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ELCDismissedEnvironment and Land Appeal E013 of 2021· [2023] KEELC 16752 (KLR)

Richu & another v Kahawa Sukari Limited

Environment and Land Court
23 March 2023
BEB M Eboso
3,427 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Environment and Land Court confirmed that land buyers cannot force a sale without a written, signed contract, and can only recover their money back.

What this practically means

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Executive summary

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The appellants, who had applied in 2014 to purchase three plots (Nos 1786, 1868 and 2108) from the respondent at Kshs 2,000,000 per plot and paid deposits totalling Kshs 1,300,000, sued for specific performance and general damages after the intended sale aborted. The trial court (Hon C K Kisiangani, SRM) declined specific performance and damages, awarding only a refund of the purchase price with interest at court rates, with each party bearing its own costs. On appeal, B M Eboso J framed three issues: availability of specific performance, availability of general damages, and costs. The court held that the transaction, occurring between February 2014 and June 2015, was subject to the mandatory writing, signature and attestation requirements of Section 3(3) of the Law of Contract Act, and that no enforceable land sale contract existed - the appellants had not identified any contract and their own evidence showed they were waiting for allocation documents. Although the court disagreed with the trial court's reasoning, it upheld the ultimate finding that specific performance was unavailable, applying the principles in Reliable Electrical Engineers v Mantral Kenya. On damages, the court held that general damages are not recoverable in contract (citing KTDC v Sundowner Lodge and Dharamshi v Karsan) and that breach was neither pleaded nor proved. The appeal was dismissed, the trial court's refund award left undisturbed, and, since non-compliance with Section 3(3) was attributable to all parties, each side was ordered to bear its own costs of the appeal.

Key legal issues

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01

Availability of specific performance

Holding

Specific performance unavailable because there was no enforceable land sale contract under Section 3(3) of the Law of Contract Act; trial court's ultimate finding upheld despite flawed reasoning

Reasoning

The transaction occurred between February 2014 and June 2015, when written, signed and attested contracts were mandatory for land dispositions. The appellants pleaded and sought enforcement of no identified contract; their own evidence that they awaited allocation letters showed they knew no enforceable contract existed. The appellate court disagreed with the trial court's reasoning but affirmed its conclusion.

p. 6
02

General damages

Holding

General damages unavailable: no enforceable contract, breach neither pleaded nor proved, and general damages are not recoverable in contract

Reasoning

Having found the transaction failed Section 3(3) requirements, the plea for general damages failed on that ground alone. The court reiterated the settled position that general damages are not recoverable in breach of contract, citing KTDC v Sundowner Lodge and Dharamshi v Karsan. The appellants also neither pleaded nor proved breach.

p. 6
03

Costs

Holding

Each party to bear own costs because non-compliance with Section 3(3) was attributable to all parties

Reasoning

The court found that the failure to formalise the transaction in compliance with the Law of Contract Act was the fault of all parties, making it just that each side bears its own costs of the appeal.

p. 7

Legal principles established

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  • A suit on a contract for disposition of an interest in land requires a written contract signed by all parties and attested; specific performance cannot found on an unenforceable contract
  • General damages are not recoverable in claims founded on contract
  • Duty of a first appellate court to re-evaluate the evidence and reach its own conclusions

Court orders

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  1. 1.Appeal dismissed for lack of merit
  2. 2.Trial court's award (refund of purchase price with interest at court rate from date of filing suit) not disturbed
  3. 3.Each party to bear their respective costs of the appeal

Authorities

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Legislation

  • Law of Contract ActSection 3(3)
  • Auctioneers Act

Cases cited (7)

  • Susan Munyi v Keshar Shiani
    [2013] eKLR

    Duty of first appellate court to analyse and evaluate evidence afresh and reach independent conclusions

  • Abok James Odera t/a AJ Odera & Associates v John Patrick Machira t/a Machira & Co Advocates
    [2013] eKLR

    First appellate court's role to re-evaluate, re-assess and re-analyse the record

  • Kenya Ports Authority vs Kustron (Kenya) Limited
    2000 2EA 212

    Referenced within Abok James Odera on first appeal duty

  • Reliable Electrical Engineers Ltd v Mantral Kenya Limited
    [2006] eKLR

    Principles for granting specific performance: valid enforceable contract, discretion, adequate alternative remedy

  • Kenya Tourist Development Corporation V Sundowner Lodge Limited
    (2018) eKLR

    General damages not recoverable in breach of contract

  • Dharamshi vs Karsan
    [1974] EA 41

    General damages not allowable in addition to quantified damages

  • Securicor (K) vs Benson Davi Onyango & Anor
    [2008] eKLR

    Supports exclusion of general damages in contract claims

On appeal from
Ruiru Senior Principal Magistrate's Court
Ruiru MCL&E Case No 143 of 2019
Jurisdiction invoked
First appellate jurisdiction over the subordinate court's judgment (Environment and Land Court Act)

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, "Richu & another v Kahawa Sukari Limited", Case Analysis (2023). Environment and Land Appeal E013 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/16752/eng@2023-03-23

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