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ELCDismissedCMCC No 1787 of 2016 (Appeal)· [2022] KEELC 314 (KLR)

Baobab Development Group Limited v Jaspher Mwenda Ikiara [2022] KEELC 314 (KLR)

High Court of Kenya
28 March 2022
3,611 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The High Court confirmed a property developer must refund a Kshs 1.5 million deposit after breaching a pre-contract agreement for a Malindi property that never existed.

What this practically means

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Executive summary

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This was a first appeal to the High Court against the judgment of Resident Magistrate Hon S.G. Gitonga delivered on 12th February 2021 in Milimani CMCC No 1787 of 2016, in which the Respondent purchaser recovered a refund of Kshs 1,500,000 being a deposit paid under a pre-contract advice agreement dated 17th January 2012 for the purchase of Villa Number 39 on Title No. 3402 at Malindi for Kshs 7,500,000. The Appellant developer argued that the Respondent, not the Appellant, breached the agreement by repudiating and demanding a refund; that the magistrate rewrote the contract by failing to enforce the default clause requiring forfeiture of 10% of the purchase price; and that the Appellant was denied the chance to call its evidence, violating its right to fair trial. The Respondent maintained the property did not exist, that he was denied an opportunity to view it and was not furnished with the certificate of lease, and that discrepancies between the pre-contract advice and the sub lease justified his refusal to sign. E. K. Wabwoto J, exercising the court's duty on a first appeal to re-evaluate the evidence while respecting the trial court's advantage, framed four issues. The court found the Appellant breached the pre-contract agreement with no evidence to controvert the Respondent's testimony, that the Appellant was accorded a fair hearing having elected to call one witness and close its case, and that the trial magistrate was justified in granting the reliefs. A temporary stay earlier granted on condition of depositing Kshs 1,500,000 as security had been issued by a differently constituted court. The appeal was dismissed with costs to the Respondent.

Key legal issues

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01

Whether the Appellant breached the pre-contract agreement

Holding

The Appellant was in breach; no evidence controverted the Respondent's testimony that the property did not exist and that there were material discrepancies between the pre-contract advice and the sub lease agreement

Reasoning

The court evaluated the trial record and found the Respondent had shown the sub lease was not specific on its operation date, the deposit was to be held by a lawyer as stakeholder, a different financer was proposed, and due diligence revealed the land did not exist. The Appellant led no evidence to challenge this testimony, so the trial court's finding of breach could not be disturbed.

p. 4
02

Whether the Appellant was denied a fair hearing

Holding

The Appellant was properly accorded an opportunity to adduce its evidence and this ground of appeal failed

Reasoning

The record showed the defence hearing proceeded on 21st November 2019 and 22nd January 2020, where the Appellant's advocates elected to call only one witness, Allan George Njogu Kamau, an Advocate, and then closed their case. In adversarial litigation it is for counsel, not the court, to decide which witnesses to call, so no infringement of the right to fair trial arose.

p. 4
03

Whether the trial court was justified in granting the Respondent the reliefs sought

Holding

The trial magistrate did not misdirect herself and the judgment could not be interfered with

Reasoning

The Respondent had sought refund of the Kshs 1,500,000 deposit, interest and costs, and proved the claim on a balance of probability. The court held a first appellate court cannot interfere merely because it would have reached a different result, and found the magistrate took into account all relevant factors.

p. 5

Legal principles established

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  • A pre-contract agreement relating to land must comply with Section 3(3) of the Law of Contract Act for an order of specific performance to issue
  • On a first appeal the court must re-evaluate the evidence and draw its own conclusions while giving due allowance to the trial court's advantage of seeing and hearing witnesses
  • Costs follow the event unless there is good cause to deprive the successful party

Court orders

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  1. 1.The appeal is dismissed as devoid of merit
  2. 2.Costs of the appeal awarded to the Respondent

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 50
  • Constitution of Kenya, 2010Article 25(c)
  • Civil Procedure Act, Chapter 21, Laws of KenyaSection 27
  • Law of Contract ActSection 3(3)

Cases cited (8)

  • Selle & Another vs. Associated Motor Boat Co. Ltd & Others
    [1968] EA 123
  • Prime Salt Works Ltd v Kenya Industrial Plastics Ltd
    (2000) LLR 986
  • Pius Kimaiyo Langati vs Cooperative Bank of Kenya
    (2017) eKLR
  • G.K. Macharia & another v Lucy N. Mungai
    [1995] eKLR
  • LTI Kisii Safari Inns Ltd. & 2 Others –vs- Deutsche Investitions –Und Entwicklungsgellschaft & Others
    [2011] eKLR
  • China Zhingxing Construction Company Ltd vs Ann Akuru Sophia
    [2020] eKLR
  • Peters vs Sunday Post Limited
    [1958] EA 424
  • Watt vs Thomas
    [1947] A.C. 484
On appeal from
Resident Magistrate's Court, Milimani
CMCC No 1787 of 2016
Jurisdiction invoked
First appellate jurisdiction over the subordinate court's judgment (Civil Procedure Act)

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, "Baobab Development Group Limited v Jaspher Mwenda Ikiara [2022] KEELC 314 (KLR)", Case Analysis (2022). CMCC No 1787 of 2016 (Appeal). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/314/eng@2022-03-28

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