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ELCPartially AllowedELC Case No. 139 of 2017 (Formerly Nairobi Civil Suit No. 521 of 2010)· [2018] KEELC 2630 (KLR)

Charles Wambicho Kinuthia v Planchem Limited [2018] KEELC 2630 (KLR)

Environment and Land Court
29 June 2018
LGL. Gacheru
3,985 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~16 min to read original · ~4 min brief

The bottom line

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A land sale agreement signed while the property belonged to someone else is void, and the buyer only recovered what he could prove he paid.

What this practically means

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Executive summary

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The Plaintiff sued the Defendant for specific performance of a sale agreement dated 19th March 2009 over plot Thika Municipality Block 9/679, a permanent injunction restraining interference with the property, or alternatively a refund of Kshs.1,848,000/= comprising the purchase price paid, liquidated damages and incidental expenses, with costs and interest. The Plaintiff alleged he paid Kshs.1,300,000/= of the Kshs.1,600,000/= purchase price, with the balance payable upon removal of a restriction on the register, and that the Defendant wrongfully repudiated the agreement by letter dated 1st November 2010. The Defendant denied breach, contending the property had been fraudulently transferred to a third party, that the agreement was void ab initio, that the Plaintiff took possession in breach of the contract, and that it had offered a refund which the Plaintiff declined. The court framed four issues: validity of the agreement, breach and by whom, entitlement to the prayers, and costs. It found that at the time of the agreement the property was registered in the name of Mwangi Waigwa, not the Defendant, and held the sale agreement null and void ab initio and unenforceable. In the alternative analysis, it found both parties in breach: the Plaintiff took possession before full payment, and the Defendant failed to evidence removal of the restriction. Specific performance and the injunction were refused, the latter because the property had been sold to a third party. The Plaintiff was awarded a refund of the documentary-proven Kshs.1,280,000/= with interest at court's rate from the date of judgment, with each party bearing its own costs.

Key legal issues

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01

Whether a valid sale agreement existed over the suit property

Holding

The sale agreement was null and void ab initio because at the time it was executed, the suit property was registered in the name of Mwangi Waigwa, not the vendor

Reasoning

The court noted that evidence of ownership of land is through registration documents such as a certificate of title, and a vendor can only sell what is rightfully owned. At the time of the 19th March 2009 agreement, the property was registered in a third party's name and a decree in CMCC No. 961 of 2006 reverting it to the defendant issued only on 9th November 2010. Relying on Delphis Bank v Sanyu Int. Ltd, the court held the agreement void ab initio and unenforceable.

p. 4
02

Whether the sale agreement was breached and by whom

Holding

Both parties were in breach: the Plaintiff took possession before full payment, and the Defendant failed to provide evidence of having removed the restriction

Reasoning

Clause 7 required the purchaser to take possession only upon full payment; the Plaintiff admitted depositing building materials and digging trenches, breaching the clause. Clause 2(b) required the Defendant to pay Kshs.520,000 after the restriction was completed, but there was no evidence she informed the Plaintiff that the restriction had been removed. The court held both parties in breach of the agreement dated 19th March 2009.

p. 4
03

Whether the Plaintiff was entitled to the prayers sought

Holding

Specific performance and injunction refused; only a refund of Kshs.1,280,000/= with interest from the date of judgment was awarded

Reasoning

The agreement being void, it was unenforceable and specific performance unavailable; even if enforceable, the Plaintiff had not complied with his obligations. The injunction could not issue because the property had been sold to a third party. Since both parties breached, no damages beyond refund of the documentary-proven Kshs.1,280,000/= were payable.

p. 4

Legal principles established

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  • A contract is illegal as formed if its very formation is prohibited and is void ab initio if it is a nullity
  • A court of law cannot rewrite a contract between the parties; parties are bound by their contract unless coercion, fraud or undue influence are pleaded and proved
  • A vendor can only sell what is rightfully owned; where the suit property was not registered in the vendor's name at the time of the sale agreement, the agreement is null and void ab initio
  • A party seeking specific performance must show proof that he has complied with his part of the agreement

Court orders

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  1. 1.Dismissal of the Plaintiff's case on prayers No. (a), (b) and (c) of the Amended Plaint
  2. 2.Refund to the Plaintiff of Kshs.1,280,000/= being part payment of the purchase price
  3. 3.Interest on the refund at court's rate from the date of judgment to payment in full
  4. 4.Each party to bear its own costs

Authorities

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Legislation

  • Law of Contract ActSection 3

Cases cited (5)

  • Delphis Bank Vs Sanyu Int. Ltd
    Nairobi HCCC No.714 of 1995
  • Emo Investment Ltd Vs Stephanus Petrus Kiinge
    (2010) eKLR
  • National Oil VS Pipeplastic Samkolit (K) Ltd & Prof Samson K. Ongeri
    CA No.95 of 1999
  • Guidev Singh Birdi & Another Vs Abubaker Madhubuti
    Civil App. No.165 of 1996
  • Jane Kemunto Mayaka Vs Municipal Council of Nakuru & Others
    HCCC No.124 of 2005
Jurisdiction invoked
Environment and Land Court jurisdiction over disputes relating to land (Article 162(2)(b) 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 (3)

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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, "Charles Wambicho Kinuthia v Planchem Limited [2018] KEELC 2630 (KLR)", Case Analysis (2018). ELC Case No. 139 of 2017 (Formerly Nairobi Civil Suit No. 521 of 2010). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/2630/eng@2018-06-29

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