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ELCPartially AllowedAppeal from Bungoma Chief Magistrate's Court ELC Case No. E014 of 2020· [2024] KEELC 1234 (KLR)

Makori v Barasa; Faulu Microfinance Bank Ltd (Third party) (Environment and Land Appeal E017 of 2023) [2024] KEELC 1234 (KLR)

Environment and Land Court
7 March 2024
3,426 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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A Kenyan court upheld the eviction of a former landowner, but scrapped the Kshs. 1.5 million compensation award because it was never properly backed by evidence.

What this practically means

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Executive summary

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This is a first appeal from the judgment of Hon. A. Odawo, Principal Magistrate, delivered on 27th February 2023 in Bungoma Chief Magistrate's Court ELC Case No. E014 of 2020. The respondent, as plaintiff, had sued the appellant, as defendant, seeking eviction, a permanent injunction and mesne profits in respect of land parcel East Bukusu/South Kanduyi/4775, which she purchased at a public auction held on 23rd July 2019 following the appellant's default on a charge with Faulu Micro-Finance Bank Ltd (joined as third party). The trial court entered judgment for the plaintiff, ordering eviction, a permanent injunction, mesne profits of Kshs. 1,500,000/=, costs and interest. The defendant had counter-claimed, alleging that the advertisement was fraudulent, the property undervalued, no auction took place, and that her constitutional right to property under Article 40 was infringed; she sought declarations that the sale and transfer were null and void and rectification of the register. On appeal, E. C. Cherono, ELC Judge, framed four issues. The court found that the respondent held a certificate of title which under Sections 24(a) and 26(1) of the Land Registration Act is prima facie evidence of indefeasible ownership. The appellant's fraud allegations were unsupported by evidence and the court held that fraud must be specifically pleaded and strictly proved to a standard higher than balance of probabilities. Relying on Court of Authority, the court held there is no duty on a purchaser at a duly advertised auction to inquire into the mortgagee's right to sell. However, the award of mesne profits was set aside, the court finding that the rental figures were neither substantiated by expert evidence nor proved as special damages. The appeal was partially allowed: eviction and permanent injunction orders were upheld, mesne profits set aside, and the appellant ordered to pay 80% of the costs.

Key legal issues

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01

Whether the respondent proved ownership of the suit property

Holding

Yes - the respondent produced a certificate of title issued by the Land Registrar, which is prima facie evidence of indefeasible ownership under Sections 24(a) and 26(1) of the Land Registration Act.

Reasoning

The court applied Sections 24(a) and 26(1) of the Land Registration Act, holding that a certificate of title vests absolute ownership and can be challenged only on fraud to which the proprietor is a party, or where the title was acquired illegally, unprocedurally or through a corrupt scheme. The green card confirmed a title issued to the respondent, shifting the burden to the appellant to displace it.

p. 5
02

Whether the respondent obtained the suit property fraudulently

Holding

No - the appellant pleaded fraud but produced no evidence; fraud must be strictly proved to a standard higher than balance of probabilities.

Reasoning

The appellant alleged irregular advertisement, undervaluation and that no public auction took place, but did not produce the impugned advertisement nor prove the alleged sham auction. Applying Kinyanjui Kamau v George Kamau and Ndolo v Ndolo, the court held that allegations of fraud must be pleaded and strictly proved; the tort of fraud cannot be inferred from mere allegations of irregularity.

p. 5
03

Whether the purchaser at a duly advertised auction owes any duty to investigate the mortgagee's right to sell

Holding

No - there is no such duty on a purchaser at a properly advertised auction.

Reasoning

Relying on Abdi Adan Hussein v Attorney General, Patrick Kanyagia and David Katana Ngomba, the court held that a purchaser who participates in an auction that has been duly advertised cannot be said to have engaged in fraud or a corrupt scheme, and the respondent was under no legal obligation to ensure due process was followed prior to the public auction.

p. 6
04

Whether the award of mesne profits of Kshs. 1,500,000/= was justified

Holding

No - although pleaded, the mesne profits were not sufficiently proved since no valuation report or substantiation of the rental figures was produced.

Reasoning

Mesne profits are special damages which must be pleaded and proved. The respondent quoted rent figures (Kshs. 15,000/= for the main house and Kshs. 7,000/= per rental house) but gave no basis for them and produced no expert valuation. Citing Peter Mwangi Mbuthia v Samow Edin Osman and Karanja Mbugua v Marybin Holding Co. Ltd, the court found the award was neither substantiated nor established and set it aside.

p. 7

Legal principles established

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  • A certificate of title is prima facie evidence of absolute and indefeasible ownership, challengeable only on fraud/misrepresentation or where acquired illegally, unprocedurally or through a corrupt scheme (Section 26(1) Land Registration Act).
  • Fraud must be specifically pleaded and strictly proved to a standard higher than balance of probabilities but not beyond reasonable doubt.
  • No duty is cast on an intending purchaser at a duly advertised auction sale to inquire into the rights of the mortgagee to sell.
  • Mesne profits, being special damages, must not only be pleaded but also proved with material demonstrating how the amount claimed was computed.

Court orders

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  1. 1.Appeal allowed only to the extent of setting aside the order awarding Kshs. 1,500,000/= mesne profits
  2. 2.Eviction order against the appellant upheld
  3. 3.Permanent injunction restraining the appellant from entering, occupying or using East Bukusu/ South Kanduyi/4775 upheld
  4. 4.Appellant to pay the respondent 80% of the costs

Authorities

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Legislation

  • Land ActSection 97
  • Land Registration ActSection 24(a)
  • Land Registration ActSection 26(1)
  • Civil Procedure Act (Cap 21, Laws of Kenya)Section 2 (definition of mesne profits); Order 21, Rule 13
  • Auctioneers RulesRule 11(b)(x); Rule 16
  • Constitution of KenyaArticle 40

Cases cited (12)

  • Kenya Ports Authority v Kuston (Kenya) Limited
    (2009) 2 EA 212
  • Elijah Makeri Nyangw'ra v Stephen Mungai Njuguna & Another
    (2013) eKLR
  • Kinyanjui Kamau v George Kamau
    [2015] eKLR
  • Ndolo v Ndolo
    (2008) 1 KLR (G & F) 742
  • Abdi Adan Hussein & 2 others v Attorney General & 2 others
    [2017] eKLR
  • Captain Patrick Kanyagia and Another v Damaris Wangeci and others
    NBI civil appeal no 150 of 1993 (unreported)
  • David Katana Ngomba v Shafi Grewal Kaka
    [2014] eKLR
  • East African Industries v. Trufoods
    [1972] EA 420
  • Giella v. Cassman Brown & Co. Ltd
    [1973] EA 358
  • Nguruman Limited v. Jan Bonde Nielsen & 2 Others
    [2014] eKLR
  • Peter Mwangi Mbuthia & another v Samow Edin Osman
    [2014] eKLR
  • Karanja Mbugua & another v Marybin Holding Co. Ltd
    [2014] eKLR
On appeal from
Bungoma Chief Magistrate's Court (ELC Case No. E014 of 2020)
E014 of 2020
Jurisdiction invoked
First appellate jurisdiction over the trial court's judgment (appeal from the Principal Magistrate's ruling of 27th February 2023)

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, "Makori v Barasa; Faulu Microfinance Bank Ltd (Third party) (Environment and Land Appeal E017 of 2023) [2024] KEELC 1234 (KLR)", Case Analysis (2024). Appeal from Bungoma Chief Magistrate's Court ELC Case No. E014 of 2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/1234/eng@2024-03-07

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