Ng'ang'a & 19 others (Suing as the Shareholders/ Members of Hawi Apartments Management Limited) v Hawi Developers Limited (Environment & Land Case 75 of 2015) [2024] KEELC 3520 (KLR)
The bottom line
#A Kenyan court forced a landowner to transfer a property title to an apartment owners' company, ruling that company contracts bind a company even after directors change.
What this practically means
#Executive summary
#Key legal issues
#Whether the Defendant was obligated to transfer the reversionary interest in LR No. 209/14990/4 to Hawi Apartments Management Limited.
Yes. All 23 apartments were sold, leases registered and the lease clause required transfer of the reversionary interest to the Manager once all leases were registered; the Defendant was compelled to transfer it.
It was not disputed that the Defendant was the registered owner and that all 23 apartments were sold to different parties. The uniform lease agreements, particularly clause 4, obliged the lessor to transfer the reversionary interest to the Manager within sixty days of notice after registration of all leases. DW1 admitted the transfer had not been effected. His claim of being a stranger to the agreements failed because agreements executed by former directors bind the company, not the directors personally. The 2009 Settlement Agreement postdated the sale agreements and did not bind the Plaintiffs, who were not privy to it.
Whether the defence based on the Settlement Agreement of 14th July 2009 and the demand for Kshs. 1,000,000 consideration had merit.
No. The Plaintiffs were not privy to the Settlement Agreement, which postdated their sale agreements, and the agreements bound the company regardless of changes in directorship.
DW1 acknowledged that the apartments were already on the land and the Plaintiffs were owners before the Settlement Agreement was signed, and that registered lease entries predated it. The court held that a contract is binding and a court cannot rewrite it; the directors who signed the sale agreements acted as representatives of the company, so the current directors could not escape those obligations. The claimed Kshs. 1,000,000 consideration for shares in the Defendant's company was unsupported, and DW1 denied blackmailing Plaintiffs though a Deed of Rectification for Vikram Dave who paid that sum existed.
Legal principles established
#- Actions of former directors who entered into contracts as representatives of a company are binding on current directors, since the agreements were with the company and not the directors personally.
- Where all units in an estate have been sold and registered leases require transfer of the reversionary interest to the management company, the lessor is obligated to effect that transfer.
Court orders
#- 1.The Defendant is ordered and compelled to deliver the original title document of LR No. 209/14990/4 together with the duly executed transfer documents necessary to facilitate registration of the title over LR No. 209/14990/4 in the name of Hawi Apartments Management Limited within Ninety (90) days from the date of the Judgment.
- 2.In default, the Deputy Registrar of the Court to execute all the necessary transfer documents to facilitate registration of the title over LR No. 209/14990/4 in the name of Hawi Apartments Management Limited.
- 3.Costs of the suit are awarded to the Plaintiffs.
- Jurisdiction invoked
- Original civil jurisdiction over land and reversionary interest claims (Originating Summons under the Civil Procedure Act)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ng'ang'a & 19 others (Suing as the Shareholders/ Members of Hawi Apartments Management Limited) v Hawi Developers Limited (Environment & Land Case 75 of 2015) [2024] KEELC 3520 (KLR)", Case Analysis (2024). Originating Summons dated 30th January 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/3520/eng@2024-04-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.