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ELCPartially Allowed· [2020] KEELC 3704 (KLR)

Cyka Estates Limited v Bosco Munywoki Kimulu [2020] KEELC 3704 (KLR)

Environment and Land Court

12 February 2020

BEB M Eboso

1,798 words in judgment

View original judgment Read on Kenya Law Watch case

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The bottom line

A Nairobi land buyer recovered its deposit and nominal damages after the vendor failed to complete, but lost a higher interest claim by failing to prove the rate.

What this practically means

Executive summary

The plaintiff sued by plaint dated 20/12/2013, claiming that it entered into a land sale agreement dated 8/4/2011 with the defendant over Land Parcel Number Dagoretti/Waithaka/1136, registered in the names of Kigondu Kiragu, Julius Mbogo and Cyrus Kiragu. The purchase price was Kshs 2,800,000 with a deposit of Kshs 500,000. The plaintiff alleged that the defendant went into hiding after receiving the deposit and failed to complete the transfer, and sought refund of the deposit, interest at 24% per annum from 4 April 2011, general damages for breach, costs and interest. The defendant denied the agreement and, in the alternative, pleaded frustration and automatic cancellation after the 30-day completion period. The defendant led no evidence. The court framed three issues: existence of the agreement, payment of the deposit, and entitlement to the prayers. It found the agreement was entered into (the defendant's signature was unchallenged), that the deposit of Kshs 500,000 was paid and acknowledged, and that under Special Condition C the defendant, having failed to complete, was bound to refund the deposit. The claim for interest at 24% per annum failed for want of proof of the Barclays Bank of Kenya rates and ambiguity as to whether the 10% margin was per annum or per month; general damages failed for want of evidence, and nominal damages of Kshs 100,000 were awarded. Judgment was entered for the plaintiff with refund of the deposit, court-rate interest from filing, nominal damages, and costs.

Key legal issues

Existence and binding nature of the land sale agreement dated 8/4/2011

Holding

The parties entered into the agreement

Reasoning

The plaintiff exhibited a land sale agreement designating the defendant as vendor, signed by the defendant on the execution clause and on every page. The defendant made general denials but gave no specific evidence challenging the signature, and led no evidence to controvert the plaintiff's evidence.

p. 2

Payment of the Kshs 500,000 deposit

Holding

The plaintiff paid and the defendant received Kshs 500,000

Reasoning

Clause 1 of the sale agreement contained an unequivocal acknowledgment of receipt of Kshs 500,000 from the plaintiff, and no contrary evidence was led.

p. 2

Entitlement to refund of the deposit

Holding

Refund of Kshs 500,000 awarded under Special Condition C

Reasoning

The completion period was 30 days and the unrebutted evidence showed the defendant failed to complete. Special Condition C provided that on breach or inability to complete, the purchaser could rescind and the vendor would refund the entire deposit with interest.

p. 2

Contractual interest at 24% per annum

Holding

Claim for interest at 24% failed

Reasoning

Special Conditions (a) and (c) provided for interest at 10% above the Barclays Bank of Kenya rate, but the plaintiff led no evidence of those rates, and the agreement did not specify whether the additional 10% was per annum or per month.

p. 2

General damages for breach

Holding

Only nominal damages of Kshs 100,000 awarded

Reasoning

The plaintiff adduced no evidence to support general damages; the court awarded nominal damages solely because of the defendant's breach.

p. 2

Legal principles established

A vendor who fails to complete the contract must refund the deposit where the agreement so provides
A party seeking special damages/contractual interest must prove the applicable rates; a court will not invent figures absent evidence

Court orders

1.Refund of deposit paid in the sum of Kshs 500,000
2.Interest on the refund at court rate from the date of filing suit till payment in full
3.Nominal damages in the sum of Kshs 100,000
4.Interest on the nominal damages at court rate from the date of judgment
5.Costs and interest on costs at court rate from the date of taxation

Authorities

Cases cited (1)

Joseph Kangethe Irungu v Peter Ng'ang'a Muchoki
[2018] eKLR

Jurisdiction invoked: Not expressly stated; original civil jurisdiction over a claim relating to land (suit filed by plaint dated 20/12/2013)

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Cyka Estates Limited v Bosco Munywoki Kimulu [2020] KEELC 3704 (KLR)", Case Analysis (2020). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3704/eng@2020-02-12

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