Dasahe Investments Limited v Mugo (Environment & Land Case 1020 of 2016) [2024] KEELC 1583 (KLR) (22 February 2024) (Judgment)

Kenya Law

Automated Summary

Key Facts

Dasahe Investments Limited and Editor Irina Mugo disputed the validity and performance of a 2009 land sale agreement for Land Reference Number 9084 in Nairobi. The Plaintiff claimed it paid Kshs 500,000 deposit and Kshs 1,000,000 balance via lawyers, while the Defendant argued the Plaintiff failed to process the title within 90 days and did not pay land rent and rates. The court found the agreement remained valid as no termination notice was issued, the Defendant was estopped from rescinding the contract, and the Plaintiff is entitled to specific performance for land transfer. The Defendant's counterclaim was dismissed, and costs were awarded to each party separately.

Transaction Type

Land Sale Agreement

Issues

  • What orders should issue as to costs in the suit and counter-claim.
  • Whether the Contract between the parties terminated upon expiry of ninety (90) days pursuant to Clause 9.1 of the agreement dated 14th October, 2009.
  • Whether the letter of allotment dated 1st July, 1999 conveyed any interest on the Plaintiff.
  • Whether the Defendant is entitled to the reliefs sought in the counter-claim, including vacant possession, permanent injunction, and declaration of invalidity of the sale agreement.
  • Whether the Plaintiff is entitled to the reliefs sought in its plaint, including an order of specific performance and general damages.

Holdings

  • Each party to bear own costs of the suit and counter-claim.
  • An order of specific performance is hereby issued compelling the Plaintiff to transfer all that parcel of land known as Land Reference Number 9084 – Nairobi.
  • The Counter-claim by the Defendant is dismissed.

Remedies

  • An order of specific performance was issued compelling the Plaintiff to transfer all that parcel of land known as Land Reference Number 9084 – Nairobi.
  • Each party to bear own costs of the suit and counter-claim.
  • The Counter-claim by the Defendant is dismissed.

Contract Value

1500000.00

Legal Principles

  • The court ruled that the defendant did not prove her counter-claim to the required standard, thus failing to meet the burden of proof.
  • The court applied the principle of estoppel, preventing the defendant from denying the validity of the sale agreement once it was executed and the plaintiff fulfilled their obligations.
  • The court held that the parties are bound by the terms of their contract under the principle of Pacta Sunt Servanda, as they cannot rewrite the agreement unless there's evidence of coercion, fraud, or undue influence.
  • The court determined that the defendant's counter-claim lacked sufficient proof to meet the standard of proof, leading to its dismissal.
  • The court applied costs principles, directing each party to bear their own costs of the suit and counter-claim as no special circumstances warranted otherwise.

Precedent Name

  • Pius Kimaiyo Langat vs. Co-operative Bank of Kenya Ltd
  • Torino Enterprises Ltd -vs- Attorney General
  • Guarder Sign Birdi & Narinder Singh Ghatora as Trustees of Ramgharia Institute of Mombasa -vs- Abubakar Madhbuti
  • Anne Murambi -vs- John Munyao Nyamu & Another
  • National Bank of Kenya Ltd vs. Pipe Plastic Samkolit (K) Ltd
  • Thomas Openda -vs- Peter Martin Ahn
  • Bernard Allred Wekesa -vs- John Muriithi Kariuki & 2 others
  • Housing Company of East Africa Limited -vs- Board of Trustees National Security Fund & 2 others
  • Thrift Homes Ltd -vs- Kays Investment Ltd
  • Gurdev Singh Birdi & Another Vs Abubakar

Key Disputed Contract Clauses

  • Clause 10.2 of the sale agreement required the purchaser to pay the standard premium, land rent, and rates up to the completion date within 90 days. The defendant argued the plaintiff failed to make these payments, while the plaintiff claimed compliance and attributed delays to external factors.
  • Clause 9.1 of the sale agreement stipulated that the purchaser must process the title to the property within 90 days from the date of the agreement. The dispute centered on whether this 90-day period terminated the contract due to the plaintiff's failure to meet the deadline and the absence of a 'time is of the essence' provision or termination notice.

Cited Statute

Civil Procedure Act

Judge Name

E.K. Wabwoto

Passage Text

  • An order of specific performance is hereby issued compelling the Plaintiff to transfer all that parcel of land known Land Reference Number 9084 – Nairobi.
  • It is the finding of this Court that the agreement herein did not terminate after 90 days as stated in Clause 9.1 of the sale Agreement and therefore remained valid and enforceable.
  • In the circumstances, it is the finding of this Court that the Defendant is estopped from rescinding the sale agreement dated 14th October, 2009 on the basis that the letter of allotment did not confer any interest in the suit property to the Plaintiff.

Damages / Relief Type

  • Order of specific performance compelling transfer of Land Reference Number 9084 – Nairobi
  • General damages
  • Declaration that the sale agreement dated 14th October, 2009 is invalid and unenforceable
  • Refund equivalent to current market price of L.R. No. 9084
  • Permanent injunction restraining trespass on L.R. No. 9084