Automated Summary
Key Facts
Ephantus Ndiritu and two other appellants (Printtouch Limited and Potters Group) appealed against a trial court judgment in Milimani CMCC No. E424 of 2021. The appellants paid Nyale Investment Kshs. 1,660,000 for fabrication and installation services for a shopping complex project at Gachie, which was abandoned after Kiambu County Government declined approval. The trial court ordered the release of three containers but did not order a refund of the payment. The High Court allowed the appeal in part, ordering the refund of Kshs. 1,660,000 while dismissing claims for USD 16,250 (containers) and USD 2,025 (handling expenses).
Transaction Type
Construction contract for shipping container conversion project
Issues
- The appellants claimed USD 2,025.00 for handling expenses incurred in Mombasa. The court found no evidence to support the claim and noted that the expenses were for the appellants' own containers, so they were not due.
- The appellants claimed a refund of Kshs. 1,660,000.00 paid as a deposit for fabrication and installation services that were not carried out due to the project's collapse. The court found that the deposit should be refunded as the purpose for which it was paid was not fulfilled.
- The appellants sought the return of 10 containers allegedly not released by the respondent. The trial court ordered the release of 3 containers, and the appellate court upheld this finding, dismissing the appeal on this point.
Holdings
The Court allowed the appeal on the claim for Kshs. 1,660,000.00, ordering the respondent to refund this amount. The appeal was dismissed for the USD claims (USD 16,250.00 and USD 2,025.00). The appellants were awarded costs.
Remedies
- The court ordered the respondent to refund Kshs. 1,660,000.00 to the appellants for fabrication and installation services not completed due to the County Government's project rejection.
- The court awarded the appellants the costs of the appeal following the partial success of their appeal.
Contract Value
1660000.00
Monetary Damages
1660000.00
Legal Principles
The court applied the doctrine of contract frustration, ruling that the payment of Kshs. 1,660,000.00 for fabrication and installation services constituted a deposit intended for a specific project. When the project collapsed due to the County Government's rejection of approval, the purpose of the payment was frustrated, necessitating a refund as the contract could not be fulfilled.
Judge Name
WM Musyoka
Passage Text
- At trial, PW1 did not talk about it, in his own testimony. DW1 conceded that it was a deposit, meant for making shutters, for plumbing works, fabrications, ground preparations and ground work. In the judgment, the trial court did not make a finding on it. As the DW1 acknowledged the payment, in his testimony, and did not account for it, and as the project collapsed, it should mean that the purpose for which it was paid was not met, and the court should have ordered its refund.
- I find merit, in the appeal, on the aspect of the Kshs. 1,660,000.00, but not on the USD 16,250.00 and USD 2,025.00. The appeal herein succeeds to that limited extent. The judgment of the trial is hereby affirmed on all aspects, except that an order shall be added, for a refund of Kshs. 1,660,000.00, by the respondent, to the appellants. The appellants shall have costs of the appeal. Orders accordingly.
Damages / Relief Type
Refund of Kshs. 1,660,000.00