Mayfair Holdings Ltd v Ahmed

Court of Appeal, at Kisumu December 10, 1990

Hancox CJ, Gachuhi & Gicheru JJ A

Civil Appeal No 18 of 1990

(Appeal from the Judgement/Ruling of the High Court of Kenya

at Kisumu (Omolo J) dated 30th May, 1989 in High Court

Civil Case No 215 of 1987)

Power of Attorney - registration of Power of Attorney - Power of Attorney created under the UK legislation - donor residing in UK giving Power of Attorney to donee resident in Kenya - donee entering into negotiations to sell the donor’s land in Kenya - Power of Attorney not registered in Kenya - whether such Power of Attorney admissible in evidence – whether agreement to sell land proper.

Land law - agreement for the sale of land - party entering into agreement on behalf of vendor on the strength of a Power of Attorney - Power of Attorney created under foreign law but not registerd or verified as required under Kenyan law - whether sale agreement valid.

Civil Practice and Procedure - costs - circumstances in which a successful pary may not be entitled to costs - how court should exercise its discretion to deny costs to such party.

The respondent to this appeal appointed his son to be his attorney in accordance with section 10 of the United Kingdom Power of Attorney Act 1971.

In exercise of powers conferred by the Power of Attorney the respondent’s son met the chairman of the appellant at a social function where they discussed possible sale of the suit property to the appellant.

The Chairman of the appellant negotiated on behalf of the appellant while the donee of the power of attorney negotiated on the respondent’s behalf. It was agreed that the suit property would be sold at Kshs 2,000,000.

A sale agreement was drawn up and signed by the parties before their common advocate and a cheque for Kshs 200,000/- being the 10% deposit was given by the appellant to the advocate.

The advocate, however not being sure of the effectiveness of the power of attorney as concerned the sale of the suit land, prepared another power of attorney which was handed over to the respondent’s son who was soon going to the United Kingdom and who was to have it executed by the respondent and returned.

On his return from England the respondent’s son informed the appellant that the respondent was unwilling to proceed with the deal and he had declined to sign the second power of attorney.

The appellant therefore commenced proceedings in the High Court seeking among other remedies, specific performance of the sale agreement. In its judgment, the High Court found that the power of attorney did not qualify for registration under section 116(1) of the Registered Land Act as it lacked the certificate prescribed under section 110 (4) of the same Act.

The High Court however declined to award costs to the respondent after the judge observed that the respondent succeeded simply because his son failed to register the power of attorney and not on any intrinsic merit of his case.

Held:

1. The Registrar is obliged to enter a Power of Attorney in the register thereof if the donor or the donee makes an application for that purpose, but it does not seem on the plain wording of section 116(1) of the Registered Land Act that the donor or the donee is obliged to apply for it to be registered.

2. It may be that it could not in fact be registered without having been verified under section 110(4) but that does not in any sense mean that this particular power of attorney was not registrable under the Registered Land Act.

3. Accordingly the power of attorney was not inadmissible as a document evidencing the issue of the authority of the principal even though for the purposes of registration it did not comply with the Kenyan statute.

4. The Power of Attorney was receivable, even if it was not registerd in Kenya, and it could be taken into account along with other evidence in orer to determine the effect of the relationship of principal and agent and whether the principal was liable to be sued on the agreement.

5. While the nationals of a country are presumed to know its laws, such an assumption cannot apply to persons resident elsewhere. The prospective purcaser could not have been expected to know the provisions of the English Act.

6. The correct principle to apply in the case of land is that the Power of Attorney has to be construed for its effect in this case according to the law of Kenya.

7. The transaction in the parties’ advocates’ office was not final and binding on the parties. The handing back of the deposit cheque to the advocate coupled with the fact that he prepared another Power of Attorney to be executed by the principal according to the law of Kenya showed that the parties knew that the first power of Attoney did not give the agent unconditional powers to dispose the land.

8. In the absence of special circumstances, successful litigants should receive his costs and it is necessary for the court to show some reason for refusing to give him the costs.

9. The High Court judge was right in taking into consideration the conduct of the respondent and his son in exercising his discretion not to award costs to him and in finding that there was no intrinsic merit in his case. The judge had exercised his discretion properly.

Appeal dismissed.

Cases

1. Re Crosfield [1910] 1 Ch D 118

2. Re Brock [1910] 1 Ch D 130

3. Re Davis’ Trade Mark (1927) 113 LT 714

4. Mwanasokoni v Kenya Bus Services Ltd & another [1985] KLR 931; [1982-88] 1 KAR 870

5. Ritter v Godfrey [1920] 2 KB 47; [1918-19] All ER 714

6. Campbell, Donald & Co Ltd v Pollack [1927] All ER Rep 1; [1927] AC 732

7. Bevan v Webb [1901] 2 Ch D 59

8. Montgomerie v United Kingdom Mutual SS Association [1891] 1 QB 370

9. Teheran-Europe Co Ltd v Belton (ST) (Tractors) [1968] 2 All ER 886; [1968] 2 QB 545; [1968] 3 WLR 205; (1968) 112 SJ 501; [1968] 2 Lloyd’s Rep 37

10. Chatenay v Brazilian Submarine Telegraph Co [1891] 1 QB 79

11. Odd Jobs v Mubia [1970] EA 476

Texts

1. Story, J (1882) Commentaries on the Law of Agency as a Branch of Commercial and Maritime Jurisprudence with Occasional Illustrations from Civil and Foreign Law Boston: Little Brown & Company 9th Edn

2. Simonds, V et al (Eds) (1963) Halsbury’s Laws of England London: Butterworths 3rd Edn Vol XLI

3. Rustomji KJ Law of Limitation and Adverse Possession Calcutta: Allahabad Law Publishers India 5th Edn Vol II pp 1374, 1375

4. Oxford English Dictionary Oxford: Oxford University Press

5. English Empire Digest London: Butterworths Vol I(1), 1(2)

Statutes

1. Powers of Attorney Act 1971 [UK] sections 10, 10(1)(a), 10(2), 109, 109(2)(a), 110, 110(4), 116(1), 117

2. Registration of Documents Act (cap 285) sections 4, 9, 18

3. Registered Land Act (cap 300) sections 38(1), 85(1), 85(2), 108(1), 109, 109(2), 110, 110(1), 110(2) 110(4), 114(1), 114(3), 116(1), 116(2), 160

4. Registered Land Act Form RL 17 (cap 300 Sub Leg) Third Schedule

5. Law of Contract Act (cap 23) section 3(3)

6. Law of Property Act 1925 [UK] section 40(1)

7. Civil Procedure Act (cap 21) section 27(1)

Advocates

Mr Gautama for the Appellants.

Mr Shakeel Ahmed for the Respondent.