Macho & another vs Athuman & 2 others 2025 KECA 2078 (KLR)

Factual background and introduction

The appellants and the 1^st Respondent entered into a land sale agreement in 2009 over a parcel of land for a consideration of KSh 900,000.  Out of the agreed purchase price, the appellants paid KShs. 572,000.  The Appellants contended that they were always willing to pay the remaining balance of the purchase and blamed the 1^st Respondent for failing to honour their end of the bargain. The Appellants served the 1^st Appellant with a completion certificate in 2014, five years after the execution of the sale agreement. This was replied to with a termination notice by the 1^st Respondent, prompting the Appellants to approach the trial court seeking an order of specific performance and general damages for loss of income and profit. 

The 1^st respondent, on the other hand, conceded to have harboured no intention of honouring their end of the bargain. According to the 1^st Respondent, he faced opposition from his family, a fact he claims to have informed the appellants of. He further contended that he was willing to refund the paid purchase price together with the penalty clause under the contract.

The trial court found that the 1^st Respondent demonstrated that he had no intention of honouring the sale agreement by virtue of replying to the completion notice from the Appellants with a termination notice. The court further held that the Appellants were not entitled to an order of specific performance since they had not fully paid for the purchase agreement.  They were instead awarded general damages of KShs 4,000,000. Aggrieved, they lodged this appeal before the Court of Appeal sitting in Malindi.

The decision of the Court of Appeal

One of the main issues before the appellate court was whether the Appellants were entitled to an order of specific performance. The court extensively discussed the ingredients of the remedy of specific performance, holding, inter alia, that:

1. An order of specific performance is only awarded where the common law remedy of pecuniary damages would be inadequate.
2. An order of specific performance can only be awarded to enforce the terms of a concluded or executed contract.
3. A party seeking an order of specific performance has to approach the court with clean hands, that is, they have to have fully performed their part of the agreement that they seek to be specifically enforced.

In determining whether the Appellants were entitled to an order of specific performance, the court considered whether the sale agreement was still valid and whether the Appellants had fully performed their part of the bargain.

The sale agreement contained a clause requiring the purchase- the appellants, to issue the vendor with a completion agreement within 90 days of receipt of the land control board consent.

According to the Appellants’ own evidence, they were in receipt of the land control board consent in 2010. The court found that the Appellants, having not served the 1^st Respondent with a completion notice within 90 days of the receipt of the land control board consent, the land sale agreement lapsed by effluxion of time. There was, therefore, no contract to be specifically enforced at the time of filing the suit at the trial court in 2014.

On general damages, the Appellant court found that the Appellants were only entitled to nominal damages, having suffered significant harm. Nominal damage is damages payable to a plaintiff whose rights have been infringed, for example, by failure to honour a contractual agreement, but who has suffered no significant harm or loss. The Trial court’s award of general damages of KShs. 4,000,000 was substituted with a nominal damage of KShs. 100,000.

Key takeaways

In every contractual transaction with clear timelines, failure to honour your end of the bargain within the set timelines will lead to the lapse of the agreement. Therefore, in any sale agreement or any other contractual agreement, prompt execution of the contract within the set timelines is key. Procrastination will steal away your contract, together with any potential legal interests that could have accrued to you.

Remember, in all contracts, always act fast.