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ELCPartially AllowedELC Suit No. 359 of 2008· [2020] KEELC 2032 (KLR)

Enkasiti Flower Growers Limited v Protein & Fruits Processing Limited & another [2020] KEELC 2032 (KLR)

Environment and Land Court
18 June 2020
4,240 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~17 min to read original · ~4 min brief

The bottom line

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A Kenyan court ordered a land seller to complete the sale after taking the buyer's Kshs.31 million, ruling it could not renege on its own agreement.

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 11th June 1996 (and a further agreement dated 24th April 1997) for the purchase of LR No. 10871/1 Thika from the 1st defendant for Kshs.31,000,000. The 2nd defendant held a charge over the property, and part of the purchase price was to be applied to discharging the loan. The 1st defendant denied valid execution, alleged non-payment of the full price, defective land control board consent and lack of the chargee's consent under the AFC Act, and counterclaimed for vacant possession, an injunction, rentals and release of title documents. The 2nd defendant filed a defence but called no witnesses. The court found the agreements were in writing, signed and attested as required by section 3(3) of the Law of Contract Act, that the plaintiff proved payment of the full consideration by receipts, and that the 1st defendant surrendered possession and directed payments to the chargee, making it estopped from resiling. The land control board consent granted on 17th June 2008 was held properly obtained, and following the Court of Appeal authorities on estoppel and constructive trust the court held the 1st defendant could not escape its obligations. The counterclaim was found unmerited, lacking particulars of bad faith or undue influence, and res judicata of HCCC 1207 of 2005. Judgment was entered for the plaintiff against the 1st defendant with an order of specific performance, execution by the Deputy Registrar in default, and costs to the plaintiff and the 2nd defendant borne by the 1st defendant.

Key legal issues

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01

Validity and enforceability of the sale agreements of 11th June 1996 and 24th April 1997

Holding

Both agreements were validly executed and enforceable; the plaintiff proved payment of the full consideration of Kshs.31,000,000 and the 1st defendant surrendered possession

Reasoning

Section 3(3) of the Law of Contract Act was satisfied: the agreements were in writing, signed by the contracting parties and attested. PW1 testified the CEO was authorised to sign, and the 1st defendant gave instructions on payments to the 2nd defendant without challenge. Payment was proved by receipts. The court applied RTS Flexible Systems on objective contractual formation and estopped the 1st defendant from resiling.

p. 5
02

Effect of lack of timely land control board consent

Holding

Consent was properly sought and granted on 17th June 2008, curing any defect; in any event estoppel and constructive trust apply

Reasoning

The plaintiff exhibited the consent granted on 17th June 2008, produced as exhibit P17a, and the 1st defendant called no evidence to disprove its legitimacy. Following Kiplagat Kotut and Willy Kimutai Kitilit, the doctrines of estoppel and constructive trust prevent a vendor who allowed the purchaser to incur expense and take possession from asserting invalidity. The chargee's release of title documents evidenced its consent to the sale.

p. 5
03

Whether the 1st defendant's counterclaim was merited and/or res judicata

Holding

Counterclaim not merited; no particulars or evidence of bad faith or undue influence; it raised the same issues as HCCC 1207 of 2005 and was an abuse of process

Reasoning

The plaintiff had performed its obligations and no notice to rescind was issued. The allegations of bad faith and undue influence were not particularised or supported by evidence. The same issues had been raised in HCCC 1207 of 2005, which was dismissed, so under section 7 of the Civil Procedure Act the counterclaim was res judicata and an abuse of court process.

p. 5

Legal principles established

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  • A suit on a contract for the disposition of an interest in land must comply with section 3(3) of the Law of Contract Act - the contract must be in writing, signed by all parties and attested by a witness
  • A party who by representation induces another to pay consideration or discharge obligations on the faith of an agreement is estopped from reneging on it; constructive trust and proprietary estoppel may save contracts otherwise defective, including for lack of land control board consent
  • Specific performance is a discretionary equitable remedy granted only where a valid enforceable contract exists

Court orders

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  1. 1.An order of specific performance directing the 1st defendant to execute a transfer of LR No. 10871/1 Thika free from all encumbrances in favour of the plaintiff
  2. 2.In default of the 1st defendant executing the transfer, the Deputy Registrar of the court to execute such transfer on behalf of or in the names of the 1st defendant
  3. 3.The plaintiff and the 2nd defendant to have costs of the suit, to be borne by the 1st defendant

Authorities

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Legislation

  • Law of Contract Act, Cap 23Section 3(3)
  • Land Control Act(consent provisions, generally)
  • Land ActSection 38(2)
  • Civil Procedure ActSection 7
  • AFC ActSection 30
  • Civil Procedure Rules 2010Order 2 rule 15(1)

Cases cited (17)

  • Reliable Electrical Engineering vs Mantrac Kenya Limited
    [2006] eKLR
  • Oscar Ochieng & Another vs Prilscot Co. Ltd
    [2018] eKLR
  • Mamta Peeush Mahajan (suing on behalf of the Estate of the late Peeush Premlal Mahajan) vs Yashwant Kumari Mahajan
    [2017] eKLR
  • Macharia Mwangi Maina & Others vs Davidson Mwangi Kagiri
    [2014] eKLR
  • Isaack Ngatia Kihagi vs Paul Kaiga Githui
    [2017] eKLR
  • Willy Kimutai Kitilit vs Michael Kibet
    [2018] eKLR
  • Time Magazine International Ltd vs Michael F Rotich & Another
    [2000] eKLR
  • Kenya Breweries Ltd vs Kiambu General Transport Agency Limited
    [2000] 2 EA 398
  • Gitanga Maniki & Another vs Annunciata Waithira Kibue
    ELC 541 of 2009
  • Yaya Towers Ltd vs Trade Bank Ltd (in liquidation)
    CA Civ Appeal No. 35 of 2000
  • Abubakar Zain Ahmed vs Premier Savings and Finance Ltd & 3 Others
    Civil Appeal No. 109 of 2004
  • RTS Flexible Systems Ltd vs Molkerei Alois Muller GmbH
    [2010] UKSC 14
  • Macharia Mwangi & 87 others vs Davidson Mwangi Kagiri
    [2014] eKLR
  • Kiplagat Kotut vs Rose Jebor Kipng'ok
    [2019] eKLR
  • Reliance Electrical Engineering vs Mantrac Kenya Ltd
    [2006] eKLR
  • Steadman vs Steadman
    [1976] AC 536
  • Lloyds Bank PLC vs Rosset
    [1991] AC 107
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court under Article 162(2)(b) of the Constitution (suit concerning land; court not stated to have sat on appeal)

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, "Enkasiti Flower Growers Limited v Protein & Fruits Processing Limited & another [2020] KEELC 2032 (KLR)", Case Analysis (2020). ELC Suit No. 359 of 2008. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2032/eng@2020-06-18

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