Gachanja v Njuguna (Environment and Land Appeal E016 of 2024) (Environment and Land) [2025] KEELC 5704 (KLR)
The bottom line
#A Kenyan court threw out a land sale over missing bank consent, ruling the buyer only gets his money back—no interest.
What this practically means
#Executive summary
#Key legal issues
#Existence and form of the sale agreement
The agreement of 14th May 2018 was a genuine sale agreement for Naivasha/Town Block 1/516 (Kihoto) complying with section 3(3) of the Law of Contract Act
The agreement identified the parties, the land by title number and acreage, the purchase price of Kshs. 2,500,000 and payment terms, and was written, signed by the parties and attested as required by section 3(3). The Appellant's claim that it was merely a bail-out arrangement was rejected on the documents produced.
Validity of the sale agreement over charged land
The agreement was invalid and unenforceable because the land remained charged to Family Bank, the bank was not a party and no consent was obtained, contrary to the charge instrument and sections 87 Land Act and 59 Land Registration Act
The charge was a registrable interest in the land superior to any purchaser's rights. Clause 6.8 of the charge prohibited dealing with the property without the bank's prior written consent. Neither party obtained consent, so no legal interest could pass and the transfer could not be registered.
Equitable relief and specific performance
Neither party was entitled to specific performance or any equitable remedy as both had unclean hands
Both parties knew the land was charged and about to be auctioned, yet dealt with it behind the bank's back. The maxim ex turpi causa non oritur actio and the clean-hands principle barred equitable relief for a void and unenforceable contract.
Entitlement to 20% contractual interest
The Respondent was not entitled to the 20% interest under clause 8 because the contract was void ab initio; only restitution of the purchase price was available
Interest is a component of damages for breach of a valid contract or a term of a valid contract. With no valid contract there is no breach and no basis for contractual interest. The court substituted the trial judgment with an order for refund of the purchase price only.
Legal principles established
#- A sale of charged property without the chargee's written consent renders the sale agreement invalid and unenforceable, and no transfer can be registered without that consent
- Parties to an illegal or void transaction may not invoke equitable remedies; only restitution is available to restore the parties to their pre-contractual positions
- A first appellate court must reconsider and assess the evidence and reach its own conclusions
Court orders
#- 1.Appeal allowed
- 2.Judgment of the trial court set aside and substituted with an order for refund of the purchase price only to the Respondent
- 3.The award of 20% interest per annum from 14th May 2018 set aside
- 4.The Appellant to have the costs of the Appeal
- On appeal from
- Principal Magistrate's Court, Naivasha (ELC)
- Naivasha CMCELC No. 10 of 2019
- Jurisdiction invoked
- First appellate jurisdiction over a subordinate court decision (Civil Procedure Act, sections 78 as referenced in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Gachanja v Njuguna (Environment and Land Appeal E016 of 2024) (Environment and Land) [2025] KEELC 5704 (KLR)", Case Analysis (2025). Naivasha ELC Appeal (from Naivasha CMCELC No. 10 of 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5704/eng@2025-07-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.