Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELCPartially AllowedCivil Appeal (Machakos) arising from Machakos CMCC No. 156 of 2012· [2024] KEELC 3504 (KLR)

Nouvetti Realtor Limited v Onduso (Suing On Her Own Behalf And On Behalf Of The Estate Of The Late George Kisanda Onchiri) (Environment and Land Appeal 3 of 2023) [2024] KEELC 3504 (KLR)

Environment and Land Court
8 April 2024
COChristine Ochieng
2,807 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

#

Kenya's Environment and Land Court ruled a company can't be held to a contract signed before it existed, overturning a land sale judgment against Nouvetti Realtors Limited.

What this practically means

#

Executive summary

#
This is a first appeal against the judgment of Hon. E. H. Keago (CM) in Machakos Chief Magistrate's Civil Suit No. 156 of 2012, delivered on 27th May 2021, in which judgment was entered in favour of the plaintiff (Respondent) against the defendant (Appellant). The Respondent, as personal representative of the estate of George Kisanda Onchiri, had sought specific performance of a Memorandum of Understanding dated 16th February 2004, or alternatively compensation at market value of Plot No. 2 (LR No. 12715/3207), plus a permanent injunction and costs. The Appellant raised four issues: the Respondent's locus standi; the validity of the MOU; the merit of the appeal; and costs. On locus standi, the court found the Respondent had annexed the Death Certificate, Grant of Letters of Administration Ad Litem and a consent to her substitution application, which the trial court allowed, so she had capacity to sue. On the substantive issue, the court found the MOU was entered into between the deceased and Nouvetti Realtors, a business name of Thomas M. Musau, whereas the Appellant, Nouvetti Realtors Limited, was only incorporated on 7th December 2004 - after the MOU. Applying the distinct legal personality principle from St. Lavina Medical & Laboratory Services Limited v NHIF Board and Nicholas Mahihu Muriithi v Barclays Bank Kenya Limited, the court held there was no privity of contract between the deceased and the Appellant, and the trial court erred in entering judgment against an entity that was not party to the MOU. The appeal was allowed, the trial court's judgment set aside, the Respondent's claim dismissed, and, as the Respondent sued in a representative capacity for a suit commenced by the deceased, each party was directed to bear its own costs.

Key legal issues

#
01

Whether the Respondent had locus standi to continue the suit after the deceased plaintiff's death

Holding

Yes - she produced a Death Certificate, Grant of Letters of Administration Ad Litem and a consent, and the substitution application was allowed by the trial court.

Reasoning

The court perused the trial court record and found the application dated 4th May 2018 to substitute the deceased was supported by the Death Certificate, the Grant of Letters of Administration Ad Litem in Machakos CMC P&A No. 25 of 2018, and a consent signed by both parties' advocates. The Senior Principal Magistrate allowed the substitution on 7th May 2018, so the Respondent had capacity to proceed.

p. 4
02

Whether a valid MOU existed between the deceased and the Appellant

Holding

No - the MOU was between the deceased and Nouvetti Realtors, a business name; the Appellant, a limited company incorporated on 7th December 2004, did not exist when the MOU was made on 16th February 2004.

Reasoning

The MOU dated 16th February 2004 was signed by Thomas M. Musau for Nouvetti Realtors, a business firm. The Appellant's Certificate of Incorporation shows it was registered on 7th December 2004, after the MOU. Applying the distinct legal personality principle, the court found the Appellant was distinct from Nouvetti Realtors and there was no privity of contract between the deceased and the Appellant; the trial court erred in entering judgment against an entity that was not party to the MOU.

p. 5

Legal principles established

#
  • A business firm (business name) and a limited liability company are two separate legal entities, and a company cannot be bound by a contract made before its incorporation by a business name.

Court orders

#
  1. 1.Appeal allowed; judgment of the trial court delivered on 27th May 2021 set aside
  2. 2.Respondent's claim vide further amended Plaint dated 13th July 2018 dismissed
  3. 3.Each party to bear their own costs
On appeal from
Chief Magistrate's Court at Machakos
Civil Suit No. 156 of 2012
Jurisdiction invoked
First appellate jurisdiction over the Chief Magistrate's Court (Memorandum of Appeal dated 21st June 2021)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Nouvetti Realtor Limited v Onduso (Suing On Her Own Behalf And On Behalf Of The Estate Of The Late George Kisanda Onchiri) (Environment and Land Appeal 3 of 2023) [2024] KEELC 3504 (KLR)", Case Analysis (2024). Civil Appeal (Machakos) arising from Machakos CMCC No. 156 of 2012. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/3504/eng@2024-04-08

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