Simba Hills Farm Ltd v Sultan Hasham Lalji & 5 others [2020] KEELC 3098 (KLR)
The bottom line
#A buyer who took possession of land decades ago can enforce an unwritten land sale in Kenya, but must still pay any unpaid purchase price.
What this practically means
#Executive summary
#Key legal issues
#Validity of the oral sale agreement of 1969 under section 3(3) of the Law of Contract Act
The oral agreement was valid because the plaintiff took and continued possession of the suit land in part performance, satisfying the proviso to section 3(3)
The court noted the dispute was not the existence but the validity of the oral agreement. The plaintiff took possession with the 1st defendant's permission, remained in possession, and developed the land, which was an act in furtherance of the contract. Relying on Peter Mbiri Michuki v Samuel Mugo Michuki, the court held that part performance saved the oral contract from the writing requirement.
Validity of the 1997 written agreement between the 1st defendant and the 4th, 5th and 6th defendants
The 1997 agreement was null and void as the plaintiff's earlier agreement was subsisting and the 4th-6th defendants were the plaintiff's own shareholders
The 4th, 5th and 6th defendants were shareholders of the plaintiff company and members of its finance committee. Having sold the land and not rescinded the first agreement after the plaintiff took uninterrupted possession, the 1st defendant could not enter a parallel sale with the plaintiff's own shareholders.
Whether fraud vitiated the Land Control Board consent
No fraud was proved; the allegation failed for want of evidence and for failure to plead and prove fraud to the required standard
The defendants claimed fraud in obtaining consent for 1680 acres instead of 840 but led no evidence, never reported the matter to investigating agencies, and never impeached the consent. Relying on Vijay Morjaria and R.G. Patel v Lalji Makanji, the court held fraud must be distinctly pleaded and proved above a mere balance of probabilities.
Whether the plaintiff was entitled to specific performance
Specific performance was granted as damages would be inadequate, the plaintiff being in possession with the vendor's permission and the consent having issued
The court applied Reliable Electrical Engineers v Mantrac and Gurdev Singh Birdi, holding that where it is just and equitable and the underlying contract is valid, specific performance lies. The plaintiff was in possession, the consent had issued over 40 years prior, and damages would not be an adequate remedy. However, as full payment was not proved, the plaintiff was ordered to pay the outstanding balance with interest.
Legal principles established
#- An oral contract for the disposition of an interest in land is enforceable under the proviso to section 3(3) of the Law of Contract Act where the purchaser has taken and continued possession in part performance of the contract
- Fraud must be specifically pleaded and distinctly proved; it cannot be left to be inferred from the facts
- A second agreement over land already sold and in the purchaser's possession, entered into with the purchaser's own shareholders, is null and void
Court orders
#- 1.A permanent injunction restraining the defendants, their servants and agents from interfering with, trespassing onto, surveying, subdividing, alienating, selling, transferring or in any other way doing anything over LR No. 8304 situated at Eldoret North, Moiben Division in Uasin Gishu District measuring 1680 acres
- 2.An order compelling the 1st, 2nd and 3rd defendants to transfer to the plaintiff the title deed of the suit property
- 3.The 1st defendant's counterclaim is dismissed with costs
- 4.The plaintiff to pay the 1st defendant Kshs. 1,000,000 being the balance of the purchase price with interest from the date of filing the suit
- 5.Defendants to pay costs of this suit and interest
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a claim concerning title to land (LR No. 8304), the suit having been transferred from the High Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Simba Hills Farm Ltd v Sultan Hasham Lalji & 5 others [2020] KEELC 3098 (KLR)", Case Analysis (2020). Eldoret ELC No. 71 of 2017 (originally Eldoret HCC No. 22 of 2006; transferred to Kitale as ELC No. 12 of 2013 and retransferred to Eldoret). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3098/eng@2020-03-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.