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ELCPartially AllowedELC Case No. 12 of 2019· [2020] KEELC 3864 (KLR)

Catherine Wamuyu Ng’ang’a & another v Kabete Dam Limited & another [2020] KEELC 3864 (KLR)

Environment and Land Court
16 January 2020
2,141 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~9 min to read original · ~4 min brief

The bottom line

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A Kenyan court ordered a developer to refund Kshs. 31.5 million with interest and pay Kshs. 38 million in damages after reselling a buyer's off-plan house.

What this practically means

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Executive summary

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The Plaintiffs sued the Defendants, a property developer and its selling agent, for breach of contract arising from an offer dated 7/2/2012 to sell house number 7 on the Kabete Green Villas development on L.R. No. 2951/36 for Kshs. 47,000,000/=. The Plaintiffs paid Kshs. 31,500,000/= between February 2012 and February 2015, roughly 67% of the price, towards an off-plan purchase whose construction repeatedly stalled. In 2017 the Defendants demanded an increased price of Kshs. 80,000,000/= and subsequently sold the Suit Property to third parties for Kshs. 85,000,000/= under a sale agreement dated 18/7/2015. The Defendants filed no defence and their attempt to stay and reopen the proceedings was withdrawn by consent on 6/11/2019. The court framed a single issue: whether to grant the refund of Kshs. 31,500,000/= plus damages and costs. It held the Defendants repudiated the contract on 18/7/2015 and did not deny receipt of the payments, their contentions being unsupported by evidence. The Plaintiffs were awarded the refund with interest at court rates from the dates of payment, plus damages for loss of bargain of Kshs. 38,000,000/=, being the difference between the repudiation-date resale value of Kshs. 85,000,000/= and the contract price of Kshs. 47,000,000/=. The court declined the claimed Kshs. 106,722,500/= damages based on current market value because no valuation report or evidence of the prevailing market price was tendered, applying Halsbury's measure of damages computed at the date of repudiation. The Plaintiffs also received the costs of the suit. Judgment was delivered by K. Bor J on 16 January 2020.

Key legal issues

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01

Whether the Plaintiffs were entitled to a refund of the purchase price paid

Holding

Yes; the Defendants did not deny receipt of Kshs. 31,500,000/= and repudiated the contract by selling the Suit Property to third parties

Reasoning

The Defendants' replying affidavit did not deny receipt of the purchase price; their contentions that the Plaintiffs breached the payment schedule and that alternative offers were made were unsupported by evidence. The Defendants sold the Suit Property to Sachin and Seema Dhanani in 2015 for Kshs. 85,000,000/=. The court treated 18/7/2015 as the date of repudiation and held the Plaintiffs entitled to a refund with interest from the dates of payment.

p. 2
02

The quantum of damages for breach of contract

Holding

Damages for loss of bargain of Kshs. 38,000,000/= awarded, based on the repudiation-date resale price rather than the claimed current market value

Reasoning

The court adopted Halsbury's Laws of England, Volume 12, paragraph 1183: the deposit is returned with interest plus damages for loss of bargain measured at the date of repudiation. As the property was sold for Kshs. 85,000,000/= against a contract price of Kshs. 47,000,000/=, loss of bargain was Kshs. 38,000,000/=. The Plaintiffs' claim for Kshs. 106,722,500/= based on an 80.85% increment rate failed for want of valuation evidence.

p. 3

Legal principles established

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  • Measure of damages for a vendor's repudiation of a sale of land contract is return of the deposit with interest plus loss of bargain, computed as the difference between the market value at the date of repudiation and the contract price
  • A party claiming damages must prove its loss with evidence; absent a valuation report, the court may rely on the price for which the property was actually resold at repudiation

Court orders

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  1. 1.Refund of Kshs. 31,500,000/= paid by the Plaintiffs to the Defendants, with interest at court rates from the dates of payment until payment in full
  2. 2.Damages for loss of bargain of Kshs. 38,000,000/=, being the difference between the Kshs. 85,000,000/= sale price on the date of repudiation and the contractual price of Kshs. 47,000,000/=
  3. 3.Costs of the suit to the Plaintiffs

Authorities

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Cases cited (4)

  • Delilah Kerubo Otiso v Ramesh Chander Ndingra
    [2018] eKLR
  • Hardley v Baxen Dale
    (1854) 9 Exch. 341
  • Simon Manyara and another v Pauline Mahugu trading as Mianda Investments
    [2019] eKLR
  • Gami Properties Limited v National Social Security Fund Board of Trustees and 2 Others
    [2018] eKLR
Jurisdiction invoked
Environment and Land Court jurisdiction under the Environment and Land Court Act (original suit over breach of a sale of land contract)

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, "Catherine Wamuyu Ng’ang’a & another v Kabete Dam Limited & another [2020] KEELC 3864 (KLR)", Case Analysis (2020). ELC Case No. 12 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/3864/eng@2020-01-16

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