Railways Housing Cooperative Society Limited v Thuo t/a Cossy Homes Commercial Agency Limited & another

2. b. Whether the Plainti was entitled to a commission of 5% of each sale and a further 3% of the total sales for the costs of marketing, advertisement and transport expenses under their agreement. c. Whether the Plainti sold all the plots on behalf of the Defendants in the agency agreement. d. Whether the Defendants owe the Plainti a total of Kshs. 6,761,505/= in unpaid commissions. e. Whether the Plainti is in possession of Kshs. 9,088,000/= on account of 55 titles paid for by the individual titles but not yet transmitted to the Defendants. f. Whether the Plainti owes the Defendants Kshs. 2,326,495/= being the dierence between the unpaid commission by the Defendants and the purchase price paid to the Plainti. g. Whether the Defendants submitted 10 titles to the Plainti of the 55 titles and whether the Defendants ought to submit 45 original titles together will all completion documents thereof to the Plainti. h. Whether the Defendants have failed and/or refused to deliver to the Plainti 45 titles together with all completion documents. i. Whether the Plainti has demanded from the Defendants the submission of the 45 original titles and the relevant completion documents. j. Whether the Defendants should be ordered to submit the 45 original titles and the completion documents thereof as tabulated above? Subsequently, they sought the following orders; i. That the Defendants be ordered to submit to the Plainti titles to the 45 plots in Kitengela L.R No. 42702 (24 plots), Kitengela L.R No. 87277 (4 plots), Kitengela L.R No.75182 (13 plots), and Kitengela L.R No.89846 (24 plots) as per table shared; ii. That the Defendants be condemned to pay costs arising therein. 3. The summons are supported by the Adavit of Francis Waweru Kamau, the Chairman of the Applicant. He deposed that the Applicant had been engaged in an agency relationship with the Defendants, whereof the Applicant would sell plots to the members of the public on behalf of the Defendants and had so far undertaken 16 projects on behalf of the Defendants. Further that the responsibility of the Applicant would be to procure purchasers whereas the Defendants would enter into land sale agreements with the individual purchasers. That upon execution of sale agreements, the Defendants were to release the original title documents together with completion documents to the Plainti for purposes of registration of the transfers in favour of the individual purchasers. 4. He stated that pursuant to an audit conducted in 2019, he prepared a report dated 13th August 2019, which indicated that the Plainti had eected sales worth Kshs. 128,254,886/= which entitled the Plainti to retain Kshs.6,761,505/= in regard to unpaid commissions. He also stated that he was in possession of Kshs. 9,088,000/= on account of 45 titles that are still held by the Defendants with only 10 of the titles released to the Plainti. 5. It was his averment that he had requested the Defendants to release the remaining 45 titles and all completion documents in exchange for his transmission of Kshs. 2,326,495/= to the Defendants, but that the Defendants refused to honor their obligation. He stated that there had been several meetings https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20850/eng@2023-10-18 2

page 2 of 6

to arbitrate the matter between the parties at the Sub-County Co-operatives Oce but the dispute was not resolved. 6. The Plaintis/Applicants attached copies of the agency agreements dated 9th January 2011, 16th December 2015, and 14th October 2016; report dated 13th August 2019; and demand letter dated 29th October 2019. 7. The Defendants did not enter appearance or le any response to the summons, despite service. 8. On 22nd March 2022, the court directed that the matter proceeds by way of viva voce evidence. Plainti ’s Evidence 9. PW1 was Francis Waweru Kamau, the chairman of the Plainti, who testied on 1st February 2023. He adopted contents of his witness statement dated 4th April 2023 and his supporting adavit dated 23rd April 2021 as his evidence in chief. It was his testimony that the Plainti was engaged in an agency relationship with the Defendants wherein the Plainti would sell the Defendants’ plots to the public on the Defendants’ behalf. He stated that they had completed over 16 projects, some being in Kitengela and Kajiado. He stated that under the agency agreement, agreements for sale were entered into between the Defendants and the individual purchasers and that the Defendants were obligated to release to the Plainti completion documents and the original title documents for the registration of transfers in favor of the individual purchasers. 10. He further stated that sometime in August 2019, the management board of the Plainti obtained audit of the sales with a view to ascertaining the status of the projects thereof and prepared a report dated 13th August 2019. It was his testimony that the agency engagement entered into between the parties provided for a commission of 5% of the purchase price per plot to the Plainti and a further 3% of the total sales to cover costs of advertisement, marketing and related expenses. 11. PW1 further testied that the Plainti eected on behalf of the Defendants sales worth Kshs. 128,254,886/= out of which the Plainti was entitled to retain Kshs. 6,761,505/= in unpaid commissions. He also stated that the Plainti was in possession of Kshs. 9,088,000/= on account of 55 titles paid for by the purchasers but not transmitted to the Defendants herein. 12. He also stated that out of the 55 titles held by the Defendants, 10 titles were submitted to the Plainti while 45 titles are still being held by the Defendants. It was his testimony that the Plainti demanded that it transmits Kshs. 2,326,495/= to the Defendants and in return the Defendants submit the 45 original remaining titles and all the other completion documents thereof to the Plainti which demand the Defendants have and continue to refuse to honor. 13. He stated that there had been several meetings arbitrated at the oces of the Sub-County Cooperatives Ocer with the Defendants but the matter was not resolved. He produced the following documents in support of the Plainti’s case; copies of agency agreements dated 9th January 2011, 16th December 2015 and 14th October 2016; a copy of the report dated 13th August 2019; and a copy of the demand letter dated 29th October 2019. 14. That marked the close of the Plainti’s case. On 14th February 2023, the Plainti led submissions in support of their case. Plainti ’s Submissions 15. Counsel for the Plainti submitted that the evidence shown in the agency agreements produced, show that the Defendants engaged the Plaintis to sell their plots, and that after the purchase, the Defendants https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20850/eng@2023-10-18 3

page 3 of 6

were obligated to release the original titles and completion documents for registration of transfers in favor of individual purchasers. They argued that it was evident that the Plainti was entitled to 5% commission on each sale and a further 3% of the total sales. It was their argument that the contracts entered into were valid as they had met all essential elements of a contract, and that the parties intended a meeting of minds. They buttressed their arguments by citing the case of Stancom Sacco Society Ltd v Alliance One Tobacco Limited [2018] eKLR, for the proposition that to create a contract, there must be a common intention. 16. On the issue of titles, counsel submitted that the evidence adduced conrmed that only 10 titles were submitted and that the Defendants have been unresponsive to eorts or proposals to reach an amicable settlement on the release of 45 original titles to the Plainti. They also submitted that no iota of evidence had been tabled to controvert the evidence by the Plainti. On this point, they cited the case of Gateway Insurance Co. Ltd vs Jamila Suleiman & Another [2018] eKLR. 17. On whether the Plainti is entitled to an order of specic performance, they argued that the agency agreements required the Defendants to forward the titles and that an award of damages could not be adequate since the purchasers already completed payment of the parcels of land. They relied on the case of Reliable Electrical Engineers Ltd vs Mantrac Kenya Limited (2006) eKLR to argue that specic performance is based on the existence of a valid contract. 18. In conclusion, they submitted that the Plainti had proved their case to the required standard of balance of probability and prayed for the court’s discretion to grant the prayers sought with costs. Analysis And Determination 19. The court has carefully considered the pleadings, evidence and submissions. The issues that arise for determination are; a. Whether there is a valid contract between the Plainti and the Defendants; and b. Whether the Plainti is entitled to orders sought of specic performance. 20. Section 2 of the Law of Contract Act Cap 23 Laws of Kenya provides that the English law on contract and common law shall apply in Kenya as modied by equity. Under common law the elements of a valid contract are oer, acceptance, intention for a contractual relationship and consideration. The Plainti pleaded and testied that they entered into an agency agreement with the Defendants. He produced three agreements to that eect. Having considered the agreements produced, and which contained similar terms, it is clear that the Defendant authorized the Plainti to sell on his behalf several plots at a commission of 5% of the consideration and another 3% to cover the costs of advertisement, transport and related costs. That agreement was signed by both the Plainti and the Defendants. In view of the above evidence, I am satised that the Plainti and the Defendants entered into valid contracts. 21. Specic performance is an equitable remedy granted where there exists a valid contract and where damages would be inadequate in the circumstances of the case. 22. In the case of Gharib Suleman Gharib v Abdulrahman Mohamed Agil LLR No. 750 (CAK) Civil Appeal No. 112 of 1998 the court held that: The jurisdiction to order specic performance is based on the existence of a valid and enforceable contract and being an equitable relief, such relief is more often than not granted where the party seeking it cannot obtain sucient remedy by an award of damages, the focus being whether or not specic performance will do more perfect and complete justice than an award of damages. https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20850/eng@2023-10-18 4

page 4 of 6

23. Consideration for specic performance was clearly laid out in the case of Reliable Electrical Engineers Ltd v. Mantrac Kenya Limited (2006) eKLR where the court stated as follows; 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 invalid or enforceable. Even when a contract is valid and enforceable, specic performance will however not be ordered where there is an adequate alternative remedy. In this respect damages are considered to be an adequate alternative remedy where the claimant can readily get the equivalent of what he contracted for from another source. Even when damages are not an adequate remedy, specic performance may still be refused on the ground of undue inuence or where it will cause severe hardship to the Defendant. 24. In the instant case, the Plainti stated that they had been engaged as the sole sales agent for the Defendants at a commission of 5% with an additional 3% to cover advertisement and other expenses. The Plainti produced three agreements to support that allegation. No evidence was produced by the Defendant who failed to enter appearance and le defence, despite service. 25. This court is alive to the fact that even where a suit is undefended, the burden of proof in a suit still rests with the Plainti as provided for in section 107 of the Evidence Act. In the case of Mercy Wanjiru Nyaga v Josphat Kiura & Another [2020] eKLR, the court held that; [p.20] In my opinion, a suit cannot be allowed as prayed just by the mere fact that it was not opposed. The Plainti in a suit has a duty to tender sucient evidence in support of his case. Otherwise, the court would end up allowing even frivolous claims just because the evidence was uncontroverted. 26. From the Plainti’s evidence and considering the agreements produced by the Plainti, it is clear that they were engaged by the Defendants to sell plots to the public on behalf of the Defendants which they did, at 5% and 3% of the consideration to cover commission and the cost of advertisement and attendant costs respectively. The Plainti sought specic performance by asking that the Defendants do release 45 original titles with attendant completion documents, contending that the Defendants were bound under the contracts produced to release those titles. 27. I have considered the agency agreements dated 9th January 2011, 16th December 2015 and 14th October 2016. I note that the three agreements are similar in all material aspects. Essentially the agreements granted the Plainti the power to sell the Defendants’ plots on behalf of the Defendants. The consideration was 5% of the purchase price as commission and 3% of the total sales to meet incurred expenses of advertisement, marketing, transport and other related expenses. Under the contracts, the Plainti was obligated, on completion of payment of the purchase price, in the company of the surveyor to show the purchasers their boundaries and beacons and see to it that the surveyor signs the beacons indemnity certicates. 28. Having considered the three contracts, I note that there is no clause on release of any titles by the Defendants to the Plainti. This therefore means that there is no evidence that the Defendants were obligated to release original title documents and completion documents to the Plainti whose role was under the contracts herein, limited to procuring purchasers and showing them their respective properties and boundaries. The Plainti’s evidence is that they have received a sum of Kshs. 2,326,495/ = over and above that which they are entitled to. https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20850/eng@2023-10-18 5

page 5 of 6

29. In the premises, I am not persuaded that there is material before court to demonstrate breach of contract on the part of the Defendants in the manner described by the Plainti or at all. The upshot is that the Plainti has failed to prove their case on a balance of probabilities and I hereby dismiss the same with no order as to costs. 30. It is so ordered. DATED, SIGNED AND DELIVERED AT MACHAKOS VIRTUALLY THIS 18TH DAY OF OCTOBER, 2023 THROUGH MICROSOFT TEAMS VIDEO CONFERENCING PLATFORM A. NYUKURI JUDGE https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/20850/eng@2023-10-18 6

page 6 of 6