Emerg Investments Ltd v Kenya Farmers Limited

2. The Defendant filed a statement of defence dated 10th December, 2012, denying the allegations contained in the Plaint and only admitted to having sold the Plaintiff the suit property. PLAINTIFF’S CASE 3. PW1, Nalinkimar Meghji Shah, adopted his witness statement dated 7th November, 2012, as his evidence in chief and produced lists and bundle of documents dated 5th November, 2012, 29th August, 2016, and 3rd February, 2020, respectively. 4. PW1 testified that they entered into a sale agreement with the Defendant on 21st December 2011, for the purchase of the suit property, Nakuru Municipality Block 4/35, situated on Kenyatta Avenue at a consideration of Kshs. 124,000,000, which was paid in full. PW1 produced the sale agreement as Pex No.1. He testified that under clause 1:1- the completion date was 90 days from the date of execution of the agreement, while clause 7 was on vacant possession, which they were entitled to on 21 st March 2012 but were not granted. PW1 further stated that the suit plot was developed and had many tenants. 5. PW1 stated that they instructed their lawyer to write to the vendor to put them into possession, copied to the Defendant and Kale Maina & Bundotich Advocates and the property was then charged to National Bank. The letters are dated 12th April, 2021, 1st October, 2012 and 10th December, 2012, which he produced as PExh 2(a), 2(b) and 2(c) respectively. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 2

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6. PW1 further testified that there was a letter from Rachuonyo & Rachuonyo Advocates dated 21st August, 2012 to Kale Maina & Bundotich Advocates indicating that there was a delay in the conclusion of the matter, and the same was marked for identification as PMF1-3. 7. It was PW1’s testimony that the property was transferred in September, 2012 to the Plaintiff and was registered as the owner. He produced the transfer documents to the Plaintiff dated 24th September, 2012 as PExh.4. He stated that he was later registered on 27th September, 2012 and was issued with a Certificate of Lease the same date, but by then they had not been put into vacant possession. 8. PW1 testified that he intended to lease out the property to business people in the country and got several potential tenants who wished to rent the premises, but it was difficult as he did not have vacant possession. PW1 further stated that he had to go through court and the Tribunal to seek eviction, and to get the premises in May, 2013 but it was not the Defendant who gave him vacant possession. 9. He produced a lease dated 3rd June, 2013 with Woolmatt Ltd leasing for Kshs.600,000 per month as Pexh No.5, Certificate of Lease as Pexh No. 6, and testified that he no longer needs vacant possession or eviction, but is only claiming mesne profits from March, 2012 to the date of possession. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 3

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10. PW1 stated that Woolmatt is in the premises as tenants on Kenyatta Avenue, but lost revenue which he claims. PW1 further testified that the owners of Extreme Cars Ltd had shown interest in the suit premises, for lease and asked them to write a letter of offer, which they subsequently did and made an offer to pay Kshs.700,000 exclusive of rent per month starting 1 st November, 2012. 11. PW1 stated that by the time of the offer, they were entitled to vacant possession by the Vendor but had not got vacant possession, and stated that he would have obtained rent from Extreme Cars Limited by 2012 if he had vacant possession. PW1 testified that they finally leased the premises to Woolmatt Ltd in June 2013. He stated that they were denied possession for 14months for Kshs 600,000 rent from Woolmatt. PW1 testified that he was not aware that the Defendant had one tenant paying Kshs.130,000. 12. Upon cross-examination by counsel for the defendant, PW1 testified that the property is presently owned by Woolmatt Ltd, which they sold in January 2023, but they initially leased to them at a monthly rent of Kshs. 600,000 before the sale but it did not have any evidence of the sale. PW1 also stated that he got vacant possession in May-June 2013, through their own effort. 13. PW1 was refereed to Clause 1(a) of the agreement and stated that nothing talks of vacant possession and his lawyers who were to tender the documents in clause 6.2. It was PW1’s testimony that prior to the purchase, there was a tripartite meeting where the vendor indicated that the property was charged, NAKURU ELC NO. 56 OF 2012 – JUDGMENT 4

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hence the need for a professional undertaking to enable the Bank to release the title documents, therefore completion could not happen without the documents in clause 6.2. PW1 also stated that the purchase price was 124 million and a 10% deposit, was to be paid and a balance of Kshs.111,600,00/= was to be paid on releasing documents to the purchaser’s advocate. PW1 testified that they did not pay the purchase price within the stipulated time but paid in July, 2012, 7months from the sale agreement execution date, and admitted they were in default. 14. It was PW1’s evidence that they were not in breach as the vendor never provided the completion documents under Clause 6.2, and that the lease had expired. PW1 testified that the vendor was to renew the lease, but admitted that he did not make any allegations in the Plaint over failure to extend the lease. He relied on clause 7, which stated that it was sold with vacant possession upon payment of full balance of the purchase price. 15. According to PW1, he was not aware that there was another tenant when he bought the land and there was no formal handover, and he has never recognized the tenants as their tenants as they had to go to the Business Premises Rent Tribunal and got eviction orders where the Defendant was not a party. 16. PW1 referred to Clause 22.2 regarding negotiations and admitted that the Plaintiff neither declared a dispute nor issued a notice to KFA referring the NAKURU ELC NO. 56 OF 2012 – JUDGMENT 5

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matter to any dispute to arbitration. PW1 noted that Clause 22.2 uses the word “shall” and stated that the Plaintiff was in breach of Clause 22.2. He further stated that Clause 22.2.4 addresses the finality of an arbitration decision and argued that while only an award should be brought for enforcement, the clause did not bar the Plaintiff from approaching the court for interpretation. 17. PW1 noted that by the time this case was filed, the Plaintiff was already defending the BPRT case, and as such, the issue of vacant possession had been overtaken by events. PW1 stated that the Plaintiff now sought compensation, and that Prayers (i) and (ii) of the Plaint were overtaken by events. PW1 testified that orders for vacant possession were obtained in May 2012, and the Plaintiff is seeking rent for that period, and has no claim for vacant possession in June 2013. PW1 confirmed that the Plaintiff neither amended its Plaint nor indicated to the court that any part of the claim was being abandoned. 18. PW1 stated that Clause 5.2 did not provide for mesne profits or general damages and that no other agreement existed, pointing to Clause 16 on cumulative remedies and Clause 19.1, which bound both parties without barring a claim for general damages. PW1 stated that the mesne profits amounted to Kshs. 700,000/= and that he paid the purchase price in July, and had evidence of payment of tax on rent. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 6

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19. PW1 further stated that the Plaintiff did not demolish or develop the land, but stated that negotiations had occurred during the pendency of the case, and while he was aware negotiations for the purchase involved the lawyers acting for KFA, he was unaware of any conflict of interest. 20. Upon re-examination, by counsel, PW1 testified that Paragraph 1(e) granted leave to demolish and customize, and Woolmatt demolished the existing structures and built their own. The Plaintiff obtained vacant possession in June 2013 on its own initiative, as the vendors never handed over the premises. 21. Referring to DMFI-3 dated 30th October, 2012, he described it as an admission. He stated that the case was filed in November 2012 when the Plaintiff was seeking vacant possession, but having obtained possession in May 2013, the Plaintiff now sought mesne profits and damages for trespass. Completion was set for 90 days after execution on 21st December,2011, meaning possession should have been delivered by 21 st March,2012, resulting in an 11-month delay since payment was made in July. 22. PW1 stated that under Clause 6.1, no undertaking was required of the purchaser to the vendor, but rather to National Bank, and that Clause 3.12 NAKURU ELC NO. 56 OF 2012 – JUDGMENT 7

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governed the balance of the purchase price, payable to the chargee against release by the vendor’s advocates. 23. PW1 explained that payment was not made within 90 days because they were awaiting completion documents listed under Clause 6.2, and that payment was made once the documents were availed, hence the Plaintiff was not to blame for the delay, and the Defendants provided no proof of furnishing the documents within time. 24. PW1 stated that vacant possession was required without conditions other than payment of the balance and that the vendor’s advocates were Kale Maina Advocates, while Sheth & Wathigo acted for the Plaintiff. The claim for Kshs. 600,000/= was based on rent from Woolmatt Ltd from 2013, which the Plaintiff would have received had vacant possession been delivered on time. 25. Upon further cross-examination, PW1 was shown PExh. 2(c) (paragraph 2) and stated that the money was with the advocates and instructions were issued via that letter threatening legal action against the Defendant or chargee due to default in delivering vacant possession. PW1 stated that money had been paid as per the agreement and that completion documents were released to his advocates, and undertakings were given to the vendor's chargees in January. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 8

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26. PW1 acknowledged that while non-delivery of vacant possession was pleaded in the Plaint, the failure or delay in delivering completion documents was not included in the Plaint, the witness statement, or the correspondence. DEFENDANT’S CASE 27. DW1 Simon Cherogony, the Managing Director of KFA for the last 20 years, adopted his statement dated 13th March,2023, as his evidence in chief and produced further a list of documents as Dex No1 to 3. DW1 testified that he was involved in the negotiations and the sale of the suit property with MM Shah with their lawyers Sheth & Wathigo who had been their advocates on other matters. 28. DW1 stated that when they sold the property in 2011, it had issues as the lease had expired and the property had been charged to National Bank of Kenya, of which the purchaser knew about the status of the property and at the time it had a tenant known as Nakuru City Mega. He stated that the suit property had an old building at a monthly rent of Kshs.130,000. He further stated that the property was advertised through bids and the Plaintiff won with a bid of Kshs.124million. 29. DW1 testified that the agreement was that they renew the lease, discharge it from NBK then take the possession. The purchaser was to take over the NAKURU ELC NO. 56 OF 2012 – JUDGMENT 9

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tenant and further that they terminated the tenancy (see Dex No.3, letter addressed to the tenant dated 30th October,2012.). DW1 testified that they forfeited one month in lieu of notice, as per the tenancy agreement. 30. DW1 testified that after 30th October, 2012, KFA did not have any interest in the property as it had transferred the property to Emerg Investments as per Pex No.6 Certificate Lease registered in the name of Emerg Investment on 22nd September, 2012. He stated that they were never involved in any lease as the Business Premises Rent Tribunal in respect of the suit property and were not parties to the case. 31. DW1 was referred to clause 22; there were no negotiations to solve the dispute amicably and did not receive any declaration of a dispute, and that the sale agreement does not provide for payment of damages. 32. During cross-examination he testified that Sheth & Wathigo Advocates were acting for Emerg Investments the Plaintiff, while Kale Maina acted for the Defendant, and National Bank is an interested party was represented by Rachuonyo & Rachuonyo Advocates. It was DW1’s evidence that the parties agreed on the mode of payment and the deposit was paid upon execution of the agreement. The balance was payable to Rachuonyo & Rachuonyo who NAKURU ELC NO. 56 OF 2012 – JUDGMENT 10

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were acting for the National Bank of Kenya. He stated that Rachuonyo & Rachuonyo were to pay the bank to clear the debts owed by KFA. 33. DW1 testified that KFA was selling the suit property with vacant possession on or before the completion date 90 days from the agreement from 24 th December, 2011 to 21st March, 2012 and the Plaintiff was entitled to vacant possession after full payment. It was DW1’s testimony that they had not put the Plaintiff into vacant possession as at 30 th October, 2012 and did not have any handover documents to the Plaintiff. Further that the Plaintiff did not agree to take over the tenant City Mega. 34. DW1 further testified that he was not aware whether the firm of Konosi & Co Advocates went to the Tribunal to stop the Plaintiff from taking possession as the registered owners on 27th September, 2012, and at the time they had not taken possession. DW1 was referred to lease dated 3 rd June, 2013, to Woolmart Ltd at Page 2 Clause 1 introductory part of the lease at a monthly rent of Kshs.600,000, and that KFA was paid Kshs.12million upon execution. 35. On cross-examination by counsel for the Plaintiff, DW1 was referred to paragraph 3.1.3, and stated that the balance was not paid within 90 days, and that they could not have granted vacant possession before completion, and that the lease with Woolmart was in 2013. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 11

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PLAINTIFF’S SUBMISSIONS 36. Counsel for the Plaintiff filed submissions dated 6 th March,2026, and identified the main issue for determination as to whether or not the reliefs sought in the Plaint are tenable. 37. Regarding the prayer for an order of specific performance and eviction against the Defendant, counsel submitted that specific performance is an equitable remedy, and relied on the cases of Amina Abdulkadir Hawa v Rabinder Nath Anand & Another [2012] eKLR, Reliable Electrical Engineers Ltd. vs Mantrac Kenya Limited (2006) eKLR, and Thrift Homes Ltd vs Kenya Investment Ltd [2015] eKLR. Counsel argued that the Defendant agreed to grant vacant possession upon payment of the purchase price of Kshs. 124,000,000/=, and despite the Plaintiff paying the full purchase price before the completion date of 21st March, 2012, the Defendant refused to deliver vacant possession, constituting a material breach. 38. Mr. Kisila, asserted that the Defendant's argument regarding the other party’s tenancy agreements holds no water, as the Plaintiff was not privy to those contracts, and the Defendant was obligated to remove tenants and grant vacant possession. In support of this position and the plea for vacant NAKURU ELC NO. 56 OF 2012 – JUDGMENT 12

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possession, counsel relied on Ngaira v Chengoil (Civil Appeal 397 of 2017) [2022] KECA 80 (KLR). 39. On the issue whether the Plaintiff is entitled to the prayer for mesne profits, defined under Section 2 of the Civil Procedure Act Cap 21, the counsel relied on the cases of Mistry Valji - Versus - Janendra Raichand & 2 others [2016] eKLR, Rajan Shah T/A Rajan & Partners vs Bipin P.Ahah (2016) e KLR and Ngaira vs. Chengoil (supra), and submitted that having paid the full purchase price, the Plaintiff was entitled to vacant possession and mesne profits. 40. To establish the quantum of mesne profits, the Plaintiff relied on a letter of offer to lease the suit property to Extreme Centre Limited dated 15 th October, 2012, at Kshs. 700,000/= monthly with a 10% annual escalation, as well as a lease agreement with Woolmatt Limited dated 3rd June, 2013 showing a starting rent at Kshs. 600,000/= and escalating up to Kshs. 720,000/= per month. Counsel submitted that the parties are bound by their pleadings, hence the Plaintiff prayed for mesne profits at the rate of Kshs. 700,000/= per month. 41. Regarding damages for trespass and loss of business opportunity, the counsel relied on Halsbury Laws of England 4th Edition, Vol 45 at para NAKURU ELC NO. 56 OF 2012 – JUDGMENT 13

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26, 1503, and the cases of Philip Ayaya Aluchio vs Crispinus Ngayo (2014) eKLR (citing Hostler – vs– Green Park Development Co. 986 S. W 2d 500), Nakuru Industries Limited vs S S Mehta & Sons (2016) eKLR, and Willesden Investments Limited vs Kenya Hotel properties limited NBI H.C.C. NO. 367 of 2000, and proposed a sum of at least Kshs. 10,000,000/= as reasonable damages for trespass. 42. Addressing whether mesne profits and damages for trespass can be awarded simultaneously, counsel cited the cases of James Macharia & Another Vs. Mohammed Nazir Khan (Nakuru Civil Suit No 288 of 1990) and Zainul Velji vs Eri Limited (2021) KEHC 3696 (KLR), and urged the court to allow the reliefs sought in the Plaint plus costs. DEFENDANT’S SUBMISSIONS 43. Counsel for the Defendant filed submissions dated 10th August, 2026, and identified the following issues for determination: a) Whether the Plaintiff proved that the Defendant breached the sale agreement? b) Whether the Plaintiff proved that the Defendant failed to deliver vacant possession c) What was the meaning of vacant possession in the context of the contract here? NAKURU ELC NO. 56 OF 2012 – JUDGMENT 14

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d) Whether the Plaintiff proved or is entitled to its pleaded claims herein to wit specific performance, eviction orders, mesne profits, general/exemplary damages 44. On the issue as to whether the Plaintiff proved the alleged contractual breach, counsel submitted that under the express terms of the Sale Agreement, vacant possession was explicitly conditioned upon full payment of the purchase price, not merely on the completion date. The Plaintiff defaulted on its obligation to pay the purchase price within the stipulated contractual timelines, thereby committing a breach of Clause 3.1.3 of the Sale Agreement. Counsel further submitted that, even after the funds were transferred, they were unlawfully withheld from the Defendant via instructions issued to the Chargee’s Advocates. Counsel stated that possession was duly handed over upon the actual release of the purchase price funds. 45. Ms. Magana, submitted that there were no allegations of delayed completion documents or extension of lease made either in the plaint, the witness statements or any evidence tendered to court on the same. It was counsel’s submission that parties are bound by their pleadings and relied on the case of Independent Electoral and Boundaries Commission & Another v Stephen Mundia Mule & 3 Others (2014) e KLR. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 15

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46. Counsel submitted that completion was a reciprocal process requiring the Plaintiff’s Advocates to furnish Professional Undertakings under Clause 6.2. Additionally, the Plaintiff failed to issue the mandatory 21-day Default Notice required under Clause 5.2 prior to alleging breach. In support of the principle that a court cannot rewrite a contract for the parties, counsel relied on the case of National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & another [2001] eKLR, and submitted that the Plaintiff could not ignore its reciprocal obligations while seeking to enforce those of the Defendant. 47. On the issue as to whether the Plaintiff proved that the Defendant failed to deliver possession, counsel submitted that the vacant possession, within the meaning of the Sale Agreement, was delivered upon completion when the Defendant relinquished control and transferred the rights of ownership and landlord status to the Plaintiff. Further, the Plaintiff took physical possession, exercised dominion over the suit property, and subsequently assumed the legal status of landlord over the existing tenants. 48. Counsel pointed out that the Plaintiff initiated legal proceedings before the Business Premises Rent Tribunal (BPRT) to secure eviction orders against the sitting tenants, and relied on Section 2 and 12 of the Landlord and Tenant (Shops, Hotels and Catering Establishments) Act (Cap. 301), and that the jurisdiction of the BPRT was strictly predicated upon an existing NAKURU ELC NO. 56 OF 2012 – JUDGMENT 16

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landlord and tenant relationship, not a vendor and purchaser relationship. In support of the requirement of a property owner and tenant relationship as a condition precedent to the Tribunal’s jurisdiction, reference was made to the case of Republic v Chairman, BPRT & another; Carrington Complex Ltd (Ex Parte Applicant) [2023] KEELC 16272 (KLR). 49. On the issue of the meaning of vacant possession in the context of the Sale Agreement, counsel submitted that the assertion that “vacant possession” required the physical removal of every occupying tenant prior to completion was legally and contractually flawed, as the transaction was conducted with the mutual understanding that the property was being acquired as a going concern with active tenancies, which was confirmed by Clause 10 of the Sale Agreement (“Treatment of Income and Outgoings”), which explicitly provided for the apportionment of rental income and outgoings before and after the grant of vacant possession. The agreement clearly contemplated the transfer of ownership together with existing tenancies. 50. On the issue as to whether the Plaintiff was entitled to the pleaded claims (Specific Performance, Eviction Orders, Mesne Profits, General and Exemplary Damages), counsel submitted that the prayers for specific performance and eviction orders were moot, incompetent, and unmaintainable given that possession was already acquired. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 17

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51. According to counsel, general damages were not recoverable for breach of contract as contractual damages were quantifiable in law, and relied on the cases of Dharamshi v Karsan [1974] EA 41, Securicor Courier (K) Ltd v Benson David Onyango & Another [2008] eKLR, and Kenya Tourist Development Corporation v Sundowner Lodge Ltd [2018] eKLR. Further, on the issue of mesne profits, counsel submitted that mesne profits depended entirely on proof of wrongful possession and the precise duration thereof, as established in the case of Attorney General v Halal Meat Products Limited [2016] KECA 306 (KLR). Mesne profits constituted special damages and had to be specifically pleaded and strictly proved, as was held in the case of Karanja Mbugua & Another v Marybin Holdings Co. Ltd [2014] eKLR. 52. Ms. Magana submitted that the Plaintiff failed to establish any wrongful occupation, rental value, or financial loss attributable to the Defendant, and that the claims presented departed materially from the pleadings. Counsel relied on Sections 107(1), 108, and 109 of the Evidence Act, and submitted that the legal burden rested entirely on the Plaintiff to prove the facts necessary to sustain its claims, a burden it totally failed to discharge, and cited the cases of Karugi & Another v Kabiya & 3Others (1987) KLR 347, and Peter Mwangi Mbuthia & Another v Samow Edin Osman (2014) e KLR. 53. It was counsel’s submission that Clauses 22.1 through 22.2.5 of the Sale Agreement contained mandatory arbitration provisions, and that the NAKURU ELC NO. 56 OF 2012 – JUDGMENT 18

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substantive contractual dispute fell outside the jurisdiction of this Court, which was limited strictly to enforcing awards or granting interim conservatory measures. Further, there was a mandatory pre-arbitration steps specifically mandatory negotiations and formal written notification of a dispute under Clauses 22.1 and 22.2 which were never complied with; hence the suit was premature and incompetent. 54. Consequently, counsel submitted that the Plaintiff failed to prove his case against the Defendant as the Defendant fully satisfied its contractual obligations by delivering vacant possession upon completion as properly construed under the agreement. ANALYSIS AND DETERMINATION 55. This case was filed in 2012, and took many years to be completed. The reasons for the delay may be attributed to many circumstances, but mainly to the Defendant who dragged its feet in the hearing of the suit. This is not to say that the Defendant was solely to blame. This is a matter that could have been determined a long time ago even through mediation /negotiations, as most of the issues had been spent. There was very little to be determined in this matter. The beauty is that it is finally over. The issues for determination are as follows: a) Whether the Plaintiff proved that the Defendant breached the sale agreement by failing to deliver vacant possession of Nakuru Municipality Block 4/35 b) Whether the Plaintiff is entitled to the relief sought? NAKURU ELC NO. 56 OF 2012 – JUDGMENT 19

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56. The background to this suit is that the Plaintiff and the Defendant entered into a sale agreement dated 21st December 2011, for the purchase of the suit land Nakuru / Municipality Block 4/35, at a consideration of Kshs. 124 million, which amount was paid in full. It is not in dispute that the parties entered into a sale agreement for the suit land and the purchase price was paid in full. What is in contention is whether the Plaintiff should be paid mesne profits and damages by the Defendant having not handed over vacant possession. 57. The sale agreement entered between the parties show that the completion date was within 90 days and clause 7 provided for vacant possession upon payment of the full purchase price. From the evidence on record, the Plaintiff did not pay the balance within the 90day period and the full purchase price was eventually paid in July, 2012. PW1 stated that the delay was because the Defendant had not supplied the completion documents necessary to facilitate payment. The Defendant stated that the Plaintiff was in default and could not demand vacant possession before completion. 58. The evidence on record shows that by the time the Plaintiff paid the full purchase price, the Defendant had not delivered vacant possession, but possession was eventually granted upon completion in May/June 2012 after the proceedings involving the occupants of the premises. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 20

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59. It is further on record that the sale agreement made payment of the full purchase price as a condition before vacant possession under clause 7, of which the Plaintiff admitted that the balance was not paid until July, 2012. It follows that the Plaintiff cannot blame the Defendant for not giving vacant possession as at 21st March, 2012, when the Plaintiff itself had not fulfilled the contractual obligation for payment of the full purchase price, upon which vacant possession was to be given. 60. The Plaintiff’s claim that the delay in payment was due to the Defendant’s failure to provide competition documents was neither pleaded nor supported by documentary evidence showing when the documents were due. It is trite that parties are bound by their pleadings, as was held in the case of Daniel Otieno Migore v South Nyanza Sugar Co. Ltd [2018] eKLR, as follows: “11. It is by now well settled by precedent that parties are bound by their pleadings and that evidence which tends to beat variance with the pleadings is for rejection. Pleadings are the bedrock upon which all the proceedings derive from. It hence follows that any evidence adduced in a matter must be in consonance with the pleadings. Any evidence, however strong, that tends to be at variance with the pleadings must be disregarded. That settled position was re-affirmed by the Court of Appeal in the case of Independent Electoral and Boundaries Commission & Ano. vs. Stephen Mutinda Mule & 3 others(2014)eKLR which cited with approval the decision of the Supreme Court of Nigeriain Adetoun Oladeji (NIG) vs. Nigeria Breweries PLC SC 91/2002 where Adereji, JSC expressed himself NAKURU ELC NO. 56 OF 2012 – JUDGMENT 21

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thus on the importance and place of pleadings: - “…..it is now trite principle in law that parties are bound by their pleadings and that any evidence led by any of the parties which does not support the averments in the pleadings, or put in another way, which is at variance with the averments of the pleadings goes to no issue and must be disregarded…… …In fact, that parties are not allowed to depart from their pleadings is on the authorities basic as this enables parties to prepare their evidence on the issues as joined and avoid any surprises by which no opportunity is given to the other party to meet the new situation.” 61. The failure to provide completion documents was not pleaded in the Plaint and no sufficient documentary evidence was produced to show when the documents were due or that their absence could allow the Plaintiff to delay in payment of the remaining balance of the purchase price. 62. DW1’s evidence shows that even after payment was made, vacant possession was not given immediately.DW1 stated that the Defendant had not placed the Plaintiff into possession by October 2012 and that the existing tenants remained on the premises. Once the contractual condition relating to payment had been fulfilled, the Defendant was required to perform its obligation. The evidence shows that the Defendant failed to deliver vacant possession within reasonable period after completion. Although the Plaintiff was not entitled to vacant possession before paying the full purchase price, the Defendant failed to deliver vacant possession within a reasonable time after completion. NAKURU ELC NO. 56 OF 2012 – JUDGMENT 22

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63. On the issue as to whether the Plaintiff is entitled to mesne profits, mesne profits arise from wrongful possession and are compensation for the profits which the person in wrongful possession received or might reasonably have received from the property. In the case of Karanja Mbugua & another vs. Marybin Holding Co. Ltd [2014] eKLR, it was correctly stated that mesne profits, being special damages must not only be pleaded but also proved, as shown by the provisions of Order 21, Rule 13 of the Civil Procedure Act. 64. Similarly, in the case of Dr. J K Bhakthavasala Rao –v - Industrial Engineers, Nellore AIR 2005 AP 438 it was held that mesne profits by its very nature, involves adjudication of a pure question of fact. “The onus of proving what mesne profits might, with due diligence, have been received in any year lies upon the party claiming mesne profits.” 65. The Plaintiff sought Kshs.700,000/= per month from March, 2012, which claim was not supported by any evidence, as at March, 2012, the Plaintiff had not paid the full purchase price and therefore had not fulfilled its contractual obligation for delivery of vacant possession. The Plaintiff cannot claim mesne profits from the date because the contractual completion date had passed. 66. The Plaintiff relied on offers from Extreme Cars Limited offering Kshs.700,000/= per month and lease to Woolmatt Limited at Ksh.600,000 per month. The letter of offer was objected to and was not admitted in evidence. The Woolmatt lease commenced in June 2013, after the Plaintiff NAKURU ELC NO. 56 OF 2012 – JUDGMENT 23

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had obtained possession. The evidence does not show that the Defendant wrongfully earned or deprived the Plaintiff of Kshs.700,000/= per month during the period claimed. 67. It was the Plaintiff’s evidence that the premises were occupied by tenants and that it had to institute proceedings before the Business Rent Tribunal before it got possession, there is no evidence that the Defendant remained in wrongful possession throughout the entire period claimed or that the Defendant was receiving the rental income. The claim for mesne profits has not been strictly proved. 68. As regards the claim for specific performance and eviction, the Plaintiff acknowledged that it obtained possession in May/June 2013 and stated that it does not require vacant possession or eviction. Since the property has already been transferred and possession obtained there is no purpose for granting prayers (i) and (ii). 69. On general and exemplary damages, the evidence does not show that the Defendant unlawfully entered, remained in possession over the property after the Plaintiff became entitled to possession. There is only evidence that there were tenants and disputes concerning their occupation. 70. Regarding Arbitration provisions contained in clause 22 of the sale agreement, the PW1 admitted during cross- examination that it did not declare a dispute or issue notice referring the dispute to arbitration and did not invoke the contractual dispute resolution mechanism. The Defendant NAKURU ELC NO. 56 OF 2012 – JUDGMENT 24

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argued that the suit was premature. The Defendant filed a defence and participated in the proceeding without demonstrating that it had sought an order compelling arbitration. The Defendant also submitted to the jurisdiction of the court and did not file an objection to the hearing of the suit. This argument was an afterthought. 71. I find that the Plaintiff did not establish that the Defendant was in breach as early as 21st March, 2012, since the Plaintiff had not paid the full purchase price required under clause 7 of the sale agreement. After the payment of the purchase price, the Plaintiff was not immediately placed in possession. The Plaintiff failed to prove the amount and period of the mesne profits claimed and there was no sufficient basis for an award of general and exemplary damages. 72. The upshot is that although there was failure on the part of the Defendant to deliver vacant possession immediately after completion, the Plaintiff failed to prove monetary reliefs sought. The Plaintiff’s suit is hereby dismissed with each party bearing their own costs. DATED, SIGNED AND DELIVERED AT NAKURU THIS 2ND DAY OF OCTOBER 2026. M. A. ODENY JUDGE NAKURU ELC NO. 56 OF 2012 – JUDGMENT 25

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