Equity Bank Limited (Formerly Equity Building Society) v James Muraya Mahugu [2021] KEELC 1488 (KLR)
The bottom line
#A Kenyan court confirmed that a land buyer's claim survived decades of delay, but cut the interest award and removed unproven damages.
What this practically means
#Executive summary
#Key legal issues
#When the cause of action accrued for limitation purposes
The cause of action arose on 27th November 2007 after the demand letter, so the suit filed in March 2009 was not time barred.
The completion clause had no time frame, making completion open ended. Breach could occur only after reasonable time and notice to complete. The Respondent waited for the determination of pending cases over the mother title, sent a demand on 27th November 2007 which went unanswered, and the cause of action accrued at that point, not in 1992 or 1995.
Entitlement to specific performance
Specific performance was properly granted as the Respondent proved fulfilment of his obligations and the Appellant's breach, offering no evidence to the contrary.
The Respondent proved a valid agreement dated 4th December 1991, payment of the purchase price and loans, and the Appellant's failure to transfer. The Appellant adduced no evidence. Because of the passage of time, the alternative remedy of refund with interest was properly retained.
Mesne profits and loss of use
The award of Kshs. 3,000/- per month was set aside as neither pleaded with proof nor founded on wrongful possession.
Mesne profits require proof and lie only against a trespasser or wrongful possessor. The Respondent did not prove the Appellant was in possession of the property, did not support the Kshs. 3,000/- figure with evidence, and the property had never been transferred to him. General damages for breach were not proved either.
Rate and start date of interest on the refund
Interest at the court rate of 12% (not 14%) per annum to run from the date of filing suit, 25th March 2009, not from 1992.
No Practice Note or amendment raised the court rate above 12% fixed by Practice Note No. 1 of 1982. Backdating interest to 1992 had no basis because the Appellant was not under a duty to transfer on that date given the open-ended completion clause.
Legal principles established
#- In a contract with no fixed completion date, breach occurs only after reasonable time has elapsed and notice to complete has been given; limitation runs from that point.
- Court interest rate is 12% per annum pursuant to Practice Note No. 1 of 1982; interest should run from the date of filing suit unless a basis for backdating is laid.
- Mesne profits are payable only against a trespasser or person in wrongful possession, and must be sufficiently pleaded and proved.
- A party who tenders uncontroverted evidence stands to have that evidence accepted, but a pleading is not evidence.
Court orders
#- 1.The order awarding the Respondent interest on Kshs. 70,000/- at the rate of 14% per annum is set aside and in place thereof the said amount shall attract interest at the rate of 12% per annum.
- 2.Interest shall accrue on the said sum of Kshs. 70,000/- from 25th March, 2009 until payment in full and not from 16th November, 1992.
- 3.The award of Kshs. 3000/- per month for loss of use and mesne profits is set aside.
- 4.The other parts of the judgment (specific performance or refund of Kshs. 70,000/- in the alternative) shall remain the same.
- 5.Each party shall bear its own costs of the appeal.
- On appeal from
- Milimani Commercial Court (Chief Magistrate's Court)
- Civil Case No. 1783 of 2009
- Jurisdiction invoked
- First appellate jurisdiction over the subordinate court (statutory appeal from the magistrate's court in a land/contract matter)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Gakuru v Nguyai (Environment and Land Case E095 of 2022) [2026] KEELC 3665 (KLR)[2026] KEELC 3665 (KLR)15 Jun 2026
Cite this brief
#Cite this brief
Caselaw, "Equity Bank Limited (Formerly Equity Building Society) v James Muraya Mahugu [2021] KEELC 1488 (KLR)", Case Analysis (2021). Appeal against judgment in Milimani Commercial Court Civil Case No. 1783 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/1488/eng@2021-10-04
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.