Alton Homes Limited & another v Davis Nathan Chelogoi & 2 others [2018] KEELC 4326 (KLR)
The bottom line
#A Kenyan land buyer who paid most of the price won: the court ordered the seller to transfer the property, cancelled a later resale, and awarded Kshs. 5 million in damages.
What this practically means
#Executive summary
#Key legal issues
#Validity of the sale agreements
The sale agreement dated 4th August 2009, which superseded prior agreements, was a valid and enforceable contract, but no valid written sale agreement was proved between the 1st and 2nd Defendants
The 4th August 2009 agreement was in writing, signed by the parties and contained parties' names, property description, price and conditions, satisfying Section 3(3) of the Law of Contract Act. No written agreement or evidence of payment of the Kshs.12 million price was produced for the 1st/2nd Defendants' transaction, only a Green Card.
Breach of the sale agreement
The 1st Defendant, not the 1st Plaintiff, was in breach as he failed to deliver title or completion documents by the completion date
Completion was to be 3rd November 2009, but the 1st Defendant only obtained title in his own name on 9th December 2009. The final Kshs.2 million was conditional on transfer. His subsequent demand for an additional Kshs.13,958,355/= as interest introduced a term not in the contract.
Lawfulness of termination
The termination was unlawful as no completion notice was served under the Law Society of Kenya Conditions of Sale
The agreement incorporated the LSK Conditions of Sale (1989), clause 4, requiring notice to complete within 21 days. The 1st Defendant arbitrarily cancelled the transaction by a letter dated 14th December 2009 without following this procedure, while himself in breach.
Occupancy status of the 2nd Plaintiff
The 2nd Plaintiff occupied the suit property as an intended purchaser, not as a tenant or licensee
No evidence of rent payment to the 1st Defendant was adduced. The burden of proof under Sections 107 and 109 of the Evidence Act lay on the party alleging tenancy, and neither the 1st nor 2nd Defendant discharged it.
Specific performance
Specific performance was granted as the contract was valid and the 1st Plaintiff proved it was ready, willing and able to complete
The 1st Plaintiff had paid Kshs.6 million acknowledged plus three instalments of Kshs.1 million each; the final Kshs.2 million was payable only upon transfer, which the vendor never facilitated. In contracts for sale of land, specific performance is available since no satisfactory substitute exists.
Innocent purchaser for value without notice
The 2nd Defendant was not an innocent purchaser as he bought with knowledge of the 2nd Plaintiff's occupation and the incomplete sale to the 1st Plaintiff
The 2nd Defendant admitted the property was occupied at the time of purchase and that he was aware the 1st Defendant had not completed the sale to the 1st Plaintiff. No sale agreement or proof of payment of the Kshs.12 million was produced.
Illegal distress for rent
The distress levied by the 3rd Defendant on the 2nd Plaintiff's goods was irregular and unlawful as no tenancy existed
There being no tenancy agreement between the 2nd Plaintiff and the 2nd Defendant, and the 2nd Plaintiff being in occupation as an intended purchaser, the 2nd and 3rd Defendants' levying of distress was without basis, entitling the Plaintiffs to relief under prayers 6, 7 and 9.
Legal principles established
#- A contract for the disposition of an interest in land must be in writing and signed by all parties under Section 3(3) of the Law of Contract Act
- Parties are bound by the terms of their contract and a court cannot re-write it
- Invocation of a non-existent clause to terminate a contract is not legitimate
- Costs follow the event
Court orders
#- 1.Judgment entered for the Plaintiffs against the Defendants jointly and severally in terms of prayers Nos.1, 2, 4, 5, 6, 7, 8 and 9 of the Plaint dated 27th April 2010
- 2.Declaration that the sale and transfer of Nairobi Block 26/113 to the 2nd Defendant on 14th January 2010 was null and void ab initio and cancellation thereof; rectification of the register and cancellation of the 2nd Defendant's registration pursuant to Section 80(1) of the Land Registration Act
- 3.1st Defendant ordered to specifically perform the sale agreements and deliver completion documents to the 1st Plaintiff
- 4.Injunctions restraining the Defendants from dealing with the suit property and from interfering with the Plaintiffs' occupation (prayers 4, 5 and 6)
- 5.Mandatory order for return of distrained furniture and chattels (prayer 7)
- 6.General damages of Kshs.5,000,000/= payable by all Defendants jointly and severally with interest from the date of judgment until payment in full (prayer 8)
- 7.Damages for trespass, wrongful seizure of goods, conversion and illegal distress per prayer 9
- 8.Dismissal of the 2nd Defendant's Counter-claim entirely with costs to the Plaintiffs
- 9.Costs of the suit to the Plaintiffs, to be borne by all Defendants jointly and severally, plus interest
- 10.Refund to the Plaintiffs of Kshs.400,000/= deposited in court as security for injunctive order (Deposit Receipt No.0013045 of 7th March 2011)
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a dispute relating to land, Nairobi Block 26/113
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Alton Homes Limited & another v Davis Nathan Chelogoi & 2 others [2018] KEELC 4326 (KLR)", Case Analysis (2018). Civil Suit No. 193 of 2010 (Now ELC.276 'A' of 2017 - Thika). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4326/eng@2018-02-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.