A search is not enough; a commentary on the Supreme Court of Kenya’s Decision in “Dina Management Limited vs County Government of Mombasa & 5 Others (Petition 8(E010) of 2021) [2023] KESC 30 (KLR) (21 April 2023) (Judgment)”
On 21st April 2021, the Supreme Court of Kenya delivered a judgment that shook legal circles to the core. The thrust of the decision is that when buying land; it does not offer security to a buyer to claim that they did a search. In the event that the seller or any person in the chain of ownership is found to have acquired the title irregularly, every other transaction after that will be a nullity. The court affirmed the decision of the Court of Appeal that protection under the doctrine of innocent purchaser is not available to individuals who unwittingly purchase property that was acquired legally. A title subsequently acquired by the purchaser in such circumstances is a nullity.
The suit pertained a prime property in Mombasa which was alienated and allocated as private property and a freehold title issued to H. E. Daniel Arap Moi, the first registered owner, in 1989. H.E. Arap Moi thereafter sold the property to Bawazir & Co. Ltd who later sold it to the Appellant. The Appellant argued that the allocation in 1989 was proper, whereas the 1st Respondent argued that it was not as the land had been designated as an open space. The Supreme Court in arriving at its decision noted that the title or lease is a product of a process and where the process that was followed prior to issuance of the title did not comply with the law, then such a title cannot be held as indefeasible. The first allocation having been found to have been irregularly obtained, H.E. Arap Moi had no valid legal interest which he could pass to Bawazir & Co. (1993) Ltd, who in turn could pass to the appellant.
When encountered with the question of whether or not one is a bona fide purchaser, the Court of Appeal has in some instances answered in the affirmative where, as a key ingredient, the vendor had apparent valid title at the time of sale. Two Court of Appeal cases accentuate this: Weston Gitonga & 10 others v Peter Rugu Gikanga & another [2017] eKLR and Tarabana Company Limited v Sehmi & 7 others (2021) eKLR.
In other instances, however, the Court of Appeal declined to confer the status of a bona fide purchaser upon individuals with apparently valid titles where the title was not actually legal and valid. This includes the case of Wambui v Mwangi & 3 others (Civil Appeal 465 of 2019) [2021] KECA 144 (KLR) (19 November 2021) (Judgment), and Samuel Kamere v Lands Registrar, Kajiado Civil Appeal No. 28 of 2005 [2015] eKLR where the court stated that “…in order to be considered a bona fide purchaser for value, they must prove; that they acquired a VALID and LEGAL title, secondly, they carried out the necessary due diligence to determine the lawful owner from whom they acquired a legitimate title and thirdly that they paid valuable consideration for the purchase of the suit property…”
The Supreme Court’s decision under consideration settled the impasse at the Court of Appeal as now the requirement is that title must be actually legal and valid at the time of purchase for one to be deemed a bona fide purchaser. Apparent validity is no longer sufficient to confer indefeasibility of title upon an innocent purchaser. The Supreme Court lay emphasis on the need for the “root” of the title to be investigated before a bona fide purchaser’s title can be deemed indefeasible.
Further, mere possession of a seemingly valid title confers no advantage at all to the holder where another person also claiming ownership of the same parcel of land also holds a similar document, as was held in Hubert L. Martin & 2 Others v Margaret J. Kamar & 5 Others (2016) eKLR. The Supreme Court cited with approval the Court of Appeal’s decision in Munyu Maina v Hiram Gathiha Maina Civil Appeal No. 239 of 2009 [2013] eKLR where it held that it is not enough for one to “…dangle the instrument of title as proof of ownership. It is the instrument that is in challenge and therefore the registered proprietor must go beyond the instrument and prove the legality of the title and show that the acquisition was legal, formal and free from any encumbrance including interests which would not be noted in the register.”
“Indefeasibility of title” as a legal concept is universally accepted to be the brainchild of Sir Robert Richard Torrens (1812-1884). Under the Torrens System of Registration of Title, named after its progenitor, there is envisioned a register of titles which confers a title to land that is indefeasible to the individuals whose names appear on the register as proprietors thereof. From its conception, the Torrens system was aimed at doing away with the uncertainty, delay, and high cost of earlier conveyancing systems which relied heavily on the accuracy of a long series of prior deeds, wills, and other documents for the validity of conveyances. The harshest critics of the Supreme Court’s decision under consideration contend that the decision effectively condemns prospective purchasers of land to mandatory costly, tedious and prolonged due diligence excursions.
Security of land transactions and quiet title to land are the bedrock on which the Torrens system was built. Once the government issues an official certificate per Section 26 of the Land Registration Act, subject to the conditions and exceptions therein listed, it is expected that such certificate is indefeasible and imprescriptible. Yet it is now commonplace for several such certificates to be found to exist over attractive parcels of land at any given time. The Supreme Court decision thus underscores that the tedious and costly exercise of undertaking scrupulous due diligence is one’s best hope of securing their title against all others. After all, the buyer has need of a hundred eyes, the seller but one.
Disclaimer: This article was written by KOMM Advocates. It is not intended to be legal advice or relied upon in respect of any specific situation you or an acquaintance may encounter. Additionally, the law changes rapidly and often without much notice so from time to time, an article might not be up to date. This article is thus intended only for information purposes. Should you require legal advice or representation in a real life situation, you may reach us at [email protected] | 0207840212
