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ELCDismissedAppeal (memorandum of appeal dated 23.6.2022) - not stated· [2024] KEELC 4595 (KLR)

Mureri v Maroo & another (Environment and Land Appeal E033 of 2022) [2024] KEELC 4595 (KLR)

Environment and Land Court
5 June 2024
2,981 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan land seller who hid a bank charge on the title lost his appeal and must pay Kshs.3.6 million in agreed damages plus costs.

What this practically means

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Executive summary

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This is a first appeal against a trial court judgment delivered on 26.5.2022 in a claim for breach of a sale agreement dated 6.2.2017 over L.R No. Nkuene/Nkumari/1954 offered for Kshs.1,800,000. The respondents sued for refund of the deposit and liquidated damages of Kshs.3,600,000; the appellant counter-blamed them for failing to pay a Kshs.1,300,000 deposit needed to offset a charge in favour of Progressive Credit Ltd. The appellant raised ten grounds of appeal, including that the trial court found breach without proof, wrongly held he received the deposit, and awarded more than the parties had agreed. The court rehearsed the evidence as required on a first appeal. It held that courts do not rewrite contracts and extrinsic evidence cannot vary written terms; the appellant admitted signing the agreement warranting a title free of encumbrances while the title was charged, and never disclosed the charge. His signature beneath the acknowledgment clause proved receipt of the deposit, no separate receipt being necessary. His belated reliance on Section 29 of the Land Registration Act (buyer's due diligence) was a new issue not pleaded below. The court found it was the appellant who breached, having failed to disclose the encumbrance, clear the loan or complete the transfer, and that the Kshs.3,600,000 liquidated damages were pleaded, proved and not shown to be punitive or unconscionable. The appeal was dismissed with costs on 5 June 2024.

Key legal issues

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01

Validity of the sale agreement and admission of its terms

Holding

The appellant admitted willingly signing the sale agreement and could not introduce parol evidence to vary its written terms, including clause 1 that the land was sold free of encumbrances.

Reasoning

The court held the agreement had to be construed within its four corners. The appellant admitted signing it and never pleaded fraud, illegality, unconscionability or undue influence against the default/penalty clause. His defense that the sale was meant to offset a loan to Progressive Credit Ltd was parol evidence inadmissible to vary the written terms.

p. 4
02

Payment and acknowledgment of the deposit

Holding

The appellant's signature beneath the acknowledgment clause of the sale agreement constituted acknowledgment of receipt of the deposit; no separate receipt was required.

Reasoning

The agreement provided the vendor shall instantly acknowledge receipt of the deposit, and the appellant's signature appeared below that line, witnessed by an advocate, and again on page two. The appellant never challenged this signature in his defense or testimony and did not call the witnessing advocates to contradict it.

p. 4
03

Non-disclosure of the encumbrance and breach

Holding

The appellant breached the agreement by failing to disclose the charge in favour of Progressive Credit Ltd despite warranting a clean title, making it the appellant's duty to clear the loan and effect the discharge.

Reasoning

Clause 1 warranted the land free from encumbrances, yet the appellant had charged the title on 15.9.2016 and admitted non-disclosure. His belated invocation of Section 29 of the Land Registration Act (buyer's due diligence) was a new issue not pleaded below. The encumbrance also blocked the land control board consent.

p. 5
04

Liquidated damages of Kshs.3,600,000

Holding

The liquidated sum of Kshs.3,600,000 was explicitly pleaded, proved, and incorporated in the sale agreement as a consequence of default, and its enforcement was lawful.

Reasoning

The default/penalty clause was never challenged as punitive, unconscionable or illegal. The sum was a pre-estimate incorporated in the agreement as a consequence of acts producing the damage, and the court found nothing illegal in enforcing the legal consequences of default against the offending party.

p. 5

Legal principles established

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  • A first appellate court must rehearse, re-analyze and re-appraise the entire lower court record and reach independent findings while giving credit to the trial court's advantage of hearing witnesses.
  • Courts do not rewrite contracts and extrinsic evidence cannot be used to vary the terms of a written contract.
  • Parties are bound by their pleadings and cannot raise new issues on appeal without leave that were not pleaded at the lower court.

Court orders

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  1. 1.The appeal is dismissed
  2. 2.The appellant to pay costs of the appeal

Authorities

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Legislation

  • Land Registration ActSection 29
  • Evidence ActSections 107 – 111

Cases cited (14)

  • Abok James Odera t/a A.J Odera & Co. Advocates v John Patrick Machira t/a Machira & Co. Advocates
    (2003) eKLR
  • Selle & another v Associated Motor Boat Co. Ltd
    (1968) E.A 123
  • Stanley Makira Kaguongo v Isaack Kibiru Kahuthia
    (2022) eKLR
  • Joseph Kangethe Irungu v Peter Nganga Muchoki
    (2018) eKLR
  • Millicent Perpetua Atieno Wandiga & another v John Chege
    (2013) eKLR
  • Curtis v Chemical Cleaning & Dyeing Co. Ltd
    (1951) ALL ER 631
  • NBK v Pipe Plastic Samkolit (K) Ltd
    (2011) 2 E.A 503
  • Pius Kimaiyo Langat v Cooperative Bank of Kenya Ltd
    (2017) eKLR
  • Margaret Njeri Muiruri v Bank of Baroda (K) Ltd
    (2014) eKLR
  • RTS Flexible Systems Ltd v Molkerel Alois Muller Gmbit & Co. KG (U.K. Production
    (2010) UKSC14
  • Gurdev Singh Birdi & another v Abubakar Madhubuti
    C.A No. 166 of 1996
  • Haba v Singh
    (1985) KLR 716
  • Ratcliffe v Evans
    (1892) 2 QB 524
  • Nizar Virani t/a Kisumu Beach Resort v Phoenix of East Africa
    (2004) 2 KLR
On appeal from
Trial court (chief magistrate's court, not named)
Suit over breach of sale agreement dated 6.2.2017 - number not stated
Jurisdiction invoked
First appellate jurisdiction over the trial court judgment delivered 26.5.2022 (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, "Mureri v Maroo & another (Environment and Land Appeal E033 of 2022) [2024] KEELC 4595 (KLR)", Case Analysis (2024). Appeal (memorandum of appeal dated 23.6.2022) - not stated. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4595/eng@2024-06-05

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