LAW

CONTENT

 Structure and jurisdiction of law courts in Kenya

 Sources of law
 Law of tort
 Implication of trespassing
 Types of nuisance
 Forms of defamation
 Vicarious liability
 Land ownership
 Mortgage and charge
 Arbitration

Structure and jurisdiction of law courts in Kenya

LAW

 Law can be described as a collection of rules of human conduct prescribed by human beings for the
obedience of human beings.
 It is a system of rules that are created and enforced through social of governmental institution to
regulate behavior.
 It’s the system of rules which a particular country or community recognizes as regulating the
action of its members and which may enforce by imposition of penalties.
 Its binding custom or practice of a community or a rule of conduct or action prescribe or formerly
recognized as binding enforced by a controlling authority
 The laws of any country are said to be to some extent to be an expression of the morality of that country.
 Rules of law should aim to achieve justice. The function of the courts is to administer justice according to the
law.
LAW

MUNICIPAL/STATE LAW INTERNATION LAW

● Consists of that body of law which

PUBLIC LAW PRIVATE LAW
regulates the relationsbetween states. It
This consist of those is based on customs, treaties and
This is the law that is basically fields of law in which conventions.
concerned with the rights and the state has an
duties of ● Disputes between states can be settled
interest, these Include: in the international court of Justice at
Persons towards persons.
● Constitutional law
Examples of this type of law the Hague in Holland but litigant states
● Administrative law
are:- Law of tort, law of contract, must consent to its jurisdiction.There
● Criminal law
law of property andlaw of is also Private International Law
succession
concerned with determining what
system of State Law shall apply in a case
Structure of Courts in Kenya which contains of a foreign element.

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 Supreme Court of Kenya

Court of Appeal

High Court/Environment and Land Court/Employment and Labour Relations Court

Kadhi Martial Court

Chief Magistrate Court/Tribunals/Chief Kadhi

Resident Magistrate Courts/Kadhi Courts

Sources of law
The Sources of Kenya Law Stipulated under Sec 3 of the Judicature Act ,CAP 8 of the laws of Kenya. It
includes:
1. The Constitution of Kenya

2. Legislation which includes;

i. Acts of the parliament of Kenya
ii. Specific Acts of the Parliament of the UK cited in the scheduleto the Judicature Act and the Law of contract
Act.
iii. One Act of Parliament of India
iv. English statutes of general application in force in England on 12th August 1897

3. Subsidiary legislation
4. The substance of the common law, the doctrines of equity andthe Statutes of general application in force in
England on the 12th Aug 1897. It should be borne in mind that these only apply “so far only as the
circumstances of Kenya and its inhabitants permit and subject to such qualifications as those circumstances
may render necessary.
5. African customary law
The Constitution of Kenya

● Document having special legal sanctity

● Sets out the framework and principal functions of the organs of government of a state
● Declares the principles governing the operations of the organs
● Brings out linkages and interrelationships between the different arms of government
● Supreme law, taking precedence over all other forms of law, written or unwritten.
● If any other law is inconsistent with the constitution, the constitution prevails and the other law to
the extent of the inconsistency is void.
• Some constitutions are written while others are unwritten
e.g. in the UK. The constitution of Kenya is a written constitution originally enacted on 12th December 1963.
• The current Constitution of Kenya was enacted on Independence Day, December 12, 1963. It was
amendedon 12th December 1964 so as to establish a republic with a president as head of state.
• Since then, the Constitution has been amended several times,with the most current and effective Kenya
Constitution being revised in 2001. In November 2005, in a nation-wide referendum, Kenyan voters
rejected a government-backed, proposed new constitution.
• In Aug 2010, another referendum was held in which a proposed new constitution was passed.

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 • The main feature of the new constitution is the change in the structure of the government and parliamentary
system.
• Constitutional amendment requires a vote of 65% of all members of the National Assembly.

● Chapter 1 of the laws of Kenya has eighteen chapters covering; ● The legislature
● Sovereignty of the people and supremacy of the constitution
● The executive
● The Republic
● The judiciary
● Citizenship
● Devolved government
● The bill of rights
● Public finance
● Land and environment
● National security
● Leadership and integrity
● Commissions and independent
● Representation of the people bodies
● Amendment of constitution
● General provisions and
Legislation
● Transitional and consequential
● By legislation means Statutes or Acts of Parliament. provisions
● The legislative power of parliament is exercisable by Bills passed by t
he national assembly.
● When a bill is passed by parliament it is presented to the president for his assent. When this assent is given,
it becomes law and by definition an Act of Parliament.
● A bill must receive three readings in the National Assembly. The second and third readings are occasions
for wide debates on the main objects of the Bill under discussion.
● Detailed consideration is left to a committee stage which takes place either in a select committee or
the national assembly itself.
● Thereafter the president must give his assent to the Bill before it is passed into law.
● A new Act binds all people in Kenya.
● An Act may come into operation either at the time ofassent or at a later date to be determined by ministerial
order.
● As parliament is sovereign, it can make, amend orrepeal any law subject to the constitution.
Specific Acts of Parliament of the United Kingdom
These are cited in the schedule to the Judicature Act and include:
● The Admiralty Offences (Colonial) Act, 1849.
● The Evidence Act, 1851, sections 7 and 11.
● The Foreign Tribunals Evidence Act, 1856.
● The Evidence by Commission Act, 1859.
● The British Law Ascertainment Act, 1859.
● The Admiralty Offences (Colonial Act), 1860.
● The Foreign Law Ascertainment Act, 1861.
● The Conveyancing (Scotland) Act, 1874 Section 51.
● The Evidence by Commission Act, 1885.

Certain Acts of Parliament of India

The Transfer of Property Act, 1882 of India contains the procedural law applicable where the Registration of Titles
Act, the Land Titles Act and the Government Lands Act are applied.

English statutes of general application in force in England on 12th August 1897 that are applicable only to the
extent that they are acceptable to Kenyans given the circumstances
The reception date of 12th August 1897 is important as the English statutes applicable in Kenya are in the form
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they had at the reception date.This means that any amendment of such statutes in England have no effect in
Kenya.
Subsidiary /Delegated Legislation
● Subsidiary legislation is part of the written law and is, therefore,a source of law. It is also known as delegated
legislation .
● Local authorities, statutory boards, professional bodies exercise adelegated power to legislate.
● Must not be inconsistent with any statute
● Parliament delegates its legislative authority because:
● It lacks enough time to enact rules on all aspects of national issues.
● Some of these aspects are technical in nature hence require experts outside parliament
● Its also impossible to foresee all contingencies when enacting a statute.
Reasons for delegated legislation

● Parliament has no the time to enact all rules; otherwise the parliamentary machine would break
down.
● The technicality of legislation; allows for consultation with outside bodies
● The need for flexibility outdated rules can be more easily changed
● The impossibility of seeing all contingencies in the initial or enabling statute.
● Opportunity for experiment
● Need for rapid action e.g. in times of emergency

Delegated legislation has been criticized forthe following reasons:

• Legislation is passed in skeleton form, leaving matters of principles to be decided by delegated
legislation
• Inadequate parliamentary control
• Delegated powers are so wide, thus adding to theuncertainty of the law
• Delegated powers are loosely defined, thus detracting from judicial control
• Lack of publicity and advance consultation with interests affected
• Lack of judicial control
• Retrospective operation
• If Subsidiary legislation conflicts with a statute, the statute prevails. Otherwise, subsidiary legislation
takesprecedence over judge made law.
• All subsidiary legislation is made under the express authority of an Act of Parliament and must comply
withany procedure laid down by the Parent Act.

The substance of common law and doctrines ofequity

• Applicable only to the extent that they are acceptable to Kenyans given the circumstances
• Common law- entails practices of any society and evolve out of usage and culture and consists of the ancient
customs and usages of England which have been recognized and given the force of law.
• The common law has been developing for nearly a thousandyears and is embodied in the reported
decisions of English courts stretching back to the 13th century.
• The common law is in itself a complete system of law both civiland criminal.

Remedy for violation is a right calling for payment of damages, irrespective of how unjust the plaintiff has
actedand whether or not the damages will make good the loss suffered.

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 • Equity refers to fairness or natural justice.
● remedy for breach is discretionary, depending on the justice of the cause and includes injunctions
and Specific performance.
Equity emerged after citizens became dissatisfied with thejudgments of the English common law system.

• Common law may mean rules developed through precedents rather than created by Acts of
Parliament.
• Precedent- when a judge gives his decision in a case before him, this has two elements:

• The actual decision affecting the parties

• The principles of law which have caused the judge toarrive at that decision.
• Where the case concerns facts or situations which are comparable with earlier cases heard by the
courts, thejudge will normally apply the principles from earlier cases.
• The English common law and doctrines of equity remain a source of the Law of Kenya but “ so far
onlyas the circumstances of Kenya and its inhabitants permit and subject to such qualifications as
those circumstances may render necessary”
• The common law of Kenya has its roots in the EnglishCommon Law, but the decisions of East African
courts are related to East African conditions. The body of the Kenya Common Law is also swollen by
a substantial number of Kenya cases interpreting Kenya Statutes.
Question of binding decision and Precedence

• The doctrine of “stare decisis” requires that a court having once decided a case in a particular
manner should follow the decision in all subsequent cases involving the same legal issues.
• The doctrine also requires that inferior courts are bound by the decisions of superior courts where
thedecision is relevant to the issue before the court.
• Decisions of the court of appeal of Kenya are normally binding on itself, subject to what has been said,
the High court and the Magistrate’s courts. Decisions of the High Courts are binding on the magistrate’s
courts.
Advantages of the system of precedent

• One of the greatest advantages of the system of bindingprecedent is that the rules have evolved from
real life cases and are therefore practical.
• It promotes certainty, allows for growth and contains awealth of detail.
Disadvantages of the system of precedent

• Once a rule has been laid down, it is binding eventhough the decision was wrong
• It creates a bulky system.
• The system can at times be very uncertain due the roleplayed by judges.
African Customary Law

• Before the adoption of English law, there were rules applicable to the different ethnic groups in Kenya and
these rules formed what is described as African Customary Law.

• African Customary law- applicable in civil cases in which one or more parties is subject to it or affected by
it. Customary law will apply only if it is not “repugnant to justice and morality or inconsistent with any
written law”
• Limited to matters relating to;

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 • Land held under customary law
• Marriage , divorce, maintenance or dowry
• Seduction or pregnancy of an unmarried girl or woman.
• Enticement or adultery with a married woman
• Succession
Islamic Law

• Islamic law is applied by Kadhis courts where both parties profess the Muslim faith.
• Limited to matters relating to;
• Personal status
• Marriage
• Divorce
• Inheritance
Hindu Law

• Hindu customary rites are a source of Kenyan Law only for purposes of solemnizing Hindu marriages
and divorce and succession among the Indians.

The Law Reform Commission

• Established in 1982 to review all laws of Kenya,ensuring;

• Systematic development and reform
• Integration ,unification and codification
• Elimination of anomalies
• Repeal of obsolete and unnecessary enactment
• Simplification and modernisation
Common Law of Kenya

• Rapidly emerging source

• Not spelt out in the Judicature Act.
• Based on decisions made by East African and Kenyan courts.
Acts of parliament relating toConstruction industry

● Physical planning act 1986 Revised 2009

It provides for the physical development planning for the whole country, region towns etc.
● Occupational Safety and Health Act, 2007
This replaced the factories and other places of work act, chapter 514

● The Employment Act Cap (226) and the regulation of wages and conditions of employment
Act Cap (229)
Makes rules governing wages, housing, leave, health and safety, the special position of juveniles and
women and termination of employment.
● The National Construction Corporation Act CAP. 493-1985

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 An Act of Parliament to provide for the establishment of the National Construction Corporation to assist
persons engaged in the construction industry and for purposes incidental thereto and connected therewith

LAW OF TORTS
● A tort is a civil wrong which gives rise to an action at common law forunliquidated damages.
● The rules of the law of tort determine when one party can be compensated for the behaviour of
another.
● The right of action in tort springs from the breach of a duty which a personowes to another
person in general.
Nature of torts
• Law of tort is concerned to compensate victims who have suffered harm.
• Tort liability is imposed by law
• The compensatory function of the law of tort is an award of damagesor an
injunction
Motive and Malice
• Motive is the reason behind the act of the defendant.
• As a general rule, motive is not relevant in deciding whether a person is liable in tort.
• The general irrelevancy of evil motive is observed in Bradford Corporation V Pickles
(1895) A.C 587.
• Malice in itself is not a tort, although it will be an essential element incertain torts
e.g. malicious prosecution; cases of defamation etc.
GENERAL DEFENSES TO TORTS
For the plaintiff to succeed in action in tort, he must prove the essential elementsof the tort
in question. If he fails, then judgment will be given for the defendant

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 1. Self defence
• A person is entitled to defend himself or members of his family and hisproperty.
• The main criterion here is one of reasonableness.
• In defending himself, a man may use such force as is reasonably necessaryand the
means of defence must be related which would otherwise be suffered.

2. Volenti non fit injuria

• The defence of consent.
• This is the defence that the plaintiff both knew of the risk he wasrunning and
willingly consented to run the risk.
• Simple examples are found in the world of sport e.g. football, rugby, boxing etc.
• The consent to the risk can be either expressed or implied.
• It is implied in the case of sporting events or express where it wasstipulated in the
contract.
• The knowledge of the risk does not necessarily amount to consent.

3.Inevitable accident
• This is an accident which is “not avoidable by any such precautions as areasonable
man, doing such an act then and there could be expected to take”. Stanley V Powell
(1891)
• Inevitable accident is no defence to action under the rule in Rylands VFletcher

4. Act of God
• In the words of sir Charles Newbold, P in Ryde v Bushell (1967) E.A,
• “Nothing can be said to be an act of God unless it is an occurrence due exclusively to
natural causes of so extraordinary a nature that it could not reasonably have been
foreseen and the results of which occurrence could not have been avoided by the person
who seeks to avoid liabilityby reason of the occurrence”
• In the case in question the defendant was unable to prove that a deluge of rain which
swept away coffee plants was of such an extraordinary nature as could amount to an act
of God.
• The defence can apply to damage caused by floods, earthquakes, hurricanes,
lightning etc.
5.Act in respect to Statutory Authority
When a statute authorizes the commission of what would otherwise be atort, then the
injured person is remediless.
Of the many statutory corporations which act in pursuance of statutory powers and duties, local
authorities are given the greater scope for interfering with the rights of the individual.

6. Necessity
Where intentional damage is done so as to prevent greater damage the defence ofnecessity
can be raised. If damage is caused to avoid greater damage, it becomes a good defence.

7.Mistake
Mistake whether of law or facts is usually no defence to an action in tort. Mistaken belief that a prisoner
was not due for release was no defence. It can be relevant on malicious prosecution and false
imprisonment

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 8. Capacity
The general rule is that all persons can sue and be sued in tort.Where two or more persons assist each
other in the furtherance of a common design and commit a tort, they are known as joint tort feasors.

9. Insanity
Insanity is not a defence to an intentional tort. What is essential is whether D by reason of insanity was
capable of forming the intent to commit the tort.

10. Infants
Minority is not a defence in torts. What is essential is whether D understood the natures of his/her
conduct. Hart V A-G .5 year old boy was held liable

11. Discipline
● A parent may use reasonable and moderate force to discipline a child.
● What is reasonable will depend on age, mentality and physique of child.
● Provocation
● Is not defence in tort law.

VICARIOUS LIABILITY
• The word ‘vicarious’ means in place of another person or in substitution for the proper
person.
• The person who commits a tort is always liable, but sometimes another person who
did not commit a tort is also liable.
• This is the case when the relationship of master and servant exists.
• The basic rule is that a master is liable for any tort which the servant commits in the
course of his employment.
• The reason for this rule of the common law is that as the master has the benefit of his
servant’s services, he should also accept his liabilities.
• The importance of vicarious liability is that it ensures that the injured person can sue the
employer instead of employee. The two main criteria for the operation of the ruleare :
• The person who commits the tort must be an employee.
• The employee must commit the tort in the course of employment.

The Course of employment

 There is no single test to determine when an employee is in the course ofemployment.
 The decisions of the courts tend to humour the individual facts of the case. Certain
situations certainly seem to be covered:
 Torts committed while the employee is doing what he is employed to do.

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  Torts committed while the employee is doing what he is employed to dobut doing it in a
manner forbidden by his employers.
 Torts committed while the employee is doing what he is employed to do but doing it in a criminal
manner.
 Tort committed while the employee is doing acts which are reasonablyincidental to his
work.
 Torts committed while the employee is acting in an emergency for the protection of his
employer’s person or property when his actions wouldhave normally be outside the scope of
his employment.
 Generally, an employer is not vicariously liable for the torts of anindependent
contractor.
 However, in some cases either the liability imposed is strict, or duties owedby a person are
so onerous that there can be no delegation to someone else. Then the employer is liable in
addition to the contractor.
 Although the following are often spoken of as examples of vicarious liability, it is
more appropriate to regard them as examples of an employer continuing to be
personally liable. This can arise in the following situations:
 When an employer is negligent in choosing the contractor, he remainspersonally liable.
 When the liability of the employer is strict e.g. in the tort of Rylands V Fletcher and can
occur even if he has taken reasonable care, the employer is liable whether he commits the
tort personally or through anindependent contractor.
 When the employer undertakes a particularly hazardous activity especially when it is on or near
the highway, he is liable for torts committed personally or by his independent contractor.
 When the employer authorises or instructs the contractor to do something involving the
commission of a tort, he remains liable.
 Even in the above cases where both the employer and contractor are liablethe former will
not be held responsible for the contractor’s collateral acts of negligence.
 In other words, an employer will only be liable if the risk of harm arises from the work
itself rather than the negligent performance of the work.

SPECIFIC TORTS
1. Trespass

Trespass is commonly thought to be a tort relating to land but the law also recognisestrespass
to the person and to goods.

Trespass to the person

o It occurs if force is directly and intentionally inflicted on another person. For this
purpose force means any physical contact.
o It is a special feature of trespass that an action can be brought even if no damage
has been suffered. This tort is said to be actionable per se, of itselfwithout proof of
damage.
o Where there is a trespass to the person, the same behaviour could also be acrime.
E.g. a punch on the nose could also be result in a prosecution for assault.
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 o Trespass to the person embraces assault, battery, and false imprisonment
o Assault is an act of the defendant which causes the plaintiff reasonable
apprehension of the infliction of violence on his person by the defendant.
o Battery is inflicting of violence.
o False imprisonment is constituted when a person’s physical freedom is
unlawfully restricted.
o Defences to assault and battery are lawful arrest and volenti non fit injuria.

Trespass to goods
o Trespass to goods is an intentional and direct act of interference by a
defendant with goods in the plaintiff’s possession.
o The emphasis here is to protect possession.
o The common form this tort will be causing damage to goods or destroyingthem.
o Proof of damage is not necessary.
o Frequently, the person in possession will be the owner of the goods inquestion.
o The defendant’s act must be direct and intentional, so tearing a page from
someone’s book or throwing a stone at their car are examples of trespass togoods.

Conversion
o Conversion consists of an unauthorised dealing with the goods or chattels ofanother
which amounts to a denial of the owner’s title or is inconsistent with the owner’s
right to immediate possession of them.
o Trespass and conversion usually coincide but not always so e.g. if X by mistake
takes the hat of Y and on Y pointing this out, X returns the hat, this constitutes
trespass but not conversion.
o Conversely if on the same facts X denies Y’s title to his hat, X will have
committed conversion in addition to trespass.

Detinue
o Detinue consists of the unlawful retention of the goods of another.
o The plaintiff must prove that he is entitled to immediate possession of the chattel
and secondly that the defendant refused to restore it upon reasonabledemand being
made.
o Detinue usually amounts to conversion but the action of detinue is primarilyone for
recovery of goods rather than damages.
o If the plaintiff succeeds he can recover either goods or their value.
Trespass to Land
o This tort consists of an unjustified interference with the possession of land.
o The interference may consist of walking over another’s land, or throwingthings
onto the land, or placing a ladder against the surrounding wall or even swinging
a crane jib over the land.
o For the purpose of this tort, land means the surface of the earth itself, anything
which is a fixture on it, the airspace above it to the extent necessary for the use and
enjoyment of the land, and the sub soil below the land.
o This tort is actionable without proof of damage.
o It is obvious that construction work involve constant danger of trespass.
o A contractor would be wise to seek permission for acts which would
otherwise cause a breach of these rules.
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 NUISANCE
For the purposes of the law, nuisance falls into three categories:
1. Public nuisance,
2. Private nuisance
3. Statutory nuisance.

Public nuisance
o A public nuisance is an unlawful act or omission to discharge a legal duty which
causes inconvenience or annoyance to the public, or interfering withthe exercise of
employment of a right common to all.
o Public nuisance is primarily a crime, but if a member of the public canprove that
he has suffered some special damage over and above that suffered by the general
public, he will succeed in a civil action.
Statutory nuisance
Constitute certain maters which are declared by statute to be a nuisance.
Certain statutory nuisances have been created by Parliament e.g. Public Health Act (cap 242)
section 118 contains a long list of Statutory nuisances
e.g. “premises in such a state as to be injurious or dangerous to health; anystream,
pool…cesspit in such a state as to be injurious to health”
The Environmental Protection Act also contains a list of statutory nuisances
e.g. accumulation or deposits or animals which are ‘prejudicial to health ora
nuisance’.
A statutory nuisance cannot exist where there is merely an interference with the personal
comfort of the occupiers.
Private Nuisance
• Private nuisance is committed where one person unlawfully interferes withanother’s
use or enjoyment of land.
• Some form of unjustifiable interference must take place e.g. noise, smells, smoke,
fumes, pollution of the air or water etc.
• Essentially, the law of private nuisance attempts to reconcile conflicting interests.
• The duration of the nuisance is relevant, not only in establishing the existence of
a nuisance but also in determining which remedy is most appropriate – an
injunction or damages or both.
• To hold a party at times of universal gaiety is reasonable, but to hold
frequent parties going into the early hours of the morning causing excessive
and continuous noise would amount to a private nuisance.
• The person who will be liable in an action for nuisance will be he personwho
creates the nuisance, or permits it to continue on his land unabated.
• It is no defence in nuisance for the defendant to show that the plaintiff cameto the
nuisance or that the conditions giving rise to nuisance are even beneficial to the
community e.g. providing employment.
• Act of God is a defence and statutory authority.
• It has been seen that malice is not a tort in itself (Bradford v Pickles) but malice
could be relevant in nuisance, depending upon the surrounding circumstances.
• In Hollywood silver Fox farm Ltd V Emmett (1963) All ER 825,
• It was held that the plaintiffs were entitled to damages and an injunction torestrain
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 the defendant from firing guns or making other noises in the vicinity of the plaintiff’s
fox farm during the breeding season.

Remedies
• Damages,
• Injunction, or Abating of the nuisance e.g. the occupier of land can always lop off thebranches of
his neighbour’s tree which protrude over his land.
• However this form of remedy should not be taken lightly.
• The sort of problem a plaintiff could face is shown in one case where branches
from the defendants’ apple trees encroached over the plaintiff’s land.
• The plaintiff cut off the branches stripped off the apples and then sold them. Although
he was within his rights to lop off the branches, he had no right to keep them, or the
fruit.
• He was successfully sued by his neighbour for having misappropriated thefruit.
The rule in Rylands v Fletcher
• The type of liability created by this tort is Strict Liability. This means that if a set
of given facts fit the requirements of the rule, thenthe defendant will be liable,
whether he took care or not.
• This tort is always known by the name of the case which gave rise to
particularly form of liability.
• The basics of liability were stated as follows:
• “Where a person, for his own purposes, brings on to his land, and collects
and keeps there anything likely to do mischief if it escapes, he must keep it
at his peril and if he does not do so, he is liable for all the damage which is
a natural consequence of the escape.”
• Decisions on this have extended the scope of the rule apart from water to
fire, gas explosions, electricity, oil, and fumes even to a flag pole.
• But even if it has been established that there has been a non-natural user of
land, it must be proved that there has been “escape” from the defendant’s
land to the plaintiff’s land and consequential damage.

The rule involves a number of points:

1. The dangerous ‘thing’ must be brought by the defendant on to his land. It follows that
no liability can arise from an escape of something which is naturally on the land.
E.g. weeds or rocks
2. The ‘thing’ must be likely to cause harm if it escapes
3. There must be an escape i.e. the person injured must show that he was not on the
defendant’s land at the time when the harm occurred.
4. The escape must cause damage; may be injury to the person or damage to property.
5. The defendant must bring the ‘thing’ on to his land for his own purpose and in
doing so must be making a non-natural use of his land. In case of Rylands v
Fletcher, the non-natural use was bulk storage of water in a reservoir.

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 There are several well established defences to an action under the rule:
• Where the damage caused has been due to the natural user of the land e.g. where
water escapes from land owing to natural gravitation, wrongful act, he cannot
recover.
• Fault of the plaintiff- if the damage is caused by the plaintiff’s own wrongful act,
he cannot recover.
• Consent of the plaintiff-presumably tenants on different floors of a building
impliedly consent to the presence of a water supply running through the
building. If flooding occurs on an upper floor causing damage to a lower floor,
there will be liability.

• Where the escape is caused by the wrongful act of a stranger.

• Act of God

• Statutory authority
• A tangent of the rule is liability for fire. Someone will no be held liable if a fire
begins in their estate/house accidentally and spreads.
• Another tangent is liability for animals. Liability for animals may arise in both
nuisance and negligence but there are two sets of rules governing this form of
liability.
• An occupier of land is liable without proof of negligence for damage doneby his
cattle if they trespass on to the land of his neighbour and thereby cause damage.
This is known as cattle trespass.
“Cattle” includes bulls, cows, horse, sheep, goats, pigs and even poultry but not
cats and dogs. It is in the nature of cats and dogs to trespass.
• Liability can also arise under what is known as the scienter rule, whichstems
from the rule in Rylands v Fletcher.
• For the purpose of the scienter rule, animals are divided into two main
categories:
i) Animals mensuatae naturae
ii) Animals ferae naturae
• Animals mensuatae naturae are those which are harmless by their nature

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 e.g. rabbits, pigeons, domestic pets, e.g. dogs, cats etc.
• The owner of such an animal will only be liable if the animal commits an act
which is contrary to the nature of its species but which the owner knows that
has a propensity to commit.
• Animals ferae naturae are those which by their nature are dangerous e.g. lions,
elephants, snake etc.
• A man who keeps such an animal does so at his peril for if it causes injury hewill
be strictly liable, even in the absence of negligence.

NEGLIGENCE
Negligence is the “omission to do something which a reasonable man, guided upon those
considerations which ordinarily regulate the conductof human affairs, would do, or doing
something which a prudent and reasonable man would not do”.
To succeed in an action for negligence, the plaintiff must prove:
1. That the defendant owes the plaintiff a legal duty of care.
2. That the defendant was in breach of that duty.
3. That as a result of the breach of that duty the plaintiff suffered damage.
4. The damage must not be too remote (i.e. must be foreseeable)
5. The defendant must not be able to raise any defence to the plaintiff’s claim.
• The question as to whether the defendant owed the plaintiff a legal duty ofcare is
for the courts to decide.
• The case of Donoghue v Stevenson
is a good example.
• Duty, remoteness and causation, are all devices by which the courts
limitthe range of liability for negligence…

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 • It is not every consequence of a wrongful act which is the
subject ofcompensation.
• The law has to draw a line somewhere.
• Sometimes it is by limiting the range of persons to whom a duty is owed.
• Sometimes it is done by saying that there is a break in the
chain ofcausation.
• At other times it is done by saying that the consequence is too
remote to bea head of damage.

The duty of care

• The role of the duty of care concept is a simple one: that of
marking outproblem areas and laying down the rules limiting
liability in each.
• Liability in negligence can only arise if a duty to take care is owed.
• Whether a legal duty of care exists depends upon whether what
took placewas reasonably foreseeable.
• It is clear that a motorist owes a legal duty of care towards fellow
motoristsand pedestrians, the surgeon and dentist towards their
patient, the manufacturer towards the consumer.
• Before a duty of care can exist, it must be shown that there is
foresight of harm, that there is proximate relationship between the
parties and that it is just and reasonable to impose the duty.
• There are certain well-recognised situations where the courts have
faced particular problems in establishing whether a duty should
exist because ofpolicy considerations. These include:
Cases involving pure
economic loss
• As a general rule, no duty of care is owed where plaintiff
suffers only pureeconomic loss.
• An example can be found in the case where a research institute
negligentlyallowed a virus to escape which caused foot and
mouth disease, and as a result cattle needed to be slaughtered
over a wide area. Markets were closed to stop the spread of the
infection.
• The plaintiff was a cattle auctioneer who lost profits as a
result i.e. his onlyloss was pure economic loss.

cases involving negligent mis-statements

• If the negligent statement results in physical damage, the

normal rules ofnegligence operate.
• So, in one case where an architect negligently stated that a wall was
safe to be left standing, he was successfully sued in negligence by a
workman who was injured when the wall collapsed (Clay V
Crump).
• In negligent statements, there has to be dishonesty, mere
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 carelessness is not enough.

Judicial Immunity situations

o The courts have recognised that there are times when there will be
liabilityin tort for negligent misstatements.
o Nevertheless, no liability attaches of the statement made by a judge,
lawyeror arbitrator in the course of legal proceedings.
Nervous shock situations
o Nervous shock in this context means illness like psychiatric disorder or
depression.
o Nervous shock as a consequence of negligent behaviour causes no
problems wherethe victim has also sustained physical injuries.
o The cases which cause problems are those where the only harm is
the nervous shock especially if a person was never in any danger
himself of suffering physicalharm.
Negligent exercise of statutory powers
o Where a Local Authority acts under statutory powers e.g. in the
building inspectionprocesses, there may be liability for negligence if,
once having decided to inspect, the inspector fails to carry out the
inspection properly.
o However there would be no liability in negligence. So long as the
Local Authorityhad given proper consideration to the question of
whether or not to inspect.
Omission to act
o As a broad general rule there can be no liability in negligence for
pure omissionto act.

Breach of Duty of Care

The plaintiff must prove that there was a breach of that duty.

o This is a question of fact.

o The standard of care required will be that of a reasonable man and
will varyaccording to the facts of the case.
o So a surgeon must operate with the care that a reasonable surgeon
would take, a builder must build with the care that a reasonable
builder would takeand so on.
o In formulating a standard of reasonable care, everyone is assumed
to haveknowledge about common facts. e.g. fire burns, knives cut,
water can drown etc.
o In assessing how much risk is involved in the defendant’s activities, one
o judge has said that ‘people must guard against reasonable possibilities not
o fantastic possibilities’.
o As a general rule, the plaintiff has to prove that the legal duty of
care owedhim was broken.
o A plaintiff seeking to prove negligence may also rely on the
maxim “resipsa loquitur”, the facts speak for themselves.
o In the absence of any explanation on the part of the defendant, the
plaintiffwill have discharged the burden of proof.
o The respondents can avoid liability if they can show either that there
was no negligence on their part which contributed to the accident; or

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 that there wasa probable cause of the accident which does not
connote negligence on their part or that the accident was due to
circumstances not within their control.
Damage resulting of the type which is not too remote
• Once the breach of the legal duty of care has been
established , the plaintiffmust prove that the injury suffered
was caused by the breach.
• A break in the line of causation may make the damage too remote.
• Causation is concerned with the problem of whether the
defendants conduct caused the plaintiff’s damage.
• Remoteness is concerned with the cut-off point at which the
law regards, thedefendant as no longer liable to compensate
the plaintiff.
• Causation- a defendant may behave
negligently towards a plaintiff and yet still not be the cause of his injuries
e.g. (doctor & patient).

• Remoteness- the plaintiff must show the harm he suffers was

not too remotea consequence of the negligent act.
• The test used by the court is that a defendant is only liable for such
Consequences of his negligent act as could reasonably be foreseen.
Contributory negligence
• The court has power to reduce the damages awarded to the
plaintiff if he is found guilty of contributory negligence.
This means that the plaintiff has shown lack of reasonable
care for his own safety.
• It is important to note that if someone possessed of a
special skill undertakes, quite irrespective of contract,
to apply that skill for the assistance of another person
who relies upon such a skill, a duty of carewill arise.
Duties of an employer
Closely related to the study of common law negligence are the common
law duties owedby an employer to his employees. They are as
follows:
1. To provide a competent staff.
2. To provide adequate plant and material.
3. To provide a safe system of work.

Occupier’s liability
• Occupier’s Liability Act ( Cap 34) provides that the occupier of
premises owes “the common duty of care” to all his visitors.
• Visitors are all persons who are lawfully on the occupier’s premises.
• The common duty is also defined as “a duty to take such care as in
all circumstances of the case as is reasonable to see that the visitor
will be reasonably safe using the premises for the purposes for
which he is invited or permitted by theoccupier to be there”.
• The duty concerns “dangers due to the state of the premises or to the
things done oromitted to be done on them”
• In Lougher V Kenya Safari Lodges & Hotels the plaintiff was a guest
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 at the defendant’s hotel. He slipped on the floor outside a changing
room in the hotel swimming pool area and broke an ankle. A claim for
damages for breach of common duty of care by the plaintiff succeeded;
proper precautions had not beentaken against the probable wetness of
the floor due to barefooted swimmers walking on it.
Some conditions are imposed to decide if there’s been breach:
• An occupier must be prepared for children to be less careful than adults.
• An occupier may expect that a person in the exercise of his calling, will
appreciateand guard against any special risks ordinarily incident to it, so
far as the occupier leaves him free to do so.
• If the occupier has given a warning of a danger
• The occupier is not liable for the negligence of an independent contractor.
• The occupier is not liable if the visitor has willingly accepted a risk.

Forms of defamation
Defamation is the communication of a false statement that harms the reputation of an
individual or oganisation. The law of defamation protects a person’s reputation and good
name against communications that are false and derogatory. Defamation consists of two
torts:
1. libel
2. slander.
Libel consists of any defamation that can be seen, most typically in writing.
Slander is a form of defamation that consists of making false oral statements about a
person/organization which would damage that person’s/organization’s reputation. If I
Spread a rumor that my neighbor has been in jail and this is not true, I could be held liable
for slander.
A person is liable for the defamation of another. In order to prove defamation, the plaintiff
must
prove:
● that a statement was made about the plaintiff’s reputation, honesty or integrity that is not
true;
● there was publication to a third party (i.e., another person hears or reads the statement);
and
● the plaintiff suffers damage as a result of the statement.
Public figures have a more difficult time proving defamation. Politicians or celebrities are
understood to take some risk in being in the public eye and many of them profit by their
public persona. A celebrity must prove that the party defaming them knew the statements
were false, made them with actual malice (intent to harm), or was negligent in saying or
writing them. Proving these elements can be an uphill battle. However, an outrageously
inaccurate statement that’s harmful to one’s career can be grounds for a successful
defamation suit, even if the subject is famous.

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 LAND LAW

Introduction

The Unit is designed to introduce the fundamental principles of land law. It builds upon the study
of conceptsrelated to land since pre-colonial to the current system.
Definition of terms

Land law is the form of law that deals with the rights to use, alienate, or exclude others
from land.
In many jurisdictions, these kinds of property are referred to as real estate or real property, as
distinctfrom personal property.
● Each of the legal interests in land assumesthat there is a relationship between two or more
people (such as a landlord and a tenant) and it looks at the rights and duties of each party to
that relationship.

● The conveyancing dimension of land law

Conveyancing is a document that transfers the ownership of an interest in land from one
person to another: it looks at the formalities to be followed when creating or transferring an
interest in land.
Importance

● to ensure that there is certainty as to who has some kind of proprietary (or ownership)
interest in a given piece of land
● promotes certainty by defining the procedure to be followed when creating, transferring or
extinguishing an interest in land or contracting to do so (the law on formalities)
● promote certainty by requiring owners to register their interests in a public register.
Legal concept of land

● Jackson (1987) defines land as land covered with water, all matter growing onit together with
buildings and any other things permanently affixed to it.
● Jacobus (2003) asserts that land is the surface of the earth, the sky above it andeverything
below to the centre of the earth.
NB: The above definitions have the three rights of ownership in land i.e sub-surface,surface
and air rights.

◦ Physical characteristics of land

● Land is immobile - land cannot be movedalthough sand soil gravel may move by action of
nature the land retains its geographical location.
● It's indestructible – this means land is durable and this makes land a worthwhile
investment
● Non-homogeneous - no two parcels of land can be the same and cannot occupythe same

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 position on the globe.

◦ Economical characteristics of land

● Scarce - there is shortage of land and thus has a great demand .This also means that excess
supplyof land in one area cannot meet the requirementsof another area.The market is
restricted thus making supply inelastic
● Modification - Can be modified or improved
● Fixity - Fixed in terms of payment or return on investment.The land cannot be moved from
its present location of a lesser value to a location ofa higher value for instance land in
Kamulu being moved to Runda.
● Situs - Sites or location generally hinders the preferences of land in different locations
differs.

RIGHTS AND INTERESTS INLAND

● Interests recognized under law are;
1. Estates,
2. Servitudes and
3. Encumbrances

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 1. Estates in land

● These are interests in land capable of being created for a defined period of time. They are
quantifiable in terms of time scale i.e. interests for a given duration of time and areenjoyed
in one’s own land.
● Whereas estate is the legal interest in land,tenure of land on the other hand means aset of
conditions upon which an estate or interest in land may be owned.
● Types of interests in common law are;
a) Freehold,
b) Leasehold and
c) Customary estate

a) Free Hold

● This is the greatest interest in land a personcan have. It gives absolute ownership of the
land.
● A freehold title generally has no restrictionas to the use or occupation but in practice
there are conditional freeholds which restrict the use say agriculture or ranching
purposes only.
● They are subdivided into;
i. Freeholds of inheritance i.e. Fee-Simple estateand Fee-Tail estate
ii. Freeholds not of inheritance i.e. Life estate andEstate Per autre vie

● Fee simple - This is the largest quantum or bundle that land owners can have.A fee simple
represents absolute ownership of land, and therefore the owner may do whatever he or she
chooses with the land. If an owner of a fee simpleestate dies intestate, the land will descend to
the heirs.

● Fee tail - This is an estate in land subject to a restriction regarding inheritance. A fee tail is an
interest in real property that is ordinarily createdwith words such as "to A and the heirs of
his body." It may be limited in various ways, such as to male or female heirs only, or to
children produced by a particular spouse
Life interest - This estate only lasts for the life time of the guarantee or interestholder
● Estates per autre vie - In this form of estate the ownership lasts for the life time of another. Example
if a property is given to A for the life of B, when B dies before A the property then reverts to the
settler and eventually B inherits nothing from the settler.

b) Lease Holds

These are interests in land that are limited in duration i.e. there are specific periods for which they are
meant to last and where such duration is not expressly stated or explained such durations shouldbe
capable of being ascertained, currently limited to 99 years. It may be granted by afreeholder usually
subject to a fee payment or rent and subject to certain conditions to be observed.They include:-

• Fixed term estate

• Periodic tenancy
• Tenancies at will

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 • Tenancies at sufferance

● Fixed term estate

This is normally a lease held by an owner for a fixed period of time i.e. 99 years. It is guided by
certain conditions which may or may not be done in the continuing relationship of the parties.
● Periodic tenancy
This may be defined as tenancy from year to year or half year to half year. This tenancy is
characterized by the element of continuity .It does not end abruptly but there are steps to be
taken for this tenancy to end i.e. giving a notice.
● Tenancies at will
This tenancy is created by an express agreement. If there is no time fixation in the agreement
then the tenant may be evicted by the owner at any time, and this also applies to the tenant
terminating the agreement at will.
● Tenancy at sufferance
This is said to be the smallest estate known to law. It exists when one owns or possesses land by
lawful title but then keeps ownership without the title at all.

c) Customary estate

● This applies in those areas not covered byregistration where the applicable law is customary
law. Hence, it is presumed thatthis estate exists as a result of the state failure in not having all
the land brought under the registration system.Thus if a land based matter pertaining to
certain people’s rights was to arise in an area notregistered the applicable law would be
governed by the customary estate of the particular community.

2. Servitudes

● Can be defined as a device that ties rights and obligations to ownership or possessionof
land so that they run with the land to successive owners and occupiers.
● Servitudes allow people to create stable long-term arrangements for a wide variety of
purposes, including shared land uses; maintaining the character of a residential
neighborhood, commercial development, orhistoric property; and financing infrastructure
and common facilities.
● The owner of property burdened by servitude cannot unilaterally terminate the servitude or
transfer the property free from the servitude without the consent of all the beneficiaries.Thus,
whether or not they expressly agree to its terms,subsequent owners and occupiers are bound
to follow the servitude.
● Servitudes arise out of agreements between owners and users but may also be created by
prescription (i.e., by open use of someone else’sproperty for a specified period of time) or
by eminent domain (i.e., government appropriationof private property for public use).
● Agreements to create servitudes are subject to astatutory requirement which requires that
they be created by a written instrument.
● Servitudes usually, but not always, involve two or more parcels of land, one of which is
burdened and the other benefited by the servitude.The burdened parcel is called the “servient
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 estate” and the benefited parcel the “dominant estate.” Benefits and burdens that run with the
land are “appurtenant” (i.e., they must be used for specificproperty) and cannot generally be
detached fromthe land with which they are associated.
● use arrangements implemented by servitudes range from simple driveway easements and
covenants prohibiting non-residential use of subdivision lots to complex declarations that
provide for the physical and governmental infrastructure, planned developments, or private
towns.
● The three basic types of servitudesinclude:
a) Easements,
b) Covenants, and
c) Profits.

a) Easements

● These allow the right to enter and use, for a specified purpose, land that is owned by another
(e.g., the right to install and maintainan electric power line over someone else’s land).
● Easements are commonly used to provide for driveways, private roadways, parking, utility
lines, irrigation ditches, and pipelines. Historically, easements have been used to create rights-
of-way for rail, roads, streets, and highways, but more often full ownershipinterests are
acquired for those kinds of facilities

b) Restrictive covenants

● These are often referred to as negative easements tothe extent that they restrain the
activities of the registered proprietor as to what he can possibly do within his land.
● In the event the place curves on the free exercise of the proprietor’s powers and freedoms
in relation to his land, they in effect introduce an element of curtailment of enjoyment of
one’s rights in relation tohis own property and that restraint is intended to benefit all
persons other than the proprietor himself.
● Examples of covenants are agreements between owners of a parcel of land that they
will pay assessments to a homeowner’s association and agreements with an owner of a
business on a parcel of land that another parcel of land in the area will notbe used by a
competing business.

c) Profits

● profits as a right to go on right of another,to take a particular substance from that land
whether it is the soil or products ofthe soil.
● A profit entails the taking of something from another’s land, something capable ofownership
that is taken from the servienttenement.
● They give someone the right to enter andremove natural resources (e.g., sand and gravel)
from the land of another.
● There are 3 ways in which a profit can be broughtabout:
ii) Unity of seisin which involves acquisition of ownership or the servient tenement by the
owner ofthe profit at which point the question of enjoying theprofits ceases. Easements and
other rights of servienttenement for the benefit of a dominant tenement areextinguished if both
tenements come into the same ownership).Where profit is pertinent to land it terminates
through unity of both tenements
iii) Release that is duly executed and evidenced inwriting;
iv) Alteration of the dominant tenement in such a way that it cannot support the exercise of
such a right sothe alteration must be such that it alters the nature the dominant tenement and
is completely overhauledand there is a presumption that any right that existedmust be
distinguished.
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 c) encumbrances

These includes Mortgages and Charges andit forms Land as Security for a Loan.They are
borrowing transactions.

14.3.05T MORTGAGES AND CHARGE

14.3.05T11 MORTGAGE AND CHARGE

Definition of Mortgage: is the transfer of an interest in specific securing the payment of
money advanced or to be advanced by way of loan, an existing or future debt, or the
performance of an engagement, which may give rise to peculiarity liability.

The transferor is called a mortgager and the transferee a mortgagee. The principal
money and interest on this money for which payment is secured is called the mortgage
money. The instrument (document) by which the transfer is effected, is called a
mortgage deed.

Definition of charge: is an interest in land, securing the money payment of money or

money‟s worth or the fulfillment on any condition, and includes sub charge and the
instrument creating a charge.

14.3.05.T13 TYPES OF MORTGAGES

Are two main types:
a Legal Mortgages, and
b Equitable Mortgages

a LEGAL MORTGAGES
In Kenya the Legal Mortgage may be created under Section 58 of the Indian Transfer of
Property Act 1882. According to this Act, the following four classes of Legal Mortgages
may be created:
i) Simple Mortgages
ii) Usufructuary Mortgages
iii) Mortgages by Conditional Sale
iv) English Mortgages.
i) In a simple mortgage, the borrower binds himself to repay the loan and in the case
ofdefault, the lender can sell the security to recover his money.
ii) In the case of a Usufructuary mortgage, the lender takes possession of the
mortgaged property and repays himself, either wholly or partially, from the rents,
rates and proceeds from the land.
iii) A Mortgage by conditional sale, is that type of arrangement where the
borrowersells the property to the lender subject to the following conditions:
1. That on the default of payment the sale shall become absolute; or
2. That on payment of the mortgage debt, the sale becomes void;
3. That on payment of the debt, the property will be transferred to the
borrower

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iv) An English mortgage: is that type of mortgage when the mortgager binds himself to
repay the mortgage money on a certain date and the transfers the mortgages
property absolutely to the lender, subject to this provision that he will retransfer it
to the borrower upon repayment of the mortgage money. The English mortgagers
are more valuable as compared to other types of legal mortgages.
b EQUITABLE MORTGAGES
These mortgages are created in accordance with the provisions of the Equitable
Mortgages Act (Cap. 291) together with the relevant sections of the Government Lands
Act and the Land Titles Act. In the case of an equitable mortgage, the mortgager
(borrower) deposits with the lender (mortgagee) the title deed of the property as security
for the loan. When the loan has been repaid, the Lender (Mortgagee) returns the title deed
to the borrower (mortgager).

Rights of Mortgagers (Lenders)

Section 100 (A) (1) of the Indian Transfer of Property Act provides that the remedies of a
legal Mortgage are available as contained in the Act. The same remedies are also
extended to equitable mortgages under section 100 (A) (2) of this Act. It means that legal
and equitable mortgages have similar rights. The rights of the mortgages are described as
under:
a Foreclosure:
Under this right the mortgagee (lender) may obtain a court order extinguishing the
mortgager‟s equitable right to redeem the property. This order can be obtained if the
mortgager (borrower) fails to pay the sum due for an unreasonable time. This order is
made in two stages:
i) The borrower is given time within which to repay the debt so as to redeem
his property.
ii) If the borrower is unable to repay the mortgage money as ordered then
absolute order of foreclosure is made. In this case, the full estate is vested in
the name of the mortgagee. After this order, the land can be offered by the
mortgagee for sale.
b Sale:
This is an alternative remedy to that of foreclosure. In this case, a mortgagee may sell the
mortgaged property upon an order of court. A sale of the property may also be affected
without an order of court, but only where the mortgagee to sell without applying to court.
The sale must take place in public auction.
The proceeds of the sale must be applied in the following orders:
i) In payment if all expenses property incurred or incidental to the sale.
ii) In payment of all sums due to the mortgagee and to pay any other encumbrances.
iii) In payment in the order of priority of any encumbrances subsequent to the
mortgagee; and
iv) The residue if any, in payment to the mortgager

c Suit on Personal Covenant:

In every mortgage, the mortgager covenants, among other things, to repay the principal
sum plus interest on a definite date. This is a personal covenant, which he enters into with
the mortgagee. Once the date of repayment has passed, the mortgage may sue on this
personal covenant.
Under the Limitation of Actions Act (Cap 22), a suite to recover the principal sum will be
barred if instituted after twelve years from the date of the accrual of the right to receive it.
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Only six years interest is reasonable under the Act.

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d Appointment of a Receiver:
This is one of the ways in which the mortgagee may realize his security. Such
appointment may be made by the mortgage, in which case it must be done in writing, or it
may be made by the court upon an application by the mortgagee. A receiver is appointed
by the lender in writing, but he is deemed to be the agent of the borrower. The receiver is
responsible for collecting rents, profile, and income relating to the property. The money
received must be applied in the following order:
i) In discharge of any prior encumbrances free from which the property was sold.
ii) In paying the receiver‟s own commission insurance premiums and the cost of
repairs (if any);
iii) In payment of interests accruing sue in respect of the principal due under the
mortgage;
iv) In discharge of the mortgage debt if so directed by the lender.

e Right to take possession:

A mortgagee may also realize his security by entering into possession of the security
property. Where the mortgagee chooses to realize his security by taking possession of the
mortgaged property, he becomes a mortgagee in possession. He is then accountable to the
mortgager for any income received by him from the time of entering into possession. In
this case the mortgagee is responsible for:
i) Any failure to be diligent in realizing any sum due to him from the
mortgagedproperty.
ii) An occupation rent if he occupies all or part of the mortgaged land, at the
fairmarket value.
iii) An unreasonable injury or neglect of the mortgaged land caused by his willful
ornegligent act or omission.
iv) Repairs and improvements to protect the value of mortgaged land. In this case
heis allowed to charge reasonable cost of repairs and improvements made.

Rights of the Mortgager (borrower)

The main right of the mortgager is his right to redeem the mortgaged property on
payment of the principal sum borrowed, plus interest. In Common Law, if a borrower
didn‟t repay the mortgage debt on due date (i.e. Legal date of redemption), hid right to
redeem the mortgaged property was extinguished. But the equity of redemption was
allowed to the mortgager. The term “equitable right of redemption” was based on the
following two equitable principals.
i) Once a mortgage, always a mortgage;
ii) Equity looks at the intent rather than the form.
According to the principal of “Equitable Right of Redemption”, the mortgager has the
right to repay the debt plus interest, even after the date for redemption. Equity treats the
right of redemption with special care. Any term in a mortgage deed, which greatly
benefits the mortgagee at the expense of the mortgager, should be viewed carefully. The
right of redemption exists as long as an order of foreclosure has not been issued by a
court.

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 In addition to the Equitable Right of Redemption, the mortgager has the following
rights:
i) The appointment of a receiver
ii) The statutory power of sale of land
iii) The action on the personal covenant to repay the money lent
iv) The improvements to the mortgaged property
v) The payment of public charges in respect of the mortgaged property.

Revision Questions
a) Briefly explain the following:
i) Mortgage
ii) Charge (6mks)
b) Describe equitable mortgages.
(3mks)
c) i) Briefly explain the term „mortgage‟
ii) Outline the types of mortgages.
iii) Outline the use of land as security in mortgage transactions. (12mks)

ARBITRATION
Arbitration is similar to going to court, but faster, cheaper and less complex than litigation. If the
case settles, an arbitration will last around one year. If the case goes to hearing, an arbitration
typically takes 16 months. There are typically seven stages of the arbitration process:

1. Claimant Files a Claim

2. Respondent Submits Answer
3. Parties Select Arbitrators
4. Parties Attend Initial Prehearing Conference
5. Parties Exchange Discovery
6. Parties Attend Hearings
7. Arbitrators Deliberate and Render a Decision

1. Claimant Files a Claim

The first step for parties who want to file an arbitration claim is to submit the following to The
Capital Markets Authority (CMA)

 Statement of Claim: This is a document that is drafted and submitted by the person
filing the claim — the “claimant.” It includes your description of the dispute, the parties
involved, and the monetary size (inclusive of non-monetary damages) of the claim. It is
the claimant’s first opportunity to explain their side of the story, and it helps if claimant
can explain the events clearly — in chronological order. The claimant should attach any
supporting documents to their claim. They should also provide the full names and
addresses of the people or firms that are named as parties in the case.

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  Submission Agreement: The Submission Agreement lists the parties in the arbitration
case and confirms that CMA will administer it. It also establishes that, if the case ends
with a hearing, the parties all agree to abide by the arbitrators’ decisions. The parties
listed in the submission agreement must match the parties in the Statement of Claim.
 Filing Fee: CMA also requires that the claimant submit the appropriate filing fee at the
time of filing of the arbitration claim. CMA has a fee calculator to help estimate the
initial fees for filing an arbitration. Be aware that there may be additional fees as the case
progresses. If a party is experiencing financial difficulties, they can request a waiver of
some of the fees.

Upon receipt of the claim, CMA assigns a case number and a contact number for parties to
contact CMA staff. CMA staff may also advise if there are any deficiencies, or any clarifications
required prior to the case being served.

CMA staff serves as the impartial provider of the arbitration forum. Staff members have no
authority to evaluate the strengths and weaknesses of claims or defenses. That job is reserved for
the arbitrators.

2. Respondent Submits Answer

A respondent is a firm or person against which claimant filed their case. CMA notifies each
respondent of the case by sending—or serving—them a “Claim Notification Letter” by mail, or
at a designated claim service email for some CMA member firms. If the respondent is registered
with CMA, then the respondent must arbitrate with the claimant. The respondent’s Claim
Notification Letter will provide information about accessing the Party Portal to obtain a copy of
the statement of claim, and service letters, which will include, information about the rules of
CMA’s forum, and a blank CMA Submission Agreement for each respondent to fill out, sign and
return to CMA in electronic form (PDF) through the portal.

A respondent has 45 days to submit an answer. In it, the respondent can outline the defenses they
plan to argue and any exhibits that support this position. If the answer contains counterclaims
(claims by the respondent against the claimant), cross claims (claims by one respondent against
another respondent), or third-party claims, the party asserting the claims will have to submit the
appropriate filing fees to CMA.

If the answer contains a third-party claim, the respondent must serve the third party with the
answer containing the third party claim as well as the Statement of Claim, and provide FINRA
with proof of service.

3. Parties Select Arbitrators

Then, the parties select their arbitrators. CMA provides identical lists of possible arbitrators for
the case to both sides of the dispute. A computer generates the names randomly. CMA also
provides both sides with a detailed report, called the Arbitrator Disclosure Report, on each

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arbitrator’s background. The disclosure report resembles a résumé, and includes the arbitrator’s
employment background, education and training. Both sides can remove, or strike, some of the
arbitrators on the list from consideration and rank the remaining names in order of their
preference. This process gives both parties a say in who the arbitrators will be.

Arbitrators are not CMA employees but work on a case-by-case basis as independent contractors.
They must apply to be arbitrators, and CMA evaluates their education, professional licenses, and
employment. They also must take required training.

Customer Cases: A public arbitrator serves as the sole arbitrator on smaller claims
involving customers. A three-arbitrator panel hears the larger customer claims.
Customers in cases that proceed with three arbitrators have the option to have an all-
public arbitration panel or a majority-public panel decide their claim.

Intra-Industry Cases: Disputes between firms are decided exclusively by non-public

arbitrators. Smaller disputes between firms and their employees are decided by a single
public arbitrator. Larger disputes between firms and their employees are decided by a
three-arbitrator panel comprised of two public arbitrators and one non-public arbitrator.
Disputes involving statutory discrimination claims use all public panels with specially
qualified chairs.

In all cases, arbitrators are required to make decisions based on the facts and merits of the cases
they hear, and they take an oath to remain neutral. CMA constantly monitors arbitrators to ensure
that they meet necessary standards and, if they fail to meet them, CMA removes them from the
pool of arbitrators.

4. Parties Attend Initial Prehearing Conference

Once the parties select their arbitrators, the panel holds an initial prehearing conference with the
party representatives—typically over telephone or video conference. The parties are usually
represented by an attorney, but some parties choose to represent themselves. During the call, the
arbitrators and party representatives—usually lawyers—discuss procedural issues, the mediation
alternative, and scheduling hearings. At this conference, the parties select hearing dates, and
CMA recommends that the representatives have their calendars available. The parties should also
raise any issues that they think the arbitrators will need to address at this time.

5. Parties Exchange Discovery

The next stage is discovery. This is when the parties exchange documents and identify their
witnesses.

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Motions
A motion is a request to the arbitrator(s) asking them to decide an issue in the case. The basis for
the most frequently filed motions include issues like amending pleadings, discovery, and
scheduling.

6. Parties Attend Hearings

Once the parties complete the discovery phase of the case, it is time for the hearings. This is
when each party presents its case to the arbitrators. A hearing may be held in person, via video
conference, or by telephone.

7. Arbitrators Deliberate and Render Award

After the hearing, the arbitrators consider the evidence and decide the case—also called
rendering an award—typically within 30 days. All the arbitrators have an equal vote, with the
majority deciding the outcome. The decision is put in writing and is signed by the arbitrators.
This decision is called the arbitration award and is sent to the parties. In the award, the arbitrators
decide the claims and counterclaims presented by the parties.

The arbitrators will also decide how to allocate CMA. If the award requires a firm or a broker to
take any action—like making a payment—then the firm or broker must comply and make the
payment within 30 days. Firms or brokers who do not comply in a timely manner risk suspension
from CMA. If that happens, then they cannot sell securities to the public until they comply with
the award.

Once the panel renders an award, it is legally binding and final unless there is a court challenge.
There is no internal appeals process at CMA. A party can challenge an arbitration decision in
court by filing a motion to vacate or request that the court set aside the award as void. These
motions must typically be made within 90 days of the award, but a respondent can move to
vacate before the payment is due. However, judges only overturn arbitration awards in very
limited situations.

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