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ELCPartially AllowedOriginating Summons dated August 20, 2021· [2022] KEELC 3392 (KLR)

Maralink Tours & Photography Co. Ltd v Dawagi Investments Limited (Originating Summons 17 of 2021) [2022] KEELC 3392 (KLR)

Environment and Land Court
11 May 2022
2,542 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court ordered a land seller to refund a Kshs 2.6 million deposit plus legal fees after hiding a court case over the property.

What this practically means

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Executive summary

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The applicant sued by Originating Summons seeking refund of a Kshs 2,600,000 deposit (10% of the Kshs 26,000,000 purchase price), Kshs 98,723 interest, Kshs 455,000 legal fees, and interest at 15% per annum, arising from a sale agreement dated April 21, 2021 over land parcel Kilifi/Chembe Kibabamshe/366. The applicant contended the respondent breached warranties in clause 20 of the agreement warranting the property free from encumbrances and litigation: the respondent had been sued by Mayungu Real Estate Limited over the same land in Malindi ELC No. 20 of 2021, with interim injunctions issued before the sale agreement, and had written to the National Land Commission in 2017 objecting to gazettement of the land in favour of the 'Shahs', without disclosing these facts. The respondent filed a preliminary objection that the supporting affidavit was defective for lack of authority under Order 11 rule 2, and maintained the applicant had consented to an extension and that clause 9.2 capped relief at the deposit plus 10% interest. On the preliminary objection, the court held lack of authority is a curable technicality, cured by the further affidavit filed October 22, 2021, and dismissed the objection with costs. On the merits, the court found the respondent knew of the impediments and breached clauses 20(f) and 20(h), declined to rewrite the contract, and awarded refund of Kshs 2.6 million, Kshs 455,000 legal fees, interest at the agreed 10%, and costs of the suit. Judgment delivered at Malindi on May 11, 2022 by M.A. Odeny, Judge.

Key legal issues

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01

Whether failure to annex an authority to swear the supporting affidavit fatally defective the suit

Holding

Preliminary objection dismissed; the defect was curable and the authority was filed by further affidavit before hearing

Reasoning

The objection raised a procedural technicality rather than a pure point of law under the Mukisa test. Order 19 Rule 7 permits the court to receive affidavits notwithstanding technical irregularity. Authorities establish that a corporate resolution may be filed any time before the suit is fixed for hearing, and it lies on the objecting party to prove lack of authority with evidence. The applicant filed the signed authority by further affidavit sworn October 22, 2021, curing the anomaly.

p. 4
02

Whether the respondent breached the sale agreement dated April 21, 2021

Holding

The respondent breached clauses 20(f) and 20(h) warranties by failing to disclose the injunction and ownership dispute over the suit land

Reasoning

The suit property was subject to interim injunctive orders in Malindi ELC No. 20 of 2021, filed before the sale agreement, making completion impossible. The respondent's letter of July 27, 2017 to the National Land Commission showed it knew of ownership challenges (gazettement claim by the 'Shahs') yet warranted the property free from any challenge or litigation. The court declined to rewrite the contract and applied the agreed remedies for breach, awarding refund of deposit, legal fees, and agreed interest.

p. 5

Legal principles established

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  • Lack of authority to swear an affidavit for a corporate body is a curable procedural irregularity and not fatal if the authority is filed before hearing and determination of the suit
  • The court cannot rewrite a contract whose express terms are clear; it must apply the agreed remedies for breach

Court orders

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  1. 1.Preliminary objection dismissed with costs to the applicant
  2. 2.Respondent to refund the applicant Kshs 2,600,000/- deposit
  3. 3.Respondent to pay Kshs 455,000/- legal fees incurred as a result of the sale agreement
  4. 4.Interest on both sums at the agreed 10% (3% above Central Bank rates)
  5. 5.Costs of the suit to the applicant

Authorities

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Legislation

  • Constitution of KenyaArticle 159(2)(d)
  • Civil Procedure ActSections 1A and 1B
  • Civil Procedure Rules, 2010Order 11 rule 2
  • Civil Procedure Rules, 2010Order 19 Rule 7
  • Civil Procedure Rules, 2010Order 21 [1]

Cases cited (15)

  • Leo Investments Limited v Trident Insurance Co. Limited
    [2005] eKLR
  • Republic v Registrar General & 13 others
    Misc Application No 67 of 2005 [2005] eKLR
  • Raila Odinga v IEBC & others
    [2013] eKLR
  • Kenya Agricultural Research Institute v Farah Ali, Chairman Isahakia Self Help Group & another
    NKR HCCC No. 23 of 2011
  • Ngere Tea Factory Company Ltd v Alice Wambui Ndome
    [2018] eKLR
  • Millicent Perpetua Atieno v Louis Onyango Otieno
    [2013] eKLR
  • Ayub Ndungu v Marion Waithera Gacheru
    [2006] eKLR
  • Kenya Limited v Joseph Ojiem
    NBI HCCC No. 1243 of 1999
  • National Bank of Kenya Limited v Pipeplastic Samkolit K Limited & another
    Civil Appeal No. 95 of 1999 [2001] KLR 112 [2002] EA 503
  • Aiman v Muchoki
    [1984] KLR 353
  • Dewdrop Enterprises Limited v Wambugu Wambui Angeline t/a A W Kinuthia & Co Advocates
    [2012] eKLR
  • Makupa Transit Shade Limited & another v Kenya Ports Authority & another
    [2015] eKLR
  • Eye Company (K) Limited v Erastus Rotich t/a Vision Express
    [2021] eKLR
  • Trollope Colls Ltd v North West Metropolitan Regional Hospital Board
    (1973) 1 WLR 601
  • Mayungu Real Estate Limited v Dawagi Investment Limited
    Elc No. 20 of 2021
Jurisdiction invoked
Article 162(2)(b) of the Constitution (Environment and Land Court, original jurisdiction over land contracts)

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, "Maralink Tours & Photography Co. Ltd v Dawagi Investments Limited (Originating Summons 17 of 2021) [2022] KEELC 3392 (KLR)", Case Analysis (2022). Originating Summons dated August 20, 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/3392/eng@2022-05-11

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