Erick Mundia Wanene v Ann Wanjiku Ndungu [2017] KEELC 1538 (KLR)
The bottom line
#Kenya's Environment and Land Court cancelled titles bought from a trustee who sold family land without consent, but ordered the beneficiaries refund the buyer's money.
What this practically means
#Executive summary
#Key legal issues
#Legal capacity of an administrator to sell estate property
The trustee had the legal capacity to sell the suit properties as they were vested in him by law, subject to limitations in the grant
Section 79 of the Law of Succession Act vests all properties of the deceased in the legal representative, and section 82(b) confers power of sale. However, that power is subject to any limitation imposed by the grant. The grant here expressly made the trustee a trustee of the suit properties for minor beneficiaries, limiting his power of sale.
Lawfulness of the sale in breach of trust
The sale of the suit properties was unlawful as it was carried out in breach of trust without consent of the beneficiaries or court sanction
The beneficiaries were minors who could not consent, so the trustee was obliged to seek court sanction under section 56 of the Trustee Act before selling. He did not. Section 82 of the Law of Succession Act was inapplicable because the trustee did not appropriate the properties but purported to sell them to purchase other assets for the minors. Neither the beneficiaries nor the court later approved the sale.
Plaintiff's entitlement to refund
The Plaintiff was entitled to a refund of Kshs.1,500,000/- paid for Plot No. 2168, whose proceeds the Defendant's side received as other assets
Though the sale was unlawful, the payment was pleaded and proved, and uncontroverted evidence showed the proceeds bought four Ruiru plots and a motor vehicle handed to the Defendant and her siblings. It would be inequitable for the Defendant to recover the property and retain the money. No evidence of payment existed for Plot No. 2167, so no refund could be ordered for it.
Defendant's counter-claim for cancellation of title
The counter-claim was merited; the Plaintiff's title to Plot No. 2167, acquired in breach of trust, was cancelled
The Plaintiff knew the trustee was registered to hold the properties in trust for minors and had a due diligence duty to ensure all necessary consents were obtained. The Proviso to section 28 of the (repealed) Registered Land Act made the trustee's rights subject to his trust obligations, and the court has jurisdiction to cancel titles acquired in breach of trust.
Legal principles established
#- A trustee of suit properties under a confirmed grant has no power to sell trust property without the consent of the beneficiaries or the sanction of the court under section 56 of the Trustee Act.
- A purchaser who knows of a trustee's trust obligations has a duty of due diligence and takes the property subject to the trust.
- A beneficiary who recovers property sold in breach of trust may be equitably bound to refund the purchase price received from a purchaser.
Court orders
#- 1.Prayers (a), (b), (c), (d) and (e) in the plaint dated 2nd September, 2011 are disallowed
- 2.The Defendant in her capacity as the administrator of the estate of James Ndungu Mwangi shall pay to the Plaintiff a sum of Kshs.1,500,000/= being a refund of the purchase price paid for L.R. No. Dagoretti/Kinoo/2168
- 3.The title held by the Plaintiff in respect of L.R. No. Dagoretti/Kinoo/2167 is cancelled and the property shall revert to the estate of James Ndungu Mwangi to be held by the Defendant in trust for herself and her siblings, Beth Wanjiru Ndungu, Anthony Mwangi Ndungu and Finnie Mwangi Ndungu
- 4.Each party shall bear its own costs of the suit and the counter-claim
- Jurisdiction invoked
- Environment and Land Court jurisdiction under the Environment and Land Court Act over disputes relating to title to land
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Erick Mundia Wanene v Ann Wanjiku Ndungu [2017] KEELC 1538 (KLR)", Case Analysis (2017). Nairobi ELC Case of 2011 (suit filed 2nd September, 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1538/eng@2017-09-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.