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ELCPartially AllowedNot stated in the judgment (Plaint dated 7th July 2022, amended 6th November 2023)· [2025] KEELC 1310 (KLR)

Lutomia v Kings Pride Properties Limited & another (Environment and Land Case Civil Suit E228 of 2022) [2025] KEELC 1310 (KLR)

Environment and Land Court
13 March 2025
2,428 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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A Kenyan court ordered apartment developers to refund a buyer KES 9.5 million after secretly mortgaging the property, confirming buyers can recover full compensation.

What this practically means

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Executive summary

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The Plaintiff purchased Unit 2 on the 2nd Floor of Capital View Apartments on LR Nairobi/Block/93/1488 off-plan from the 2nd Defendant acting for the 1st Defendant for KES 9,500,000, paying in instalments between September 2015 and February 2018, executing a sale agreement warranting the unit free of encumbrances, paying KES 508,500 for title processing, and taking possession. He later discovered in March 2020 that the 1st Defendant had in April 2016 charged the entire property to Eco Bank for a KES 90,800,000 facility, and the unit was auctioned on 7th October 2022 after an earlier injunction application failed; his tenant was redirected to pay rent to the bank. The suit proceeded undefended as the 1st and 2nd Defendants filed no defence. The court found the Plaintiff's uncontradicted evidence established full payment, possession, and breach by misrepresentation, and lamented the recurring exploitation of off-plan investors. Granting all prayers risked double compensation, so the court granted the specific heads: refund of the purchase price and stamp duty/legal fees, lost rental income of KES 990,000 for May 2022 to October 2023, and general damages quantified as additional lost rental income of KES 960,000 (November 2023 to March 2025 at KES 60,000 monthly), plus reimbursement of the bank's taxed costs of KES 502,750, with interest at court rates on specified heads and costs of the suit, all against the 1st and 2nd Defendants jointly and severally.

Key legal issues

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01

Whether the Defendants breached the sale agreement by selling the unit as free of encumbrances while it was charged to a bank

Holding

Yes - the Plaintiff paid the full purchase price, was put in possession, and the unit was subsequently auctioned because the Defendants had secretly charged the land to Eco Bank; this constituted breach by misrepresentation

Reasoning

The suit proceeded undefended since no statement of defence was filed. The Plaintiff's evidence of the offer letter, full payment in instalments, the sale agreement warranting the unit free of encumbrances, payment of Kshs 508,500 for title processing, and the handover form was uncontradicted. The charge to Eco Bank of Kshs 90,800,000 in April 2016 predated the final payment and the unit was auctioned after the Defendants failed to service the loan.

p. 3
02

Whether the Plaintiff was entitled to general damages for breach of contract

Holding

General damages are not normally awarded for breach of contract; the court instead awarded a quantified sum premised on lost rental income

Reasoning

Relying on the Court of Appeal's decision in Kenya Tourism Development Corporation v Sundowner Lodge Ltd quoting Consolata Anyango Ouma v South Nyanza Sugar Co Ltd, damages for breach of contract must be pleaded and proved, following Hadley v Baxendale. To avoid double compensation, the court quantified general damages as additional lost rental income from November 2023 to March 2025 at KES 60,000 monthly.

p. 4

Legal principles established

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  • Damages for breach of contract are special damages that must be pleaded and proved, measured by the Hadley v Baxendale rule, not damages at large
  • Where reliefs claimed in a plaint are not denied, the court may grant them, but not in a manner that amounts to double compensation

Court orders

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  1. 1.Judgment entered for the Plaintiff against the 1st and 2nd Defendants jointly and severally
  2. 2.Refund forthwith of the full purchase price of Kshs 9,500,000 for the apartment
  3. 3.Refund of Kshs 508,500 paid as stamp duty and legal fees
  4. 4.Refund (if already paid by the Plaintiff) and/or payment to Eco Bank Ltd of KES 502,750 being costs awarded against the Plaintiff in favour of the bank
  5. 5.Payment of Kshs 990,000 as lost rental income from May 2022 till 31st October 2023
  6. 6.Payment of KES 960,000 as general damages based on loss of rental income (November 2023 to March 2025 at KES 60,000 per month)
  7. 7.Interest at court rate from date of filing of the suit on items (i) and (ii)
  8. 8.Interest on items (iii) and (iv) at court rate from date of judgment
  9. 9.Costs of the suit

Authorities

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Cases cited (9)

  • Kenya Tourism Development Corporation v Sundowner Lodge Ltd
    2018 eKLR
  • Consolata Anyango Ouma v South Nyanza Sugar Co. Ltd
    [2015] eKLR
  • Kenya Industrial Estates Ltd v Lee Enterprises Ltd
    NRB CA Civil Appeal No. 54 of 2004 [2009]eKLR
  • Kenya Breweries Ltd v Natex Distributors Ltd
    Milimani HCCC No. 704 of 2000 [2004]eKLR
  • Hadley v Baxendale
    [1854] 9. Exch. 341
  • Standard Chartered Bank Limited v Intercom Services Ltd & Others
    NRB CA Civil Appeal No. 37 of 2003 [2004]eKLR
  • Coast Bus Service Ltd v Sisco Murunga Ndanyi & 2 others
    NRB CA Civil Appeal No. 192 of 92 (UR)
  • Charles C. Sande v Kenya Co-operative Creameries Ltd
    NRB CA Civil Appeal No. 154 of 1992 (UR)
  • Peter Umbuku Muyaka v Henry Sitati Mmbasu
    [2018] eKLR
Jurisdiction invoked
Not expressly stated; original civil jurisdiction over a claim for breach of a sale agreement relating to land (amended plaint dated 6th November 2023)

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, "Lutomia v Kings Pride Properties Limited & another (Environment and Land Case Civil Suit E228 of 2022) [2025] KEELC 1310 (KLR)", Case Analysis (2025). Not stated in the judgment (Plaint dated 7th July 2022, amended 6th November 2023). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/1310/eng@2025-03-13

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