https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/4049

**REPUBLIC OF KENYA** **IN THE ENVIRONMENT AND LAND COURT AT MACHAKOS** **ELC CASE NO. 105 OF 2018** **PAUL MUSYOKA MUUNDA & KALONDU MUUNDA** *(Suing as Administrators of the estate of Gidion Muunda Kiliku (Deceased)***::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: PLAINTIFF** **VERSUS** **DOLPHINS REAL ESTATES LIMITED:::::::::::::::::::::::1ST DEFENDANT** **E.G. KARIUKI T/A GACAU KARIUKI & CO. ADVOCATES:::::::::::::::::::::::::::::::::::::::::::::::::::::::::2ND DEFENDANT** **CO-OPERATIVE BANK OF KENYA LIMITED::::::::::::3RD DEFENDANT** **JUDGEMENT** The Plaintiff avers that at all material times, the Estate of Gidion Muunda Kiliku (deceased) was the former registered proprietor of all that piece of land known as Title Number Donyo Sabuk Koma Rock Block 1/4149 measuring approximately nineteen decimal eight seven (19.87 Ha) of a hectare. On 27th April, 2016, the Plaintiffs entered into an Agreement with the 1st Defendant in which the Plaintiff’s agreed to sell and the 1st Defendant agreed to purchase Forty-Four (44) acres of land to be sub-divided from Title Number Donyo Sabuk/Koma Rock Block 1/4149. The terms and conditions were well set out in the First Agreement to include among others; the purchase price of Kshs 68,200,000/-, a deposit of Kshs 2,100,000/- on or before the execution of the First Agreement and the balance of the purchase price to be paid on or before the completion date which was the 31st day of December, 2016. Subsequently, the parties herein entered into another Agreement dated 27th April,2016 (hereinafter referred to as the 'Second Agreement) in which the following terms were reiterated and/or clarified in line with the First Agreement for the sale transaction: That vide the First Agreement, the parties herein agreed that the purchase price was Kshs. 68,200,000/=. That although the First Agreement indicated a purchase of 44 acres, the actual size of the land purchased from the Property was 37 acres to be subdivided from the Property upon remittance of the balance of the purchase price by the 3rd Defendant to the Plaintiffs. That on payment of the full purchase price by the 3rd Defendant, the 1st Defendant was to subdivide 12.6 acres from the Property and transfer the same to the Plaintiffs. That the Plaintiffs were to transfer the Property to enable the 1st Defendant to charge 37 acres to Co-operative Bank of Kenya Limited, Mombasa Road Branch. That on registration of the charge in favour of the 3rd Defendant, 3rd Defendant was to pay the balance of the purchase price to the Plaintiffs. Contrary to the clear terms and conditions stipulated in the foresaid agreements, and in affront and total disregard to the completion date, the 1st Defendant transferred the Property to itself and charged the same to the 3rd Defendant to secure a sum of Kshs. 45,000,000/=, but in breach of contract failed, neglected and/or refused to pay to the Plaintiffs the balance of the purchase price of Kshs 28,244,000/= before or on the completion date of 31st December, 2016 The Plaintiffs prays for judgment against the Defendants jointly and severally for: 1. Special damages of Kshs. 28,244,000/= together with interest at commercial rates until payment in full. 2. A permanent injunction to stop the Defendants from dealing, subdividing, selling or in any other way of alienation of land parcel Donyo Sabuk/Komarock Block 1/4149. 3. A declaration that the 1st Defendant pays the Plaintiffs the amount of the loan from the 3rd Defendant 4. A declaration that the 12.6 acres of the land be transferred to the Plaintiffs as per the Agreements for Sale herein. Or in the alternative this Honourable Court orders that the 1st Defendant pays the Plaintiffs the sum of Kshs. 24,000,000/= being the price of 12.6 acres @ 2,000,000/- per acre. 5. A declaration that the 1st Defendant is holding 12.6 acres in trust for the Plaintiffs. 6. Further and in the alternative, a declaration that the contract is rescinded and the Plaintiffs’ Property be returned to the Plaintiff upon repayment of the loan amount to the 3rd Defendant. 7. General Damages for breach of contract. 8. Costs of this suit. 9. Interests on items (i), and (vi) and (vii) above. The Defendant admits that it entered into an agreement for sale on 27th April 2016 for the purchase of Forty Four Acres (44 acres) from the Plaintiff. That during the execution of agreement of sale and payment of the deposit on 27th April, 2016, the Defendant informed the Plaintiffs that when they were carrying out due diligence and the surveying of the parcel, the Defendant's Surveyor found out that the parcel was approximately Forty Four Acres (44acres) less than the acreage stated in the Title Deed. The Title Deed indicated that the acreage was One Nine Decimal Eight Seven Hectares (19.87 Ha) which is equivalent to Four Nine Decimal One Naught Acres (49.1 Acres). That the Plaintiff also sought the services of a Surveyor and who also confirmed that the correct and actual acreage of the parcel was Forty Four (44) acres. That it was also found out by both the Plaintiff and the Defendant that out of the Forty Four (44) Acres only Thirty Seven (37) acres was suitable for intended use by the Purchaser as Seven (7) Acres was swampy. It was on premise that the Parties entered into a Second Agreement and which supplemented the earlier agreement. That to compensate the Purchaser for the Seven (7) Acres, the Plaintiff agreed to transfer and have actually transferred Seven (7) Acres from another parcel also owned by the Plaintiff. That contrary to the assertion that the Defendant had illegally transferred the whole parcel to itself without the Plaintiff's knowledge is unfounded. The Plaintiff was aware and vide Clause No. 6(d) of the Agreement for sale allowed the Defendant to enter the suit property and subdivide the same. The Plaintiff vide Clause 5 of the Second Agreement voluntarily consented to transfer the suit property to the First Respondent to enable them charge to the Cooperative Bank Limited, a former Co-Defendant in the suit. The acreage that was in excess of the Thirty Seven (37) acres was to be retransferred back to the Vendors upon discharge of the property. It would be illogical to expect a retransfer for the same as the whole parcel has already been charged to Cooperative Bank Limited on express consent by the Plaintiff in line with the agreement amongst the parties. That excess acreage has now been retransferred back to the Plaintiff and the title issued in the name of the Plaintiff. The Defendant states that it has paid the substantive purchase price and has only left an unpaid balance of Kenya Shillings Five Million Five Hundred and Fifty-Eight Thousand (Kshs5,558,000). The Defendant prays that the Plaintiff should only be allowed to the extent that the Defendant be ordered to pay the Plaintiff the outstanding balance of Kenya Shillings Five Million Five Hundred and Fifty Eight Thousand (Kshs. 5,558,000). This court has considered the evidence and the submissions therein. The Defendant was served but failed to attend court during the Trial. The Law of Contract Act clearly stipulates the requirements for a valid instrument to convey an interest in land. Section 3 (3) of the Law of Contract Act (Cap 23 of the Laws of Kenya) stipulates that; *No suit shall be brought upon a contract for the disposition of an interest in land unless—* 1. *the contract upon which the suit is founded—* 2. *is in writing;* 3. *is signed by all the parties thereto; and* 4. *the signature of each party signing has been attested by a witness who is present when the contract was signed by such party:* While Section 38 (1) of the Land Act states; *Other than as provided by this Act or by any other written law, no suit shall be brought upon a contract for the disposition of an interest in land—* *(a) the contract upon which the suit is founded—* *(i) is in writing;* *(ii) is signed by all the parties thereto; and* *(b) the signature of each party signing has been attested to by a witness who was present when the contract was signed by such party.* In Harris JA in Garvey vs Richards (2011) JMCA 16 the court in considering the essential components of a contract reflected the following principles; *“It is a well-settled rule that an agreement is not binding as a contract unless it shows an intention by the parties to create a legal relationship. Generally, three basic rules underpin the formation of a contract, namely, an agreement, an intention to enter into contractual relationships and consideration. For a contract to be valid and enforceable an essential terms governing the relationship of the parties must be incorporated therein. The subject matter must be certain. There must be positive evidence that a contractual obligation, born out of an oral or written agreement is in existence.”* I have perused the documents adduced as evidence by both parties. It is not in dispute that on the 27th April, 2016, the Plaintiffs entered into an Agreement with the 1st Defendant in which the Plaintiff’s agreed to sell and the 1st Defendant agreed to purchase Forty-Four (44) acres of land to be sub-divided from Title Number Donyo Sabuk/Koma Rock Block 1/4149. The terms and conditions were well set out in the First Agreement to include among others; the purchase price of Kshs 68,200,000/-, a deposit of Kshs 2,100,000/- on or before the execution of the First Agreement and the balance of the purchase price to be paid on or before the completion date which was the 31st day of December, 2016. It is also not disputed that the parties herein entered into another Agreement dated 27th April 2016 in which the following terms were reiterated and/or clarified in line with the First Agreement for the sale transaction: That vide the First Agreement, the parties herein agreed that the purchase price was Kshs. 68,200,000/=. That although the First Agreement indicated a purchase of 44 acres, the actual size of the land purchased from the Property was 37 acres to be subdivided from the Property upon remittance of the balance of the purchase price by the 3rd Defendant to the Plaintiffs. That on payment of the full purchase price by the 3rd Defendant, the 1st Defendant was to subdivide 12.6 acres from the Property and transfer the same to the Plaintiffs. That the Plaintiffs were to transfer the Property to enable the 1st Defendant to charge 37 acres to Co-operative Bank of Kenya Limited, Mombasa Road Branch. That on registration of the charge in favour of the 3rd Defendant, 3rd Defendant shall pay the balance of the purchase price to the Plaintiffs. The 1st Defendant stated that excess acreage has now been retransferred back to the Plaintiff and the title issued in the name of the Plaintiff. The Defendant states that it has since paid the substantive purchase price and has only left an unpaid balance of Kenya Shillings Five Million Five Hundred and Fifty-Eight Thousand (Kshs5,558,000). That the Plaintiffs should only be allowed to the extent that the Defendant be ordered to pay the Plaintiff the outstanding balance of Kenya Shillings Five Million Five Hundred and Fifty Eight Thousand (Kshs. 5,558,000). I find that the certificate issued by the Land Registrar in respect of an official land search conducted on 10th January, 2018 adduced as evidence states that on 16th September, 2016, the 1st Defendant was registered as the proprietor of the Property. That on 19th September 2016, the 1st Defendant was issued with the property’s title deed. That on 6th October, 2016, the Property was charged in favour of Co-operative Bank of Kenya Limited to secure the aforesaid sum of Kshs 45,000,000/=. To date the 1st Defendant has not completed the purchase price as per their own admission. The second agreement dated 27th April 2016 reiterated and/or clarified in line with the First Agreement for the sale transaction: that vide the First Agreement, the parties herein agreed that the purchase price was Kshs. 68,200,000/=. That although the First Agreement indicated a purchase of 44 acres, the actual size of the land purchased from the Property was 37 acres to be subdivided from the Property upon remittance of the balance of the purchase price by the 3rd Defendant to the Plaintiffs. That on payment of the full purchase price by the 3rd Defendant, the 1st Defendant shall subdivide 12.6 acres from the Property and transfer the same to the Plaintiffs. That the Plaintiffs were to transfer the Property to enable the 1st Defendant to charge 37 acres to Co-operative Bank of Kenya Limited, Mombasa Road Branch. That on registration of the charge in favour of the 3rd Defendant, 3rd Defendant were to the balance of the purchase price to the Plaintiffs. The Defendants states in their defence that a portion has been retransferred to the Plaintiff, no evidence was adduced to prove this. The Defendants have offered no evidence to rebut the Plaintiffs case and I find the Agreements are valid and enforceable. I find that the Plaintiffs have proved their case on a balance of probabilities and I grant the following orders; 1. Accounts to be done on the balance of the purchase price jointly by both parties within the next 30 days from the date of service of this order and the same to be paid together with interest at commercial rates until payment in full. 2. A declaration that the 1st Defendant is holding 12.6 acres in trust for the Plaintiffs. And that the 12.6 acres of the land be transferred to the Plaintiffs as per the Agreements for Sale herein. 3. Costs of this suit to be borne by the 1st Defendant. It is so ordered. **DELIVERED, DATED AND SIGNED AT MACHAKOS THIS 2ND DAY OF JULY 2026.** **N.A. MATHEKA** **JUDGE**