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ELCPartially AllowedCivil Suit No. 193 of 2010 (Now ELC.276 'A' of 2017 - Thika)· [2018] KEELC 4326 (KLR)

Alton Homes Limited & another v Davis Nathan Chelogoi & 2 others [2018] KEELC 4326 (KLR)

Environment and Land Court
23 February 2018
8,714 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~35 min to read original · ~4 min brief

The bottom line

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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

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Executive summary

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The 1st Plaintiff contracted in three successive agreements (27th February 2007, 3rd May 2009 and 4th August 2009) to purchase Nairobi Block 26/113 from the 1st Defendant at a final price of Kshs.11 million. The 4th August 2009 agreement superseded the earlier ones. The 1st Plaintiff paid a deposit and substantial instalments, took occupation through its Director, the 2nd Plaintiff, but the 1st Defendant failed to register and transfer the property by the completion date of 3rd November 2009, having only obtained title in his own name on 9th December 2009. He then demanded an additional Kshs.13,958,355/= not provided for in the agreement, terminated the transaction without serving a completion notice under the Law Society of Kenya Conditions of Sale, and transferred the property to the 2nd Defendant on 14th January 2010 without producing any written agreement or proof of payment. The 2nd Defendant, with the 3rd Defendant's assistance, distrained goods for alleged rent and evicted the 2nd Plaintiff. The court held the sale agreements valid; that the 1st Defendant alone breached them and terminated them unlawfully; that the 2nd Plaintiff occupied as an intended purchaser, not a tenant; that the 2nd Defendant was not an innocent purchaser for value without notice; and that the transfer to him was null and void ab initio. Judgment was entered for the Plaintiffs on prayers 1, 2, 4, 5, 6, 7, 8 and 9, including cancellation of the registration and rectification of the register under Section 80(1) of the Land Registration Act, specific performance, general damages of Kshs.5 million with interest, and relief for the illegal distress. The 2nd Defendant's Counter-claim was dismissed entirely, with costs of the suit awarded to the Plaintiffs jointly and severally against all Defendants, plus a refund of a Kshs.400,000/= court deposit.

Key legal issues

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01

Validity of the sale agreements

Holding

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

Reasoning

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.

p. 5
02

Breach of the sale agreement

Holding

The 1st Defendant, not the 1st Plaintiff, was in breach as he failed to deliver title or completion documents by the completion date

Reasoning

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.

p. 6
03

Lawfulness of termination

Holding

The termination was unlawful as no completion notice was served under the Law Society of Kenya Conditions of Sale

Reasoning

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.

p. 7
04

Occupancy status of the 2nd Plaintiff

Holding

The 2nd Plaintiff occupied the suit property as an intended purchaser, not as a tenant or licensee

Reasoning

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.

p. 7
05

Specific performance

Holding

Specific performance was granted as the contract was valid and the 1st Plaintiff proved it was ready, willing and able to complete

Reasoning

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.

p. 9
06

Innocent purchaser for value without notice

Holding

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

Reasoning

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.

p. 7
07

Illegal distress for rent

Holding

The distress levied by the 3rd Defendant on the 2nd Plaintiff's goods was irregular and unlawful as no tenancy existed

Reasoning

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.

p. 8

Legal principles established

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  • 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

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  1. 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. 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. 3.1st Defendant ordered to specifically perform the sale agreements and deliver completion documents to the 1st Plaintiff
  4. 4.Injunctions restraining the Defendants from dealing with the suit property and from interfering with the Plaintiffs' occupation (prayers 4, 5 and 6)
  5. 5.Mandatory order for return of distrained furniture and chattels (prayer 7)
  6. 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. 7.Damages for trespass, wrongful seizure of goods, conversion and illegal distress per prayer 9
  8. 8.Dismissal of the 2nd Defendant's Counter-claim entirely with costs to the Plaintiffs
  9. 9.Costs of the suit to the Plaintiffs, to be borne by all Defendants jointly and severally, plus interest
  10. 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)

Authorities

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Legislation

  • Law of Contract ActSection 3(3)
  • Evidence ActSections 107 and 109
  • Land Registration ActSection 80(1)
  • Civil Procedure ActSection 27
  • Law Society of Kenya Conditions of Sale (1989)Clause 4
  • Auctioneers ActCap. 526

Cases cited (11)

  • Mawji Vs US International University & Another
    (1976-80) 1 KLR
  • Nelson Kivuvani Vs Yuda Komora & Another
    Nairobi HCCC No.956 of 1991
  • Lulume Vs Coffee Marketing Board
    (1970) EA 155
  • Total Kenya Ltd Vs Joseph Ojiem
    Nairobi HCCC No.1243 of 1999
  • National Bank of Kenya Ltd Vs Pipeplastic Samkolit (K) Ltd & Another
    Civil Appeal No.95 of 1999 (2001) KLR 112 (2002) EA 503
  • Kenya Breweries Ltd Vs Natex Distributors Ltd
    Nairobi HCCC No.704 of 2000
  • Ayub Ndungu Vs Marion Waithera Gacheru
    (2006) eKLR
  • Mbugua Njuguna Vs Elijah Mburu & Another
    (2004) eKLR
  • Kisumuullah Oil Industries Ltd Vs Panasiatic Commodities PTA Ltd & Another
    Civil Appeal No.100 of 1995
  • Nabro Properties Ltd Vs Sky Structures Ltd & Others
    Civil Appeal No.175 of 2000 (2002) 2 KLR 299
  • R Vs Rosemary Wairimu Munene, Exparte Applicant Vs Ihururu Diary Farmers Cooperative Society Ltd
    null
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a dispute relating to land, Nairobi Block 26/113

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, "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.