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ELCAllowedNot stated in the judgment text provided· [2022] KEELC 3222 (KLR)

Kaoyeni Enterprise Limited v Unifresh Exotics (K) Limited (Environment & Land Case 428 of 2017) [2022] KEELC 3222 (KLR)

Environment and Land Court
24 May 2022
11,195 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~45 min to read original · ~4 min brief

The bottom line

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A Kenyan court stripped a land buyer who paid only a quarter of the price, awarding the seller Kshs. 80.9 million in profits plus possession of the farm.

What this practically means

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Executive summary

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The Plaintiff company, through its director Ceciliah Rimber, sued the Defendant company for breach of two agreements dated 14th May, 2015 and 30th April, 2016 for the sale of land title KWALE/MNANASINI/763 measuring 65 hectares in Kwale County for Kshs. 24,260,346. The Defendant took possession in August 2014, planted sugarcane, and paid only about Kshs. 6,250,000 despite extended completion dates, prompting a rescission notice dated 16th August, 2017 and this suit seeking rescission, possession, mesne profits, forfeiture of monies paid, and damages. The Defendant denied breach, contending no valid 14-day notice was served, that the Plaintiff lacked completion documents including the Land Control Board consent and original title, and that mesne profits were unpleased and unproved, attacking the Plaintiff's expert report. The court framed three issues and found the Defendant in utter breach, holding the notice properly served, completion documents being deliverable only upon full payment. It accepted the uncontroverted expert evidence of PW-2 assessing profits from sugarcane at Kshs. 80,906,844, the Defendant's criticisms having been raised only in submissions. Allowing the suit, the court declared the contract rescinded, awarded immediate possession, mesne profits of Kshs. 80,906,000, damages, forfeiture of monies paid, a 90-day statutory notice to vacate under Section 151E of the Land Act, police enforcement assistance, and costs with interest to the Plaintiff.

Key legal issues

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01

Breach of the sale and supplementary agreements

Holding

The Defendant was in breach for failing to pay the balance of the purchase price past the extended completion date

Reasoning

The purchase price was Kshs. 24,260,346 with only about Kshs. 6,250,000 paid by the extended completion date of 31st December, 2016. The Defendant remained on the land cultivating sugarcane and failed to remedy default despite notice. The court applied the express contractual terms and declined to imply conditions precedent in the Defendant's favour.

p. 15
02

Validity of the rescission notice

Holding

The notice dated 16th August, 2017 was properly served and effective

Reasoning

The court accepted the Plaintiff's evidence that the notice was sent by email and a hard copy delivered to the Defendant's offices, in line with the notice clause permitting service by email. The Defendant's objection was dismissed as semantics since completion documents were only deliverable upon full payment.

p. 15
03

Mesne profits

Holding

Mesne profits awarded as claimed, per the uncontroverted expert evidence

Reasoning

The Plaintiff's agricultural economist assessed profits from sugarcane grown on the land from 2014. The Defendant's criticisms of the report were raised only in submissions, not evidence, and no counter-expert was engaged, so the evidence stood uncontroverted and the court awarded mesne profits as prayed.

p. 15

Legal principles established

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  • Courts cannot re-write contracts for parties nor imply terms not in the contract
  • A vendor in possession of land by a defaulting purchaser may rescind and resume possession or obtain a court order under sections 39 and 41 of the Land Act
  • Mesne profits require proof of wrongful possession

Court orders

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  1. 1.Declaration that the Defendant breached the two sale agreements dated 14th May, 2015 and 30th April, 2016
  2. 2.Declaration that the contract stands rescinded and the Defendant is in wrongful possession of the suit land
  3. 3.Order granting the Plaintiff the right to take immediate possession of the suit land together with improvements
  4. 4.Order for mesne profits of Kshs. 80,906,000.00 from 15th August, 2014 until the Plaintiff regains possession
  5. 5.Award of damages for breach of the contract of sale
  6. 6.Order that all monies paid pursuant to the sale stand forfeited
  7. 7.Ninety (90) days notice under Section 151E of the Land Act for the Defendant to vacate the suit land leaving improvements behind
  8. 8.Order to the Officer In Charge of Diani Police Station, Ukunda to ensure compliance
  9. 9.Costs of the suit and interest at court's rate to the Plaintiff

Authorities

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Legislation

  • Law of Contract ActCap. 23
  • Land ActSections 38, 39, 40, 41, 151E
  • Civil Procedure ActSection 2 (definition of mesne profits), Section 27(1)
  • Constitution of Kenya, 2010Article 159(2)(c)

Cases cited (11)

  • Ann Mumbi v William Mwangi Gathuma & Another
    (2017) eKLR
  • Kenya Hotels Properties Limited v Willesden Investments Limited
    Civil Appeal No. 149 of 2007
  • Peter Mwangi Mbuthia & Another v Samow Edin Osman
    (2014) eKLR
  • Consolata Anyango Ouma v South Nyanza Company Limited
    MGR HCCA No. 53 of 2015 (2015) eKLR
  • Rufale v Umon Manufacturing Company (Ramsboltom)
    (1918) LR 1KB 592
  • Photo Production v Securicor Limited
    (1980) AC 827
  • Kinake Co-operative Society v Green Hotel
    (1988) KLR 242
  • Nyamongo & Nyamongo Advocates v Barclays Bank of Kenya Limited
    (2015) eKLR
  • Reids Heweet & Company v Joseph
    AIR 1918 Cal. 717
  • Myres v Defries
    (1880) 5 Ex. D. 180
  • Kenya Tourism Development Corporation
    (Supra - not fully cited)
Jurisdiction invoked
First-instance civil suit under the Law of Contract Act (Cap. 23) and the Land Act, No. 6 of 2012; Environment and Land Court jurisdiction

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, "Kaoyeni Enterprise Limited v Unifresh Exotics (K) Limited (Environment & Land Case 428 of 2017) [2022] KEELC 3222 (KLR)", Case Analysis (2022). Not stated in the judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3222/eng@2022-05-24

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