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ELCDismissedNot stated in the judgment as provided· [2019] KEELC 1497 (KLR)

Ocra Realtors Ltd v Abdulghani Kipkemboi Komen & 2 others [2019] KEELC 1497 (KLR)

Environment and Land Court
30 September 2019
MSMunyao Sila
6,169 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~25 min to read original · ~4 min brief

The bottom line

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A Kenyan court dismissed an auctioneer's land sale suit because it was unregistered and had no authority from the buyers it claimed to represent.

What this practically means

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Executive summary

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The plaintiff company sued the defendants, beneficiaries of 100 acres excised from LR No. 10013/4 Njoro Ngata under a succession cause, seeking to enforce two agency agreements dated 21 April 2011 and 14 November 2011 under which it was contracted to plan, subdivide and sell the land. The plaintiff pleaded that it sold portions of the land to various purchasers who paid the purchase price, and sought a permanent injunction restraining the defendants from interfering with the sold parcels, a declaration that the purchasers are the rightful owners, an order for surrender of the original title, and costs. The defendants denied the sales, alleged fraud and termination of the agreements, and asked for dismissal with costs. The court confined itself to the pleaded issues. It held, first, that the plaintiff lacked capacity to sue on behalf of the purchasers, since rights from purchase of land vest in the purchasers themselves and no power of attorney had been donated to the plaintiff; purchasers claiming rights must sue on their own behalf. Second, PW-1 admitted that the plaintiff was not a registered estate agent, and Section 18 of the Estate Agents Act, Cap 533 prohibits unregistered practice, making it an offence. Following Mapis Investment (K) Limited v Kenya Railways Corporation, the agency agreement was an illegal contract, null and void and incapable of vesting rights, including any capacity to sue. Third, the court deprecated the plaintiff's execution of sale agreements on behalf of the owners without a power of attorney, stressing that an agent's role is only to introduce buyers to sellers. The suit was dismissed with costs, with the court observing that the purchasers remain free to litigate their own claims.

Key legal issues

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01

Capacity of the plaintiff to sue on behalf of purchasers

Holding

The plaintiff lacked capacity to sue on behalf of the purchasers as it held no power of attorney from them

Reasoning

The court held that rights arising from purchase of land vest in the purchaser alone, and it is the purchaser who may sue or be sued. No law permits an agent to sue on behalf of a purchaser without a power of attorney donated by the purchaser. Any claim of implied or constructive trust must be pursued by the purchasers themselves, not by the agent.

p. 5
02

Illegality of the agency agreement for want of registration under the Estate Agents Act

Holding

The agency agreement was an illegal contract, null and void, incapable of vesting rights on the plaintiff

Reasoning

Section 18 of the Estate Agents Act (Cap 533) prohibits unregistered persons from practising as estate agents and renders contravention an offence. PW-1 admitted the plaintiff was not registered. Following Mapis Investment (K) Limited v Kenya Railways Corporation, a contract to perform estate agency services is only legal if entered into with a registered estate agent. The plaintiff therefore could not derive any rights, including the capacity to sue, from the agreement.

p. 5
03

Capacity of an agent to execute sale agreements without a power of attorney

Holding

It was wrong for the plaintiff to execute sale agreements on behalf of the land owners without a power of attorney

Reasoning

The court emphasised that the role of an agent is to find buyers and refer them to the seller so that buyer and seller enter into their own written sale agreement. An agent who executes sale agreements on behalf of an owner without a power of attorney improperly elevates himself to the position of the owner of the land.

p. 6

Legal principles established

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  • A person cannot sue on behalf of a land purchaser without a power of attorney donated by the purchaser
  • An estate agency contract entered into by an unregistered estate agent is illegal and unenforceable
  • An agent without a power of attorney has no capacity to execute sale agreements on behalf of a land owner

Court orders

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  1. 1.The plaintiff's suit is dismissed
  2. 2.Costs of the suit awarded to the defendants

Authorities

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Legislation

  • Estate Agents Act, Chapter 533, Laws of KenyaSection 18(1) and 18(2)
  • Estate Agents Act, Chapter 533, Laws of KenyaSection 2 (definition of 'practice as an estate agent')

Cases cited (1)

  • Mapis Investment (K) Limited vs Kenya Railways Corporation
    (2006) KLR
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (7)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Ocra Realtors Ltd v Abdulghani Kipkemboi Komen & 2 others [2019] KEELC 1497 (KLR)", Case Analysis (2019). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/1497/eng@2019-09-30

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.