Nizar Hudani v Elizabeth Mugure Mukunya & 5 others [2018] KEELC 4445 (KLR)
The bottom line
#A Kenyan court dismissed a property buyer's case because he delayed over a year paying off the bank's charge, losing the property but recovering his deposit.
What this practically means
#Executive summary
#Key legal issues
#Whether the vendor was entitled to withdraw from the sale agreement
Yes - the purchaser failed to pay the outstanding charge or provide an undertaking, and his delay was inordinate
The purchaser knew the title was held by the chargee and was obliged to pay the loan sum or give an undertaking, but only contacted the Bank three months after the agreement and tendered payment over a year later, only after learning of the intended sale. The loan continued to attract interest. Unreasonable delay entitled the vendor to treat time as of the essence and withdraw.
Whether the Bank lawfully exercised its statutory power of sale
Yes - sale under Section 76 of the Registration of Titles Act was lawful since the charge debt was unpaid
Under Section 69 of the Transfer of Property Act, 1882, a mortgagee may sell without court intervention once the mortgage money is due. The purchaser never paid the charge amount nor gave an acceptable undertaking, so the Bank was entitled to sell and was not bound by the purchaser-vendor agreement.
Whether the transfer and charge breached the injunction of 15/10/2007
No breach proved - the Plaintiff failed to prove service of the order on the Bank before the transfer
The burden of proving service lay on the Plaintiff. There was no affidavit of service, the order was extracted after the transfer on 18/10/2007, and although the application was stamped by the Bank on 17/10/2007, no copy of the order served was attached. Fraud and collusion were likewise not proved.
The 5th and 6th Defendants' counterclaim
Dismissed - the claimed costs would have been incurred regardless of the injunction
The sums claimed for architectural drawings and guard fees were costs the 5th Defendant would have incurred even absent the injunction, and the counterclaim was not proved.
Legal principles established
#- A condition precedent for specific performance is that the purchaser must pay or tender the purchase price at the time and place of completion
- A purchaser who fails to complete on the completion date is not in fundamental breach if ready to complete within a reasonable time, but unreasonable delay entitles the other party to make time of the essence
- A chargee is not bound by a sale agreement between the chargor and a third party and may exercise its statutory power of sale where the outstanding charge is not paid or undertaken
- The onus of proving service of a court order, and of fraud, rests on the party alleging it
Court orders
#- 1.Plaintiff's suit dismissed
- 2.Plaintiff entitled to refund of deposit of Kshs. 680,000/= plus interest at court rates from the date of payment until payment in full, payable by the 1st Defendant
- 3.5th and 6th Defendants' counterclaim dismissed with no orders as to costs
- 4.Each party to bear its own costs
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over the suit property
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Nizar Hudani v Elizabeth Mugure Mukunya & 5 others [2018] KEELC 4445 (KLR)", Case Analysis (2018). ELC Civil Suit No. 721 of 2007. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4445/eng@2018-01-25
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.