Zenith Realtors Limited v Ngenya Location Ranching Co. Ltd & 1 other

knowledge of any agency agreement between them and denied tortious inducement. 4) Upon hearing evidence of the parties herein and upon consideration of the written submissions by parties, this Court is invited to make its findings based on the following issues;a) Whether the Plaintiff is a registered estate agent under the Estate Agents Act (Cap 533); b) Whether the Plaintiff is entitled to the reliefs sought; c) Whether the 2nd Defendant is liable for tortious inducement to breach of contract; d) Who bears the costs of this suit. Analysis and findings i) Whether the Plaintiff is a Registered Estate Agent? 5) The Plaintiff averred in its Plaint that it is a real estate and project management consultant. The 1 st Defendant denied this and required strict proof. 6) During cross-examination, the Plaintiff's witnesses admitted they are commission agents, not estate agents. PW1testified as follows;- "I am a commission agent. Not an estate agent. We are registered as general commission agent..." 7) PW2 equally admitted under oath that, "the plaintiffs are commission agent. I am unaware that such agents have to be licensed." 8) The 2nd Defendant produced a letter dated 9th February 2018 from the Estate Agents Registration Board stating: ".…We have carried out a search... and wish to state that Francis Muriuki Kinyua and Zenith Realtors Company Ltd are not registered to practice as Estate Agents." 2|P a g e

page 2 of 7

9) The Estate Agents Act (Cap 533), Section 2, defines practice as an estate agent to include negotiating sale of immovable property as an intermediary. Section 18(1) prohibits unregistered individuals, partnerships, or corporations from practicing as estate agents. Section 18(2) makes such practice a criminal offence. 10) In the circumstances, I find that the Plaintiff is not a registered estate agent under the Estate Agents Act. ii) Whether the Plaintiff is entitled to the reliefs sought? 11) The Plaintiff's claim for commission is founded on an alleged agency agreement dated 5th December 2013. However, to legally claim commission for sale of immovable property, registration under the Estate Agents Act is mandatory. 12) In the case of Mapis Investments (K) Ltd v Kenya Railways Corporation [2006] eKLR, the Court of Appeal held; "a contract to perform estate agency services can only be legal if entered into with a registered estate agent." 13) Similarly in Ocra Realtors Ltd v Abdulghani Kipkemboi Komen [2019] eKLR, the Court held that an unregistered estate agent cannot enforce a contract for commission, as such contract is illegal and void ab initio. 14) Courts therefore, cannot enforce illegal contracts as a matter of public policy. The Plaintiff's witnesses admitted they are commission agents, not estate agents, and the Plaintiff failed to prove compliance with the Estate Agents Act. 3|P a g e

page 3 of 7

15) The Plaintiff argued that Article 10 of the Constitution (national values) should allow its claim, but constitutional values cannot override express statutory prohibitions. 16) I therefore find the Plaintiff is not entitled to the reliefs sought. The alleged agency agreement is void ab initio due to lack of registration. iii) Whether the 2nd Defendant is Liable for Tortious Inducement to Breach of Contract? 17) The Plaintiff alleges that the 2nd Defendant induced breach of contract by:a) entering into a sale agreement with the 1st Defendant while knowing the Plaintiff was the sole agent; b) failing to disclose the sale transaction details to the Plaintiff; c) concealing the Plaintiff's role from the 1st Defendant. To succeed in tortious inducement, the Plaintiff must prove: i. A valid and enforceable contract between Plaintiff and 1st Defendant; ii. 2nd Defendant's knowledge of the contract; iii. 2nd Defendant intentionally induced the 1st Defendant to breach; iv. Resulting damage. 18) This Court has already found that the alleged agency agreement is void ab initio. The first element therefore fails. 19) Even assuming a valid contract existed, the Plaintiff failed to prove the 2nd Defendant had knowledge of the agency agreement: 4|P a g e

page 4 of 7

20) Initial inquiries were to Maina & Maina Advocates, who presented themselves as acting for the 1 st Defendant, with no mention of the Plaintiff. 21) Subsequent negotiations were with Mbari Kioni & Co. Advocates, who furnished a Board resolution confirming their mandate; 22) The sale agreement dated 2nd October 2014 was executed at Kshs. 640,000/acre, totaling Kshs. 160,793,600/=; 23) The full agreed purchase price was paid to the 1 st Defendant through its advocates; 24) PW3 (Joseph Muturi Wambui) testified that the Plaintiff's representatives introduced themselves as owners of the land (1 st Defendant), not as agents as now pleaded. 25) The 2nd Defendant's witness, Nelson Irungu, testified that the 2nd Defendant acted in good faith and fulfilled all obligations. As such, the 2nd Defendant’s advocates were discharged upon payment. 26) In Lumley v Gye (1853), the Court held that liability arises only where the defendant procures breach maliciously or with intent to injure. 27) In Barclays Bank of Kenya Ltd v Njenga [2007] eKLR, the Court held: "Mere knowledge of a contract is insufficient; there must be active persuasion or procurement leading to the breach, coupled with damage." 28) There is no evidence that the 2nd Defendant actively persuaded or procured the 1st Defendant to breach any contract. The 2 nd 5|P a g e

page 5 of 7

Defendant merely purchased land offered for sale, dealing with the 1st Defendant’s authorized representatives. 29) In the case of Said v Butt [1920] 3 KB 497, applied in Otieno Cleveland Okoth & Another v Juni Awiti Asiyo [2016] eKLR, the Court found that a purchaser dealing with a principal in good faith incurs no liability for an agent's undisclosed claims. 30) I am therefore persuaded that the 2 nd Defendant is not liable for tortious inducement to breach of contract. The Plaintiff failed to prove the necessary elements. Costs 31) Under Section 27 of the Civil Procedure Act, costs follow the event. The Plaintiff's suit has failed in its entirety and it shall bear the costs of this suit. 32) In the end, this court enters judgment as follows: i. The Plaintiff's Defendants be suit against and is the hereby 1st and dismissed 2nd in its entirety. ii. The Plaintiff shall pay the costs of this suit to the 1st and 2nd Defendants, to be taxed if not agreed. iii. The Plaintiff's claim for Kshs. 47,735,600/=, interest, and costs is hereby dismissed with costs to both Defendants. Dated, signed, and delivered at Nakuru this 14th day of august, 2026. 6|P a g e

page 6 of 7

J. K. SERGON JUDGE In the presence of: Rutoh C/A Githui for the Plaintiff Waiganjo for 1st Defendant Mugambi holding brief for Kegwa for 2nd Defendant 7|P a g e

page 7 of 7