George Waweru Gathiga v Joseph Maina Kamau [2014] KEELC 441 (KLR)

Environment and Land Court

14 March 2014

AOA. OMBWAYO

767 words in judgment

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The bottom line

A Kenyan land vendor who failed to hand over the property was ordered to refund the buyer's money plus 50% liquidated damages as agreed in the contract.

What this practically means

Executive summary

The plaintiff sued the defendant over an agreement of sale dated 15 November 2010 for one acre out of land parcel No. LOC.15/MUGEKA/840, registered in the name of Kama Rukenya (deceased), at a consideration of Kshs.235,000. The plaintiff paid Kshs.163,000 towards the purchase price, with the balance of Kshs.80,000 payable on transfer. Under the agreement, the purchaser was to take possession upon execution and meet succession fees, with transfer to follow determination of the succession cause. A default clause provided that the defaulting party would pay the non-defaulting party a liquidated sum of 50% of the total paid plus any other sum legally payable. The plaintiff claimed Kshs.244,500, being the monies paid plus the 50% penalty, alleging the defendant reneged on his undertaking to transfer the land or refund the monies. The defendant filed a defence admitting the agreement but asserting that the plaintiff, not he, was in breach. At the hearing on 4 December 2013 the defendant and his counsel failed to attend despite the date having been taken by consent; the plaintiff testified and produced the agreement. The court found the defendant in breach for failing to give possession, invoked clause 6 of the agreement, and awarded the plaintiff Kshs.244,500, being refund of the money paid plus 50% of that amount, together with costs of the suit. Judgment was delivered at Nyeri on 14 March 2014 by A. Ombwayo J.

Key legal issues

Breach of the agreement for sale of land

Holding

The defendant vendor breached the agreement by failing to give the plaintiff possession of the 1 acre purchased and by reneging on the undertaking to transfer and/or refund.

Reasoning

The plaintiff testified and produced the sale agreement dated 15/11/2010 for 1 acre out of LOC.15/MUGEKA/840 at Kshs.235,000, of which he paid Kshs.163,000. The agreement provided possession on execution, transfer after succession, and a default clause entitling the non-defaulting party to 50% of monies paid. The defendant, though served with the hearing date taken by consent, did not appear, so the evidence stood uncontroverted. The court found possession was never given and the default clause was triggered.

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Enforcement of the liquidated damages (default) clause

Holding

The plaintiff was awarded Kshs.244,500, being refund of the Kshs.163,000 paid plus 50% thereof, in accordance with clause 6 of the agreement.

Reasoning

Clause 6 of the agreement provided that a defaulting party would pay the non-defaulting party a liquidated sum of 50% of the total paid plus any other legally payable sum. Since the defendant defaulted in giving possession, the court invoked that clause and computed the award as refund of the monies received plus the agreed 50% penalty, aligning with the plaintiff's pleaded claim of Kshs.244,500.

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Legal principles established

A party in default of a land sale agreement is bound by an agreed liquidated damages clause entitling the non-defaulting party to a refund of monies paid plus 50% of the amount paid.
Where a defendant fails to attend the hearing of which he had notice, the court may determine the claim on the plaintiff's uncontroverted evidence.

Court orders

1.Award of Kshs.244,500 to the plaintiff, being refund of the money paid plus 50% of that amount, under clause 6 of the agreement
2.Defendant to pay the plaintiff's costs of the suit

Jurisdiction invoked: Original civil jurisdiction over a claim for refund of purchase monies and liquidated damages under a land sale agreement; cause of action arose within the court's jurisdiction as pleaded.

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "George Waweru Gathiga v Joseph Maina Kamau [2014] KEELC 441 (KLR)", Case Analysis (2014). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2014/441/eng@2014-03-14

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