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ELCPartially AllowedELC Case No. 174 of 2018 (Formerly Nairobi ELC No. 236 of 2009)· [2022] KEELC 1389 (KLR)

Josvir Traders & Agencies Limited v Geffrey Chege Kirundi &2 others [2022] KEELC 1389 (KLR)

Environment and Land Court
18 February 2022
OAO. A. Angote
10,286 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~41 min to read original · ~4 min brief

The bottom line

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A Kenyan land buyer who was defrauded recovered only a refund with interest, because written land sale agreements cannot be changed by spoken promises.

What this practically means

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Executive summary

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The Plaintiff sued the 1st and 2nd Defendants (husband and wife) and their associated company for breaching a sale agreement dated 30th December 2008 over L.R No. 10090/23 Juja, seeking specific performance, cancellation of the 3rd Defendant's title, or damages for deceit of Kshs. 109,500,000. The Defendants contended the agreement was orally varied to require full payment by 30th April 2009, that the Plaintiff fundamentally breached it by sub-dividing and selling plots without consent, and that the lack of Land Control Board consent rendered the agreement void. The court framed four issues: variation, breach, fraud in the transfer to the 3rd Defendant, and appropriate orders. It found no oral variation was proved, holding that Sections 97 and 98 of the Evidence Act and Section 3(3) of the Law of Contract Act bar oral variation of a written land sale agreement, following Peter Mujunga Gathuru. The 1st and 2nd Defendants were found in breach for issuing an illegal termination notice without the 21-day completion notice required under the Law Society Conditions of Sale (1989), and for fraudulently transferring the property to the 3rd Defendant on 11th May 2009 while simultaneously applying for Land Control Board consent. The court would ordinarily have cancelled the 3rd Defendant's title, but the Court of Appeal in Civil Appeal No. 172 of 2010 had nullified the Defendants' own title, which reverted to the Estate of Walter Karanja, leaving the Plaintiff entitled only to damages. The suit partially succeeded: the court awarded a refund of the purchase price of Kshs. 22,550,000 (though the court's reasoning states Kshs. 22,500,000) with interest at 18% per annum compounded monthly from the date of filing suit, plus costs against the 1st and 2nd Defendants. Specific performance and cancellation of title were refused as overtaken by the appellate nullification.

Key legal issues

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01

Whether the sale agreement was orally varied to require full payment by 30th April 2009

Holding

No oral variation was proved; the payment of Kshs. 10,000,000 was a further instalment under the written agreement, and any alleged oral variation would be a nullity

Reasoning

The Plaintiff's advocates described the Kshs. 10,000,000 payment as a further instalment under the sale agreement. Nothing in the correspondence showed the payment was pursuant to a variation. Relying on Sections 97 and 98 of the Evidence Act and Section 3(3) of the Law of Contract Act, and following the Court of Appeal in Peter Mujunga Gathuru, the court held a written land sale agreement cannot be varied orally.

p. 8
02

Which party breached the sale agreement of 30th December 2008

Holding

The 1st and 2nd Defendants breached the agreement by issuing an illegal termination notice and fraudulently transferring the property to the 3rd Defendant

Reasoning

The termination notice of 5th May 2009 did not comply with Clause 4 incorporating the Law Society Conditions of Sale (1989), which required a 21-day completion notice and time to remedy breach. The Defendants had already applied for Land Control Board consent to transfer to the 3rd Defendant on 28th April 2009 while demanding full payment from the Plaintiff, showing the breach allegations were a red herring.

p. 10
03

Whether the transfer of the suit property to the 3rd Defendant was fraudulent

Holding

The transfer was deceitful, fraudulent, illegal, null and void

Reasoning

The Defendants complained of the Plaintiff's subdivision on 4th May 2009 when they had already applied for consent to transfer the land to the 3rd Defendant on 28th April 2009. The consent issued on 5th May 2009, the same day the 3rd Defendant's sale agreement was executed, and the transfer was effected on 11th May 2009 before the termination notice was served on 15th May 2009. The property had been alienated before termination was communicated.

p. 10
04

Appropriate remedies

Holding

Specific performance and cancellation of title were not available since the Defendants' own title had been nullified on appeal; the Plaintiff was entitled to a refund of Kshs. 22,500,000 with contractual interest

Reasoning

The Court of Appeal in Civil Appeal No. 172 of 2010 nullified the transfer of the property to the 1st and 2nd Defendants, so the property reverted to the Estate of Walter Karanja and the Defendants had no title to pass. Damages were assessed strictly per Clause 11 of the agreement - refund of the purchase price with interest at 18% per annum compounded monthly from the date of filing suit.

p. 10

Legal principles established

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  • An oral agreement varying a written sale agreement for land is inadmissible under Sections 97 and 98 of the Evidence Act and void under Section 3(3) of the Law of Contract Act
  • Where a sale of land to a third party is a nullity, the ensuing title should be cancelled and revert to the party entitled, whether or not the third party was an innocent purchaser

Court orders

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  1. 1.The 1st and 2nd Defendants to jointly and severally pay the Plaintiff Kshs. 22,550,000
  2. 2.The 1st and 2nd Defendants to jointly and severally pay the Plaintiff interest on the above amount at the rate of eighteen (18%) per centum per annum compounded on a monthly basis from the date when the suit was filed until payment in full
  3. 3.The 1st and 2nd Defendants to jointly and severally pay the costs of the suit

Authorities

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Legislation

  • Evidence ActSections 97 and 98
  • Law of Contract ActSection 3(3)
  • Land Control ActSections 6, 7 and 8(1)
  • Physical Planning ActAct No. 6 of 1996
  • Survey Act
  • Land Registration ActSection 66(1) and (2)
  • Advocates ActSection 35(1)
  • Companies Act
  • Law Society of Kenya Conditions of Sale (1989) EditionClause 4 (21-day Completion Notice)

Cases cited (7)

  • Peter Munjunga Gaturu vs Harun Osoro Nyambuki & Another
    [2015] eKLR
  • Building Contractors & Another vs Elizabeth Kuher-Heier & Another
    [2010] eKLR
  • National Bank of Kenya Limited vs Anaj Warehousing Limited
    [2015] eKLR
  • Mutua & Another vs Kanua
    [2004] eKLR
  • Okiya Omtatah Okoiti & Another vs AG & 2 Others
    [2015] eKLR
  • Katende vs Haridah & Company Advocates
    (2008) 2 EA
  • Dwijendra Kumar T/A Rafkins College vs The Registered Trustees of National Union of Kenya Muslims Coast Province Trust Fund
    (2015) eKLR
Jurisdiction invoked
Environment and Land Court jurisdiction over disputes relating to land (article 162(2)(b) of the Constitution and the Environment and Land Court Act) - suit transferred from Nairobi ELC

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, "Josvir Traders & Agencies Limited v Geffrey Chege Kirundi &2 others [2022] KEELC 1389 (KLR)", Case Analysis (2022). ELC Case No. 174 of 2018 (Formerly Nairobi ELC No. 236 of 2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1389/eng@2022-02-18

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