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Court of AppealDismissedCivil Appeal No. 29 of 2017· [2019] KECA 222 (KLR)

George Njenga Kagai v Samuel Kabi Njoroge & another [2019] KECA 222 (KLR)

Court of Appeal of Kenya
8 November 2019
6,419 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan land buyer who failed to pay the purchase price lost his attempt to force the sale to be completed, despite the seller's own unlawful cancellation.

What this practically means

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Executive summary

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The appellant sued the 1st respondent for breach of a 2003 sale agreement over Dagoretti/Riruta/4170 and sought specific performance against him, and an order that the 2nd respondent (church trustees who bought the land in 2004) vacate. The High Court (Ougo, J.) dismissed the suit, holding time was of the essence, the appellant breached by failing to pay the balance, and ordered a refund of Kshs. 430,000/= without interest, removal of the caution, and transfer of the land to the 2nd respondent as an innocent purchaser for value without notice. On appeal, the Court of Appeal identified five issues and held that although time was not of the essence - there was no express stipulation, no notice making time of the essence was served, and the 1st respondent's acceptance of late payments waived any such condition - and the 1st respondent's rescission was therefore unlawful, the appellant still could not obtain specific performance because he breached the essential term of payment, was never ready and willing to complete, and came to equity with unclean hands. The refund without interest was the proper remedy. The court affirmed the trial court's finding that the 2nd respondent was an innocent purchaser for value without notice and held that a counterclaim was in contemplation from the prayers in its defence despite not being specifically pleaded. The appeal failed and was dismissed with no order as to costs. Asike-Makhandia, JA wrote the lead judgment; J. Mohammed, JA and Kantai, JA concurred separately.

Key legal issues

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01

Whether time was of the essence in the sale agreement between the appellant and the 1st respondent

Holding

Time was not of the essence: there was no express stipulation, the circumstances did not show it, and no notice making time of the essence was served. Late payments accepted by the 1st respondent amounted to waiver.

Reasoning

The agreement contained only a completion period of 90-120 days, not an express stipulation that time was of the essence. The nature and surrounding circumstances did not indicate time was essential, and no written notice was given to the defaulting party. The 1st respondent accepted and acknowledged late payments, condoning the delay and waiving any essence-of-time condition.

p. 4
02

Whether the sale agreement was validly rescinded by the 1st respondent

Holding

The rescission was unlawful because no notice making time of the essence was served and the alleged reason (funds needed for a son's overseas studies) was not in the contract and could not be proved extrinsically.

Reasoning

Guided by Sisto Wambugu and Cassam v Sachania, the court held the right to rescind for non-payment can only be exercised where time is of the essence or after reasonable notice to the defaulting party. The parol evidence rule barred proof of an oral motive outside the written contract. The agreement for sale was therefore not legally rescinded.

p. 5
03

Whether the 2nd respondent was an innocent purchaser for value without notice entitled to the orders without a counterclaim

Holding

The 2nd respondent was an innocent purchaser for value without notice, and although no formal counterclaim was pleaded, the prayers in its defence showed a counterclaim in contemplation, so the trial court did not err in ordering transfer to it.

Reasoning

The 2nd respondent paid the full purchase price and has been in occupation since 2004. Although it conducted no official search and the 1st respondent knew of the caution, the court agreed with the trial court that it was an innocent purchaser without notice. On the counterclaim point, the prayers in the defence by implication put the transfer relief in contemplation and evidence was led in support.

p. 7
04

Whether the appellant was entitled to specific performance

Holding

Specific performance was unavailable: the appellant breached the essential term of payment, was never ready, willing and able to complete, and came to equity with unclean hands; refund of the Kshs. 430,000/= paid, without interest, was the proper remedy.

Reasoning

Specific performance is discretionary and requires a valid, enforceable contract and a plaintiff who has performed or is ready and willing to perform the essential terms. The appellant paid only Kshs. 430,000/= of Kshs. 2,100,000/=, registered a caution and vanished; a mere assertion of readiness is insufficient. The trial court correctly decreed a refund without interest given his own misconduct.

p. 6

Legal principles established

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  • Time will not be considered of the essence in a contract unless the parties expressly so stipulate, the nature or surrounding circumstances show it, or notice making time of the essence is given to the defaulting party.
  • Where time is not of the essence, a vendor cannot validly rescind a sale agreement for non-payment without first giving the defaulting party notice making time of the essence.
  • Acceptance of late payment after the completion period evidences waiver of the condition that time is of the essence.
  • Specific performance is discretionary and will not be granted to a plaintiff in breach who has not performed or shown readiness and willingness to perform the essential terms of the contract.
  • On a first appeal, the Court of Appeal is enjoined to re-evaluate the evidence afresh while bearing in mind that it did not see or hear the witnesses.
  • A party seeking equitable relief must come to court with clean hands; one who breached the contract cannot obtain specific performance.

Court orders

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  1. 1.The appeal was dismissed
  2. 2.No order as to costs

Authorities

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Legislation

  • Land Control Actsection 8
  • Land Control Actsection 9(2)

Cases cited (11)

  • Mwangi v Wambugu
    [1984] KLR 453
  • Sagoo v Dourado
    (1983) KLR 366
  • Njamunya v Nyaga
    (1983) KLR 282
  • Elijah Kipkorir Barmalel & Another v John Kiplagat Chemweno & 3 others
    (2010) eKLR
  • William Kazungu Karisa v Cosmas Angore Chanzera
    [2006] eKLR
  • Cassam v Sachania
    [1982] KLR 191
  • Sisto Wambugu v Kamau Njuguna
    [1983] eKLR
  • Katende v Haridar & Company Limited
    [2008] 2 E.A. 173
  • Gurdev Singh Birdi and Marinder Singh Ghatora and Abubakar Madhbuti
    Civil Appeal No. 165 of 1996
  • Nabro Properties Limited v Sky Structures Limited & 2 others
    (2002) 2 KLR 300
  • Syedna & Others v Jamil's Engineering Co. Limited
    [1973] 244
On appeal from
High Court of Kenya at Nairobi
HCCC No. 1103 of 2004
Jurisdiction invoked
First appellate jurisdiction over the High Court (Court of Appeal jurisdiction under the Constitution and the Appellate Jurisdiction Act, exercising de novo review of the first appeal)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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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, "George Njenga Kagai v Samuel Kabi Njoroge & another [2019] KECA 222 (KLR)", Case Analysis (2019). Civil Appeal No. 29 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2019/222/eng@2019-11-08

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