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ELCAllowedNot stated in the judgment (Thika ELC suit)· [2019] KEELC 4041 (KLR)

John Guchu Njoroge v Mboi Kamiti Farmers Company Limited [2019] KEELC 4041 (KLR)

Environment and Land Court
22 March 2019
3,478 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan court ordered a company to transfer 46 Ruiru land parcels to a buyer, holding it held them in trust under an irrevocable Power of Attorney.

What this practically means

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Executive summary

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The Plaintiff sued the Defendant company seeking a declaration that, as at 2007, the Defendant held 46 parcels of land in Ruiru/Kiu Block 4 on trust for him, plus an injunction, orders for transfer of the properties, and costs. He averred that the Defendant owed him over Kshs. 2,990,000 and, by an Agreement dated 17th July 2007, agreed to transfer the parcels in full and final settlement of the debt; that he was given possession, paid processing costs, and was donated an irrevocable Power of Attorney on 25th July 2007; and that the Defendant later instructed the Commissioner of Lands to stop processing the leases and offered the properties for sale. The Defendant filed a defence alleging fraud and absence of a Board Resolution but did not appear at trial despite service, and the Plaintiff testified unopposed. The Court framed five issues: the effect of the Power of Attorney, the validity of the sale agreement, the trust question, entitlement to prayers, and costs. It found the Power of Attorney irrevocable, being coupled with an interest and given for valuable consideration; the sale agreement valid under Section 3(3) of the Contract Act and supported by a certified Board resolution; and that the Defendant held the properties in trust for the Plaintiff, a trust being implied to give effect to the parties' intention notwithstanding Section 25 of the Land Registration Act. The Plaintiff's uncontroverted evidence discharged the burden of proof on a balance of probabilities. Judgment was entered for the Plaintiff in terms of prayers (a) to (e), with costs to the Plaintiff.

Key legal issues

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01

Whether the Power of Attorney was irrevocable

Holding

The Power of Attorney was irrevocable because it was given for valuable consideration, coupled with an interest in the subject property, and expressly stated to be irrevocable; the Defendant could not revoke it or transfer the suit lands.

Reasoning

The Court adopted the definition of a power coupled with an interest from Black's Law Dictionary, 8th Edition, and the decision in CCB v MIB & Another. Since the power was donated in the context of a sale for value, it was not held for the benefit of the principal. From 25th July 2007 only the Plaintiff had power to deal with the suit properties.

p. 4
02

Whether the sale agreement was valid

Holding

The sale agreement was valid and enforceable, satisfying Section 3(3) of the Law of Contract Act, and was supported by a certified Board resolution dated 5th June 2007.

Reasoning

The agreement contained the parties' names, property descriptions, purchase price and conditions, and was signed and witnessed, meeting the test in Nelson Kivuvani v Yuda Komora & Another. The Defendant's allegation that the directors who signed were not genuine was unsupported by any evidence.

p. 4
03

Whether the Defendant held the suit properties in trust for the Plaintiff

Holding

The Defendant held the suit properties in trust for the Plaintiff from the date of the Power of Attorney, the parties' intention being that the properties be transferred to the Plaintiff.

Reasoning

Relying on Section 25 of the Land Registration Act, which subjects a proprietor's rights to trusts, and Rose Naswa Masinde v Lillian Nekesa Simiyu, the Court held that a trust may be implied to give effect to the parties' intention, as evidenced by the valid sale agreement and the irrevocable Power of Attorney.

p. 4
04

Whether the Plaintiff was entitled to the prayers sought

Holding

The Plaintiff proved his case on a balance of probabilities and was entitled to the prayers sought.

Reasoning

The Defendant, though served and aware of hearing dates, neither appeared nor called evidence, leaving the Plaintiff's evidence uncontroverted. Applying Section 107 of the Evidence Act, the Court found the Plaintiff had discharged the burden of proof on the required standard.

p. 5

Legal principles established

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  • A Power of Attorney is irrevocable where it is given for valuable consideration, is coupled with an interest, and expressly states that it is irrevocable.
  • Where a party fails to adduce evidence, its pleadings remain unsubstantiated statements of fact and the opposing party's evidence stands uncontroverted.
  • A trust may be implied from the intention of the parties, and a registered proprietor holds land subject to any trust notwithstanding the indefeasibility of title under Section 25 of the Land Registration Act.
  • An agreement for sale of land containing the parties' names, property description, purchase price, conditions and signatures attested by witnesses amounts to a valid contract satisfying Section 3(3) of the Contract Act.

Court orders

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  1. 1.Declaration that the Defendant, as at 2007, held legal title in respect of the 46 enumerated Ruiru/Kiu Block 4 properties as trustee for the Plaintiff (prayer (a))
  2. 2.Injunction restraining the Defendant, its members, servants, employees, agents, assignee or any party claiming under them from trespassing, entering, alienating, dealing, charging, transferring or interfering with the Plaintiff's quiet possession of the suit properties (prayer (b))
  3. 3.Order directing the Defendant to sign and deliver all documents necessary to transfer the enumerated properties to the Plaintiff (prayer (c))
  4. 4.Order directing that the said properties be transferred to the Plaintiff (prayer (d))
  5. 5.Costs of the suit to the Plaintiff (prayer (e))

Authorities

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Legislation

  • Law of Contract Act (cited as the Contract Act)Section 3(3)
  • Land Registration ActSection 25
  • Evidence ActSection 107
  • Civil Procedure ActSection 27
  • Auctioneers Act(Cap. 526) - referenced in the proviso to Section 3(3)

Cases cited (5)

  • Bishan Singh Chadha Ltd vs Mohinder Singh & Another
    (1956) 29 KLR 20
  • Charter Bank Limited vs Frank N. Kamau
    (2016) eKLR
  • CCB vs MIB & Another
    (2014) eKLR
  • Nelson Kivuvani vs Yuda Komora & Another
    Nairobi HCCC No. 956 of 1991
  • Rose Naswa Masinde vs Lillian Nekesa Simiyu
    (2014) eKLR
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over disputes relating to land (not expressly cited in the judgment)

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, "John Guchu Njoroge v Mboi Kamiti Farmers Company Limited [2019] KEELC 4041 (KLR)", Case Analysis (2019). Not stated in the judgment (Thika ELC suit). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4041/eng@2019-03-22

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