Riccardo Nelson Pasotto v Carlo Barbin Lissone [2017] KEELC 698 (KLR)
The bottom line
#A Kenyan court ruled that an oral land sale agreement, though not written, can still support a refund claim through constructive trust, and the refund suit was filed on time.
What this practically means
#Executive summary
#Key legal issues
#Whether the absence of a written contract under Section 3(3) of the Law of Contract Act warranted striking out the Plaint
No. The transaction created a constructive trust in favour of the Plaintiff, and substantive justice required that the suit proceed despite the agreement being unenforceable as a contract.
The court applied the Court of Appeal's endorsement in Macharia Mwangi Maina of Yaxley v Gotts, holding that an oral agreement for sale of land, though void and unenforceable as a contract, can ground a constructive trust or proprietary estoppel. The Defendant did not deny receipt of the 10,000 Euros. Acting on the conscience of the legal owner, the constructive trust doctrine and the overriding objective justified allowing the suit to proceed to trial rather than striking it out on a technicality.
Whether the suit filed in 2016 over a 2007 agreement was time-barred
No. Time began to run in 2012 when the Defendant failed to complete the sale and put the Plaintiff in possession or refund the deposit, so the 2016 suit was within the six-year period.
Section 4(1)(a) of the Limitation of Actions Act prescribes six years for contract claims. Although the agreement was made in 2007, the court held the cause of action arose in 2012 when the Plaintiff discovered the apartments had been completed and sold to a third party and the Defendant would neither give possession nor refund the money. The Defendant did not controvert these assertions, and the suit filed on 23rd May 2016 was therefore within time.
Whether the suit was frivolous or vexatious
Not necessary to decide, since the court found the suit was not time-barred and raised at least one triable issue.
Having found that the suit was within limitation and disclosed a possible triable issue against the Defendant, the court declined to determine whether the suit was frivolous or vexatious, considering the point academic for purposes of the striking-out application.
Legal principles established
#- An oral agreement for sale of land, though unenforceable for want of writing under Section 3(3) of the Law of Contract Act, may still found a suit on the basis of a constructive trust or proprietary estoppel.
- Where a party stands by and lets the other incur expenses on the faith of an agreement, he cannot later assert that the agreement is unenforceable.
- For limitation purposes under Section 4(1)(a) of the Limitation of Actions Act, time in a contract claim runs from the date of breach, not merely from the date of the agreement.
Court orders
#- 1.The Defendant's application dated 1st September 2016 seeking to strike out the Plaint is dismissed
- 2.Costs of the application to the Plaintiff
- Jurisdiction invoked
- Original civil jurisdiction over the suit; contested on territorial/jurisdictional grounds by the Defendant
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- In the Matter of Jagdish Ram Singh Bhatti - Raj Singh Bhatti v Dhruv Kumar Bhatti & Mohan Ram Singh Bhatti[2020] KEHC 5375 (KLR)28 May 2020
- Benjamin Kimaiyo Itok v National Land Commission & 3 others [2020] KEELC 3463 (KLR)[2020] KEELC 3463 (KLR)19 Feb 2020
Cite this brief
#Cite this brief
Caselaw, "Riccardo Nelson Pasotto v Carlo Barbin Lissone [2017] KEELC 698 (KLR)", Case Analysis (2017). Not stated in judgment (Plaint dated 23rd May 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/698/eng@2017-12-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.