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ELCPartially AllowedNot stated in the judgment as provided· [2022] KEELC 3251 (KLR)

Gitau v Muruthi (Environment & Land Case 812 of 2013) [2022] KEELC 3251 (KLR)

Environment and Land Court
21 July 2022
5,268 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~21 min to read original · ~4 min brief

The bottom line

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A Kenyan court ruled that whoever pays for a house owns it in equity, even when someone else's name is on the title.

What this practically means

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Executive summary

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This first-instance judgment of the Environment and Land Court at Nairobi, delivered by L. Komingoi J on 21st July 2022, concerned Flat No.G on LR No.25980 Madaraka Estate. The Plaintiff, brother-in-law to the Defendant, sued for a permanent injunction, declarations of constructive and resulting trust, and specific performance compelling transfer of the lease to him. The Defendant, the registered tenant and later lessee, counterclaimed for eviction and rent arrears, contending that sums paid by the Plaintiff were a loan and that no sale agreement existed. The court framed four issues, centred on whether the Defendant held the property in trust for the Plaintiff. Relying on the Defendant's email of 6th November 2006 committing to transfer the property upon payment of the purchase balance and refund of her deposit, the court found she had intention to transfer. Applying Twalib Hatayan and Julelabi African Adventure, the court held a trust arose in favour of the person advancing purchase money. The Defendant's plea of duress was rejected as she accepted the refund in part performance and later reiterated her willingness to transfer, making her estopped from resiling. The Plaintiff's claim succeeded in full; the counterclaim was dismissed for want of any purchase monies advanced by the Defendant. Judgment was entered with a permanent injunction, declarations of trust, specific performance within sixty days (failing which execution by the Deputy Registrar), plus costs and interest to the Plaintiff.

Key legal issues

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01

Whether the Defendant held the suit property in trust for the Plaintiff

Holding

Yes. The Defendant had the intention of transferring the property to the Plaintiff as evidenced by her email of 6th November 2006; the Plaintiff paid the balance of the purchase price and refunded the deposit, and as a fiduciary who advanced the purchase money, a resulting/constructive trust arose in his favour.

Reasoning

The court found the Plaintiff was a fiduciary of the Defendant, that he paid the purchase balance of Kshs.1,890,000 to the National Housing Corporation and refunded her deposit of Kshs.210,000. Relying on the Court of Appeal's exposition in Twalib Hatayan and in Julelabi African Adventure, the court held that a trust arises in favour of the person advancing purchase money. The Defendant's 6th November 2006 letter evinced an intention to transfer, and she partly performed by accepting the refund, making estoppel applicable.

p. 9
02

Whether the doctrine of estoppel applied to bar the Defendant from denying the agreement

Holding

Yes. The Defendant committed by letter to transfer the property on conditions the Plaintiff fulfilled; her claim of duress was unsupported, and she accepted the refund in part performance.

Reasoning

The Defendant acted on the Plaintiff's payments, accepted the refund of the deposit, and six years later reiterated her willingness to transfer subject to goodwill payment. The court found she could not invoke duress only belatedly, having done nothing to repudiate the transaction until suit was filed. She was thus estopped from resiling from her representation upon which the Plaintiff acted.

p. 9
03

Whether the Defendant was entitled to the reliefs in her counterclaim (eviction and rent arrears)

Holding

No. The counterclaim was dismissed because the Defendant did not advance any monies towards the purchase of the house and was found to be holding the property in trust for the Plaintiff.

Reasoning

The court found that the Defendant failed to prove her claim that monies paid by the Plaintiff were a loan or that she was entitled to rent. Having been found to be a trustee, she could not evict the beneficiary nor claim mesne profits for the period of the trust. The counterclaim was dismissed in its entirety.

p. 9

Legal principles established

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  • A resulting trust automatically arises in favour of the person who advances the purchase money, whether or not the property is registered in his name
  • A party who makes a representation upon which another party acts to his detriment is estopped from going back on that representation

Court orders

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  1. 1.A permanent injunction restraining the Defendant from selling, transferring and/or registering any change in ownership of Flat No.G situate on 2nd floor of Block MF-8 on LR No.25980 Madaraka Estate to any person or persons
  2. 2.An order/declaration that a constructive trust exists between the Plaintiff and the Defendant by virtue of the agreement entered into by the parties and payments made by the Plaintiff towards purchase of the property
  3. 3.An order/declaration that the registration of the Defendant as owner of Flat G situate on 2nd floor of Block MF-8 on LR No.25980 Madaraka Estate is as a trustee of the Plaintiff
  4. 4.An order of specific performance compelling the Defendant to execute the transfer of lease of Flat No.G in favour of the Plaintiff within sixty (60) days, failing which the transfer be executed by the Deputy Registrar of the High Court of Kenya with an order directing the Chief Land Registrar to register the same
  5. 5.Costs of the suit plus interest

Authorities

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Legislation

  • Land Registration ActSection 25
  • Land Registration ActSection 28
  • Evidence ActSection 120
  • Law of Contract Act (Cap 23, Laws of Kenya)Section 3
  • Trustee ActNot specified

Cases cited (7)

  • LN v SMMM
    [2013] e KLR
  • Rose Naswa Masinde v Lilian Nekesa Simiyu Mukopi
    [2014] e KLR
  • David Ledama Morintat v Mary Christine Kiarie & 2 others
    [2017] e KLR
  • Peter Ndungu Njenga v Sophia Watiri Ndungu
    [2000] e KLR
  • Twalib Hatayan Twalib Hatayan & Another v Said Saggar Ahmed Al-Heidy & Others
    [2015] e KLR
  • Julelabi African Adventure Ltd & Another v Christopher Michael Lockley
    [2017] e KLR
  • Dyer v Dyer
    (1788) 2 Cox Eq, 92
Jurisdiction invoked
Original civil suit (land dispute) before the Environment and Land Court; specific provision not stated

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, "Gitau v Muruthi (Environment & Land Case 812 of 2013) [2022] KEELC 3251 (KLR)", Case Analysis (2022). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3251/eng@2022-07-21

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