John Okuna Ogango v Dolores N. Collins & another [2017] KEELC 1843 (KLR)
The bottom line
#A Kenyan court stopped a land seller from cancelling a Kshs 52 million sale because she hadn't first delivered the documents required under the contract.
What this practically means
#Executive summary
#Key legal issues
#Whether the 1st Defendant could rescind the sale agreement
The purported rescission was invalid because the 1st Defendant had not completed her part of the agreement and the notice did not comply with clause 11.
Clause 9 placed responsibility for providing the completion documents, including the Certificate of Occupation, on the 1st Defendant. The Certificate of Practical Completion forwarded on 6/1/2016 was not the certificate contemplated by clause 6. Securing the irrevocable undertaking alone was insufficient. The clause 11 notice required the vendor to confirm readiness to complete in all respects, which she had not done.
Whether the 2nd Defendant breached its irrevocable undertaking
Yes; the 2nd Defendant failed to transfer the Suit Property by way of a long lease and to furnish the clause 9 completion documents.
The 2nd Defendant was the registered proprietor of L.R. No. 3734/220 and gave its consent and an irrevocable undertaking witnessed on 22/4/2015. It received the deposit of Kshs. 15,320,000. Its claim to be a mere contractor was rejected; the excuse relating to unpaid advocates' fees was unsupported by the agreement, which provided each party bears its own advocates' charges.
Whether the 1st Defendant could forfeit 10% of the purchase price
No; the Plaintiff was instead entitled to liquidated damages of 10% under clause 11(b), and the vendor had to refund monies paid above the 10% deposit.
Clause 11 provided that on default the vendor would refund monies paid over and above the 10% deposit. The Plaintiff had paid 20% deposit plus further sums, which the 1st Defendant did not refund within seven days of the purported termination. The suggestion that the Plaintiff sue for recovery of the balance was contrary to the parties' agreement.
Legal principles established
#- A vendor who has not furnished the completion documents required of her under clause 9 of the sale agreement cannot validly issue a completion notice or rescind under clause 11.
- A registered proprietor who gives an irrevocable undertaking to transfer the property directly to the purchaser and to supply completion documents is bound by that undertaking even though not a party to the sale agreement.
- A party cannot make payment of its own advocates' fees a condition precedent to performing an obligation the agreement placed on it, where the agreement provided each party bears its own costs.
Court orders
#- 1.Declaration that the 1st Defendant was not entitled to rescind the sale agreement as she purported to do
- 2.Finding that the 2nd Defendant is in breach of its irrevocable undertaking
- 3.The 2nd Defendant to transfer the Suit Property to the Plaintiff by way of a long lease and furnish the completion documents listed at clause 9 of the sale agreement, including the Certificate of Occupation, within 30 days of the date of the judgment
- 4.The Plaintiff to pay the balance of the purchase price to the 1st Defendant within three days of receiving the lease and all the completion documents from the 2nd Defendant
- 5.The Plaintiff awarded liquidated damages assessed at 10% of the purchase price from the 1st Defendant pursuant to clause 11(b) of the sale agreement
- 6.Costs of the suit to be borne by the 1st Defendant
- Jurisdiction invoked
- Environment and Land Court jurisdiction under the Environment and Land Court Act over disputes relating to the sale and transfer of land (suit property L.R. No. 3734/220, Unit No. 2)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Okuna Ogango v Dolores N. Collins & another [2017] KEELC 1843 (KLR)", Case Analysis (2017). ELC. Case No. 606 of 2016 (Originating Summons). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1843/eng@2017-09-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.