Nyati Housing Co-operative Society Limited v Ngossheny Housing Co-operative Society Limited [2024] KECPT 1163 (KLR)

Nyati Housing Co-operative Society Limited v Ngossheny Housing Co-operative Society Limited (Tribunal Case 237 of 2019) [2024] KECPT 1163 (KLR) (25 July 2024) (Judgment)

Neutral citation: [2024] KECPT 1163 (KLR)

Republic of Kenya

In the Cooperative Tribunal

Tribunal Case 237 of 2019

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

July 25, 2024

Between

Nyati Housing Co-operative Society Limited

Claimant

and

Ngossheny Housing Co-operative Society Limited

Respondent

Judgment

1. Matter for determination is 2nd Amended Statement of Claim dated 30/9/2020. The Claimants aver that the Respondent represents themselves a registered owner of Land parcel Title No. Yatta B2/Kangonde/827 situated at Matuu township. The Claimant offered to purchase 40 plots and the Respondent accepted the offer.the Claimant and Respondent entered into an agreement dated 23/6/16 and Claimant undertook to pay 50% of the agreed consideration upon subdivision.The balance of 50% was to be paid to the Respondent after transfer of resulting sub-title of the Sub-division into individual names of the members of the Claimant.

2. The Claimant avers on 9/1/2017 pursuant to the Memorandum of Agreement, the Respondent subdivided the subject parcel of land into 38 plots registered in the Respondent’s names as title no. Yatta B2/Kangonde/842. On 17/5/2017, the Claimants paid the Respondent a down payment of Kshs. 3,275,000/= being 50% of agreed consideration.On 4/9/2017, the Respondent obtained letters of consent of Kitui Central Land Control Board for transfer of 13 land titles to the members.The Claimant on 18/1/2019 wrote to the Respondent requesting the surrender of the original title deed for the 40 plots for purpose of transferring the titles into individual members of Claimant. However, vide letter dated 5/3/2019, the Respondent declined to surrender the subject original title deeds and demanded for full payment of 50% balance before surrender of original title deeds.As such the demand by Respondents was in breach of Memorandum of Agreement made on 23/6/2016. The Claimant further states that the Respondent availed only 14 plots to the Claimant out of the 40 plots offered for sale/purchase in further breach of the contract.The Claimant thus prays for;a.An order of inhibition restraining the Respondent from dealing in any manner whatsoever with the Land title numbers Yatta B2/Kangonde/842, 843, 844, 845, 846, 847, 848, 849, 850, 851, 852, 853, 853, 854, 855, 856, 857, 858, 859, 860, 861, 862, 863, 864, 865, 866, 867, 868, 869, 870, 871, 872, 873, 874, 875, 876, 877, 879, 879 pending settlement of the Claimant’s claim.b.Payment of Kshs. 3,275,000/=c.Payment of special damages of Kshs. 317,500/=d.Interest on the sum of Kshs. 3,275,000/= at 13. 5% per annum (Bank Interest) from 17/05/2017 until payment in full.e.In the alternative to prayers (b), (c) and (d) above, the Respondent be directed to transfer to the Claimant land title numbers Yatta B2/Kangonde/842, 843, 844, 845, 846, 847, 848, 849, 850, 851, 852, 853, 853, 854, 855, 856, 857, 858, 859, 860, 861, 862, 863, 864, 865, 866, 867, 868, 869, 870, 871, 872, 873, 874, 875, 876, 877, 879, 879 within a specified period.f.Costs of this claim.

3. The Claimant filed a List of Document s dated 15/4/2021 filed on 16/4/2021 to which included.1. Memorandum of agreement dated 23/06/2016. 2.Receipt dated 17/05/2017 for payment of Kshs. 3,275,000/=3. Claimants letter dated 14/07/2017. 4.Respondent’s letter dated 21/09/2017. 5.Respondent’s letter dated 09/10/2019. 6.Claimant’s Advocate’s letter dated 18/01/2019. 7.Respondent’s letter dated 05/03/2019. 8.Claimant’s Advocate’s letter dated 28/03/2019. 9.Respondent’s letter dated 02/05/2019. 10. Respondent’s letter dated 02/05/2019. 11. Claimant’s Advocate’s letter dated 01/10/2020. 12. Respondent’s Advocate’s letter dated 02/11/2020. 13. Claimant’s Advocate’s letter dated 11/11/2020. 14. Search Certificate for land Title no. Yatta B2/Kangonde/827. 15. Search Certificate for land Title No’s. Yatta B2/Kangonde/ 842, 843, 844, 845, 846, 847, 848, 849, 850, 851, 852, 853, 853, 854, 855, 856, 857, 858, 859, 860, 861, 862, 863, 864, 865, 866, 867, 868, 869, 870, 871, 872, 873, 874, 875, 876, 877, 879, 879. Also the Claimant filed Witness Statement by Alex Karanja Mwangi.The Claimants filed Supplementary List of Documents dated 11/4/2023 filed on 12/4/2023 which included;1. Court Order made on 20/05/2019. 2.Letter dated 27/05/2019 for registration of court order.3. Application dated 28/05/2021 for registration of court orders.4. Payment receipt dated 28/05/2019 for Kshs. 500/=5. Payment receipt dated 28/05/2019 for Kshs. 18,000/=6. Claimant’s Advocate’s letter dated 07/06/2022/=

4. The Respondent filed Statement of Defence and counterclaim dated 18/19/2020 to which in Defence to amend Statement of Claim the Respondent denied the claim therein stating the agreement between the Claimant and Respondent was not on number of plots but number of Claimant’s members who would have paid for the available plots ready to be sold.They (the Respondents) admit to have received payment of 50% from the Claimant but deny the number of plots bought.Further, the Respondent’s response to the claim is that the Respondent sold plots to the Claimant located in 3 phases with each phase of plots attracting a different price.Phase 1 – plots were Kshs. 380,000/=Phase 2 – plots were Kshs. 250,000/=Phase 3 – plots were Kshs. 170,000/=

5. The Respondent further avers the Claimant was an agent of its members and the number of plots to be transferred was in regard to the plots bought by the Claimant’s members. Further, the agreement between the Claimants and the Respondent did not expressly state that the Respondent did not sell the plots resulting from the subdivision of land title no Yatta B2/ Kangonde/ 827 near Matuu Township.At the time of transfer, the Claimant had bought 14 plots that the Respondent took to Kitui Central Land Control Board to enable transfer in the name of the Claimant’s members.The Respondent could only transfer plots to Claimant’s paid up members.The Respondents specifically deny paragraph 14B of the Amended Statement of Claim since as per the law, the searches are free and the Claimant is put to strict proof.

6. In the Counter Claim, the Respondent stated that the Claimant placed inhibitor on titles which belonged to the Respondent. As such, the inhibitor has caused the Respondent loss of businesses and that the plots in dispute are 14 in number and not all plots as the other plots have been bought by the members of the Respondent.The Respondent thus Claim for;1. The Claim be dismissed with costs,2. General damages.The Claimant filed a Reply to the Counter Claim and stated in Defence that the Claimant placed inhibitor on the land titles following an order from the Tribunal made on 20/5/2019 and prayed for the Respondent’s Counter Claim to be dismissed.The Respondent filed List of Documents dated 23/11/2022 filed on 12/4/2023 which documents include:1. Certificate of official search (827-878)2. Title deed number Yatta B2/Kangonde/B273. Memorandum of Agreement dated 23rd June, 2016. 4.Letter of transfer of Kshs. 3,275,000/= to Co-operative Bank dated 11th May, 2017. 5.Receipt from Ngossheny Housing Co-operative dated 17th May, 2017. 6.Letter of consent from the Land Control Board in Kitui Central all dated 4th September, 2017 and numbered as No. (2160-2167,2171-2174 &2176).7. Letter to Ngossheny Housing from Nguva Kitonga and company advocates dated 18th January 20198. Letter on Nyati land sale from Ngossheny Housing dated 5th March, 2019. 9.Letter from Nduva Kitonga and company advocates to Ngossheny Housing dated 27th March 2019.

7. Matter proceeded for hearing on 21/11/2023. It is important to note that matter proceeded with the counter claim only as parties had entered into a consent in regard to the main suit that is, the 2nd Amended Statement of Claim dated 30/9/2020 as Respondent fully settled the Claimant’s case and the only issue remaining was costs.The Respondents/ the Claimants in the Counter Claim dated 18/9/2020 called their witness RW1 – Priscilla Kamau Mungai who is the Chairperson of the Respondent; that is, Ngossheny Housing Co-operative limited and adopted her Witness Statement dated 23/11/2022 as her Evidence -in -Chief. She produced her List of Documents dated 23/11/2022 filed on 12/4/2023 as the Respondent Exhibit 1-10.

8. She confirmed entering an Agreement with the Claimant and acknowledged receipt of 50% of purchase price; about Kshs. 3,000,000/=, as the amount agreed in 2017. In 2018, the Respondent wanted the Claimant to clear the balance which they did not and as such they had 14 plots. The Respondent stated they were given names of paid up members and only did they discover later that the Claimant had put restriction on all 38 plots, instead of 18, which they had bought.She stated other members of the Respondent had sued them for breach of Contract and they have 10 cases in Kitui Law Courts. Thus, they wish to be paid damages and for the restrictions to be removed.

9. On cross-examination, she confirmed in the Sale Agreement dated 23/6/2016 the agreement did not specify on the number of plots. As per the Respondent’s Exhibit 3, the purchase price was not included Land title being purchased was also not included.She further confirmed on cross-examination that balance of 50% was to be paid after transfer of the plots.She did not deny the plots were not transferred explaining they could not be transferred before payment of the balance of 50% despite the Agreement stating otherwise.She could not explain how many plots of the Claimant was purchasing with the Kshs. 3,000,000/= deposit that was paid.

10. While still being cross-examined, she confirmed that the Respondent had not specified the number of plots that were inhibited neither did the Respondent indicate the title, members or date of inhibition.In re-examination, the Respondent Witness 2 confirmed that the Claimant knew only 14 plots would be transferred as they forwarded documents of 14 of their members.The Respondent closed their case and the Claimant did not call any witness.Parties were directed to file their Written Submissions and the Respondent/Claimant in the Counter Claim filed Written Submissions dated 11/3/2024 and the Claimant/Respondent in the Counter-Claim filed Written Submissions on 15/3/2024 on 17/4/2924. Having considered the evidence adduced and Written Submissions by the parties, the issues for determination are;

11. Issue one.Whether the Respondents/Claimants in the Counter Claim are entitled to General Damages.The Respondent’s Claim is that they have incurred loss as a result of Claimant/Respondent placing inhibitors on the plots.From the evidence adduced during trial, the agreement was clear;Paragraph 2 states; Both parties agree that Ngossheny Housing Cooperative Society Limited shall transfer the Titles directly to the members but not to Nyati Housing Cooperative Society Limited.Paragraph 3 states; it was agreed that the first payment shall be done upon presentation of mutation searches for the individual titles in the name of Ngossheny Housing Cooperative Society Limited ready for transfer to the members. The payment shall be 50% of the agreed amount.Paragraph 4 states; after transfer of the Titles into Members’ names, the balance of 50% shall be paid to Ngossheny Housing Cooperative Society Limited.Paragraph 4 clearly states the balance of 50% was to be paid after transfer of titles.The question then would be, who amongst the Claimant and Respondent breached the Agreement dated 23/6/2016 is all?

12. The Agreement is clear that the plots were being sold in phases and the balance would only be paid after transfer. The said agreement unfortunately does not mention the property being sold, the average or plot numbers.That is an issue we believe on Claimant and Respondent were pricy too and form whatever reason was not indicated in the agreement.The Agreement dated 23/6/2016 is what can be deemed a ‘losing agreement’ as it were an agreement would essentially have;1. Offer,2. Acceptance,3. Consideration,4. Capacity to Contract,5. Intention to create legal relations.The agreement as presented by parties does not specify property being bought, the size/ average being bought which is key to any land transaction.As such, we have no other option but to consider the agreement as is and ‘read’ into the spirit of the parties which the Agreement was being extended into.

13. The Respondent/Claimant in Counter Claim are indeed the ones who breached the agreement dated 23/6/2016 in the strict sense.They were to do the transfers and balance paid, however, they opted to ask for balance first as per evidence of Respondent Witness 1. Be that as it may, the 14 names which they were given, names by the Claimant, we are not told whether the Kshs. 3,000,000/= was for 14 plots and the balance of kshs. 3,000,000/= would have been payable. All this is silent by the Claimant and the Respondent.We also take into consideration the fact that the parties entered into a consent on 10/5/2021 adopted on 27. 7.2021 and it settled the Claimant’s case except on the issue of costs. As per the proceedings of 21/11/2023, all the plots were transferred.We are not pricy whether all the 38 plots were conserved by the 14 members of the Claimant.We shall not delve into it.

14. As such, since the Respondent from the face of it was in breach of Agreement, then their Counter Claim dated 18/9/2020 has to fail therefore, the counterclaim is dismissed.

Upshot.The Counter Claim dated 18/9/2020 is thus found to be without merit and dismissed.

Claim settled vide consent

If there are any restrictions, the same should be lifted within 14 days herein.

On costs of the claim and costs of the counter- claim, each party to bear their own costs.

JUDGMENT SIGNED, DATED AND DELIVERED VIRTUALLY AT NAIROBI THIS 25TH DAY OF JULY, 2024. HON. B. KIMEMIA - CHAIRPERSON SIGNED 25. 7.2024HON. J. MWATSAMA - DEPUTY CHAIRPERSON SIGNED 25. 7.2024HON. BEATRICE SAWE - MEMBER SIGNED 25. 7.2024HON. FRIDAH LOTUIYA - MEMBER SIGNED 25. 7.2024HON. PHILIP GICHUKI - MEMBER SIGNED 25. 7.2024HON. MICHAEL CHESIKAW - MEMBER SIGNED 25. 7.2024HON. PAUL AOL MEMBER - SIGNED 25. 7.2024Tribunal Clerk JemimahMugo advocate for the ApplicantNo appearance for RespondentHON. B. KIMEMIA CHAIRPERSON SIGNED 25. 7.2024