Macharia & 52 others v Leltayet Court Developers Ltd & another (Environment and Land Case Civil Suit 423 of 2008) [2024] KEELC 5273 (KLR)
The bottom line
#Fifty-three plot buyers lost their Nairobi land because they never verified the seller's title before purchasing.
What this practically means
#Executive summary
#Key legal issues
#Validity of the 2nd Defendant's title
The 2nd Defendant lawfully obtained title; the transfer stood despite non-payment of the balance because the rescission agreement through the professional undertaking failed and the 1st Defendant never issued a completion notice or rescinded under the LSK Conditions.
The court found the initial sale agreement frustrated and replaced by a rescission agreement under which the 1st Defendant's advocates gave a professional undertaking to refund Kshs 4.1 million within 90 days. The 1st Defendant's advocate failed to remit the money and returned the title documents, so the rescission stood rescinded and the 2nd Defendant remained registered proprietor. No fraud or misrepresentation was proved to impeach the title.
Whether the Plaintiffs were bona fide purchasers for value without notice
No. They had no titles, did not prove payment, the subdivision was unapproved, and they admitted failing to conduct due diligence.
The Plaintiffs admitted on oath that they did not conduct official searches and relied on newspaper advertisements and the 1st Defendant's representations. No titles were issued and the subdivision was never approved by the county government or Director of Surveys. Proof of payment was not exhibited. An official search would have revealed the 2nd Defendant's registration.
Privity of contract
The Plaintiffs, not being parties to the sale agreement between the Defendants, could not enforce it against the 2nd Defendant.
Applying the doctrine in Dunlop v Selfridge, the court held that only a party to a contract can sue on it. The Plaintiffs had no standing to challenge the rights and obligations of the 2nd Defendant under the 1998 sale agreement.
The 2nd Defendant's counterclaim for possession
Merited as to declarations, injunction and vacant possession, but damages for trespass were declined.
Having found the 2nd Defendant the lawful registered proprietor and the Plaintiffs trespassers, the court granted the declaratory and injunctive reliefs sought in the counterclaim and ordered vacant possession within 90 days, but in the circumstances declined general damages for trespass.
Legal principles established
#- A court cannot rewrite a contract between parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved.
- Allegations of fraud must be pleaded and strictly proved to a standard higher than the balance of probabilities.
- A party who fails to call evidence leaves its pleadings unsubstantiated and its counterclaim must fail.
- A professional undertaking is an unequivocal promise which operates as a binding contract between advocates.
- Purchasers of titled property must carry out due diligence beyond an official search; a vendor cannot pass better title than it has.
Court orders
#- 1.A declaration that the 2nd Defendant is entitled to exclusive and unimpeded right of possession and occupation of Land Reference No. 209/22143.
- 2.A declaration that the Plaintiffs are unlawfully in occupation of the sub plots in Land Reference No. 209/22143.
- 3.A declaration that the Plaintiffs are not entitled to remain on the respective sub plots in Land Reference No. 209/22143.
- 4.A permanent injunction restraining the Plaintiffs from remaining on or continuing in occupation of the respective sub plots.
- 5.The Plaintiffs directed to give the 2nd Defendant vacant possession within 90 days of delivery of the Judgment.
- 6.Costs of the suit and the counterclaim to be borne by the 1st Defendant.
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court over land disputes
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Macharia & 52 others v Leltayet Court Developers Ltd & another (Environment and Land Case Civil Suit 423 of 2008) [2024] KEELC 5273 (KLR)", Case Analysis (2024). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/5273/eng@2024-07-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.