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ELCDismissed· [2018] KEELC 1743 (KLR)

Brook Villas Estate Limited v Duncan Macharia Gatu & 16 others [2018] KEELC 1743 (KLR)

Environment and Land Court
27 September 2018
SOS. Okong'o
2,268 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A land buyer who hadn't paid the agreed deposit lost his bid to stop the seller reselling the property, because he couldn't show a strong case.

What this practically means

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Executive summary

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The plaintiff, who had agreed to purchase 12 acres from the 1st defendant's parcel Juja/Komo Block 1/25 for Kshs. 84,000,000 and paid a deposit of Kshs. 10,000,000, moved the court by Amended Notice of Motion dated 7th October, 2016 seeking a temporary injunction restraining the defendants from breaching the sale agreement of 14th May, 2015 by contracting with third parties over Juja/Komo/Block 1/3452 (the suit property) pending trial. The plaintiff alleged the 1st defendant maliciously subdivided the original parcel, closed its title, defeated the registration of an inhibition order, and sold the road-abutting portion to the 2nd defendant, who was advertising plots on it. The 1st and 2nd defendants opposed, contending the plaintiff failed to pay the 40% further deposit of Kshs. 33,600,000 due within 60 days, that the agreement was lawfully rescinded, that the 1st defendant was free to sell to others, and that the application was an abuse of process. The plaintiff relied on its status as a bona fide purchaser first in time and offered to pay the balance. Applying Giella v Cassman Brown as glossed in Mrao Ltd v First American Bank, the court held the plaintiff failed to establish a prima facie case: the further deposit was unconditional, was not paid, and rescission by the innocent party was not shown to be wrongful. The irreparable loss and balance of convenience limbs were not reached. The application was dismissed with costs to the defendants.

Key legal issues

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01

Whether the plaintiff established a prima facie case with a probability of success

Holding

No prima facie case was established because the plaintiff breached the agreement for sale by failing to pay the 40% further deposit, which payment was not conditional on the 1st defendant fulfilling any precondition, and the 1st defendant lawfully rescinded

Reasoning

The agreement made time of essence and required payment of a 40% further deposit within 60 days of execution. The court found the payment was not subject to any condition by the 1st defendant and there was no evidence the plaintiff paid it. The plaintiff thus stood in breach of the very agreement it sought to enforce and did not show the rescission was wrongful.

02

Whether irreparable loss and the balance of convenience needed determination

Holding

It was unnecessary to consider these limbs once the plaintiff failed to establish a prima facie case

Reasoning

Under Giella v Cassman Brown, the injunction limbs are applied sequentially; once the first limb fails, the court need not proceed further. The plaintiff's claim of irreparable harm and its offer to pay the balance were therefore not reached.

p. 3

Legal principles established

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  • An applicant for a temporary injunction must establish a prima facie case with a probability of success, demonstrate irreparable injury not compensable by damages, and failing which the court decides on a balance of convenience
  • Where a contract is breached by one party, the innocent party has a right of rescission

Court orders

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  1. 1.The plaintiff's Amended Notice of Motion dated 7th October, 2016 is dismissed
  2. 2.Costs of the application awarded to the defendants

Authorities

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Cases cited (7)

  • Daniel Kipkenda Rono v James Kariuki Nganga & 4 Others
    (2013) eKLR
  • Maureen Muthua v Nathan Kahara & Anor
    (2013) eKLR
  • Gatere Njamunyu v Joseck Njue Nyaga
    (1983) eKLR
  • Kalya Soi Farmers Cooperative Society v Paul Kirui & Another
  • Anita Chelegat O’donovan & 2 others v Fredrick Kwame Kumah & 2 Others
    (2015) eKLR
  • Giella v Cassman Brown & Co. Ltd.
    [1973] E.A 358
  • Mrao Limited v First American Bank of Kenya Limited & 2 Others
    (2003) KLR 125
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a land transaction dispute (interlocutory application in a pending suit)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Brook Villas Estate Limited v Duncan Macharia Gatu & 16 others [2018] KEELC 1743 (KLR)", Case Analysis (2018). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/1743/eng@2018-09-27

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