Agri Seedco Ltd v Christine Chepchirchir Baig & another [2019] [2019] KECA 389 (KLR)
The bottom line
#The Court of Appeal upheld that a power of attorney labelled 'irrevocable' can still be revoked, and a buyer who ignores the owner's warnings loses the land.
What this practically means
#Executive summary
#Key legal issues
#Whether a power of attorney expressed to be irrevocable, given out of natural love and affection, is revocable
The power of attorney was revocable; the label 'irrevocable' does not make it so at common law unless supported by consideration and coupled with an interest of the agent.
Sections 50 and 51 of the Registration of Titles Act contemplate revocable powers of attorney and do not address irrevocable ones. At common law, per Bowstead and Reynolds, an authority is irrevocable only where given by deed or for valuable consideration to secure an interest of the agent. Here the power was donated out of natural love and affection for the benefit of the donor's children, not the agent, so it lacked both consideration and a coupled interest and remained revocable.
Effect of a registered revocation on a pending land transaction
Once the revocation of the power of attorney was registered, the registrar could not give effect to the conveyance or transfer, rendering the transaction invalid and ineffective.
The revocation was registered on 11 January 2012, before the appellant lodged the conveyance documents for registration on 6 February 2012. Under section 51 of the Registration of Titles Act the registrar is barred from giving effect to instruments signed pursuant to a revoked power. Because registration of the transfer had not been effected, the retrospective argument failed and the transaction could not be completed.
Whether the appellant was a bona fide purchaser for value without notice
The appellant was not a bona fide purchaser because it knew, through the 1st respondent's direct warnings and those of her relatives from November 2011, that the registered owner did not wish to sell, yet proceeded with the transaction.
Kassim, the appellant's general manager, conceded the 1st respondent called him from the US in November 2011 stating she was not selling the land. Despite this, the appellant paid the balance, lodged conveyance documents, and took possession. The transaction was also executed in the 1st respondent's name without disclosing the power of attorney, and the price of Kshs. 27 million was a gross undervalue against a valuation of about Kshs. 56.96 million. These circumstances defeated any claim to bona fide purchaser status.
Fiduciary duty of an attorney and the burden of proving good faith
The relationship of principal and agent created a fiduciary duty; the 2nd respondent, in a position of active confidence, failed to prove good faith and exhibited fraudulent intent by selling without the donor's knowledge or consent.
Under section 117 of the Evidence Act, the burden of proving good faith lies on the party in a position of active confidence. The 2nd respondent entered the transaction without consulting the 1st respondent, acted in his own interest, and only sought to resile when she discovered the sale. He called no evidence. His conduct exhibited fraudulent intention, and his defence did not discharge the burden on him.
First appellate court's duty on appeal
As a first appellate court, the Court of Appeal is obliged to subject the evidence adduced at trial to a fresh analysis and reach its own conclusion.
Citing Rule 29 of the Court of Appeal Rules and Zingo Investment Ltd v Maina Enterprises Ltd, the court restated that a first appeal is decided on the evidence heard at trial, with the appellate court re-evaluating that evidence and drawing its own conclusions, while allowing for the fact that it neither saw nor heard the witnesses.
Legal principles established
#- A power of attorney is not irrevocable merely because the word 'irrevocable' is used in it; it is only irrevocable where it is given for valuable consideration and is for protecting or securing the interest of the agent.
- Natural love and affection is not valuable consideration capable of supporting an irrevocable power of attorney.
- After registration of a revocation of a power of attorney, the registrar shall not give effect to any transfer or other instrument signed pursuant to that power.
- Fraud must be specifically pleaded with particulars on the face of the pleading, and fraudulent conduct must be distinctly alleged and distinctly proved; it is not allowable to leave fraud to be inferred from the facts.
- Where a question arises as to the good faith of a transaction between parties one of whom stands in a position of active confidence, the burden of proving good faith is on the party in the position of active confidence.
- A party who has knowledge that the registered owner does not wish to sell cannot be a bona fide purchaser for value without notice, even where the sale was executed under a power of attorney that was subsisting when the agreement was made.
Court orders
#- 1.The appeal is dismissed with costs
- On appeal from
- High Court of Kenya, Environment and Land Court at Kitale
- ELC Case No. 34 of 2012
- Jurisdiction invoked
- First appeal under the Court of Appeal Rules (Rule 29 of the Court of Appeal Rules invoked); appeal from the High Court sitting as Environment and Land Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Agri Seedco Ltd v Christine Chepchirchir Baig & another [2019] [2019] KECA 389 (KLR)", Case Analysis (2019). Civil Appeal No. 264 of 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/389/eng@2019-07-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.