Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELCDismissedNot stated in judgment (related suits: ELC 381 of 2010; ELC No. 167 of 2007)· [2024] KEELC 5321 (KLR)

Gachoni Enterprises Limited v Nyaga & 5 others (Environment & Land Case 561 of 2015) [2024] KEELC 5321 (KLR)

Environment and Land Court
11 July 2024
AOA. Omollo
1,498 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

#

What this practically means

#

Executive summary

#
The 3rd and 6th Defendants filed identical preliminary objections dated 25th September 2017 seeking to defeat the Plaintiff's suit, which seeks declaration that an agreement for sale of L.R 7149/115 dated 19th February 2010 was a nullity, general damages for loss of bargain, or in the alternative payment of the deposit and penalty damages under the sale agreement. The objections raised four grounds: lack of jurisdiction over recovery of money claims under Article 162(2)(b) and Section 13 of the ELC Act; limitation, the alleged fraud having been discovered in July 2010; prematurity for want of a notice to complete sale; and vexatious prosecution of the suit before settling costs in ELC 381 of 2010. The 6th Defendant separately argued he could not be sued personally for the acts of the 3rd Defendant, a company. The court, per A. Omollo J, held the claim was founded on breach of a contract for sale of land, not fraud per se, and therefore fell within the ELC's jurisdiction under Section 13(1)(d), following Peter Mukunya Maloba v Denis Kusinyo. The 6-year contractual limitation period applied, rendering the 2015 suit timely. On the corporate veil question, the court held affidavit evidence was required to establish whether the 6th Defendant acted for the company, making the objection unsuitable for summary determination. Both preliminary objections were dismissed with costs to the Plaintiff.

Key legal issues

#
01

Jurisdiction of the ELC over money/damages claims

Holding

The objection fails; the claim, though seeking recovery of money, is founded on a contract for sale of land and thus falls under Section 13(1)(d) of the ELC Act and Article 162(2)(b).

Reasoning

The court read the plaint and found the cause of action arises from a contract for sale of land executed on 19th February 2010. Section 13(1)(d) confers jurisdiction over disputes relating to land and contracts granting enforceable interests in land. The court adopted the reasoning in Peter Mukunya Maloba v Denis Kusinyo that disputes revolving around sale, transfer, rescission and breach of land sale contracts fall within the ELC's jurisdiction.

p. 3
02

Limitation of actions

Holding

The suit is not time-barred; the 3-year limitation for tort/fraud does not apply because the claim is contractual and subject to a 6-year period.

Reasoning

The court found the claim not premised on fraud per se; fraud was pleaded alongside misrepresentation only to explain why the sale agreement should be declared null and void. Section 4(1)(d) of the Limitation of Actions Act gives 6 years for contract actions, so a suit filed in 2015 on a 2010 agreement was within time, and authorities on the 3-year tort period were inapplicable.

p. 3
03

Personal liability of the 6th Defendant (director)

Holding

The preliminary objection on the 6th Defendant's personal liability was not determined in his favour because affidavit evidence is needed on whether he acted for the 3rd Defendant.

Reasoning

While acknowledging the separate corporate personality doctrine (Salomon) relied on by the 6th Defendant, the court held that whether a director/shareholder may be sued alongside the company without lifting the corporate veil calls for evidence, making it unfit for determination as a pure point of law on a preliminary objection.

p. 4

Legal principles established

#
  • Disputes arising from breach of a contract for the sale of land fall within the jurisdiction of the Environment and Land Court under Section 13(1)(d) of the ELC Act, notwithstanding that the relief sought is recovery of money or damages
  • Actions premised on contract must be brought within 6 years under Section 4(1)(d) of the Limitation of Actions Act
  • Whether a director can be sued personally for a company's actions without lifting the corporate veil may require affidavit evidence and is not a pure point of law

Court orders

#
  1. 1.Both Preliminary Objections dismissed with costs to the Plaintiff

Authorities

#

Legislation

  • Constitution of Kenya, 2010Article 162(2)(b)
  • Environment and Land Court ActSection 13(1)(d), Section 13(2)
  • Limitation of Actions Act (Cap 22)Section 4(1)(d), Section 4(2)
  • Indian Transfer of Property ActSection 52
  • Land Registration Actnot specified
  • Land Actnot specified

Cases cited (6)

  • Kenya Bus Services Ltd & Another v Minister for Transport & 2 Others
    (2012) eKLR
  • Martha v BBK
    (2019) eKLR
  • Peter Mukunya Maloba v Denis Kusinyo
    (2020) eKLR
  • Koloba Enterprises Ltd v Sham Shuddin Hussein Varvani & Another
    (2014) eKLR
  • Salomon v Salomon
    (1897) A.C 22 H.L
  • Dennis Wanjohi v Peter Mburu Njihia
    (2021) EKLR
Jurisdiction invoked
Article 162(2)(b) of the Constitution and Section 13 of the Environment and Land Court Act

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Gachoni Enterprises Limited v Nyaga & 5 others (Environment & Land Case 561 of 2015) [2024] KEELC 5321 (KLR)", Case Analysis (2024). Not stated in judgment (related suits: ELC 381 of 2010; ELC No. 167 of 2007). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/5321/eng@2024-07-11

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