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ELCDismissedNot stated in the judgment· [2024] KEELC 61 (KLR)

Lapera Company Limited v B Concept Limited & 2 others (Environment & Land Case 42 of 2018) [2024] KEELC 61 (KLR)

Environment and Land Court
18 January 2024
5,058 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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A land seller lost its breach case because its completion notice came too early, and the buyer also lost its counterclaim for failing to testify.

What this practically means

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Executive summary

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The Plaintiff, registered proprietor of L.R 1159/390 (Original Number 1159/94/2) Karen, sued the 1st and 2nd Defendants (purchaser and its nominee) for breach of an agreement for sale of the suit property for Kshs 75,000,000, seeking injunctions, return of completion documents held by the 3rd Defendant (advocate), declarations, damages and interest. The Plaintiff alleged the agreement was concluded on 28th June 2017 with completion within 150 days, that it delivered completion documents, and that the 1st Defendant failed to pay the balance of Kshs 67,500,000 despite a completion notice and an unsigned addendum. The Defendants denied breach, contended the agreement was undated and void ab initio (attestation allegedly witnessed while the Plaintiff's director was abroad), that the notice to complete was premature, and counterclaimed for refund of the Kshs 7,500,000 deposit. The 3rd Defendant was withdrawn from the suit. At trial only the Plaintiff's director testified; the Defendants did not. The court held that uncontroverted evidence is not automatic proof, applying Charterhouse Bank and Sections 107, 109 and 112 of the Evidence Act, but the Defendants' failure to testify doomed their counterclaim. Construing the undated agreement under clause 3.1.1 of the incorporated Law Society Conditions of Sale (2015), the court found the operative date was 12th October 2017, making the completion date 11th January 2018; the notice to complete of 11th December 2017 was therefore premature and no breach was established. The Agreement itself satisfied Section 3(3) of the Law of Contract Act. Both the suit and the counterclaim were dismissed with each party bearing its own costs.

Key legal issues

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01

Whether the Plaintiff proved breach of the sale agreement by the 1st Defendant

Holding

No. The agreement's operative date was 12th October 2017 (date the Plaintiff's director last signed), making the completion date 11th January 2018; the notice to complete dated 11th December 2017 was premature, so no breach arose.

Reasoning

The Agreement was undated. Clause 4.2 incorporated the Law Society Conditions of Sale (2015), clause 3.1.1 of which fixes the date of an undated agreement as the date the party signing last signed. The deposit was a condition precedent to execution, so 28th June 2017 could not be the operative date. The 90-day completion period therefore ran to 11th January 2018, rendering the completion notice premature and the alleged breach non-existent.

p. 10
02

Whether the Defendants' untested Defence and allegations of illegality (attestation of an absent signatory) availed them

Holding

No. The Defendants did not testify, so the allegations remained unsubstantiated and their Counterclaim was dismissed; but their failure to testify did not automatically prove the Plaintiff's case.

Reasoning

The court reiterated that uncontroverted evidence is not automatic evidence; the plaintiff still bears the burden under Sections 107, 109 and 112 of the Evidence Act. However, the counterclaim, on which the Defendants bore the burden, necessarily failed for want of evidence. The Plaintiff's own evidence was therefore assessed on its merits against the contract documents, which revealed the premature completion notice.

p. 7
03

Validity of the Agreement for sale under Section 3(3) of the Law of Contract Act

Holding

The Agreement was valid, being in writing, executed by the parties and duly attested; the allegation of invalidity was unsubstantiated.

Reasoning

The Defendants alleged the agreement was void because the Plaintiff's director was out of the country when the Advocate attested his signature. Having not testified, they produced no evidence of this. On its face the written, executed and attested agreement met the statutory formalities, and there was no contest as to the validity of the Plaintiff's documentary evidence.

p. 8

Legal principles established

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  • Uncontroverted evidence is not automatic proof; the plaintiff's burden is not lessened by a defendant's failure to adduce evidence
  • A defendant's failure to testify has fatal consequences for the counterclaim but not necessarily for the defence
  • Courts will not rewrite contracts between parties; parties are bound by the terms of their contracts
  • Where a contract incorporates the Law Society Conditions of Sale (2015), an undated agreement is made on the date the party signing last signed it
  • A contract for sale of land must satisfy Section 3(3) of the Law of Contract Act to be valid

Court orders

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  1. 1.The Plaintiff's suit is dismissed
  2. 2.The Defendants' Counterclaim is dismissed for failure to prosecute it by adducing evidence
  3. 3.Each party to bear its own costs

Authorities

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Legislation

  • Evidence Act, Cap 80Sections 107(1)(2), 109 and 112
  • Law of Contract ActSection 3(3)
  • Law Society Conditions of Sale (2015 Edition)Clauses 3.1.1 and 3.1.2

Cases cited (9)

  • Mumias Sugar Co. Limited and Another vs Beatrice Akinyi Omondi
    [2016] eKLR
  • Savings Loan Kenya vs Mayfair Holdings Limited
    [2012] eKLR
  • Charterhouse Bank Limited (Under Statutory Management) vs Frank N. Kamau
    [2016] eKLR
  • Mumbi M'Nabea vs David M. Wachira
    [2016] eKLR
  • Maria Ciabaitaru M’mairanyi & Others v. Blue Shield Insurance Company Limited - Civil Appeal No. 101 of 2000
    [2005] 1 EA 280
  • Palace Investments Limited vs Geofirey Kariuki Mwenda & another
    [2015] eKLR
  • Miller –vs- Minister of Pensions
    [1947] 2 All ER 372
  • Fidelity Commercial Bank Limited vs Kenya Grange Vehicle Industries Limited
    [2017] eKLR
  • Pius Kimaiyo Langat vs Co-operative Bank of Kenya Ltd
    (2017) eKLR
Jurisdiction invoked
Original civil jurisdiction over a claim relating to land (suit over L.R 1159/390 (Original Number 1159/94/2) Karen); specific provision not 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, "Lapera Company Limited v B Concept Limited & 2 others (Environment & Land Case 42 of 2018) [2024] KEELC 61 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/61/eng@2024-01-18

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