Njenga v Africa Reit Limited & 3 others
The bottom line
#A Nairobi court ordered a developer and related parties to transfer an apartment to a buyer, but refused him extra damages because he hadn't paid the full price.
What this practically means
#Executive summary
#Key legal issues
#Whether the 2nd Defendant had capacity to contract under the Power of Attorney
The 2nd Defendant had actual authority under the Power of Attorney dated 13th May 1997 to sell and to enter into the assignment agreement with the Plaintiff; the alleged amendment by correspondence dated 23rd May 1997 was not proved.
The Power of Attorney donated power to sell LR No.1/153. The 3rd and 4th Defendants argued it was amended by a letter of 23rd May 1997 stripping the power to sell, but the court found the letter did not amend the Power of Attorney. DW3 confirmed the 3rd Defendant never contested the sale of the parent property and conceded the 2nd Defendant had authority to sign the Property Development Agreement.
Effect of revocation of the Power of Attorney on the assignment agreement
Revocation discharged the 2nd Defendant from further obligations but did not invalidate the agreement; the duty to complete shifted to the 4th Defendant as the new donee.
The court agreed with the 2nd Defendant that revocation discharged him, but held the 4th Defendant, as the subsequent donee of the 3rd Defendant's Power of Attorney over the same property, was obliged to complete the transaction. The 2nd Defendant had also attempted to include apartment B6 in his estate, showing he treated it as subject to the sale.
Privity of contract between the Plaintiff and the 1st Defendant
The 1st Defendant was privy to the transaction by virtue of clause 6.1(a) of the Property Development Agreement and its issuance and cancellation of the letter of allotment.
Clause 6.1(a) provided that agreements for sale of apartments would be entered into between the 1st Defendant and prospective purchasers. The 1st Defendant issued the letter of allotment to the Plaintiff as the 2nd Defendant's nominee and later cancelled it; DW1 admitted apartment B6 was among the Retained Apartments and that the 2nd Defendant nominated the Plaintiff.
Whether the Plaintiff was entitled to specific performance
Yes; the assignment agreement was valid and enforceable and the property remained capable of conveyance by the 1st Defendant.
Applying Reliance Electrical Engineers v Mantric and Anne Murambi, the court found a valid enforceable contract, no adequate alternative obstacle, no hardship or doubtful title barring the remedy. The lease to apartment B6 was left blank, the property was still registered in the 1st Defendant's name, and the 4th Defendant had a role to see the transaction concluded.
Legal principles established
#- A donee of a power of attorney with authority to sell may validly contract to sell an apartment on the donor's land, and revocation of the power does not invalidate an agreement already entered into.
- A subsequent donee of a power of attorney over the same property is obliged to complete a transaction validly entered into by the former donee.
- A party alleging forgery of a document must prove it, for instance by calling a document examiner.
Court orders
#- 1.A permanent injunction restraining the Defendants, their officers, servants or agents from occupying, selling, disposing of or in any other way interfering with the Plaintiff's interests in Apartment Number B6 on Land Reference Number 1/153, Wood Avenue, Nairobi
- 2.An order of specific performance compelling the 1st, 3rd and 4th Defendants to register the Plaintiff as the owner of Apartment Number B6 on LR No.1/153 Wood Avenue Nairobi upon payment of the balance of the purchase price of Kshs.9,030,175/= within 120 days from the date of judgment; in default the Deputy Registrar to execute transfer forms on the Plaintiff's favour
- 3.The Plaintiff shall have costs of the suit and interest
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a dispute concerning Apartment B6 on LR No.1/153 Wood Avenue, Nairobi
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Njenga v Africa Reit Limited & 3 others", Case Analysis (2023). Environment & Land Case 1544 of 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/19301/eng@2023-07-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.