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ELCPartially AllowedELCA No. 16 of 2019· [2020] KEELC 2678 (KLR)

Rebecca Wangui Kamau v Peter Kibicho Kagiri & another [2020] KEELC 2678 (KLR)

Environment and Land Court
12 May 2020
1,734 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The land seller who received your money must refund you directly, even if his own seller caused the failed transfer.

What this practically means

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Executive summary

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This was a first appeal to the Environment and Land Court at Murang'a against the judgment of the Hon E M Nyagah PM delivered on 16 July 2019 in CMCC No. 52 of 2012. In the lower court, the Appellant had sued the 1st Respondent for refund of Kshs 126,500/-, being the balance of the purchase price of parcel LOC11/MARAGI/5293 agreed to be sold at Kshs 100,000/- in October 2006. The sale collapsed because the land was not available for transfer. The 1st Respondent, who had bought the land from the 2nd Respondent, brought third-party indemnity proceedings against her; judgment in default was entered against the 2nd Respondent. The magistrate held the 2nd Respondent liable and entered judgment against her, without pronouncing judgment against the 1st Respondent. The Appellant appealed on the ground that the 1st Respondent, who received the purchase price, should bear liability. Applying the principles in United India Insurance Co Ltd v East African Underwriters (Kenya) Ltd [1985] eKLR on interference with discretionary decisions, the court found the magistrate reached the right result wrongly: judgment should have been entered first against the 1st Respondent, with the 2nd Respondent liable under the crystallised indemnity. The court varied the lower court judgment, holding the 1st Respondent liable to refund Kshs 126,500/- upfront, with full indemnity from the 2nd Respondent, and awarded the Appellant costs in both courts.

Key legal issues

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01

Whether the trial magistrate erred in entering judgment against the third party (2nd Respondent) without first entering judgment against the defendant (1st Respondent)

Holding

The magistrate reached the right result but by the wrong route; judgment should have been entered against the 1st Respondent as prayed, with the 2nd Respondent liable under the indemnity

Reasoning

The 1st Respondent sold the suit parcel to the Appellant and acknowledged receipt of the full purchase price of Kshs 100,000/- but failed to transfer the land, refunding only Kshs 23,500/-. Although leave was properly granted for third-party proceedings against the 2nd Respondent, who did not controvert the indemnity claim, the magistrate should have pronounced judgment against the 1st Respondent first; the indemnity then crystallised against the 2nd Respondent.

p. 2
02

Apportionment of liability as between the 1st and 2nd Respondents

Holding

The 1st Respondent bears primary liability to refund the purchase price, and the 2nd Respondent fully indemnifies him

Reasoning

The contract of sale was between the Appellant and the 1st Respondent, who received the purchase monies and partially rescinded by refunding Kshs 23,500/-. The default arose because the 2nd Respondent, from whom the 1st Respondent had bought the land, failed to avail a clean title. The uncontested third-party indemnity claim means the 2nd Respondent must indemnify the 1st Respondent to the full extent of the liability.

p. 3
03

Standard of interference on appeal against the discretionary judgment of the trial court

Holding

The appeal court may interfere where the trial court misdirected itself, misapprehended the facts, took into account irrelevant considerations, failed to take relevant ones into account, or where the decision is plainly wrong

Reasoning

Counsel relied on United India Insurance Co Ltd & Others v East African Underwriters (Kenya) Ltd [1985] eKLR, which this court applied in reviewing the magistrate's judgment. On that standard, the failure to enter judgment against the 1st Respondent was a misdirection warranting interference, though the quantum of Kshs 126,500/- was not disturbed.

p. 2

Legal principles established

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  • An appellate court will only interfere with a discretionary decision of the trial court on established grounds: misdirection in law, misapprehension of facts, taking into account wrong considerations, failing to take account of relevant considerations, or that the decision is plainly wrong
  • Where a defendant has properly brought third-party proceedings for indemnity that are undefended, judgment should first be entered against the defendant, who is then indemnified by the third party to the extent of the liability

Court orders

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  1. 1.The judgment of the lower court is varied and replaced with the judgment that the 1st Respondent is liable to refund the sum of Kshs 126,500/- in favour of the Appellant
  2. 2.The 2nd Respondent shall indemnify the 1st Respondent to the full extent of the liability
  3. 3.The 1st Respondent shall pay the Appellant upfront and seek indemnity from the 2nd Respondent
  4. 4.The costs of the suit in the lower court and the appeal are in favour of the Appellant

Authorities

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Cases cited (2)

  • Sango Bay Estates Limited & Others v Dresdner Bank AG (No.2)
    [1971] EA 307
  • United India Insurance Co Ltd, Kenindia Insurance Co Ltd & Oriental Fire & General Insurance Co Ltd v East African Underwriters (Kenya) Ltd
    [1985] eKLR
On appeal from
Chief Magistrate's Court, Murang'a
CMCC No. 52 of 2012
Jurisdiction invoked
First appeal to the Environment and Land Court against the judgment of the principal magistrate in CMCC No. 52 of 2012

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, "Rebecca Wangui Kamau v Peter Kibicho Kagiri & another [2020] KEELC 2678 (KLR)", Case Analysis (2020). ELCA No. 16 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2678/eng@2020-05-12

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