Bernard Macheah Ngicuru v Caroline Atieno Opar & another [2017] KEELC 1208 (KLR)

Environment & Land Court of Kenya

10 October 2017

EOE. O. Obaga

1,176 words in judgment

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The bottom line

A Nairobi land seller who authorised a buyer's title transfer and refused the buyer's payment lost his case and had to complete the sale.

What this practically means

Executive summary

The plaintiff purchased plot A 960 from the second defendant, a Sacco, and on 14th June 2006 entered into a sale agreement with the first defendant for the plot at Kshs.583,500/=. Although clause 2 of the agreement provided for payment on execution, the true purpose of the agreement was to enable the first defendant, an employee of Habib Bank Limited, to obtain a bank loan. The plaintiff wrote to the second defendant authorising it to instruct the first defendant's advocates to process title into her name; the letter was received on 26th June 2006 and the certificate of lease issued on 16th October 2006. A cheque for the purchase price was drawn in the plaintiff's favour on 17th March 2008 but he refused it, contending he had rescinded the agreement by letter dated 9th November 2006 for breach. The plaintiff sought a declaration that the transfer was null and void, cancellation of the lease, and damages for breach of contract. The first defendant counter-claimed for specific performance; the Sacco denied liability, having acted on the plaintiff's instructions. The court framed three issues: breach, fraudulent registration, and specific performance. It found no breach since no time limit was set for the loan and payment was tendered; the registration was made with the plaintiff's authority, defeating the fraud claim; and the first defendant was ready and willing to complete. The suit was dismissed with costs to the defendants, and judgment was entered for the first defendant on the counter-claim, with the plaintiff to bear the costs of the counter-claim as well.

Key legal issues

Breach of the sale agreement

Holding

The first defendant was not in breach; payment was contingent on her obtaining a bank loan and payment was tendered by cheque which the plaintiff refused

Reasoning

Although clause 2 of the agreement required payment of the purchase price on execution, the true understanding was that the agreement was signed to enable the first defendant to obtain a loan from Habib Bank Limited. No time limit was set for the loan. When funds became available a cheque was drawn in the plaintiff's favour but he refused it. The plaintiff therefore had no basis for claiming breach.

p. 3

Fraudulent registration of title

Holding

The registration in the first defendant's name was done with the plaintiff's authority; the particulars of fraud have no basis

Reasoning

The plaintiff wrote to the second defendant authorising it to write to the first defendant's advocate to process title in her name. That letter was received on 26th June 2006 and the title was issued on 16th October 2006. When the plaintiff purported to rescind on 9th November 2006, the title had already been processed. The second defendant acted on the plaintiff's instructions and owed him no further clarification duty.

p. 2

Specific performance of the counter-claim

Holding

The first defendant was ready and willing to complete and was awarded specific performance on her counter-claim

Reasoning

The first defendant demonstrated readiness and willingness to perform by tendering a cheque for the purchase price after obtaining the loan, which the plaintiff refused to accept. Having found the plaintiff failed to prove breach or fraud, the court entered judgment for the first defendant on her counter-claim for specific performance with costs.

p. 3

Legal principles established

Where a party authorises processing of title into a transferee's name, the transferor cannot later allege the title was procured by fraud
A party is not in breach where no time limit was agreed for performance and payment was tendered once funds were available

Court orders

1.The plaintiff's suit is dismissed with costs to the defendants
2.Judgment entered in favour of the first defendant in terms of her counter-claim (specific performance)
3.The plaintiff to pay costs of the counter-claim

Jurisdiction invoked: Article 162(2)(b) of the Constitution establishing the Environment and Land Court (implied from the court's subject matter); no express provision invoked in the judgment

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Bernard Macheah Ngicuru v Caroline Atieno Opar & another [2017] KEELC 1208 (KLR)", Case Analysis (2017). ELC Case No. 816 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1208/eng@2017-10-10

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