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ELCPartially AllowedRuiru MCL & E Case No 41 of 2019 (Appeal)· [2021] KEELC 517 (KLR)

Samuel Murigi Waigwa Francis Babu Mwangi [2021] [2021] KEELC 517 (KLR)

Environment and Land Court
1 December 2021
3,966 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~16 min to read original · ~4 min brief

The bottom line

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A Kenyan vendor who has already transferred land to a buyer cannot cancel the sale; they must sue for the unpaid balance instead.

What this practically means

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Executive summary

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This was a first appeal to the Environment and Land Court at Thika against the judgment of Hon C K Kisiangani, SRM, in Ruiru MCL & E Case No 41 of 2019, in which the trial court had granted the respondent (plaintiff) rescission of a sale agreement dated 23/10/2018 over Ruiru Kiu Block 2 (Githunguri) 14214, sold to the appellant for Kshs 2,800,000, of which only Kshs 1,000,000 was paid despite transfer of the property on 19/2/2019. Eboso J identified five issues: breach, crystallisation and availability of rescission, the available remedy, costs, and disposal. The court held that the appellant fundamentally breached the agreement by failing to pay the balance despite transfer, possession and developments on the land. However, rescission had not crystallised because the respondent's letters of 7/3/2019 and 9/4/2019 did not constitute a compliant, unequivocal completion notice as required by special condition (b) of the agreement and paragraph 13.4.1 of the LSK Conditions of Sale (2015). Further, following Mwangi v Kiiru, rescission was unavailable to a vendor who had conveyed the land and handed over possession; the proper remedy was a claim for the balance of the purchase price. The appellant could not deduct Kshs 713,492 allegedly owed to Sampesa Agency Limited, having neither counterclaimed nor pleaded set-off. The court set aside the trial court's orders and substituted an award of Kshs 1,800,000 with interest at court rate from filing suit, plus costs of the suit to the respondent, with each party bearing their own costs of the appeal.

Key legal issues

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01

Whether the appellant breached the sale agreement

Holding

Yes - failure to pay the balance of the purchase price despite transfer and possession was a fundamental breach

Reasoning

The agreement fixed a 90-day completion date, time being of the essence, and required payment into the vendor's named bank account upon transfer. The property was transferred on 19/2/2019 and the appellant acknowledged this, yet paid only Kshs 1,000,000 of the Kshs 2,800,000 price, made no payment after demand, and never deposited the balance in court.

p. 4
02

Whether rescission had crystallised and was available

Holding

No on both limbs - no compliant completion notice preceded the purported rescission, and rescission was unavailable after conveyance and handover of possession

Reasoning

Under special condition (b) and paragraph 13.4.1 of the LSK Conditions of Sale (2015), rescission requires a prior unequivocal completion notice. The letter of 7/3/2019 was a mere demand for the balance, and the letter of 9/4/2019 purported to rescind immediately rather than call for completion. Further, following Mwangi v Kiiru, a vendor who has conveyed the land must sue for damages referable to the balance of the purchase price.

p. 5
03

What remedy was available to the respondent

Holding

Recovery of the balance of the purchase price (Kshs 1,800,000) with interest from filing suit

Reasoning

The contract for the disposal of an interest in land was subject to Section 3 of the Law of Contract Act, and there was no agreement allowing payment to a third party (Sampesa Agency Limited). The appellant neither counterclaimed nor pleaded a set-off, so he could not deduct Kshs 713,492 from the purchase price; Sampesa could pursue the respondent directly.

p. 5

Legal principles established

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  • The jurisdiction of the first appellate court is to re-evaluate and re-assess the entire evidence and arrive at independent conclusions
  • Rescission must follow a completion notice duly issued and served, and such notice must be unequivocal
  • Where the vendor has conveyed the land and handed over possession, rescission is unavailable; the remedy is to sue for the balance of the purchase price
  • A purchaser has no right to withhold the purchase price on account of an unpleaded third-party claim

Court orders

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  1. 1.The disposal orders made by the trial court in Ruiru MCL & E Case No 41 of 2019 are set aside and substituted with an award of Kshs 1,800,000 being the balance of the purchase price relating to Ruiru/Kiu Block 2 (Githunguri) 14214 in favour of the plaintiff, Francis Babu Mwangi
  2. 2.Interest on the sum of Kshs 1,800,000 at court rate from the date of filing suit till payment in full
  3. 3.Costs of the suit in the Magistrate Court to the respondent/plaintiff
  4. 4.Parties shall bear their respective costs of this appeal

Authorities

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Legislation

  • Land Registration ActSection 80
  • Law of Contract ActSection 3
  • Penal CodeSection 313
  • Law Society of Kenya Conditions of Sale (2015 Edition)Paragraph 13.4.1

Cases cited (3)

  • Abok James Odera t/a AJ Odera & Associates v John Patrick Machira t/a Machira & Company Advocates
    [2013] eKLR
  • Mwana Sokoni v Kenya Bus Services Limited
    [1985]
  • Mwangi v Kiiru
    [1987] eKLR
On appeal from
Senior Principal Magistrate's Court at Ruiru
Ruiru MCL & E Case No 41 of 2019
Jurisdiction invoked
First appellate jurisdiction over the Senior Principal Magistrate's Court at Ruiru

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, "Samuel Murigi Waigwa Francis Babu Mwangi [2021] [2021] KEELC 517 (KLR)", Case Analysis (2021). Ruiru MCL & E Case No 41 of 2019 (Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/517/eng@2021-12-01

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