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ELCPartially AllowedNot stated in judgment (Plaint dated 18th February 2019)· [2020] KEELC 2311 (KLR)

John Ndegwa Maina & 11 others v John Ndun’gu Mwaura & another [2020] KEELC 2311 (KLR)

Environment and Land Court
3 June 2020
7,516 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~30 min to read original · ~4 min brief

The bottom line

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Kenyan land buyers who paid for plots through an agent won their land; the registered owner cannot evict them because a constructive trust protects their purchase.

What this practically means

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Executive summary

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The Plaintiffs, purchasers of 16 subdivided plots carved out of title No. Sipili/Donylop Block/2/757 (Mutukanio), sued the registered proprietors seeking a declaration that the land was held in trust for them, dissolution of the trust and transfer of their entitlements. They bought through Elijah Githinji Charara (PW1), the undisputed agent of the 1st Defendant, paying the agreed Kshs.35,000 per plot; the agent remitted only Kshs.105,000 to the 1st Defendant and withheld Kshs.318,000 after discovering the land had been transferred to the 2nd Defendant. The Defendants served eviction notices and counterclaimed for a declaration of ownership, an order of eviction and vacant possession, alleging trespass. The Defendants argued the agent breached the agency contract, voiding the sales, and later sought in submissions to plead limitation and illegality. The court held that the agency agreement expressly benefited the third-party purchasers, who presumptively could enforce it, and that the transaction created a constructive trust in favour of the purchasers who had paid the purchase price. New issues raised in submissions, being at variance with the pleadings, were disregarded. The Plaintiffs' case was proved on a balance of probabilities; the defence and counterclaim were dismissed in their entirety. The court declared the Defendants not entitled to evict the Plaintiffs, ordered dissolution of the trust and transfer/subdivision of the plots (with the Deputy Registrar to execute documents in default), and awarded the Plaintiffs costs of the suit and counterclaim plus interest at court rates.

Key legal issues

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01

Whether breach of the agency contract by the agent defeated the purchasers' rights

Holding

No - the agency agreement expressly benefited the third-party purchasers, who could enforce it notwithstanding the agent's breach; a constructive trust arose in their favour

Reasoning

The court found an express agency contract between DW1 and PW1 creating privity of contract. Relying on the doctrine of third-party enforcement where a contract expressly benefits a third party, the court held the purchasers presumptively entitled to enforce the agreement. The agent's partial sale with authority bound the principal; the subsequent transfer to the 2nd Defendant could not defeat the purchasers' rights, and a constructive trust arose in their favour.

p. 9
02

Whether new issues (limitation and illegality) raised in submissions could be determined

Holding

No - parties are bound by their pleadings and evidence at variance with pleadings must be disregarded

Reasoning

The Defendants introduced in submissions the claims that the Plaintiffs' suit was time-barred and that the sale agreements were void for illegality. The court, relying on IEBC v Stephen Mutinda Mule and Adetoun Oladeji, held parties cannot depart from their pleadings, as this deprives the other side of the opportunity to meet the new situation.

p. 9
03

Whether a court may rewrite a contract

Holding

No - a court cannot rewrite a contract between parties; parties are bound by its terms absent coercion, fraud or undue influence

Reasoning

Guided by National Bank Kenya Ltd v Pipeplastic Samsolit (K) Ltd, the court reiterated that it cannot rewrite contracts and that parties are bound by their contractual terms unless they prove coercion, fraud or undue influence in the procurement of the contract.

p. 8

Legal principles established

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  • A principal is liable on an agent's contract where the agent acted with express, implied or apparent authority
  • A contract that expressly benefits a third party gives rise to a presumption that the parties intended the third party to have a right of enforcement
  • A transaction of this nature creates a constructive trust in favour of purchasers who paid the purchase price

Court orders

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  1. 1.Declared that the Defendants are not entitled to evict the Plaintiffs from title No. Sipili/Donylop Block/2/757 (Mutukanio) as the same is held in trust on their behalf
  2. 2.Granted an order for dissolution of the said trust and transfer to the Plaintiffs their respective entitlements out of the title, and in default the Court's Deputy Registrar to execute all necessary documents to facilitate subdivision and transfer
  3. 3.Granted the Plaintiffs the costs of the suit and Counter-claim plus interest thereon at Court's rate

Authorities

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Legislation

  • Civil Procedure RulesOrder 11
  • Insurance (Motor Vehicle Third Party Risks) ActCap 405
  • Land Act2012

Cases cited (10)

  • Karanja vs Phoenix of E.A Assurance Co. ltd
    [1991] eKLR
  • Macharia Mwangi Maina & 87 Others vs Davidson Mwangi Kagiri
    [2014] eKLR
  • Sammy Likuyi Adiema vs Charles Shamwati Shisikani
    [2014] eKLR
  • Willy Kimutai Kitilit vs Michael Kibet
    [2015] eKLR
  • William Kipsoi Sigei vs Kipkoech Arusei & Another
    [2019] eKLR
  • Branwhite vs Worcester Works Finance Ltd
    [1969] 1 A.C 552
  • National Bank Kenya Limited vs Pipeplastic Samsolit (K) Limited and Another
    [2002] 2 EA 503
  • Aineah Liluyani Njirah v Agha Khan Health Services
    [2013] eKLR
  • Independent Electoral and Boundaries Commission & Ano. vs. Stephen Mutinda Mule & 3 others
    (2014) eKLR
  • Adetoun Oladeji (NIG) vs. Nigeria Breweries PLC
    SC 91/2002
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court under the Environment and Land Court Act over disputes relating to title and possession of 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, "John Ndegwa Maina & 11 others v John Ndun’gu Mwaura & another [2020] KEELC 2311 (KLR)", Case Analysis (2020). Not stated in judgment (Plaint dated 18th February 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2311/eng@2020-06-03

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