Caroline Nyakiringa Ndungu & 7 others v Registered Trustees of Teleposta Pension Scheme; Bernard Kariuki Wataari & 11 others (Interested Parties) [2019] KEELC 3649 (KLR)
The bottom line
#Kenya's Environment and Land Court ruled that an 'expression of interest' letter gave tenant-purchasers no legal right of first priority to buy the houses they occupied.
What this practically means
#Executive summary
#Key legal issues
#Whether the Plaintiffs had a legitimate expectation of first priority to purchase their occupied houses
No legitimate expectation arose; the letter of 31st October 2003 was an invitation to express interest and Form 'A' merely requested consideration.
The court examined the Defendant's letter and Form 'A' and found the letter expressly stated that completing the form was merely an expression of interest and did not constitute a sale contract. There was no automatic clause conferring first priority, no evidence of a binding policy document entitling occupants to priority, and only eight occupants who complied with the conditions (fresh tenancy agreements, outstanding rent, 10% deposit, payment in 90 days) were sold their houses.
Whether the Defendant breached its obligations by selling the houses to third parties
No breach; the Plaintiffs failed to meet the conditions of sale and the Defendant was raising funds for pensions.
The court found that the Defendant set conditions precedent to sale - signing a fresh tenancy agreement, paying outstanding rent, signing a letter of offer, paying 10% deposit and the balance within 90 days. Only eight occupants complied; the Plaintiffs did not, and had not paid rent since 2005 while receiving pensions from the Defendant. Selling to third parties therefore did not breach any obligation owed to them.
Costs of the consolidated suits
Costs of ELC 381 of 2014 to the Defendant; costs of ELC 157 of 2016 to the Plaintiffs to be borne by the Defendant.
ELC 157 of 2016 had been resolved by a consent judgment under which the Defendant undertook repairs and to form a Corporation under sections 17 and 27 of the Sectional Properties Act, leaving only costs open, which the court awarded to the Plaintiffs. The dismissed suit in ELC 381 of 2014 carried costs to the Defendant as the prevailing party.
Legal principles established
#- A letter inviting an occupant to express interest in purchasing a house, with an express rider that filling and returning the form does not constitute a sale contract, does not confer a legitimate expectation of first priority to purchase absent a binding policy.
- Legitimate expectation cannot arise where the decision-maker had no binding policy entitling the claimant to the priority claimed.
Court orders
#- 1.Dismissal of the Plaintiffs' suit in ELC 381 of 2014 with costs to the Defendant
- 2.Award of costs of ELC 157 of 2016 to the Plaintiffs, to be borne by the Defendant (the suit having been concluded by consent judgment on repairs and formation of a Corporation under sections 17 and 27 of the Sectional Properties Act)
- Jurisdiction invoked
- Environment and Land Court, ELC Case No. 157 of 2016 (consolidated with ELC 381 of 2014)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Caroline Nyakiringa Ndungu & 7 others v Registered Trustees of Teleposta Pension Scheme; Bernard Kariuki Wataari & 11 others (Interested Parties) [2019] KEELC 3649 (KLR)", Case Analysis (2019). ELC Case No. 157 of 2016 (Consolidated with ELC 381 of 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/3649/eng@2019-04-29
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.