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ELCPartially AllowedNot stated in judgment excerpt (Embu ELC suit)· [2026] KEELC 2719 (KLR)

Mwangi & 2 others v Rafiki Microfinance Bank Limited (Environment and Land Case 55 of 2017) [2026] KEELC 2719 (KLR)

Environment and Land Court
7 May 2026
ECE.C Cherono
2,051 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan court voided a bank's charge over family trust land because it was created without court approval or the children's consent, permanently blocking any sale.

What this practically means

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Executive summary

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The Plaintiffs sued seeking a permanent injunction restraining the Defendant bank from selling land parcel Mbeti/Gachuriri/430, a declaration that the charge over it was null and void, time to sell an alternative property (L.R No. Mavoko Town Block 3/4415) to settle the loan, and release of the title upon settlement. The 1st Plaintiff, Christine Mutile Mwangi, had executed a charge over the property in 2014 to secure a revolving LPO/invoice discounting facility of Kshs. 10,000,000 advanced to the 2nd Plaintiff, which she and the 3rd Plaintiff claimed she held in trust for her children pursuant to a confirmed grant in Succession Cause No. 1464 of 2007. The Defendant filed an amended Defence and Counterclaim seeking Kshs. 29,518,650.35 and leave to exercise its statutory power of sale, but failed to adduce any evidence at trial, and its Defence and Counterclaim were dismissed for want of prosecution. The 1st and 3rd Plaintiffs testified, producing the certificate of confirmation of grant and the green card showing the trust. The court, citing Re Eunice Wanjeri Wanjenga, held that a trustee cannot deal with trust property prejudicially to beneficiaries without court sanction, and that the charge, created without such sanction, was irregular and unlawful ab initio. The court declared the charge null and void, granted a permanent injunction restraining interference with the suit property, directed release of the title upon settlement of the loan, and awarded costs to the Plaintiffs, while declining to compel the Defendant to accept alternative security.

Key legal issues

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01

Lawfulness of a charge over trust property created without court sanction or beneficiaries' consent

Holding

The charge was irregular and unlawful ab initio; the Plaintiffs were entitled to a declaration that it was null and void

Reasoning

The certificate of confirmation of grant and the green card showed the 1st Plaintiff held the property in trust for herself and her three children. The law is settled that a trustee cannot deal with trust property prejudicially to beneficiaries without court sanction, citing Re Eunice Wanjeri Wanjenga. No evidence showed consent of the beneficiaries or court sanction was obtained, so the charge was void from inception.

p. 4
02

Whether the Defendant's statutory power of sale had validly arisen

Holding

No; the Defendant adduced no evidence to substantiate default or the claimed outstanding sum, its Defence and Counterclaim having been dismissed for want of prosecution

Reasoning

The Defendant relied on averments of default and an outstanding sum of Kshs. 29,518,650.35 but failed to adduce evidence despite the hearing date being taken by consent. Pleadings are not evidence, so assertions of default and the exercise of statutory power of sale remained unsubstantiated and were incapable of rebutting the Plaintiffs' case.

p. 4

Legal principles established

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  • A trustee cannot deal with trust property in a manner prejudicial to the beneficiaries without the sanction of the court; a charge over trust property created without consent of beneficiaries or court sanction is irregular and unlawful ab initio
  • Pleadings are not evidence; unchallenged allegations by a party who fails to adduce evidence remain unsubstantiated

Court orders

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  1. 1.A declaration that the charge created over land parcel Mbeti/Gachuriri/430 in favour of the Defendant was unlawful, irregular, null and void
  2. 2.A permanent injunction restraining the Defendant, its servants, agents, or employees from selling, auctioning, alienating, transferring, or otherwise interfering with land parcel Mbeti/Gachuriri/430
  3. 3.The Defendant shall release the title to the suit property upon settlement of the loan advanced, should the Plaintiffs conclude the sale of L.R No. Mavoko Town Block 3/4415 or otherwise settle the debt
  4. 4.Costs of the suit awarded to the Plaintiffs

Authorities

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Legislation

  • Trustees Actsections 56 and 59 (as cited in Re Eunice Wanjeri Wanjenga)

Cases cited (3)

  • EMY V MY & Another
    (1983) EKLR
  • FWG V SMK & Others
    Succession Cause No. 594 of 1986
  • Re Eunice Wanjeri Wanjenga
    (2013) eKLR
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over the charged land parcel

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, "Mwangi & 2 others v Rafiki Microfinance Bank Limited (Environment and Land Case 55 of 2017) [2026] KEELC 2719 (KLR)", Case Analysis (2026). Not stated in judgment excerpt (Embu ELC suit). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/2719/eng@2026-05-07

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