Ringsview Apartments Limited v Vishnu Builders Company Ltd & another (Environment and Land Case Civil Suit 782 of 2014) [2023] KEELC 591 (KLR)
The bottom line
#A Kenyan developer's Kshs. 140 million delay damages claim failed because granting deadline extensions waived its right to the agreed penalties.
What this practically means
#Executive summary
#Key legal issues
#Whether the 1st Defendant breached the construction contract by failing to complete on time
Yes - the 1st Defendant breached the contract by failing to complete by 30th May 2014 despite extensions
The contract commenced 27th July 2011 with completion due 19th October 2012. Extensions were granted from time to time, the last on 16th May 2014 requiring completion by 30th May 2014. The 1st Defendant's reasons for delay had been taken into account in the extensions, and it did not complete by 30th May 2014.
Whether the Kshs. 140,000,000/- agreed damages for delay were payable
No - the Plaintiff waived the 25th April 2012 agreement by granting further extensions
The agreement of 24th/25th April 2012 provided for Kshs. 10,000,000/- per month if completion did not occur by 31st March 2013. The Plaintiff thereafter extended the completion period repeatedly, the last extension being on 16th May 2014 to 30th May 2014. Having extended the period, the Plaintiff could not revert to the earlier agreement; the breach and consequential damages were waived.
Whether fraud was proved in respect of leases for apartments C1, A4 and B4
No - fraud was not proved; the leases followed agreements executed by the Plaintiff
The Plaintiff executed the agreement of 16th April 2013 converting a loan of Kshs. 22,000,000/- into a deposit for apartments C1 and A4, and the leases followed. The 16th December 2013 reconciliation acknowledged only small outstanding balances. The claim of blackmail was implausible given the Plaintiff was not a weaker party and delayed nearly two years before complaining.
Whether apartment B2 was given to J.G. Wathigo advocate as fees and swapped for apartment B4
No - there was no evidence of such an agreement or swap; B2 and B4 are separate apartments
No agreement between the Plaintiff and Wathigo giving him apartment B2 was proved. The 16th December 2013 agreement listed B2 and B4 separately with distinct outstanding amounts. The court found B4 was lawfully purchased from the Plaintiff under the agreement of 27th December 2011.
Whether the Plaintiff's termination of the contract on 31st May 2014 was lawful
Yes - the termination complied with clause 38.2 of the contract
The 1st Defendant failed to complete by the extended date of 30th May 2014, giving the Plaintiff the right to terminate. The architect had given 14 days' notice to complete, and the termination notice was issued within 14 days of its expiry.
Whether the 1st Defendant was entitled to payment for uncertified certificates No. 21 and 22
Yes - Kshs. 19,338,552/- awarded since the failure to certify was attributable to the Plaintiff's own consultants
The contractor's valuations for certificates No. 21 (Kshs. 11,816,880/-) and No. 22 (Kshs. 7,521,672/-) were not challenged. It would be unfair to deny payment where the Plaintiff's own Quantity Surveyor and Architect failed to certify after termination, and the consultants were the Plaintiff's agents.
Whether the retention money of Kshs. 21,895,218/- should be released
Yes - ordered released to the 1st Defendant since the project was completed and no justification for continued holding was given
The project had been completed by another contractor and the apartments occupied. Depositing the retention money in a joint account would serve no purpose. As no justification for continued withholding was given, release was ordered.
Legal principles established
#- A party who extends a completion period after the default date cannot claim agreed damages under a prior default agreement; extension waives the breach and its consequential damages
- A claim in the nature of special damages must be pleaded with particulars and strictly proved
- An allegation of fraud in the execution and registration of leases must be proved; absent proof, no cancellation of the leases will issue and a plaintiff cannot both claim balances due under allegedly fraudulent leases and seek their cancellation
- An employer cannot escape liability for its consultant Quantity Surveyor's and Architect's failure to certify work done by a terminated contractor
- Costs are discretionary under section 27 of the Civil Procedure Act; where there is no outright winner each party may bear its own costs
Court orders
#- 1.The 1st Defendant to return forthwith all the keys to the residential apartments on L.R No. 4858/11 known as Ringsview Apartments if still in its possession
- 2.The 2nd Defendant restrained from charging, selling, disposing of or transferring apartments A12(A9), A11(A10), B6(B5), B4(B5), C1, A4 and C10 until the outstanding balances due to the Plaintiff are cleared
- 3.An injunction restraining the Defendants jointly and severally from dealing with or interfering with the possession and quiet enjoyment of the residential apartments save for apartments purchased and paid for or being paid for by the 2nd Defendant and his associates
- 4.Kshs. 375,000/- awarded to the Plaintiff against the 2nd Defendant as balance of purchase price for apartments A9(A12), A10(A11) and B5(B6)
- 5.Kshs. 125,000/- awarded to the Plaintiff against the 2nd Defendant as balance of purchase price for apartment B4(B5)
- 6.Kshs. 2,500,000/- awarded to the Plaintiff against the 2nd Defendant as balance of purchase price for apartments C1 and A4
- 7.Kshs. 3,000,000/- awarded to the Plaintiff against the 2nd Defendant as balance of purchase price for apartment C10
- 8.The Plaintiff to give the 2nd Defendant and his associates access to and quiet vacant possession of apartment B3 forthwith and of apartments A12(A9), A11(A10), B6(B5), B4(B5), C1, A4 and C10 upon payment of the balances
- 9.An injunction restraining the Plaintiff from charging, selling, transferring or dealing with apartments B3, A12(A9), A11(A10), B6(B5), B4(B5), C1, A4 and C10 for 45 days within which the 2nd Defendant and his associates shall pay the balances
- 10.Kshs. 21,895,218/- awarded to the 1st Defendant against the Plaintiff as retention money
- 11.Kshs. 19,338,552/- awarded to the 1st Defendant against the Plaintiff as the sum due and owing on the contract dated 26th July 2011
- 12.Kshs. 1,360,000/- awarded to the 2nd Defendant against the Plaintiff as damages for loss of use of apartment B3
- 13.Payments awarded to be made within 45 days from the date of the judgment
- 14.Interest to accrue on the amounts awarded at court rates at the expiry of 45 days until payment in full
- 15.Each party to bear its own costs of the suit and the counter-claim
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a dispute relating to land (L.R No. 4858/11) and leases registered in respect thereof; no specific provision invoked in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ringsview Apartments Limited v Vishnu Builders Company Ltd & another (Environment and Land Case Civil Suit 782 of 2014) [2023] KEELC 591 (KLR)", Case Analysis (2023). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/591/eng@2023-02-09
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.