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ELCPartially AllowedELC No. 230 of 2019 (Formerly Civil Case No. 121 of 2011)· [2021] KEELC 109 (KLR)

Toshike Construction Company Limited v Harambee Co-operative Savings and Credit Society Limited [2021] KEELC 109 (KLR)

Environment and Land Court
20 December 2021
7,364 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ordered a Sacco to complete a 2006 land sale after 15 years, ruling written contract terms cannot be changed by excuses or oral claims.

What this practically means

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Executive summary

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The Plaintiff, Toshike Construction Company Limited, sued Harambee Co-operative Savings & Credit Society Limited seeking specific performance of a sale agreement dated 17 March 2006 over mansionettes G, H and I on L.R No. 209/7546, Parklands, together with surrender of completion documents, damages for breach, and exemplary damages. The Defendant denied the claims and counterclaimed to be discharged from the agreement on the ground of frustration, with a refund of monies paid. The Plaintiff's witness testified that a 10% deposit of KShs 2,010,000 was paid, that the Defendant was to subdivide the property into three freehold titles, and that the Plaintiff, with the Defendant's permission, renovated and occupied the premises while the Defendant repeatedly sought indulgence. The Defendant's witness conceded he could not explain clause 2 and Special Condition 1 of the agreement. The court framed four issues and held that the written agreement was clear and unambiguous, that extrinsic evidence could not be used to vary it, and that specific performance was available since the Plaintiff was ready and willing to complete. Frustration failed because it was neither particularised in the pleadings nor self-induced-free, appearing to be an afterthought. General, special and exemplary damages were refused for want of pleading and proof and by virtue of clause 3 of the agreement, which excluded liability for delay. The counterclaim was dismissed. The court ordered specific performance, surrender of completion documents within 60 days, execution by the Deputy Registrar in default, dismissal of the damages claims and the counterclaim, and awarded costs of the suit and counterclaim to the Plaintiff.

Key legal issues

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01

Clarity of the written sale agreement

Holding

The terms of the sale agreement of 17 March 2006 were explicit, express and unambiguous as to the property sold

Reasoning

The court confined itself to the four corners of the written agreement, which was drafted by the Defendant's own advocate and adopted as a common exhibit. Clause 2 described the property sold as the mansionettes G, H and I with servant's quarters and all developments thereon, and Special Condition 1 obliged the vendor to subdivide into three separate freehold titles. The Defendant could not invoke the earlier advertisements to vary the written terms.

p. 5
02

Entitlement to specific performance

Holding

Specific performance was granted as the terms were capable of compliance and the Plaintiff was ready and willing to complete

Reasoning

The Defendant had taken steps towards performance (engaging surveyors) and repeatedly sought the Plaintiff's indulgence, showing the contract was executable. The Plaintiff undertook renovations with the Defendant's concurrence, occupied the premises, and offered the balance of the purchase price, which the Defendant declined. Equity deems as done that which ought to have been done.

p. 6
03

Doctrine of frustration

Holding

Frustration was not established; the alleged frustrating event was self-induced and not pleaded with particulars

Reasoning

The Defendant never communicated impossibility to the Plaintiff and raised frustration only in its amended defence of 4 February 2020, without particulars. The terms complained of were contained in a contract drafted by the Defendant's own advocate. Long after execution the Defendant kept assuring the Plaintiff that completion was in progress, demonstrating an election not to complete rather than an extraneous frustrating event.

p. 8
04

Damages in addition to specific performance

Holding

Claims for general, special and exemplary damages were dismissed

Reasoning

General damages are not recoverable for breach of contract. Special damages must be specifically pleaded and proved with particularity, which the Plaintiff failed to do, tendering no evidence. The exemplary damages claim was unsupported by evidence and defeated by clause 3 of the sale agreement, which excluded vendor liability for loss arising from delay beyond the completion date.

p. 9

Legal principles established

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  • Extrinsic evidence is inadmissible to contradict, vary or add to the terms of a written contract
  • A party relying on the doctrine of frustration must plead particulars of the frustrating event and show it was not self-induced
  • Specific performance requires the purchaser to have performed or be always ready and willing to perform
  • General damages are not recoverable for breach of contract and special damages must be specifically pleaded and proved

Court orders

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  1. 1.An Order for Specific performance be and is hereby issued to compel the Defendant to specifically perform the Contract vide Sale agreement dated 17th of March 2006
  2. 2.The Defendant be and is hereby compelled to surrender all the completion documents and/or instruments and to hand same over to the Plaintiff and/or the Plaintiff's nominee within 60 days from the date hereof
  3. 3.In default by the Defendant to surrender and hand over the completion documents, the transaction in respect of the Suit property shall be proceeded with and a surrender of the original title document shall be dispensed with
  4. 4.Upon failure to comply, the Deputy Registrar of this Court shall execute the relevant transfer documents to facilitate effective transfer and registration of the suit property, whether in whole or after subdivisions, to the Plaintiff
  5. 5.The claim for Damages of breach of contract be and is hereby Dismissed
  6. 6.The claim for Exemplary Damages is unfounded and is similarly Dismissed
  7. 7.The counter claim by the Defendant be and is hereby Dismissed
  8. 8.Costs of the suit and the counter Claim be and are hereby awarded to the Plaintiff
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court under Article 162(2) of the Constitution and the Environment and Land Court Act (suit concerning land L.R No. 209/7546)

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, "Toshike Construction Company Limited v Harambee Co-operative Savings and Credit Society Limited [2021] KEELC 109 (KLR)", Case Analysis (2021). ELC No. 230 of 2019 (Formerly Civil Case No. 121 of 2011). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/109/eng@2021-12-20

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