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ELCPartially AllowedELC No. 156 of 2010

Margaret Nduta Kamithi & another v Annunciata Waithera Kibue & 2 others [2020] KEELC 1197 (KLR)

Environment and Land Court
30 September 2020
6,279 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~25 min to read original · ~4 min brief

The bottom line

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A Nairobi court ordered land sellers to complete a 1994 sale decades later, ruling the buyers' claim was filed in time and the contract must be honoured.

What this practically means

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Executive summary

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The plaintiffs, administrators of the estate of Stephen Kamithi Mira, sued the administrators of the estate of James Aram Njau Kibue for specific performance of a sale agreement dated 8th November 1994 under which the late Mira agreed to buy three plots (1, 2 and 19) to be hived out of LR No. 5989/14, partly to pay off a debt owed by the late Kibue to Kenya Planters Co-operative Union Limited and thereby save LR No. 5989/17 from public auction. The purchasers paid Kshs.950,000 towards the debt; the vendor died in 1994's aftermath and the purchaser in 1999. After the original parties' deaths, the widows ratified the sale in a meeting of 8th March 2002 and the defendants' advocates confirmed willingness to transfer, but on 28th June 2006 the defendants repudiated and tendered a refund of Kshs.950,000, which was rejected. The defendants argued the suit was time barred, that the agreement was void for want of Land Control Board consent, and that damages for breach of a void agreement were unavailable. The court held the cause of action accrued on 28th June 2006, so the suit was within the six-year limitation period under section 4(1) of the Limitation of Actions Act. It found the suit property lies within Nairobi City County and is not agricultural land subject to the Land Control Act, and that in any event equitable doctrines of constructive trust and proprietary estoppel supersede the Act, following Kiplagat Kotul and Willy Kimutai Kitilit. The 2006 repudiation letter was held ineffective as the plaintiffs committed no breach; clause 4 required transfer before payment of the balance. Judgment was entered for the plaintiffs: specific performance compelling transfer of the three plots within ninety days, with the Deputy Registrar to execute documents on default, plus costs and interest.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether this suit is statutorily time barred
  2. 2.Whether the sale agreement was void for not obtaining land control board consent
  3. 3.Whether the purported completion notice dated 28th June 2005 was in breach of the sale agreement and had no effect of terminating the agreement
  4. 4.Whether the plaintiffs are entitled to the reliefs sought
  5. 5.Who should bear costs?

Key legal issues

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01

Limitation of actions

Holding

The suit, filed in 2010, was not time barred because the cause of action accrued on 28th June 2006 when the defendants repudiated the agreement

Reasoning

The agreement was executed on 8th November 1994 with completion due 28th February 1995. Under section 4(1) of the Limitation of Actions Act, contract actions must be brought within six years. The court accepted the plaintiffs' submission that the cause of action accrued only on 28th June 2006 when the defendants' advocates communicated that their clients had decided not to proceed with the sale, so the 2010 suit fell within six years.

p. 5
02

Land Control Act consent

Holding

The suit property is within Nairobi City County and is not agricultural land, so no Land Control Board consent was required; alternatively the agreement would still be enforceable under equitable doctrines

Reasoning

The court preferred the letter from the Director of Surveys confirming the property lies in Ridgeways area, Nairobi County, over the Commissioner of Lands' letter and the defendants' inconsistent testimony that tenants carried out commercial activities. Relying on Kiplagat Kotul and Willy Kimutai Kitilit, the court held that even assuming the land was controlled, constructive trust and proprietary estoppel supersede the Land Control Act.

p. 5
03

Termination of the sale agreement

Holding

Neither the completion notice of 28th June 2005 nor the letter of 28th June 2006 terminated the agreement; the plaintiffs were in no breach and the balance was payable only after transfer

Reasoning

Clause 4 obliged the vendor to transfer the plots first, without liability if the 28th February 1995 date was not met, whereupon the purchaser would release the balance. The 2005 notice was contrary to the agreement, and the 2006 letter gave no reasons for rescission. The court also noted conduct of the parties — the March 2002 ratification meeting and correspondence — showing the defendants were willing to complete.

p. 7
04

Entitlement to specific performance

Holding

The plaintiffs proved their case on a balance of probabilities and were granted specific performance of the sale agreement

Reasoning

Citing Orion East Africa v Ite Farmers and the Ugandan case of Manzoor v Baram, the court held damages are traditionally an inadequate remedy for breach of a contract for the sale of land and no inequitable circumstances barred the order. The 1st defendant had admitted under oath she was willing to sign the transfers, and the court ordered completion within 90 days with the Deputy Registrar to execute documents on default.

p. 7

Legal principles established

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  • Time in a contract suit begins to run when the other party unequivocally repudiates the agreement, not from the contractual completion date
  • Land within Nairobi City County is not agricultural land subject to the Land Control Act
  • Even if land were controlled, equitable doctrines of constructive trust and proprietary estoppel may supersede the Land Control Act where a party seeks to renege
  • A letter purporting to rescind a sale agreement without reasons, where the plaintiff committed no breach, does not terminate the agreement

Court orders

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  1. 1.An order of specific performance compelling the defendants to complete the transaction in terms of clause 4 of the sale agreement dated 8th November 1994 and transfer plot nos 1, 2 and 19 situate within LR No. 5989/14 to the plaintiffs within ninety (90) days from the date of the judgment, thereafter the plaintiffs shall release the balance of the purchase price to the defendants within thirty (30) days
  2. 2.In default of the defendants executing the transfers, the Deputy Registrar, Environment and Land Court ordered to execute all the necessary documents to effect transfers in favour of the plaintiffs
  3. 3.Plaintiffs to have costs of the suit and interest

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over disputes relating to land

Relief refused

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Alternative prayer for damages for loss of bargain (Kshs. 186 million)

The court granted specific performance instead, so the alternative prayer was not called upon

p. 7

Costs

The plaintiffs shall have costs of the suit and interest.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

That an order of specific performance is hereby issued compelling the defendants to complete the transaction in terms of clause 4 of the sale agreement dated 8th November 1994 and transfer plot nos 1, 2 and 19 situate within LR NO. 5989/14 to the plaintiffs within ninety (90) days from the date of this judgment
p. 7Final orders - specific performance
In default the deputy registry Environment and Land Court is hereby ordered to execute all the necessary documents to effect transfers in favor of the plaintiffs.
p. 7Final orders - execution by Deputy Registrar
That the plaintiffs shall have costs of the suit and interest.
p. 7Final orders - costs
I agree with the plaintiffs’ submissions that time started to run from 28 th June 2006 hence the suit is not time barred.
p. 5Limitation - accrual of cause of action
I find that the letter dated 28 th June 2006 did not terminate the said agreement. No reasons are given for the said decision to rescind the agreement. The plaintiffs have committed no breach.
p. 7Repudiation without cause ineffective
This confirms that the suit property is within Nairobi City County hence it is not agricultural land. It was therefore not subject to the Land Control Act.
p. 5Land Control Act inapplicability

Issues in the judgment

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minor

The judgment inconsistently records the estate succession cause number: DW1's evidence cites High Court Succession Cause No. 2356 of 1996 while DW2's evidence cites Nairobi High Court Succession Cause No. 2358 of 1996

minor

The judgment refers to a completion notice 'dated 28th June 2005' in one passage while elsewhere discussing the termination letter as dated 28th June 2006

minor

Payments to Hamilton Harrison & Mathews are inconsistently recorded (Kshs.334,744.30 in PW1's evidence and Kshs.334,774.30 in PW5's evidence)

minor

Contradiction in DW1's testimony as recorded: she first confirmed willingness to sign transfers, then on re-examination stated she was not ready

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, "Margaret Nduta Kamithi & another v Annunciata Waithera Kibue & 2 others [2020] KEELC 1197 (KLR)", Case Analysis (2020). ELC No. 156 of 2010. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/1197/eng@2020-09-30

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