Kioko v Tercy Investments Limited (Civil Appeal 376 of 2018) [2024] KECA 1739 (KLR)
The bottom line
#Kenya's Court of Appeal confirmed a land sale agreement was binding despite a missing ID number and company seal, dismissing the seller's appeal with costs.
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 learned judge erred by making a finding that the parties had entered into a valid agreement for sale in respect of the suit property
- 2.Whether the learned judge erred by awarding the respondent the Kshs.3,810,100/= pleaded in the Plaint
Key legal issues
#Validity of the sale agreement for the disposition of an interest in land under section 3(3) of the Law of Contract Act
The agreement was valid: it was in writing, signed by the appellant in the presence of the attesting advocate, and executed on behalf of the respondent by its director; non-afixation of the common seal and omission of the ID number could not invalidate it
The court found as a fact that the appellant signed the agreement in the presence of Mr. Mburu. The appellant was not illiterate nor taken advantage of, and the page she signed identified the respondent as purchaser. Execution by Mercy as director, holding a power of attorney from her co-director, sufficed; under section 42(7) of the Companies Act, 2015 (since deleted), failure to afix the seal rendered a document void only so far as the company was concerned, and after the Business Laws (Amendment) Act, 2020 a local company need not have a common seal.
Whether the trial court erred in awarding Kshs.3,810,100 as pleaded and proved
The award was proper: the monies were pleaded with a breakdown and proved by banking documents, and the appellant's claim that they related to a joint venture was unsupported and contradicted by her own letter offering to refund the deposit
The respondent produced withdrawal slips, bank transfer instructions and payment receipts. The appellant's invoices were issued in her own name, not the joint venture's, and she produced no receipts or evidence of agreed investment proportions. Her 15th August 2005 letter expressly offered to refund Kshs.1,000,000 as deposit towards the purchase price, undermining the joint-venture defence. The punitive contractual interest rate could not be rewritten by the court.
Whether the appellant was denied a fair hearing because the trial judge did not summon the attesting advocate
No denial of fair hearing: the burden lay on the appellant to seek the advocate's summoning for cross-examination; the trial court had no duty to do so
The court noted that neither party called Mr. Mburu. The appellant could have asked the trial court to summon him for cross-examination on the documents he had prepared if she so desired. Her failure to do so could not ground a complaint of unfairness, and the trial court's satisfaction that the case was proved on a balance of probabilities was not disturbed.
Legal principles established
#- A first appellate court may not interfere with findings of fact by the trial court unless they are based on no evidence, on a misapprehension of the evidence, or on wrong principles
- A court cannot rewrite the express terms of a contract freely entered into by the parties, even where the interest rate is punitive
- Omission of a company's common seal, or of a party's national identification card number, from an agreement duly executed and signed does not invalidate the agreement
- Where a party fails to adduce evidence supporting its alternative explanation for monies received, the court may infer that the monies were payments under the pleaded transaction
Court orders
#- 1.The appeal is dismissed
- 2.The appellant is to pay the costs of the appeal to the respondent
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
Wrote the judgment
Wrote the judgment
- On appeal from
- Environment and Land Court at Nairobi
- ELC Suit No. 505 of 2017 (formerly HCCC No. 168 of 2006)
- Jurisdiction invoked
- First appellate jurisdiction over the Environment and Land Court (provision not expressly cited in the judgment)
Relief refused
#The appellant's prayer to set aside the trial court's judgment on the validity of the sale agreement (attestation under section 3(3) Law of Contract Act, non est factum, fraud, mistake, misrepresentation, common seal)
The court was satisfied the parties entered into a valid sale agreement; the appellant agreed she signed it in the presence of the advocate, and omission of the ID number or common seal could not invalidate it
The appellant's challenge to the award of Kshs.3,810,100 on the basis that it was unproven special damages
Payment documents were produced in evidence, and the monies were found to be purchase-price payments refundable under the sale agreement
The appellant's complaint that she was denied a fair hearing because the trial judge did not call Mr. J. M. Mburu Advocate to testify
It was not for the trial court to summon the advocate; the appellant could have applied for his summoning for cross-examination
Costs
The appeal is dismissed with costs to the respondent.
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.
All in all, we find this appeal unmeritorious and dismiss it with costs to the respondent.
we ordinarily ought not to interfere with findings of fact by the trial court, unless they are based on no evidence, or on a misapprehension of it, or the trial court is shown demonstrably to have acted on wrong principles in reaching the findings.
We are satisfied that the parties herein had entered into a valid sale agreement.
The rate of interest as prescribed in the sale agreement is rather punitive, but the trial court could not rewrite the terms of the contract.
the allegation that the monies paid to her by Mercy were in respect of the joint venture is a red herring intended to deny the respondent a refund of its monies.
Failure to have the appellant’s national identification card number indicated on the sale agreement cannot invalidate an agreement which the appellant agrees to have signed.
Issues in the judgment
#The name of the respondent company is not expressly stated in the body of the judgment; the only reference is in the letter from the Commissioner of Lands ('transfer to Tersy Investments'), so the full corporate identity and the appellant's own name (drawn from the letter 'Nancy J. Kioko to Yourself') are inferred from quoted correspondence rather than from the caption or coram.
Internal inconsistency in the judgment's figures: the relief clause and the question for determination refer to an award of Kshs.3,810,100/=, while paragraph 31 refers to Kshs.3,810,000.
The breakdown of the pleaded sum includes an interest period stated as '1st August 2005 to 31st April 2006'; 31st April is not a valid date.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kioko v Tercy Investments Limited (Civil Appeal 376 of 2018) [2024] KECA 1739 (KLR)", Case Analysis (2024). Court of Appeal Civil Appeal (ELC) – from ELC Suit No. 505 of 2017 (formerly HCCC No. 168 of 2006). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2024/1739/eng@2024-12-06
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.