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ELCPartially AllowedKisii HCCC Appeal from Kisii CMCC No. 899 of 2006 (appeal admitted 18th March 2009)· [2016] KEELC 28 (KLR)

Charles Gichana Angwenyi v Josephat Mwangi Moracha [2016] KEELC 28 (KLR)

High Court of Kenya
16 December 2016
3,580 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's High Court ruled the plot size in the title documents governs; the buyer who broke the sale contract had to pay the agreed penalty damages.

What this practically means

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Executive summary

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This was a first appeal against the judgment of C. G. Mbogo SPM delivered on 5th May 2008 in Kisii CMCC No. 899 of 2006, in which the trial magistrate found that the appellant (vendor) had misrepresented the size of the plot sold to the respondent (purchaser) under an agreement for sale dated 4th December 2006, entered judgment for the respondent for refund of Kshs. 900,000/= deposit, special damages and penalty damages, and dismissed the appellant's counterclaim. Mutungi J held that the trial magistrate erred: the plot measured 0.0319Ha as stated in the agreement, title documents, survey plan and the surveyor's report, and the appellant had only shown the respondent the general location of a vacant, un-beaconed plot, as the parties had agreed a surveyor would later fix the boundaries. There was therefore no misrepresentation. The respondent, who failed to pay the instalment due on 7th December 2006 and wrote to repudiate the agreement on 11th December 2006, was the party in breach. Since the respondent had not served the one month's written notice required by Clause 12 of the agreement before claiming the 20% penalty, he was not entitled to penalty damages; the appellant, who had served a compliant notice, was entitled to judgment on his counterclaim. The court allowed the appeal, set aside the trial judgment and dismissed the respondent's suit with costs to the defendant, entered judgment on the counterclaim awarding the defendant Kshs. 430,000/= liquidated damages to be offset against Kshs. 937,080/= paid, leaving a refund of Kshs. 507,080/= to the plaintiff upon which both parties would stand discharged from the agreement, with interest if unpaid by 31st December 2016. Each party was to bear their own costs on the counterclaim, and the appellant was awarded 60% of the costs of the appeal.

Key legal issues

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01

Misrepresentation as to the size of the plot

Holding

The appellant did not misrepresent the size of the plot; the respondent did not prove misrepresentation.

Reasoning

The sale agreement, search certificate, survey plan and the surveyor's report all confirmed the plot measured 0.0319Ha. The plot was vacant with no beacons on the ground, so the appellant could only show the general location, which was agreed would be fixed by a surveyor of the purchaser's choice. The size was predetermined by the title documents and could not be changed by the appellant. A claim of misrepresentation would only lie if a different location had been shown, which was not the case.

p. 4
02

Breach of the agreement for sale

Holding

The respondent, not the appellant, was in breach for failing to pay the instalment due on 7th December 2006 and repudiating the agreement.

Reasoning

Payment of instalments was not dependent on the surveyor fixing beacons, which Clause 3 anticipated would occur upon payment of the last instalment. The respondent gave no explanation for failing to pay the 7th December 2006 instalment, and his letter of 11th December 2006 was a reaction to the appellant's breach letter seeking justification to walk away from the agreement. The reason given for backing out was not plausible on the evidence.

p. 5
03

Damages under the penalty clause

Holding

The respondent was not entitled to penalty damages as he was the defaulting party and did not serve the one month's notice required by Clause 12; the appellant complied with the notice requirement.

Reasoning

Clause 12 required the innocent party to give one calendar month's written notice of default to the defaulting party before claiming the 20% penalty. The respondent filed suit on 22nd December 2006 without any such notice, so the trial magistrate had no basis to award damages under the clause. The appellant's letter of 11th December 2006 complied with Clause 12, and the filing of suit by the respondent did not invalidate the notice where breach was proved by counterclaim.

p. 5

Legal principles established

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  • On a first appeal the court is obligated to review and reappraise the evidence tendered before the lower court, while being cautious in interfering with findings of fact since it did not see the witnesses testify.
  • Where the size of a property is predetermined and clear from the title documents, agreement and survey map, showing a purchaser the general location of a plot on the ground does not amount to misrepresentation as to its size.
  • A party claiming the penalty for default must comply with the contractual requirement of one month's written notice to the defaulting party before being awarded damages under the penalty clause.

Court orders

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  1. 1.The judgment of the subordinate court delivered on 5th May 2008 is set aside and substituted with an order dismissing the plaintiff's suit with costs to the defendant
  2. 2.The defendant's counterclaim in the subordinate court is allowed and judgment entered on the counterclaim
  3. 3.The defendant is awarded the sum of kshs. 430,000/= being agreed liquidated damages under Clause 12 of the agreement for sale dated 4th December 2006
  4. 4.The sum of kshs. 430,000/= to be offset from the payments made by the plaintiff to the defendant in the sum of kshs. 937,080/= so that a refund of kshs. 507,080/= is made to the plaintiff whereupon all parties would stand discharged from the agreement dated 4th December 2006
  5. 5.The sum of kshs. 507,080/= to accrue interest at court rates with effect from 1st January 2017 if not paid to the plaintiff/respondent by 31st December 2016
  6. 6.Each party to bear their own costs on the counter claim
  7. 7.The appellant is awarded 60% costs of the appeal
On appeal from
Senior Principal Magistrate's Court, Kisii
Kisii CMCC No. 899 of 2006
Jurisdiction invoked
First appeal from the subordinate court

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Charles Gichana Angwenyi v Josephat Mwangi Moracha [2016] KEELC 28 (KLR)", Case Analysis (2016). Kisii HCCC Appeal from Kisii CMCC No. 899 of 2006 (appeal admitted 18th March 2009). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/28/eng@2016-12-16

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.