Shamo & another v Ganza Limited & 3 others (Environment & Land Case 46 of 2018) [2024] KEELC 583 (KLR)
The bottom line
#Kenya's Environment and Land Court ordered developers to refund homebuyers' deposits with interest because no properly written sale contract existed.
What this practically means
#Executive summary
#Key legal issues
#Liability to refund the deposit for the off-plan sale
The 1st and 2nd defendants are jointly and severally liable to refund the deposits of Kshs 2,000,000 to each plaintiff
The defendants admitted receiving Kshs 2,000,000 from each plaintiff but asserted a contractual bar to refund without leading any evidence of such contract. No compliant written contract under section 3 of the Law of Contract Act was tendered. The completion timelines passed unmet, the project stalled, and refund demands were rejected. Since no enforceable contract crystalized, retention of the deposits had no legal basis.
Interest on the refund
Interest at court rate payable from 1/12/2017, being shortly after the November 2017 demand
The parties transacted on trust with no written instrument on interest and no formal evidence of a contractual rate. The deposit is therefore a civil debt payable from the date of demand. The email of 15/11/2017 evidences the demand, so interest runs from 1/12/2017 at court rate.
Costs following withdrawal of claims against the 3rd and 4th defendants
The 1st and 2nd defendants to bear the plaintiffs' costs and the 3rd defendant's costs jointly and severally; no costs for the 4th defendant
The suit would not have been necessary had the defendants refunded the deposits, and the 3rd defendant's joinder was occasioned by the defendants secretly charging the suit land after receiving the deposits. The defendants' conduct caused the litigation, so they bear costs of both the plaintiffs and the 3rd defendant, while the 4th defendant, having taken no part, gets no costs.
Legal principles established
#- Where no compliant written contract for sale of land exists, a vendor who has received a deposit has no basis for retaining it and must refund it
- In the absence of a written instrument on interest, a refundable deposit is treated as a civil debt attracting interest from the date of demand at court rate
Court orders
#- 1.Judgment entered in favour of the 1st plaintiff against the 1st and 2nd defendants jointly and severally for Kshs 2,000,000 with interest at court rate from 1/12/2017
- 2.Judgment entered in favour of the 2nd plaintiff against the 1st and 2nd defendants jointly and severally for Kshs 2,000,000 with interest at court rate from 1/12/2017
- 3.Costs of the plaintiffs and costs of the 3rd defendant to be borne by the 1st and 2nd defendants jointly and severally
- 4.Costs to attract interest from the date of taxation or assessment by the taxing officer
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over the suit land parcel Kabete/Kibichiko/906 (specific provision not stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Shamo & another v Ganza Limited & 3 others (Environment & Land Case 46 of 2018) [2024] KEELC 583 (KLR)", Case Analysis (2024). Not stated in the judgment as provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/583/eng@2024-02-01
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.