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ELCPartially AllowedELC Case No. 455 of 2017 (Formerly Milimani ELC. 373 of 2011)· [2018] KEELC 3722 (KLR)

Peter Kimani Wainaina & 2 others v Decon Enterprises Limited [2018] KEELC 3722 (KLR)

Environment and Land Court
27 April 2018
1,674 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ordered a plot seller who resold paid-for land to buyers to compensate them at today's market value, plus damages, costs and interest.

What this practically means

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Executive summary

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This was an exparte first-instance suit before the Environment and Land Court at Thika in which three Plaintiffs claimed against Decon Enterprises Limited for breach of sale agreements entered in 2000 for the purchase of plots carved out of LR.No.20695/20696. The Plaintiffs alleged they paid the entire purchase price in instalments, were allocated pre-survey plots, but the Defendant failed to transfer the plots to them and instead fraudulently transferred Thika Mun/Block 34/44, 45, 46, 85, 84, 164 & 162 to third parties while retaining the purchase monies. The Defendant entered appearance but filed no defence and did not attend the hearing, which proceeded exparte on 30th November 2017. The 1st Plaintiff testified and produced certificates of official search and a Valuation Report. The court held that although the claim was undefended, the Plaintiffs bore the burden of proving their case on a balance of probabilities under Sections 107 and 109 of the Evidence Act, which they discharged through uncontroverted evidence. Applying the rule that parties must perform their contractual obligations, and guided by Hadley v Baxendale and Milicent Perpetua Atieno v Alouis Onyango Otieno on the measure of damages for a vendor's wrongful refusal to complete, the court found the Defendant in breach. Judgment was entered for the Plaintiffs: compensation at the current market value of each plot as per the Valuation Report, general damages of Kshs.500,000 for breach of contract, costs of the suit, and interest at court rates from the date of judgment rather than the commercial rates of 20% from 2000 sought in the Plaint. The judgment was delivered by L. Gacheru, J, on 27th April 2018.

Key legal issues

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01

Burden of proof in an undefended suit

Holding

Even where the Defendant filed no defence, the Plaintiffs bore the burden of proving their case on a balance of probabilities under Sections 107 and 109 of the Evidence Act, which they discharged

Reasoning

The court noted that although the Defendant did not file a defence to controvert the allegations, Section 107 of the Evidence Act places the onus on he who alleges. The Plaintiffs produced sale agreements, certificates of official search showing the plots registered in third parties' names, and an unchallenged Valuation Report. The court found their evidence uncontroverted and credible, and held that they proved their case on the required standard of balance of probability.

p. 3
02

Breach of the sale agreements and entitlement to damages

Holding

The Defendant breached the sale agreements by failing to transfer the plots after receiving the full purchase price and instead transferring them to third parties, and is bound to pay damages measured as the full current market value of the suit properties plus general damages

Reasoning

Applying the basic rule that parties must perform their obligations in accordance with the terms of the contract, the court found the Defendant in breach. Guided by Hadley v Baxendale and Milicent Perpetua Atieno v Alouis Onyango Otieno, it held that damages should compensate the purchaser for loss naturally arising from the vendor's repudiation. Relying on the unchallenged Valuation Report, it quantified compensation per plot and awarded general damages of Kshs.500,000 for breach of contract.

p. 2

Legal principles established

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  • A party who alleges must prove its case on a balance of probabilities even where the claim is undefended
  • Uncontroverted plaintiff evidence, where the defendant files no defence, may be accepted if the court finds no reason to doubt it
  • A vendor in breach of a sale agreement is liable to compensate the purchaser for the loss incurred as the natural and direct result of the repudiation, including loss of bargain

Court orders

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  1. 1.The Defendant to compensate the Plaintiffs with the full and current market value of Thika Mun/Block 34/44, 45, 46, 85, 84, 164 & 162, itemised as Block 34/44 – Kshs.2,200,000; Block 34/45 – Kshs.2,200,000; Block 34/46 – Kshs.2,200,000; Block 34/84 – Kshs.2,700,000; Block 34/85 – Kshs.2,500,000; Block 34/86 – Kshs.2,200,000; Block 34/162 – Kshs.2,400,000; Block 34/164 – Kshs.2,000,000
  2. 2.General damages of Kshs.500,000 for breach of contract
  3. 3.Costs of the suit to the Plaintiffs
  4. 4.Interest on the compensation, general damages and costs at court rates from the date of judgment to payment in full

Authorities

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Legislation

  • Evidence ActSection 107(1)
  • Evidence ActSection 109

Cases cited (4)

  • William Kazungu Karisa vs Cosmas Angora Chanzera
    (2006) eKLR
  • Kariuki Kinuthia vs Job K. Chirchir & 3 Others
    (2013) eKLR
  • Milicent Perpetua Atieno vs Alouis Onyango Otieno
    (2013) eKLR
  • Hadley vs Baxendale
    (154) 9 Exch, 241
Jurisdiction invoked
Environment and Land Court jurisdiction over disputes relating to land (sale and transfer of land parcels)

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, "Peter Kimani Wainaina & 2 others v Decon Enterprises Limited [2018] KEELC 3722 (KLR)", Case Analysis (2018). ELC Case No. 455 of 2017 (Formerly Milimani ELC. 373 of 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3722/eng@2018-04-27

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