Kimathi & 5 others v Teleposta Pension Scheme Registered Trustees

3. The defendant owned houses which were on property known as Nairobi block 34/160. There was an arrangement between the plaintis and the defendant whereby, the defendant was to sell the housing units to the employees of Telkom Kenya Limited including the plaintis. 4. The agreements appear not to have been honored prompting the plaintis to le various suits against the defendant. In case no. 150 of 2008, the claimant – Ann Kimathi was buying house unit no. 19 vide a sale agreement dated 15th November 2004. In case no. 151 of 2008, the claimant Susan Mwaluda was buying house unit no. 7 vide an agreement dated 16th March 2005; for case no. 152 of 2008, the claimant Emmy Chepkemoi was buying house unit no 35 vide a sale agreement dated 26.11. 2005; for case no 153 of 2008, the claimant Hellen Wesutsa was buying house unit no. 37 vide a sale agreement dated 26th November 2005; for case no 154 of 2008, the claimant Mary Jepkoech Chepyator was buying house no. 9 vide an agreement dated 15.11.2004, while in case no 529 of 2009, the claimant Caroline Mumbi Njega was buying house no. 8 vide a sale agreement dated 17th may 2006. 5. In their pleadings, the plaintis seek the following orders; a) An injunction does issue restraining the Defendant/Respondent by itself, its servants, agents, assigns or otherwise howsoever from oering for sale, selling, transferring alienating or in any way disposing of the suit properties situate in Parklands, Nairobi to a person other than the Applicants and from evicting or dispossessing the Applicants herein therefrom. b. A mandatory Injunction does issue compelling the Defendant to release to the Plaintis title to the suit properties situate in Parklands, Nairobi, under an appropriate professional undertaking from the Plaintis’ Advocates. b. An order of specic performance does issue compelling the Defendant to perform its obligations under the suit Sale Agreements and to sell, transfer and issue title to all the suit properties situate in Parklands, Nairobi to the Plaintis. b. Costs and interests.” 6. The defendant led various statements of defenses in respect of all the 6 suits. 7. For the better part of the lifespan of these suits (until year 2021), litigation generally was anchored on the prosecution of various applications. On 29th September 2010, Judge Sitati (now retired) delivered a ruling whereby she dismissed the application for injunction lodged by the plainti made in case no. 153 of 2008. That ruling was to apply in the other les. On 9th September 2011, another ruling was delivered by Judge H.M. Okwengu (as she then was) where she declined to review the orders of Judge Sitati. An appeal was thereafter lodged against the ruling of Judge Okwengu in the Court of Appeal case no. 254 of 2011. Apparently the case is still active. Still another ruling was delivered on 4.5.2012 where Judge R. Ougo dismissed the application dated 16.11.2011 (led by the plainti in case No. 150 of 2008) on the basis that it was an application for injunction of which that issue had previously been dealt with and the matter was at the Court of Appeal. 8. Eventually the matter took o on 25th of January 2021 with two witnesses testifying on the side of the plaintis and two witnesses testifying on the side of the defendant. Case management 9. On 28th September 2017the court gave pretrial directions re-designating the parties in the consolidated suits as follows: 1. Ann Kimathi -1st plainti https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 2

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2. Susan Mwalunda -2nd plainti 3. Emmy Chepkemoi -3rd plainti 4. Hellen Wesutsa -4th plainti 5. Mary Chepchoech Chepyator- 5th plainti 6. Caroline Mumbi Njenga- 6th plainti 10. On the aforementioned date, each plainti was directed to le and serve a bound paginated Trial Bundle with index containing pleadings, witness statements and documentary evidence within 30 days. Not only was there none compliance with the timelines given, but even when the aforementioned Trial Bundles were led, the plaintis carried out the tasks haphazardly. 11. It is noted that by then, the 1st and 4th plaintis were being represented by one rm of advocates. Their trial bundle dated 24th February 2019 does not contain their pleadings while their witness statements have been led as stand alone documents. For the 2nd, 3rd, 5th and 6th plaintis, they were being represented by another rm of advocates. Their trial bundle led in court on 21.2.2019 and which they were relying upon contains the documents pleadings and witness statements of 2nd, 5th and 6th plaintis only. It is noted that the pleadings of the said plaintis do not bear case numbers!. The documents of the 3rd plainti (Emmy Bunei) were led in a separate bundle on 25th February 2019 of which the plaint is missing from the said bundle. 12. Despite the aforementioned shortcomings the court has endeavored to trace the missing documents particularly the pleadings from the various les. 13. On 25th January 2021 the parties entered into a consent in terms of the prosecution of the case in the following manner: 14. 1. . Ann Kimathi (1st plainti) and Mary Chepkoech Chepyator (5th plainti) shall testify and produce documents on behalf of all the other plaintis. 2. The Defendant will call one witness whose testimony will apply to all the consolidated causes.” The defendants made an application dated 12th march 2021 seeking to reopen the case to call another witness which application was allowed vide a ruling delivered on 4th October 2021. Joinder 15. A perusal of the proceedings of 17.6.2015 reveals that an application dated 31.3.2015 led by the 3rd Plainti Emmy Bunei (case no. 152 of 2008) was marked as withdrawn. The said application was seeking orders to consolidate the current suits with HCCC. NO. 290 OF 2011. Though the said High Court case le is not amongst the les in this suit, I have stumbled upon a plaint indicating that in HCCC 290 OF 2011, parties are Emmy Bunei vs. Christine Wangari Munga and David Mwaura in which the plainti (Emmy) was challenging the demand for rent by the defendants. 16. The same plainti (Emmy) was to le another application dated 30th may 2017 seeking orders that: Christine Wangari Munga And David Mwaura be joined as 2nd and 3rd defendants in the current suit(s), that the two defendants be ordered to le their defense to the plainti’s claim, and that the sum of kshs. 1,500,000 held at chase bank in the joint names of M/S Mitei and associates advocates and Michael Daudi and associates advocates should not be withdrawn till the determination of the suit. https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 3

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17. On 27th January 2020 the aforementioned application was allowed in terms of prayer no. 1 and 2 (joinder and the ling of defence by the new defendants). There is no evidence to indicate that the said prayers were eectuated, in that the 2 new parties were never served with the aforementioned orders of joinder and ling of defences. There is also no evidence to indicate that the said parties were served with the pleadings in case no. 152 of 2008. In terms of the provisions of Order 5 of the Civil Procedure Rules, I nd that the evidence to invite the new defendants to defend themselves in this suit is missing. 18. It is not lost to this court that the parties entered into the consent of 25th January 2021 where all the parties were mute on the status of the purported new defendants. 19. Further I nd that the plaint led by Emmy Bunei in case no. 152 of 2008 does not contain any claim against the two new parties. There is no evidence to indicate that the said plaint was ever amended. In light of the foregoing analysis, I nd that any claim against the purported two new parties cannot stand, the same is hereby Dismissed. Evidence 20. The case of the plaintis was advanced by the 1st and the 5th plaintis. PW1 Anne Karimi Kimathi testied and adopted her witness statement dated 25th February 2019 as her evidence. In addition, she also adopted the witness statements of the 4th plainti (Hellen Manyonge Wesutsa) dated 25th February 2019 and that of Alfayo Keya dated 24.2.2019 as their evidence. In addition, PW1 produced the documents in their bundle led on 25th February 2019 as Exhibits 1 - 10. 21. In her recorded statement pw1 identies herself as a former employee of Telkom and that by virtual of her employment, she is a member of Telposta Pension Scheme Registered Trustees. She contends that the plaintis were occupying the houses situated in parcel block 34/160 in Parklands Nairobi as tenants of the defendant, of which she had moved into her house in 1999. 22. That by a letter dated 19 March 2002, the defendant informed them of their intention to sell the houses to the tenants. On 14th May 2002, their employer Telkom Kenya Limited wrote to all occupants of the suit premises indicating that they were negotiating with the defendant to sell the suit premises to the occupants of the various units. The purchase price was set at 1.5 million of which the tenants were to pay 50% thereof and the balance was to be spread within a period of 15 months. 23. The agreement did not materialize as Telkom Kenya Limited, the employer of the plaintis pulled out of the arrangement, and also embarked on retrenching the employees without their knowledge. 24. Thereafter, the defendant entered into other agreements with the plaintis in which the houses in question were being sold at a price of kshs. 1.8 million. The terms of the agreement were that 10% deposit being ksh. 180, 000 was to be paid on execution while the balance thereof of ksh 1,620 000 was to be paid on completion. Pw1 paid the deposit but she was unable to get nancing for the balance. She then joined and started saving with Kenya union of saving and credit corporation limited (KUSCCO), where she was promised a loan to nance the balance. The defendant however declined to release the title document or to cooperate with KUSCCO and went on to frustrate PW1’s eorts to complete the transactions. 25. Pw1 contends that to date, the defendant has never shown any willingness to be bound by the contract agreement for sale. 26. She further states that although the completion date in the agreement was indicated as 90 days, the defendant never indicated its readiness for completion in the 90th day. What more, the defendant https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 4

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continued to receive balances of the purchase price from her fellow colleagues of which 25 sales out of 32 were completed. 27. Pw1 added that to date, she has been paying rent beyond the completion date, of which she had paid approximately ksh. 2,125,000 as at February 2019. The defendant still holds her deposit paid on 24th November 2004. 28. The contents of the statements of Hellen Manyonge are similar to those of pw1, save that her unit is no. 37 and her agreement was made on 26th November 2005. She also contends that she paid a sum of kshs. 200,000 as a deposit, and that by February 2019, she had paid a proximately ksh 1,975,000. 29. Further, the contents of the statement of Alfayo Keya are again more or less similar to the statements of Ann Kimathi and Hellen Manyonge. The points of departure are that Alfayo is not a plainti, he is a former employee of Telkom Kenya Limited, that he entered into an agreement with the defendant on or about 31st December 2004 which agreement was similar to that of the other employees of Telkom Kenya Limited. He contends that he is one of those people who did not pay the purchase price within 90 days as stipulated in the agreement. Nevertheless, he paid the balance in installments with the last batch being paid on March 2007 for ksh. 600,0000 and the housing unit was transferred to him. 30. The case of the 2nd, 3rd, 5th and 6th plainti was advanced by Jepkoech Chepyator (5th plainti). She adopted her witness statement dated 5th February 2019 as their evidence. She also produced the 17 documents in their bundle as their exhibits. Further, Pw2 adopted the witness statements of her colleagues namely: Susan Mwaluda (2nd plainti), Emmy Bunei (3rd plainti) and Caroline Mumbi Njega (6th plainti) as their evidence. 31. She avers that she was renting unit no. 9 from the defendant and this is the house she also agreed to buy vide her agreement dated 7th October 2005. Again the evidence is more or less similar to that of PW1. She however added that the defendant discriminated them by accepting payments from persons who are not employees of Telkom Kenya and Postal Corporation of Kenya. Further, on 16th November 2016, the defendant through one of his agents caused her household goods to be auctioned to satisfy the alleged rent arrears. 32. The contents of the statement of Susan Mwaluda (2nd plainti) is again similar to that of PW2. She was buying unit no. 7 and her sale agreement is dated 15th March 2005. She avers that the auction of her household property occurred on 6th November 2011. 33. The contents of the witness statement of one Caroline Mumbi Njenga (6th plainti) is again similar to that of pw2. She was buying unit no. 8 as per the agreement of 17 may 2006. Equally her household property were auctioned on 6th December 2011. 34. For Emmy Chepkemoi Bunei, the contents of her statement indicate that she was to buy house no. 35 and she paid the defendant a deposit of ksh. 430,000. She resided in the same house from 1995 until July 2022 when she was evicted on the basis that the house was paid for by Christine and Mwaura. She contends that the defendants acted in a discriminatory manner by allowing some of the employees to purchase the properties beyond the time given, yet they were not evited. 35. Dw1 is peter Kipyegon Rotich who identied himself as the trustee secretary/administrator of the defendant. He adopted his 6 witness statements led on 31st October 2019 as his evidence in all the consolidated 6 les. He also produced the 14 documents in their bundle as exhibits. He contends that indeed the board of trustees did make a decision to sell the suit properties, of which the board agreed with Telkom Kenya Limited that willing scheme members who were tenants were to get rst priorities in purchasing the houses. Vide the various sale agreements the defendant oered to sell the houses at https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 5

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the sum of kshs. 1.8 million of which 10 % of the purchase price was to be paid upon execution of the agreement. The balance thereof was to be paid to the vendor upon completion of which the date of completion was pegged at 90 days. 36. That in fragrant breach of the agreements, the plaintis did not pay the purchase price within 90 days prompting the defendants to issue notices to the plaintis. Still there was no compliance with the said notices, thus the defendant was entitled to sell the suit premises to third parties. 37. Dw1 further states that the purported undertaking given by KUSCCO’s advocates to nance the plaintis with the balance of the purchase price was issued almost 2 years after the expiry of the completion period without any explanation and was therefore unacceptable. 38. Dw2 Esther Onsembe testied that she is an advocate of the High Court of Kenya. She adopted her witness statement dated 8th March 2021 as her evidence. She avers that between year 2004 and 2007 she worked in the rm of Kale Maina & company advocates who acted on behalf of the defendant and the plaintis in the same transaction of the suit premises. That the said rm of advocates is the one which prepared the various sale agreements which provided that completion was to be 90 days. 39. Dw2 avers that the plaintis did not fully comply with the terms of the various sale agreements and were subsequently issued with completion notices which she availed as exhibits. She contends that the plaintis personally collected the notices from the aforementioned rm of the advocates. 40. Dw2 also contends that unit no. 35 which had been oered to Emmy Chepkemoi Bunei (3rd plainti) has since been transferred to a 3rd party that is Christine Wangari Munga and the title to that eect has been issued. Submissions 41. The submissions of the 1st and 4th plaintis are dated 13th February 2023 where they raise the following two issues; 1. Whether the plaintis are entitled to an order of specic performance. 2. Whether the defendants indicated readiness to complete the transaction. 42. On the issue of specic performance, it was submitted that the 1st and 4th plaintis had entered into sale agreements with the defendant vide the agreement dated 15th November 2004 and 26th November 2005. That the said agreements were in writing and were duly executed by the parties. Thus the two agreements were valid contracts which were capable of being enforced by the parties. To this end, the cases of Bernard Nganga Ndirangu versus Samuel Wainaina Tiras [2019] eKLR and Nelson Kivuvani versus Yuda Komora & Another Nairobi HCCC NO. 956 of 1991 were relied upon. 43. It was further submitted that none of the parties to the contract had cited any defect, illegality or mistake in the said contract that could have crippled or invalidated the same. These plaintis further argue that they have always occupied and paid rent upon their respective housing units, thus the same have sentimental value to them hence they cannot be compensated by any other remedy except an order of specic performance. 44. On the issue of completion date it was argued that the defendant has not availed any evidence to show that they furnished the plaintis with the completion documents when they were requested, and they have not shown proof of service of the completion notice to the plaintis. To this end, these plaintis refute the claim that they were ever served with the completion notices mentioned by Dw2, Esther Onsembe dated 20th and 21st January 2006. On this point reference was made to the cases of Olive https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 6

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Mweya Wachira and David Duhiu Wahome (as administrators of John Wahome Wachira – deceased) versus Amboseli Court Limited [2021] eKLR. 45. Finally, the plaintis contend that their 10% deposit given to the defendant was never refunded back. They also contend that they were discriminated upon by the defendant thus they deserve the orders sought. 46. The submissions of 2nd, 3rd, 5th and 6th plaintis are dated 15th November 2022. They dwell on the issue of completion, arguing that they were never issued with completion documents as claimed by the defendant, yet at all material times they had complied with the terms of the agreement by paying the 10% deposit and securing a nancier to pay the balance of the purchase price. To this end, the case of Olive Mweya Wachira and David Nduhiu Wahome (supra) was cited. The plaintis are also demanding for costs in tandem with the case of Cecilia Karuru Ngayu versus Barclays Bank of Kenya and another [2016] eKLR. 47. The submissions of the defendant are dated 22nd February 2023 where they have framed the following issues for determination; a. Whether there was a breach of the term of the sale agreements by either party. b. Whether the plaintis are entitled to the orders sought and who should bear the cost of the suit. 48. On the issue of breach, it was submitted that the plaintis breached the terms of the sale agreements as they never completed the sale, since the balance of the purchase price was not paid within the stipulated 90 days. It was further submitted that the other undertakings issued by KUSCCO to the plaintis came two years from the date of the agreements. To this end, the defendants argue that the court cannot rewrite contracts for the parties and has relied on the cases of Rufale –vs- Umon Manufacturing Co. (Ramsboltom) (1918) L.R IKB 592, Scrutton L.J., and Attorney General of Belize et al –vs- Belize Telecom Ltd & Another (2009), IWLR 1980. 49. The defendants aver that they issued completion notices in accordance with the law society of Kenya conditions of sale whose notices were availed by DW2; pointing out that the advocate for the plainti admitted that the said notices were served. On this point, reference was made to the cases of Christopher Kurutyon Lonyala & 27 others; Ekitale Ekal Lodio & 12 others (Interested Parties) vsCabinet Secretary Ministry of Lands and Settlement & 10 others and David George Bell & another – vs- Ashutosh Bhasin [2009] eKLR. 50. On whether the plaintis are entitled to the prayers sought, it was submitted that prayer A is spent while prayer B & C (specic performance or mandatory injunction) are remedies which are equitable in nature and the plaintis have come to court with unclean hands. It was submitted that the plaintis failed to pay the full purchase price, hence the defendant was entitled to repudiate the agreement. In any event the agreements were executed almost 20 years ago and a lot has happened since then. The defendant therefore urges the court to strike out the claims with costs. 51. The defendant has also relied on the cases of Ole Meikoki –vs- Ole Sirere [1981] KLR 593, Kubal Properties Development Limited –vs- Maloo & Others [1990-1994] E.A, and Amina Abdulkadir Hawa – Vs- Rabinder Nath Anand & another [2012] eKLR. Determination 52. It is common ground that the plaintis were employees of Telkom Kenya Limited, of which they became members of the defendant. Further, there is no dispute that the defendant had oered for sale the house units situated on the suit premises to the plaintis and their colleagues. To this end, the https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 7

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parties had entered into various sale agreements, but the suit properties were not transferred to them. It follows that there was a breach of the sale agreements. 53. I nd that the issues falling for determination are; 1. Who breached the agreements. 2. What relieves are available to the plaintis. 54. It is apparent that all the sale agreements between the plaintis and the defendants are more or less similar. The purchase price for each house unit was Ksh. 1,800 000 of which a purchaser was required to pay a deposit of Ksh.10 % thereof. The balance of the purchase price was to be paid on completion, which was pegged at 90 days. On or before the completion date, the vendor was to release the completion documents to the advocates for the purchaser. 55. It has been held over and over again that courts cannot re-write contracts for parties, and cannot deviate from the intention of the parties to a contract. The sacred duty of the court is to enforce and/or legitimize what the parties have agreed between themselves as was held in National Bank of Kenya Ltd V Pipeplastic Samkolit (K) Ltd and Another (2002) Ea 503. The Court of Appeal in the case of Five Forty Aviation Limited v Erwan Lanoe [2019] eKLR cited in the case of Pius Kimaiyo Langat versus Co-operative Bank of Kenya Ltd [2017] eKLR stated that; “ We are alive to the hallowed legal maxim that it is not the business of Courts to rewrite contracts between parties. They are bound by the terms of their contracts, unless coercion, fraud or undue inuence are pleaded and proved.” 56. The Court of Appeal in the case of Mwangi v Kiiru [1987] eKLR made reference to Lord Diplock in the case of Photo Production v Securicor Ltd (1980) AC 827 at page 848 in which it was stated that: “ …Every failure to perform a primary obligation is a breach of contract…” 57. None of the plaintis paid the balance of the purchase price within the stipulated time in the agreement. The plaintis contend that in further compliance with the agreement, and in order to get the balance of sh.1 620 000, they acquired a nancier known as Kenya Union of Savings & Credit Cooperative Limited (KUSCCO), but the defendant refused to release the completion documents, thereby frustrating the contract. 58. A perusal of the various sale agreements reveals that there was no provision on how the purchasers were to get nances to enable them purchase the housing units. Indeed Pw2 conrmed during cross examination that the Sale Agreements did not contain a provision for nancing by KUSCCO. The letters of oer of sh. 1 620 000 authored by KUSCCO were addressed to the plaintis and there is no indication that the defendant accepted the terms set out there in. In that regard, the engagement between the plaintis and KUSCCO was between the two parties, of which the defendant had no obligation to comply with the same. In any event, it is worthy to note that the oers made by KUSCCO came in year 2007, by then two or so years had lapsed from the time the various agreements were made in years 2004-5. 59. It is noted in the various agreements that that the parties (vendor and purchaser) were having joint advocate for the transaction. The plaintis cannot therefore advance an argument that the completion documents had not been availed by the defendant. https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 8

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60. I nd that there was no evidence of Coercion, Fraud or Undue inuence, in the sale agreements, rather, it is the plaintis who failed to make good the consideration amounting to Sh.1 620 000 as per the contract. In that regard, the breach was occasioned by the plaintis. 61. An issue has been raised as to whether the defendant had the mandate to sell the properties to third parties. In the case of Brook Villas Estate Limited v Duncan Macharia Gatu & 16 others [2018] eKLR, the court stated that; “ Where a contract is breached, the innocent party has among other rights, a right of rescission”. 62. Thus in the suit at hand, the defendant had every right to call o the agreements. It is noted that the defendant is a pension scheme where the contributing members were Telkom, Postal Corporation and CCK. Such a scheme is meant to cushion the members in their sunset years (after retirement) in terms of nancial support. In that regard, the scheme had a right to sell properties to 3rd parties. 63. Further, the fact that one Alfayo Keya apparently paid his balance of the purchase price after the completion date does not in any way vary the contract between the plaintis and the defendant. It is perhaps a moral issue if indeed the defendant was accepting monies from some of the purchasers while rejecting others, but the said issue cannot be elevated to a legal obligation. After all, it is noted that any arrangement done by the defendant with any of the buyers after the completion period amounted to a separate individual transaction. 64. What relief is available to the plaintis?. Other than injunctive orders, the other claim made by the plaintis is that of “specic performance”. In the case of Solomon Ndegwa Kuria v Peter Nditu Gitau [2019] Eklr, the court cited the case of Reliable Electrical Engineers Ltd…..Vs….Mantrac Kenya Limited (2006) eKLR, where it was stated that; “ Specic performance like any other equitable remedy is discretionary and the Court will only grant it on well laid principles. The Jurisdiction of specic performance is based on the existence of a valid enforceable contract. It will not be ordered if the contract suers from some defect, such as failure to comply with the formal requirements or mistake or illegality, which makes the contract….”. 65. In the suit at hand, the contract is no longer eective due to none compliance on the part of the plaintis. The said plaintis are therefore not entitled to an order of specic performance. 66. The plaintis had however paid deposits for their house units. The same were not refunded. But again, there is no evidence that the plaintis ever made a demand for the same. Even in their pleadings, the plaintis have not requested for the refund. Noting that the case is rather old and that any subsequent suits may be caught up by the statute of limitation, and in order to bring some semblance of nality, this court proceeds to give the following orders; 1. All the six suits led by the plaintis are hereby dismissed. 2. The defendant is directed to refund back the deposits paid by the plaintis. 3. Each party is to bear their own costs of the suits. DATED, SIGNED AND DELIVERED AT NAIROBI THIS 11TH DAY OF MAY, 2023 THROUGH MICROSOFT TEAMS. LUCY N. MBUGUA https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 9

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JUDGE In the presence of:Arori for 2nd, 3rd, 5th and 6th Plaintis M/s Muthama holding brief for Mr. Munene for 1st & 4th Plaintis Mr. Maina holding brief for Mr. Oketch for Defendant Court assistant: Eddel https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/17474/eng@2023-05-11 10

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