Manyara Estate Ltd. and Others v. The National Development Credit Agency Court of Appeal Civ. App. 27-D-69; 13/10/69; Dissenting Opinion of Duffus V-P.

Manyara Estate Ltd. and Others v. The National Development Credit Agency Court of Appeal Civ. App. 27-D-69; 13/10/69; Dissenting Opinion of Duffus V-P.

Per Duffus V.P. dissenting: “An “unexhausted improvement”, is therefore the extent to which the owner of the right of occupancy has during the term of his tenure permanently improved the land it has to be an improvement that attaches to the land itself and that goes with the land. In fact it represents the value of the occupier’s interest in the land once his right of occupancy has ceased. The question is, has a mortgagee of a right of occupancy any right or interest in the value of this unexhausted improvement? The mortgages in this case are both made under the Land Registration Act and follow the form provided by that Act. (L.R. 11 as set out in the second schedule of the Act). There are special provisions for registered mortgages under the Act and in particular Section 57 provides inter alia that: ‘A mortgage shall, when registered, have effect as a security and shall not operate as a transfer of the estate thereby mortgaged, but the lender shall have all the powers and remedies in case of default and be subject to all the obligations that would be conferred or implied in a transfer of the estate subject to redemption:’ A mortgagee is therefore once default has been made placed in a position similar to a purchaser of the right of occupancy. In this respect a right of occupancy can be sold but only with the approval of the President. It is clear that the purchaser of a right of occupancy and would, there fore, in my view, be entitled to a charge on any proceeds that may be found payable to the mortgager. This charge would, of course, only be to the extent of the amount secured by the mortgage and any surplus would be payable to the mortgagor and would be liable to attachment by the un-secured creditors. I am of the definite view that this must be the correct interpretation of Section 57. it is certainly he most equitable and common sense point of view as otherwise the mortgagee’s security over a right of occupancy would be of little value, as a dishonest mortgagor could cause the Government to forfeit his right of occupancy and then collect his compensation for the value of the “unexhausted improvement and then as in this case, leave the country and leave the mortgagee without any security holding only his bare rights against the mortgagor personally; this, even though the mortgagor might have used the entire loan covered by the mortgage to carry out the very “unexhausted improvements” on the land for which the mortgagor has collected the compensation.” For majority opinion see [1970] H.C.D. 267.