Ngonya & another (Suing in their Capacity as Legal Administrators of the Estate of the Late Ngonya wa Gakonya) v Chege & 3 others

was subsequently included as part of the deceased’s estate in P & A Cause No. 1733 of 2009 on the understanding that the 1st respondent would eect transfer to the estate. 2. The appellants further averred that in 2005, the 1st respondent obtained a title deed over the resultant parcel, being Dagoretti/Riruta/1648, but thereafter colluded with the 2nd respondent, Ernest Mwaniki Wangui, and fraudulently transferred the suit property to him. They further pleaded that the 2nd respondent subsequently charged the property to the Co-operative Bank of Kenya Limited (the 3rd respondent) for Kshs.9,100,000. It was also their case that in July 2014, the 2nd respondent threatened eviction of the 1st appellant and, on 14th July 2014, caused persons to set re to semi-permanent structures on the land. 3. The appellants particularised fraud against the respondents, alleging, inter alia, that the 1st respondent failed to transfer the property to the deceased’s estate despite having received full consideration; wrongfully sold and transferred the property to the 2nd respondent notwithstanding prior assurances and subsisting occupation by the appellants; and acted in collusion with the 4th respondent in dealings over the title, including failure to prevent or sustain a caution placed by the appellants. As against the 2nd respondent, they alleged that he purchased the property knowing it belonged to the deceased’s family and was subject to their occupation. As against the 3rd respondent, they alleged that it accepted the property as security despite knowledge, actual or constructive, that it did not belong to the chargor. As against the 4th respondent, they alleged collusion with the 2nd respondent in the registration process and failure to give eect to the appellants’ caution. 4. On that basis, the appellants sought judgment, inter alia, for a permanent injunction restraining the 2nd and 3rd respondents from evicting them, selling, transferring, or further charging LR No. Dagoretti/ Riruta/1648; a declaration that the suit property forms part of the estate of the late Ngonya wa Gakonya; cancellation of the title issued to the 2nd respondent; reversion of the property to the estate of the deceased; and costs of the suit. 5. In its statement of defence dated 27th May 2015, the 3rd respondent opposed the suit and contended that it had undertaken due diligence prior to nancing the purchase of land parcel Dagoretti/Riruta/1648. It stated that, pursuant to a letter of oer dated 16th December 2013 issued to the 2nd respondent and one Hellen Waruguru Kamuyu, trading as Day to Day Fashion Exhibition, it advanced a loan which was secured by a charge registered over the suit property. 6. During the trial, the appellants relied on the sale agreement dated 19th December 1979, under which the deceased had purchased a ¼ acre portion of land from the 1st respondent. They testied that pursuant to the agreement, the deceased took possession of the suit property, where he and his family resided, and that he was later buried thereon. It was also admitted that the appellants had not sought a refund of the purchase price. 7. DW1, William Mugo Maina, testied on behalf of the 3rd respondent that due diligence had been undertaken prior to advancing a loan to the 2nd respondent for the purchase of the suit property. He stated that at the time of the transaction, the property was registered in the name of the 1st respondent. He further testied that the valuation report did not indicate the existence of any grave on the property. He added that the 2nd respondent was in default of Kshs16,000,000. 8. In its judgment, the superior court (K. Bor, J.) found that the appellants’ claim was founded on a sale agreement entered into on 19th December 1979 between the deceased, Ngonya wa Gakonya, and the vendor. Applying section 7 of the Limitation of Actions Act, the Judge held that an action to recover land must be brought within twelve years from the date the right of action accrues. In the court’s https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1918/eng@2026-09-25 2

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view, the deceased’s right to recover the land accrued when the vendor failed to transfer the property pursuant to the sale agreement. Since no action was commenced within twelve years of the execution of the agreement, that right became extinguished by operation of law. Consequently, the court concluded that the suit, having been led approximately thirty-ve years after the agreement was executed, was statute-barred. On that basis, the suit was dismissed, with each party ordered to bear its own costs. 9. Aggrieved by the above nding, the appellants raise the following grounds on appeal - that the learned trial Judge erred in law and fact by: failing to appreciate that the appellants had proved their case on a balance of probabilities as required by law; failing to consider the nature of the evidence presented by the appellants, the submissions and authorities laid before her; failing to consider that the 1st respondent had acted fraudulently when he sold the suit property to 2nd respondent; nding that the 1st respondent had the legal capacity to transfer the suit property to the 2nd respondent having already sold to the deceased; nding that the transfer of the suit property to the 2nd respondent was valid despite the 1st respondent having not adhered to the mandatory provisions of section 28 of the Land Registration Act; holding that the suit was statute barred given that time for the purpose of the calculation of limitation commenced in 2005 when the certicate of title to the suit property was issued; erred by holding that there was no evidence showing that the suit property formed part of the assets of the estate of the late Ngonya was Gakonya despite the suit property being part of the assets listed in the certicate of conrmation of grant; and failing to consider that the 2nd and 3rd respondents failed to carry out the appropriate due diligence before purchasing and charging of the suit property. 10. In opposing the appeal, the 3rd respondent led a notice of grounds arming the decision on the basis that the agreed redress under the agreement for sale dated 19th December 1979 in the event of breach by the vendor was a refund of the purchase price plus damages but not specic performance as sought by the appellant; the agreement dated 19th December 1979 was never completed to convey ownership to the appellants as agreed under clause 5 therein hence the prayers sought in the plaint could not issue; and the appellants’ interest over the suit property, if any, was never registered on the title hence the 3rd respondent’s rights over the property as a bona de chargee for value without notice rank superior to the interest of the appellants, if at all. 11. The appeal came up for hearing on 20th January 2026. Learned counsel, Mr. Kiplangat, appeared for the 3rd respondent. There was no appearance on behalf of the appellants. Upon consideration of the circumstances, it was directed that the appeal be determined on the basis of the written submissions already led by the respective parties. 12. The appellants submit that the learned Judge erred in holding that their claim was statute-barred, arguing that limitation did not begin to run from the date of the 1979 sale agreement but only upon interference with their possession and/or discovery of the subsequent transfer of the suit property to the 2nd respondent, and the creation of a charge in favour of the 3rd respondent. They contend that, properly understood, their claim is not conned to enforcement of a contract but arises from the broader eect of the transaction, namely that full payment of the purchase price and entry into possession gave rise to an enforceable equitable or benecial interest in the land, which equity protects notwithstanding absence of registration. In that regard, they rely on Samuel Miki Waweru -vs- Jane Njeri Richu [2007] eKLR to argue that possession under a sale agreement is consensual and not adverse, and on Dina Management Limited -vs- County Government of Mombasa & 5 Others [2023] KESC 30 (KLR) and Margaret Njeri Muiruri -vs- Bank of Baroda (Kenya) Ltd [2014] eKLR to support the proposition that such equitable interests, once crystallised, may bind subsequent purchasers and chargees with notice. They further contend that Clause 7 of the agreement, which provided for refund and damages upon non- completion, reects the contractual framework but did not extinguish the proprietary or equitable interest arising from payment and possession, and that the 1st respondent, https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1918/eng@2026-09-25 3

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having received the full purchase price, held the land subject to a trust which was breached upon subsequent dealings. They maintain that the 2nd respondent and the 3rd respondent were not bona de purchasers or chargees without notice, given the appellants’ asserted open and continuous occupation, which ought to have prompted inquiry. 13. In opposition, the 3rd respondent, Co-operative Bank of Kenya Limited, supported the nding that the suit was time-barred under section 7 of the Limitation of Actions Act, contending that the cause of action properly arose from the 1979 sale agreement and that the suit, led in 2014, was brought well outside the limitation period. Relying on Gathoni -vs Kenya Co- operative Creameries Ltd [1982] KLR, it argued that limitation statutes exist to bar stale claims and that the appellants’ predecessor failed to exercise due diligence in enforcing any rights arising from the transaction. The Bank further contended that, viewed in substance, the appellants’ claim remained contractual in nature, that fraud was not pleaded as an independent basis sucient to invoke section 26 of the Act, and that neither the deceased nor the appellants ever acquired registered title. It also pointed to inconsistencies in the alleged transaction, including discrepancies in parcel identication and questions as to the vendor’s capacity, and disputed the suciency of evidence of occupation to impute notice. The Bank submitted that Clause 7 of the agreement reected the parties’ intention that, in the event of non- completion, the remedy would be refund and compensation rather than transfer, and therefore the relief sought amounted to specic performance, which was an equitable remedy not granted as of right and which was unavailable in light of delay, changed circumstances, and adequacy of damages, as supported by Southgate -vs- Graham [2024] EWHC 1692 (Ch), Patel -vs- Ali [1984] 1 All ER 978, and Benard Nganga Ndirangu -vs- Samuel Wainaina Tiras [2019] eKLR. The Bank denied any notice of adverse interest and maintains that it conducted due diligence and acted as a bona de chargee for value. 14. As this is a rst appeal, this Court is under a duty to re- evaluate, re-analyse, and re-assess the evidence on record and draw its own independent conclusions, while bearing in mind that it did not have the advantage of seeing and hearing the witnesses testify. See Selle -vs Associated Motor Boat Co. Ltd [1968] EA 123 and Peters -vs- Sunday Post Ltd [1958] EA 424. 15. The dispute arises from a sale agreement dated 19th December 1979 relating to a portion of land to be excised from LR No. Dagoretti/Riruta/944. It is not in dispute that the deceased purchaser was placed in possession of the suit property pursuant to the agreement and remained in occupation, where he developed the land and lived with his family. The agreement did not stipulate a completion date. Clause 5 provided that upon the vendor obtaining title, the parties would jointly apply for transfer. Clause 7 expressly provided that in the event of failure or refusal to transfer upon acquisition of title, the vendor would refund Kshs.30,000 together with 10% damages and the value of improvements. No transfer was ever eected in favour of the deceased or his estate, and the present suit was led in 2014. 16. The superior court dismissed the suit on the basis that it was statute-barred under section 7 of the Limitation of Actions Act. The issue before this Court is whether that nding was correct. 17. It is settled law that limitation under section 7 is substantive and extinguishes the right of action, not merely the remedy, as stated in Iga -vs- Makerere University [1972] EA 65 and rearmed in Gathoni vs- Kenya Co-operative Creameries Ltd [1982] KLR. An action to recover land must be brought within twelve years from accrual of the cause of action. 18. Where, as here, a land sale agreement contains no completion date, time begins to run once there is failure or refusal to complete within a reasonable time after the vendor is in a position to transfer. This Court in Githu -vs- Ndeete [1984] KLR and Kariuki -vs- Kariuki [1983] KLR emphasised that limitation begins when the claimant’s right to enforce is triggered and is not dependent on subsequent dealings with the land. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1918/eng@2026-09-25 4

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19. In the present case, Clause 5 tied completion to the vendor obtaining title, while Clause 7 anticipated non-performance and provided an agreed contractual remedy of refund, damages, and compensation for improvements. Properly construed, the agreement did not create an open-ended proprietary right capable of subsisting indenitely; rather, it provided a contractual framework whose breach gave rise to an immediate cause of action upon failure to transfer after title was obtained and transfer became possible. At that point, the deceased was entitled to enforce his rights, and time began to run. The evidence was that by 2005 the 1st respondent had refused to transfer title to the deceased. It is clear that breach occurred long before the institution of suit in 2014. The twelve-year limitation period under section 7 had therefore long expired. The learned Judge correctly held that the claim was statute- barred. 20. The appellants invoked fraud, equitable interest arising from payment of the purchase price, and long possession. Although the superior court did not substantially pronounce itself on these issues, it is necessary to restate the governing principles. Fraud, where relied upon to displace limitation under section 26 of the Limitation of Actions Act, must be specically pleaded and strictly proved, as held in R.G. Patel -vs- Lalji Makanji [1957] EA 314. General allegations are insucient. In this case, the pleaded fraud was not established by evidence capable of meeting that threshold, nor was any clear basis laid for postponement of time under section 26. 21. As to equity, while payment of purchase price and possession may in appropriate circumstances found an equitable claim or trust, such doctrines cannot be used to circumvent statutory limitation. This Court in Samuel Miki Waweru -vs- Jane Njeri Richu [2007] eKLR held that possession under a sale agreement is permissive and does not, by itself, confer an overriding interest capable of defeating registered title. Further, as rearmed in Iga -vs- Makerere University (supra), once a claim is extinguished by limitation, there remains no enforceable right upon which equity can operate. 22. Accordingly, even if any equitable interest arose at some point, it was extinguished once the statutory limitation period lapsed. 23. With respect to the subsequent transfer and charge, there is no sucient evidential basis to displace the protection aorded to a registered proprietor and a chargee for value without notice. In the absence of proof of fraud or knowledge of any unregistered interest, the 3rd respondent was entitled to the protection accorded by the register and settled principles governing secured lending. 24. In the result, the Court nds no error in the conclusion of the superior court that the appellants’ claim was statute-barred. Once that nding is upheld, the substratum of the appeal collapses. 25. Accordingly, the appeal is dismissed with costs to the 3rd respondent. DATED AND DELIVERED AT NAIROBI THIS 25TH DAY OF SEPTEMBER, 2026. P. NYAMWEYA ................................ JUDGE OF APPEAL A. O. MUCHELULE ................................ JUDGE OF APPEAL W. KORIR ................................ https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1918/eng@2026-09-25 5

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JUDGE OF APPEAL I certify that this is a true copy of the original. Signed DEPUTY REGISTRAR. https://new.kenyalaw.org/akn/ke/judgment/keca/2026/1918/eng@2026-09-25 6

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