https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3690

Standard Chartered Bank Kenya Ltd v Mbiti alias Susan Musangi & 2 others (Environment and Land Appeal E015 of 2025) [2026] KEELC 3690 (KLR) (17 June 2026) (Judgment) Neutral citation: [2026] KEELC 3690 (KLR) Republic of Kenya In the Environment and Land Court at Mombasa Environment and Land Appeal E015 of 2025 JO Olola, J June 17, 2026 Between Standard Chartered Bank Kenya Ltd Appellant and Susan Musangi Mbiti Alias Susan Musangi 1st Respondent Edward Gachogu 2nd Respondent The Land Registrar Kwale Land Registry - Kwale 3rd Respondent Judgment Background 1.This is an Appeal arising from the Judgment of the Hon J. B. Kalo, CM delivered on 19th December 2023 in Mombasa CMELC No. 1615 of 2018. 2.By a Plaint dated 13th August 2018 as amended on 2nd June 2023, Susan Musangi Mbiti alias Susan Musangi Maseki (the 1st Respondent) had sought Judgment jointly and severally against the Standard Chartered Bank Kenya Ltd (the Appellant), Edward Gachogu Muigai (the 2nd Respondent) and The Land Registrar Kwale (the 3rd Respondent) for:a.General damages against the 1st Defendant for breach of contract;b.A declaratory order that the Plaintiff is the bonafide and/or the registered absolute proprietor of Title No. Kwale/Kikoneni/ Bumbani/“A”/19;c.Revocation and/or cancellation of the Title to Plot No. Kwale/Kikoneni/Bumbani/“A”/19 bearing the name of the 2nd Defendant;d.An order directed to the third Defendant for the rectification of the registry records as to reflect the Plaintiff’s name as the absolute proprietor of Title No. Kikoneni/Bumbani/ “A”/19;e.Costs of the suit; andf.Interest on (a) above and (c) at Court rates. 3.The basis for those prayers was the 1st Respondent’s contention that at all material times she was the bonafide owner of 0.765 Ha of the said parcel of land known as Kwale/Kikoneni/Bumbani/“A”/19, and that she had on 24th April 1980 charged the same with the Appellant to secure a loan facility of Kshs 10,000/=. The 1st Respondent averred that in the year 2018 upon conducting a search at the Kwale Land Registry, she discovered that the land had been fraudulently transferred into the 2nd Respondent’s name. 4.It was the 1st Respondent’s case that having cleared her loan obligations she requested for the subject title vide a letter dated 3rd May 2018 and that the Appellant responded on 10th May 2018 confirming that the original title had been discharged and released to her. The 1st Respondent asserted that she had thereafter requested for proof that the title had been released to her to no avail. It was further her case that she did not enter into any agreement or transaction with the 2nd Respondent in regard to the suit property. 5.The 1st Respondent further asserted that the Appellant, the 2nd and 3rd Respondents had illegally, fraudulently and/or through a corrupt scheme colluded in the un-procedural transfer of her title to the 2nd Respondent. 6.In its Statement of Defence dated 3rd September 2018 as amended on 24th May 2023 and further amended on 18th June 2023, the Appellant asserted that the 1st Respondent had indeed obtained a loan facility of Kshs. 10,000/= and that she had settled the same. The Appellant further asserted that on 11th March 1986, it did execute a discharge of charge and released the title to the 1st Respondent. 7.The Appellant further averred that the 1st Respondent had duly executed transfer forms in favour of the 2nd Respondent and that on 7th April 1993, the Kwale Land Control Board gave its consent for the transfer at a consideration of Kshs. 100,000/=. It is the Appellant’s position that it did not transfer the suit property to the 2nd Respondent as it had no further interest thereon. 8.The 2nd and 3rd Respondents did not respond to the suit. 9.Having heard the parties and by the judgment delivered on 19th February 2025 aforesaid, the Learned Chief Magistrate allowed the 1st Respondent’s suit and issued orders against the Appellant as well as the 2nd and 3rd Respondents. 10.Aggrieved by the said determination, the Appellant who was the 1st Defendant in the Lower Court proceedings moved to this Court and lodged a Memorandum of Appeal dated 12th March 2025, urging this Court to set aside the judgment on some eight (8) grounds set out as follows:1.That the Learned Magistrate erred in finding that the Appellant fraudulently discharged the title, and in ignoring evidence of the Green-Card that showed a discharge of charge was duly registered upon payment of the loan facility and that the Appellant had no further interest in the suit land No. Kwale/Kikoneni/Bumbani/“A”/19, and hence arrived at an erroneous decision;2.The Learned Magistrate erred in law and fact in ignoring evidence on record in particular, the application for consent to transfer dated 07th April 1993, the Letter of Consent by Kwale Land Control Board, the Transfer forms and the cancelled title deed for the suit land No. Kwale/Kikoneni/ Bumbani/ “A”/19, which proved that only the 1st, 2nd and 3rd Respondents were directly involved in the transfer process and not the Appellant;3.The Learned Magistrate erred in fact and law in finding that the Appellant fraudulently transferred the suit land to the 2nd Respondent, yet the Appellant never executed any transfer Forms at all, and no evidence of fraud had been proven and hence arrived at an erroneous decision;4.The Learned Magistrate erred in failing to apply the Doctrine of Presumption of Regularity, and in failing to find that the documents at the Land Registry were conclusive, unless there was proof of fraud;5.The Learned Magistrate erred in law and in fact in failing to find that the 3rd Respondent failed to appear to elaborate on the missing Discharge of Charge form registered on 11th March 1986;6.The Learned Magistrate erred in law and in fact in failing to consider the 1st Respondent’s own admission of losing the title deed for the suit land No. Kwale/Kikoneni/Bumbani/“A”/19 and having reported the same as lost or missing and arrived at an erroneous decision;7.The Learned Magistrate erred in law and in fact in awarding the sum of Kshs 900,000/= as general damages, for breach of contract, yet general damages are not awarded in a claim for breach of contract; and8.The Learned Magistrate erred in fact and in law in ignoring the weight of the evidence on record. Analysis and Determination 11.This is a first appeal. It is settled law that the duty of the fist appellate Court is to re-evaluate the evidence which was adduced in the Subordinate Court both on points of law and fact and come up with its own findings and conclusions (see Peter –vs- Sunday Post Limited (1958) EA 424). 12.In Selle & Another –vs- Associated Motor Boat Company Ltd & Others (1968) 1 EA 123, that duty was stated as follows:“... this court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular, this Court is not bound necessarily to follow the trial Judge’s findings of fact if it appears that either he has clearly failed on some point to take account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanour of a witness is inconsistent with the evidence in the case generally. (Abdul Hamed Saif –vs- AL’ Mohamed Sholan (1955), 22 E.A.C.A. 270).” 13.Accordingly, I have carefully perused and considered the Record of Appeal together with the impugned judgment, I have similarly perused and considered the submissions and authorities placed before the Court by the Learned Advocates representing the parties. 14.In her Plaint as amended on 2nd June 2023, the 1st Respondent had sought for general damages against the 1st Defendant for breach of contract. She had sought for a declaration that she is the bona fide registered proprietor of the property known as Kwale/Kikoneni/Bumbani/ “A”/19 and for a revocation or cancellation of the title bearing the name of the 2nd Respondent herein. In addition, the 1st Respondent had prayed for an order directed to the 3rd Respondent to rectify land registry records to reflect her name as the proprietor of the suit property. 15.From the material placed before the Court, there was no dispute that before 7th April 1993, the 1st Respondent was the registered proprietor of the suit property and that on 24th April 1980, she had charged the property to the Appellant to secure a loan facility in the sum of Kshs. 10,000/=. It was also not in dispute that the 1st Respondent had at some point in time settled the loan facility and that the suit property was discharged. The bone of contention was whether the Appellant released the original title for the suit property to the 1st Respondent and the circumstances in which the property came to be registered in the name of the 2nd Respondent. 16.Having considered the issues before the Court, the Learned Trial Magistrate concluded in his brief analysis as follows:“Only the 1st Defendant filed a defence and presented a witness. The case against the 2nd, 3rd and 4th Defendant is found to have been proved based on the uncontroverted evidence by the Plaintiff.As regards the 1st Defendant, it is the Plaintiff’s case that the 1st Defendant did not surrender the title to the land to her after the loan had been fully repaid and the title due for discharge. She later discovered that the title had been transferred into the name of the 2nd Defendant despite the same being in the custody of the 1st Defendant. She pleaded fraud and collusion between the 1st and 2nd Defendants for the loss of the title and the 3rd Defendant for illegally registering the title in the name of the 2nd Defendant.The 1st Defendant called a witness whose testimony amounted to mere denials and speculation. He admitted that he joined the bank long after the transaction and that he was not involved in it. He further admitted that due to passage of time, he did not find any document relating to the transaction. In essence, he expressed his ignorance of the Plaintiff’s claim. The 1st Defendant has therefore failed to controvert the Plaintiff’s evidence that it did not release the title deed to her upon discharge of the same. For failing to release the Plaintiff’s title, the 1st Defendant caused the Plaintiff to suffer damages for which damages are awarded.On the basis of the evidence on record, the Court finds and holds that the Plaintiff has proved her case against the Defendants. The claim for general damages is assessed at Kshs. 900,000/=” 17.From the outset, it was clear to me that the conclusion by the Court that the 1st Respondent had proved her case against the 2nd and 3rd Respondent on the basis that they had not entered appearance or filed any pleadings was rather fallacious. When a Defendant fails to appear, a Court does not automatically rule in the Plaintiff’s favour, for the Plaintiff is still required to prove their case to the required standards. 18.In the matter herein, it was the 1st Respondent’s case that she had charged her property to the Appellant to secure a loan of Kshs. 10,000/= on 24th April 1980. According to the 1st Respondent, having cleared her loan obligations, she requested for the subject title to be handed back to her by a letter dated 3rd May 2018. She told the Court that the Appellant had responded to her by a letter dated 10th May 2018 stating that the original title had been discharged and released to her. The 1st Respondent further told the Court that she requested the Appellant for any proof that they had released the original title to herself but they could not produce any. 19.In addition, the 1st Respondent told the Court that during the same year, she conducted a search at the Kwale Land Registry only to realize that the property had been fraudulently transferred into the 2nd Respondent’s name. On that basis, she accused the Appellant as well as the 2nd and 3rd Respondents of illegally and fraudulently colluding in the irregular transfer of her title to the 2nd Respondent. 20.In response to that position, the Appellant had asserted that the Bank had executed a discharge of charge and relased the title to the 1st Respondent on 11th March 1986. The Appellant further asserted that upon being accused of fraudulently transferring the land, it had sought documents from the Kwale Land Registry and that the same indicated that it was the 1st Respondent who had executed land transfer forms and thereafter transferred the suit land to the 2nd Respondent on 7th April 1993 at a consideration of Kshs. 100,000/=. The Appellant further asserted that it could not transfer the suit property to the 2nd Respondent as it had no further interest in the property. 21.As the Court held in the case of Kinyanjui Kamau –vs- George Kamau (2015) eKLR:“It is trite law that any allegations of fraud must be pleaded and strictly proved. see Ndolo vs Ndolo [2008]1KLR (G & F) 742 wherein the court stated that “….we start by saying that it was the Respondent who was alleging that the will was a forgery and the burden to prove the allegation lay squarely on him. Since the Respondent was making a serious charge of forgery or fraud, the standard of proof required of him was obviously higher than that required in ordinary civil cases, namely; proof upon a balance of probabilities; but the burden of proof on the Respondent was certainly not one beyond a reasonable doubt as in criminal cases...” In case where fraud is alleged it is not enough to simply infer fraud from the facts.” 22.In the matter herein, the 1st Respondent insisted that she did not enter into any transaction with the 2nd Respondent who despite service by substituted service did not enter appearance in the matter. It was however telling that she did not tell the Court when she completed her loan repayments and why it had taken her some 38 years from the date she took the loan to claim for the original title to be returned to her. From her own account statements placed before the Court, it was evident that as at 30th July 1988, her Loan Account had a zero balance and it was evident that she had completed the payments around that time. 23.From a copy of the Green Card for the suit property produced by the Appellant, it was apparent that on 7th April 1993, the said property was transferred to the name of the 2nd Respondent who was issued with a title thereto the same day. That would be some 25 years before the 1st Respondent claims to have discovered that the title had been transferred to the 2nd Respondent. The title was in the 1st Respondent’s name and there was no way the Bank could have transferred the same to the 2nd Respondent. 24.While the Learned Trial Magistrate blamed the Appellant Bank for sending a witness who was not involved in the transaction and whose evidence was termed as “speculation”, the 1st Respondent’s claim was clearly in my view stale and there was no law that required the Appellant to maintain its records for such a long period. 25.As it were, the law favours the vigilant and not those who sleep on their rights. The essence of the statutes of limitation such as the Limitation of Actions Act (Cap 22) is to prescribe strict time limits within which a Claimant must file a law suit or initiate legal proceedings. They ensure legal certainty, encourage the timely enforcement of rights and protect Defendants from defending against stale and outdated claims. 26.In the circumstances herein, I was persuaded that the Learned Trial Magistrate fell in error in coming to the conclusion that the 1st Respondent had proved her case and that she was entitled to recover general or any damages from the Appellant. 27.Accordingly, it is my finding that there is merit in the Appeal. I hereby allow the same, set aside the Judgment delivered in the Lower Court on 19th December 2023 and substitute therewith an order dismissing the 1st Respondent’s suit with costs. 28.As it was the Court that fell in error, each party shall bear their own costs as regards this Appeal. 29.It is so ordered. JUDGMENT DATED, SIGNED AND DELIVERED IN OPEN COURT AND VIRTUALLY AT MOMBASA THIS 17TH DAY OF JUNE, 2026.…………………………..J.O. OLOLAJUDGEIn the presence of:Ms. Firdaus Court Assistant.Mr. Wafula Advocate for the AppellantMr. Apollo Muinde Advocate for the 1st RespondentNo Appearance Advocate for the 2nd Respondent