Nabro Properties Ltd v Sky Structures Ltd & 2 others [2002] KECA 296 (KLR)
The bottom line
#The Court of Appeal refused to force a land sale because the buyer delayed, signed a new deal, and couldn't prove it had the money.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the agreement for sale dated 19th December, 1992 was alive and capable of being performed at the time the appellant went to court
- 2.If the agreement was alive, whether the 1st respondent breached it and whether the appellant was entitled to specific performance
- 3.Whether the 3rd respondent was a bona fide purchaser for value without notice
- 4.Whether the transfer to the 3rd respondent was fraudulent
- 5.Whether the appellant was entitled to damages in the alternative
Key legal issues
#Whether the 19 December 1992 agreement survived the completion date of 31 March 1993
The agreement was impossible to perform because the vendor had not obtained the 'perfect assignment' from the City Commission by the completion date, and it was rescinded by the purchaser's execution of the June 1994 assignment which created a new and inconsistent contractual obligation
The special condition requiring the vendor to procure a valid and perfect assignment was fundamental; it was fulfilled only after the completion date. The purchaser then executed a fresh assignment with a different interest and lower price, which was inconsistent with the old agreement and amounted to rescission, so no rescission notice was necessary and the old agreement no longer vested any cause of action.
Entitlement to specific performance
Specific performance was refused: the agreement could not sustain the claim, the purchaser was guilty of laches and inordinate delay, and it failed to prove it was ready, willing and able to perform
Equity aids the vigilant. The purchaser did not come to court until April 1995 despite knowing of problems since 1994, made only a mere statement of readiness to pay without evidence of funds, and could not show reciprocity since it had signed a new assignment with new arrangements.
Whether the 3rd respondent was a bona fide purchaser for value without notice
Yes. Fraud was not pleaded with particularity and was not proved; the 3rd respondent's title acquired bona fide and for value without notice of any defect could not be disturbed
Allegations of collusion based on a business relationship and a lower price were mere allegations requiring more proof; a reduced price depends on market conditions; the caveat had been removed before the transfer and the trial judge could not be faulted in finding the 3rd respondent a bona fide purchaser.
Proper execution of a company contract
Owuor JA disagreed with the trial judge on this point: a person dealing with a company is not bound to make enquiries into internal execution formalities and was entitled to assume the agreement was properly executed
Section 34 of the Companies Act provides how company contracts are executed and they need not be under seal; it is an elementary tenet of company law that an outsider dealing with a company need not enquire into internal compliance with the Memorandum and Articles.
Legal principles established
#- A party seeking specific performance must show and satisfy the court that it is ready, willing and able to perform its part of the bargain
- Fraud must be specifically pleaded and particularised under Order VI rule 8 of the Civil Procedure Rules before it can be relied upon
- A caveat based on a lapsed agreement creates no registrable interest in land; acceptance of such a caveat does not create any interest
- Inordinate delay disqualifies a party from the equitable remedy of specific performance
- A reduced purchase price, by itself, is no evidence of fraud; the price at any time depends upon prevailing market conditions
Court orders
#- 1.Appeal dismissed
- 2.No order as to costs both in the Court of Appeal and in the court below
The bench
#Judges wrote separately. A dissent does not bind; a concurrence may narrow the ratio.
Wrote the judgment
Wrote the lead judgment. Held the 1992 agreement invalid for want of proper execution and incapable of enforcement; the June 1994 assignment rescinded or superseded it; the caveat created no registrable interest; the transfer to the 2nd Added Party made performance impossible; no fraud was established against the 3rd respondent; and the purchaser was guilty of inordinate delay disqualifying it from specific performance. Dismissed the appeal with no order as to costs.
In these circumstances, I am satisfied that none of these documents can sustain a claim on behalf of the purchaser for specific performance of the earlier agreement.p. 2
Wrote the judgment
Wrote a separate concurring judgment. Agreed the agreement was impossible to perform because the vendor never obtained the 'perfect assignment' of the 99-year lease from 1985, but disagreed that improper execution was a ground. Held the June 1994 assignment amounted to rescission of the old contract, the purchaser failed to prove readiness and willingness, damages were not proved, and fraud was neither pleaded with particularity nor proved. Would dismiss the appeal.
In the circumstances, I find, on the first issue that the agreement for sale dated 19th December, 1992 was not only impossible to perform but that it was also had been rescinded by the execution of the new assignment.p. 6
Wrote the judgment
Dissented. Held that the vendor could not perform at the completion date, subsequent conduct showed time was no longer of the essence, and the removal of the caveat and transfer to the 3rd respondent, a sister company, smacked of bad faith and fraud. Invoking the maxim that no one shall take advantage of his own wrong, he would have allowed the appeal, entered judgment for specific performance and on the counterclaim, with costs.
I would in the circumstances allow this appeal, set aside the judgment of the superior court in favour of the 1st respondent and in place thereof enter judgment in favour of the appellant for specific performance of the Agreement together with costs.p. 11
- On appeal from
- High Court of Kenya (Superior Court)
- HCCC No. 2994 of 1994 (OS)
- Jurisdiction invoked
- First appeal to the Court of Appeal from the Superior Court (High Court) in a civil suit
Relief refused
#Specific performance of the agreement of sale dated 19th December 1992
The agreement was invalid for want of proper execution, impossible of performance, and had been rescinded by the June 1994 assignment; the purchaser was also guilty of inordinate delay and could not show reciprocity
Damages in the alternative
No evidence of loss: the purchaser showed no funds, had no approved plans, and could not raise funds on the short unexpired term
Cancellation of the 3rd respondent's title on the ground of fraud
Fraud was not pleaded with particularity and was not proved to the required standard; a reduced purchase price by itself is no evidence of fraud
Costs
No order as to costs both here and in the court below
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
A party seeking specific performance must show and satisfy the court that it can comply i.e. it must be ready, willing and able to do so.
the requirement under Order VI rule 8 of the Civil Procedure Rules, that a party who intends to rely on any fraudulent acts of another the same must be pleaded and particularize so as to put the other party in full knowledge and be able to defend itself.
But a reduced purchase price, if any, by itself is no evidence of any fraud. The purchase price at any time depends upon prevailing market conditions
Accordingly, I would dismiss the purchaser's appeal with no order as to costs both here and in the court below.
But as Lakha and Owuor, JJ A disagree there will be a majority judgment of this Court that the appellant's appeal is dismissed with no order as to costs both here and in the Court below.
Issues in the judgment
#The suit property is referred to inconsistently within the judgment as LR 209/11875 and LR 1870/11/121/R
The date of registration of the transfer to the 3rd respondent appears variously as 19 October 1994 and 6 October 1994
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- One Hundred and Two Peponi Road LLP & another v National Environment Management Authority & 2 others (Civil Appeal E326 of 2021) [2026] KECA 1380 (KLR)[2026] KECA 1380 (KLR)10 Jul 2026
- Sambo & another v Mwakio & another (Civil Appeal E082 of 2022) [2025] KECA 913 (KLR)[2025] KECA 913 (KLR)23 May 2025
Cite this brief
#Cite this brief
Caselaw, "Nabro Properties Ltd v Sky Structures Ltd & 2 others [2002] KECA 296 (KLR)", Case Analysis (2002). Civil Appeal (Nairobi). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2002/296/eng@2002-04-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.