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Court of AppealAllowedCivil Appeal No. 106 of 2000

Vijay Morjaria v Nansingh Madhusingh Darbar & another [2000] KECA 223 (KLR)

Court of Appeal of Kenya
1 December 2000
Philip Kiptoo TunoiTunoiLALakhaKEKeiwua
1,060 words in judgment
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The bottom line

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Kenya's Court of Appeal restored a property buyer's title, ruling fraud must be clearly detailed in court papers and low prices don't void voluntary sales.

What this practically means

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Executive summary

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The Court of Appeal at Nairobi (Tunoi, Lakha and Keiwua, JJ.A.) allowed the appellant's appeal against the judgment and decree of Onyango Otieno, J. of 25th February 2000 in Milimani Commercial Court Civil Case No. 277 of 1998, by which the respondents' title challenge had resulted in cancellation of the appellant's title to the suit property. The appellant argued that the re-amended plaint lacked the necessary particulars of fraud and that title could not be cancelled where fraud was neither pleaded nor proved. The court, in the judgment of Tunoi, JA delivered with the agreement of Keiwua, JA, reaffirmed the settled rule that fraud must be specifically pleaded with particulars on the face of the pleading, that fraudulent conduct must be distinctly alleged and distinctly proved, and that fraud may not be left to inference from the facts, following Davy v Garrett. The plaint and re-amended plaint were held defective on their faces, and the trial Judge's failure to strike out the fraud paragraphs prejudiced the appellant by leaving the issues for trial undefined. The court further held that the trial Judge failed to consider PW2's admission that he had convinced his father to sign the sale documents, which confirmed a genuine intention to sell, rendering the transaction valid. On undervaluation, the court adopted the dictum in Printing & Numerical Registering Co. v Sampson that freely and voluntarily entered contracts are held sacred, holding it inimical for courts to limit freedom of contract on unconscionability grounds. The appeal was allowed with costs to the appellant, the orders to be in the terms proposed by Keiwua, JA.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the re-amended plaint disclosed a cause of action in fraud when it did not contain the necessary particulars of fraud specifically pleaded
  2. 2.Whether the High Court was wrong to order cancellation of the appellant's title where fraud had not been pleaded and proved
  3. 3.Whether the learned Judge misdirected himself in failing to consider the evidence of PW2 confirming a genuine intention to sell the suit property
  4. 4.Whether the undervaluation of the suit property rendered the transaction unconscionable and voidable

Key legal issues

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01

Pleading of fraud

Holding

The plaint and re-amended plaint were defective on their faces for failure to specifically plead fraud with particulars; the ground of appeal on this failure had to succeed.

Reasoning

Following Davy v Garrett, the acts alleged to be fraudulent must be set out and stated to have been done fraudulently; fraud cannot be left to be inferred from the facts. The acts attributed to the appellant - interfering with title documents, secretly transferring the property, concealing document contents - were fraudulent acts that should have been distinctly alleged. The trial judge's refusal to strike out the fraud paragraphs left the issues undefined and prejudiced the appellant.

p. 1
02

Validity of the transaction and failure to consider material evidence

Holding

The learned Judge failed to consider PW2's admission that he convinced his father to sign the documents, which confirmed a clear and genuine intention to sell the suit property; had he considered it, he would have found the transaction valid and above board.

Reasoning

PW2, the prime mover of the transaction, admitted advising his father to sign the sale agreement for the suit property. The judgment did not show that the trial Judge considered the effect of this evidence. The appellate court asked whether, had the Judge had regard to it, he could have reached a different conclusion, and held the transaction was valid.

p. 2
03

Undervaluation and unconscionability

Holding

The undervaluation of the property did not render the transaction unconscionable; the respondents knew the value of their property yet accepted the price, and courts should not limit freedom of contract on unconscionability grounds.

Reasoning

The trial Judge found the assigned value 'odd and unlikely' and held the property undervalued on a valuation report. The appellate court reasoned that if the respondents knew the proper value and still accepted Shs.5,000,000/=, it would only be different had they not known the value. Adopting Sir George Jezzel's dictum in Printing & Numerical Registering Co. v Sampson, freely and voluntarily entered contracts are held sacred and enforced.

p. 2

Legal principles established

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  • Fraud must be specifically pleaded and its particulars stated on the face of the pleading; fraudulent conduct must be distinctly alleged and distinctly proved, and may not be left to inference from the facts.
  • Where a pleading contains allegations of fraud without particulars, the offending paragraphs must be struck out; leaving them in prejudices the defendant by leaving the issues for trial undefined.
  • An appellate court will not lightly interfere with a finding of fact by a court of first instance unless the judge drew a wrong inference from the proved facts, misdirected himself on the facts, or failed to take into account some material fact.
  • Courts should not limit freedom of contract on grounds of unconscionability; contracts entered into freely and voluntarily by persons of full age and competent understanding will be enforced.

Court orders

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  1. 1.Appeal allowed
  2. 2.Costs of the appeal to the appellant
  3. 3.Orders of the court to be in the terms proposed by Keiwua, JA in his judgment

The bench

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One judgment of the whole court — no separate or dissenting opinions.

Philip Kiptoo Tunoi
concurring

Wrote the judgment

Tunoi, JA wrote a separate judgment in which he entirely agreed with the judgment of Keiwua, JA, both as to reasoning and conclusions. He found that fraud must be specifically pleaded with particulars on the face of the pleading, that the re-amended plaint was defective for want of such particulars, and that the learned Judge below failed to consider PW2's admission confirming a genuine intention to sell the suit property. He endorsed the sanctity of freely entered contracts and would have allowed the appeal with costs.

I entirely agree with the judgment of Keiwua, J.A. in this appeal. I am in full agreement with it both as to reasoning and conclusions.p. 1
KE
majority

Wrote the judgment

LA
majority
On appeal from
High Court of Kenya at Nairobi
Milimani Commercial Court Civil Case No. 277 of 1998
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court (Court of Appeal Act/Constitutional appellate jurisdiction; the judgment does not state the specific provision)

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

It is well established that fraud must be specifically pleaded and that particulars of the fraud alleged must be stated on the face of the pleading.
p. 1Pleading fraud - particulars required
It is also settled law that fraudulent conduct must be distinctly alleged and as distinctly proved, and it is not allowable to leave fraud to be inferred from the facts.
p. 1Standard of pleading and proof of fraud
An appellate court should not lightly differ from a finding of fact by a court of first instance and as a general rule should not interfere with such a finding unless it can be shown that the judge has drawn a wrong inference from the proved facts, or has misdirected himself on the facts, or has failed to take into account some material fact.
p. 2Appellate interference with findings of fact
It is inimical for courts to limit freedom of contract on the grounds of unconscionability.
p. 2Freedom of contract
In the circumstances, I would allow the appeal with costs.
p. 2Disposition
As Keiwua, J.A. agrees the orders of the court shall be in the terms proposed by him in his judgment.
p. 3Final orders of the court

Issues in the judgment

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material

The judgment as supplied contains only the judgment of Tunoi, JA, which expressly adopts the judgment of Keiwua, JA ('the orders of the court shall be in the terms proposed by him in his judgment'), but Keiwua, JA's judgment itself is not reproduced in the text provided; the precise final orders proposed by Keiwua, JA therefore cannot be quoted verbatim.

minor

No separate judgment or recorded concurrence of Lakha, JA appears in the text, although he is listed in the coram; his position is inferred from the coram and the absence of any dissent.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (19)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Vijay Morjaria v Nansingh Madhusingh Darbar & another [2000] KECA 223 (KLR)", Case Analysis (2000). Civil Appeal No. 106 of 2000. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2000/223/eng@2000-12-01

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