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ELCDismissedEnvironment & Land Case 648 of 2015· [2023] KEELC 17924 (KLR)

Ingoi v Macharia & another

Environment and Land Court of Kenya
9 June 2023
AOA. A. Omollo
4,977 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~20 min to read original · ~4 min brief

The bottom line

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The court dismissed a landowner's claim and confirmed buyers' ownership of a Komarock plot, ruling you cannot cancel a land sale after it's fully paid and transferred.

What this practically means

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Executive summary

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The Plaintiff sued for a declaration that he was the lawful owner of Plots 63 and 68 Komarock Shopping Centre, a permanent injunction against the Defendants, general damages and costs, alleging they breached a 2012 agreement for sale of the two plots at K.Shs. 600,000 each by paying only K.Shs. 590,000, prompting him to rescind and refund the monies. The Defendants, in a joint defence and counterclaim, asserted they jointly owned Plot 68, having paid the full purchase price which the Plaintiff acknowledged, and that the plot was transferred to them via a special power of attorney. They further counterclaimed K.Shs. 690,170 for servicing Total Kenya Local Purchase Orders, alleging Plot 63 was orally offered as security. The court framed five issues and held that a valid written agreement for Plot 68 existed complying with section 3(3) of the Law of Contract Act; the Plaintiff admitted his signature and proved no forgery or duress. The full purchase price was acknowledged as paid by 10th September 2012, so the purported rescission of 11th November 2014 was void, the contract having been fully performed. No valid written contract existed for Plot 63, which was registered in a third party's name. The court found an implied contract for the subcontracted LPO services from the conduct of the parties and documentary evidence. The Plaintiff's suit was dismissed and judgment entered for the Defendants on the counterclaim: declaration of joint ownership of Plot 68, a permanent injunction, K.Shs. 690,170 with interest at court rates, and costs of the suit.

Key legal issues

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01

Validity of the sale agreement for Plot No. 68

Holding

A valid written, signed and attested agreement existed; the Plaintiff acknowledged his signature and proved no forgery, duress or misrepresentation, and the full purchase price was paid

Reasoning

Both witnesses confirmed an agreement for sale of Plot 68. The only agreement produced (DEx 1) complied with section 3(3) of the Law of Contract Act. PW1 denied executing it but admitted the signature was his and offered no proof of forgery. The special power of attorney also bore his signature. Payment breakdown documents acknowledged by the Plaintiff showed the full K.Shs. 600,000 was paid by 10th September 2012.

p. 6
02

Whether the Plaintiff validly rescinded the contract

Holding

No; the contract was fully performed on 10th September 2012, so the purported revocation of 11th November 2014 was void

Reasoning

The Plaintiff claimed the Defendants breached by failing to pay the balance and that he rescinded by letter dated 11th November 2014 and refunded monies. However, the payment breakdown acknowledged by the Plaintiff showed the full purchase price of K.Shs. 600,000 was received by 10th September 2012. The transfer to the Defendants occurred on 29th September 2014, before the purported rescission. Rescission of a performed contract is legally impossible.

p. 7
03

Validity of the alleged sale of Plot No. 63

Holding

No valid contract for Plot 63; the alleged oral agreement offended section 3(3) of the Law of Contract Act and the plot belonged to a third party

Reasoning

DW1 admitted the agreement for Plot 63 was verbal and never reduced to writing, contrary to section 3(3). Further, PW1 testified the plot was registered in his wife's name (Phoebe Akinyi Asiondo), so the Plaintiff had no mandate to transact on it. The Defendants themselves acknowledged the weakness of their claim to Plot 63 in submissions.

p. 7
04

Implied contract for servicing Total Kenya LPOs

Holding

An implied contract existed between the parties for the subcontracted services; the Plaintiff owes K.Shs. 690,170

Reasoning

The Defendants produced LPOs drawn in favour of Mimar Engineering (the Plaintiff's trading name), Mpesa and bank statements corresponding to the LPO dates, and a handwritten letter by the Plaintiff recognising the 2nd Defendant's work. The Plaintiff's refunds narrative was undermined because payments began before the purported 2014 rescission and he produced no written sale agreement for the two plots. Applying the implied-contract principles, a contract was inferred from conduct.

Legal principles established

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  • A contract for the disposition of an interest in land must be in writing, signed by all parties and attested, per section 3(3) of the Law of Contract Act
  • A contract may be implied from the conduct of the parties where necessary to give business reality to a transaction
  • A vendor cannot rescind a contract for sale of land that has already been fully performed

Court orders

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  1. 1.Declaration that the Defendants are the legal joint owners of Plot No. 68 Komarock Shopping Centre
  2. 2.Permanent injunction restraining the Plaintiff, his servants, employees and/or agents from interfering with the Defendants' possession, title and interest in Plot No. 68 Komarock Shopping Centre
  3. 3.Plaintiff to forthwith pay the Defendants K.Shs. 690,170/- being the balance of the consideration for the contract for services offered to Total Kenya Limited
  4. 4.Interest on the K.Shs. 690,170/- from the date of judgment at Court rates until payment in full
  5. 5.Defendants awarded the costs of the suit

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 40
  • Law of Contract ActSection 3(3)

Cases cited (7)

  • Titus Barasa Makhanu v Police Constable, Simon Kinuthia Gitau No. 83653 & 3 others
    [2016] eKLR

    Article 40 protects proprietary rights including the right to alienate and exclude others from property

  • Beatrice Muthio Nzioka v Charles Akelo Ong'wen
    [2014] eKLR

    Law on rescission of a contract for sale of land - vendor may rescind only per contract condition or on repudiation with restoration possible

  • Peter Mbiri Michuki v Samuel Mugo Michuki
    [2014] eKLR (Civil Appeal No. 22 of 2013)

    Section 3(3) Law of Contract Act requirements and the part-performance proviso

  • William Muthee Muthami v Bank of Baroda
    (2014) eKLR

    Elements of contract - offer, acceptance and consideration must be proved

  • The Aramis
    (1989) 1 Lloyds Rep 213

    Implied contract is a question of fact; implied only where necessary to give business reality to a transaction

  • Ali Abdi Mohamed v Kenya Shell & Company Limited
    (2017) eKLR

    A contract can be inferred from the conduct of the parties without words

  • Lamb v Evans
    (1893) 1 Ch 218

    Definition of an implied contract or promise in law

Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over disputes relating to land (Article 162(2)(b) Constitution / ELC Act); not expressly stated in the judgment

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, "Ingoi v Macharia & another", Case Analysis (2023). Environment & Land Case 648 of 2015. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17924/eng@2023-06-09

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