Mountain Mall Limited v Motha (Environment & Land Case 520 of 2018) [2022] KEELC 2980 (KLR)
The bottom line
#A Mombasa land buyer who was never told about a rival claim won back over Kshs 103 million with interest from the seller.
What this practically means
#Executive summary
#Key legal issues
#Whether the Deeds of Variation were valid despite the Defendant's denial of signature
The Deed of Variation dated September 11, 2014 was validly entered into as it was drawn by the vendor's Advocates and acknowledged in their correspondence; a second variation extended completion to May 2, 2015
Although the Defendant denied signing the Deed of Variation, the court found it was drawn by his own Advocates and acknowledged in their letters, indicating valid entry. Attestation is not a precondition to contractual obligations unless statute requires it, and PW1 acknowledged the variation in evidence. The court therefore found the completion date had been varied twice.
Whether the Defendant was in breach of the contract
The Defendant was in breach due to material non-disclosure of the third-party claim and fraudulent subdivisions, and continued receiving monies despite that
The court found Delta Communications Limited held a purchaser's interest and had fraudulently subdivided the land with deed plans issued, facts not disclosed to the Plaintiff at the time of the transaction. The Defendant and his donees continued to receive monies despite this. The caveat protecting the Plaintiff was removed and the property sold to a third party, confirming the breach.
Whether the Memorandum of Understanding dated November 11, 2016 binds the Defendant
The MoU is unenforceable against the Defendant because the donees had no authority to acknowledge a debt
The Power of Attorney dated July 2, 2014 was specific; the donees were only to complete the transaction. The court held they had no capacity to enter the MoU acknowledging the debt, and the Defendant did not authorise the donees to acknowledge any debt on his behalf. The Plaintiff therefore could not rely on the MoU.
Whether the Plaintiff was entitled to a refund of monies paid
The Plaintiff was entitled to a refund of Kshs 101,170,000/- paid to the Defendant's advocates and Kshs 2.5 million acknowledged by the donees, plus damages of Kshs 500,000/-
A voucher prepared on April 15, 2015 showed total payments of Kshs 101,170,000/- to M/S Kithure Kindiki Advocates, inclusive of the amount offsetting the Barclays Bank loan. The donees acknowledged receipt of Kshs 2.5 million. The court found the Plaintiff proved its case on a balance of probabilities and granted refunds with interest.
Legal principles established
#- Attestation is not a pre-condition to the existence of contractual obligations unless statute dictates otherwise; where execution is not denied, an agreement may be binding even if unsigned by one party
- Invocation of a nonexistent clause to terminate a contract is not legitimate even where a termination clause exists
Court orders
#- 1.Damages for breach of contract of Kshs 500,000/-
- 2.Refund of the deposit of Kshs 103,670,000/= together with interest
- 3.A declaration that the deposit of Kshs 46,170,000/= paid by the Plaintiff to Barclays Bank of Kenya is recoverable from the Defendant and an order of payment of the same together with interest since May 2014
- 4.In the alternative to prayers (b) and (c), a declaration and order that the Defendant is liable to carve out for transfer to the Plaintiff a portion of LR No 463/III/MN (CR 13065) valued at Kshs 103,670,000/= as at November 2016
- 5.Costs of the suit plus interest
- Jurisdiction invoked
- Original civil jurisdiction over a claim for breach of contract relating to land; Environment and Land Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Mountain Mall Limited v Motha (Environment & Land Case 520 of 2018) [2022] KEELC 2980 (KLR)", Case Analysis (2022). ECO-COM-B/130/2020. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/2980/eng@2022-07-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.