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Court of AppealDismissedCivil Appeal (Nakuru) – first appeal against Nakuru HCCC No. 90 of 2009· [2022] KECA 81 (KLR)

Samuel Ikumbu v Veronicah Wanjiru

Court of Appeal of Kenya
4 February 2022
7,205 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Court of Appeal upheld a Kshs.9.46 million award against a property seller who failed to release the title, confirming buyers can recover deposits, damages and renovation costs.

What this practically means

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Executive summary

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This is a first appeal to the Court of Appeal against the judgment of A. Emukule, J. delivered on 7th November, 2014 in Nakuru HCCC No. 90 of 2009, in a dispute over an abortive agreement of sale of Nakuru Municipality Block 4/54 at a purchase price of Kshs.18,000,000.00. The respondent paid a deposit of Kshs.3,000,000.00 and secured a Kshs.14,000,000.00 facility from Equity Bank, but the appellant, who under clause 2 of the agreement undertook to secure release of the title documents mortgaged to Barclays Bank, failed to do so; the property was auctioned on 13th October, 2010. The trial Judge pinned blame for the breach wholly on the appellant and awarded the respondent a refund of the deposit, liquidated damages of Kshs.3,600,000.00 (20% of the purchase price), Kshs.2,700,000.00 for renovations, offset by Kshs.840,000.00 in rent arrears on the appellant's counterclaim, with half costs. On appeal the appellant contended the Judge had contradicted himself by finding both parties in breach, rewrote the contract, and erred in awarding renovations without consent. The Court, exercising its mandate under Rule 29(1) to re-evaluate the evidence while deferring to trial court factual findings, found no basis for faulting the Judge. It held that a finding of mutual non-compliance within the completion period did not bar allocation of responsibility, affirmed the finding that the appellant wholly caused the collapse, upheld the renovations award as strictly proved by a registered valuer despite absence of receipts, and affirmed the deposit refund as a no contest. The appeal was dismissed with costs to the respondent both on appeal and at the trial.

Key legal issues

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01

Whether the trial Judge erred in pinning responsibility for the breach of the agreement of sale wholly on the appellant

Holding

The finding was affirmed: the appellant failed to meet his obligation under clause 2 to secure release of the title documents from Barclays Bank, made no effort to salvage the agreement, and did not communicate the revised bank offer to the respondent, while the respondent demonstrated readiness and willingness to complete

Reasoning

The court found no evidence that the appellant complied with clause 2 of the agreement or paid fees, rents and outgoings in readiness for completion. Letters on the record from Equity Bank and the respondent's advocates demonstrated the respondent's continued willingness to complete even after the 90-day period lapsed. The appellant produced no proof of communication of the revised bank offer to the respondent and made no effort to seek an extension or facilitate the Equity Bank facility. The Judge's attribution of blame wholly to the appellant was therefore well founded in law and fact.

p. 11
02

Whether the trial Judge's remark that both parties breached the contract contradicted his subsequent finding pinning blame on the appellant

Holding

No contradiction: the finding of mutual non-compliance within the 90-day completion period did not preclude the Judge from examining the circumstances to allocate responsibility for the default

Reasoning

The court held that the Judge's remark was simply based on either party's failure to comply within the stipulated 90-day completion period. Such a finding did not bar interrogation of the circumstances under which the breach was occasioned in order to determine which of the two contracting parties should bear responsibility. The Judge properly examined the record and concluded that the appellant's failure to secure release of the title documents caused the collapse.

p. 10
03

Whether the award of Kshs.2,700,000.00 for renovations was sustainable as a claim in special damages

Holding

The award was affirmed: clause 3 of the agreement entitled the respondent to deal with the property as owner, the appellant admitted the renovations with knowledge and raised no objection, and the claim was proved through a registered valuer

Reasoning

The respondent relied on clause 3 of the agreement under which, from the date of execution, she was to deal with the property as if she were the owner; the appellant never recanted his signature on the agreement and admitted on oath the renovations were carried out with his knowledge and without objection. He tendered no authority on behalf of the Nakuru Municipality and did not controvert the respondent's testimony that she obtained the relevant consents. Although she had no receipts, the valuation by PW2, a registered valuer, satisfied the strict-proof requirement for special damages, particularly as the appellant did not seek his own valuation.

p. 11
04

Whether the refund of the Kshs.3,000,000.00 deposit was contested

Holding

The trial Judge's finding was affirmed, the appellant's submissions being silent on the issue and the respondent having argued it as a no contest

Reasoning

The respondent drew the court's attention to the consent order granting the appellant stay of execution on condition of liquidating Kshs.3,000,000.00 by instalments, and submitted the appellant did not contest the refund of the deposit. The court accepted the respondent's submission that the appellant's silence amounted to a no contest and affirmed the trial Judge's findings on this item.

p. 9

Legal principles established

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  • A first appellate court must re-evaluate and re-analyse the evidence to draw its own inferences of fact, while deferring to the trial court's factual findings unless they are based on no evidence, are based on a demonstrable misapprehension of the evidence, or are unsupported by the evidence
  • Special damages must not only be specifically claimed but also strictly proved, with the degree of certainty and particularity of proof depending on the circumstances and nature of the acts
  • A finding that both parties failed to comply with a contractual completion period does not bar the court from interrogating the circumstances of the breach to determine which party bears responsibility for the default

Court orders

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  1. 1.The appeal is dismissed
  2. 2.Costs awarded to the respondent both on appeal and at the trial
  3. 3.Affirmation of the trial Judge's findings on the refund of the deposit of Kshs.3,000,000.00, liquidated damages of Kshs.3,600,000.00, renovations of Kshs.2,700,000.00, offset by rent arrears of Kshs.840,000.00
On appeal from
High Court of Kenya at Nakuru
HCCC No. 90 of 2009
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal Rules (Rule 29(1) of the Court of Appeal Rules invoked as the court's mandate)

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, "Samuel Ikumbu v Veronicah Wanjiru", Case Analysis (2022). Civil Appeal (Nakuru) – first appeal against Nakuru HCCC No. 90 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2022/81/eng@2022-02-04

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