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Court of AppealDismissedCivil Appeal (Nairobi)· [2020] KECA 496 (KLR)

Kihia v Caroll (Civil Appeal 96 of 2016) [2020] KECA 496 (KLR)

Court of Appeal of Kenya
24 July 2020
3,064 words in judgment
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The bottom line

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A landowner who appoints an agent, delays signing, and skips raising issues at trial cannot later cancel the sale—the Court of Appeal ordered him to complete it.

What this practically means

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Executive summary

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The appellant, registered proprietor of Nakuru Municipality Block 18/78, sold the property to the respondent through two agreements dated 21st July 2003, later varied by a supplementary agreement raising the price to Kshs. 1,350,000, with payments deposited with Muigai Commercial Agencies Ltd as stakeholders. The High Court (W. Ouko, J) granted the respondent a permanent injunction and specific performance. On appeal, the appellant argued the contract was invalid for want of proper witnessing under Section 3(3) of the Law of Contract Act, that Muigai lacked authority to receive money on his behalf, and that the respondent breached completion timelines so time was of the essence. The Court of Appeal (Okwengu, Kiage and Sichaale, JJ.A) unanimously dismissed the appeal. It declined to entertain the witnessing argument as it had not been pleaded at trial, holding parties bound by their pleadings. It found the agreements designated Muigai as stakeholder and the appellant had appointed them as agents, estopping him from denying their authority to receive and disburse the purchase price; any claims lay against the agents, not the buyer. On timing, the Court held that although time was initially of the essence, the appellant's own conduct - delaying execution for over three months - rendered it not of the essence, so his repudiation had no legal effect. The respondent, having performed and remained ready and willing, was properly granted specific performance. The appeal was dismissed with costs to the respondent. The High Court judgment was affirmed.

Key legal issues

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01

Authority of the agent to receive the purchase price

Holding

The appellant appointed Muigai as his agent to find a buyer and receive the purchase price; the agreements designated Muigai as stakeholder, and the appellant is estopped from denying that authority.

Reasoning

The sale agreements expressly provided that all payments be deposited with Muigai as stakeholders, a term unaltered by the supplementary agreement. The appellant's appointment letter and irrevocable authority, plus correspondence forwarding the bankers' cheque, affirmed Muigai's status. The learned Judge rightly held the appellant estopped from denying the agency; any grievance lies against the agents, not the respondent.

p. 5
02

Whether time was of the essence

Holding

Although time was initially of the essence, the appellant's own conduct in delaying execution of the agreements for over three months rendered time not of the essence, invalidating his purported repudiation.

Reasoning

Time is made of the essence by express provisions and the parties' conduct. The respondent made two payments before the initial completion date, while the appellant delayed execution until 30th October 2003. Having himself failed to fulfil his obligations, including giving vacant possession, the appellant could not repudiate for delay by the respondent.

p. 6
03

Raising the Section 3(3) Law of Contract Act witnessing issue on appeal

Holding

The issue of witnessing of the agreement was not raised in the amended defence and counterclaim and therefore could not be advanced on appeal.

Reasoning

The Court perused the amended defence and counterclaim and found the appellant had not raised the witnessing issue at trial. Parties are bound by their pleadings, and issues not canvassed at trial cannot be introduced at the appellate stage, so the argument was declined.

p. 4
04

Entitlement to specific performance

Holding

Specific performance was properly granted because the respondent proved a valid and enforceable contract and that he performed and was always ready and willing to perform his obligations.

Reasoning

Specific performance requires a valid, enforceable contract. The respondent paid the purchase price into the designated stakeholder, while the appellant was himself in breach. Following Sisto Wambugu v Kamau Njuguna, a party who has performed and remains ready and willing is deserving of the order, and the learned Judge properly directed himself.

p. 6

Legal principles established

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  • A first appellate court must reconsider and re-evaluate the evidence and reach its own independent conclusions.
  • Specific performance can only be granted where there exists a valid and enforceable contract, being an equitable relief granted where damages would be insufficient.
  • Parties are bound by their pleadings; issues not raised at trial cannot be advanced for the first time on appeal.
  • Where time has not been made of the essence of the contract, one party cannot suddenly cancel the agreement and forfeit the deposit without notice.
  • A principal cannot complain of the actions of his own duly appointed agent; his remedy lies against the agent.

Court orders

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  1. 1.The appeal is dismissed with costs to the respondent

Authorities

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Legislation

  • Law of Contract ActSection 3(3)

Cases cited (7)

  • Abok James Odera T/A A.J Odera & Associates v John Patrick Machira T/A Machira & Co. Advocates
    [2013] eKLR
  • Gharib Suleman Gharib v Abdulrahman Mohamed Agil
    LLR No. 750 (CAK) Civil Appeal No. 112 of 1998
  • George Muriaini Muhoro T/A A.M. Muhoro Advocate v George Ndungu Kamiti
    [2011] eKLR
  • Kinluc Holdings Ltd v Mint Holdings Ltd & Another
    [1998] eKLR
  • Stevenson v. Rowand
    6, English Reports, 668
  • Gurdev Singh Birdi & Another as Trustees of Ramgharia Institute of Mombasa v Abubakar Madhbuti
    [1997] eKLR
  • Sisto Wambugu v Kamau Njuguna
    [1983] eKLR
On appeal from
High Court of Kenya
Jurisdiction invoked
First appeal to the Court of Appeal under the appellate jurisdiction of the Court over the High Court (the judgment does not cite a specific provision)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Kihia v Caroll (Civil Appeal 96 of 2016) [2020] KECA 496 (KLR)", Case Analysis (2020). Civil Appeal (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2020/496/eng@2020-07-24

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