Francis Kaagu Karichu v Lucy Nyambura Mburu [2019] KECA 423 (KLR)

IN THE COURT OF APPEAL

AT ELDORET

(CORAM: E. M. GITHINJI, H. OKWENGU & J. MOHAMMED, JJ.A)

CIVIL APPEAL NO 64 OF 2015

BETWEEN

FRANCIS KAAGU KARICHU......................................APPELLANT

AND

LUCY NYAMBURA MBURU (Legal representative of the

late JOHNSON MBURU KARICHU (Deceased)....RESPONDENT

(Appeal from the judgment of the High Court of Kenyaat Eldoret (Mshila, J)

delivered on 29th May 2013

in

High Court Succession Cause No 182 of 1996)

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JUDGMENT OF THE COURT

Background

1. This is an appeal against the judgment of the High Court (Mshila J.) in which an application lodged by the appellant Francis Kaagu Karichu for revocation of grant issued to Johnson Mburu Karichu (Johnson) was dismissed. The appellant had also sought orders restraining the respondent or his agent from surveying, sub-dividing or carrying out any dealings and/or transaction in respect of Title No. Laikipia/Ol’Arabel/265 (the suit property).  Johnson died on 18th December, 2015 and his widow, Lucy Nyambura Mburu was appointed as legal representative of his estate and was joined as a party in the appeal on 25th April, 2017, and is in that capacity the respondent to this appeal.

2. The late Peninah Wangari Karichu (herein after referred to as the deceased) died intestate on 7th April 1996 leaving behind four children. These were Johnson), Peter Ngugi Karichu (Peter), Dominic Karichu (Dominic) and the appellant, Francis Kaagu Karichu (Francis).  Johnson, applied for a grant of letters of administration for the estate of the deceased in High Court Succession Cause No 182 of 1996 and a certificate of confirmation of grant was issued on 1st September 2000. In accordance with the certificate of confirmation the property Title No Ol’ Arabel/265 (the suit property) that was registered in the deceased’s name was to be shared between Johnson, Rahab Wambui (Rahab) (as the widow of Peter who had since died and Dominic.

3. By way of Chamber Summons dated 23rd November, 2009, the appellant applied to have the certificate of confirmation of grant revoked, and to restrain the surveying, subdividing and/or carrying out any dealings in the suit property. The appellant set out four (4) grounds upon which he relied in support of his application.  These were that the grant and the confirmation were obtained fraudulently by the making of false statements and concealment of relevant facts; that there was a likelihood that the appellant would be deprived of his rightful share to the estate of the deceased; that the respondent had in the interim secretly obtained a title document in respect of the property to the exclusion of all the beneficiaries of the deceased’s estate, and that the respondent was already in the process of selling part of the suit property thereby deprive all the other beneficiaries of their share to the property.

4. This application was opposed by the respondent. In a replying affidavit sworn on 13th January 2010, the respondent averred that the application for revocation of grant was in bad faith and an abuse of the court process as the deceased did not have any property of her own that could have been inherited by her estate; that Johnson and the deceased’s sons Peter had contributed the amount of Kshs 12,000. 00 in 1973 to buy the suit property from the vendor, one Jane Cherotich (Cherotich);  that since the purchase price was from a pool of resources, Johnson and Peter opted to register the suit property in the name of the deceased; that in addition to paying the vendor the sum of Kshs 12,000. 00, Peter had also made two payments of Kshs 222. 75 and Kshs 269. 04 to the vendor. Thereafter, Johnson and Peter paid the, Settlement Fund Trustees (SFT) to offset a loan that Cherotich had taken against the suit property.

5. The respondent denied the assertion that the deceased had purchased the suit property, stating that the deceased had no income with which she could have done so; and that for this reason Johnson applied for letters of administration of the deceased’s estate. The respondent denied concealing any facts and asserted that neither the appellant nor any of his other brothers was entitled to any portion of the suit property as they did not contribute to its purchase, and further that the deceased was holding the land in trust for Johnson and his brother, Peter and that the appellant’s intention was to reap where he did not sow.

6. The impugned judgment was delivered on 17th May 2013 wherein the court found, inter alia that in view of the fact that the respondent had possession of all the relevant documentation which was tendered in court as evidence, comprising receipts made to the SFT, statements of account and a transfer document, Johnson and his late brother Peter had bought the property which was registered in the name of their mother, Peninah, who was to hold the property in trust for them. The Court found that there was nothing to support the contention that there had been a material concealment of facts that would warrant the revocation of the confirmation of grant. The application was therefore dismissed.  Aggrieved by that decision, the appellant filed this appeal.

7. The appellant filed a prolix memorandum of appeal, which raises the grounds that: the learned trial judge erred in law by not applying the provisions of section 76 of the Law of Succession Act (LSA) to the evidence before her; that the respondents did not disclose the existence of a trust in their favour; and that the learned judged erred in failing to find that all the documentary evidence adduced showed that the property belonged to the deceased,  and therefore formed part of her estate to be shared by all her beneficiaries.

Submissions

8. The appellant, who appeared in person during the hearing of this appeal, relied on his written submissions and urged this Court to revoke the grant confirming the letters of administration for material concealment of facts as he and his siblings were left out during the subdivision process, yet the suit property was registered in the name of their mother, the deceased.  It was the appellant’s further submission that the suit property was registered in the name of the deceased as she had purchased it from Cherotich and that she was not holding the suit property in trust for Johnson and Peter.

9. Mr Soita, learned counsel for the respondent, opposed the appeal and submitted that after the purchase of the suit property, Johnson and his brother, Peter, opted to retain the registration of the suit property in their mother’s name as they had already purchased property through SFT and were only allowed to enter into one transaction with SFT. For this reason, the respondent contended that the appellant and his siblings were not entitled to any share of the suit property as they did not contribute towards its purchase price. The respondent asserted that there was no material concealment of facts.  She explained that the reason there were no assets registered in the deceased’s name other than the suit property was that the deceased and her husband did not have the money to buy land; that she lived and worked on Johnson’s farm; that she and her husband were buried on Peter’s land; and that the only property registered in the deceased’s name was the suit property which she held in trust for her two sons (Johnson and Peter). The respondent took issue with the application before the court maintaining that although the succession proceedings do not have a limitation on time, the appellant was guilty of laches, as the application for revocation of grant was made thirteen (13) years after the confirmation of grant was issued. For these reasons, the respondent urged that the appellant had not demonstrated any reasons why the grant should be revoked.

Determination

10. In this first appeal, our duty is to re-evaluate, re-assesses and re-analyze the evidence adduced in the court below and reach our own conclusion on the issues raised. See Abok James Odera & Associates v John Patrick Machira t/a Machira & Co. Advocates[2013] eKLR (Civil Appeal No. 161 of 1999).

11. It was the appellant’s testimony that the deceased was engaged in farming and also sold second hand clothes in Kaptagat forest; and she bought the suit property from Cherotich out of her own funds; that by the time the deceased died in 1996, the suit property was the only property that she owned, and that after her death, Peter took over all her personal possessions. The appellant refuted the allegation that his brothers (Johnson and Peter) bought the suit property and registered it in the deceased’s name with the intention that she holds it in trust for Johnston and Peter. The appellant further denied that there was any loan that was serviced by Johnson and Peter, and maintained that if any loan was taken in respect of the suit property, the same was taken by the appellant for his own benefit.

12.  On the other hand, in furtherance of his case, the respondent testified that the deceased was a housewife who had no income of her own; that in 1972, Johnson and his brother Peter bought the suit property from Cherotich and registered the property in the deceased’s name with the intention that she act as their trustee; that they first paid the sum of Kshs 12,000. 00 to the vendor, and thereafter, on 27th September 1999 paid a further sum of Kshs 65,000. 00. The respondent’s evidence was supported by the evidence of Paul Githinji (Githinji) and Kipruto Lagat (Lagat) who testified that sometime in 1972, the deceased and Peter visited Cherotich and entered into negotiations with her with the aim of Peter purchasing the suit property which property was to be jointly owned by Johnson and Peter. The terms of the agreement were that Peter would pay the sum of Kshs 12,000. 00 to Cherotich and that he would also offset a loan to the SFT. Mathew Ngugi Karichu (Mathew), the appellant’s step brother corroborated this evidence and testified that the reason for Johnson and Peter registering the property in the name of the deceased was that Johnson and Peter had already bought other properties that they had purchased from the SFT and they could not therefore purchase another property from the STF.

13. The main issue that arises is whether or not the property in question was held in trust by the deceased on behalf of Johnson and Peter. It is trite law that the existence of a trust is a matter of fact that must be proved by evidence. See Phillicery Nduku Mumo v Nzuki Makau[2002] eKLR (Civil Appeal 56 of 2001). The Court cannot imply a trust unless it is clearly seen that that was what the parties intended.  In Peter Ndungu Njenga v Sophia Watiri Ndungu [2000] eKLR (Civil Appeal No. 2 of 2000) this Court held that:

“The concept of trust is not new. In case of absolute necessity, but only in case of absolute necessity, the court may presume a trust. But such presumption is not to be arrived at easily. The courts will not imply a trust save in order to give effect to the intention of the parties. The intention of the parities to create a trust must be clearly determined before a trust is implied. See Ayoub vs Standard Bank of S.A [1963] E.A. 619 at pp 622, 623. ”[Emphasis supplied].

14. Was there evidence of a resulting trust in favour of the respondent in regard to the suit property?  The onus lay with the respondent to prove the same through evidence.  (See Jutelabi African Adventure Limited & Another vs Christopher Michael Lockley – Civil Appeal No. 75 of 2016 (unreported). It was upon the respondent to establish that it was the intention of the parties that the respondent would purchase the suit property and the deceased would hold it in trust for Peter and Johnson. The evidence led in this appeal was as follows: none of the parties ever lived on the property. The deceased, lived on a different farm which was owned by Peter. The documents provided by the respondent were a copy of the transfer, a statement of accounts as well as a receipt for the payment of stamp duty. All these documents are in the name of the deceased. The question that arises is whether a trust was created in favour of Peter and Johnson.

This Court considered the law on trust in detail in Twalib Hatayan Twalib Hatayan & anor vs. Said Saggar Ahmed Al-Heidy & Others [2015] eKLR, and outlined the basic tenets for the creation of a trust as follows:

“According to the Black’s Law Dictionary, 9th Edition; a trust is defined as“1. The right, enforceable solely in equity, to the beneficial enjoyment of property to which another holds 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…”

In the absence of an express trust, we have trusts created by operation of the law.  These fall within two categories; constructive and resulting trusts.  Given that the two are closely interlinked, it is perhaps pertinent to look at each of them in relation to the matter at hand. A constructive trust is an equitable remedy imposed by the court against one who has acquired property by wrong doing…It arises where the intention of the parties cannot be ascertained.  If the circumstances of the case are such as would demand that equity treats the legal owner as a trustee, the law will impose a trust.  A constructive trust will thus automatically arise where a person who is already a trustee takes advantage of his position for his own benefit (see Halsbury’s Laws of England supra at para 1453).  As earlier stated, with constructive trusts, proof of parties’ intention is immaterial; for the trust will nonetheless be imposed by the law for the benefit of the settlor.  Imposition of a constructive trust is thus meant to guard against unjust enrichment…

A resulting trust is a remedy imposed by equity where property is transferred under circumstances which suggest that the transferor did not intend to confer a beneficial interest upon the transferee…this trust may arise either upon the unexpressed but presumed intention of the settlor or upon his informally expressed intention.  (See Snell’s Equity 29th Edn, Sweet & Maxwell p.175).  Therefore, unlike constructive trusts where unknown intentions maybe left unexplored, with resulting trusts, courts will readily look at the circumstances of the case and presume or infer the transferor’s intention.  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) (supra).”

15. Applying the aforementioned principles to the instant appeal, we find that the respondent established that a clear intention existed between the parties that the deceased would hold the suit property in trust for Johnson Peter.  It is clear from the evidence on record and the evidence adduced by the four (4) defence witnesses that Peter paid the purchase price and paid off the loan to STF.  It is also on record that the deceased was not in a financial position to purchase the suit property at the time it was purchased.  It is common ground that of the family members only Johnson and Peter paid the purchase price and that in view of the fact that they had already acquired property through loans from SFT they were not eligible to acquire another property through SFT and therefore registered the suit property in the deceased’s name to hold in trust for them.  The totality of the evidence is that a clear intention was established by the respondent for the creation of a trust by the deceased in favour of Johnson and Peter and therefore we find that the learned Judge did not err in finding that a trust had arisen in favour of Peter and Johnson.

16. The conditions for the revocation of a grant are set out in section 76 of the Law of Succession Act. That section states that:

76. Revocation or annulment of grant:

A grant of representation, whether or not confirmed, may at any time be revoked or annulled if the court decides, either on application by any interested party or of its own motion—

(a) that the proceedings to obtain the grant were defective in substance;

(b)  that the grant was obtained fraudulently by the making of a false statement or by the concealment from the court of something material to the case;

(c) that the grant was obtained by means of an untrue allegation of a fact essential in point of law to justify the grant notwithstanding that the allegation was made in ignorance or inadvertently;

In the circumstances of this case, we find that the appellant did not meet the conditions for the revocation of a grant.

17.  The upshot of the foregoing is that we find the appeal has no merit and it is hereby dismissed.  This being a family matter, we order that each party bears their own costs.

Dated and Delivered at Eldoret this 28th day of June, 2019.

E. M. GITHINJI

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JUDGE OF APPEAL

HANNAH OKWENGU

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JUDGE OF APPEAL

J. MOHAMMED

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JUDGE OF APPEAL

I certify that this is a

true copy of the original

DEPUTY REGISTRAR