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ELCPartially AllowedNairobi ELC Case of 2011 (suit filed 2nd September, 2011)· [2017] KEELC 1538 (KLR)

Erick Mundia Wanene v Ann Wanjiku Ndungu [2017] KEELC 1538 (KLR)

Environment and Land Court
22 September 2017
4,075 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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This Environment and Land Court judgment at Nairobi, delivered by S. Okong'o J on 22nd September, 2017, resolved a dispute over two Dagoretti/Kinoo plots forming part of the estate of James Ndungu Mwangi, who died in 1999. Following a confirmed grant, the plots were registered in John Njoroge Mwangi (the trustee) to hold in trust for the deceased's four minor children, including the Defendant. The trustee sold Plot No. 2167 to the Plaintiff in 2001 for Kshs.480,000/- and Plot No. 2168 in 2006 for Kshs.1,500,000/-, the latter never being transferred. After the Defendant obtained a new grant in 2007, she caused Plot No. 2168 to be registered in her name and restricted Plot No. 2167, prompting this suit by the Plaintiff seeking injunction, declaration, transfer and damages, while the Defendant counter-claimed for cancellation of the Plaintiff's title to Plot No. 2167. The court framed four issues. It held that the trustee had legal capacity to sell but that the power was limited by the trust; since the beneficiaries were minors who could not consent and no court sanction was obtained under section 56 of the Trustee Act, both sales were unlawful. The Plaintiff, aware of the trust, took subject to it, so the Defendant's counter-claim succeeded and the title to Plot No. 2167 was cancelled. However, equity required a refund of the Kshs.1,500,000/- paid for Plot No. 2168, whose proceeds had been handed to the Defendant and her siblings; no refund was ordered for Plot No. 2167 for want of proof of payment. Each party bore its own costs.

Key legal issues

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01

Legal capacity of an administrator to sell estate property

Holding

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

Reasoning

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.

p. 4
02

Lawfulness of the sale in breach of trust

Holding

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

Reasoning

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.

p. 5
03

Plaintiff's entitlement to refund

Holding

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

Reasoning

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.

p. 5
04

Defendant's counter-claim for cancellation of title

Holding

The counter-claim was merited; the Plaintiff's title to Plot No. 2167, acquired in breach of trust, was cancelled

Reasoning

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.

p. 5

Legal principles established

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  • 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

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  1. 1.Prayers (a), (b), (c), (d) and (e) in the plaint dated 2nd September, 2011 are disallowed
  2. 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. 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. 4.Each party shall bear its own costs of the suit and the counter-claim

Authorities

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Legislation

  • Law of Succession Act, Chapter 160 Laws of KenyaSection 71
  • Law of Succession Act, Chapter 160 Laws of KenyaSection 79
  • Law of Succession Act, Chapter 160 Laws of KenyaSection 82 (and 82(b))
  • Law of Succession Act, Chapter 160 Laws of KenyaSection 84
  • Trustee Act, Chapter 167 Laws of KenyaSection 56
  • Registered Land Act, Chapter 300 Laws of Kenya (repealed)Proviso to Section 28
Jurisdiction invoked
Environment and Land Court jurisdiction under the Environment and Land Court Act over disputes relating to title to land

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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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.