Ukulima Co-operative Savings & Credit Ltd v Populite International Limited [2022] KEELC 1731 (KLR)
The bottom line
#A Kenyan court ruled that a land buyer who breached a sale agreement gets only 80% of their deposit back and must remove their caveat on the property.
What this practically means
#Executive summary
#Key legal issues
#Who breached the agreement for sale dated 24.8.2011
The Defendant breached the agreement by raising the extraneous issue of 'perfection of the title' only after the 90-day completion period had expired, despite having signed an agreement which only required the vendor to avail a provisional certificate of title
The agreement obliged the vendor to deliver only the original provisional certificate of lease and completion documents upon payment of the balance. The Defendant signed knowing the vendor held only a provisional certificate. DW1 conceded there was no communication of title concerns before expiry of the 90 days. The addendum on title perfection was never executed and communications did not vary the agreement, so the Defendant's demand was extraneous and constituted the breach.
Whether the caveat lodged by the Defendant should be removed
The caveat had no reasonable basis and was to be removed, since the Defendant had paid only the deposit, doubted the vendor's title, and had abandoned specific performance
The only payment made was the 10% deposit. Following the vendor's unequivocal letter of 18.4.2013 refusing to perfect the title, the Defendant acquired no interest in the land. The Defendant itself doubted the vendor's title and had abandoned its claim for specific performance, so there was no interest capable of supporting the caveat.
What refund, if any, of the deposit was due
The Defendant was entitled only to 80% of the deposit (Kshs 14,000,000) without interest, per Clause 9(1)(iii), because it was the breaching party
Although the vendor cannot retain both the land and the deposit, the principle that a party should not take advantage of its own breach applies. The Defendant initiated and perpetuated the breach, so the contractual forfeiture of 20% of the deposit as damages and costs was invoked, leaving Kshs 14,000,000 refundable without interest.
Whether the Defendant was entitled to special damages
No special damages were awarded; the Defendant's suit claiming them was dismissed
The Defendant was the party in breach and had abandoned specific performance. Its claim for loss of bargain (Kshs 85,000,000 per the Crystal Valuers valuation of Kshs 260,000,000) could not stand against a vendor who was not in breach. No relief was granted on the counter-claim treated as the claim in ELC 305/2015.
Legal principles established
#- A court cannot re-write a contract between the parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved
- Verbal or written communications, meetings or visits to the lands office do not amount to a variation of a written agreement unless a variation document is executed
- A purchaser who has not completed payment and who doubts the vendor's title acquires no registrable interest sufficient to sustain a caveat, and a party cannot take advantage of its own breach
Court orders
#- 1.The caveat on the suit land is to be removed forthwith.
- 2.It is declared that the Defendant (Populate International Ltd) has no right over the suit land.
- 3.The Plaintiff is to refund to the Defendant Kshs 14,000,000 without interest within 45 days, failing which interest shall accrue at court's rates.
- 4.The Defendant is condemned to pay costs of suit No. 1023 of 2014 with interest at court's rates.
- 5.No orders as to costs in ELC 305/2015.
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under Article 162(2)(b) of the Constitution and the Environment and Land Court Act (sale of land dispute; land parcel L.R. No. 209/5001, Nairobi)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ukulima Co-operative Savings & Credit Ltd v Populite International Limited [2022] KEELC 1731 (KLR)", Case Analysis (2022). ELC No. 1023 of 2014 (OS) (Consolidated with ELC No. 305 of 2015). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/1731/eng@2022-02-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.