Kilifi Colours & another v Soso Investments Limited & another [2021] KEELC 4335 (KLR)
The bottom line
#A Kenyan court ruled that a buyer who paid late and incompletely lost the property to a second buyer, but the owner's claim for occupation rent failed for lack of evidence.
What this practically means
#Executive summary
#Key legal issues
#Whether the 2nd Defendant lawfully rescinded the 2002 sale agreement with the 1st Defendant and lawfully sold the property to the Plaintiff
Yes. The 1st Defendant defaulted (first payment made eight months after execution, completion far beyond the 60-day implied timeline), was given notice and reasonable time, and the 2nd Defendant was entitled to rescind and resell.
The court relied on Halsbury's Laws of England and Njamunyu v Nyaga to hold that a defaulting purchaser must be notified and given reasonable time to rectify before rescission. The 1st Defendant conceded that no payment was made at execution and the first payment of Kshs 2.3 Million came eight months later. Correspondence from 2004 to 2008 showed repeated demands and notices of intention to sell, which the 1st Defendant acknowledged receipt of but did not respond to. The resale to the Plaintiff on 22nd October 2008 was therefore valid.
Whether the Plaintiff proved its claim against the 1st Defendant
Yes, on a balance of probabilities, as to the declaration of ownership, vacant possession and injunction; but the mesne profits claim failed.
The Plaintiff's director testified that the Plaintiff purchased the suit land and it was transferred to it on 15th December 2008. The court found no basis for the 1st Defendant's refusal to vacate since the 2nd Defendant was entitled to resell after the 1st Defendant's default. However, no evidential basis supported the claim of Kshs 200,000/= monthly mesne profits, and the Plaintiff knew or should have known of the 1st Defendant's presence prior to purchase.
Whether the 1st Defendant's Counterclaim (declaration of ownership and cancellation of the subdivision and transfer) should succeed
No; the Counterclaim was dismissed with costs.
The 1st Defendant's claim that it had paid Kshs 5.5 Million was unsupported by evidence apart from the bankers' cheque of Kshs 2.3 Million and the supplementary agreement acknowledging Kshs 200,000/-. Its renovation claims were also unevidenced, and the bare sale agreement gave no authority to deduct repair costs. Its own conduct in taking possession without payment and paying years beyond the completion date undermined its claim of lawful ownership.
Legal principles established
#- Where a party is in default under a sale agreement and time is made of the essence, the defaulting party must be notified of the default and given reasonable time to rectify before the agreement is rescinded
- Time not originally of the essence may be made so by notice fixing a reasonable time for performance, failing which the contract may be treated as broken
Court orders
#- 1.The 1st Defendant's Counterclaim is dismissed with costs
- 2.Judgment is entered for the Plaintiff against the 1st Defendant as prayed at paragraph 'a' of the Plaint, namely a declaration that the suit property belongs to the Plaintiff, an order for vacant possession with improvements, and a permanent injunction against the 1st Defendant
- Jurisdiction invoked
- Environment and Land Court jurisdiction over land disputes (suit transferred to this court on 27th July, 2015)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kilifi Colours & another v Soso Investments Limited & another [2021] KEELC 4335 (KLR)", Case Analysis (2021). ELC Case No. 129 of 2015 (formerly Mombasa HCCC No. 65 of 2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/4335/eng@2021-02-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.