https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/9056

Otieno alias Evance Chiro v Kottonya alias Beryl Kottonya Omune (Civil Appeal E010 of 2024) [2026] KEHC 9056 (KLR) (23 June 2026) (Judgment) Neutral citation: [2026] KEHC 9056 (KLR) Republic of Kenya In the High Court at Homa Bay Civil Appeal E010 of 2024 JR Karanja, J June 23, 2026 Between Evance Onyango Otieno alias Evance Chiro Appellant and Beryl Kottonya alias Beryl Kottonya Omune Respondent (Being an appeal from the ruling and/or decree of the Principal Magistrates ’s Court at Oyugis delivered by Hon. S.O. Ongeri on 8th March 2024 in Oyugis Commercial Suit No. E003 of 2023) Judgment 1.This appeal emanates from the ruling of the Senior Principal Magistrate’s Court at Oyugis made on 8th March 2024 in Oyugis CMCC No.E003 of 2023 in which the appellant, Evance Onyango Otieno alias Evance Chiro was sued by the respondent, Beryl Kottonya alias Beryl Kottonya Omune for damages and loss arising from breach of trust. In the plaint dated 14th September, 2023, the plaintiff prayed for declaratory, compelling and injunctive orders against the appellant/defendant. Alternatively, the plaintiff prayed for refund by the defendant of US Dollars 66,745.53 respecting motor vehicles Reg. No.KCA 812R Toyota S. Wagon and KCB 242W Toyota S. Wagon 2.Seemingly, the appellant/defendant did not file a statement of defence. Instead, he filed a Notice of Preliminary Objection dated 19th January 2024, praying for the dismissal of the suit with costs for reason that the suit as predicted on the existence of a trust between the plaintiff and defendant was governed by the Trustee Act Cap 167 Laws of Kenya which pursuant to section 2 confers jurisdiction to the High Court, hence the trial court lacked jurisdiction to decide the matter. 3.After due consideration of the objection on the basis of the rival submissions from both sides, the trial court rendered its ruling on 8th March 2024, dismissing the preliminary objection with costs to the plaintiff/respondent.Being aggrieved, the defendant/appellant preferred the present appeal on the basis of the grounds set out in the Memorandum of Appeal dated 11th March 2024, to wit:- 1.The honorable judge (sic) erred in fact and law when interpreting the jurisdiction of court when it comes to matters of trust and Constractive (sic) Trust. 2.The learned judge erred in law and fact by failing to look in totality principles and precedence governing jurisdiction thereby granting himself jurisdiction beyond that which the law permits. 4.The appeal was opposed by the respondent and was canvassed by way of written submissions filed herein by C Obiero & Associates Advocates, on behalf of the appellant and by M/S Mtalaki Law Advocates LLP, on behalf of the respondent.This court having considered the appeal on the basis of the supporting grounds and those in opposition thereto as highlighted and argued in the rival submissions had a duty to reconsider the matter as raised in the trial court and draw its own conclusions. 5.In that regard, the basic issue for determination in the trial court and indeed in this appellate court was whether the trial court had the power or jurisdiction to deal with this matter based on an alleged breach of trust.The issue was raised by way of the impugned preliminary objection which was ruled in favour of the respondent against the appellant thereby provoking this appeal; 6.Basically, a preliminary objection was defined in the famous case of Mukhisa Biscuits Manufacturing Co. Ltd Vs West End Distribution Ltd (1969)EA 696, in the following terms:-“A preliminary objection is in the nature of what used to be a demurer, it raises a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion. The improper raising of point by way of preliminary objection does nothing but unnecessarily increase costs and on occasion confuse the issue”. 7.In that case, the court was in effect discouraging and/or frowning upon the rampant practice of parties raising points which ordinarily should be argued in the normal manner under the guise of preliminary objections which could dispose of a suit without the necessity of a full hearing or trial.In essence, the court emphasized that a preliminary objection must be based on a pure point of law which is argued on the assumption that all the facts pleaded by the other side are correct. 8.It is instructive to note that the trial court record does not contain any statement of defence from the defendant/appellant to show whether or not the facts pleaded by the plaintiff/respondent were correct or admitted. The fact that the appellant filed a notice of preliminary objection rather than a statement of defence implied that the facts as pleaded by the respondent in the plaint were correct. 9.The present dispute arose from those pleaded facts which clearly show that what existed between the appellant/defendant and the respondent/plaintiff was a private and personal arrangement or agreement based on friendship and mutual trust involving remittance of funds to the appellant/defendant by the respondent/plaintiff for purposes of investing and carrying out business for and on behalf of the respondent/plaintiff who was at the material time base in the United States of America. This was akin more to an agency relationship rather than one based on trust in terms of the Trustee Act (Cap 167LOK). 10.Section 2 of the Trustees Act is the interpretation clause for the purposes of the Act. Thus, the word “court”, means the High Court or a judge thereof. Undoubtedly, it was because of that interpretation that the impugned preliminary objection was raised. But the Act relates to trustees. Therefore, the question of jurisdiction would arise in relation to trusts created under the Act i.e those which are readily expressed rather than arising by operation of the law referred to as Constructive Trusts. 11.Section 3(1) and (2) of the Act provides that:“(1)This Act, except where otherwise expressly provided applies to trusts including, so far as this Act applies thereto, executorships and administrationship constituted or created either before or after commencement of this Act. 2.The power conferred by this Act on trustees are in addition to the powers conferred by the instrument; if any, creating the trust, but those powers, unless otherwise stated, apply if and so far only as a contrary intention is not expressed in the instrument if any, creating the Trust and have effect subject to the terms of the instrument”. 12.Whereas an express Trust is intentionally created by a written agreement, a constructive trust is created by the court from the circumstances of the case in order to achieve fairness. Such are circumstances where there is no person appointed as a trustee. Instead, a person holding property, for the benefit of another may be compelled to surrender the property to the intended beneficiary as he would be treated as a trustee. 13.The primary purpose of Constructive Trust is essentially to prevent unjust enrichment or to prevent a person from benefitting at the expense of another.Under Section 2 of the Trustees Act, the expressions “Trust and Trustee” extend to implied and constructive trusts.With regard to constructive trusts, the Court of Appeal in Twalib, Hatayan Twalib Hatayan & another Vs Said Saggar Ahmed Al-Heidy & others [15]eKLR, held as follows:-According to the Black Law Dictionary, 9th Edition; A Trust is defined as:“1.The rights enforceable solely in equity, to the beneficial enforcement of property to which another hold legal title; a property interest held by one person (Trustee) at the request of another (settlor) for the benefit of a third party (beneficiary)”.Under the Trustee Act, “...the expressions “Trust and Trustee” extend to implied and constructive trust and cases where the trustee has a beneficial interest in the trust property.....”. 14.The same court went further to state that:-...Trusts are created either expressly (by the parties) or by operation of law. An express trust arises where the trust property, its purpose and beneficiaries have been clearly identified (see, Halsbury’s Laws of England Vol.16 Butterworts 1976 at para.1452). In this case, we have a definite property and beneficiary.The purpose/intent for which the property was bought remains in dispute. This negates the existence of an express trust herein. In the absence of an express trust, we have trusts created by operation of the law. These fall into two categories; constructive and resulting trust”. ............................................................A Constructive Trust is an equitable remedy imposed by the court against one who has acquired property by wrong doing. (see, Blacks Law Dictionary)(Supra). It arises where the intention of the parties cannot be ascertained. If the circumstances of the case are such as would demand that equity treat the legal owner as a trustee, the law will impose a trust. Constructive trust will thus automatically arise where a person who is already a trustee takes advantage of his position for his own benefit”. 15.Also stated by the court was the following-;As earlier stated, with Constructive Trusts, proof of parties intention is immaterial; for the trust will nonetheless be imputed by the law for the benefit of the settlor. Imposition of a constructive trust is thus meant to guard against unjust enrichment ........ ........ unlike constructive trusts where unknown intentions maybe left unexplored with resulting trusts, court will readily look at the circumstances of the case and presume or infer the transferor’s intentions. Most importantly, the general rule here is that a resulting trust will automatically arise in favour of the person who advances the purchase money. Whether or not the property is registered in his name or that of another is immaterial (see, Snell’s Equity at P.177)”. 16.The Supreme Court in the case of Shah & 7 others Vs Mombasa Bricks & Tiles Ltd & 5 others (2023)KESC106 KLR had the following to say on Constructive Trust-;The Trustee Act defined a “trust and Trustee” as extending to implied and constructive trusts. A Constructive Trust was an equitable instrument which served the purpose of preventing unjust enrichment.Trusts were created either expressly, where the trust property; its purpose and the beneficiaries were clearly stated, or established by the operation of the law. Like in the instant case, where it was not expressly stated, the trust may be established by operation of the law......”.A constructive trust was a right traceable from the doctrines of equity. It arose in connection with the legal title to property when a party conducted himself in a manner to deny the other party beneficial interest in the property acquired. A constructive Trust would thus automatically arise where a person who was already a trustee took advantage of his position for his own benefit”. 17.The facts of this case as deciphered from the respondents pleadings, show that the appellant took advantage of his friendship with the respondent to acquire the subject property and register them in his name as the legal owner using funds solely contributed by the respondent. Such circumstances were ideal for the court to impose a constructive trust as an equitable remedy to prevent the appellant from unjustly enriching himself or taking advantage of his relationship with the respondent of whatever nature to benefit personally at her own expense. In fact, it would appear that the appellant defrauded the respondent of her money by using it for the purpose it was not intended. 18.Be that as it may, the provisions of the Trustee Act as confirmed in the authorities cited hereinabove clearly placed the question of trusts whether express or implied under the jurisdiction of the High Court. Therefore, the impugned preliminary objection was purely on a point of law and well founded.This court must therefore find that the trial magistrate’s court was devoid of jurisdiction to deal with this matter founded on the doctrines of Trusts and where the respondent sought an equitable remedy on the basis of existence of a Constructive Trust. 19.In the circumstances, the trial court ought to have divested itself of the jurisdiction to deal with the matter by sustaining rather than overruling the appellants preliminary objection as it did in the impugned ruling delivered on 8th March 2024, while relying on the decision of Environment and Land Court,, Lucy Njeri Gikonyo Vs Agnes Wanjiru Muregi (2021)eKLR, which involved a customary trust. 20.In sum, the present appeal is merited and is hereby allowed to the extent that the impugned ruling of the trial court be and is hereby set aside and substituted for a ruling upholding the preliminary objection with orders that the entire suit be stuck out and dismissed for want of jurisdiction. The appellant shall have the costs of the suit and the appeal. The respondent shall have the liberty to file the suit afresh before a court of competent jurisdiction.Ordered accordingly. DATED & DELIVERED, THIS 23RD DAY OF JUNE, _2026HON. J.R. KARANJAHJUDGE