Moorgate Investments Limited v Romsard Limited & 3 others; Chief Land Registrar & 3 others (Interested Parties) (Civil Case 67 of 2016) [2025] KEELC 479 (KLR)
The bottom line
#A Kenyan court cancelled a fraudulent apartment sale, ruling that even innocent buyers lose title protection when property was acquired through fraud.
What this practically means
#Executive summary
#Key legal issues
#Whether the 1st defendant acquired a valid title to the suit apartments as an innocent purchaser for value without notice
No. The 1st defendant's title originated from fraudulent and illegal processes; the Powers of Attorney did not authorise the sale, the corporate resolutions were never filed or effected at the Registrar of Companies, and the purchase monies went to a dummy account. Section 26(1)(b) LRA and Article 40(6) of the Constitution remove innocent purchaser protection from illegally acquired titles.
Tracing the root of the 1st defendant's title, the court found the Powers of Attorney donated by Giancarlo Bottini did not authorise the sale or make the 3rd defendant a director. The Registrar of Companies confirmed the resolutions and CR12 were forgeries never lodged. The Diamond Trust account was a dummy account through which the 3rd defendant withdrew the purchase monies. Due diligence by the 1st defendant was inadequate. The innocent purchaser's remedy is to recover the purchase money from the perpetrators.
Whether Ibrahim Abdi Athman was a director and Margaret Kaptuiya Cheboiwo the company secretary of the plaintiff
No. The Registrar of Companies' records and testimony confirmed Ibrahim Abdi Athman was never a director and Walter Kilonzi was the only company secretary throughout; the changes were never registered.
The Registrar of Companies produced the plaintiff's company file showing the directors as Bottini Matteo and Benter Carolyne Otieno, with Walter Kilonzi filing annual returns. Letters from the Registrar to Anjarwalla & Khanna confirmed the resolutions of 2nd October 2015, form 203A and the CR12 were never filed and the filing receipt was a forgery. The 4th defendant never entered appearance, and a negative inference was drawn that she was not the company secretary.
Whether the defendants' counter-claim should succeed
Dismissed. The counter-claim depended on the validity of the 16th October 2015 transfer, which the court found null and void as a product of fraud.
Having found that the transfer of sub-lease was executed under Powers of Attorney that did not authorise it, based on forged corporate documents, and that the purchase monies were received into a dummy account, the court could not sustain the counterclaim's claims to declarations of lawful ownership, vacant possession, accounts of rents, damages for trespass and an injunction against the plaintiff.
Legal principles established
#- A registered proprietor whose root of title is under challenge must prove the legality of how he acquired the title, beyond merely producing the title instrument
- Indefeasibility of title does not protect titles acquired through fraud, misrepresentation, illegality, unprocedural means or corrupt schemes; section 26(1)(b) of the Land Registration Act as read with Article 40(6) of the Constitution removes protection from such titleholders even where innocent
- A bona fide purchaser must prove, among other elements, that he purchased in good faith, without knowledge or notice of the fraud, for valuable consideration, from a vendor with apparent valid title, and was not party to the fraud
Court orders
#- 1.A declaration that the plaintiff is the lawfully registered proprietor of the leasehold interest in apartments E1, E2, E12, and E18, the staircase accessing apartments E12 and E18, the bank premises and terrace A erected on plot No. 603 title No. LT.41 Folio 60/A File 11222
- 2.A declaration that the 3rd defendant is not and has never been a director or shareholder of the plaintiff and that the transfer of sub-lease dated 16th October 2015 executed by the 2nd and 3rd defendants in favour of the 1st defendant was null and void
- 3.A declaration that the 4th defendant is not and has never been the company secretary of the plaintiff and that all company secretarial documents she prepared in that capacity are null and void and of no legal effect
- 4.A declaration that the registration of the sublease dated 16th October 2015 concerning apartments E1, E2, E12 and E18 was unlawful, null and void and did not divest the plaintiff of its lawful interest
- 5.An order that the 2nd interested party rectifies the register concerning plot No. Portion 603 title No. LT.41 Folio 60/A file 11222 by cancelling all entries about the transfer of the apartments to the 1st defendant and reinstating the plaintiff as registered leasehold proprietor
- 6.A permanent injunction restraining the 1st, 2nd and 3rd defendants from entering, using, occupying, leasing, transferring, charging, selling or interfering with apartments E1, E2, E12 and E18 and the plaintiff's premises on plot No. Portion 603
- 7.The counter-claims by the defendants dismissed with costs; costs of the plaintiff's claim awarded to the plaintiff
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the leasehold interest in plot No. 603 title No. LT.41 Folio 60/A File 11222 (specific enabling provision not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Moorgate Investments Limited v Romsard Limited & 3 others; Chief Land Registrar & 3 others (Interested Parties) (Civil Case 67 of 2016) [2025] KEELC 479 (KLR)", Case Analysis (2025). Civil Case No 67 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/479/eng@2025-02-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.