Firoz Nurali Hirji & another v Marcellus Lazima Chegge [2017] KEELC 1634 (KLR)
The bottom line
#A Nairobi court ordered a property buyer to pay the outstanding purchase balance with interest, but refused rent and cancellation claims because he occupied the home lawfully as a purchaser.
What this practically means
#Executive summary
#Key legal issues
#Whether the defendant was in wrongful occupation so as to justify the rental income and mesne profits claims
The defendant was not in wrongful occupation; he entered and remained as a purchaser in possession with the plaintiffs' knowledge and permission and pursuant to a sale in vacant possession, so the rental and mesne profits claims failed.
The court reasoned that mesne profits/rent are only claimable where occupation is wrongful, exemplified by trespass without colour of right. Here the property was sold vacant, possession passed with the plaintiffs' consent after part payment of the purchase price, and the transfer was signed by the 1st plaintiff with the 2nd plaintiff's knowledge. The relationship was purchaser and seller, not landlord and tenant, and no fraud or illegality tainted the transfer.
Whether there was an outstanding balance of Kshs 5,869,496/- on the purchase price
Yes. The defendant admitted paying Kshs 19,227,945/- but had no documentary proof of full payment; the balance claimed tallied with the documents and was payable.
The defendant conceded in cross-examination that he had no receipts, bank details or documents to prove payment of the outstanding sum or the alleged renovation costs. The court analysed the documents and found the unpaid balance matched the plaintiffs' claim of Kshs 5,869,496/-. Deductions fronted by the defendant for repairs and preconditions were rejected as afterthoughts given the express terms of the third agreement.
Whether the three agreements bound the parties and which governed the transaction
The first agreement of 18th September 2006 governed the sale; the second of 29th September 2006 was solely to facilitate the defendant's loan from his employer's SACCO and was to be nullified; the third of 26th May 2007 was an agreement for payment of a debt of Kshs 12.5 million due to the 2nd plaintiff.
The court reviewed all three agreements. The second agreement existed only to secure a loan and its obligations (except the acknowledged amounts) were not meant to bind the parties. The third agreement acknowledged a debt due to the 2nd plaintiff and altered the payment schedule, extending payment of Kshs 6,521,500/- to within 12 months of registration of transfer. The defendant's failure to pay under both the first and second agreements constituted breach.
Whether the 2nd plaintiff breached the third agreement by failing to remove the inhibition
No breach. No time frame was specified for removal, and she in any event fulfilled the obligation on 13th September 2007.
The defendant alleged the transaction was delayed by the caveat/inhibition on title. The court held that clause D of the third agreement set no deadline for removal of the inhibition, and that its removal on 13th September 2007 discharged the 2nd plaintiff's obligation. The defendant's claim that payment of the balance was conditional on release of title documents was also unsupported by the first agreement.
Whether interest should be awarded and at what rate
Simple interest at court rates from the date of filing suit until payment in full, as compensation for deprivation of the use of money; compound interest was refused.
The court invoked section 26(1) of the Civil Procedure Act and Lata v Mbiyu, holding that a party deprived of money by another's wrongful act should be compensated by interest. Since the sale agreement provided no interest clause and the suit was filed within the contractual 12-month period, the court awarded interest at court rates rather than commercial or compound rates, noting the money had been withheld for close to 9 years.
Legal principles established
#- Rent or mesne profits are only awardable where occupation is wrongful, such as trespass by one with no colour of right; occupation as purchaser with the owner's permission is not wrongful.
- Mesne profits are another term for damages for trespass, and a claimant must prove ownership or lawful occupation of the property.
- A party who claims to have paid a debt must prove payment; absent documentary proof, the outstanding balance as claimed is payable.
- A successful party deprived of the use of money by the defendant's wrongful act is entitled to interest as compensation for such deprivation.
- A party may not withhold payment of a purchase price on account of unauthorised repairs where no counterclaim was made.
Court orders
#- 1.A declaration that the defendant is in breach of the terms of the sale agreement
- 2.The defendant to pay the 1st and 2nd plaintiffs the sum of Kshs 5,869,496/- being outstanding balance of the sale inclusive of Kshs 97,441/- being city council rates with interest thereon at court rates from the date of filing suit until payment in full
- 3.The defendant shall pay the costs of the suit
- 4.Claim for Kshs 18,237,650/- as gross cumulative rental income declined
- 5.Claim for mesne profits at Kshs 250,000/- per month declined
- 6.Alternative prayer for cancellation of the sale and transfer of LR No. 7785/266 rejected
- 7.Claim for general damages declined
- Jurisdiction invoked
- Original civil suit for breach of a sale agreement relating to land; specific provision not stated in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Firoz Nurali Hirji & another v Marcellus Lazima Chegge [2017] KEELC 1634 (KLR)", Case Analysis (2017). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1634/eng@2017-09-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.