Uzimapress Limited v Ashraf Savani & 3 others [2020] KEELC 1401 (KLR)
The bottom line
#A Kenyan court cancelled a land transfer obtained through misrepresentation, ruling that a buyer who never paid the purchase price cannot force a seller to complete the sale.
What this practically means
#Executive summary
#Key legal issues
#Whether the issues raised in ELC No. 387 of 2019 and ELC Misc. Application No. 191 of 2019 were res judicata
Not res judicata: the validity of the notice of termination and the parties' rights and obligations under the 15/6/2007 sale agreement were neither litigated nor decided in ELC No. 2315 of 2007
Section 7 of the Civil Procedure Act requires that the matter be directly and substantially in issue between the same parties and heard and finally decided. In ELC No. 2315 of 2007 the dispute was whether the Dungarwalla agreement was lawfully terminated; the court dismissed his suit and allowed Uzima's counterclaim. It did not determine breach of the 15/6/2007 agreement between Uzima and Right End Properties, the failure to pay the balance, or the validity of the 27/11/2014 termination notice.
Whether Uzima Press Limited lawfully terminated the sale agreement dated 15/6/2007 by notice dated 27/11/2014
Yes - lawful termination under special condition 8
Special condition 8 made time of the essence and entitled the vendor to rescind by 21 days' written notice if the purchaser failed to comply with obligations including payment of the balance. It was not in dispute that Right End Properties, Savani and Chatur never paid the Kshs. 36,000,000/= balance within the contractual timelines, never attempted to pay or deposit it, and did not pay within the 21-day notice. The injunction did not excuse the purchasers, who could have sought an extension under clause 6.
The legal effect of the judgment in ELC No. 2315 of 2007 delivered on 4/7/2018
The judgment did not compel Uzima to transfer the property, did not direct registration of the transfer, did not reinstate the transfer, and did not discharge the parties from their obligations under the sale agreement
The judgment dismissed Dungarwalla's suit and allowed Uzima's counterclaim declaring the transfer lodged in favour of Right End Properties valid and not subject to Dungarwalla's rights. It did not grant a vesting order, direct the Registrar to lift the caveat, or address the contractual rights and obligations between Uzima and Right End Properties. The purchasers accordingly could not treat the judgment as compelling completion without performing their own obligations.
Whether the transfer of the Suit Property registered on 6/2/2019 in favour of Right End Properties Limited was valid
Invalid - obtained after lawful rescission, through misrepresentation to the Magistrate's Court and without Uzima's knowledge
The transfer was registered after the agreement had been lawfully terminated in 2014. It was procured by a false representation by Madatali Chatur in his affidavit of 21/9/2018 that the court had given strict timelines for effecting the transfer, which was untrue, and via an order of 9/10/2018 in Criminal Case No. 338 of 2014 in which the Chief Magistrate lacked jurisdiction to deal with reinstatement of the transfer. The registration also breached the professional undertaking to pay the balance within 14 days of registration.
Whether Right End Properties Limited was entitled to specific performance/enforcement orders
No - it failed to show readiness and willingness and did not come to court with clean hands
Specific performance requires the party to have performed all terms it undertook to perform at the date of the writ. Right End Properties never paid the balance within the contractual timelines and made no attempt to pay or deposit it during the pendency of the suit. Granting enforcement orders would allow a party to benefit from its own breach and from an illegality committed on the court, and would be oppressive given the appreciation in the value of the land.
Legal principles established
#- Parties to a suit should bring forward their whole case and only in special circumstances may they reopen the same subject of litigation; but res judicata only applies where the issue was directly and substantially in issue, between the same parties, and heard and finally decided
- A judgment does not discharge parties from their contractual obligations; parties are bound by the terms of the agreement they enter into and the court will not rewrite contracts for them
- A vendor may rescind a contract for sale of land where a contractual condition entitling rescission is triggered and the purchaser fails to pay the balance of the purchase price within the notice period
- A party seeking specific performance must show it performed all terms it undertook to perform; it would be oppressive, unjust and financially injurious to compel performance years after the agreed completion date where value has significantly appreciated
- A Chief Magistrate in a criminal case lacked jurisdiction to order the release of title documents to effect reinstatement of a transfer over land in the manner done
Court orders
#- 1.The orders sought in the application dated 23/10/2019 filed in ELC Miscellaneous Application No. 191 of 2019 (to compel Uzima Press Limited to receive payment of Kshs. 36,000,000/=, vacant possession and mandatory injunction) are declined
- 2.Prayers (a), (b), (c), (d), (e), (f), (g) and (h) of the plaint dated 27/11/2019 in ELC No. 387 of 2019 are granted (declarations that the sale agreement was properly rescinded by the notice dated 27/11/2014, that the purchasers breached the agreement, that the transfer registered on 6/2/2019 was obtained through fraud, mistake, misrepresentation and material non-disclosure, cancellation of the transfer, vesting of the Suit Property in Uzima Press Limited and permanent injunction)
- 3.Each party to bear its own costs of the miscellaneous application
- 4.Each party to bear its own costs of the suit
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under the Environment and Land Court Act over disputes relating to land (ELC Case No. 387 of 2019 and ELC Misc. Application No. 191 of 2019)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Uzimapress Limited v Ashraf Savani & 3 others [2020] KEELC 1401 (KLR)", Case Analysis (2020). ELC Case No. 387 of 2019 (Consolidated with ELC Miscellaneous Application No. 191 of 2019). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/1401/eng@2020-08-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.