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ELCPartially AllowedELC Case of 2012 (Nairobi), transferred from High Court Nairobi by order dated 7th November 2019· [2021] KEELC 264 (KLR)

Leonard Munyua v Valley Creek Ltd [2021] KEELC 264 (KLR)

Environment and Land Court

15 December 2021

LMLucy N. Mbugua

2,323 words in judgment

View original judgment Read on Kenya Law Watch case

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The bottom line

A Nairobi court ordered a developer to complete the sale of a Lavington apartment, but refused the buyer's claim for Kshs. 100,000 monthly occupation profits.

What this practically means

Executive summary

The Plaintiff sued for specific performance of a sale agreement dated 25th March 2011 for Apartment B2 of LR No. 330/713 Kingara Close, Lavington, Nairobi, priced at Kshs. 13,500,000. He pleaded that he paid a total of Kshs. 4,280,000 (including a deposit and incidental costs), obtained a financing facility from Standard Chartered Bank whose advocates gave an undertaking to pay the Kshs. 10,000,000 balance upon registration, but the Defendant failed to deliver completion documents, issued a lease with wrong particulars, demanded interest contrary to the agreement, had undisclosed charges over the property to I&M Bank, and sought to dispose of the property during arbitration before E.N. Wanjama. The Defendant, though entering appearance and filing a defence and counterclaim, did not attend the hearing, which proceeded on 3rd November 2021 after two indulgences on medical grounds. The court framed two issues: breach of contract and the resulting relief. Applying Pius Kimaiyo Langat and Five Forty Aviation, it found a valid contract existed and that on a balance of probabilities the Defendant breached or caused frustration of the contract by failing to comply with the completion clause. Mesne profits of Kshs. 100,000 per month were refused because the Plaintiff had apparently taken possession and later vacated under circumstances not established. The court entered judgment for the Plaintiff: specific performance of the agreement and lease, a mandatory injunction to release completion documents within 45 days, payment by the Plaintiff of the balance of the purchase price within 45 days, and costs of the suit against the Defendant.

Key legal issues

Whether a valid contract existed between the parties

Holding

A valid contract existed: the agreement dated 25th March 2011, signed by the Plaintiff and the Director of the Defendant and witnessed by their advocates, contained offer, acceptance and consideration

Reasoning

Citing Pius Kimaiyo Langat v Co-operative Bank of Kenya Ltd, the court held that breach requires proof of offer, acceptance and consideration. The produced agreement satisfied these elements, with a completion clause conditioned on issuance of authority to occupy by the City Council of Nairobi, and the Plaintiff made partial payments evidenced by receipts.

p. 3

Whether the Defendant was in breach of the contract

Holding

The Defendant breached and/or caused frustration of the contract

Reasoning

The completion date was conditioned on the vendor sending a letter confirming authority to occupy from the City Council of Nairobi. No evidence of such compliance was produced. The Plaintiff was instead sent documents with wrong particulars of the property, while the Defendant demanded interest on the balance - conduct inconsistent with the agreement - and sought to dispose of the property during arbitration.

p. 3

Whether the Plaintiff was entitled to mesne profits

Holding

Mesne profits were refused because the circumstances of the Plaintiff taking and then vacating possession were unclear

Reasoning

Documents in the Plaintiff's bundle showed the Plaintiff apparently took possession of the property and placed a tenant in it at some point. Because the circumstances in which he took over the property and then left did not come out clearly, the court declined to award mesne profits despite the general finding of breach.

p. 3

Legal principles established

An aggrieved party to a contract must prove offer, acceptance and consideration before claiming breach
Courts cannot re-write contracts between parties; parties are bound by their contractual terms unless coercion, fraud or undue influence are pleaded and proved
Every failure to perform a primary obligation is a breach of contract

Court orders

1.An order for specific performance of the agreement dated 25th March 2011 and lease agreement in respect of apartment number B2 of LR No. 330/713 Kingara Close Lavington Nairobi
2.A mandatory injunction compelling the Defendant to release completion documents including duly executed leases for registration by the Plaintiff's advocates within 45 days
3.The Plaintiff to remit the balance of the purchase price within 45 days from the date of the judgment
4.The Defendant condemned to pay costs of the suit

Authorities

Cases cited (5)

Pius Kimaiyo Langat v Co-operative Bank of Kenya Limited
[2017] eKLR
William Muthee Muthami vs Bank of Baroda
[2014] eKLR
Five Forty Aviation Limited v Erwan Lanoe
[2019] eKLR
Mwangi v Kiiru
[1987] eKLR
Photo Production v Securicor Ltd
(1980) AC 827

Jurisdiction invoked: Original civil jurisdiction over land disputes vested in the Environment and Land Court, to which the suit was transferred from the High Court vide an order dated 7th November 2019

Key timeline

Practical implications

Frequently asked questions

Cite this brief

Caselaw, "Leonard Munyua v Valley Creek Ltd [2021] KEELC 264 (KLR)", Case Analysis (2021). ELC Case of 2012 (Nairobi), transferred from High Court Nairobi by order dated 7th November 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/264/eng@2021-12-15

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