REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT KISUMU
HIGH COURT CIVIL APPEAL NO. E034 OF 2025
BERNARD ONYANG OMORE……..……….……...……………….1 ST APPELLANT
PAULINE ATETO AYUGA…………………………………………….2 ND APPELLANT
VERSUS
VICTORIA ESTATES LIMITED.....……………......................RESPONDENT
JUDGMENT
1. This appeal arises from the judgment of Hon. E. Mwenda PM delivered on 20/1/2025. In the impugned judgment the learned magistrate dismissed the appellant’s suit and ordered each party to bear their own costs.
2. The appellants were aggrieved and filed a memorandum of appeal dated 6/2/2025 where they listed the following grounds of appeal;
(a) That the learned trial magistrate erred in law and facts by failing to appreciate that the issuance of the 21 days compliance notice was not mandatory before terminating the contract between the parties.
(b) That the trial court erred in law and in fact by failing to hold that the construction having not taken off more than 10 years after the parties executed the contract amounted to breach of contract which entitled the appellant to refund of the money paid.
(c) That the trial magistrate erred in law and in fact by failing to appreciate the testimony of the plaintiff.
(d) That the trial magistrate erred in law and in fact by failing to appreciate the plaintiff’s submissions and the authorities quoted therein.
(e) That the judgment herein was against the weight of the evidence offered before the court.
3. The appeal was canvassed by way of written submissions by both sides.
4. This being a first appeal the court is under a duty to re-evaluate and re-assess the evidence on record and make its own conclusions. It must while doing so keep at the back of its mind that the trial court had the advantage of observing the demeanor of the witnesses which the appellate court lacks.
5. The duty of the first appellant court was set out on the case of Selle and another versus Associated Motor Boat Company and others (1968) EA 123 where the Court of Appeal held:
‘this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court…is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluateit itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect…’’
6. Commenting on the authority to interfere with the exercise of judicial discrection the same Court of Appeal at around the same time in Mbogo and Another versus Shah (1968) EA 93 stated as follows:-
‘….that this court will not interfere with exercise of judicial discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matter on which it should not have acted or because it failed to take into consideration matters which it should have taken into consideration and in doing so arriving at a wrong conclusion.’
7. As I embark on that duty I will restate the evidence as recorded by the trial court.
8. PW1 the 1 st appellant, adopted his statements dated 15/5/2023. He then produced the two listed documents and exhibits. They were sale agreement dated 18/12/2014 and deposit slip dated 14/3/2015. The statement was brief. All it said is that they rented into agreement to purchase house number 71 phase 3 on land parcel no. Kisumu/Kanyakwar ‘B’/2587. That they paid Kshs. 3.8 Million to the respondent and the land had not been transferred to date.
9. In cross examination the 1 st appellant stated that he had paid Kshs. 3.8 Million. that unit was to be ready in one year. That construction had not started. That there was no completion date. That land was to be transferred upon completion of construction. That he was to issue a default notice. That he did not make subsequent payments because no architects certificate had been supplied. He insisted that they were not in breach.
10. In defence Charles Otieno Ogada testified. He introduced himself as a Director of Victoria Estates Limited. He adopted a statement dated 9/10/2023. In that statement he witnesses referred to the same agreement produced by the appellants. He said that the purchase price was Kshs. 16,500,000/=. He set out a schedule of payment and complained that the appellants had failed to pay as agreed and were therefore in default.
11. It was the appellants position that there were still houses on sale and if the appellants completed payment they could take possession and transfers will be executed. That the suit was premature.
12. In cross examination DW1 admitted entering into a contract for purchase of a house. That they were paid 10% of the purchase price as deposit. That at the time of the hearing construction had not commenced. That this was ten years later. That they did not issue architect’s certificate because the appellants had not completed payment. That the last payment was to be made in March 2016. That the payment were not conditional to issuance of architects certificate. That although the construction of the property had not started they had alternative houses from which the appellants could choose.
13. I have carefully and keenly read and understood the pleadings, proceedings and the judgment of the trial court. I have also considered the rival submissions on appeal.
14. The main issue for determination is whether there was a breach of contract by the respondent. To get to this issue it is important to lay out the contract and its terms.
15. As agreed by both parties the contract is captured in the agreement for sale dated 18/12/2014. It was produced as exhibit Number 1 by the appellant. The parties are in agreement to all the terms except to what constituted default and what the remedies were in that event. Default is covered under clause 4 and 5 of the agreement. I find clause 4.4 and 5 to be germane to this issue. I reproduce them as follows:
‘4.4 In the event of default on part of the vendor and if the vendor fails to comply with its obligations under the agreement the purchaser may give the vendor twenty one (21) days’ notice in writing to comply with its obligation and such notice (being of essence)and if the under them fails to comply with the notice the purchased may at the discretion and without prejudice to this rights and remedies resent this agreement and the vendor shall forthwith refund the deposit paid together with a monthly interest rate of 50% to the purchaser forthwith.
5. In the event that completion of the property is delayed for any reason beyond the completion date this agreement shall continue in force until actual completion can take place and the vendor shall not be liable for any loss and damage suffered to the purchase as a result of such delay provided that such delays shall not be for a period of more than twelve (12) months following the date of receipt of completion notice issued to the vendor by and on behalf of the purchaser in which ….the purchaser shall be at liberty to rescind the agreement and be entitled to a full refund of the deposit paid. ’
16. It is common ground that the appellant as purchaser paid Kshs. 3,800,000/= too the respondent. This constituted a deposit. The purchase price was Kshs. 16,500,000/=
16. It is also not in dispute that up to the time this suit was filed the respondent had not delivered the completed house. In fact, construction had not even started. Clause 2.1.3 provided that completion shall be notified through issuance of architect’s certificate of practical completion. Under definition and interpretations completion date is indicated as six months and within fourteen (14) days from the date when the architects issue a certificate of practical completion whichever shall be later.
17. My reading of this clause lacks the completion date in this agreement. The parties in addition agreed on timelines for payment of the balance of purchase price. The payment was to be made in four installments starting from February 2015 with the last payment being made in March 2016. None of these payments was to be made without architect’s certificates of practical completion. The certificate was to be delivered by the vendor. They did not. As a matter of fact they did not even start the construction 10 years later.
18. The respondents cannot be heard to say that the appellants did not pay the installments as expected. As time lapsed without the requisite architects certificate the vendor fell into default. They failed to comply with the obligations.
19. Whether this constituted a breach of the contract is covered under clause 4.4 of the agreement which I have reproduced above. In the case of National bank of Kenya Limited versus Pipe plastic Sankolit (K) Limited & another (2001) eKLR the court observed as follows:-
‘a court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved. There was not the remotest suggestion of coercion fraud and undue influence in regard to the terms of charge.’
20. It had been stated earlier by Shah JA in Fina Bank Limited versus Spares & Industries Limited (Civil Appeal No. 51 of 2000 (unreported) as follows:
‘it is clear beyond peradventure that save for those special cases where equity might be prepared to relieve a party from a bad bargain; it is ordinarily no part of equity’s function to allow a property to escape from a bad bargain.’
21. The contested part of clause 4.4 is the part that provides that if the vendor defaults its obligations the purchaser may (emphasis mine) give the vendor twenty one (21) days notice to comply. It is further provided that if the vendor fails to comply with the notice the purchaser may opt to rescind the contract and at that point the vendor shall refund the deposit together with the monthly interest of 5% .
22. The trial court found the giving of notice to the condition precedent to the claim of refund. The appellant is of the firm view that the use of the word ‘may’ makes this condition not mandatory.
23. I have carefully considered clause 4.4 and 5 of this agreement. I do not find any ambiguity. In my understanding of clause 4.4 the use of the word ‘may’ gives the purchaser options. The notice to comply is supposed to trigger the rescinding of the contract if not complied within 21 days. Without the notice the remedy of a refund of the deposit together with interest rate at 5% is simply not available. It only crystalizes upon failing by the vendor to comply with the notice. So to the question whether the notice is mandatory the answer is in the affirmative if the purchaser wishes to get a refund of his deposit. He could, of course, opt for other remedies including specific performance and damages.
24. It is admitted by the appellant that he did not give the requisite notice. He then did not give himself within the remedy offered by clause 4.4 of the contract. As noted above this court will not rewrite the contract for the parties. There is no suggestion that there was undue influence or inequality of bargain. I therefore find no reason to disturb or set aside the findings of the trial court on this issue.
25. Further, under clause 5 the issue of delay is addressed. It is provided that the contract shall continue in force if ‘completion of the property is delayed for any reason beyond completion date.’ That the vendor shall not be liable for any loss or damage suffered to the purchaser as a result of such delay. The only proviso is that the delay shall not be more than twelve (12) months following the date of receipt of completion notice (emphasis supplied). This completion notice is the one referred to under clause 4.4. It is at that point that the purchaser can rescind the contract for delay. Again, the twelve (12) months’ period is triggered by the notice by the purchaser. No notice was issued. This is not in dispute. The parties having agreed on the terms of the contract they were bound by them.
26. In the result I find that there was no breach of the contract. The appeal by the appellant is one without merit. It is hereby dismissed.
27. On costs, this is within the court’s discretion. In this case the respondents are the successful party. They get the costs of the appeal. It is so ordered.
Hon. A.K. Ithuku
JUDGE
Court
Judgment delivered in virtual court.
Ms. Anyango for appellant
The firm of Omuthe for the respondent/absent
Hon. Alex. K. Ithuku
JUDGE
Delivered, dated and signed at Makadara Law Courts this 3 TH … day of July, 2026
Hon. Alex. K. Ithuku
JUDGE
Page 11 of 11 HCCRA NO. E034 OF 2025
IN THE HIGH COURT OF KENYA AT KISUMU
HIGH COURT CIVIL APPEAL NO. E034 OF 2025
BERNARD ONYANG OMORE……..……….……...……………….1 ST APPELLANT
PAULINE ATETO AYUGA…………………………………………….2 ND APPELLANT
VERSUS
VICTORIA ESTATES LIMITED.....……………......................RESPONDENT
JUDGMENT
1. This appeal arises from the judgment of Hon. E. Mwenda PM delivered on 20/1/2025. In the impugned judgment the learned magistrate dismissed the appellant’s suit and ordered each party to bear their own costs.
2. The appellants were aggrieved and filed a memorandum of appeal dated 6/2/2025 where they listed the following grounds of appeal;
(a) That the learned trial magistrate erred in law and facts by failing to appreciate that the issuance of the 21 days compliance notice was not mandatory before terminating the contract between the parties.
(b) That the trial court erred in law and in fact by failing to hold that the construction having not taken off more than 10 years after the parties executed the contract amounted to breach of contract which entitled the appellant to refund of the money paid.
(c) That the trial magistrate erred in law and in fact by failing to appreciate the testimony of the plaintiff.
(d) That the trial magistrate erred in law and in fact by failing to appreciate the plaintiff’s submissions and the authorities quoted therein.
(e) That the judgment herein was against the weight of the evidence offered before the court.
3. The appeal was canvassed by way of written submissions by both sides.
4. This being a first appeal the court is under a duty to re-evaluate and re-assess the evidence on record and make its own conclusions. It must while doing so keep at the back of its mind that the trial court had the advantage of observing the demeanor of the witnesses which the appellate court lacks.
5. The duty of the first appellant court was set out on the case of Selle and another versus Associated Motor Boat Company and others (1968) EA 123 where the Court of Appeal held:
‘this court is not bound necessarily to accept the findings of fact by the court below. An appeal to this court…is by way of retrial and the principles upon which this court acts in such an appeal are well settled. Briefly put they are that this court must reconsider the evidence, evaluateit itself and draw its own conclusions though it should always bear in mind that it has neither seen nor heard the witnesses and should make due allowance in this respect…’’
6. Commenting on the authority to interfere with the exercise of judicial discrection the same Court of Appeal at around the same time in Mbogo and Another versus Shah (1968) EA 93 stated as follows:-
‘….that this court will not interfere with exercise of judicial discretion by an inferior court unless it is satisfied that its decision is clearly wrong, because it has misdirected itself or because it has acted on matter on which it should not have acted or because it failed to take into consideration matters which it should have taken into consideration and in doing so arriving at a wrong conclusion.’
7. As I embark on that duty I will restate the evidence as recorded by the trial court.
8. PW1 the 1 st appellant, adopted his statements dated 15/5/2023. He then produced the two listed documents and exhibits. They were sale agreement dated 18/12/2014 and deposit slip dated 14/3/2015. The statement was brief. All it said is that they rented into agreement to purchase house number 71 phase 3 on land parcel no. Kisumu/Kanyakwar ‘B’/2587. That they paid Kshs. 3.8 Million to the respondent and the land had not been transferred to date.
9. In cross examination the 1 st appellant stated that he had paid Kshs. 3.8 Million. that unit was to be ready in one year. That construction had not started. That there was no completion date. That land was to be transferred upon completion of construction. That he was to issue a default notice. That he did not make subsequent payments because no architects certificate had been supplied. He insisted that they were not in breach.
10. In defence Charles Otieno Ogada testified. He introduced himself as a Director of Victoria Estates Limited. He adopted a statement dated 9/10/2023. In that statement he witnesses referred to the same agreement produced by the appellants. He said that the purchase price was Kshs. 16,500,000/=. He set out a schedule of payment and complained that the appellants had failed to pay as agreed and were therefore in default.
11. It was the appellants position that there were still houses on sale and if the appellants completed payment they could take possession and transfers will be executed. That the suit was premature.
12. In cross examination DW1 admitted entering into a contract for purchase of a house. That they were paid 10% of the purchase price as deposit. That at the time of the hearing construction had not commenced. That this was ten years later. That they did not issue architect’s certificate because the appellants had not completed payment. That the last payment was to be made in March 2016. That the payment were not conditional to issuance of architects certificate. That although the construction of the property had not started they had alternative houses from which the appellants could choose.
13. I have carefully and keenly read and understood the pleadings, proceedings and the judgment of the trial court. I have also considered the rival submissions on appeal.
14. The main issue for determination is whether there was a breach of contract by the respondent. To get to this issue it is important to lay out the contract and its terms.
15. As agreed by both parties the contract is captured in the agreement for sale dated 18/12/2014. It was produced as exhibit Number 1 by the appellant. The parties are in agreement to all the terms except to what constituted default and what the remedies were in that event. Default is covered under clause 4 and 5 of the agreement. I find clause 4.4 and 5 to be germane to this issue. I reproduce them as follows:
‘4.4 In the event of default on part of the vendor and if the vendor fails to comply with its obligations under the agreement the purchaser may give the vendor twenty one (21) days’ notice in writing to comply with its obligation and such notice (being of essence)and if the under them fails to comply with the notice the purchased may at the discretion and without prejudice to this rights and remedies resent this agreement and the vendor shall forthwith refund the deposit paid together with a monthly interest rate of 50% to the purchaser forthwith.
5. In the event that completion of the property is delayed for any reason beyond the completion date this agreement shall continue in force until actual completion can take place and the vendor shall not be liable for any loss and damage suffered to the purchase as a result of such delay provided that such delays shall not be for a period of more than twelve (12) months following the date of receipt of completion notice issued to the vendor by and on behalf of the purchaser in which ….the purchaser shall be at liberty to rescind the agreement and be entitled to a full refund of the deposit paid. ’
16. It is common ground that the appellant as purchaser paid Kshs. 3,800,000/= too the respondent. This constituted a deposit. The purchase price was Kshs. 16,500,000/=
16. It is also not in dispute that up to the time this suit was filed the respondent had not delivered the completed house. In fact, construction had not even started. Clause 2.1.3 provided that completion shall be notified through issuance of architect’s certificate of practical completion. Under definition and interpretations completion date is indicated as six months and within fourteen (14) days from the date when the architects issue a certificate of practical completion whichever shall be later.
17. My reading of this clause lacks the completion date in this agreement. The parties in addition agreed on timelines for payment of the balance of purchase price. The payment was to be made in four installments starting from February 2015 with the last payment being made in March 2016. None of these payments was to be made without architect’s certificates of practical completion. The certificate was to be delivered by the vendor. They did not. As a matter of fact they did not even start the construction 10 years later.
18. The respondents cannot be heard to say that the appellants did not pay the installments as expected. As time lapsed without the requisite architects certificate the vendor fell into default. They failed to comply with the obligations.
19. Whether this constituted a breach of the contract is covered under clause 4.4 of the agreement which I have reproduced above. In the case of National bank of Kenya Limited versus Pipe plastic Sankolit (K) Limited & another (2001) eKLR the court observed as follows:-
‘a court of law cannot rewrite a contract between the parties. The parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved. There was not the remotest suggestion of coercion fraud and undue influence in regard to the terms of charge.’
20. It had been stated earlier by Shah JA in Fina Bank Limited versus Spares & Industries Limited (Civil Appeal No. 51 of 2000 (unreported) as follows:
‘it is clear beyond peradventure that save for those special cases where equity might be prepared to relieve a party from a bad bargain; it is ordinarily no part of equity’s function to allow a property to escape from a bad bargain.’
21. The contested part of clause 4.4 is the part that provides that if the vendor defaults its obligations the purchaser may (emphasis mine) give the vendor twenty one (21) days notice to comply. It is further provided that if the vendor fails to comply with the notice the purchaser may opt to rescind the contract and at that point the vendor shall refund the deposit together with the monthly interest of 5% .
22. The trial court found the giving of notice to the condition precedent to the claim of refund. The appellant is of the firm view that the use of the word ‘may’ makes this condition not mandatory.
23. I have carefully considered clause 4.4 and 5 of this agreement. I do not find any ambiguity. In my understanding of clause 4.4 the use of the word ‘may’ gives the purchaser options. The notice to comply is supposed to trigger the rescinding of the contract if not complied within 21 days. Without the notice the remedy of a refund of the deposit together with interest rate at 5% is simply not available. It only crystalizes upon failing by the vendor to comply with the notice. So to the question whether the notice is mandatory the answer is in the affirmative if the purchaser wishes to get a refund of his deposit. He could, of course, opt for other remedies including specific performance and damages.
24. It is admitted by the appellant that he did not give the requisite notice. He then did not give himself within the remedy offered by clause 4.4 of the contract. As noted above this court will not rewrite the contract for the parties. There is no suggestion that there was undue influence or inequality of bargain. I therefore find no reason to disturb or set aside the findings of the trial court on this issue.
25. Further, under clause 5 the issue of delay is addressed. It is provided that the contract shall continue in force if ‘completion of the property is delayed for any reason beyond completion date.’ That the vendor shall not be liable for any loss or damage suffered to the purchaser as a result of such delay. The only proviso is that the delay shall not be more than twelve (12) months following the date of receipt of completion notice (emphasis supplied). This completion notice is the one referred to under clause 4.4. It is at that point that the purchaser can rescind the contract for delay. Again, the twelve (12) months’ period is triggered by the notice by the purchaser. No notice was issued. This is not in dispute. The parties having agreed on the terms of the contract they were bound by them.
26. In the result I find that there was no breach of the contract. The appeal by the appellant is one without merit. It is hereby dismissed.
27. On costs, this is within the court’s discretion. In this case the respondents are the successful party. They get the costs of the appeal. It is so ordered.
Hon. A.K. Ithuku
JUDGE
Court
Judgment delivered in virtual court.
Ms. Anyango for appellant
The firm of Omuthe for the respondent/absent
Hon. Alex. K. Ithuku
JUDGE
Delivered, dated and signed at Makadara Law Courts this 3 TH … day of July, 2026
Hon. Alex. K. Ithuku
JUDGE
Page 11 of 11 HCCRA NO. E034 OF 2025