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ELCPartially AllowedELC Case No. 277 of 2011· [2020] KEELC 2529 (KLR)

Jim’s Fresh Vegetable Growers & Exporters Limited v Locland Limited & another [2020] KEELC 2529 (KLR)

Environment and Land Court
5 May 2021
7,491 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~30 min to read original · ~4 min brief

The bottom line

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A Kenyan court threw out a buyer's Kshs.90 million land deal claim because no signed written agreement existed, and ordered the buyer evicted.

What this practically means

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Executive summary

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The Plaintiff sued for specific performance of an alleged agreement to purchase two Kajiado/Kitengela parcels, or damages, claiming it paid Kshs.32,500,000/= towards a Kshs.90,000,000/= purchase price and spent Kshs.35,000,000/= on improvements. The Defendants denied any concluded or signed agreement, admitted only Kshs.7,500,000/= appropriated to vehicles, a tractor and stock, and counterclaimed for injunction, eviction, mesne profits, Kshs.9.57m for assets and general damages. The court framed seven issues and found that the parties' negotiations shifted from assets, to shares, to lease, to sale, with unexecuted drafts showing inconsistent purchase prices; applying the objective theory of contract formation, no binding agreement existed, and the transaction failed the requirements of section 3(3) of the Law of Contract Act. The alleged Kshs.25,000,000/= cash payments were unproved, and the special damages claim failed for want of strict proof, the invoices being in the name of Mboga Tuu Limited. The equitable doctrines invoked by the Plaintiff were distinguished. The Plaintiff's suit was dismissed in its entirety with costs. On the counter-claim, the court found the Plaintiff a trespasser from January 2010 and entered judgment for the Defendants: a permanent injunction, eviction, removal of cautions, general damages of Kshs.10,000,000/= with interest at 14% from the date of judgment, and three quarters of the costs of the counter-claim. Claims for mesne profits and the Kshs.9,570,000/= balance failed.

Key legal issues

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01

Existence of a binding agreement for sale of land

Holding

No binding agreement was concluded; the exchanged drafts were unexecuted and their terms, including purchase price, kept changing

Reasoning

The parties progressed from assets purchase, to shares, to lease, to sale, with drafts showing differing prices of Kshs.62.5m, 90m and 120m. Applying the objective theory of contract formation, the court found no consensus on essential terms, so no legally binding contract arose capable of supporting specific performance.

p. 5
02

Compliance with section 3(3) of the Law of Contract Act

Holding

The alleged transaction did not comply with section 3(3) and no equitable doctrine could salvage it

Reasoning

The draft agreement was neither signed nor attested as required. The court held that neither common law doctrines nor equity could cure the statutory formalities, and part-performance/constructive trust arguments failed because the plaintiff entered as a prospective lessee and the equitable remedies relied on by the plaintiff were distinguishable.

p. 6
03

Payment of Kshs.32,500,000/= towards purchase price

Holding

Only Kshs.7,500,000/= was admitted as paid and it was appropriated to movable assets; the alleged Kshs.25,000,000/= cash payment was unproved

Reasoning

The court found no bank statements, acknowledgments or debit evidence supporting the alleged cash payments to the 2nd Defendant's son via Mboga Tuu Limited cheques. The admitted Kshs.7.5m was allocated to vehicles, tractor and stock, which the Plaintiff's own schedule confirmed.

p. 6
04

Proof of special damages for improvements

Holding

Special damages of Kshs.35,000,000/= failed for want of strict proof; invoices were in the name of Mboga Tuu Limited

Reasoning

Relying on Capital Fish Kenya Limited, the court reiterated that special damages must be specifically pleaded and strictly proved. The Plaintiff's schedule showed some vehicles bought before possession, mixed Isinya and Kitengela expenditure, and receipts addressed to a sister company, so no attributable loss was proved.

p. 6
05

Whether constructive trust arose from possession and improvements

Holding

No constructive trust; the doctrine applies where executed agreements exist and a vendor seeks to take unfair advantage of lack of consent

Reasoning

Distinguishing Macharia Mwangi Maina and Willy Kimutai Kitilit, the court noted those cases involved properly executed sale agreements. Here no contract existed, and it was the Plaintiff who was not keen on continuing, so no unjust enrichment by the Defendants was established.

p. 7
06

Defendants' counter-claim: eviction, injunction, removal of cautions and damages

Holding

Counter-claim allowed save for mesne profits and the Kshs.9,570,000/= claim; general damages of Kshs.10,000,000/= assessed

Reasoning

Having become a trespasser from January 2010, the Plaintiff was liable to eviction and injunction. The stock claim failed for lack of valuation; mesne profits failed because entry was with permission and quantum was unproved. Prime location of Kitengela informed the general damages award.

p. 8

Legal principles established

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  • A suit on a contract for disposition of an interest in land fails where the contract is not in writing, signed by all parties and attested as required by section 3(3) of the Law of Contract Act
  • A draft agreement can only be treated as binding where the parties had agreed all terms they regarded as essential; terms that keep changing negate a concluded contract
  • Special damages must be specifically pleaded and strictly proved
  • Specific performance is a discretionary equitable remedy founded on the existence of a valid, enforceable contract
  • Once illegal occupation is established, general damages for trespass are assessable without proof of specific damage

Court orders

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  1. 1.Plaintiff's suit dismissed in its entirety with costs to the Defendants
  2. 2.Permanent injunction restraining the Plaintiff from planting crops or in any manner dealing with land parcels Nos. Kajiado/Kitengela/5110 and Kajiado/Kitengela/8125
  3. 3.Order of eviction against the Plaintiff from land parcels Nos. Kajiado/Kitengela/5110 and Kajiado/Kitengela/8125
  4. 4.Order compelling the Plaintiff to remove the cautions over land parcels Nos. Kajiado/Kitengela/5110 and Kajiado/Kitengela/8125
  5. 5.General damages of Kshs.10,000,000/= for the Defendants
  6. 6.Interest on the general damages at the rate of 14% from the date of judgment
  7. 7.Three quarters (3/4) of the costs of the counter-claim

Authorities

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Legislation

  • Law of Contract Act (Cap 23)Section 3(3)
  • Companies Act

Cases cited (12)

  • G Percy Trentham Limited Vs Archital Luxfer Limited
    (1993) Lloyds Rep 25
  • RTS Flexible Systems Limited and Molkerei Alois Müller GmbH & Co KG (UK Production)
    (2010) UKSC 14(45)
  • Reville Independent LLC Vs Anotech International (UK) Ltd
    (2016) EWCA Civ 443
  • Ol Loita Road Limited Vs Kenya Commercial Bank Limited
    (2011) eJLR
  • Patrick Tarzan Matu & another Vs Nassim Sharrif Nassir Abdulla & 2 others
    (2009) eKLR
  • Machakos District Co-operative Union Limited v Philip Nzuki Kiilu
    C.A. No. 112 of 1997
  • Silverbird Kenya Limited Vs Junction Limited and 3 others
    (2013) eKLR
  • Capital Fish Kenya Limited Vs Kenya Power & Lightening Company Limited
    (2016) eKLR
  • Macharia Mwangi Maina & 87 Others Vs Davidson Mwangi Kagiri
    (2014) eKLR
  • Willy Kimutai Kitilit Vs Michael Kibet
  • Twalib Hatayan & Others Vs Said Saggar Ahmed Al-Heidy & 5 Others
    (2015)
  • Reliable Electrical Engineers Ltd Vs Mantrac Kenya Limited
    (2006) eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over disputes relating to land (LR No. Kajiado/Kitengela/5110 and Kajiado/Kitengela/8125)

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, "Jim’s Fresh Vegetable Growers & Exporters Limited v Locland Limited & another [2020] KEELC 2529 (KLR)", Case Analysis (2021). ELC Case No. 277 of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2529/eng@2020-05-05

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