Kilonzo v Ndolo (Civil Appeal 127 of 2018) [2023] KECA 1030 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed a land buyer gets their deposit back, but killed extra damages and an 18% monthly interest rate.
What this practically means
#Executive summary
#Key legal issues
#Whether general damages lie for breach of contract
No. Upon breach the purchaser's remedies were those in Clause 4 of the agreement - extension of the completion period or rescission - plus refund of the deposit under Special Condition No 1.3. The trial court applied wrong principles and its award of general damages was set aside in entirety.
The Court reaffirmed settled authority (Kenya Tourist Development Corporation v Sundowner Lodge; Dharamshi v Karsan; Securicor Courier) that general damages are not recoverable for breach of contract where loss has been quantified and particularised. Compensation must be tied to specific proved loss, not sympathy. The contract itself provided no head of general damages, so the trial court's discretion-based award was erroneous.
Whether the Kshs 70,000/- legal and valuation fees were awardable as special damages
No. Although pleaded, the claim was not proved; the trial court gave no basis for the award and it was set aside.
Applying Hahn v Amrik Singh, special damages must not only be specifically claimed but strictly proved, as they are not the natural or probable consequence of the breach and cannot be inferred. The legal burden of proof lay on the respondent, who adduced no documentary or oral evidence of the expense, leaving the claim a mere unsubstantiated allegation.
Whether 18% per month interest on the awards was tenable
No. The rate was not a term of the agreement, was unjustified in the pleadings, and was exorbitant; the Court substituted interest at prevailing court rates from October 27, 2011 till payment in full.
The discretion under section 26(1) of the Civil Procedure Act is not absolute and must be exercised judiciously, with reason, not caprice. The statutory contemplation is an annual, not monthly, rate. Following Abok James Odera v John Patrick Machira, absent contractual provision or justification for the rate claimed, the court should apply existing court interest rates. The 18% monthly rate was manifestly harsh and unconscionable.
Whether the deposit of Kshs 730,000/- was refundable and whether further deposit monies were contractually due
Yes. The alleged requirement to top up Kshs 770,000/- within 10 days was not an agreed term and was unsupported by evidence; under Special Condition No 1.3 the respondent was entitled to a refund of the deposit.
The contents of the sale agreement were not denied. Special Condition No 1.3 provided for refund of the deposit if the sale was not completed, and Clause 6(5) made the agreement the full understanding of the parties, superseding prior offers. The appellant's claim of an additional deposit instalment was neither an agreed term nor proved, so the trial court's refund finding was correct and is affirmed.
Legal principles established
#- General damages are not awardable for breach of contract; only specific, quantified loss may be compensated
- Special damages must be specifically pleaded and strictly proved before they can be awarded
- Courts cannot rewrite contracts; parties are bound by their agreed terms unless coercion, fraud or undue influence is pleaded and proved
- The section 26(1) Civil Procedure Act discretion to award interest must be exercised judiciously and with reason, and interest rates must be per annum unless justified; absent contractual provision or justification, court rates apply
Court orders
#- 1.Set aside the trial court's award of general damages of Kshs 400,000/- for breach of contract in entirety
- 2.Set aside the award of special damages of Kshs 70,000/- for legal and valuation fees
- 3.Set aside the 18% per month interest rate on the Kshs 730,000/- deposit and substitute interest at prevailing court rates from October 27, 2011 till payment in full
- 4.Appellant to have costs of the appeal
- On appeal from
- Environment and Land Court at Nairobi
- ELC Case No 408 of 2015
- Jurisdiction invoked
- First appellate jurisdiction of the Court of Appeal over the Environment and Land Court; no specific constitutional provision is cited in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kilonzo v Ndolo (Civil Appeal 127 of 2018) [2023] KECA 1030 (KLR)", Case Analysis (2023). Court of Appeal Civil Appeal (Nairobi) against ELC Case No 408 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2023/1030/eng@2023-08-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.