Zachariah Mburu Chege v Naku Dwellers Ltd & another
The bottom line
#A Nakuru court ordered a land seller and his agent to pay a buyer over Kshs 9.9 million after wrongfully refusing to complete a plot sale.
What this practically means
#Executive summary
#Key legal issues
#Authority of the agent and liability of the principal
The 2nd defendant had valid authority from the 1st defendant, making the 1st defendant liable for the agent's acts
The 2nd defendant pleaded he was duly authorized; neither defendant called evidence. The court held the greater burden lay on the alleged principal to prove he gave no authority, which he failed to discharge. The plaintiff's evidence that he was shown a letter authorizing Kabage to sell also went uncontroverted.
Measure of damages for wrongful refusal to complete a land sale
Plaintiff entitled to refund of deposit, contractual 10% penalty, and loss of bargain measured against property value at date of repudiation
Relying on Consoline Atieno Ononia and Philip Wanjohi Kariuki, the court adopted the measure of damages for a vendor's wrongful refusal to complete: deposit with interest, expenses, and loss of bargain where value at repudiation exceeded the purchase price. The valuation report of October 2014 fixed value at Kshs 27,500,000/=.
Proportioning loss of bargain to the deposit paid
Loss of bargain limited to 38.46% (the proportion of purchase price actually paid) of the discounted property value, yielding Kshs 8,653,500/=
The plaintiff had paid only Kshs 1,000,000/= of the Kshs 2,600,000/= consideration. The court discounted the valuation by Kshs 5,000,000/= for developments the plaintiff did not erect, then applied the 38.46% payment ratio, reasoning a full-payment purchaser would merit a higher award.
Legal principles established
#- Failure by a defendant to call evidence does not automatically result in judgment against him, but an uncontroverted plaintiff's case may still be judged on its merits
- Where a vendor wrongfully refuses to complete, damages include return of deposit with interest, expenses incurred, and loss of bargain where property value at repudiation exceeded the purchase price
- A principal who adduces no evidence to rebut an agent's assertion of authority bears the burden of proving no authority was given
Court orders
#- 1.The 1st and 2nd defendants shall pay the plaintiff Kshs 1,000,000/= being refund of the deposit paid to the 2nd defendant
- 2.The 1st and 2nd defendants shall pay the plaintiff Kshs 260,000/= being the prescribed penalty in the contract for termination without good reason
- 3.The 1st and 2nd defendants shall pay the plaintiff Kshs 8,653,500/= being damages for loss of bargain
- 4.The claim for costs incurred in performance of obligations under the contract is declined as unproved
- 5.Damages for loss of bargain shall bear interest at court rates only from the date of judgment until payment in full
- 6.The 1st and 2nd defendants shall pay the plaintiff the costs of the suit
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over disputes relating to land (sale of land/plots)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Zachariah Mburu Chege v Naku Dwellers Ltd & another", Case Analysis (2023). Environment & Land Case 296 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16531/eng@2023-03-23
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.