Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
AI-generated case brief
Case Brief · caselaw.co.ke
ELCPartially AllowedEnvironment and Land Miscellaneous Application 1 of 2021· [2023] KEELC 18362 (KLR)

Jahadhmy & another v Fort Jesus Sea View Apartments Ltd

Environment and Land Court
20 June 2023
2,081 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

#

A Mombasa court ordered a developer to refund Kshs 3 million in apartment deposits with 12% interest after failing to build, but refused extra damages.

What this practically means

#

Executive summary

#
Two purchasers who paid deposits totalling Kshs 3,000,000 for four apartments (A4 & B4 and A5 & B5) on Plot No 280, Section VI Mombasa Island under sale agreements dated February 17, 2018 sued the developer by originating summons seeking rescission, a refund with interest at 12%, and damages for breach. The Respondent entered appearance but filed no defence; the matter proceeded by oral evidence from the two Applicants, whose documentary evidence comprised the executed sale agreements, swift deposit slips dated March 15, 2018 and acknowledgement receipts dated March 16, 2018. The court first confirmed the agreements were valid under Section 3(3) of the Law of Contract Act, being written, signed and witnessed, and containing the parties, property, price and conditions. It then found a clear breach: the apartments were never constructed or delivered and the Respondent offered no explanation. Declining specific performance as discretionary and impracticable given the apartments' non-existence and the Respondent's failure to construct anything since 2018, the court held the suitable remedy was a refund of the deposits. Damages for breach were refused because general damages are not awardable in contract and the Applicants neither pleaded nor proved special damages. The court granted a refund of Kshs 3,000,000 with interest at 12% per annum from the date of payment, plus costs to the Applicants.

Key legal issues

#
01

Validity of the sale agreements

Holding

The sale agreements were valid and enforceable, complying with Section 3(3) of the Law of Contract Act

Reasoning

The court perused the sale agreements produced as exhibits and found them in writing, signed by the parties and attested by witnesses, containing the parties' names, property description, purchase price and conditions, thereby satisfying the formal requirements for contracts for disposition of an interest in land.

p. 2
02

Breach of contract

Holding

The Respondent committed a clear breach by taking deposits and failing to construct or deliver the apartments

Reasoning

The Applicants' evidence was uncontroverted as the Respondent entered appearance but filed no defence. Deposit slips and acknowledgement receipts proved payment of Kshs 3,000,000. The apartments were never constructed nor delivered and the Respondent offered no explanation, amounting to a clear breach of the contracts.

p. 3
03

Appropriate remedy

Holding

Refund of the deposit with interest rather than specific performance

Reasoning

Specific performance is discretionary and the court declined to order it because the apartments do not exist and the Respondent might be unable to deliver them given its failure to construct anything since 2018. The suitable remedy was held to be a refund of the deposits already paid.

04

Damages for breach of contract

Holding

Damages refused as not specifically pleaded or proved

Reasoning

Relying on Court of Appeal authority, the court held that general damages cannot be awarded for breach of contract; contractual damages are in the nature of special damages which must be specifically pleaded and proved. The Applicants' claim for damages was neither pleaded nor proved and could not be awarded.

p. 4

Legal principles established

#
  • An agreement for sale of land containing parties' names, property description, purchase price and conditions, signed and witnessed, is a valid contract under Section 3(3) of the Law of Contract Act
  • General damages cannot be awarded on a claim anchored on breach of contract; contractual damages are in the nature of special damages and must be pleaded and proved
  • Specific performance is discretionary and will not be ordered where there is an adequate alternative remedy

Court orders

#
  1. 1.A refund of the deposit paid of Kshs 3,000,000 being the total for the deposits paid for Apartments A4 & B4 and A5 & B5 plus interest at 12% per annum from the date of payment
  2. 2.Costs of the suit to the Applicants

Authorities

#

Legislation

  • Law of Contract ActSection 3(3)
  • Auctioneers ActCap. 526

Cases cited (11)

  • Nelson Kivuvani vs Yuda Komora & Another
    Nairobi HCCC No 956 of 1991

    Elements of a valid agreement for sale of land

  • Reliable Electrical Engineers Ltd vs Mantrac Kenya Limited
    (2006) eKLR

    Specific performance is discretionary and refused where adequate alternative remedy exists

  • James Maranya vs. South Nyanza Sugar Co. Ltd
    (2017) eKLR

    No general damages for breach of contract; damages must be pleaded and proved

  • Joseph Urigadi Kedeva vs. Ebby Kangishal Kavai
    Kisumu Civil Appeal No 239 of 1997 (UR)

    There can be no general damages for breach of contract

  • Consolata Anyango Ouma vs. South Nyanza Sugar Co. Ltd
    (2015) eKLR

    Purpose and measure of damages for breach of contract; special damages must be pleaded and proved

  • Hadley v Baxendale
    (1854) 9. Exch. 341

    Measure of damages arising naturally from breach or contemplated by parties

  • Kenya Industrial Estates Ltd v Lee Enterprises Ltd
    NRB CA Civil Appeal No 54 of 2004 [2009] eKLR

    Restitution in integrum principle

  • Kenya Breweries Ltd v Natex Distributors Ltd
    Milimani HCCC No 704 of 2000 [2004] eKLR

    Restitution in integrum principle

  • Standard Chartered Bank Limited v Intercom Services Ltd & Others
    NRB CA Civil Appeal No 37 of 2003 [2004] eKLR

    Measure of damages under Hadley v Baxendale rule

  • Coast Bus Service Ltd v Sisco Murunga Ndanyi & 2 others
    NRB CA Civil Appeal No 192 of 92 (UR)

    Special damages must be pleaded and proved

  • Charles C. Sande v Kenya Co-operative Creameries Ltd
    NRB CA Civil Appeal No 154 of 1992 (UR)

    Special damages must be pleaded and proved

Jurisdiction invoked
Environment and Land Court jurisdiction over contracts for disposition of interest in land (Environment and Land Court Act)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Jahadhmy & another v Fort Jesus Sea View Apartments Ltd", Case Analysis (2023). Environment and Land Miscellaneous Application 1 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18362/eng@2023-06-20

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