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ELCPartially AllowedNot stated in the judgment· [2024] KEELC 4667 (KLR)

Kiema & another v LA Nyavu Gardens Limited (Environment & Land Case E330 of 2022) [2024] KEELC 4667 (KLR)

Environment and Land Court
13 June 2024
8,950 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~36 min to read original · ~4 min brief

The bottom line

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A church-affiliated organization must pay KES 15 million plus interest because it broke its written promise of land in settlement.

What this practically means

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Executive summary

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The Plaintiffs, a married couple, sued the Defendant (an organization affiliated to a church) over a failed sale of a half-acre portion of L.R No. 2259/66. They applied for the plot in May 2007 and paid Kes.4,603,088/= towards the purchase price, but the transaction never concluded; the Defendant later raised un stipulated infrastructural costs, and successive settlement offers of alternative land (Mavoko worth Kes.15,000,000 and Mwiki plots) never materialised. The Defendant filed a defence and counterclaim seeking dismissal, referral to mediation/arbitration and damages for breach. At trial the court framed four issues. On limitation, it held the plea under Section 7 of the Limitation of Actions Act could not be sneaked in via submissions since it was never pleaded; doing so violated fair hearing and the doctrine of departure, and in any event the parties' continuing negotiations and the Defendant's acknowledgements defeated limitation, the provision applying only to recovery of land. On contract, the court found no lawful contract complying with Section 3(3) of the Law of Contract Act, so neither party could sue for breach. The claim for disgorgement of profits and for damages for deceit and loss of chance failed for want of specific pleading and proof. However, the court awarded the Plaintiffs Kes.15,000,000/=, being the value the Defendant itself affixed to the three-acre Mavoko land offered in settlement on 4th May 2017, holding the Defendant estopped from reneging. The counterclaim was dismissed as stillborn and misconceived. The Plaintiffs obtained costs of both the suit and counterclaim, to be taxed, with interest on the award at 14% from 4th May 2017.

Key legal issues

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01

Limitation of actions

Holding

The plea of limitation fails on four grounds: it was not pleaded, it breaches the doctrine of departure, raising it via submissions violates fair hearing, and the evidence of continued negotiations and acknowledgement defeats it; Section 7 applies to recovery of land, which is not what the Plaintiffs seek

Reasoning

The court held that Order 2 Rule 4 of the Civil Procedure Rules requires limitation to be specifically pleaded; it appeared nowhere in the defence. Raising it in submissions at the tail-end would take the Plaintiffs by surprise and breach fair hearing under Article 50(1). Further, the parties' continued negotiations up to 2021 and the Defendant's offers of alternative land amounted to acknowledgements defeating limitation, and Section 7 governs actions to recover land, which this is not.

p. 12
02

Existence of a lawful contract and breach

Holding

No lawful contract existed under Section 3(3) of the Law of Contract Act, so neither party could sue for breach; the Defendant's breach claim was anchored on quicksand

Reasoning

The transaction concerned disposition of an interest in land, requiring compliance with Section 3(3) of the Law of Contract Act: a written contract, signed by both parties and attested by a witness. No such written contract was executed; the Plaintiffs even declined to execute the letter of offer. Having received Kes.4,603,088/= without a concluded contract, the Defendant could not contend the Plaintiffs breached a non-existent agreement.

p. 14
03

Entitlement to Kes.15,000,000 being the value of the Mavoko land offered in settlement

Holding

The claim is tenable and payable: the Defendant voluntarily affixed a value of Kes.15 Million to the 3-acre Mavoko land in its letter of 4th May 2017 and, the land never having been given, is estopped from reneging on the monetary equivalent

Reasoning

The Defendant itself came up with the offer of three acres at Mavoko and declared its value as Kes.15 Million through its advocates. The allocation never materialised. Relying on estoppel (Section 120 of the Evidence Act) and equity, the court held the Defendant, an organization affiliated to a church, could not run away from its clear representations, and equity detests unjust enrichment. Judgment for Kes.15,000,000/= with 14% interest from 4th May 2017.

p. 15
04

Defendant's counterclaim for reference to mediation/arbitration and damages

Holding

The counterclaim is stillborn and misconceived: no agreement containing an arbitration clause was produced, and damages for breach of a non-existent, unpleaded agreement cannot lie

Reasoning

No agreement with an arbitration clause was tendered in evidence; reference to a mediator or arbitrator would anyway be an interlocutory measure requiring invocation of Section 6 of the Arbitration Act at the proper stage. On damages, there was no agreement to breach, and even if there were, special damages had to be pleaded and proved, which the Defendant failed to do.

p. 17

Legal principles established

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  • A plea of limitation of actions must be specifically pleaded in the defence and cannot be raised for the first time in written submissions; doing so violates the right to fair hearing and the doctrine of departure
  • Contracts for the disposition of an interest in land must comply with Section 3(3) of the Law of Contract Act; absent a written contract signed and witnessed as required, no lawful contract exists
  • A party who by clear and unequivocal representation voluntarily affixes a monetary value to property offered in settlement of a dispute is estopped from reneging on that monetary value when the land is never given
  • Claims framed as disgorgement of profits, deceit and loss of chance constitute special damages which must be specifically pleaded and specifically proved

Court orders

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  1. 1.Judgment entered in favor of the Plaintiffs for the sum of Kes.15,000,000/= only being the monetary value of the plot at Mavoko which was being offered by the Defendant in settlement of the dispute but which did not materialize
  2. 2.The award of Kes.15,000,000/= to attract interest at court rates at 14% w.e.f 4th May 2017
  3. 3.The Defendant's counterclaim dismissed
  4. 4.Plaintiffs awarded costs of the suit
  5. 5.Plaintiffs awarded costs of the counterclaim
  6. 6.Costs to be taxed by the Deputy Registrar in the usual manner
  7. 7.Any other relief not expressly granted declined
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over a dispute relating to the disposition of an interest in land (portion of L.R No. 2259/66)

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, "Kiema & another v LA Nyavu Gardens Limited (Environment & Land Case E330 of 2022) [2024] KEELC 4667 (KLR)", Case Analysis (2024). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/4667/eng@2024-06-13

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