HCCC NO.E477 OF 2023 REPUBLIC OF KENYA IN THE HIGH COURT OF KENYA AT NAIROBI COMMERCIAL AND TAX DIVISION CASE NО. E477 of 2023 GRACE CHEROTICH PLAINTIFF LANG'AT……………………………………… VERSUS JANE CHEMUTAI ROTICH......................................................DEFENDANT REGISTRAR COMPANIES……………………………...INTERESTED PARTY OF JUDGEMENT 1. This is a Judgement arising out a breach of contract. The Plaintiff seeks orders of specific performance against the 1 st Defendant for failure to execute transfer of shares in a management company. It is referred to as Camden Court Management Limited. The suit was not defended. Background Facts 2. The Plaintiff vide the Plaint dated 18 th September 2023 and stated that the Defendant initially entered into a Lease Agreement dated 16th June 2004. The lease was with Unizone Investments Limited as the Lessor and Camden Court Management Limited Page 1 of 12 as the Management
page 1 of 12
HCCC NO.E477 OF 2023 Company. It was in respect of Apartment A1, Block A, Camden Court, Kilimani, Nairobi. Subsequently, through an Agreement for Sale dated 6th July 2007, the Defendant agreed to sell the apartment to the Plaintiff for Kshs. 5,600,000. The conveyance was drawn and completed by M/s. Murgor and Murgor Advocates. This was later formalized by an Assignment of Lease dated 30 th March 2009. Through this assignment, the Defendant transferred all her rights and interests in the property to the Plaintiff. 3. As a result of these transactions, the Plaintiff became the lawful and rightful proprietor of the apartment, with all relevant documents duly executed and witnessed. It was also a requirement that the Defendant transfer her one ordinary share in the Management Company to the Plaintiff. She was also to hand over the original share certificate, thereby enabling the Plaintiff to fully enjoy her rights as a property owner. This is including participation in the management of the property. 4. However, despite numerous demands, the Defendant failed, refused, and/or neglected to execute the share transfer form Page 2 of 12
page 2 of 12
HCCC NO.E477 OF 2023 or release the original share certificate for over ten years. Efforts by the Plaintiff to involve the Management Company were unsuccessful, as the company requires these documents to effect the transfer. Consequently, the Plaintiff remained unable to participate in the affairs of the Management Company. This presented a risk of exposure to legal consequences under Section 497 of the Companies Act, 2015 due to the incomplete transfer of shares. 5. The Plaintiff prayed for Judgment against the Defendant for the following: a) That the Defendant be ordered to effect and/or execute the share transfer form in favour of the Plaintiff pertaining to Camden Court Management Limited pursuant to the sale of Apartment Number A1 Block A, Camden Court situated on Land Reference Number 1/185, Kilimani, Nairobi by the Defendant to the Plaintiff and in default the Registrar of Companies be directed to execute the said share transfer form and such other necessary documents and/or instruments herewith; Page 3 of 12
page 3 of 12
HCCC NO.E477 OF 2023 b) That the Defendant be compelled to release the Original Share Certificate pertaining to the Management Company, being Certificate No. 30 in order to facilitate the transfer of the share in the Management Company from the Defendant to the Plaintiff herein; c) Costs of this suit; and d) Any other relief that this Court deems fit to grant. Issues for determination 6. After carefully considering the Plaintiff’s case, the evidence and the written submissions the Court frames the following issues for determination; a) Whether the Defendant breached the contract; b) Whether an order of Specific Performance should be issued directing the Defendant to effect and/or execute the share transfer form and issue the Original Share Certificate; and c) Who bears the cost of this suit. Analysis Page 4 of 12
page 4 of 12
HCCC NO.E477 OF 2023 7. The Defendant was served with Summons and failed to enter Appearance. The Plaintiff did request for Judgement in default. The same was endorsed on 6 th November, 2024. As this was a claim for unliquidated damages, the matter was set down for a formal proof. 8. The matter proceeded for a formal proof hearing and the Plaintiff testified on 30thApril, 2025. Thereafter the matter was reserved for submissions. a) Whether the Defendant breached the contract. 9. On 6th July 2007, the Plaintiff and Defendant voluntarily entered into a sale agreement for Apartment A1, Block A, Camden Court, Kilimani, Nairobi. The Agreement expressly required the Defendant, under special conditions, to deliver the original share certificate for one share in Camden Court Management Limited upon completion. 10. In submission, the Plaintiff relied on authorities National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another and Francis H. Shiaba v Morris M. Isiye. Page 5 of 12
page 5 of 12
HCCC NO.E477 OF 2023 The Court of Appeal affirmed that parties are bound by the terms of their contract unless vitiated by factors like fraud, coercion, or undue influence. None of these are alleged here. Accordingly, the Plaintiff took the position that the Defendant remains fully bound by the agreement. That having failed for over ten years to issue the original share certificate and execute the share transfer, is in clear breach of the contractual obligations. 11. Was there a contract, and did the Defendant breach the contract? The Plaintiff availed the Contract dated 6 th July 2007. Through the said agreement, the parties entered into a sale agreement for Apartment A1, Block A, Camden Court, Kilimani, Nairobi. Part B of the sale agreement under the special conditions provided; “e) On the Completion date the Vendor shall deliver to the Purchaser's advocate the following completion documents: (iii) Original Share Certificate of one share in the Camden Court Management Limited.” 12. Subsequently, vide an Assignment of Lease dated 30 th March, 2009, the Defendant, being the lessee, agreed to Page 6 of 12
page 6 of 12
HCCC NO.E477 OF 2023 assign unto the Plaintiff all her rights and interest in the apartment. 13. However, it is clearly undisputed that the Defendant failed for over ten years to issue the original share certificate and execute the share transfer, thus breaching a term in the contract. 14. On this issue, the Court finds that the Defendant was in breach when she failed to fulfil a term of the contract. b) Whether an order of Specific Performance should be issued directing the Defendant to effect and/or execute the share transfer form and issue the Original Share Certificate. 15. The Plaintiff argued that despite several demands to the Defendant, she failed, refused and/or neglected to execute the Share Transfer Form. This was for purposes of transferring her one ordinary share in the Management Company. It is with this regard that the Plaintiff sought an order of specific performance against the Defendant. Page 7 of 12
page 7 of 12
HCCC NO.E477 OF 2023 16. In the case of Geoffrey Kinuthia Njoroge vs Macro Ventures Developers Ltd (2013) eKLR the Court pronounced itself as follows; “The remedy of Specific performance involves the Court in issuing an order directing one of the parties to a contract to carry out his or her obligations. The sanction for failure to comply is that the person concerned will be in contempt of Court and liable to fines and imprisonment as a consequence. Since the remedy is an equitable one, it is discretionary, unlike damages which are available as of right. This means that a claimant is not entitled to the order simply as a result of proving that the other party is in breach of its obligations. Once this has been established, the Court will then decide whether it is appropriate in this particular case that the order should be made.” 17. Further, in the case of Gurdev Singh Birdi & Another vs. Abubakar Madhbuti (1997) eKLR, the Court of Appeal held as follows: “It cannot be gainsaid that the underlying principle in granting the equitable relief of specific performance has always been that under all the obtaining circumstances in the particular case, it is just and equitable so to do with a view to doing more perfect and complete justice. Indeed, as is set out in paragraph Page 8 of 12
page 8 of 12
HCCC NO.E477 OF 2023 487v of volume 44 of Halsbury’s Laws of England, Fourth Edition, a Plaintiff seeking equitable remedy of specific performance of a contract: ‘must show that he has performed all the terms of the contract which he has undertaken to perform, whether expressly or by implication, and which he ought to have performed at the date of the writ in the action…Where a condition or essential term ought to have been performed by the Plaintiff at the date of the writ, the court does not accept his undertaking to perform in lieu of performance but dismisses the claim.” 18. The Plaintiff has demonstrated to the Court that she fulfilled all her contractual obligations. The only pending issue is for the Defendant to effect and/or execute the share transfer form and issue the Original Share Certificate. 19. In light of the above, the Court finds it necessary and appropriate to issue an order of specific performance against the Defendant. Thus, the prayer is allowed. c) Who bears the cost of this suit. 20. The issue of costs lies at the discretion of this Court. Costs ordinarily follow the event. Though undefended there is no good reason to deny the successful Plaintiff the costs of the suit. The same are awarded to her. Page 9 of 12
page 9 of 12
HCCC NO.E477 OF 2023 21. Looking at the Interested Party, the Registrar of Companies, no specific claim was levelled against that office. It will be assumed that it was named in the proceedings for purposes of facilitating compliance with any Court orders that may ensue. Determination 22. Judgement is HEREBY entered in favour of the Plaintiff as against the Defendant as follows; a) THAT the Defendant is HEREBY ordered to effect and/or execute the share transfer form in favour of the Plaintiff pertaining to Camden Court Management Limited pursuant to the sale of Apartment Number A1 Block A, Camden Court situated on Land Reference Number 1/185, Kilimani, Nairobi by the Defendant to the Plaintiff within the next Thirty (30) days from the date of service of this Decree and Order upon her. In default the Registrar of Companies is HEREBY directed to execute the said share transfer form and such other necessary documents and/or instruments herewith; Page 10 of 12
page 10 of 12
HCCC NO.E477 OF 2023 b) THAT the Defendant is HEREBY compelled to release the Original Share Certificate pertaining to the Management Company, being Certificate No. 30 in order to facilitate the transfer of the share in the Management Company from the Defendant to the Plaintiff herein within the next Thirty (30) days from the date of service of this Decree and or Order. In default, the Management Company to dispense with production of the Original Share Certificate for purposes of facilitating the transfer. c) The costs of the suit are awarded to the Plaintiff to be borne by the Defendant. 23. It is so ordered. DATED, SIGNED AND DELIVERED AT MILIMANI THIS 14TH DAY OF MAY, 2026. NJOROGE BENJAMIN K JUDGE In the presence of; Mr. Cheruiyot for the Plaintiff. Page 11 of 12
page 11 of 12
HCCC NO.E477 OF 2023 N/A for the Defendant. Ms. Susan Nzioka - Court Assistant. Page 12 of 12
page 12 of 12