Hinga & another v Urithi Housing Cooperative Society & 2 others [2023] KECPT 789 (KLR)

Hinga & another v Urithi Housing Cooperative Society & 2 others (Tribunal Case 243 of 2017) [2023] KECPT 789 (KLR) (21 September 2023) (Judgment)

Neutral citation: [2023] KECPT 789 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 243 of 2017

BM Kimemia, Chair, J. Mwatsama, Vice Chair, B Sawe, F Lotuiya, P. Gichuki, M Chesikaw & PO Aol, Members

September 21, 2023

Between

Evelyn Wanjiru Hinga

1st Claimant

Jeff Muthondu Maina

2nd Claimant

and

Urithi Housing Cooperative Society

1st Respondent

Samuel Maina

2nd Respondent

Cosmas Kamau

3rd Respondent

Judgment

1. The 1st and 2nd Claimant filed a suit vide a Statement of Claim dated 8/4/2019. The Claimants aver in January 2018, they approached the Respondent to inquire on availability of LOC.20/Gikindu/Githunguri plot No. 38,39,40,42,43,43,44,4,4,47 and 58 measuring approximately 2. 605 Ha. The Respondent confirmed availability of the plot to purchase at Kshs. 10,250,000/= with an option to pay in installments.The Claimant made payments on varying dates;a.16/4/2018 Payment Receipt Number 126459 Kshs. 500,000/=.b.16/4/2018 Payment Receipt Number 126457 Kshs. 500,000/=.c.18/5/2018 Payment Receipt Number 128289 Kshs. 1,000,000/=.d.4/9/2018 Payment Receipt Number 134708 Kshs. 200,000/=.

2. In December 2019, the Respondent sent the Claimant a Purchase Agreement. They executed the agreement on 3/1/2019. After execution, the Claimants further made payments of;a.21/1/2019 Payment Receipt Number 141,224 Kshs. 840,000/=.b.30/1/2019 Payment Receipt Number 141564 Kshs. 60,000/=.c.30/1/2019 Payment Receipt Number 14563 Kshs. 1,600,000/=.Upon finishing payment, the Claimant sought for their title deed but the same was not forthcoming. On 6/2/19, the Claimant sought to be reimbursed back their money to no avail despite issuing a Demand Letter. The Claimant prays for;a.The sum of Kshs. 4,700,000/=.b.General damages for breach of contract on the footing of aggravated damages.c.Interest at Commercial rates on the said sum of Kshs. 4,700,000/= with effect from 13/3. 2019 until payment in full.d.Costs of the suit together with interests thereon at such rate and such period of time as this Honorable Court may deem fit to grant.e.Any such other or further relief as this Honorable Court may deem appropriate.

3. The Respondents filed their Statement of Defence dated 17/6/2019 and denied the Claimants claim. They claim that the Claimants only paid a total of Kshs. 2,040,00/= and they are the ones who breached the contract by failing to complete the balance of the purchase price. Further, they claim the title to the piece of land cannot be released until the land is paid in full. The Statement of Defence was accompanied by a Replying Affidavit and Witness Statement sworn by Samuel Ngundo Maina dated 2/12/2020 and 19/2/2021 respectively.Matter came up for hearing on 5/6/23 where CW1, Evelyn Wanjiru Hinga testified by producing her Witness Statement dated 11/4/2019 filed on 8/5/19 as her Evidence in Chief. She also produced her List of Documents dated 2/3/21 as evidence. She confirmed they went to two site visits and identified the land and despite payment, the title was not given to them. She made payment in good faith and had contributed Kshs. 4,700,000/=.There was no cross examination as the Respondents counsel could not cross examine for reasons they did not have instructions to proceed with the case. The Tribunal directed the Respondents to close their case. As such, Claimants filed their written submissions dated 30/6/23 filed on 4/7/23 and the Respondents filed their written submissions dated 31/7/23 filed on the same date.

4. Having considered the pleadings, evidence of the Claimants and written submissions of both parties, the issues for determination are;a.Whether the Claimant is entitled to a refund?The Claimant in her evidence showed payment done to the 1st Respondents account together with the amount, date of repayment and receipt vouchers. The Claimant further produced the Sale Agreement as evidence. The Respondents in their written submissions state the Claimants are the ones who breached the Sale Agreement. The Respondents state that the Purchase Price was Kshs. 10,250,000/= which was to be paid as scheduled as per clause 2. 1.1. The Claimants failed to complete payment as such were in breach. They deny receiving a Demand Letter from the Claimant.The Respondents aver the Claimants are not entitled to a refund of Kshs. 4,700,000/= and that amount was already sunk in the project. The model employed by the 1st Respondent makes each and every project independent. We have considered the pleadings and evidence carefully. The Claimants did in fact make deposits of Kshs. 4,700,000/=. However, they stopped making payment upon requesting for a copy of the title which was not availed to themIn their Written Statement, the Claimants aver that after the partial payment they had a change in circumstance and they decided to terminate the Purchase Agreement. They wrote their notice of intention to terminate and despite assistance by the 1st Respondent, no reimbursement was made.

5. Looking into the Sale Agreement which was produced, we have looked into the termination clause provided in Paragraph 9 of the Agreement. Paragraph 9. 2 provides:“If the Purchaser shall fail to comply with its obligations under this Agreement including the obligation to pay the Purchase Price (or any part thereof), the vendor may give the purchase notice in writing to comply with its obligations and this notice shall specify the default and require the Purchaser to make good the default within fourteen (14) days, time being of the essence.”We note the Vendor did not issue notice to the Claimants as per the Agreement in Paragraph 9. 2 above. Paragraph 9. 3 of the Sale Agreement takes effect which reads:On the failure of the Purchaser to comply with the notice the Vendor may, without prejudice to it other rights or remedies:-“9. 3.1 rescind this Agreement by notice in writing to the Purchaser and proceed to register a caveat against the title.9. 3.2 raise the Purchase Price or9. 3.3 charge interest rate at the rate of 1. 5% per month till compliance in full.”The Agreement does not provide the Claimants wishes to withdraw once given notice as per the Agreement. An Agreement ought to be two sided if at all, more so in its termination. Why does the Agreement not provide for the Purchaser, in this instance Claimant, to be able to terminate the Agreement?

6. Be that as it may, we find it is imperative for any contract to have an exit clause. In the interest of justice since the Claimant proved their case of deposit of Kshs. 4,700,000/=, we note that 10% of the same would have been forfeited. As such we order fo 10% of Kshs. 4,700,000/= to be deducted.

Upshot 7. We find in favour of the Claimant against the Respondent for :Kshs. 4,700,000 470,000

Kshs. 4,230,000/= plus costs with interest.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 21ST DAY OF SEPTEMBER, 2023. HON. BEATRICE KIMEMIA CHAIRPERSON SIGNED 21. 9.2023HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 21. 9.2023HON. BEATRICE SAWE MEMBER SIGNED 21. 9.2023HON. FRIDAH LOTUIYA MEMBER SIGNED 21. 9.2023HON. PHILIP GICHUKI MEMBER SIGNED 21. 9.2023HON. MICHAEL CHESIKAW MEMBER SIGNED 21. 9.2023HON. PAUL AOL MEMBER SIGNED 21. 9.2023Tribunal Clerk JemimahMs Maalim advocate holding brief for Mr. Mugisha for the Claimant.Echon advocate holding brief for Mr. Mwangi advocate for the Respondent.Judgment delivered on 21. 9.2023. Echon advocate – We pray for 30 days stay of execution.Maalim advocate – We have no objection.Tribunal order:30 days stay of execution granted.HON. J. MWATSAMA DEPUTY CHAIRPERSON SIGNED 21. 9.2023