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ELCPartially AllowedNot stated in judgment (Application dated 9th March, 2018)· [2019] KEELC 3936 (KLR)

Chania Frontiers Limited v Bibiana Mbatha Ngotho [2019] KEELC 3936 (KLR)

Environment and Land Court
27 March 2019
2,245 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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A Kenyan court blocked a land seller from cancelling a property deal because she failed to follow the notice steps required in the contract.

What this practically means

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Executive summary

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This was a ruling on the Plaintiff's notice of motion dated 9th March, 2018 in a land sale dispute before the Environment and Land Court at Machakos. The Plaintiff sought injunctions restraining the Defendant from selling, alienating or dealing with sixty enumerated plots on Mavoko Town Block 2, from transferring her assets or accessing her bank accounts, and an order of specific performance compelling completion of the sale. The parties had contracted for the sale of 129 plots, later reduced by an Addendum of 25th March, 2016 to 121 plots at a revised price of Kshs. 166,375,000, with the balance payable by 15th January, 2017. The Defendant served a notice dated 7th March, 2017 purporting to terminate the sale of the remaining 60 plots and later rescinded by letter of 25th April, 2017, citing non-payment of accrued interest under the Law Society Conditions of Sale. The court held that Clause 7.1 required a 21-day notice to remedy breaches before rescission, that the 7th March notice could not prima facie amount to a rescission notice, and that all breaches, including accrued interest, should have been specified in a notice to complete. The Plaintiff was found to have established a prima facie case with chances of success, and to face irreparable injury not compensable in damages, while the Defendant's loss was quantifiable. The court granted a prohibitory injunction over the sixty parcels pending trial but declined specific performance at the interlocutory stage, and awarded costs of the application to the Plaintiff.

Key legal issues

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01

Validity of the rescission notice

Holding

The Notice of 7th March, 2017 was not a valid rescission notice; it could not, prima facie, rescind the Agreement because Clause 7.1 required first a 21-day notice to remedy breach

Reasoning

Clause 7.1 entitled the Vendor, upon the Purchaser's default, to serve a written notice requiring remedy within 21 days, and only upon expiry of that notice to rescind. The notice of 7th March 2017 purported to terminate the sale of the remaining 60 plots without first being a notice to complete specifying breaches, so it was ineffective as a rescission notice. The Defendant's own later letter of 25th April 2017 described the 7th March letter as a completion notice.

02

Notice to complete must specify all breaches

Holding

The Defendant was obliged to state in the notice to complete all breaches, including late payment and accrued interest, before a valid rescission notice could issue

Reasoning

The Defendant introduced the issue of non-payment of accrued interest under the Law Society Conditions of Sale only in the rescission letter of 25th April 2017, not in the earlier notice. Since the notice to complete did not alert the Plaintiff to remedy that breach, reliance on it as a ground of rescission was procedurally defective. This defect, together with the Plaintiff's payment of the balance upon notice, established a prima facie case.

p. 3
03

Prima facie case and irreparable injury

Holding

The Plaintiff established a prima facie case with chances of success and would suffer irreparable injury not compensable in damages

Reasoning

Having paid the balance of the purchase price upon service of the defective notice, and the notice not being clear on the breaches to remedy, the Plaintiff showed a prima facie case. The Defendant, who had quantified her claim in the Counter-claim and still held the titles to the 60 plots, would suffer no irreparable loss; the Plaintiff, having paid the full purchase price, would lose the properties if sold to third parties.

p. 3

Legal principles established

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  • Before rescinding an agreement for breach, a vendor must first serve a notice to complete specifying all breaches, and may only rescind if the purchaser fails to remedy them

Court orders

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  1. 1.Injunction restraining the Respondent, her agents and/or servants from selling, dealing with, interfering, alienating or disposing of all those parcels of land known as Mavoko Town Block 2/4072, 4073, 4074, 4075, 4090, 4091, 4094, 4095, 4096, 4097, 4098, 4099, 4100, 4101, 4102, 4117, 4126, 4127, 4128, 4129, 4130, 4131, 4132, 4133, 4134, 4135, 4136, 4137, 4138, 4141, 4142, 4143, 4144, 4145, 4146, 4147, 4148, 4149, 4154, 4160, 4164, 4165, 4166, 4167, 4168, 4169, 4170, 4171, 4175, 4178, 4179, 4180, 4181, 4227, 4228, 4229, 4230, 4231, 4232, 4233, 4234, 4285, 4286 and 4287, pending the hearing and determination of the suit
  2. 2.Costs of the Application to be borne by the Defendant/Respondent

Authorities

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Legislation

  • Law Society Conditions of SaleIncorporated into the Agreement (interest on late payment)
Jurisdiction invoked
Not expressly stated; original civil jurisdiction over land disputes (interlocutory application in a pending suit)

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, "Chania Frontiers Limited v Bibiana Mbatha Ngotho [2019] KEELC 3936 (KLR)", Case Analysis (2019). Not stated in judgment (Application dated 9th March, 2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/3936/eng@2019-03-27

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