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ELCPartially Allowed· [2021] KEELC 4163 (KLR)

Richard Mugaa v Cyrus Muthui Mwaura [2021] KEELC 4163 (KLR)

Environment and Land Court
3 March 2021
3,367 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court cut excessive land-sale damages from Kshs 2 million to Kshs 300,000, confirming sellers can't escape liability by blaming missing Land Control Board consent.

What this practically means

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Executive summary

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This is a first appeal to the Environment and Land Court at Meru against a judgment of the Chief Magistrate's court delivered on 31/12/2018 in a land sale dispute. The respondent had sued the appellant for specific performance or, alternatively, refund and damages under a 2004 agreement selling LR No. Ithima/Ntunene/2697 (0.10 acres) for Kshs. 90,000, of which Kshs. 50,000 was paid as deposit. The trial court awarded refund of Kshs. 50,000, liquidated damages of Kshs. 180,000 under the agreement's breach clause, general damages of Kshs. 2,000,000, interest and costs. The appellant's six grounds attacked the trial court's handling of the Land Control Act, the finding on breach, the award of general damages, and an alleged denial of the right to be heard. The ELC held that the appellant was given ample opportunity to tender evidence but filed nothing, so the respondent's unchallenged evidence stood. On the merits, the appellant was found in breach for refusing the balance, failing to obtain Land Control Board consent and reselling the land; he could not benefit from his own mischief by invoking the voidness of the controlled transaction. General damages were held tenable given his oppressive conduct but excessive at Kshs. 2,000,000, and reduced to Kshs. 300,000. The appeal partially succeeded; the trial judgment was upheld with that variation, with the Kshs. 230,000 award, interest and trial costs maintained, and the appellant to pay half costs of the appeal.

Key legal issues

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01

Whether the appellant was denied the right to be heard

Holding

The appellant was given ample opportunity to tender his defence and evidence but failed to seize it; the trial court did not err in determining the case on the respondent's evidence alone.

Reasoning

The appellant never filed a formal statement of defence, witness statements or documents. On the defence hearing date the court allowed use of his draft defence, but his advocate was absent and no evidence was tendered. The overriding objective under the Civil Procedure Act places a duty on parties to participate in and comply with court processes. The appellant cannot blame the trial court for his own missteps over 13 years.

p. 3
02

Which party breached the sale agreement

Holding

The appellant was in breach: he refused to receive the balance of the purchase price, failed to obtain Land Control Board consent and sold the suit land to a third party.

Reasoning

The parties executed a sale agreement at Kshs. 90,000; the respondent paid Kshs. 50,000 deposit and produced the agreement and acknowledgment receipt in proof. The appellant, who was put to strict proof, did not dispute his non-performance or frustration of the contract. His failure to procure consent and subsequent sale of the land to another party amounted to breach.

p. 3
03

Effect of absence of Land Control Board consent under sections 6 and 7 of the Land Control Act

Holding

The agreement became null and void for all purposes for want of consent, but the magistrate rightly awarded general damages as compensation for breach of contract rather than under the Land Control Act.

Reasoning

The agreement became void under section 6 for want of consent, and section 7 makes the consideration recoverable as a debt. The court found the trial magistrate was right in so concluding, but held that the award of general damages rested on general contract law: the appellant committed himself to perform obligations and the law of contract requires him to make good the loss he occasioned. Allowing him to rely on the voidness to escape liability would let him benefit from his own mischief.

p. 4
04

Whether the award of general damages of Kshs. 2,000,000 was deserved

Holding

General damages were tenable given the appellant's oppressive conduct, but the award of Kshs. 2,000,000 was excessive and reduced to Kshs. 300,000.

Reasoning

Following Capital Fish and Delilah Kerubo Otiso, general damages are awardable where the breaching party's conduct is oppressive, high-handed, outrageous or vindictive. However, in fixing quantum the court considered the small size of the parcel (0.10 acres), the modest sums paid (Kshs. 50,000), and the fact that the respondent had not actually developed the land as the trial magistrate had found.

p. 4

Legal principles established

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  • A first appellate court must evaluate, assess and analyze the evidence on record and make its own determination, bearing in mind it did not hear the witnesses
  • Where a party fails to adduce evidence despite being given opportunity, the opposing party's unchallenged evidence stands and may be acted upon
  • Courts should not rewrite contracts; where parties provide for liquidated damages on breach, that provision will be enforced
  • A party who frustrates a transaction cannot invoke the voidness of a controlled transaction under the Land Control Act to escape liability for breach
  • An appellate court may interfere with an award of general damages it considers excessive and substitute a lower amount considering the subject matter and sums involved

Court orders

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  1. 1.Judgment of the trial court upheld with variation that general damages for breach of contract are awarded in the sum of Kshs. 300,000 (reduced from Kshs. 2,000,000)
  2. 2.Award of Kshs. 230,000 (refund of Kshs. 50,000 plus liquidated damages of Kshs. 180,000) plus interest thereon and on costs as given by the trial court maintained
  3. 3.Appellant condemned to pay half costs in the appeal

Authorities

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Legislation

  • Land Control ActSections 6 and 7
  • Civil Procedure ActSection 1A(3)
  • Civil Procedure RulesOrder 11; Order 21 rule 1

Cases cited (11)

  • Selle & Another vs. Associated Motor Board Company Ltd
    [1968] EA 123
  • Kariuki V Kariuki
    [1983] KLR 225
  • Margaret Njeri Muiruri v Bank of Baroda Ltd
    [2014] eKLR
  • Kahia vs. Nganga
    (2004) 1EA 75
  • Hiran Ngaithe Githire vs. Wanjiku Munge
    1976-80 1KLR PG 1132
  • Capital Fish Kenya Limited v Kenya Power & Lighting Company Limited
    [2016] eKLR
  • Delilah Kerubo Otiso V Ramesh Chander Ndingra
    [2018] eKLR
  • Standard Chartered Bank Limited V Intercom Service Ltd & Others
    NRB-Civil Appeal No. 37 of 2003 (2004) eKLR
  • Motex Knitwear Limited V Gopitex Knitwear Mills Limited
  • Trust Bank Limited v Paramount Universal Bank Limited & 2 others
  • Interchemie EA Limited v Nakuru Veterinary Centre Limited
On appeal from
Chief Magistrate's Court
Not stated
Jurisdiction invoked
First appellate jurisdiction over an appeal from the magistrate's court (memorandum of appeal dated 4/2/2019)

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, "Richard Mugaa v Cyrus Muthui Mwaura [2021] KEELC 4163 (KLR)", Case Analysis (2021). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/4163/eng@2021-03-03

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