[2004] KEHC 1272 (KLR)
The court found that the plaintiffs, having only a contract for sale and not being registered proprietors of L.R. No. 11877, had no proprietary interest in the property. The charge to the 1st defendant was registered before any encumbrance by the plaintiffs, and the law is clear that a contract for sale does not...
Source-derived case information.
- Citation
- [2004] KEHC 1272 (KLR)
- Parties
- Plaintiff: Bowers Malesi Mugalo; Plaintiff: Mispah Nasimiyu Mugalo; Defendant: Kenya Commercial Bank Limited; Defendant: Garam Investments
- Court
- High Court
- Court Station
- High Court at Nairobi (Milimani Commercial Courts)
- Jurisdiction
- Kenya
- Case Number
- Civil Suit 501 of 2004
- Procedural Posture
- Civil Suit / Ruling on Interlocutory Application
- Outcome
- application dismissed with costs to the defendants
- Legal Topics
- Injunctive Relief, Proprietary Interest, Statutory Power of Sale, Caveats, Sale of Mortgaged Property
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Bowers Malesi Mugalo
Plaintiff
Mispah Nasimiyu Mugalo
Plaintiff
Kenya Commercial Bank Limited
Defendant
Garam Investments
Defendant
Procedural Posture
Civil Suit / Ruling on Interlocutory Application
Legal Issues
- 1 Whether the plaintiffs have a proprietary interest in L.R. No. 11877 sufficient to entitle them to an injunction restraining transfer of the property.
- 2 Whether the sale of the property by the 1st defendant should be nullified pending determination of the suit.
- 3 Whether the plaintiffs are entitled to relief other than damages given their status as non-registered proprietors.
Ratio Decidendi
The court found that the plaintiffs, having only a contract for sale and not being registered proprietors of L.R. No. 11877, had no proprietary interest in the property. The charge to the 1st defendant was registered before any encumbrance by the plaintiffs, and the law is clear that a contract for sale does not create an interest in land. The plaintiffs' remedy, if any, is in damages and not by way of injunction to restrain the transfer of the property. The court relied on statutory provisions and binding precedent to conclude that the plaintiffs are strangers to the suit property and cannot challenge the sale or seek to nullify it through interlocutory relief.
Court Disposition
application dismissed with costs to the defendants
Orders
- The plaintiffs' application dated 15th September 2004 is dismissed with costs to the defendants.
Full Case Text
Judgment text and source record
25 paragraphs
REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL DIVISION, MILIMANI
CIVIL SUIT NO. 501 OF 2004
BOWERS MALESI MUGALO …………….………1ST PLAINTIFF
MISPAH NASIMIYU MUGALO ………..……..…...2ND PLAINTIFF
VERSUS
KENYA COMMERCIAL BANK LIMITED…..........1ST DEFENDANT
GARAM INVESTMENTS ……………….....….…2ND DEFENDANT
RULING
The Plaintiffs have four substantive prayers in their chamber summons dated 15th September 2004 but only one is relevant for this ruling.
The relevant prayers seeks “the court do nullify the sale of L.R. No. 11877 which took place on 2 nd September 2004 pending the hearing and determination of this suit.”
The background of this matter is that the Plaintiffs entered into a sale agreement to purchase two acres of the property L.R. No. 11877 in May 1990. The Plaintiffs had previously taken possession of those two acres and had built a house thereof. According to the plaintiffs before that subdivision of the two acres could be undertaken the owner passed away. It is then that the Plaintiffs discovered that the owner had charged the entire property to the first defendant. Indeed it is not disputed that the charge was registered on 7th June 1995. The Plaintiffs were awaiting the dependants to obtain letters of Administration but also registered a caveat on 9th February 2000.
It is in that background that the plaintiffs seek an order to stop the 1st defendant from transferring the property to the person who purchased the same on 2nd September 2004.
The first issue is that the Plaintiff ought to have joined the purchaser into these proceedings because the outcome of the same will affect him or her.
The 1st defendant’s counsel said that Section 23 of the R.T.A. states that title is conclusive evidence of proprietorship and since they are not the registered owners their right is to seek damages and not an injunction.
In its Replying Affidavit the 1st defendant states, “that at the time the first defendant took the charge over the property, there was no encumbrances registered against the title and ….the first defendant is not aware of and certainly did not consent to any subdivision or sale of any part of the property.”
I have noted the 1st defendants reference to Section 54 of T.P.A, which states that a contract of sale of immovable property“does not, of itself, create any interest in or charge on such property .”
I have considered the authorities cited by the 1st defendant and I also wish to refer to the Court of Appeal ruling in Civil Application No. NAI 349 OF 2003 (174/03 UR) VENTURE CAPITAL & CREDIT LTD AND CONSOLIDATED BANK OF KENYA LTD., where it was held as follows: -
“The suit property does not belong to the applicant. The owner of the suit property M/S Komarock View Estate Ltd. is not a party to the suit and has not challenged the intended exercise of statutory power of sale by the bank.So, even if the suit property is sold, the applicant will not loose any proprietary right to the property.”
This quote I think captures the facts of this case, the plaintiffs have no proprietory interest in the suit land which can entitle them to the prayer they seek to restrict the transfer by 1st defendant of that land. They therefore cannot be heard to say that the sale was irregular or that the auctioneers breached their rules. They are strangers in the suit property and I agree the right they may have is the right of damages.
Accordingly the Plaintiff’s application dated 15th September 2004 is dismissed with costs to the defendants.
Dated and delivered this 23rd day of November 2004.
MARY KASANGO
AG JUDGE