer of land to a party not privy to the agreement of sale, and not nominated as nominee under any contract, is unlawful rather than merely erroneous
- A court cannot order rectification of a certificate of title in a manner that would confer ownership on a person who acquired it unlawfully, as that would sanction an illegality
- Where a sale agreement is subject to the Law Society Conditions of Sale and time is not of the essence, a vendor must serve a completion notice giving 21 days to complete before rescission
- A sale agreement remains uncompleted and capable of rescission so long as the balance of the purchase price remains unpaid
- A certificate of title cannot be rectified in isolation from the underlying conveyancing documentation that gave rise to it
Court orders
#- 1.The plaintiffs' suit is dismissed with costs to the 1st and 4th defendants
- 2.The Deputy Registrar shall on request return to the plaintiffs' advocates the banker's cheque for Kshs. 600,000/- dated 7th November 2011 forwarded to the court and lying in the file
- Jurisdiction invoked
- Original civil jurisdiction of the High Court/Environment and Land Court in a land suit (Civil Procedure Act, Chapter 21)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nortis Investments Limited & another v Mary Abondo Achungo & 3 others [2022] KEELC 1781 (KLR)", Case Analysis (2022). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1781/eng@2022-01-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.