Shisanya & another v National Olympic Committee of Kenya & 3 others; Tysons Limited (Interested Party)
The bottom line
#Kenya's Environment and Land Court ordered the Sports Fund to refund KES 4.6 million for a failed office purchase, with interest from 2015.
What this practically means
#Executive summary
#Key legal issues
#Proof of payment and non-refund of the deposit
The payment of Kes.4,612,000/- was proved, acknowledged by receipts and correspondence, and never refunded; the debt was admitted by DW1 and not disputed
PW1 and PW2 testified to execution of letters of offer and payment of the 20% deposit, evidenced by Exhibits P1, P5, P6, P7 and P8. DW1 admitted in cross-examination that the debt was acknowledged and that the Plaintiffs were owed the money. The sale having aborted, the deposit remained due and outstanding.
Liability for the refund as between the 1st and 3rd Defendants; effect of the 1st–3rd Defendants' sale agreement
The 3rd Defendant, having taken over the suit property and undertaken under clauses 1.1(d), 3.1 and 3.2 to settle all claims and liabilities attaching to it, is solely liable for the refund
The sale agreement expressly defined the purchase price to include all liabilities and debts attached to the property, and the 3rd Defendant undertook to settle established liquidated claims. DW2 admitted the asset and liabilities were taken over and that the Plaintiffs' claim was forwarded to and accepted by the 3rd Defendant. The court read the agreement within its four corners and held the 3rd Defendant bound.
Privity of contract objection by the 3rd and 4th Defendants
The privity doctrine is distinguished; the sale agreement conferred enforceable interests on third parties with proven claims, including the Plaintiffs
Relying on Savings & Loan (K) Ltd v Kanyenje Karangaita Gakombe, the court noted recognised exceptions to privity, including collateral contracts conferring benefits on third parties. Although the 3rd Defendant was not party to the Plaintiffs' contract, it threw itself into the mix by the 1st September 2020 sale agreement whose terms were intended to affect the rights and liabilities of third parties including the Plaintiffs.
Entitlement to general damages for breach of contract
Not entitled; general damages are not awardable for breach of contract
The claim was not canvassed in submissions. Citing Dharamshi v Karsan, Securicor Courier (K) Ltd and Kenya Tourist Development Corporation v Sundowner Lodge Ltd, the court reaffirmed that general damages are not recoverable for breach of contract and that only quantified, specially pleaded and proved damages are awardable.
Entitlement to interest and period of computation
Interest at court rates (14%) is payable but only from January 2015, being the lapse of the two-year completion period in clause 12 of the letter of offer, not from December 2012
The deposit was paid in two installments (December 2012 and early 2013), so there was no basis for interest from 12th December 2012. The letter of offer contemplated completion within two years. Following Highway Furniture Mart Ltd v Permanent Secretary Office of the President, interest compensates for deprivation of money, and computation properly begins when the obligation to hand over crystallised.
Liability of the Attorney General
The suit against the 4th Defendant was dismissed for disclosing no reasonable cause of action
The 3rd Defendant is a body corporate under the Sports Act, 2013; the Plaintiffs did not demonstrate why the Attorney General was impleaded.
Legal principles established
#- General damages are not recoverable for breach of contract; only specially pleaded and specifically proved special/liquidated damages are awardable
- A vendor who by a subsequent agreement undertakes to settle all claims and liabilities attaching to the property assumes liability for refunds owed to third-party depositors, whose interests the contract confers
- Courts cannot rewrite contracts freely entered into; parties are bound by the terms of their contract
- Extrinsic evidence is inadmissible to contradict or vary the terms of a written agreement (four corners rule)
- Interest on a refunded principal compensates for deprivation of money, but may be computed from the date the entitlement crystallised rather than the date of payment
Court orders
#- 1.The Plaintiffs shall be refunded the sum of Kes.4,612,000/- by the 3rd Defendant
- 2.The refund shall attract interest at court rates (14%) w.e.f January 2015 to date of payment in full
- 3.The Plaintiffs' claim against the 1st and 2nd Defendants is dismissed
- 4.The Plaintiffs' claim against the 4th Defendant is dismissed
- 5.The Plaintiffs awarded costs of the suit to be borne by the 3rd Defendant, to be agreed and in default taxed
- 6.The claim for General damages for breach of contract is dismissed
- 7.Any other relief not expressly granted is declined
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over a dispute relating to L.R No 209/12386 (Nock Plaza), Nairobi
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shisanya & another v National Olympic Committee of Kenya & 3 others; Tysons Limited (Interested Party)", Case Analysis (2023). Environment & Land Case E245 of 2022. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/19939/eng@2023-09-21
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.