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ELCPartially AllowedELC. Case No. 572 of 2014· [2018] KEELC 2827 (KLR)

Nouvetti Realtors Limited v Josephine Mowi Wambugu [2018] KEELC 2827 (KLR)

Environment and Land Court
12 June 2018
1,005 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nairobi land buyer won back Kshs. 2 million after the vendor secretly sold the property, but lost bigger interest and damages claims for lack of evidence.

What this practically means

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Executive summary

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Nouvette Realtors Limited sued Josephine Mowi Wambugu for refund of a deposit of Kshs. 2 million, contractual interest of Kshs. 3,737,500, damages for breach of contract, costs and interest. The claim arose from a sale agreement dated 26/7/2012 for L.R. No. Mavoko Town Block 12/419 at Kshs. 7 million, under which the Plaintiff paid a deposit of Kshs. 4.5 million. The Plaintiff later discovered the Defendant had transferred the property to Samuel Njoroge Kagiri on 8/5/2013. The Defendant unilaterally rescinded the transaction, refunding only Kshs. 2 million through instalments and cheques forwarded by her advocates, who indicated the balance would be paid once a suitable purchaser was found. The Defendant was served but did not enter appearance or file a defence. Thomas Malinda Musau testified for the Plaintiff, producing the sale agreement, payment records and an official search, confirming that no notice to complete was ever issued. The court found the claim proved on a balance of probabilities and held the Defendant in breach for rescinding unilaterally and failing to follow the contractual notice procedure. However, the court declined contractual interest because clause 11.0 was internally contradictory (three per cent in words, 4% in figures) and the Plaintiff led no evidence on the applicable bank lending rate or the computation of its claim; it also declined damages for breach of contract for want of evidence. Judgment was entered for Kshs. 2 million with interest at court rates from the date of filing suit until payment in full, with costs to the Plaintiff.

Key legal issues

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01

Breach of the sale agreement by the vendor

Holding

The Defendant breached the agreement by unilaterally rescinding it, transferring the suit property to a third party and refunding only part of the deposit without following the contractual notice procedure.

Reasoning

The sale agreement of 26/7/2012 for L.R. No. Mavoko Town Block 12/419 required that before rescission the purchaser give the vendor 21 days' notice. The Plaintiff's witness testified that no notice to complete was given and no demand for the balance of the purchase price was made. Instead the Defendant's advocates forwarded cheques totalling Kshs. 2 million, stating the balance would be paid once a suitable purchaser was found. A search showed the property had been transferred to Samuel Njoroge Kagiri. This proved breach on a balance of probabilities, the claim being undefended.

p. 1
02

Entitlement to contractual interest under clause 11.0

Holding

The contractual interest claim failed for want of proof and because clause 11.0 was ambiguous, stating three per cent in words but 4% in figures.

Reasoning

Clause 11.0 provided for interest at a rate above the maximum lending rate of Barclays Bank of Kenya, but the words stated three per cent while the figures appeared as 4%. The Plaintiff neither led evidence of the maximum bank lending rate nor broke down the Kshs. 3,737,500 claimed. In the absence of proof, the court awarded interest at court rates on the refunded deposit instead of contractual interest.

p. 2
03

Damages for breach of contract

Holding

The claim for damages for breach of contract was declined because no evidence was led on it.

Reasoning

Although the plaint sought damages for breach of contract, the Plaintiff led no evidence quantifying or supporting such damages. The court distinguished the proved liquidated deposit refund from the unproven general damages claim and declined to grant the latter.

p. 2

Legal principles established

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  • A party who proves breach of contract on a balance of probabilities is entitled to judgment for the liquidated sum proved, but must lead evidence to support ancillary claims for contractual interest and damages.

Court orders

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  1. 1.Judgment entered for the Plaintiff for Kshs. 2 million
  2. 2.Interest on the Kshs. 2 million at court rates from the date of filing suit until payment in full
  3. 3.Costs of the suit to the Plaintiff
Jurisdiction invoked
Environment and Land Court jurisdiction over disputes relating to land contracts (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 (1)

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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, "Nouvetti Realtors Limited v Josephine Mowi Wambugu [2018] KEELC 2827 (KLR)", Case Analysis (2018). ELC. Case No. 572 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/2827/eng@2018-06-12

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