Kennedy Mulwa Ngumbau v George Musyoka Mwilu & 2 others [2022] KEELC 359 (KLR)
The bottom line
#A Nairobi land seller who failed to complete a property sale was ordered to repay Kshs 14 million plus interest and the buyer's full loan and transaction costs.
What this practically means
#Executive summary
#Key legal issues
#Whether the plaintiff fulfilled his contractual obligations
The plaintiff discharged his obligations by paying the agreed deposits totalling Kshs 14,045,000 and being ready and willing to complete
There was uncontroverted evidence that the plaintiff paid the agreed deposit of Kshs 10,000,000 plus Kshs 2,825,000, acknowledged in the addendum, and a further Kshs 1,100,000 confirmed by the 1st defendant's advocates. The plaintiff also secured a Kshs 22,000,000 loan facility and was ready to complete. No evidence suggested he failed to discharge his obligations.
Whether the 1st defendant breached the contract
The 1st defendant breached the contract by failing to procure amalgamation and by failing to avail completion documents
Clause 5 of the agreement required the vendor to undertake amalgamation and subdivision within 180 days and clause 8.2 obligated him to avail completion documents before completion; the addendum repeated these covenants. The 1st defendant admitted in cross-examination that he had neither procured amalgamation nor obtained the completion documents by the extended completion date of 31/1/2019.
Measure of damages and entitlement to alternative reliefs
The plaintiff is entitled to refund of the deposit with court-rate interest from the date of default and pleaded, proved special damages; loss of business income and general damages were refused
Applying Halsbury's principle on vendor repudiation, the court awarded the refund of Kshs 14,045,000 with interest from 31/1/2019, rejected loss-of-income as duplicative of interest, granted specifically pleaded and proved special damages totalling Kshs 10,754,714, and declined general damages as unavailable in breach of contract.
Legal principles established
#- Where a vendor wrongfully refuses to complete, the measure of damages is the loss incurred by the purchaser as the natural and direct result of the repudiation, including return of deposit with interest and expenses incurred
- General damages are not recoverable in a claim for breach of contract
Court orders
#- 1.Refund of Kshs 14,045,000 by the 1st defendant to the plaintiff with interest at court rate from 31/1/2019 until payment in full
- 2.Kshs 1,870,000 being legal costs paid to the plaintiff's advocates in relation to the aborted contract
- 3.Kshs 140,381 paid to Nairobi City County Government
- 4.Kshs 4,500,000 being agency commission costs incurred by the plaintiff
- 5.Kshs 792,000 being loan processing fees charged by Equity Bank
- 6.Kshs 162,333 being insurance premiums on the loan facility
- 7.Kshs 240,000 being legal costs paid to Equity Bank's lawyers
- 8.Kshs 2,860,000 being pleaded interest paid to Equity Bank on the loan facility
- 9.Kshs 140,000 being valuation costs on the loan collateral
- 10.Kshs 50,000 being valuation costs relating to the suit property
- 11.Interest on special damages at court rate from the date of filing suit
- 12.Costs of the suit awarded to the plaintiff; 1st defendant to bear costs of the 2nd defendant [if any] and the interested party
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over land contracts (Environment and Land Court Act); suit instituted by plaint dated 20/1/2020
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kennedy Mulwa Ngumbau v George Musyoka Mwilu & 2 others [2022] KEELC 359 (KLR)", Case Analysis (2022). ELC Case (plaint dated 20/1/2020) - Nairobi (Milimani) Environment and Land Court. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/359/eng@2022-01-24
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.