Kimathi & 5 others v Teleposta Pension Scheme Registered Trustees
The bottom line
#Six Kenyan property buyers lost their land suits because they missed a 90-day payment deadline, though they will get their deposits back.
What this practically means
#Executive summary
#Key legal issues
#Which party breached the sale agreements
The plaintiffs breached the agreements by failing to pay the balance of the purchase price within the 90-day completion period
All agreements required a 10% deposit with the balance payable on completion within 90 days. None of the plaintiffs paid the balance in time. The KUSCCO financing arrangement was not a term of the agreements, the defendant never accepted KUSCCO's offer terms, and the offers came some two years late. The parties had a joint advocate, so plaintiffs could not claim completion documents were withheld. No coercion, fraud or undue influence was proved.
Whether the defendant could resile and sell to third parties
Yes; upon the plaintiffs' breach the defendant as innocent party was entitled to rescind and sell the units to third parties
Relying on Brook Villas Estate, the court held the innocent party to a breached contract has a right of rescission. The defendant, a pension scheme existing to cushion members in retirement, was entitled to call off the agreements and sell to third parties. Post-completion arrangements with other buyers were separate individual transactions that did not vary the plaintiffs' contracts.
Whether specific performance and injunctive reliefs were available
No; the contract was no longer effective due to the plaintiffs' non-compliance, so specific performance was refused
Specific performance is discretionary and premised on a valid enforceable contract. Here the contract had been defeated by the plaintiffs' own breach. The court also noted the plaintiffs never pleaded or sought refund of their deposits, but ordered refund to bring finality to the old case.
Claim against the joined third parties (Christine Wangari Munga and David Mwaura)
Dismissed; joinder orders were never effected or served and the plaint contained no claim against them
Although a 2020 order allowed joinder, there was no evidence the new parties were served with the orders or pleadings as required by Order 5 of the Civil Procedure Rules, the plaint was never amended to plead any claim against them, and the 25 January 2021 consent was silent on their status.
Legal principles established
#- Courts cannot rewrite contracts between parties; they are bound by contractual terms unless coercion, fraud or undue influence is pleaded and proved
- Specific performance is a discretionary equitable remedy granted only on well-laid principles and premised on a valid enforceable contract
- Where a contract is breached, the innocent party has, among other rights, a right of rescission
Court orders
#- 1.All the six suits filed by the plaintiffs are dismissed
- 2.The defendant is directed to refund back the deposits paid by the plaintiffs
- 3.Each party is to bear their own costs of the suits
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over disputes relating to land in Nairobi Block 34/160
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kimathi & 5 others v Teleposta Pension Scheme Registered Trustees", Case Analysis (2023). ELC 150 of 2008 (lead suit; consolidated with ELC 151, 152, 153, 154 of 2008 and ELC 529 of 2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.