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ELCPartially AllowedHCC. No. 509 of 2003· [2022] KEELC 2719 (KLR)

Mirema Drive Estate Ltd v Church of Jesus Christ of Latter Day Saints Registered Trustees (Environment & Land Case 1049 of 2007) [2022] KEELC 2719 (KLR)

High Court of Kenya
12 May 2022
3,169 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~13 min to read original · ~4 min brief

The bottom line

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The High Court dismissed a land buyer's claim but ordered the seller to refund the Kshs. 500,000 deposit, confirming that unclear contract terms leave both sides exposed.

What this practically means

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Executive summary

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The plaintiff sued under a sale agreement dated June 4, 1997 for the purchase of LR No. 7850/8 Mirema Drive, Nairobi for Kshs. 5,000,000, having paid a 10% deposit of Kshs. 500,000. In the further amended plaint the plaintiff sought an order for transfer upon payment of Kshs. 4,500,000 (specific performance), damages for breach, eviction of the defendant, costs and interest. The defendant, a church organization and registered owner, averred that the plaintiff failed to complete despite extensions to October 15, 1997, a completion notice dated September 14, 1998, and rescission on October 15, 1998. The plaintiff claimed the completion date was extended indefinitely and that it had been allowed possession by the defendant's Mr Wilcox, which claim the court found was not reduced into writing and was denied. Applying Fina Bank, National Bank of Kenya v Pipeplastic, Housing Company of East Africa and Mangi v Munyiri, the court held that time was of the essence after the extension, that no further extension existed, and that rescission was the logical and justified course. Specific performance and damages were refused because both parties failed to abide by their obligations and the plaintiff's rights had not crystallised; the claimed possession and subdivision had no contractual basis. However, as the agreement made no provision for forfeiture, the court ordered reimbursement of the Kshs. 500,000 deposit within 30 days, failing which interest at court rates would run. The claim was dismissed with each party bearing their own costs.

Key legal issues

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01

Whether time was of the essence and the defendant's rescission was valid

Holding

After the extension to October 15, 1997 there was no further clear communication extending the completion date; the vendor was entitled to rescind and the rescission was justified

Reasoning

The completion date of August 31, 1997 was extended to October 15, 1997 at the plaintiff's request. Thereafter no further written extension existed. Clause 14.2 gave an opportunity to renegotiate which was not invoked after the second deadline, leaving the contract no longer binding; rescission was the logical course of action.

p. 6
02

Whether the plaintiff was entitled to specific performance and damages

Holding

No; both parties failed to abide by their contractual obligations, and the plaintiff's claimed possession and subdivision rights were not established

Reasoning

Specific performance is discretionary and equitable, considering the parties' conduct. The claim of possession granted by Mr Wilcox was not in writing and was denied; there was no provision on possession; subdivision was baseless since the plaintiff's rights had not crystallised. Damages were not proved.

p. 6
03

Whether the deposit of Kshs. 500,000 could be forfeited

Holding

No; the agreement made no provision for forfeiture, so the deposit must be reimbursed

Reasoning

Although rescission was justified, the sale agreement contained no clause permitting forfeiture of the deposit. The court therefore ordered reimbursement of Kshs. 500,000 within 30 days, failing which interest at court rates would run.

p. 6

Legal principles established

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  • A court of law cannot rewrite a contract between the parties; parties are bound by their terms absent coercion, fraud or undue influence
  • Specific performance is an equitable remedy not granted as a matter of course; the court considers the conduct of the parties
  • Where a purchaser has dragged his feet and delayed, the vendor is entitled to serve a notice limiting time, at the expiry of which the agreement is treated as rescinded

Court orders

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  1. 1.The plaintiff's claim is dismissed
  2. 2.The defendant is directed to reimburse the plaintiff the deposit of Kshs. 500,000 within 30 days
  3. 3.Failing reimbursement within 30 days, the amount shall attract interest at court's rates from the 30th day from the date of delivery of the judgment
  4. 4.Each party is to bear their own costs of the suit

Authorities

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Legislation

  • Law Society of Kenya Conditions of SaleClause 4(7)

Cases cited (17)

  • Fina Bank Ltd vs. Spares and Industries Ltd
    [2000] 1 EA 52
  • National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd and Another
    (2002) EA 503
  • Housing Company of East Africa Limited v Board of Trustees National Social Security Fund & 2 others
    [2018] eKLR
  • Mangi v Munyiri & Another
    [1991] eKLR
  • Martin Richard Oduor v Republic
    (2019) eKLR
  • Gurdev Singh Birdi & Another as Trustees of Ramgharia Institute of Mombasa v Abubakar Madhbuti
    [1997] eKLR
  • Anne Murambi v John Munyao Nyamu & another
    [2018] eKLR
  • Amina Abdul Kadir Hawa v Rabinder Nath Anand & another
    [2012] eKLR
  • Rose Wathiru Waruinge v John Njenga Kimani
    [2006] eKLR
  • Jenniffer Syokau Mutie v Grace Mwithi Maundu & another
    [2018] eKLR
  • Samwel Kanogo Ritho v John Mwangi Kariithi & Another
    (1988) KLR
  • Cecilia Karuru Ngayu v Barclays Bank of Kenya & another
    [2016] eKLR
  • Vipingo Properties Limited v Randolph Tindika; Registrar of Titles (Interested Party)
    [2022] eKLR
  • Francis Wahiu Theuri vs Monica Njeri
    (2012) KLR
  • Samuel Ngige Kiarie v Njowamu Construction Company Limited & another
    (2019) eKLR
  • Nabro Properties Ltd v Sky Structures Ltd & 2 others
    (2002) eKLR
  • Capital Fish Kenya Limited v Kenya Power & Lighting Company
    (2016) eKLR
Jurisdiction invoked
Original civil jurisdiction of the High Court over the contract claim (HCC No. 509 of 2003)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mirema Drive Estate Ltd v Church of Jesus Christ of Latter Day Saints Registered Trustees (Environment & Land Case 1049 of 2007) [2022] KEELC 2719 (KLR)", Case Analysis (2022). HCC. No. 509 of 2003. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2022/2719/eng@2022-05-12

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