CARLOS SANTOS vs NDAMPER ENTERPRISES & 3 OTHERS [1998] KECA 70 (KLR)
The bottom line
#Kenya's Court of Appeal protected a land buyer from a fraudulent registration but ruled that a losing auction bidder can only sue for damages, not reclaim the property.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the applicant was entitled to a temporary injunction restraining dealings with L.R. No. 13080 Karen pending the intended appeal
- 2.Whether the applicant was entitled to a temporary injunction restraining dealings with L.R. No. 1160/290 pending the intended appeal
- 3.Whether the applicant had any cause of action against the third defendant in respect of L.R. No. 13080
- 4.How the court should treat the fourth defendant's procurement of registration using an unsealed, improperly obtained draft decree
Key legal issues
#Entitlement to interlocutory injunction in respect of L.R. No. 13080
The application fails because the plaintiff made no valid bid at the second auction and has no cause of action against the third defendant purchaser.
The evidence accepted by the trial Judge established that the plaintiff was told his bid would not be accepted because of his behaviour at the previous auction, so he made no valid bid on 9th December 1993. His remedy is only in damages against the party exercising the statutory power of sale under section 69B of the Transfer of Property Act, 1882. The third defendant was registered before the plaintiff filed suit, and the claim for specific performance has no chance of success.
Entitlement to interlocutory injunction in respect of L.R. No. 1160/290
The application succeeds against the first, second and fourth defendants because the sale was in flagrant breach of the chargee's duty of care and the fourth defendant procured registration by deception.
The first defendant admitted rejecting the plaintiff's highest bid, which complied with the stated conditions, merely because the deposit was offered in US dollars, then sold to the fourth defendant at a price far below the reserve price in flagrant breach of the second defendant's duty of care as chargee. The fourth defendant also used an unsealed, unsigned-in-accordance-with-the-rules document to procure registration after the application had been filed and served, in indecent haste to steal a march on the plaintiff.
Validity of a decree not signed and sealed in compliance with Order XX rule 7(2)
A draft decree submitted to the Deputy Registrar without approval of the other parties, signed but not sealed, is not a decree properly issued by the superior court.
Order XX rule 7(2) requires a draft decree to be submitted to the other parties for approval and, if approved, to be signed and sealed by the registrar. The fourth defendant neither submitted the draft to the plaintiff's advocates nor had it sealed, yet presented it to the Department of Lands as a decree and procured registration. The court relied on its earlier decision in Provincial Insurance Company East Africa Limited v Mordekai Mwanga Nandwa condemning such procedural violations.
Legal principles established
#- A party whose bid at an auction is unlawfully rejected, and who holds no valid bid, is confined to damages against the party exercising the statutory power of sale and has no cause of action against the successful purchaser.
- A draft decree that has not been approved by the other parties, signed and sealed in accordance with Order XX rule 7(2) of the Civil Procedure Rules is not a decree properly issued by the court and cannot found registration of title.
- This Court will not condone a party flouting the rules of procedure to steal a march on an opponent; the authority of the courts must be vindicated.
Court orders
#- 1.The application in relation to L.R. No. 13080 is dismissed with costs
- 2.A temporary injunction is issued in terms of prayer 1 of the Notice of Motion dated 16th September, 1998 against the first, second and fourth defendants in relation to L.R. No. 1160/290, to remain in force until the hearing and final determination of the intended appeal or further order
- 3.The Principal Registrar of Titles is ordered not to register any transfer or any other document against the title of Plot L.R. No. 1160/290 until further orders
- 4.Deputy Registrar Njai is directed to investigate the circumstances in which the bogus document was processed in the registry and report back to the Court within seven days
- 5.The costs of the application as between the applicant and the fourth respondent are costs in the intended appeal
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 298 of 1994
- Jurisdiction invoked
- Rule 5(2)(b) of the Court of Appeal Rules (application for interlocutory injunction pending an intended appeal)
Relief refused
#Temporary injunction in respect of L.R. No. 13080 Karen
The plaintiff made no valid bid at the second auction and has no cause of action against the third defendant; his remedy lies in damages and his claim for specific performance has no chance of success
Costs
The application in relation to L.R. No. 13080 is dismissed with costs; the costs of the application as between the applicant and the fourth respondent are costs in the intended appeal.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
For these reasons, the plaintiff's application against the first, second and fourth defendants in relation to L.R. No. 1160/290 succeeds and a temporary injunction is hereby issued in terms of prayer 1 of the Notice of Motion dated 16th September, 1998, to remain in force until the hearing and final determination of the intended appeal or further order.
The Principal Registrar of Titles is hereby ordered not to register any transfer or any other document against the title of Plot L.R. No. 1160/290 until further orders.
His application in relation to L.R. No.13080 accordingly fails and is dismissed with costs.
So it was not a decree properly issued by the superior court, and was at that stage just a worthless piece of paper signed by Deputy Registrar Peter Mugo.
In the fourth defendant's indecent haste to steal a march on the plaintiff, he completely disregarded the mandatory provisions of Order XX rule 7(2) of the Civil Procedure Rules
Issues in the judgment
#The cause title as printed contains garbled/overlapping text for the respondents' names and descriptions (e.g. 'RHOEUSSPIONNGD ENTFINANCE CO. OF KENYA LTD'), and the parcel number appears inconsistently as both 'L.R. No. 1160/290' and 'L.R. No.1060/290' in the body of the judgment.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "CARLOS SANTOS vs NDAMPER ENTERPRISES & 3 OTHERS [1998] KECA 70 (KLR)", Case Analysis (1998). Civil Application No. Nai. 218 of 1998 (UR.88/98). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1998/70/eng@1998-10-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.