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ELCAllowedMuranga Miscellaneous Application (Chamber Summons) dated March 7, 2022· [2022] KEELC 2805 (KLR)

In re MWG & BGN (Minor) (Environment and Land Miscellaneous Application E005 of 2022) [2022] KEELC 2805 (KLR)

Environment and Land Court
26 May 2022
LGL. Gacheru
1,550 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court allowed a mother to borrow against family trust land, confirming judges can approve mortgages on trust property when it benefits children.

What this practically means

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Executive summary

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The applicants, led by MWG, the registered proprietor of Loc.x/Gakoigo/xxx held in trust for her children BKN, MWN and the minor BGN, applied by Chamber Summons dated March 7, 2022 for consent to charge the suit property so as to secure a loan facility from Equity Bank. The loan was to complete construction of rental houses on the property, 70% complete per a valuation report, to increase family income for the children's benefit. The applicant deponed to a monthly income of Kshs.155,000/= and capacity to service the loan at Kshs.56,883/= monthly, with the property valued above the charge amount so the minor would not be prejudiced. The cause was miscellaneous and undefended, disposed of by written submissions. The applicants relied on sections 17, 48(4) and 56 of the Trustees Act, section 48(4) of the Land Registration Act and Order 37 Rules 1 & 2 of the Civil Procedure Rules, and cited Bennetah Mukimba Wafukho v The Land Registrar, Trans Nzoia. The court noted an earlier Mombasa application in 2021 had been declined on different facts. Satisfied that any improvement on the trust land would benefit the minor and co-beneficiaries, and that the applicants' evidence was uncontroverted yet properly interrogated against the supporting documents, L. GACHERU J allowed the application entirely in terms of prayer 2, granting consent to charge the property and directing the Registrar of Lands to effect the conveyancing documents, with costs in the cause. Judgment delivered virtually at Murang'a on May 26, 2022.

Key legal issues

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01

Whether the court may grant leave to charge trust property for the benefit of beneficiaries including a minor

Holding

Leave granted; charging the property to complete rental houses would benefit the trust beneficiaries

Reasoning

The court found the suit property is trust land held for the applicants' children, one a minor. The loan proceeds would complete rental houses 70% complete, increasing family income for the children's benefit. Sections 17 and 56 of the Trustees Act empower the court to confer on trustees the power to raise money by mortgage where expedient. The deponent's evidence was uncontroverted and corroborated by documents including a valuation report and loan offer, and the charge value was below the property's value so the minor would not be prejudiced.

p. 3

Legal principles established

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  • Where a transaction in the administration of trust property is expedient but the trustees lack the power to effect it, the court may confer the necessary power on such terms as it thinks fit.
  • Section 17 of the Trustees Act empowers trustees to raise money including by mortgage of trust property notwithstanding the trust instrument, except for charitable trusts.

Court orders

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  1. 1.Consent granted to charge Title No. Loc.x/Gakoigo/xxx on behalf of BGN (Minor) and the Registrar of Lands to effect the said conveyancing documents
  2. 2.Costs in the cause

Authorities

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Legislation

  • Trustees Actsections 17, 48(4), 56(1), 56(3)
  • Land Registration Actsection 48(4)
  • Civil Procedure RulesOrder 37 Rules 1 & 2

Cases cited (1)

  • Bennetah Mukimba Wafukho v The Land Registrar, Trans Nzoia & others
    Kitale Misc App No 8 of 2019
Jurisdiction invoked
Sections 17, 48(4) and 56 of the Trustees Act; Order 37 Rules 1 & 2 of the Civil Procedure Rules

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, "In re MWG & BGN (Minor) (Environment and Land Miscellaneous Application E005 of 2022) [2022] KEELC 2805 (KLR)", Case Analysis (2022). Muranga Miscellaneous Application (Chamber Summons) dated March 7, 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/2805/eng@2022-05-26

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