Agricultural Finance Corporation v Joash Winyo Ongayo

2. By a plaint dated 29th January 2018, originally filed at Nairobi as ELC Case No. 162 of 2018 and later heard at Migori as CM ELC Case No. 71 of 2020, the Respondent claimed Kshs. 3,200,000/- as compensation for breach of an agreement under which the Appellant Kamagambo/Koluoch/303 (the sold him LR No. suit land) for Kshs. 6,360.30. At paragraph 4, he expressly pleaded an obligation to supply consent to transfer, duly executed transfer forms in triplicate, the original title deed and passport photographs of the Appellant’s directors. He pleaded that he paid the full purchase price in 1977 and that the Appellant did not obtain Land Control Board consent until 2012. That the transfer was thereafter registered in his name and that Samwel Nyandiga Ondiwa subsequently sued him and the Appellant in ELC No. 115 of 2013 at Kisii (the Kisii case), resulting in a judgment delivered on 27th June 2016, cancelling his title. 3. At paragraph 13 of the Plaint, the Respondent pleaded breach by reason of failure to disclose unregistered thirdparty rights, failure and delay in securing Land Control Board consent, alleged assistance to a third party to acquire the land by adverse possession through delay in completing the transaction, and selling the land when the Appellant allegedly had no capacity to do so. He claimed Kshs. 3,200,000/- as special damages, described as the current market value of the suit land, together with general damages, interest and costs. 4. The Appellant admitted that it sold the suit land to the Respondent under an agreement executed in February 1977 JUDGMENT ELCLA NO. E001 OF 2026 2

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at a price of Kshs. 6,360.30. It pleaded that it had acquired the land at a public auction in 1976 after Mr. Ondiwa defaulted on a loan secured by it. That several attempts, stated to be eight, were made to obtain the requisite consent but were unsuccessful. That the Respondent knew that Mr. Ondiwa was in occupation and that the Respondent had slept on his rights for about forty years. At paragraph 14 of the Defence, the Appellant expressly pleaded that the suit was time-barred. It also filed a Preliminary Objection dated 4th June 2018, the first ground of which was limitation. 5. The Respondent testified and called a valuer who placed the value of the suit land at Kshs. 3,200,000/- in 2017. The Appellant called its Migori branch manager. Both parties relied on the Kisii judgment. That judgment held, among other things, that the sale to the Respondent was void for want of Land Control Board consent, that Mr. Ondiwa had acquired the land by adverse possession, and that the register should be rectified in his favour. The Record before this Court does not contain a written copy of the sale agreement. 6. The learned Magistrate found for the Respondent. He held that there was an implied term that the Appellant would provide completion documents, have a good title to pass and give vacant possession. He found that the Appellant failed in those respects and awarded the Respondent Kshs. 3,200,000/-, being the value of the suit land at the time of filing suit, together with interest and costs. c) The Appeal JUDGMENT ELCLA NO. E001 OF 2026 3

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7. By a Memorandum of Appeal dated 26 th July 2022, the Appellant raised seven grounds, namely: 1) THAT the Learned Magistrate made a fundamental error of law and misdirected himself by disregarding the Judgment of the Kisii Environment and Land Court No. 115 of 2013 that the original owner acquired the suit property by adverse possession thus validating the sale conducted by the Appellant; 2) THAT the Learned Magistrate made a fundamental error of law and fact by disregarding the evidence on record to the effect that the Court in Kisii Environment and Land Court No. 115 of 2013 vindicated the Appellant by stating that the original owner was at fault and he could be granted costs of the suit and therefore it would not be blamed on it again in the impugned judgment; 3) THAT the Learned Magistrate made a fundamental error of law by ordering that the Appellant pays Kenya Shillings Three Million Two Hundred Thousand together with interest and costs ostensibly for breach of contract in total disregard of the compelling reasons that the Appellant made 8 attempts for consent to transfer the suit parcel in vain; 4) THAT the Learned Magistrate misdirected himself by finding that the Appellant breached a contract JUDGMENT ELCLA NO. E001 OF 2026 4

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of sale yet the alleged contract was never filed in court and/or clauses breached were never expressly or impliedly pleaded thus turning the court into a party to the suit; 5) THAT the fundamental Learned Magistrate error law of by made making a a far- reaching decision with total disregard to the role played by the Respondent in the transaction; 6) THAT the Learned Magistrate made a fundamental error of law and fact by failing to interrogate the indolence on the part of the Respondent for a period exceeding 40 years and simply found the Appellant is the party on the wrong; 7) THAT the learned Magistrate erred in law by failing to determine the case on merit. 8. The Appellant seeks reversal of the judgment, dismissal of the Respondent’s suit with costs and costs of the appeal. The appeal was canvassed by written submissions dated 22nd December 2025 for the Appellant and 2 nd January 2026 for the Respondent. d) The Submissions 9. This Court begins with summarizing the appellant’s submissions. Appellant’s submissions 10. The Appellant submitted, in substance, that the learned Magistrate misread the Kisii judgment, failed to appreciate the efforts made to obtain consent, failed to consider the JUDGMENT ELCLA NO. E001 OF 2026 5

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Respondent’s own conduct and prolonged inaction, imported unproved contractual terms and adopted an incorrect measure of damages. It argued that the appropriate relief, if any, would not be the current market value of the land. It relied, among others, on Mbogo & Another v Shah [1968] EA 93, Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123; Peters v Sunday Post Ltd [1958] EA 424, National Bank of Kenya Ltd v Pipeplastic Samkolit (K) Ltd & Another [2002] 2 EA 503; and Ogutu v Anjichi (Siaya Civil Appeal E010 of 2024) [2025] KEHC 3875 (KLR). Respondent’s sumissions 11. The Respondent submitted that the sale, payment of the purchase price, delay in obtaining consent, registration of his title and the Kisii proceedings were undisputed. He contended that the Appellant, as vendor, was responsible for obtaining consent, that the Appellant’s failure enabled Mr. Ondiwa to acquire the land by adverse possession, and that the unchallenged valuation justified the award. He further submitted that the Appellant cannot retain the purchase money after failing to pass a valid transfer. ANALYSIS AND DETERMINATION 12. Having considered the Record, the grounds of appeal and the submissions, I find that the appeal raises the following issues, into which the seven grounds fall: a) What is the duty of this court as the first appellate court; JUDGMENT ELCLA NO. E001 OF 2026 6

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b) Whether the learned Magistrate correctly interpreted the judgment in Kisii ELC No. 115 of 2013; c) Whether the evidence established the contractual breaches upon which the award was founded; d) Whether the evidence concerning Land Control Board consent and the parties’ conduct was properly evaluated; e) Whether the Respondent established entitlement to Kshs. 3,200,000/ f) What orders should be made on the appeal and costs 13. This court now proceeds to determine the issues in sequence. a) What is the duty of this court as the first appellate court; 14. This is a first appeal. The duty of a first appellate court is well settled. In Selle & Another v Associated Motor Boat Co. Ltd & Others [1968] EA 123, the Court stated: “An appeal to this Court from a trial by the High Court is by way of retrial and the principles upon which this Court acts in such an appeal are well settled. Briefly put they are that this Court must reconsider the evidence, evaluate it itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect. In particular this Court is not bound necessarily to follow the trial judge’s findings of fact if it appears either that he has clearly failed on some point to take JUDGMENT ELCLA NO. E001 OF 2026 7

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account of particular circumstances or probabilities materially to estimate the evidence or if the impression based on the demeanor of a witness is inconsistent with the evidence in the case generally.” 15. The same principle has been repeatedly affirmed by the Court of Appeal. In Kenya Bureau of Standards v Kwale International Sugar Company Limited & 4 others [2022] KECA 937 (KLR), the Court in reiterating the duty of a first appellate court, stated that; “Our duty as the first appellate Court as set out in Selle and Another vs Associated Motor Boat Co. Ltd & Others (1968) EA 123, is to reconsider the evidence, evaluate it and draw our own conclusions of facts and law, and we will only depart from the findings by the trial Court if they were not based on the evidence on record; where the said court is shown to have acted on wrong principles of law as held in Jabane vs Olenja [1986] KLR 661; or if its discretion was exercised injudiciously as held in Mbogo & Another vs Shah (1968) E.A” 16. Interference with an award also requires a demonstrated error. In Mbogo & Another v Shah [1968] EA 93, the Court said that; “… A Court of Appeal should not interfere with the exercise of the discretion of a single judge unless it is satisfied that he misdirected himself in some matter and as a result arrived at a wrong decision, or unless JUDGMENT ELCLA NO. E001 OF 2026 8

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it is manifest from the case as a whole that the judge was clearly wrong in the exercise of his discretion and that as a result there has been misjustice.” 17. This Court is therefore not required merely to determine whether conclusions were the possible. learned It must Magistrate's examine the evidence afresh, determine whether the findings were supported by the evidence and applicable law, and arrive at its own conclusion. It must, however, accord appropriate respect to the findings of the trial court, particularly where those findings rested upon the assessment of oral evidence. 18. The decisive questions in this appeal concern the legal effect of an earlier judgment, the obligations established by the pleadings and evidence, and the proper foundation for compensation. I must independently examine those matters and explain any departure from the learned Magistrate’s conclusions. 19. Limitation of time is indirectly one of the seven grounds of appeal reproduced above when the appellant contents that the trail court did not determine the case on merits. I therefore will determine whether this suit was statute-barred one reason for allowing or dismissing the appeal, as will be seen at the tail end of this Judgment. The parties’ delay is relevant only to the factual questions of performance, causation and relief considered below. JUDGMENT ELCLA NO. E001 OF 2026 9

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b) Whether the learned Magistrate correctly interpreted the judgment in Kisii ELC No. 115 of 2013 20. The first and second grounds of appeal raise the question whether the Kisii judgment validated the Appellant’s sale or exonerated it from responsibility, and whether it justified the learned Magistrate’s conclusion that the Appellant lacked a good title to pass when the Respondent purchased the land. 21. Both parties produced the judgment of the ELC in Kisii ELC No. 115 of 2013 and relied on it. It is worthy of note that neither appealed it. I therefore approach it as a final determination of the matters it decided. It must nevertheless be read as a whole, and its operative findings must be distinguished from observations made in considering a separate issue. Under section 17(1) of the Limitation of Actions Act; "at the expiration of the period prescribed by this Act for any person to bring an action to recover land, the title of that person to the land is extinguished". possession therefore Extinction concerns through the effect adverse of the requisite period of adverse occupation, rather than necessarily establishing that the owner never held title. The Court of Appeal has also observed in Public Trustee v Wanduru Ndegwa [1984] KECA 72 (KLR) that, "The provisions of the Land Control Act have no JUDGMENT ELCLA NO. E001 OF 2026 10

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application where the claim to title of agricultural land is by operation of law such as by adverse possession." 22. The judgment in the ELC Court, Kisii, produced by both parties, addressed three distinct matters. The challenge to the Appellant’s acquisition of the property in 1976, the validity of its subsequent sale and transfer to the Respondent and Mr. Ondiwa’s continued occupation. Although the court questioned the evidence supporting the original auction, it held that Mr. Ondiwa’s challenge to that transaction was time-barred. It separately held that the sale and transfer to the Respondent were invalid for want of valid Land Control Board consent and that Mr. Ondiwa had acquired the property by adverse possession. 23. The timing of the title finding is material. The Kisii court held that the Appellant’s title had been extinguished in 1988, twelve years after its acquisition and failure to take possession. Consequently, when the Appellant purported to transfer the property to the Respondent on 18th April 2012, it had no title capable of passing. That finding does not, by itself, establish that the Appellant had no title when the Respondent purchased the property in 1977. Equally, it cannot be used to validate a transaction which the same judgment expressly declared invalid. 24. The learned Magistrate relied on the Kisii court’s observations about the original auction to conclude that the Appellant’s title was defective. That reasoning did JUDGMENT ELCLA NO. E001 OF 2026 11

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not sufficiently distinguish the time-barred challenge to the 1976 acquisition from the subsequent extinction of title. The proper finding is narrower, the 2012 transfer could not convey a subsisting title. Whether that failure entitled the Respondent to contractual compensation, and in what amount, still required separate determination. 25. The Kisii court declined to award Mr. Ondiwa costs because the dispute originated in his default in repaying the loan. It did not find that the Appellant had performed every obligation owed to the Respondent. Nor did its costs decision adjudicate the Respondent’s present claim for compensation against the Appellant. A finding explaining why Mr. Ondiwa should bear his own costs cannot be treated as either exonerating the Appellant or imposing the whole of the Respondent’s loss upon it. 26. The first two succeed only to the extent that they challenge the learned Magistrate’s interpretation of the earlier judgment. They fail insofar as they suggest that the Kisii judgment validated the Respondent’s purchase or absolved the Appellant from all responsibility. The earlier judgment establishes the invalidity of the transfer and the loss of title, but does not itself establish liability for Kshs. 3,200,000/-. c) Whether the evidence established the contractual breaches upon which the award was founded JUDGMENT ELCLA NO. E001 OF 2026 12

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27. The fourth ground of appeal questions whether the learned Magistrate could find breach when the sale agreement was not produced, and whether he founded liability upon matters outside the Respondent’s pleaded case. 28. Section 107(1) of the Evidence Act provides: “Whoever desires any court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts must prove that those facts exist.” 29. Section 108 provides: “The burden of proof in a suit or proceeding lies on that person who would fail if no evidence at all were given on either side.” 30. Sections 107 and 108 of the Evidence Act place the burden of establishing the asserted liability upon the claimant. Section 58 dispenses with proof of admitted facts, subject to the court’s discretion to require proof. The absence of a written agreement from the exhibits does not permit the court to disregard admissions of the transaction or of particular obligations. It does, however, require care before making findings about disputed contractual terms. Needless to say, that under Section 3(3) of the Law of Contract Act, Chapter 23 Laws of Kenya, transactions for disposition of land in a public auction do not follow the pattern of those JUDGMENT ELCLA NO. E001 OF 2026 13

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required to be in writing and signed by the parties, and the signatures attested by a witness who is present. The proviso thereto stipulates that, “Provided that this subsection shall not apply to a contract made in the course of a public auction by an auctioneer within the meaning of the Auctioneers Act (Cap. 526),…” 31. By comparison, the National Bank of Kenya Ltd v Pipeplastic Samkolit (K) [2001] KECA 362 (KLR), Ltd establishes & another that a court cannot rewrite the parties’ contract. That principle does not prohibit the recognition of obligations proved by admissions or the implication of terms on a proper legal basis. In Langat v Co-operative Bank of Kenya Ltd [2017] KECA 152 (KLR), the Court of Appeal recognised the court’s task of construing a contract and its implied terms. The court must identify the basis for the term rather than assume that every desirable undertaking formed part of the bargain. 32. In Independent Commission & Electoral another v and Mule Boundaries & 3 others [2014] KECA 890 (KLR) the Court of Appeal held: "… parties are bound by their pleadings which in turn limits the issues upon which a trial court may pronounce." 33. The rule is subject to the principle in Odd Jobs v Mubia [1970] EA 476 that an unpleaded issue may be decided where it appears from the course of the trial that the parties left it to the court for decision. Evidence JUDGMENT ELCLA NO. E001 OF 2026 14

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touching on a subject is not, without examination of the trial as a whole, enough either to ignore it or to treat a new cause of action as having been tried by consent. Here the Appellant's own trial submissions addressed possession, and DW1 was cross-examined on it. 34. The sale and payment of Kshs. 6,360.30 were admitted. Paragraph 4 of the Plaint expressly identified the completion documents which the Respondent alleged the Appellant was obliged to provide. It is therefore incorrect to say that no completion obligation was pleaded. More significantly, paragraph 4 of the Defence acknowledged the Appellant’s responsibility to provide completion documents, while distinguishing that responsibility from the Board’s authority to grant consent. Under cross-examination, DW1 identified the original title, the application for consent, the sale agreement and transfer forms as documents the Appellant was to supply. Read with the Plaint, these admissions provided an evidentiary basis for the completion obligation despite the absence of the written agreement. They did not establish every disputed term or an undertaking by the Appellant to guarantee a favourable decision by the Board. 35. At paragraph 7(i) of the Defence, the Appellant alleged that the original title and executed transfer documents were issued upon completion of payment. That pleading must be tested against the evidence. DW1 testified that the Appellant had lost the original JUDGMENT ELCLA NO. E001 OF 2026 15

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title and sought a replacement in 1982, and that transfer forms were supplied in 1983 although the Respondent had completed payment in 1977. DW1 testified that the Appellant lost the original title deed and asked for a replacement (he gave the date as 29 th November 1982), and that transfer forms were supplied in 1983 although the Respondent completed payment in 1977. The Respondent's evidence in the Kisii case was different. He said that he lost the original title deed after handing it to the chairman of the Land Control Board, and the Kisii court recorded that a replacement was issued to the Appellant in 1986. The record is therefore inconsistent on who lost the title deed and when. I need not resolve that conflict, since on either account the completion documents were not supplied on payment in 1977 as paragraph 7(i) of the Defence pleads. The learned Magistrate was entitled to examine that delay and the difference between the pleaded account and DW1's evidence. What required further analysis was the extent of the obligation, the legal consequences of the delay and its connection to the compensation claimed. 36. On this evidence, I find that the Appellant’s assertion that the completion documents were supplied upon payment is not supported by DW1’s account. The evidence establishes delay in supplying those documents. That finding, however, does not by itself establish an enforceable entitlement to compensation JUDGMENT ELCLA NO. E001 OF 2026 16

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measured by the property’s market value in 2017 or thereafter: the Respondent had more to prove that it. 37. The possession question also requires qualification. The pleaded particulars summarised above did not expressly identify failure to deliver vacant possession as a separate breach. Nevertheless, the Defence asserted an “as is” sale and knowledge of the existing occupant, and DW1 was cross-examined on possession. It cannot be safe to say that the Appellant had no opportunity to address that subject. On the other hand, its admission that it lacked possession does not, by itself, prove an unconditional contractual undertaking to deliver vacant possession or the time within which such possession was due. And in my humble view, the breach then occurred when vacant possession was required to be given and it was not. 38. The alleged “as is” term was disputed and the written agreement was absent. It could not simply be accepted from the Defence as a proved exemption from the Appellant’s obligations. Conversely, the court could not treat vacant possession as an established contractual promise without examining whether that promise arose from the admitted bargain, an applicable implied term, or an issue actually tried by the parties. The trial judgment did not adequately undertake that exercise. 39. The fourth ground fails insofar as it denies the admitted sale and/ or the admitted obligation to provide completion documents. It succeeds to the extent that JUDGMENT ELCLA NO. E001 OF 2026 17

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the trial court treated disputed obligations and their consequences as established without sufficient analysis. The missing agreement was a limitation on proof of disputed terms, it is not, standing alone, a complete answer to the claim. Because the sale was void for want of consent, however, the admitted obligations do not found a claim for contractual damages. They were relevant only to show who was responsible for the failure of the transaction and to the statutory debt considered below. d) Whether the evidence concerning Land Control Board consent and the parties’ conduct was properly evaluated 40. The third, consideration fifth of and whether sixth grounds the attempts to require obtain consent excused the Appellant’s conduct and whether the Respondent’s inaction justified attributing the loss to him. 41. The suit land was agricultural land in a land control area. The sale transaction required the grant of the consent of the Land Control Board. The relevant provisions were set out by the Court of Appeal in Lly Odhiambo Onyuka v Ayub Odhiambo Migwalla [2005] KECA 275 (KLR). 42. Section 6(1)(a) of the Land Control Act provides: “Each of the following transactions – (a) the sale, transfer, lease, mortgage, exchange, partition or other disposal of or dealing with any agricultural land which is JUDGMENT ELCLA NO. E001 OF 2026 18

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situated within a land control area … is void for all purposes unless the land control board for the land control area or division in which the land is situated has given its consent in respect of that transaction in accordance with this Act.” 43. Section 8(1) in its amended form provides: “An application for consent in respect of a controlled transaction shall be made in the prescribed form to the appropriate land control board within six months of the making of the agreement for the controlled transaction by any party thereto; Provided that the High Court may, notwithstanding that the period of six months may have expired, extend that period where it considers that there is sufficient reason so to do, upon such conditions, if any, as it may think fit.” 44. That is not the text that applied in 1976 and 1977. In Public Trustee v Wanduru Ndegwa [1984] KECA 72 (KLR) the Court of Appeal explained; "Now the period of three months for the making of the application for consent has been increased to six months after the making of the agreement, and notwithstanding that the period of six months may have expired, the High Court may extend that period where it considers there is sufficient reason to do so. The Statute Law (Repeal and Miscellaneous Amendments) Act No 13 of 1980 (section 2)." JUDGMENT ELCLA NO. E001 OF 2026 19

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45. In Ngobit Estate Ltd v Carnegie [1982] KECA 12 (KLR) the Court of Appeal considered the effect of that amendment, which came into force on 24th December 1980, on a transaction made before it. I therefore do not apply the six-month period or the extension proviso to this 1977 sale, and I make no fresh finding on when it became void. 46. The Kisii court declared the sale to the Respondent void for want of valid consent, and held that "the 1st and 2nd defendants were obliged to apply for and obtain consent of the Land Control Board". Both parties accept the judgment. It does not make the Appellant solely responsible. The ability of either party to apply does not itself determine the allocation of their contractual responsibilities, nor does it make an undertaking by a vendor to provide the necessary documents immaterial. A claimant seeking compensation must still establish the obligation breached and a legally sufficient connection between the breach and the loss claimed. Further, even if it was the appellant only who failed to take the step, the outstanding question still is, when was an action for that breach valid? 47. The Appellant's pleaded and admitted obligation to supply the completion documents therefore stands, but the finding that the sale was void rests on the Kisii declaration and not on any computation of the statutory period by this court. The Appellant was therefore not entitled to complete exoneration merely JUDGMENT ELCLA NO. E001 OF 2026 20

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because consent depended on a statutory body. Equally, the Respondent could not establish entitlement to the land’s later market value merely by proving that consent was delayed. The court had to separate the delay attributable to the Appellant’s own performance from difficulties attributable to the Board, and even the Respondent’s, and then identify the legal consequence of the proved failure. 48. As regards possession, the Kisii court found that the Appellant did not take possession after acquiring the land in 1976 and that its title was extinguished in 1988. DW1 admitted in the present proceedings that the Appellant did not have possession when it sold the land. The suggestion that it handed over a vacant parcel is inconsistent with that evidence. The Appellant’s own inaction is therefore material and cannot simply be transferred to the purchaser. 49. The Respondent also did not obtain occupation before the adverse possession claim matured. However, it does not follow that he had an enforceable legal entitlement throughout that period to evict the occupant, or that his omission necessarily caused the extinction of the Appellant’s registered title. That would require an identified legal and evidentiary foundation. His repeated attempts to secure consent also undermine an unqualified description of forty years of complete indolence. Paragraph 6 of the Plaint and his witness statement additionally described visits to the JUDGMENT ELCLA NO. E001 OF 2026 21

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Appellant’s Nairobi office and assurances that the matter was being attended to. That account had to be evaluated with the oral evidence, it could not be displaced merely by referring to the elapsed years. 50. The pleaded allegation that the Appellant aided a third party to acquire the property required proof. It was the Respondent’s obligation to take possession once he knew that the land had someone on it. There is no sufficient basis in the evidence discussed above for a finding of deliberate assistance or collusion. That is distinct from the established fact that the Appellant left the occupant in possession and failed to achieve an effective transfer. But, the absence of proof of collusion does not establish that the Appellant’s own failures had no consequences. 51. The 3rd, 5th and 6th grounds of appeal succeed to the extent that the trial judgment did not sufficiently distinguish the parties’ conduct, the Board’s role and the legal consequences of the Appellant’s own delay. They do not establish an automatic defence founded upon the purchaser’s delay. The invitation at page 7 of the Appellant’s submissions to apportion responsibility does not establish a basis for a particular percentage. Before apportioning a monetary loss, the court must identify a legally recoverable loss and each party’s proved contribution to it. The decisive remaining question is whether the relief awarded was legally available and properly established. JUDGMENT ELCLA NO. E001 OF 2026 22

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e) Whether the Respondent established entitlement to Kshs. 3,200,000/ 52. The remaining aspect of the third ground concerns whether a valuation of the property in 2017 justified an award of its full market value following the invalidation of the sale and transfer. 53. In HAHN V SINGH [1985] KECA 129 (KLR), the Court of Appeal had this to hold on special damages; “.....special damages must be not only claimed specially but proved strictly for they are not the direct natural or probable consequence of the act complained of and may not be inferred from the act. The degree of certainty and particularity of proof required depends on the circumstances and the nature of the acts themselves. This has been adumbrated by Bowen, LJ in Ratcliffee v Evans (1892), 2 QB 524, 532, 533, Lord Macnaghten in Stroms Bruks Aktic Bolag v John & Peter Hutchinson, [1905] AC 515, 525, 526, Lutta, JA in Kampala City Council v Nakaye, [1972] EA 446, 447 and Chesoni, J, in Ouma v Nairobi City Council, [1976] KLR 297, 304” 54. Damages for breach of an enforceable contract ordinarily protect the claimant’s performance interest, they seek to place the claimant, so far as money can, in the position proper performance would have placed him. Restitution, by contrast, concerns recovery of the consideration transferred. The distinction matters here. JUDGMENT ELCLA NO. E001 OF 2026 23

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A prayer for an award cannot be rejected merely because it greatly exceeds the original purchase price, but it requires a valid legal foundation, a proved breach and the correct measure and date of loss. 55. Where a controlled transaction becomes void, section 7 of the Land Control Act provides for recovery of the money or valuable consideration paid as a debt. The one clear and important fact is that the Respondent never took possession of the land in issue. How then does he claim the market value of that which he never took possession of or owned all along? In my humble view, the hereinabove provision does not confer a right to the land’s appreciated market value. If a claimant seeks compensation on a distinct cause of action or an equitable basis, that basis and the facts supporting it must be established. 56. The Respondent specifically claimed Kshs. 3,200,000/- as the current market value. He called PW2, a valuer, whose report was produced as P-exhibit 9. The Appellant produced no competing valuation. There is therefore evidence supporting the valuation figure but the question is, on what basis was the Respondent seeking the compensation to that extent? 57. The learned Magistrate reasoned that, had there been no breach, the Respondent would have held the property at its market value. That reasoning assumed an enforceable entitlement to the land notwithstanding the Kisii judgment’s findings that the transaction was JUDGMENT ELCLA NO. E001 OF 2026 24

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invalid and the Appellant’s title had been extinguished before the 2012 transfer. The court needed to explain how a recoverable performance interest survived those findings, or identify a distinct basis for compensation. It did neither. 58. The authority cited in the trial judgment as “Perpetua Atieno v Louis Onyango” is MILLICENT PERPETUA ATIENO WANDIGA & another v JOHN CHEGE [2013] KEHC 3312 (KLR), a decision of the High Court (Nyamweya J as she then was) and not of the Court of Appeal. The learned Judge there cited Halsbury's Laws of England, Volume 12, 4th Edition, paragraph 1183: "Where it is the vendor who wrongfully refuses to complete, the measure of damages is, similarly, the loss incurred by the purchaser as the natural and direct result of the repudiation of the contract by the vendor. These damages include the return of any deposit paid by the purchaser with interest, together with expenses which he has incurred in investigating title, and other expenses within the contemplation of the parties, and also, where there is evidence that the value of the property at the date of repudiation was greater than the agreed purchase price, damages for loss of bargain." 59. The learned Judge added: "The only exception provided is where a vendor fails to convey through a defect of title, in which case the JUDGMENT ELCLA NO. E001 OF 2026 25

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purchaser will not recover any damages for loss of bargain." 60. By way of distinguishing it, the holding in the authority does not support the point that an award can be made. It concerns a vendor who wrongfully refuses to complete, and it measures loss of bargain by the market value at the date of repudiation less the contract price. Herein no party refused to complete the transaction. The sale was void for want of consent, and the Appellant's failure to convey arose from that and from the later extinction of its title, so that the exception for failure to convey through a defect of title applies. The trial court did not identify the date of any breach or repudiation, explain why the 2017 value measured the loss, or distinguish a refund from loss of bargain. The absence of a competing valuation did not cure those defects. 61. Equally, the Appellant's reliance on Ogutu v Anjichi [2025] KEHC 3875 (KLR) must be read in context. This is also distinguishable. The appeal concerned a purchaser's claim to the refund of a deposit after the vendor had resold the land to a third party. It does not justify treating the absence of an express damages Clause as a universal bar to contractual compensation. 62. The prayer for general damages does not remedy the deficiency. The Court of Appeal in Kenya Tourist Development Corporation v Sundowner Lodge Limited [2018] KECA 312 (KLR) JUDGMENT ELCLA NO. E001 OF 2026 reaffirmed the 26

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general rule against an award of general damages for breach of contract not particularized in it. No separate basis was established here for such an award. 63. The issue of a refund requires separate consideration. The Plaint’s prayers are for Kshs. 3,200,000/- as current market-value compensation, general damages, costs and interest. There is no alternative prayer for repayment of Kshs. 6,360.30 and no general prayer for further relief. Nevertheless, the payment itself is pleaded and admitted, and page 9 of the Appellant’s submissions identifies refund with interest as the ordinary restitutive remedy. Furthermore, when the Respondent particularized the prayer compensation in the sum of KShs. 3,200,000/=, which was never agreed upon by the parties in their failed transaction and then sought damages again, he needed to lay the basis for it. Apart from stating that the sum was the market value of the land at the time of valuation, he did not give any other reason to found the claim. 64. Order 42 Rule 32 empowers the appellate court to make the decree which ought to have been made, including an appropriate order, in favour of a Respondent who has not cross-appealed. Absence of a cross-appeal is therefore not, by itself, an answer. Nor is absence of an express decisive. In Mwatu v refund prayer Ngumbao & invariably another [2024] KEELC 6087 (KLR), the court considered that admitted payment and the circumstances of the failed JUDGMENT ELCLA NO. E001 OF 2026 27

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transaction could justify restitution notwithstanding that omission. That persuasive reasoning underscores the need to examine the facts and procedural fairness, it does not dispense with that examination in every case. 65. Here, the remedy for a claim of the sum due as a debt, under Section 7, is distinct from the market-value damages claim tried in the court below. The Appellant’s alternative statement of the usual remedy is not an unconditional admission of liability for this debt or a waiver of all defences. Its Defence expressly raised limitation. Substitution of a statutory debt would require consideration of its accrual and any applicable defence, and of the basis and period for interest. Those questions were not determined in the compensation judgment and have not been shown to have been tried by consent. 66. In my view, the third ground succeeds insofar as it challenges the legal foundation and measure of the Kshs. 3,200,000/- award, and indeed there is none. Were this court to depart from the finding of the Kisii Court, it would have held, but it is not doing so, that once the Respondent failed to take possession of the land, a breach occurred. That entitled the Respondent to the refund of his purchase price, under Section 7 of the Land Control Act, which is not what he sought in the Court below or herein. The decisive error is the award of Kshs. 3,200,000/- without an established entitlement to damages measured in that way. The award and the JUDGMENT ELCLA NO. E001 OF 2026 28

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interest dependent upon it cannot stand. The appeal therefore succeeds against the compensation claim awarded in the court below. f) What orders should be made on the appeal and costs 67. The seventh ground broadly asserts that the suit was not decided on its merits. I find that the record shows that court heard the parties and delivered a substantive judgment. Therefore, taken on face value, the ground would add no independent basis for reversal beyond the specific errors already identified. However, looked at holistically, the ground speaks to the paucity of the merits of the judgment on one fundamental point of law which was raised by the Appellants/ Defendants but which the court ignored or deliberately brushed aside: limitation of the action, that is to say, that the suit was time barred 68. The Respondent prayed for an order for the payment of special damages in compensation at the market value and general damages. The basis for was claim was the alleged breach of a contract. At paragraph 3 of the Plaint dated 29th January 2018 the plaintiff pleaded that he entered into a sale agreement with the Defendant (now appellant) wherein the plaintiff offered to buy the suit land, LR. Kamagambo/Koluoch/303 situated in Rongo within Migori County, at the purchase price of Kenya Shillings 6360.30. The subsequent paragraphs lay the basis for by pleading the claim. At JUDGMENT ELCLA NO. E001 OF 2026 29

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paragraph 4 the Plaintiff claimed that it was a term of the agreement that the defendant was to provide the plaintiff with a consent by the Land Control Board and duly executed transfer forms and other relevant documents. The plaintiff paid the highest price for the land but was not given the documents. It was not until 2012 when the defendant gave him the consent from the local Land Control Board. He added at paragraph 8 after obtaining the consent he successfully transferred the land to himself as the registered owner. 69. Add paragraph 13 of the Plaint, the Respondent pleaded the particulars of breach of the terms of the sale agreement, and at paragraph 14 his sought compensation by way of special and general damages for the defendant’s breach of the land sale agreement. 70. In its statement of Defense is the appellant to pleaded, specifically at paragraph 14, that the suit was materially and substantially defective, and time barred. 71. During the trial, the Appellant’s witness adopted his written statement dated 24 th August 2021 and filed the following. He stated in it that the Plaintiff had no claim against the defendant. In cross examination, he added that the transactions from the defendant to the Plaintiff took place at a time he would not know but he placed it around 1983 when the transactions were completed. The Defendant, in his pleadings claimed the breach to have been immediately after the sale, but that the JUDGMENT ELCLA NO. E001 OF 2026 30

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consent of the Land Control Board was given to him in 2012. 72. After the parties closed their cases and the court delivered its judgment, it found in the judgment, after setting forth three issues for determination (because one was repeated), that the defendant, now appellant, breached the contract between itself and the plaintiff, and that he was entitled to the remedies he sought. 73. It is clear from trial court record, and particularly the judgment, that Court did not address itself a fundamental issue which was the analysis of the evidence and pleadings, particularly, regarding defendant’s claim that the suit was time barred. The Defence evidence adduced was that the transaction completion took place in 1983. Even besides that, the plaintiff had pleaded that the defendant did not honor the transaction from 1977. That was such a long time for the claim for breach of contract to be sustainable in court. because Section 4(1) of the Limitation of Actions Act provides for the time a claim for breach of contract should be instituted. It stipulates that, “The following actions may not be brought after the end of six years from the date on which the cause of action accrued— (a) actions founded on contract;” 74. It means that from the time the Appellant breached the contract, the Respondent had only six (6) years to bring his claim. He did not. He cannot bring it now, almost 40 years later. The trial magistrate did not JUDGMENT ELCLA NO. E001 OF 2026 31

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determine the merit of the limitation of time of the claim on merit. It is for those reasons above that I would allow the Appeal in its entirety. The judgment and decree of the trial Court in Migori in CM ELC Case No. 71 of 2020, delivered on 13 th July 2022, are set aside, and substituted with an order dismissing the Plaintiff’s claim. 75. On who to bear the costs of this appeal, under section 27(1) of the Civil Procedure Act, costs ordinarily follow the event unless the court gives good reason to order otherwise. The discretionary nature of costs and the need for such reasons were explained in SUPERMARINE HANDLING SERVICES LTD v KENYA REVENUE AUTHORITY [2010] KECA 373 (KLR). 76. Although successful on appeal, the Appellant received the purchase price for the failed transaction. It never refunded it, or there is no evidence of it being refunded. Those circumstances may have materially contributed to the dispute, and provide good reason to depart from the ordinary costs rule. Thus, each party shall, accordingly, bear its own costs in the trial court and on appeal. 77. Orders accordingly. Judgment Dated, Signed and Delivered virtually via the Teams Platform this 6th day of October 2026. HON. DR. IUR NYAGAKA JUDGE JUDGMENT ELCLA NO. E001 OF 2026 32

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In the presence of: Mr. Mainga Advocate for the Appellant Mr. Oriwa Advocate for the Respondent JUDGMENT ELCLA NO. E001 OF 2026 33

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