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ELCPartially AllowedELC Suit No. 8 of 2018· [2021] KEELC 140 (KLR)

Benjamin Imalingat & another v Jolly Oloit Budds & another [2021] KEELC 140 (KLR)

Environment and Land Court
16 December 2021
10,402 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~42 min to read original · ~4 min brief

The bottom line

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A Kenyan court ordered a Spring Valley land seller to transfer the property to buyers who proved most of their payment, but refused claims over a second unwritten deal.

What this practically means

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Executive summary

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The Plaintiffs sued over a 2004 agreement for sale of 0.4117ha carved out of L.R. No. 7158/48 Spring Valley, purchased at Kshs. 15,500,000/- from the 1st Defendant and his deceased father, and over a subsequent informal purchase of one acre out of L.R. No. 7158/617 for which a deposit of Kshs. 850,000/- was allegedly paid. They sought injunctions, a declaration of ownership, compulsory transfer and specific performance. The Defendants denied full payment, attributed the reduced surveyed acreage of 0.3840ha to a road reserve directed by the City Council, denied any agreement over the second parcel, and counterclaimed for Kshs. 16,080,000/- rent collected by the Plaintiffs. The court found the agreement valid and enforceable. It held the acreage reduction was not proved to be a breach, the sale having been of unsurveyed land under a subdivision scheme with approximate measurements, and that neither party proved the cause of the shortfall. Because time was not of the essence and the agreement incorporated the Law Society Conditions of Sale (1989), a completion notice was a condition precedent to treating non-completion as breach; neither party served one, so the vendors did not breach by withholding transfer, but the 1st Defendant's rescission letter of 10th October 2017 was premature and itself a breach. Only Kshs. 13,670,000/- of the price was proved paid, leaving Kshs. 1,830,000/- outstanding but not yet payable since it fell due upon transfer. The claim over the second parcel failed for want of a written agreement under section 3(3) of the Law of Contract Act. The counter-claim failed as unproved special damages. Judgment was entered for the Plaintiffs with an injunction, declaration of beneficial ownership, an order for transfer within 30 days, payment of the Kshs. 1,830,000/- balance, with each party bearing its own costs.

Key legal issues

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01

Whether the reduction of the first suit property's acreage from 0.4117ha to 0.3840ha constituted breach of the sale agreement

Holding

No breach; the agreement was based on a subdivision scheme with approximate measurements subject to final survey, and neither party proved the cause of the reduction

Reasoning

The court noted the property was sold as unsurveyed land under a 1997 subdivision scheme that expressly stated areas were approximate and subject to final survey. The 1st Defendant failed to prove the reduction was due to a road reserve; the Plaintiffs failed to prove encroachment by the second suit property. The surveyor's evidence did not establish that the second property's acreage increased by the shortfall. Neither explanation was proved.

p. 7
02

Whether the vendors breached the agreement by failing to transfer the property and by the purported rescission of 10th October 2017

Holding

The failure to transfer was not breach because no completion notice was served; but the 1st Defendant's rescission without a completion notice breached the agreement

Reasoning

The agreement was subject to the Law Society Conditions of Sale (1989), Condition 4(7), under which a party must serve a completion notice making time of the essence before treating non-completion as breach. The Plaintiffs served no such notice before suit, so no breach by refusal to transfer was established. Equally, the 1st Defendant's letter of rescission was premature because he too failed to serve a completion notice before terminating.

p. 9
03

Whether the Plaintiffs paid the full purchase price and whether their non-payment constituted breach

Holding

Only Kshs. 13,670,000/- of the Kshs. 15,500,000/- purchase price was proved; the balance of Kshs. 1,830,000/- was not yet payable since it fell due upon transfer, so the Plaintiffs were not in breach

Reasoning

Under section 107(1) of the Evidence Act, the Plaintiffs bore the burden of proving payment. Acknowledged payments and cheques proved Kshs. 13,670,000/-. The 16th October 2009 letter acknowledging final payment was signed only by the deceased and was not conclusive against the 1st Defendant. However, the agreement made the balance payable 14 days after transfer and registration, which had not occurred, so non-payment of the balance was not breach.

p. 10
04

Whether there was an enforceable agreement over the second suit property

Holding

No; no written agreement signed by all parties existed, so the claim was not maintainable under section 3(3) of the Law of Contract Act

Reasoning

It was common ground that no formal agreement was entered into over the one acre to be hived off the second suit property, and the 1st Defendant, a co-owner, was not party to the discussions. Section 3(3) of the Law of Contract Act requires a contract for disposition of an interest in land to be in writing, signed by all parties, with signatures attested. The deposit claims failed for want of such a contract.

p. 9
05

Whether the 1st Defendant was entitled to Kshs. 16,080,000/- rent collected by the Plaintiffs

Holding

Counter-claim dismissed; possession was given under a valid agreement and the special damages claim was not strictly proved

Reasoning

The vendors gave the Plaintiffs possession and knew from 2010 that they were collecting rent without protest. Since the Plaintiffs held under a valid, partly performed sale agreement, no basis existed for the rent claim. Additionally, the claim was special damages requiring strict proof, and the 1st Defendant adduced no evidence quantifying the rent collected. The counter-claim therefore failed in its entirety.

p. 10

Legal principles established

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  • Where a contract for sale of land does not make time of the essence, neither party may rescind or sue for breach of the completion timeline without first serving a completion notice making time of the essence.
  • A suit on a contract for disposition of an interest in land must be founded on a written contract signed by all parties and attested, per section 3(3) of the Law of Contract Act.
  • Measurements in a subdivision scheme are approximate and subject to change upon final survey; a party who contracted over unsurveyed land cannot claim breach merely because the surveyed area differs slightly.
  • A claim for rent/mesne profits is in the nature of special damages which must be pleaded and strictly proved.

Court orders

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  1. 1.A permanent injunction is issued restraining the Defendants either by themselves and/or their agents/employees/servants from constructing on or interfering in any way with the parcel of land known as L.R. No. 7158/616 ("the first suit property").
  2. 2.Declaration that the Plaintiffs are the beneficial owners of the first suit property.
  3. 3.The 1st Defendant shall transfer the first suit property to the Plaintiffs within thirty (30) days from the date hereof.
  4. 4.The Plaintiffs shall clear any outstanding land rent and land rates for the property.
  5. 5.The Plaintiffs shall pay to the 1st Defendant a sum of Kshs. 1,830,000/- within 14 days of registration of the first suit property in the names of the Plaintiffs being the balance of the purchase price.
  6. 6.The 1st Defendant's counter-claim is dismissed.
  7. 7.Each party shall bear its own costs of the suit and the counter-claim.
Jurisdiction invoked
Environment and Land Court jurisdiction under the Environment and Land Court Act over disputes relating to land (implied; no express constitutional provision cited in the judgment)

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, "Benjamin Imalingat & another v Jolly Oloit Budds & another [2021] KEELC 140 (KLR)", Case Analysis (2021). ELC Suit No. 8 of 2018. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/140/eng@2021-12-16

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