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ELCPartially AllowedELC Case No. 403 of 2009· [2019] KEELC 1875 (KLR)

Anne Wambui Githuri v Makfam Investments Limited & 2 others [2019] KEELC 1875 (KLR)

Environment and Land Court
30 July 2019
4,618 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 land seller to complete the sale despite his objections, ruling the buyer had fully paid and the seller's attempts to back out were dishonest.

What this practically means

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Executive summary

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The Plaintiff sued for specific performance of a sale agreement dated 20/12/2004 for an acre to be excised from L.R. No. 14675, Kiambu, plus injunctions and a declaration that a charge registered over the land in favour of Equity Bank was fraudulent and should be discharged. The 1st Defendant denied breach, asserting the Plaintiff failed to pay the balance by the completion date of 31/3/2005, and counterclaimed for vacant possession, eviction and mesne profits. The 2nd Defendant (the vendor's advocate) and 3rd Defendant (the chargee bank) filed no defences. The court found, on the correspondence, that the Plaintiff forwarded the balance of the purchase price through her advocates to Gakuru & Co. Advocates to hold in trust pending registration of new titles, and that any remedy for the advocate's release of funds lay against the advocate, not the Plaintiff. The 1st Defendant never issued a completion notice, was not ready to complete since the land had not been subdivided, and acted dishonestly in charging the land after receiving full payment and giving possession, and in failing to register the discharge of charge. The court relied on the surveyor's evidence that the purported amalgamation creating L.R. No. 27240 was irregular and unregistered. The court decreed specific performance within 30 days, with default machinery involving a fresh discharge of charge by Equity Bank and execution by the Deputy Registrar. The 2nd Defendant was ordered to pay general damages of Kshs. 300,000/= for breach of professional undertaking. The counterclaim was dismissed with costs.

Key legal issues

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01

Payment of the balance of the purchase price

Holding

The court found the Plaintiff paid the balance through her advocates to Gakuru & Co. Advocates

Reasoning

The court relied on Kimani Kairu and Company Advocates' letter of 9/8/2005 forwarding a cheque for Kshs. 1,300,000/= to Gakuru and Company Advocates, corroborated by the refund cheque of Kshs. 200,000/= for overpayment. It held the 1st Defendant's remedy was against its own advocate, not the Plaintiff.

p. 4
02

Validity of the purported rescission and completion notice

Holding

The purported rescission was invalid; the 1st Defendant never issued a completion notice and was not ready and able to complete

Reasoning

Under the Law Society Conditions of Sales, a party must serve a notice to complete where the sale is not completed. The 1st Defendant issued none and its land had not been subdivided. Possession had been given and developments made, making restitution impossible. The court relied on Ayub Ndung'u v Marion Waithera Gacheru on rescission.

p. 4
03

Charging the suit land after receipt of the full purchase price

Holding

The charge to the 3rd Defendant after full payment was dishonest and intended to frustrate the Plaintiff; the failure to register the discharge of charge was similarly intended to frustrate her

Reasoning

The 1st Defendant charged L.R. No. 14675 to Equity Bank after receiving the full purchase price and after giving the Plaintiff possession. Its witness confirmed an unregistered discharge of charge existed. The court found this conduct was designed to defeat the Plaintiff's interest.

p. 4
04

Survey irregularity

Holding

The survey amalgamating L.R. Nos. 14675 and 14676 into L.R. No. 27240 was irregular and never registered; the correct approach was to excise an acre then amalgamate it with the Plaintiff's land

Reasoning

The licensed surveyor testified that plots belonging to different owners were amalgamated, which is not registrable, and that neither plot had been altered on the ground. The court adopted this evidence in framing the specific performance order.

p. 4
05

Breach of professional undertaking by the 2nd Defendant

Holding

The 2nd Defendant breached its professional undertaking; general damages of Kshs. 300,000/= awarded

Reasoning

The 2nd Defendant released the balance of the purchase price and completion documents to the 1st Defendant without the Plaintiff's consent, contrary to the basis on which the funds were held in trust. The court awarded general damages for this breach.

p. 4

Legal principles established

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  • A vendor who has received the full purchase price and given possession cannot defeat the purchaser's claim by charging the land; specific performance will be decreed
  • Rescission of a contract for sale of land requires notice to the party in default and an opportunity to rectify, and restitution must be possible

Court orders

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  1. 1.Specific performance of the sale agreement dated 20/12/2004 by the 1st Defendant within 30 days of the judgment
  2. 2.In default of specific performance, the 3rd Defendant to prepare and deliver up another discharge of charge over L.R. No. 14675 to the Plaintiff
  3. 3.If the 1st Defendant fails to undertake the survey and transfer, the Deputy Registrar to execute all documents necessary to effect the transfer of an acre from L.R. No. 14675 to the Plaintiff
  4. 4.Grants of prayers (a) and (c) of the Amended Plaint
  5. 5.General damages of Kshs. 300,000/= awarded against the 2nd Defendant for breach of professional undertaking
  6. 6.Dismissal of the 1st Defendant's counterclaim
  7. 7.Costs of the suit to the Plaintiff; 1st Defendant to pay costs to the Plaintiff and to the 3rd Defendant

Authorities

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Legislation

  • Law Society Conditions of SaleCondition 4(7)(f)

Cases cited (1)

  • Ayub Ndung'u v Marion Waithera Gacheru
    [2006] eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court under Article 162(2) of the Constitution (land and environment disputes)

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, "Anne Wambui Githuri v Makfam Investments Limited & 2 others [2019] KEELC 1875 (KLR)", Case Analysis (2019). ELC Case No. 403 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/1875/eng@2019-07-30

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