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ELCDismissed· [2019] KEELC 4935 (KLR)

Aden Ismail Hassan & 5 others v Mohamed Amada Isaac & 2 others [2019] KEELC 4935 (KLR)

Environment and Land Court
24 January 2019
JOJ.O. Olola
2,252 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court refused to enforce a Kshs 2.7 million property commission because the claimants were not registered estate agents.

What this practically means

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Executive summary

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The six Plaintiffs, describing themselves as commissioned land agents, sued the three Defendants for a mandatory injunction compelling payment of 10% commission (Kshs 2.7 million) on the sale of Plot No. Mgumo Patsa/Mazeras/456 for Kshs 27 million to Amana Petroleum (K) Ltd. They relied on an Instruction Note dated 14th August 2014 executed with the 1st Defendant, under which they were to deliver a buyer within 30 days. The Defendants denied contracting the Plaintiffs, with the 2nd and 3rd Defendants asserting they had no interest in the land at the material time, and contended the Plaintiffs failed to produce a buyer within the agreed period. The Plaintiffs called three witnesses, including the advocate who drew the Instruction Note; the 1st Defendant testified that he had indeed asked the 1st and 5th Plaintiffs to secure a buyer but that they exceeded the 30-day period. The court accepted that the Plaintiffs played a role in introducing the eventual buyer, the 1st Defendant being unable to explain in cross-examination how he was contacted by a director of Amana Petroleum. However, the Plaintiffs' acts fell within the statutory definition of estate agency practice under the Estate Agents Act, Cap 533, and Section 18 prohibits unregistered persons from practising as estate agents. The Plaintiffs produced no evidence of registration. Applying the principle that courts will not enforce illegal contracts, the court held the commission agreement unenforceable and dismissed the suit with costs to the Defendants.

Key legal issues

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01

Enforceability of a commission agreement with unregistered estate agents

Holding

The commission agreement is unenforceable because the Plaintiffs did not prove registration under the Estate Agents Act; their acts constituted estate agency practice requiring registration under Section 18

Reasoning

The Plaintiffs' acts of bringing together a prospective vendor and purchaser fall within the statutory definition of estate agency practice under Cap 533. Section 18 prohibits unregistered practice and makes it an offence. The court cannot lend its aid to enforce a contract tainted with illegality where the plaintiff is implicated, citing Mistry Amar Singh v Kulubya. Despite finding the Plaintiffs played a role in introducing the buyer, the suit fails.

p. 3
02

Whether the Plaintiffs introduced the eventual buyers

Holding

On the evidence, the Plaintiffs played a role in introducing the eventual buyer to the 1st Defendant

Reasoning

The 1st Defendant was at pains during cross-examination to explain how he came to be contacted by a director of Amana Petroleum (K) Ltd, with whom the sale at Kshs 27 million was concluded. Although the sale was not concluded within the 30 days stipulated in the Instruction Note, the court accepted the Plaintiffs' role in sourcing the buyer.

Legal principles established

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  • No court ought to enforce an illegal contract where the illegality is brought to its notice and the plaintiff is implicated in the illegality, irrespective of whether the defendant pleaded it
  • An unregistered person cannot practise as an estate agent and cannot enforce a commission agreement arising from such unregistered practice

Court orders

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  1. 1.The suit is dismissed with costs to the Defendants

Authorities

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Legislation

  • Estate Agents Act, Cap 533Section 1
  • Estate Agents Act, Cap 533Section 2
  • Estate Agents Act, Cap 533Section 18(1) and (2)

Cases cited (1)

  • Mistry Amar Singh –vs- Servano Wofumina Kulubya
    (1963) EA 408
Jurisdiction invoked
Original civil jurisdiction over the suit (plaint filed in the Environment and Land Court); no specific constitutional provision cited

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, "Aden Ismail Hassan & 5 others v Mohamed Amada Isaac & 2 others [2019] KEELC 4935 (KLR)", Case Analysis (2019). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/4935/eng@2019-01-24

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