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ELCDismissedNot stated in the judgment provided· [2024] KEELC 5049 (KLR)

Githinji v Gitero & another (Environment and Land Appeal E008 of 2023) [2024] KEELC 5049 (KLR)

Environment and Land Court
28 June 2024
3,051 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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A Kenyan court confirmed that land sellers who walk away from sale agreements may owe buyers the plot's current market value, not just a contractual refund.

What this practically means

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Executive summary

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The Appellant (vendor) appealed against a judgment of the Senior Resident Magistrate (Hon E. Ngigi, 10/8/2018) directing him to refund the Respondents (purchasers) Kshs. 4,500,000/= being the market value of unsurveyed residential plot No. 61, Nanyuki Municipality. The parties had contracted in June 2009 for sale of the plot at Kshs. 1,000,000/=, with Kshs. 500,000/= paid on execution and the balance due on transfer; the vendor was to procure a certificate of lease within 60 days. In August 2014, over six years later, he repudiated the agreement, forwarding a cheque of Kshs. 700,000/= comprising refund, the contractual liquidated damages of Kshs. 100,000/= and an uncontracted ex gratia sum, which the Respondents rejected while remaining in possession. The trial court found the vendor in breach and awarded the land's value, holding the contractual clause lenient and disadvantageous to the purchaser. On appeal, the Appellant argued the Magistrate impermissibly rewrote the contract and relied on authorities on the sanctity of contractual terms. The court distinguished those authorities, applied the compensation principle that a party who proves breach of a bargain is to be placed, as far as money can do it, as if the contract had been performed, and held the Magistrate did not err in awarding the land's value since specific performance was impractical. However, because the Respondents had not paid the outstanding Kshs. 500,000/= of the purchase price, the award was reduced to Kshs. 4,000,000/=. The appeal was dismissed with costs to the Respondent.

Key legal issues

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01

Whether the trial court erred in awarding the value of the land (Kshs. 4,500,000/=) instead of the contractual remedy of refund plus liquidated damages of Kshs. 100,000/=, thereby rewriting the contract

Holding

The trial court did not err. The Appellant breached the agreement by failing to procure completion documents and repudiating it six years later; the Respondents were to be compensated at the value of the land as if the contract had been performed, since specific performance was impractical

Reasoning

The court distinguished the authorities relied on by the Appellant as concerning different subject matter. Applying the compensation principle from Omar Gorhan (quoting Viscount Haldane), the Respondents, who had proved breach of the bargain, were to be placed as far as money can do it in the position had the contract been performed. No evidence showed the Appellant's efforts to procure the lease; he simply changed his mind. Clause 12's Kshs. 100,000/= liquidated damages left the purchaser disadvantaged after six years of appreciating land value.

p. 5
02

Whether the award amount should be adjusted

Holding

Yes; since the Respondents had not paid the full purchase price, the award was reduced by the outstanding Kshs. 500,000/= to Kshs. 4,000,000/=

Reasoning

The purchase price was Kshs. 1,000,000/=, of which only Kshs. 500,000/= had been paid. Deducting the outstanding balance from the awarded market value prevented over-compensation of the Respondents. The appeal was nonetheless dismissed as the core finding of breach and the mode of compensation stood.

p. 5

Legal principles established

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  • An aggrieved party to a breached contract for sale of land is to be placed, as far as money can do it, in as good a situation as if the contract had been performed; where specific performance is impractical, compensation at the value of the land is proper
  • On a first appeal, the court re-analyses the evidence and law and may only overturn the trial court's finding if the trial court misdirected itself, misapprehended the facts, took into account irrelevant considerations, failed to take into account relevant considerations, or was plainly wrong

Court orders

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  1. 1.The award of Kshs. 4,500,000/= by the Learned Magistrate is reduced to Kshs. 4,000,000/= payable by the Appellant to the Respondents
  2. 2.The appeal is dismissed with costs to the Respondent

Authorities

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Cases cited (5)

  • National Bank of Kenya Limited v Pipe Plastic Sanko Lit (K) Limited
  • Mrao Limited v First American Bank of Kenya Limited and 2 Others
    [2003] eKLR
  • Delilah Kerubo Otiso v Ramesh Chander Ndingra
    [2018] eKLR
  • Omar Gorhan v Municipal Council of Malindi (Council Government of Kilifi) and Another
    [2020] eKLR
  • Jane Elizabeth Gitiri Waroga v John Dryden Kimotho
    [2019] eKLR
On appeal from
Senior Resident Magistrate's Court
Not stated
Jurisdiction invoked
First appeal from the Senior Resident Magistrate's court (statutory first-appeal jurisdiction; 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, "Githinji v Gitero & another (Environment and Land Appeal E008 of 2023) [2024] KEELC 5049 (KLR)", Case Analysis (2024). Not stated in the judgment provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/5049/eng@2024-06-28

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