General Properties Limited v Saika Two Estate Developers Limited [2021] KEELC 1231 (KLR)
The bottom line
#A Nairobi buyer lost its Kshs 52 million deposit after abandoning a building purchase, and its fraud claims failed for lack of evidence.
What this practically means
#Executive summary
#Key legal issues
#Breach of the agreement for sale
The defendant breached the agreement by failing to pay the balance of Kshs 468,000,000 within the 90-day completion period or after extension
The agreement required the balance to be paid within 90 days of 30/05/2018. The plaintiff issued notices to complete on 14/08/2018, 24/08/2018 and 30/08/2018 giving 21 days to rectify default. The defendant sought a 60-day extension which was granted subject to forfeiture conditions, yet never completed. The defendant's evidence was uncontroverted as it failed to appear despite service.
Alleged fraud and misrepresentation by the plaintiff regarding rental income
The defendant's claim of fraud and misrepresentation was not proved
Fraud is a serious accusation that must be distinctly pleaded and strictly proved on a standard higher than balance of probabilities. The defendant did not attend court, adduce evidence or file submissions, so the counterclaim's fraud allegations rested on pleadings alone. The court cannot infer fraud from pleadings.
Removal of the caveat lodged by the defendant
The caveat lodged on 7/10/2019 had no basis and was ordered removed
Sections 71 and 73(1) of the Land Registration Act govern cautions; a cautioner claiming a contractual right may lodge one, but when objected to, the onus is on the cautioner to justify it. The defendant never appeared to justify the caveat, so the plaintiff's uncontroverted prayer for removal succeeded.
Forfeiture of the 10% deposit
The plaintiff was entitled to forfeit the Kshs 52,000,000 deposit as damages for breach
The agreement contained a default clause entitling the vendor to retain 10% of the purchase price as liquidated damages without a rescission notice. Courts enforce the contract as made and cannot rewrite it. The defendant, being in default, forfeited the deposit as agreed by the parties.
Legal principles established
#- Courts cannot re-write contracts for parties nor imply terms not agreed; the clear terms of a contract must be applied
- Fraud must be specifically pleaded and proved to a standard above balance of probabilities but below beyond reasonable doubt
- The onus lies on a cautioner to justify the lodging of a caution when it is objected to by the proprietor
- A party in default under an express forfeiture clause forfeits the agreed deposit as liquidated damages
Court orders
#- 1.Removal of the Caveat registered as LR NO. 209/4292 against the title of the suit
- 2.The Land Registrar in Nairobi is directed to effect or facilitate the removal of the caveat
- 3.The deposit of 10% of the purchase price paid by the Defendant to the Plaintiff is forfeited to the Plaintiff as damages for breach of contract
- 4.The defendant's counter-claim is dismissed
- 5.Costs of the suit and the counter-claim are in favour of the Plaintiff
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a dispute relating to land (sale of LR No. 209/4292, Solar House)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "General Properties Limited v Saika Two Estate Developers Limited [2021] KEELC 1231 (KLR)", Case Analysis (2021). ELC Suit No. 209 of 2019. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1231/eng@2021-11-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.