Thomas Schiering v Nereah Michael Said & 2 Others
The bottom line
#Kenya's Environment and Land Court ruled that even registered land titles must yield where the true owner held the property in an implied trust.
What this practically means
#Executive summary
#Key legal issues
#Locus standi of a director/shareholder to sue over property held by a company
The Plaintiff had locus standi because he sued in his individual capacity, not on behalf of the company
The Defendants argued the mother title belonged to Rising Eagle Limited and the Plaintiff, as director, could not sue for wrongs against the company. The court held the Plaintiff was aggrieved as an individual and was not blaming the company; the company was not sued. Applying Article 159(2)(d) of the Constitution and the Supreme Court's guidance in Arvind Shah, the court chose substantive justice over technicality and determined the dispute on the merits.
Existence and type of trust
A trust was implied in favour of the Plaintiff notwithstanding the failure to prove the express trust agreement
The alleged agreement of 3/2/2012 was found to be a forgery based on the court's own observations (foreign drafting, no witnesses) and the defence expert's peer-reviewed report. However, the court found a relationship of trust and confidence beyond business between the parties, no proof of payment of the purchase price by the 1st Defendant, and no proof she legally acquired the Plaintiff's shares. A constructive/resulting trust was implied to prevent unjust enrichment.
Impeachability of registered titles by trust
The 1st Defendant's registered titles to the two remaining plots were impeached as she held them under an overriding trust
Relying on the Supreme Court's Arvind Shah decision, the court held that under Sections 25, 26 and 28 of the Land Registration Act, indefeasibility is subject to overriding interests including constructive trusts. Since the 1st Defendant held the properties on trust and retained the sale proceeds, it would be unconscionable to let her keep the titles; equity demanded impeachment.
The 1st Defendant's counterclaim
The counterclaim was dismissed
The court declined to enter default judgment merely because no defence to counterclaim was filed, holding a counterclaim is an independent suit that must be proved. On the merits, since a trust was found, the counterclaim based on absolute registered ownership could not be sustained. The Plaintiff's occupation was thus not unlawful.
Entitlement to the sale proceeds of the sold plot
The Plaintiff was awarded 88% of the purchase price of the sold plot
The Plaintiff's evidence was that the 1st Defendant was to retain 12% of the sale price and remit 88%. The plot had been sold to the 2nd and 3rd Defendants for Euros 122,000. The court ordered remittance of the sum less 12% at the exchange rate applicable at the time of the sale, within 90 days, without interest.
Legal principles established
#- The fact that an express trust has been pleaded does not prevent the court from implying a constructive or resulting trust on the circumstances of the case
- A counterclaim is an independent suit which must be prosecuted and proved by the counterclaimant even if unopposed
- Peer review of a forensic document examination report enhances its credibility where two contradictory expert reports exist
Court orders
#- 1.The 1st Defendant's counterclaim is dismissed
- 2.A declaration that two of the subdivided plots (Kwale/Kinondo/xxxx and Kwale/Kinondo/xxxx) are held in trust for the Plaintiff by the 1st Defendant
- 3.A declaration that the 1st Defendant's interest in those two plots is extinguished
- 4.An order directing the Land Registrar Kwale to cancel all entries on the green cards/register showing the 1st Defendant as registered owner of the two plots and to register the Plaintiff as owner
- 5.The 1st Defendant to remit to the Plaintiff the purchase price of Euros 122,000 less 12% at the exchange rate applicable at the time of the sale, within 90 days of judgment
- 6.No interest on the monetary award
- 7.Each party to bear its own costs
- Jurisdiction invoked
- Environment and Land Court Act, 2011, Section 13(7)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Thomas Schiering v Nereah Micheal Said [2019] KEELC 791 (KLR)[2019] KEELC 791 (KLR)13 Nov 2019applied
Cite this brief
#Cite this brief
Caselaw, "Thomas Schiering v Nereah Michael Said & 2 Others", Case Analysis (2024). Kwale ELC 144 of 2021 (formerly Mombasa ELC 411 of 2016, consolidated with Mombasa ELC HCCC 442 of 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/3795/eng@2024-04-12
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.