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ELCPartially AllowedNot stated in the extract provided· [2024] KEELC 4771 (KLR)

Sergon v Kigen & 5 others (Environment and Land Case Civil Suit 2242 of 2007) [2024] KEELC 4771 (KLR)

Environment and Land Court
13 June 2024
9,191 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~37 min to read original · ~4 min brief

The bottom line

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A Nairobi court cancelled a land sale because the agreement was backdated and improperly witnessed, but ordered the owner to refund the deposit with interest.

What this practically means

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Executive summary

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The Plaintiff sued seven Defendants seeking a permanent injunction, a declaration that the sale and transfer of Title Number Nairobi/Block 76/545 to the 1st Defendant on 15th December 2006 was null and void, rectification of the register, and damages for breach of contract. He alleged his signature was forged, no valid sale agreement existed under Section 3(3) of the Law of Contract Act, and the 1st Defendant, formerly his advocate, abused a fiduciary relationship. The 1st Defendant counterclaimed for specific performance, rent and outgoings, asserting a duly executed sale at Kshs. 2.7 million with a deposit of Kshs. 1.5 million paid. The court framed three issues: validity of the sale agreement and transfer, whether it was voided, and whether a constructive trust arose. It found on passport evidence and the parties' concessions that the 5th June 2005 date on the agreement and transfer was false and deliberately inserted, and the documents were not attested on the vendor's side, breaching the mandatory requirements of Section 3(3). The forgery allegation failed, as the Plaintiff's own 2007 affidavit and correspondence showed he signed an undated agreement. The agreement and transfer were held voidable, not void. The 1st Defendant defaulted by failing to give an acceptable professional undertaking and never paying the balance; no constructive trust arose since he neither paid in full nor obtained possession. His counterclaim for specific performance failed. The Plaintiff's suit succeeded, but he was ordered to refund the Kshs. 1.5 million deposit with interest at court rates from 31st August 2005. Each party was to bear its own costs given the family relationship of the parties.

Key legal issues

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01

Whether the sale agreement and transfer were lawful and valid under Section 3(3) of the Law of Contract Act

Holding

The Plaintiff did sign the sale agreement and transfer, but not on the dates indicated; the erroneous and backdated dates, and failure of attestation on the vendor's side, render the agreement and transfer voidable rather than void

Reasoning

The court found from passport evidence and the parties' own concessions that the 5th June 2005 date was false and that as at 31st August 2005 the agreement was unsigned. The advocate deliberately left dates blank. The signature forgery allegation failed, as the Plaintiff produced no evidence to disprove the signatures and the expert's testimony was not impeached. However, the backdating and defective attestation violated the mandatory attestation requirements of Section 3(3), making the documents voidable, not void.

p. 12
02

Whether the terms of the sale agreement were performed and whether the agreement was voided

Holding

The 1st Defendant defaulted by failing to give an acceptable professional undertaking and by failing to pay the balance of the purchase price; the impasse was attributable to lack of consensus ad idem from the beginning

Reasoning

The 1st Defendant never paid the balance of Kshs. 1.2 million and never obtained vacant possession. His draft professional undertaking was rejected because the balance was not stated and the 90-day period was too long; he never amended it. Clause 4 and clause 5 of the agreement conflicted on the completion period, making the undertaking critical. Neither party issued completion notices under the LSK Conditions. The court held a court cannot rewrite a contract and parties are bound by its terms.

p. 15
03

Whether a constructive trust subsists in favour of the 1st Defendant

Holding

No constructive trust arose because the 1st Defendant did not pay the purchase price in full and was never granted possession

Reasoning

The court applied the Court of Appeal's definition of a constructive trust as an equitable remedy guarding against unjust enrichment, and distinguished Macharia Mwangi Maina and Willy Kimutai Kitilit, where full payment and possession grounded the trust. On these facts neither condition existed, so the doctrine could not be invoked to sustain the counterclaim.

p. 15
04

The consequential relief owed to the Plaintiff despite the invalidity

Holding

The Plaintiff's suit succeeded, but equity required refund of the deposit with interest at court rates

Reasoning

Having found the transfer null and void, the court reinstated the Plaintiff's title and injunctive relief. However, since the deposit of Kshs. 1.5 million was received to his account, he was ordered to refund it with interest from 31st August 2005 until payment in full, preventing unjust enrichment.

Legal principles established

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  • Contracts for the disposition of an interest in land must be in writing, signed by all parties, and each signature attested by a witness present at signing under Section 3(3) of the Law of Contract Act
  • Failure to date or attest a contract for sale of land results in non-compliance with Section 3(3) of the Law of Contract Act, rendering the agreement voidable
  • A professional undertaking must be clear and unequivocal, and is a binding contract triggered by offer and acceptance
  • A party seeking specific performance must show performance of all essential and considerable terms of the contract
  • A constructive trust does not arise where the purchase price has not been paid in full and possession has not been granted

Court orders

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  1. 1.A permanent injunction restraining the Defendants from evicting, entering upon, selling, transferring, mortgaging, charging, subdividing, leasing out or otherwise interfering with parcel of land known as Nairobi Block 76/545
  2. 2.A declaration that the purported sale and transfer of the Plaintiff's property known as Title Number Nairobi/Block/76/545 to the 1st Defendant on 15th December 2006 is null and void, and be set aside and the register rectified to read the Plaintiff's name
  3. 3.The 5th and 6th Defendants ordered to rectify the register to remove the 1st Defendant's name and reinstate the Plaintiff's name as proprietor of Title Number Nairobi/Block 76/545
  4. 4.The Plaintiff to refund the deposit of Kshs. 1,500,000 to the 1st Defendant
  5. 5.The Plaintiff to pay interest on the refund at court rates from 31st August 2005 until payment in full
  6. 6.Each party to bear his/her own costs

Authorities

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Legislation

  • Law of Contract Act, Cap 23 Laws of KenyaSection 3(3)
  • Evidence Act, Cap 80 Laws of KenyaSection 107(1)
  • Government Proceedings ActSection 13A(1)
  • Law Society of Kenya Conditions, 1989Clause 4

Cases cited (20)

  • Thrift Homes Limited vs Kays Investment Limited
    [2015] eKLR
  • Universal Education Trust Fund vs Monica Chopeta
    [2012] eKLR
  • National Bank of Kenya Ltd vs Pipe Plastic Samkolit (K) Ltd
    (2002) 2 E.A. 503 / [2003] 2 E.A 503
  • Pius Kimaiyo Langat vs Co-operative Bank of Kenya Ltd
    (2017) eKLR
  • Macharia Mwangi Maina & 87 Others vs Davidson Mwangi Kagiri
    [2014] eKLR
  • Vijay Morjaria vs Nansingh Madhusingh Darbar, Hulaship Nansingh Darbar
    Civil Appeal No. 106 of 2000
  • Evans Gundo vs Naftali Sule
    Civil Appeal 234 of 1999
  • Macfoy vs United Africa Co. Limited
    (1961) 3 ALL 1169
  • RTS Flexible Systems Ltd vs Molkeri Alois Miller GmbH & Co. KG (UK Productions)
    [2010] UKSC14
  • Alfred M.O. Michira vs M/S Gesima Power Mills Limited
    Civil Appeal No. 197 of 2001
  • Willy Kimutai Kitilit vs Michael Kibet
    [2018] eKLR
  • Mombasa Bricks and Tiles Limited vs Arvind Shah & 7 Others
    [2017] eKLR
  • Kinyanjui Kamau vs George Kamau Njoroge
    [2015] eKLR
  • Central Kenya Ltd vs Trust Bank Limited & 4 others
    [1996] eKLR
  • Kagina vs Kagina & 2 others
    [2021] KECA 242
  • James Muchangi Gachemi vs Solio Ranch Limited & Chief Land Registrar
    [2017] eKLR
  • Susan K. Baur & Another vs Shashikant Shamji Shah & 2 Others
    [2017] eKLR
  • William Kazungu Karisa vs Cosmas Angore Chanzera
    [2006] eKLR
  • Waruhiu K'owade & Ng'ang'a Advocates vs Mutune Investment Limited
    [2016] eKLR
  • Twalib Hatayan Twalib Hatayan & Another vs Said Saggar Ahmed Al-Heidy & Others
    [2015] eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over title and interest in land (disposition of Title Number Nairobi/Block 76/545)

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, "Sergon v Kigen & 5 others (Environment and Land Case Civil Suit 2242 of 2007) [2024] KEELC 4771 (KLR)", Case Analysis (2024). Not stated in the extract provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4771/eng@2024-06-13

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