Eunice Nyambura Irungu v Libey Njoki Munene & 4 others [2018] KEELC 9 (KLR)
The bottom line
#The Environment and Land Court ordered a Thika property returned to the original buyer, cancelling a later transfer made while the dispute was in court.
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 plaintiff in ELC 664 of 2009 is entitled to the completion of the sale transaction over the suit property
- 2.Whether the exercise of the chargee's statutory power of sale by the deceased over the 4th defendant's half share of the suit land was lawful
- 3.Whether the transfer of the suit land by the Administrators to the 5th defendant was lawful or fraudulent
Key legal issues
#Whether both the deceased and the 4th defendant executed the sale agreement dated 25/11/2004
Both executed the agreement; the 4th defendant admitted in evidence that he signed it, and there was no claim of forgery in his evidence-in-chief.
The amended defence of the administrators admitted that both the deceased and the 4th defendant offered the property for sale. The 4th defendant, though pleading forgery, testified that he signed the papers presented to him by Dr Munene and never claimed in his evidence-in-chief that his signature was forged. The court therefore found execution proved.
Whether the plaintiff fulfilled her obligations under the agreement
The plaintiff paid the Kshs.1,000,000/= deposit; her failure to pay the balance was attributable to the vendors' failure to deliver possession.
Execution of the agreement evidenced payment of the deposit, and no evidence disproved the bankers cheque. Clause C entitled the plaintiff to immediate possession; the evidence showed the land had structures and tenants controlled by the deceased through his manager, so it was not open land. Vacant possession was never given, so the vendors, not the plaintiff, were in breach.
Whether the administrators were obliged to honour the 2004 sale agreement
Yes; the administrators stepped into the deceased's shoes and could only properly complete the transaction with the plaintiff.
Clause A of the special conditions did not envisage automatic rescission on default. The caveat registered on 6/10/2005 showed the plaintiff's intent to proceed. The agreement with the 5th defendant came after a valid agreement with the plaintiff, and the administrators could only proceed with the transaction that was proper, namely completion of the 2004 sale.
Whether the exercise of the chargee's statutory power of sale was lawful
No; the sale of the whole parcel was premature, the statutory notice was issued after the transfer, and no account of indebtedness was ever provided, rendering the exercise irregular.
The deceased executed a transfer of the whole land to the 5th defendant on 13/3/2007 to the exclusion of the 4th defendant and before the statutory notice of 14/10/2008. The chargor had demanded a breakdown of the alleged debt which was never supplied, so the notice period could not continue running. The statutory power of sale had not crystallised.
Whether the transfer by the administrators to the 5th defendant was lawful or fraudulent
The transfer was fraudulent and illegal; it was executed pendente lite, founded on misrepresentations, done by private treaty, and involved a beneficiary of the estate as a director of the purchaser.
The deceased misrepresented that the plaintiff had not paid the deposit and had lost interest; the 5th defendant knew of the plaintiff's transaction. The transfer occurred after the suit was filed, invoking lis pendens, and the subdivision was concealed. A beneficiary, Kenneth Kahiga Munene, was a director of the purchaser and never testified to rebut the allegations. Private treaty rather than auction denied the administrators the benefit of doubt.
Legal principles established
#- A court cannot rewrite a contract between the parties; the parties are bound by its terms unless coercion, fraud or undue influence are pleaded and proved
- A purchaser of property pendente lite does so at his own risk and is bound by the judgment in the suit even without notice of it
- Fraud must be distinctly alleged and distinctly proved to a standard above a balance of probabilities
- A chargee who fails to provide a breakdown of the indebtedness demanded during the notice period cannot regularly exercise the statutory power of sale
Court orders
#- 1.A declaration that the transfer dated 22nd December 2009 between the 1st, 2nd and 3rd defendants and the 5th defendant and all consequential entries on the title, including any subdivisions, are null and void
- 2.An order directing the Chief Land Registrar to cancel the entry registering the transfer dated 22nd December 2009 and all consequential entries or subdivisions
- 3.A declaration that the plaintiff has a purchaser's interest in LR 7699/2 pursuant to the agreement dated 25th November 2004
- 4.A declaration that the plaintiff is entitled to vacant possession, to be delivered by the 1st to 5th defendants within 14 days
- 5.An order that the plaintiff shall pay the administrators the balance of purchase price of Kshs.10,000,000/= within 7 days of delivery of possession
- 6.An order that the administrators shall hold such sums in trust for the 4th defendant as he is entitled to
- 7.An order that in default of payment within the stipulated time the agreement dated 25th November 2004 shall be deemed automatically rescinded
- 8.A mandatory injunction directed at the 1st, 2nd and 3rd defendants for specific performance of the agreement dated 25th November 2004 including handing over possession
- 9.A mandatory injunction directed at the 1st, 2nd, 3rd and 4th defendants to execute all necessary completion documents
- 10.A permanent injunction restraining the defendants from disposing of or interfering with LR 7699/2
- 11.An order that the aggregate proceeds of the sale to the plaintiff be shared equally between the 1st, 2nd and 3rd defendants on the one hand and the 4th defendant on the other
- 12.An order that the costs of the suit be met by the 1st, 2nd, 3rd and 5th defendants jointly and severally
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a suit concerning land (Thika Municipality LR 7699/2)
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.
I therefore enter judgment in favour of the plaintiff against the 1st, 2nd 3rd 4th and 5th defendants jointly and severally to the extent stated herein below
A declaration that the transfer dated 22nd December 2009 between 1st, 2nd and 3rd defendants on the one hand and the 5th defendant on the other and all consequential entries made on the title by the Registrar of Titles pursuant to that transfer or any subdivisions made after the transfer are null and void
A declaration that the plaintiff is entitled to vacant possession and the 1st 2nd 3rd 4th and 5th defendants shall give the plaintiff vacant possession of the land situate in Thika Municipality and comprised in Land Reference Number 7699/2 within 14 days hereof
A Court of law cannot re-write a contract between the parties. The parties are bound by the terms of their contract, unless coercion, fraud or undue influence are pleaded and proved.
A party who purchases a property and invests in it while a suit is pending, does so at his own risk notwithstanding the absence of an injunctive order duly registered against the title.
It is common ground that fraud is a serious accusation which procedurally has to be pleaded and proved to a standard above a balance of probabilities but not beyond reasonable doubt.
The purported statutory power of sale had therefore not crystallised.
Issues in the judgment
#Discrepant dates for the sale agreement within the judgment
Judgment signed at Kitale on 8th May 2018 by Mwangi Njoroge J but delivered at Nairobi on 21st May 2018 by E.O. Obaga J
Discrepant date of the transfer to the 5th defendant within the judgment
Typographical error in the heading to Issue B, which asks whether the exercise was 'Lawful or Fraudulent' while the issue framed at paragraph 20 asks only whether it was lawful
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Joshua Kathawe M’thiruaine v Jeremiah Kailemia Mirithu [2018] KEELC 2001 (KLR)[2018] KEELC 2001 (KLR)29 Aug 2018distinguished
Cite this brief
#Cite this brief
Caselaw, "Eunice Nyambura Irungu v Libey Njoki Munene & 4 others [2018] KEELC 9 (KLR)", Case Analysis (2018). Nairobi ELC No. 664 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/9/eng@2018-05-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.