[2021] KECPT 531 (KLR)
The tribunal found that the claimant had fully paid the purchase price within the agreed 240 days, and the respondent failed to transfer the property as required by the sale agreement. The respondent's arguments regarding subdivision and inability to refund were inconsistent with the contract terms, which did not...
Source-derived case information.
- Citation
- [2021] KECPT 531 (KLR)
- Parties
- Applicant: Irene Wangari Muthoni; Respondent: Urithi Housing Co-operative Society Limited
- Court
- Cooperative Tribunal
- Jurisdiction
- Kenya
- Case Number
- Tribunal Case 347 of 2019
- Procedural Posture
- Tribunal Claim / Ruling
- Outcome
- Claim allowed in part; refund of purchase price plus interest and costs awarded; claim for damages dismissed.
- Legal Topics
- Breach of Contract, Sale of Land, Refund of Purchase Price, Specific Performance, Contractual Obligations
- Source Language
- en
Source-derived case record
Summary, issues, holding and outcome
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Parties
Irene Wangari Muthoni
Applicant
Urithi Housing Co-operative Society Limited
Respondent
Procedural Posture
Tribunal Claim / Ruling
Legal Issues
- 1 Whether the respondent breached the sale agreement by failing to transfer the property to the claimant within the stipulated period.
- 2 Whether the claimant is entitled to a refund of the purchase price plus interest due to the respondent's failure to perform its contractual obligations.
- 3 Whether the claimant is entitled to damages for breach of contract.
Ratio Decidendi
The tribunal found that the claimant had fully paid the purchase price within the agreed 240 days, and the respondent failed to transfer the property as required by the sale agreement. The respondent's arguments regarding subdivision and inability to refund were inconsistent with the contract terms, which did not make transfer conditional on the sale of all plots. The tribunal held that the respondent breached the contract by not transferring the property within the completion period. As a result, the claimant was entitled to a refund of the purchase price plus interest from the expiry of the completion period until payment in full, as well as costs. However, the claim for damages for...
Court Disposition
Claim allowed in part; refund of purchase price plus interest and costs awarded; claim for damages dismissed.
Orders
- The respondent shall refund Kshs.5,000,000 to the claimant plus interest from August 2018 until payment in full at tribunal rates.
- The respondent shall pay the costs of the suit to the claimant.
Full Case Text
Judgment text and source record
61 paragraphs
REPUBLIC OF KENYA
IN THE CO-OPERATIVE TRIBUNAL
AT NAIROBI
TRIBUNAL CASE NO.347 OF 2019
IRENE WANGARI MUTHONI.................................................................CLAIMANT
VERSUS
URITHI HOUSING CO-OPERATIVE SOCIETY LIMITED........RESPONDENT
RULING
1. The Claim for determination is dated 21. 6.2019 filed on 28. 6.2019. The prayers sought therein are:
a. Kshs.5,000,000/= plus interest from 11. 7.2017 upto the time of filing suit at court rates, interest at court rates from the date of filing suit until payment in full.
b. Damages for breach of contract plus interest at court rates.
c. Costs of this suit plus interest at court rates.
2. The Respondent filed a Statement of Defence dated and filed on 23. 7.2019 and Reply to Defence filed on 30. 7.2019.
Respondent filed submissions on 20. 11. 2020 while Claimant filed submissions on 17. 11. 2020.
The matter proceeded for hearing on 10. 3.2020.
CW1 Irene Muthoni who adopted her witness statement dated 21. 6.2019 as her evidence in chief and further produced her list of documents as exhibits No. 1-13 and closed her case.
The matter came up for Defence hearing on 11. 11. 2020 and the Respondent indicated that they would not be calling any witnesses and closed their case.
Parties were ordered to file written submissions. The Claimant filed their submissions on 17. 11. 2020.
3. The gist of the matter is that the Agreement of the parties by sale Agreement of parties dated 23. 9.2017 the Claimant agreed to sell and Respondent agreed to sell land parcel plot No. 4 out of LR/Nyeri Municipality/6384/4 at the purchase price of Kshs.5,000,000/=.
That she paid the full purchase price which was acknowledged by Respondent within the stipulated period of 240 days after execution.
That it was also a condition of the said Sale Agreement that vendor was to handover vacant possession upon full payment of purchase price and transfer was to be undertaken by the vendor’s Advocate.
That the Respondent failed, neglected and or refused to perform their part of their agreement ready to breach of contract that she was now claiming to refund of 5 Million from the Respondent plus interest from 11. 9.2017 to the time of filing suit and thereafter at court rates.
4. The Respondent in their submissions aver that the Claimant was aware that the Respondent was buying land and thereafter calls for purchase of commitment of plots from members after which the said land is subdivided.
That the land in question is paid up in full. When the plots are not fully sold to pave way for subdivision and title processing.
That the Respondent fully intends to complete the transaction and transfer property to Claimant hence the issue of repayment does not arise as the same was used to pay the original owner of the land and Respondent is not in a position to refund and instead members were advised to other projects incase they were dissatisfied with the current act.
5. It is therefore demonstrated that the Respondent is not in breach of said Agreement and suit is premature and should be dismissed with costs.
We have carefully considered the evidence on records, documents and pleading and submissions of parties. We note the sale Agreement dated 23. 9.2019 in which the parties agreed on a purchase price of 5 Million for the ¼ acre piece of land out of LR. NO Nyeri Municipality 6384/4 the completion period was 240 days after execution of Sale Agreement.
It is not denied by the Respondent that the claimant did fully pay for the purchase price within the 240 days. The evidence on record is that after Claimant met all the conditions the Respondent did not perform their obligations as per contract of sale to transfer plot Number 4 to Claimant.
6. We note that the Respondent in their submissions averred the land in question was not fully paid up.
In the contract we note that the Respondent was a beneficial owner of the land parcel Title No. Nyeri Municipality /6384/4 clause b indicates that “ the vendor has caused and or is in the process of causing the land to be demonstrated into plots….” and clause Claimant “the vendor has offered the Plaintiff has accepted to purchase all that plot No. 4. ”
It is therefore not proper for the Respondent to submit that the Claimant was to wait until all the plots are fully sold to pave way for sub division and title processing.
It is also not proper for Respondent to submit that the issue of refund does not arise since the purchase price has been used to pay owner of the land and that the Respondent is not in a position to refund and instead that the Claimant should transfer to other projects incase they are not satisfied.
7. We note that parties are bound by the terms of their contract hence the issue of transfer to other projects does not arise since the contract between the parties has not been varied.
We note the terms of contract as afore sighted indicate Respondent is the beneficial owner of the party in question to utilize it awaiting registration in its name.
The Respondent had the duty to perform its obligation within the period agreed upon by the parties.
A suit was filed on 28. 6.2019 over 24 months after execution of the Sale Agreement.
8. It is clear that the completion period had expired without the vendor/ Respondent having fulfilled its obligations under the contract of sale.
The question therefore would be what remedy does the Claimant have?
The Claimant in the statement of claim sought for a refund of the purchase price of 5 million plus interest.
We therefore enter judgment in favour of the claimant against the Respondent for Kshs.5 Million plus interest.
From June 2018 (date of expiry of the completion period of 240 days) till payment in full and interest at court rates from date of filing suit and damages for breach of contract plus costs and interests.
9. As discussed above the Respondent clearly renaged its obligations to transfer the party plot No. 4 as agreed to date that is, 4 years down the line.
Even though the Respondent avers that the suit is premature we find that the Claimant is within her rights after the completion period expired to seek for a refund.
We accordingly order for the refund of Kshs.5,000,000/= and interest from date of filing suit.
On the issue of damages for breach of contract we note that despite having pleaded damages for breach of contract the claimant did not quantify the claim for damages for breach of contract to unable us assess the quantum. The prayer for damages fails.
We award NILdamages for breach of contract.
Costs follow the cause and we award costs to the Claimant.
In summary the claimant succeeds in her claim for:
a. A refund of 5 Million plus interest from August 2018 till payment in full at Tribunal rates.
b. Plus costs of the suit.
RULING SIGNED, DATED AND DELIVERED VIRTUALLY THIS 27TH DAY OF MAY, 2021
Hon. B. Kimemia Chairperson Signed 27. 5.2021
Hon. J. Mwatsama Deputy Chairperson Signed 27. 5.2021
Mr. P. Gichuki Member Signed 27. 5.2021
Tribunal Clerk Leweri.
Waweru Macharia for Claimant present
Miss Gitau for Respondent present
Miss Gitau for Respondent:I pray for 30 days stay of execution
Waweru Macharia for Claimant:They can get 14 days.
Order:21 days stay of execution granted.
Hon. B. Kimemia Chairperson Signed 27. 5.2021