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ELCAllowedOriginating Summons dated 29th August 2013· [2013] KEELC 4 (KLR)

In Re Eunice Wanjeri Njenga [2013] KEELC 4 (KLR)

High Court of Kenya
4 December 2013
PNP. NYAMWEYA
2,350 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan mother holding family land in trust for her children got court approval to sell part of it, provided at least half the proceeds buy new land.

What this practically means

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Executive summary

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By an Originating Summons dated 29th August 2013 brought ex parte under Order 37 Rules 1, 3 and 7 of the Civil Procedure Rules, the Applicant, registered proprietor of Dagoretti/Riruta/2028 (0.2 hectares) held in trust for herself and her three children, sought the court's approval to sell a 0.1 hectare portion of the trust property, with proceeds to be applied to developing the remainder, educating her sons, and purchasing a larger parcel of land elsewhere. She had already contracted to sell the portion to Spears Services Limited and received a 10% deposit, which she applied to transfer and sub-division costs. The beneficiaries swore supporting affidavits confirming they had no objection and believed the sale prudent. Counsel submitted that the Applicant was a cestui que trust with locus standi, relying on Part II and Part III of the Trustees Act, sections 56 and 59, and the decision in Re Estate Of Mbiyu Koinange on application of trust funds. The court held that the application was competently brought under Order 37 Rule 1 and sections 13, 17 and 56 of the Trustees Act, noting that section 25(2) of the Land Registration Act does not relieve a proprietor of trustee obligations. Finding the proposed investments prudent and in the beneficiaries' interests, and noting the beneficiaries' consent, the court allowed the summons. It permitted the sub-division and sale, directed that not more than 50% of proceeds go to improvements, beneficiaries' claims and legal costs, and that not less than 50% be invested in immovable property in Kenya in fee simple or a lease of at least forty years unexpired, subject to the statutory rent conditions. Costs were to be met from the sale proceeds.

Key legal issues

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01

Whether the Applicant had locus standi and whether the court had jurisdiction to entertain the application

Holding

The application was competently brought under Order 37 Rule 1 of the Civil Procedure Rules and sections 13, 17 and 56 of the Trustees Act; the Applicant, being a registered trustee-proprietor, had locus standi.

Reasoning

The court reasoned that the Applicant showed trustee status by virtue of registration as proprietor in trust for herself and her children, evidenced by the title deed. The power to sell trust property is conferred by sections 13 and 17 of the Trustees Act, and section 56 empowers the court to authorize dealings with trust property on application by a trustee or person beneficially interested. Order 37 Rule 1(f) permits approval of a sale by originating summons.

p. 3
02

Whether the proposed sale of a portion of the trust property and application of the proceeds should be approved

Holding

The proposed investments were prudent and in the interests of the beneficiaries; the approval sought was granted subject to conditions.

Reasoning

The court considered the general duties of trustees - to safeguard trust assets, invest trust money and distribute assets, while maintaining equality between beneficiaries and providing accounts. The Applicant intended to invest proceeds in the remaining portion, pay school fees for the beneficiaries and buy a larger parcel of land, which section 4(1) of the Trustees Act permits. The beneficiaries had been informed and raised no objection, so the court saw no reason to withhold approval, subject to conditions limiting the use of proceeds.

p. 4

Legal principles established

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  • Under section 56 of the Trustees Act, the court may confer upon trustees, by order, any power necessary to effect a transaction affecting trust property that is expedient but cannot be effected for want of an express power, and may direct how costs are to be borne as between capital and income.
  • A trustee may invest trust funds in immovable property in Kenya subject to the conditions in section 4(1) of the Trustees Act.

Court orders

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  1. 1.The Applicant is permitted and empowered by the Court to sub-divide and sell a portion of 0.1 hectares of the trust property known as Dagoretti/Riruta/2028
  2. 2.The Applicant shall apply not more than half (50%) of the proceeds of the sale to improvements and investments on the remaining portion of the trust property; the payment of claims by, and costs of, the beneficiaries; and to the legal costs of the said sale and of the Originating Summons
  3. 3.The Applicant shall apply the remainder of the proceeds (not less than 50%) to the purchase of an immovable property in Kenya held for an estate in fee simple or for a term of years of which not less than forty years is unexpired, not subject to a rent exceeding four per centum of the unimproved value thereof or to any condition of re-entry except for non-payment of rent, or on first mortgage thereon
Jurisdiction invoked
Order 37 Rules 1, 3 and 7 of the Civil Procedure Rules, 2010; sections 13, 17, 56 and 59 of the Trustees Act (Cap 167)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "In Re Eunice Wanjeri Njenga [2013] KEELC 4 (KLR)", Case Analysis (2013). Originating Summons dated 29th August 2013. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2013/4/eng@2013-12-04

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