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ELCPartially AllowedELC No. 41 of 2014 (Consolidated with ELC No. 46 of 2014)· [2017] KEELC 1087 (KLR)

Grace Wambuku Kamau Peter & another v Business Shade Limited & 5 others [2017] KEELC 1087 (KLR)

Environment and Land Court
12 October 2017
8,982 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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A Nakuru court ruled that a written land sale agreement controls what was bought, and the buyer got current market value damages after the seller sold land it never owned.

What this practically means

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Executive summary

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Two consolidated Environment and Land Court suits at Nakuru concerned competing claims over land in Nakuru Municipality Block 17/228. In ELC No. 41/2014, Grace Wambuku Kamau sued Business Shade Limited over an agreement of 6 February 1999 for four plots to be excised from parcel 17/197, claiming she was shown a plot in parcel 228 (portion No. 7) and seeking a declaration of ownership and permanent injunction. In ELC No. 46/2014, Peter Wangai Mararo and Jennifer Wanjiru Wangai claimed the same Plot No. 7 under a 2013 agreement with Peter Wachira Kariuki, and sued Grace and her sons for demolishing their fence. The court held, applying sections 3(3) of the Law of Contract Act and 97 and 98 of the Evidence Act, that the written agreement bound Grace to parcel 17/197 and oral evidence could not import parcel 228. Although the court believed the vendor showed her the wrong parcel and handed her the title to parcel 228, the purchaser failed in due diligence. The court found Business Shade, not Grace, breached the contract, having sold land it never owned, and held the vendor estopped from relying on late payments he continued to accept until 2006. Specific performance being impossible, the court awarded damages in lieu of specific performance, assessed at the current value of the property at judgment date following Wroth v Tyler, with the Government Valuer directed to assess the value. The Mararos' claim against the vendor was held premature, but they obtained a permanent injunction against Grace and her sons. Costs were awarded to Grace against Business Shade, with no orders as to costs in the other suit.

Key legal issues

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01

Identification of the subject matter of the sale agreement

Holding

The plaintiff purchased four plots to be excised from parcel Nakuru Municipality Block 17/197 and never purchased or aimed to purchase any land out of parcel 17/228

Reasoning

Section 3(3) of the Law of Contract Act requires land sale contracts to be in writing; sections 97 and 98 of the Evidence Act exclude oral evidence to contradict or add to written terms. The written agreement of 6 February 1999 identified plots 4, 5, 9 and 10 out of parcel 17/197, and the receipts bore the same number. The plaintiff could not import parcel 228 into the agreement by oral evidence, and her plea of age or illiteracy failed since she signed with educated companions.

p. 9
02

Which parcel was shown to the plaintiff

Holding

The court believed the vendor showed the plaintiff the wrong parcel and gave her a title deed to parcel 228, but this did not shift ownership rights, and the purchaser also failed to conduct due diligence

Reasoning

On demeanour, the court preferred the plaintiff's account that the wrong parcel was pointed out and the title to parcel 228 handed over. However, the discrepancies between the title and the agreement ought to have put her on inquiry. Both duties coexist: the vendor must act in good faith, but the purchaser must verify what is being sold against the ground.

p. 10
03

Breach of the sale agreement and entitlement to remedy

Holding

Business Shade Limited, not the plaintiff, breached the contract by selling land it never owned and failing to convey the plots; the late payments were waived

Reasoning

The vendor warranted he was the lawful purchaser of parcel 197 when in fact his purchase from Sammaly Women Group had failed. He continued receiving payments until 2006, long after the land was sold to a third party in 2000, without informing the plaintiff. His acceptance of late payments amounted to waiver and estopped him from alleging breach by the purchaser.

p. 11
04

Nature and quantification of damages in lieu of specific performance

Holding

Equitable damages in lieu of specific performance are awarded at the current value of the property as at the date of judgment

Reasoning

The jurisdiction is rooted in the Lord Cairns' Act and survives its repeal, as confirmed in Leeds Industrial Cooperative Society v Slack. Following Wroth v Tyler and Semelhago v Paramadevan, equitable damages are assessed at judgment date so as to place the injured party in the position had the contract been performed, given exponential rise in property values. The court directed the Government Valuer to assess current value within 14 days.

p. 12
05

Entitlement to Plot No. 7 of parcel 17/228

Holding

The Mararos' sale of Plot No. 7 stands; no ground to vitiate it; but their claim for declaration and transfer against the vendor is premature

Reasoning

Nothing vitiated the sale to the Mararos, whose agreement is being performed without complaint of breach. Permanent injunction issued against Grace and her sons who demolished the fence, as Grace demonstrated no proprietary rights over parcel 228. The vendor was joined reasonably given the risk of double sale, hence no costs against him.

p. 10

Legal principles established

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  • Where a contract for the sale of land is reduced to writing, its terms, including the subject matter, must be deduced from the document itself and cannot be varied by oral evidence
  • A vendor who shows a purchaser the wrong parcel of land breaches his duty of good faith, but this does not absolve the purchaser of the duty to conduct due diligence
  • Damages in lieu of specific performance are quantified at the time of judgment, not at the time of breach or contract, being the current value of the property
  • A vendor who continues receiving payments after the contractual completion date is estopped from claiming the purchaser breached the agreement by late payment

Court orders

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  1. 1.In ELC No. 41/2014, judgment entered for the plaintiff against the defendant with an award of damages in lieu of specific performance, the damages being the equivalent of the current market value of the property the plaintiff intended to purchase or the value of a comparative premise
  2. 2.The Government Valuer, Nakuru District, ordered to give the current value of an acre of land in the parcel Nakuru Municipality Block 17/197 or equivalent land and provide the report within 14 days of service of the judgment or decree
  3. 3.In ELC No. 46/2014, the plaintiffs' case against the 1st defendant held premature since their contract is still being performed
  4. 4.In ELC No. 46/2014, permanent injunction granted against the 2nd-5th defendants
  5. 5.Plaintiff awarded costs in ELC No. 41/2014 against Business Shade Limited; no orders as to costs in ELC No. 46/2014

Authorities

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Legislation

  • Law of Contract Act, Cap 23Section 3(3), (4)
  • Evidence Act, Cap 80Sections 97, 98
  • Chancery Amendment Act 1858 (Lord Cairns' Act)Section 2
  • Statute Law Revision and Civil Procedure Act 1883
  • Auctioneers Act

Cases cited (7)

  • Radia vs Transocean (Uganda) Ltd
    (1985) KLR 300
  • Kiplagat Kotut vs Rose Jebor Kipngok
    Eldoret ELC No. 691 of 2012
  • IEBC & Another vs Stephen Mutinda Mule & Others
    Nairobi HCCA No. 219 of 2013
  • Kinyanjui Kamau vs George Kamau Njoroge
    Nairobi HCCA No. 132 of 2005
  • Leeds Industrial Cooperative Society vs Slack
    (1924) All ER 259
  • Wroth & Another vs Tyler
    (1973) 1 All ER 897
  • Semelhago vs Paramadevan
    (1996) 2 SCR 415
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over disputes relating to land (articles 162(2)(b) and 165(2) of the Constitution; Environment and Land Court Act)

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, "Grace Wambuku Kamau Peter & another v Business Shade Limited & 5 others [2017] KEELC 1087 (KLR)", Case Analysis (2017). ELC No. 41 of 2014 (Consolidated with ELC No. 46 of 2014). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1087/eng@2017-10-12

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