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ELCPartially AllowedELC Case (Eldoret Municipality/Block 10/1991 suit), plaint dated February 25, 2015 (number not stated in judgment)· [2023] KEELC 148 (KLR)

Mitei v Baseland Property Consultants Ltd & 2 others (Environment & Land Case 56 of 2015) [2023] KEELC 148 (KLR)

Environment and Land Court
25 January 2023
3,624 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Kenyan land buyer whose sale agreement broke formal legal rules could not keep the land, but the court ordered the sellers to refund her full purchase price with interest.

What this practically means

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Executive summary

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The plaintiff sued for a declaration of ownership, an order of specific performance compelling transfer of a 0.083ha portion (excised as Plot Q8 from Eldoret Municipality Block 10/1639) which she bought from the 1st defendant for Kshs 710,000 under an agreement dated March 10, 2011, permanent injunction, and eviction of the 3rd defendant; alternatively refund of the purchase price. The 1st defendant admitted the sale but blamed the 2nd defendant, and counterclaimed against the 2nd defendant for refund. The 2nd defendant maintained it was the registered proprietor of the resultant plot, had only authorized the 1st defendant to market, and later sold the plot to the 3rd defendant. The court found the sale agreement unenforceable under sections 3(3) and 3(6) of the Law of Contract Act: it lacked proper signing, attestation, and the company's common seal, and neither defendant held title, the land remaining registered to third parties. The plaintiff, whose search revealed this, was doubtfully a bona fide purchaser. However, equity would not permit the defendants, who received the purchase price and whose conduct was deceitful, to retain it; following ubi jus ibi remedium and Macharia Mwangi Maina, the court ordered the 1st and 2nd defendants jointly and severally to refund Kshs 710,000 with interest at court rates from March 13, 2011, plus the plaintiff's costs. The 1st defendant's unsupported counterclaim was dismissed with each party bearing its own costs.

Key legal issues

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01

Enforceability of the sale agreement of March 10, 2011

Holding

The agreement was invalid and unenforceable for non-compliance with sections 3(3) and 3(6) of the Law of Contract Act

Reasoning

The agreement was signed by the plaintiff's brother-in-law without written authority, and executed for the 1st defendant company by one individual without affixing the common seal, contrary to section 3(6). Neither defendant was the registered proprietor and no power of attorney existed. The mandatory requirements of section 3(3) having been breached, the agreement could not support specific performance.

p. 4
02

Whether the plaintiff is entitled to reimbursement of the purchase price and by whom

Holding

The 1st and 2nd defendants are jointly and severally liable to refund the Kshs 710,000 purchase price with interest

Reasoning

Although the agreement was unenforceable, the 1st defendant admittedly received the full purchase price and remitted part to the 2nd defendant. The directors' conduct was found deceitful, both lacking title. Equity will not allow them to retain the payment; substantive justice demanded refund with interest.

p. 6
03

Whether the plaintiff qualified as a bona fide purchaser for value without notice

Holding

It is doubtful the plaintiff was a bona fide purchaser since her official search revealed the defendants were not the registered proprietors

Reasoning

Applying the Katende v Haridas criteria, the plaintiff knew from her search that the registered proprietors were Rael Jemutai Kibor and Michael Cheruiyot, yet proceeded to contract and pay the defendants who held no title. Her claim to specific performance was thus undermined.

p. 6
04

The 1st defendant's counterclaim against the 2nd defendant

Holding

Dismissed; the 1st defendant tendered no evidence and the counterclaim was a red herring

Reasoning

Despite filing a counterclaim for refund of monies remitted to the 2nd defendant, the 1st defendant adduced no evidence in support. Having found both defendants deceitful participants in selling land without title, the court saw the counterclaim as a diversion.

p. 6

Legal principles established

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  • A contract for the disposition of an interest in land must comply with section 3(3) of the Law of Contract Act: it must be in writing, signed by all parties, with signatures attested by a witness
  • A limited company must execute an agreement of sale by affixing its common seal or as provided in section 3(6) of the Law of Contract Act
  • Equity will not allow defendants who received the purchase price while lacking title to retain it; they are liable to refund it (ubi jus ibi remedium)

Court orders

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  1. 1.The 1st and 2nd defendants to jointly and severally refund the plaintiff Kshs 710,000/= being the purchase price paid, with interest at court rates from the March 13, 2011, till payment in full
  2. 2.The plaintiff is awarded costs of the suit to be paid by the 1st and 2nd defendants jointly and severally
  3. 3.The 1st defendant's counterclaim against the 2nd defendant is dismissed with each party bearing its own costs

Authorities

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Legislation

  • Law of Contract Act, Chapter 23, Laws of Kenyasections 3(3) and 3(6)
  • Registration of Documents Act (Cap. 285)referenced in section 3(6)
  • Companies Act, 2015section 37
  • Civil Procedure Act, Chapter 21, Laws of Kenyasection 27

Cases cited (2)

  • Katende v Haridas and Company Limited
    (2008) EA 173
  • Macharia Mwangi Maina & 87 Others v Davidson Mwangi Kagiri
    [2014] eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over disputes relating to land (article 162(2)(b) context; not expressly cited in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mitei v Baseland Property Consultants Ltd & 2 others (Environment & Land Case 56 of 2015) [2023] KEELC 148 (KLR)", Case Analysis (2023). ELC Case (Eldoret Municipality/Block 10/1991 suit), plaint dated February 25, 2015 (number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/148/eng@2023-01-25

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