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ELCPartially AllowedNot stated in the judgment as provided· [2022] KEELC 2793 (KLR)

Gichui v Thuku & 6 others (Environment & Land Case 228 of 2017) [2022] KEELC 2793 (KLR)

Environment and Land Court
17 May 2022
3,599 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 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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By a plaint dated 21st May 2017, the Plaintiff sued over a loan of Kshs 2,000,000 advanced to the 1st Defendant on 5th January 2013, repayable by transfer of 0.5 acres of Kwale/Diani Beach Block/194, with title to Kwale/Tiwi/1365 (co-owned by the 1st, 2nd and 3rd Defendants) deposited as security. The Plaintiff, still holding the original title, discovered the parcel had been subdivided into Kwale/Tiwi/2718, 2719 and 2720 and transferred to the 4th, 5th and 6th Defendants. He sought inhibition, cancellation of the subdivisions, alternatively a refund with interest, damages and costs. The 5th Defendant counterclaimed as a bona fide purchaser for value, having paid Kshs 2,100,000 in full for Kwale/Tiwi/2719; the 4th and 6th Defendants did not complete their purchases. The court held the agreement showed the full Kshs 2,000,000 was advanced and refused to rewrite the contract, applying National Bank of Kenya v Pipe Plastic Samkolit and Pius Kimaiyo Langat. It found the Plaintiff's claim over Kwale/Tiwi/1365 unfounded because his security was unregistered and the 1st Defendant lacked authority to pledge co-owned land. As the suit land was subject to pending litigation, the contract was frustrated, entitling the Plaintiff to a refund with interest at court rates from 5th January 2013. Applying sections 24(a) and 26(1) of the Land Registration Act and authority on indefeasibility of title, the court held the 5th Defendant a bona fide purchaser for value and declared her the lawful owner of Kwale/Tiwi/2719. Damages were refused for both sides as unproved. The 1st and 2nd Defendants were ordered to pay costs.

Key legal issues

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01

Whether the court could vary the terms of the loan agreement as to the sum advanced and the security

Holding

The agreement is clear that the 1st Defendant received the full Kshs 2,000,000 and the court cannot rewrite the contract

Reasoning

The written agreement produced as an exhibit was undisputed and showed the full sum advanced. The 1st Defendant's claim he received only Kshs 500,000 was rejected; his demeanor showed he was untruthful. Following National Bank of Kenya v Pipe Plastic Samkolit and Pius Kimaiyo Langat v Co-operative Bank, the court cannot rewrite contracts between parties.

p. 4
02

Whether the Plaintiff held a security interest in Title Number Kwale/Tiwi/1365

Holding

The claim over Kwale/Tiwi/1365 was unfounded; any security should have been registered, and the 1st Defendant had no authority to pledge co-owned land

Reasoning

The agreement stipulated repayment via transfer of 0.5 acres of Kwale/Diani Beach Block/194, not Kwale/Tiwi/1365. The Plaintiff's unregistered interest could not bind third parties, and the 1st Defendant, not being sole proprietor, could not validly offer the co-owned parcel as security.

p. 5
03

Whether the contract was frustrated, entitling the Plaintiff to a refund

Holding

The contract was frustrated because the agreed subject land was no longer available for transfer, so the Plaintiff is entitled to a refund of the loan

Reasoning

The 1st Defendant testified the suit land was subject to a pending case, ELC No. 14 of 2014, making transfer impossible. Relying on the doctrine of frustration as set out in Halsbury's Laws and Davis Contractors v Fareham UDC, the court found performance impossible without default of the Plaintiff and ordered a refund with interest from 5th January 2013.

p. 6
04

Whether the 5th Defendant is a bona fide purchaser for value of Kwale/Tiwi/2719

Holding

Yes; her registered title is indefeasible and the counterclaim is proved

Reasoning

Relying on sections 24(a) and 26(1) of the Land Registration Act, Elijah Makeri Nyangw'ra v Stephen Mungai Njuguna and Arthi Highway Developers v West End Butchery, the court held title is protected save for fraud or illegal acquisition. No such impropriety was proved against the 5th Defendant, who purchased for value with due diligence and paid the full purchase price.

p. 7

Legal principles established

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  • Courts cannot rewrite contracts between parties; parties are bound by their terms unless coercion, fraud or undue influence are pleaded and proved
  • Registration of a person as proprietor of land vests absolute ownership in that person under section 24(a) of the Land Registration Act
  • A certificate of title is prima facie evidence of absolute and indefeasible ownership, challengeable only on fraud or misrepresentation, or where acquired illegally, unprocedurally or through a corrupt scheme (section 26(1) Land Registration Act)

Court orders

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  1. 1.An order compelling the 1st and 2nd Defendants to refund the sum extended to them by the Plaintiff being Kshs 2,000,000/= plus interests at court rates with effect from 5th January, 2013
  2. 2.An order declaring that the 5th Defendant is the bona fide, legal and lawful registered owner and proprietor of all that parcel of land known as Title Number Kwale/Tiwi/2719
  3. 3.1st and 2nd Defendants to pay the costs

Authorities

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Legislation

  • Constitution of KenyaArticle 40
  • Land Registration ActSection 24(a)
  • Land Registration ActSection 26(1)
  • Registration of Titles Act (repealed)Section 23(1)
  • Halsbury's Laws of England, Vol. 9(1), 4th EditionParagraph 897

Cases cited (6)

  • National Bank of Kenya Ltd vs Pipe Plastic Samkolit (K) Ltd
    (2002) 2 E.A. 503, (2011) eKLR
  • Pius Kimaiyo Langat vs Co-operative Bank of Kenya Ltd
    (2017) eKLR
  • Charles Mwirigi Miriti vs Thananga Tea Growers Sacco Ltd & another
    (2014) eKLR
  • Davis Contractors LTD -vs- Farehum U.D.C
    (1956) A.C 696
  • Elijah Makeri Nyangw'ra vs Stephen Mungai Njuguna & Another
    (2013) eKLR
  • Arthi Highway Developers Limited vs West End Butchery Limited and Others
    Civil Appeal No. 246 of 2013
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over the land dispute (not expressly stated in the judgment)

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, "Gichui v Thuku & 6 others (Environment & Land Case 228 of 2017) [2022] KEELC 2793 (KLR)", Case Analysis (2022). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/2793/eng@2022-05-17

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