1. Vide a Plaint dated 28/7/2021, the Plaintiff instituted the present suit against the Defendant.
2. The Plaintiff's case is that it is the registered proprietor of L.R. No. 209/1052/1 ("the suit property"). It pleaded that on 10/10/2013, it entered into a Construction Loan Facility Agreement with the Defendant for a sum of Kshs. 364,000,000/= to facilitate the buy-out of an outstanding loan owed to Kenya Commercial Bank Limited in the sum of Kshs. 95,000,000/= and to finance the development of 100 apartments on the suit property. According to the Plaintiff, on 9/4/2014, the Defendant settled the outstanding KCB facility, while the balance of the facility was to be disbursed in tranches to finance the development. The Plaintiff further created a supplemental charge over L.R. No. 1160/339 Karen as additional security for the facility.
3. The Plaintiff contended that the Defendant failed to honour its obligations under the facility agreement by refusing to disburse the construction funds on the ground of alleged cash flow challenges, thereby stalling the project and occasioning it substantial losses. It averred that notwithstanding the Defendant's alleged breach, it continued servicing the partially disbursed facility. The Plaintiff further pleaded that on 5/9/2014, the Defendant issued a statutory notice of sale despite the Plaintiff having paid Kshs. 4,196,055/= as interest on the partial disbursement.
4. The Plaintiff further averred that, after prolonged negotiations, the Defendant served it with a notice to sell the suit property on 4/2/2016, prompting it to file High Court Commercial Case No. 83 of 2016 seeking injunctive relief and the discharge of the supplemental charge. The Plaintiff stated that the parties subsequently agreed to settle the dispute through mediation and entered into a Settlement Agreement dated 18/12/2017, under which the amount due to the Defendant was agreed at Kshs. 71,800,000/=. The terms of the agreement required payment of Kshs. 16,800,000/= before execution of the agreement, Kshs. 5,000,000/= within ninety (90) days, upon which the Karen title would be discharged, and payment of the balance of Kshs. 50,000,000/= through financing from Spire Bank following registration of a charge over the suit property.
5. The Plaintiff averred that although Spire Bank issued a professional undertaking dated 12/10/2017, the bank subsequently experienced liquidity challenges and returned the security documents to the Defendant. According to the Plaintiff, while it was actively pursuing alternative financing, the Defendant unlawfully rescinded the Settlement Agreement and demanded sums in excess of the agreed Kshs. 50,000,000/=, eventually claiming Kshs. 174,125,294.95/=.
6. The Plaintiff further pleaded that on 10/8/2020, through its advocates, MMC Asafo, it received a demand letter from the Defendant indicating that the Settlement Agreement had been rescinded and the original loan facility reinstated in full, failing which the Defendant would exercise its statutory power of sale. The Plaintiff also alleged that the Defendant listed it with the Credit Reference Bureau in breach of the Settlement Agreement.
7. The Plaintiff particularised the Defendant's alleged breach as including failure to honour the Settlement Agreement; wrongful listing with the Credit Reference Bureau despite there being no stipulated timeline for payment of the Kshs. 50,000,000/=; failure to facilitate completion of the refinancing transaction; and dissemination of adverse information to financial institutions, including Gulf African Bank, Dubai Islamic Bank, Consolidated Bank of Kenya and Sidian Bank, thereby frustrating the Plaintiff's efforts to secure alternative financing.
8. Consequently, the Plaintiff seeks the following orders:
i. An Order of Permanent Injunction restraining the Defendant, whether by itself, its agents or servants, from advertising for sale, selling, disposing of, transferring and/or in any other manner interfering with the Plaintiff's quiet possession, use, occupation and enjoyment of L.R. No. 209/1052/1.
ii. An Order compelling the Defendant to forthwith remove, delete, clear or otherwise expunge the Plaintiff's name from the list of defaulters maintained by the Credit Reference Bureaus.
iii. A declaration that the Defendant is only entitled to Kshs. 50,000,000/= from the Plaintiff together with an order for specific performance of the Settlement Agreement.
iv. Costs and interest of the suit.
Plaintiff's Witness
9. The Plaintiff called one witness, Patrick Kabaiya Mwangi, who adopted his witness statement dated 28/7/2021 as his evidence-in-chief. He testified that on 10/10/2013, the Plaintiff accepted the Defendant's offer of a loan facility in the sum of Kshs. 364,000,000/=, of which Kshs. 95,000,000/= was intended to offset an existing facility with Kenya Commercial Bank Limited, while the balance of Kshs. 269,000,000/= was to finance the construction of 100 apartments on L.R. No. 209/1052/1.
10. The witness testified that on 28/11/2013, the Plaintiff created a supplemental charge over L.R. No. 1160/339 Karen in favour of the Defendant as security for the facility. He further stated that on 9/4/2014, the Defendant paid Kshs. 95,000,000/= to Kenya Commercial Bank Limited and took over the existing facility, following which a legal charge over the suit property was registered on 26/5/2014.
11. It was the witness's evidence that the Defendant thereafter failed to disburse the construction funds as agreed, causing the project to stall. He testified that, as a consequence, the Plaintiff suffered losses of approximately Kshs. 720,000/= per month over a period of seven years, lost anticipated sales revenue estimated at Kshs. 240,000,000/=, and became exposed to claims from purchasers who had already paid deposits amounting to Kshs. 24,000,000/=, representing ten per cent (10%) of the purchase prices.
12. The witness further stated that in September 2014, barely four months after the initial disbursement, the Defendant issued a statutory notice of sale despite the Plaintiff having already paid Kshs. 4,196,055/= as interest on the partial disbursement. He testified that although the Plaintiff continued servicing the facility and paid approximately Kshs. 27,000,000/= between 2015 and 2016, it eventually became apparent that the Defendant had no intention of fulfilling its obligations. Consequently, the Plaintiff instituted High Court Civil Case No. 83 of 2016 seeking injunctive relief and discharge of the supplemental charge over the Karen property.
13. The witness further testified that the parties subsequently settled the dispute out of court and entered into a Settlement Agreement under which the Defendant agreed to accept Kshs. 71,800,000/= in full and final settlement of the outstanding debt. He stated that Kshs. 16,800,000/= had already been paid before execution of the agreement, Kshs. 5,000,000/= was subsequently paid within the agreed period leading to the discharge of the Karen title, while the balance of Kshs. 50,000,000/= was to be financed through Spire Bank upon issuance of a professional undertaking pending registration of a charge over the suit property. He explained that Spire Bank later experienced liquidity challenges and consequently returned the security documents to the Defendant.
14. The witness further testified that the Plaintiff thereafter approached several financial institutions, including Gulf African Bank, Diamond Trust Bank, Consolidated Bank of Kenya and Sidian Bank, seeking refinancing. He stated that those efforts were frustrated by the Defendant through negative Credit Reference Bureau listings and dissemination of adverse information regarding the Plaintiff's account. He added that although Sidian Bank initially expressed willingness to finance the transaction after verifying the Plaintiff's position, the process was ultimately frustrated by the Defendant.
15. The witness further stated that in June 2020, the Plaintiff wrote to the Defendant's Managing Director seeking intervention to facilitate resolution of the dispute. Instead, it received a demand letter dated 10/8/2020 from the Defendant's advocates, MMC Asafo, indicating that the Settlement Agreement had been rescinded and that the original loan facility had been reinstated. He contended that the Defendant was demanding Kshs. 174,125,294.95/=, notwithstanding that the entire loan facility had never been disbursed.
16. The witness expressed apprehension that the Plaintiff risked losing the suit property despite its efforts to resolve the dispute. He maintained that the Defendant's continued negative Credit Reference Bureau listing and adverse representations to financial institutions frustrated all attempts by the Plaintiff to redeem the property.
Defendant's Statement of Defence
17. The Defendant filed its Statement of Defence dated 25/11/2021, in which it admitted that it had extended to the Plaintiff a loan facility of Kshs. 364,000,000/= pursuant to a Letter of Offer dated 10/10/2013.
18. The Defendant averred that the facility was granted subject to the availability of funds and upon terms that any default in repayment would render the entire facility immediately due and payable together with accrued interest. According to the Defendant, the facility was intended to offset the Plaintiff's outstanding indebtedness to Kenya Commercial Bank Limited in the sum of Kshs. 95,000,000/= and partly finance the construction of ninety (90) one-bedroom apartments and ten (10) two-bedroom apartments on L.R. No. 209/1052/1. The Defendant further stated that the Plaintiff voluntarily offered L.R. No. 209/1052/1 and L.R. No. 1160/330 as security and that, upon fulfilment of all conditions precedent, it redeemed the KCB facility by paying Kshs. 95,000,000/=.
19. The Defendant denied breaching the facility agreement and instead maintained that it was the Plaintiff who defaulted in repayment. It pleaded that, upon default, it issued demands, reminders, and requests for regularisation of the account, but the Plaintiff failed to honour the commitments contained in its letters dated 4/8/2014 and 16/9/2014. The Defendant further averred that the Plaintiff subsequently altered the scope of the development and sought additional financing amounting to Kshs. 1.1 billion from other financiers.
20. Consequently, through letters dated 8/7/2015 and 2/2/2016, the Defendant informed the Plaintiff that the original facility of Kshs. 364,000,000/= remained available only to the extent of amounts already drawn, and that any request for further funding would require a fresh appraisal. The Defendant maintained that the Plaintiff's persistent default compelled it to commence realization proceedings against the charged properties.
21. In response to the Plaintiff's reference to High Court Civil Case No. 83 of 2016, the Defendant admitted that the suit was instituted following the issuance of statutory notices. It, however, denied that the subsequent Settlement Agreement arose from any mismanagement of the Plaintiff's account. Rather, the Defendant maintained that the agreement was entered into in good faith to afford the Plaintiff additional time within which to settle the outstanding debt and redeem the charged properties.
22. The Defendant set out the terms of the Settlement Agreement as requiring payment of Kshs. 71,800,000/= in full and final settlement of the outstanding indebtedness, comprising Kshs. 16,800,000/= already paid, Kshs. 5,000,000/= payable within ninety (90) days, and Kshs. 50,000,000/= to be financed through Spire Bank upon issuance of a professional undertaking. The Defendant maintained that the agreement expressly provided that time was of the essence and that performance by the parties was conditional upon strict compliance with the agreed timelines.
23. The Defendant denied the Plaintiff's allegations that it had breached the Settlement Agreement and contended that it was the Plaintiff that failed to perform its obligations thereunder. According to the Defendant, although Spire Bank issued a professional undertaking dated 12/10/2017, the Plaintiff failed to pay the agreed sum of Kshs. 5,000,000/= by 31/12/2017 and further instructed Spire Bank to halt the transaction, prompting the Bank to withdraw its undertaking and return all the security documents. The Defendant averred that notwithstanding the Plaintiff's default, it accepted the late payment of Kshs. 5,000,000/= and released the title to L.R. No. 1160/339 on condition that the balance of Kshs. 50,000,000/= would be paid by 31/3/2018.
24. The Defendant further averred that Spire Bank subsequently issued another professional undertaking dated 1/8/2018, but later withdrew from the transaction by its letter dated 24/9/2018. The Defendant maintained that it thereafter issued a demand dated 6/12/2018 requiring payment of Kshs. 50,000,000/= within seven (7) days. However, the Plaintiff failed to comply and instead sought further indulgence while pursuing financing from Gulf African Bank. The Defendant further stated that, by a letter dated 12/9/2019, it exceptionally extended time for payment and revised the settlement amount to Kshs. 52,000,000/=, subject to receipt of an acceptable bank undertaking by 30/9/2019. The Plaintiff nevertheless failed to honour that arrangement.
25. The Defendant denied the Plaintiff's allegation that its inability to secure financing resulted from an unlawful Credit Reference Bureau listing. It maintained that the Plaintiff admittedly remained in default of its loan obligations and that listing the Plaintiff with the Credit Reference Bureau was mandatory under the applicable banking regulations and not a matter of discretion. According to the Defendant, the Plaintiff was at all material times aware that continued default would inevitably result in CRB listing.
26. The Defendant further averred that, owing to the Plaintiff's persistent failure to regularise the loan account, it issued a thirty (30) day demand notice dated 10/8/2020, reinstating the original loan facility together with accrued interest and notifying the Plaintiff of its intention to exercise its statutory power of sale over L.R. No. 209/1052/1 upon continued default. The Defendant added that although the Plaintiff subsequently sought fresh negotiations, those proposals were declined.
27. Consequently, the Defendant contended that the Plaintiff had approached the Court with unclean hands, had admitted its indebtedness, and had failed to demonstrate any wrongdoing on the Defendant's part in the realization process. The Defendant therefore prayed that the suit be dismissed with costs.
Defendant's Witness
28. The defence called one witness, Shelemia Jalango, who adopted his witness statement dated 16/8/2024 as his evidence-in-chief. He testified that the Defendant advanced to the Plaintiff a loan facility of Kshs. 364,000,000/= pursuant to the Letter of Offer dated 10/10/2013 for the purpose of redeeming the Plaintiff's Kenya Commercial Bank facility and partly financing the proposed development on L.R. No. 209/1052/1. He further testified that the Plaintiff offered L.R. No. 209/1052/1 and L.R. No. 1160/330 as security for the facility and subsequently defaulted in repayment despite numerous demands and reminders.
29. The witness further testified that the Plaintiff altered the scope of the proposed development and sought additional financing from other lenders, prompting the Defendant to decline any further funding through its letters dated 8/7/2015 and 2/2/2016. He stated that following the Plaintiff's default, it instituted High Court Civil Case No. 83 of 2016, after which the parties entered into the Settlement Agreement requiring payment of Kshs. 71,800,000/= by 31/12/2017.
30. According to the witness, the Plaintiff breached the Settlement Agreement by failing to pay the balance of Kshs. 50,000,000/= within the agreed timelines, notwithstanding the professional undertakings issued by Spire Bank on 12/10/2017 and 1/8/2018, both of which were subsequently withdrawn. He added that although the Defendant released the title to the Karen property upon receipt of the late payment of Kshs. 5,000,000/=, the Plaintiff nevertheless remained in persistent default.
31. The witness further testified that the Defendant issued several demand notices, including letters dated 6/12/2018 and 10/8/2020, together with the statutory ninety (90) day notice dated 6/5/2021 issued under Section 90 of the Land Act. He maintained that the Plaintiff remained indebted to the Defendant in the sum of Kshs. 184,727,891/= and that the Defendant was therefore entitled to exercise its statutory power of sale.
32. The Defendant also produced a bundle of documents containing, inter alia, the Letter of Offer dated 10/10/2013, the charge instruments, demand letters, correspondence exchanged between the parties, the Settlement Agreement, the professional undertakings issued by Spire Bank, the statutory notices and the statement of account.
Plaintiff's Reply to Defence
33. The Plaintiff filed a Reply to Defence dated 6/12/2021, reiterating the averments contained in the Plaint and denying the Defendant's allegation that the default arose from its own conduct. The Plaintiff maintained that it was the Defendant that breached the loan agreement by refusing to continue disbursing the agreed construction funds.
34. The Plaintiff further averred that the Defendant unilaterally altered the terms of financing through its letter dated 10/7/2015 by insisting on the involvement of an equity partner, and thereafter rejected the Plaintiff's proposal notwithstanding the introduction of Shelter Afrique as the proposed equity partner. According to the Plaintiff, the Defendant acted maliciously and in bad faith throughout the transaction.
35. The Plaintiff also maintained that under the Settlement Agreement, only the payment of Kshs. 5,000,000/= was subject to strict timelines, whereas no deadline had been stipulated for payment of the balance of Kshs. 50,000,000/=, which was to be secured by a professional undertaking from Spire Bank. The Plaintiff therefore denied that it had breached the Settlement Agreement and contended that the Defendant's allegations were intended to discredit it despite its continued efforts to resolve the dispute.
36. The Plaintiff further challenged the Credit Reference Bureau listing on the ground that the amount reflected therein was inaccurate. It reiterated the particulars of breach pleaded in the Plaint and maintained that the Defendant could not lawfully rescind the Settlement Agreement unilaterally or proceed with realization of the securities contrary to its terms.
37. Consequently, the Plaintiff prayed that the Defence be struck out or dismissed and that judgment be entered in its favour as prayed in the Plaint.
Analysis and Determination
38. The Plaintiff relied on its bundle of documents dated 28/7/2021 and written submissions dated 24/9/2025. The Defendant, on its part, relied on its bundle of documents dated 16/8/2024 and written submissions dated 16/1/2026.
39. I have carefully considered the pleadings, the oral and documentary evidence, and the submissions filed by the parties. In my view, the following issues arise for determination:
i. Whether the Plaintiff breached the terms of the Settlement Agreement.
ii. Whether the Defendant frustrated performance
iii. Whether the Defendant validly rescinded the Settlement Agreement.
iv. Whether the Defendant acted in breach of the in duplum rule.
Whether the Plaintiff breached the terms of the Settlement Agreement
40. It is common ground that the Defendant extended to the Plaintiff a loan facility of Kshs. 364,000,000/= pursuant to the Letter of Offer dated 10/10/2013. The facility was intended to redeem an outstanding loan of Kshs. 95,000,000/= owed to Kenya Commercial Bank Limited and partly finance the construction of apartment units on the suit property. As security for the facility, the Plaintiff executed a legal charge over L.R. No. 209/1052/1 and a supplemental charge over L.R. No. 1160/339.
41. The evidence on record shows that the Plaintiff fell into arrears in servicing the loan facility, as demonstrated by its letters dated 4/8/2014 and 16/9/2014, in which it expressly acknowledged its default and undertook to regularise the account. Those letters appear at pages 66 and 67 of the Defendant's bundle of documents.
42. Following the Plaintiff's default, the Defendant commenced the process of realizing the charged securities. That prompted the Plaintiff to institute High Court Civil Case No. 83 of 2016 – Elite Intelligent Traffic Systems Limited v Housing Finance Company Limited, seeking, inter alia, an injunction restraining the Defendant from exercising its statutory power of sale.
43. That suit was subsequently withdrawn after the parties entered into a Settlement Agreement dated 18/12/2017, which is contained at pages 6 to 11 of the Plaintiff's bundle of documents. The material terms of the agreement provided as follows:
(a) Elite agrees to pay HFC the sum of Kshs. 71,800,000.00 in full and final settlement of the outstanding amount in Account No. 704-0000749;
(b) Elite has already paid the sum of Kshs. 16,800,000.00, leaving a balance of Kshs. 55,000,000.00;
(c) Spire Bank Kenya Limited shall issue a professional undertaking to HFC to pay Kshs. 50,000,000.00 in consideration of HFC releasing the discharged securities relating to L.R. No. 209/1052/1 to Spire Bank or its advocates for preparation of the requisite security documents;
(d) Within fourteen (14) days of registration of Spire Bank's charge over the suit property, Spire Bank shall remit Kshs. 50,000,000.00 to HFC by Real Time Gross Settlement System;
(e) The balance of Kshs. 5,000,000.00 shall be secured by L.R. No. 1160/339 (Karen Property);
(f) Elite shall pay the said Kshs. 5,000,000.00 within ninety (90) days, but not later than 31st December 2017;
(g) Upon payment of the Kshs. 5,000,000.00, HFC shall execute a discharge of the Supplemental Charge over L.R. No. 1160/339 and release the title within twenty-one (21) days;
(h) Elite shall, within three (3) days of execution of the Settlement Agreement, file a Notice of Withdrawal in High Court Civil Case No. 83 of 2016; and
(i) Each party shall bear its own costs of the suit.
44. It is evident from the record that the Plaintiff paid the Kshs. 5,000,000/= after 31/12/2017, contrary to Clause 1(f) of the Settlement Agreement. Notwithstanding that default, the Defendant accepted the late payment and released the title to L.R. No. 1160/339, thereby waiving strict compliance with that particular timeline.
45. Under Clauses 1(c) and 1(d) of the Settlement Agreement, the Plaintiff was required to procure a professional undertaking from Spire Bank to facilitate the release of the security documents relating to the suit property for purposes of registration. Upon completion of registration, Spire Bank was to remit Kshs. 50,000,000/= to the Defendant within fourteen (14) days.
46. The evidence demonstrates that Spire Bank duly issued a professional undertaking by its letter dated 12/10/2017, whereupon the Defendant released the requisite security documents to facilitate registration. That position is confirmed by the correspondence appearing at pages 85 to 88 of the Defendant's bundle of documents.
47. However, the correspondence subsequently exchanged between the parties reveals that the registration process was never completed because the Plaintiff instructed Spire Bank to halt the transaction. That fact is borne out by the emails dated 2/2/2018, 6/2/2018 and 8/2/2018, appearing at pages 89 to 91 of the Defendant's bundle of documents.
48. As a consequence of the Plaintiff's instructions, Spire Bank declined to remit the agreed sum of Kshs. 50,000,000/= towards settlement of the outstanding debt and considered itself discharged from its professional undertaking, as confirmed in its email dated 8/2/2018.
49. Despite those events, the Defendant afforded the Plaintiff yet another opportunity to complete the transaction after receiving a fresh professional undertaking from Spire Bank dated 1/8/2018. The relevant correspondence appears at pages 94 to 100 of the Defendant's bundle of documents.
50. By its letter dated 24/9/2018, however, Spire Bank once again informed the Defendant that the Plaintiff had halted the transaction, thereby discharging the Bank from its undertaking for the second time.
51. From the foregoing evidence, I am satisfied that the Defendant fulfilled its obligations under Clauses 1(c) and 1(d) of the Settlement Agreement by releasing the requisite security documents upon receipt of the professional undertakings from Spire Bank. The Plaintiff, on the other hand, frustrated completion of the transaction on two separate occasions by instructing Spire Bank to discontinue the registration process. Consequently, the agreed payment of Kshs. 50,000,000/= was never made. I therefore find that the Plaintiff failed to perform its obligations under the Settlement Agreement.
52. The Plaintiff argued that the Settlement Agreement did not prescribe a specific deadline for payment of the Kshs. 50,000,000/=, and that it therefore could not be said to have breached the agreement.
53. I do not agree.
54. Clause 2 of the Settlement Agreement expressly provides that time was of the essence. That provision required the parties to perform their obligations diligently and within a reasonable time.
55. The agreement therefore did not simply extinguish the original indebtedness immediately upon execution. Rather, it established a mechanism through which that indebtedness would be compromised upon successful completion of the agreed payment structure.
56. In any event, the obligation assumed under the Settlement Agreement was the Plaintiff's obligation. The Defendant did not undertake responsibility for the solvency, liquidity, or commercial decisions of Spire Bank. The Plaintiff selected its refinancing structure and assumed the attendant commercial risks.
57. In addition, the Court notes that the Plaintiff's own conduct frustrated the very mechanism agreed upon for payment of the balance of Kshs. 50,000,000/=. It would therefore be inequitable to permit the Plaintiff to rely on the absence of an express payment date when it was its own actions that prevented completion of the transaction. The applicable principle is aptly captured in Halsbury's Laws of England, 4th Edition, Volume 9, paragraph 485, which states:
"In cases where time is not originally of the essence of the contract, or where a stipulation making time of the essence has been waived, time may be made of the essence where there is unreasonable delay, by notice from the party who is not in default fixing a reasonable time for completion and stating that, in the event of non-completion within the time so fixed, he intends to enforce or abandon the contract. The time fixed must, however, be reasonable, having regard to the circumstances existing at the time the notice is given."
58. Having found that the Plaintiff was in breach of the Settlement Agreement, I now turn to the second issue, namely whether the Defendant was entitled to rescind the agreement.
Whether the Defendant frustrated performance
59. The Plaintiff's principal complaint is that the Defendant frustrated implementation of the Settlement Agreement by negatively listing it with Credit Reference Bureaus and discouraging prospective financiers.
60. It is indeed true that a party cannot insist upon performance of a contractual obligation where its own conduct substantially prevented the other party from performing.
61. The burden of proving such prevention rests upon the party alleging it. Sections 107, 108, and 109 of the Evidence Act place that burden squarely upon the Plaintiff.
62. Having reviewed the documentary evidence, the Court is unable to conclude that the Plaintiff discharged that burden.
63. The evidence establishes that long before the execution of the Settlement Agreement, the Plaintiff had already defaulted under the original facility. That default was neither disputed nor temporary. It had persisted over several years.
64. Any reporting by the Defendant to CRB of that indebtedness would therefore not necessarily amount to unlawful conduct.
65. Further, no convincing evidence was placed before the Court demonstrating that any identified financier withdrew solely because of unlawful conduct attributable to the Defendant.
66. The Plaintiff undoubtedly encountered difficulty obtaining replacement financing. However, the evidence does not establish on a balance of probabilities that those difficulties were caused by actionable misconduct on the Defendant's part rather than the Plaintiff's existing financial position.
67. The allegation of frustration therefore remains unproven.
Whether the Defendant validly rescinded the Settlement Agreement
68. The Plaintiff submitted that once the Settlement Agreement was signed, the Defendant permanently abandoned the original indebtedness.
69. Respectfully, the Court is unable to agree.
70. The Settlement Agreement was a conditional compromise. The Defendant agreed to accept a reduced settlement only upon fulfillment of the agreed payment mechanism. That mechanism was never completed.
71. The Plaintiff asks the Court to enforce only those portions of the Settlement Agreement favourable to it while disregarding its own admitted non-performance. Equity does not permit such an approach.
72. The equitable remedy of specific performance is discretionary. It is available only where the claimant demonstrates substantial compliance with its own contractual obligations and remains ready, willing, and able to perform.
73. Although the Plaintiff paid the initial Kshs.16,800,000, the principal consideration
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2. The Plaintiff's case is that it is the registered proprietor of L.R. No. 209/1052/1 ("the suit property"). It pleaded that on 10/10/2013, it entered into a Construction Loan Facility Agreement with the Defendant for a sum of Kshs. 364,000,000/= to facilitate the buy-out of an outstanding loan owed to Kenya Commercial Bank Limited in the sum of Kshs. 95,000,000/= and to finance the development of 100 apartments on the suit property. According to the Plaintiff, on 9/4/2014, the Defendant settled the outstanding KCB facility, while the balance of the facility was to be disbursed in tranches to finance the development. The Plaintiff further created a supplemental charge over L.R. No. 1160/339 Karen as additional security for the facility.
3. The Plaintiff contended that the Defendant failed to honour its obligations under the facility agreement by refusing to disburse the construction funds on the ground of alleged cash flow challenges, thereby stalling the project and occasioning it substantial losses. It averred that notwithstanding the Defendant's alleged breach, it continued servicing the partially disbursed facility. The Plaintiff further pleaded that on 5/9/2014, the Defendant issued a statutory notice of sale despite the Plaintiff having paid Kshs. 4,196,055/= as interest on the partial disbursement.
4. The Plaintiff further averred that, after prolonged negotiations, the Defendant served it with a notice to sell the suit property on 4/2/2016, prompting it to file High Court Commercial Case No. 83 of 2016 seeking injunctive relief and the discharge of the supplemental charge. The Plaintiff stated that the parties subsequently agreed to settle the dispute through mediation and entered into a Settlement Agreement dated 18/12/2017, under which the amount due to the Defendant was agreed at Kshs. 71,800,000/=. The terms of the agreement required payment of Kshs. 16,800,000/= before execution of the agreement, Kshs. 5,000,000/= within ninety (90) days, upon which the Karen title would be discharged, and payment of the balance of Kshs. 50,000,000/= through financing from Spire Bank following registration of a charge over the suit property.
5. The Plaintiff averred that although Spire Bank issued a professional undertaking dated 12/10/2017, the bank subsequently experienced liquidity challenges and returned the security documents to the Defendant. According to the Plaintiff, while it was actively pursuing alternative financing, the Defendant unlawfully rescinded the Settlement Agreement and demanded sums in excess of the agreed Kshs. 50,000,000/=, eventually claiming Kshs. 174,125,294.95/=.
6. The Plaintiff further pleaded that on 10/8/2020, through its advocates, MMC Asafo, it received a demand letter from the Defendant indicating that the Settlement Agreement had been rescinded and the original loan facility reinstated in full, failing which the Defendant would exercise its statutory power of sale. The Plaintiff also alleged that the Defendant listed it with the Credit Reference Bureau in breach of the Settlement Agreement.
7. The Plaintiff particularised the Defendant's alleged breach as including failure to honour the Settlement Agreement; wrongful listing with the Credit Reference Bureau despite there being no stipulated timeline for payment of the Kshs. 50,000,000/=; failure to facilitate completion of the refinancing transaction; and dissemination of adverse information to financial institutions, including Gulf African Bank, Dubai Islamic Bank, Consolidated Bank of Kenya and Sidian Bank, thereby frustrating the Plaintiff's efforts to secure alternative financing.
8. Consequently, the Plaintiff seeks the following orders:
i. An Order of Permanent Injunction restraining the Defendant, whether by itself, its agents or servants, from advertising for sale, selling, disposing of, transferring and/or in any other manner interfering with the Plaintiff's quiet possession, use, occupation and enjoyment of L.R. No. 209/1052/1.
ii. An Order compelling the Defendant to forthwith remove, delete, clear or otherwise expunge the Plaintiff's name from the list of defaulters maintained by the Credit Reference Bureaus.
iii. A declaration that the Defendant is only entitled to Kshs. 50,000,000/= from the Plaintiff together with an order for specific performance of the Settlement Agreement.
iv. Costs and interest of the suit.
Plaintiff's Witness
9. The Plaintiff called one witness, Patrick Kabaiya Mwangi, who adopted his witness statement dated 28/7/2021 as his evidence-in-chief. He testified that on 10/10/2013, the Plaintiff accepted the Defendant's offer of a loan facility in the sum of Kshs. 364,000,000/=, of which Kshs. 95,000,000/= was intended to offset an existing facility with Kenya Commercial Bank Limited, while the balance of Kshs. 269,000,000/= was to finance the construction of 100 apartments on L.R. No. 209/1052/1.
10. The witness testified that on 28/11/2013, the Plaintiff created a supplemental charge over L.R. No. 1160/339 Karen in favour of the Defendant as security for the facility. He further stated that on 9/4/2014, the Defendant paid Kshs. 95,000,000/= to Kenya Commercial Bank Limited and took over the existing facility, following which a legal charge over the suit property was registered on 26/5/2014.
11. It was the witness's evidence that the Defendant thereafter failed to disburse the construction funds as agreed, causing the project to stall. He testified that, as a consequence, the Plaintiff suffered losses of approximately Kshs. 720,000/= per month over a period of seven years, lost anticipated sales revenue estimated at Kshs. 240,000,000/=, and became exposed to claims from purchasers who had already paid deposits amounting to Kshs. 24,000,000/=, representing ten per cent (10%) of the purchase prices.
12. The witness further stated that in September 2014, barely four months after the initial disbursement, the Defendant issued a statutory notice of sale despite the Plaintiff having already paid Kshs. 4,196,055/= as interest on the partial disbursement. He testified that although the Plaintiff continued servicing the facility and paid approximately Kshs. 27,000,000/= between 2015 and 2016, it eventually became apparent that the Defendant had no intention of fulfilling its obligations. Consequently, the Plaintiff instituted High Court Civil Case No. 83 of 2016 seeking injunctive relief and discharge of the supplemental charge over the Karen property.
13. The witness further testified that the parties subsequently settled the dispute out of court and entered into a Settlement Agreement under which the Defendant agreed to accept Kshs. 71,800,000/= in full and final settlement of the outstanding debt. He stated that Kshs. 16,800,000/= had already been paid before execution of the agreement, Kshs. 5,000,000/= was subsequently paid within the agreed period leading to the discharge of the Karen title, while the balance of Kshs. 50,000,000/= was to be financed through Spire Bank upon issuance of a professional undertaking pending registration of a charge over the suit property. He explained that Spire Bank later experienced liquidity challenges and consequently returned the security documents to the Defendant.
14. The witness further testified that the Plaintiff thereafter approached several financial institutions, including Gulf African Bank, Diamond Trust Bank, Consolidated Bank of Kenya and Sidian Bank, seeking refinancing. He stated that those efforts were frustrated by the Defendant through negative Credit Reference Bureau listings and dissemination of adverse information regarding the Plaintiff's account. He added that although Sidian Bank initially expressed willingness to finance the transaction after verifying the Plaintiff's position, the process was ultimately frustrated by the Defendant.
15. The witness further stated that in June 2020, the Plaintiff wrote to the Defendant's Managing Director seeking intervention to facilitate resolution of the dispute. Instead, it received a demand letter dated 10/8/2020 from the Defendant's advocates, MMC Asafo, indicating that the Settlement Agreement had been rescinded and that the original loan facility had been reinstated. He contended that the Defendant was demanding Kshs. 174,125,294.95/=, notwithstanding that the entire loan facility had never been disbursed.
16. The witness expressed apprehension that the Plaintiff risked losing the suit property despite its efforts to resolve the dispute. He maintained that the Defendant's continued negative Credit Reference Bureau listing and adverse representations to financial institutions frustrated all attempts by the Plaintiff to redeem the property.
Defendant's Statement of Defence
17. The Defendant filed its Statement of Defence dated 25/11/2021, in which it admitted that it had extended to the Plaintiff a loan facility of Kshs. 364,000,000/= pursuant to a Letter of Offer dated 10/10/2013.
18. The Defendant averred that the facility was granted subject to the availability of funds and upon terms that any default in repayment would render the entire facility immediately due and payable together with accrued interest. According to the Defendant, the facility was intended to offset the Plaintiff's outstanding indebtedness to Kenya Commercial Bank Limited in the sum of Kshs. 95,000,000/= and partly finance the construction of ninety (90) one-bedroom apartments and ten (10) two-bedroom apartments on L.R. No. 209/1052/1. The Defendant further stated that the Plaintiff voluntarily offered L.R. No. 209/1052/1 and L.R. No. 1160/330 as security and that, upon fulfilment of all conditions precedent, it redeemed the KCB facility by paying Kshs. 95,000,000/=.
19. The Defendant denied breaching the facility agreement and instead maintained that it was the Plaintiff who defaulted in repayment. It pleaded that, upon default, it issued demands, reminders, and requests for regularisation of the account, but the Plaintiff failed to honour the commitments contained in its letters dated 4/8/2014 and 16/9/2014. The Defendant further averred that the Plaintiff subsequently altered the scope of the development and sought additional financing amounting to Kshs. 1.1 billion from other financiers.
20. Consequently, through letters dated 8/7/2015 and 2/2/2016, the Defendant informed the Plaintiff that the original facility of Kshs. 364,000,000/= remained available only to the extent of amounts already drawn, and that any request for further funding would require a fresh appraisal. The Defendant maintained that the Plaintiff's persistent default compelled it to commence realization proceedings against the charged properties.
21. In response to the Plaintiff's reference to High Court Civil Case No. 83 of 2016, the Defendant admitted that the suit was instituted following the issuance of statutory notices. It, however, denied that the subsequent Settlement Agreement arose from any mismanagement of the Plaintiff's account. Rather, the Defendant maintained that the agreement was entered into in good faith to afford the Plaintiff additional time within which to settle the outstanding debt and redeem the charged properties.
22. The Defendant set out the terms of the Settlement Agreement as requiring payment of Kshs. 71,800,000/= in full and final settlement of the outstanding indebtedness, comprising Kshs. 16,800,000/= already paid, Kshs. 5,000,000/= payable within ninety (90) days, and Kshs. 50,000,000/= to be financed through Spire Bank upon issuance of a professional undertaking. The Defendant maintained that the agreement expressly provided that time was of the essence and that performance by the parties was conditional upon strict compliance with the agreed timelines.
23. The Defendant denied the Plaintiff's allegations that it had breached the Settlement Agreement and contended that it was the Plaintiff that failed to perform its obligations thereunder. According to the Defendant, although Spire Bank issued a professional undertaking dated 12/10/2017, the Plaintiff failed to pay the agreed sum of Kshs. 5,000,000/= by 31/12/2017 and further instructed Spire Bank to halt the transaction, prompting the Bank to withdraw its undertaking and return all the security documents. The Defendant averred that notwithstanding the Plaintiff's default, it accepted the late payment of Kshs. 5,000,000/= and released the title to L.R. No. 1160/339 on condition that the balance of Kshs. 50,000,000/= would be paid by 31/3/2018.
24. The Defendant further averred that Spire Bank subsequently issued another professional undertaking dated 1/8/2018, but later withdrew from the transaction by its letter dated 24/9/2018. The Defendant maintained that it thereafter issued a demand dated 6/12/2018 requiring payment of Kshs. 50,000,000/= within seven (7) days. However, the Plaintiff failed to comply and instead sought further indulgence while pursuing financing from Gulf African Bank. The Defendant further stated that, by a letter dated 12/9/2019, it exceptionally extended time for payment and revised the settlement amount to Kshs. 52,000,000/=, subject to receipt of an acceptable bank undertaking by 30/9/2019. The Plaintiff nevertheless failed to honour that arrangement.
25. The Defendant denied the Plaintiff's allegation that its inability to secure financing resulted from an unlawful Credit Reference Bureau listing. It maintained that the Plaintiff admittedly remained in default of its loan obligations and that listing the Plaintiff with the Credit Reference Bureau was mandatory under the applicable banking regulations and not a matter of discretion. According to the Defendant, the Plaintiff was at all material times aware that continued default would inevitably result in CRB listing.
26. The Defendant further averred that, owing to the Plaintiff's persistent failure to regularise the loan account, it issued a thirty (30) day demand notice dated 10/8/2020, reinstating the original loan facility together with accrued interest and notifying the Plaintiff of its intention to exercise its statutory power of sale over L.R. No. 209/1052/1 upon continued default. The Defendant added that although the Plaintiff subsequently sought fresh negotiations, those proposals were declined.
27. Consequently, the Defendant contended that the Plaintiff had approached the Court with unclean hands, had admitted its indebtedness, and had failed to demonstrate any wrongdoing on the Defendant's part in the realization process. The Defendant therefore prayed that the suit be dismissed with costs.
Defendant's Witness
28. The defence called one witness, Shelemia Jalango, who adopted his witness statement dated 16/8/2024 as his evidence-in-chief. He testified that the Defendant advanced to the Plaintiff a loan facility of Kshs. 364,000,000/= pursuant to the Letter of Offer dated 10/10/2013 for the purpose of redeeming the Plaintiff's Kenya Commercial Bank facility and partly financing the proposed development on L.R. No. 209/1052/1. He further testified that the Plaintiff offered L.R. No. 209/1052/1 and L.R. No. 1160/330 as security for the facility and subsequently defaulted in repayment despite numerous demands and reminders.
29. The witness further testified that the Plaintiff altered the scope of the proposed development and sought additional financing from other lenders, prompting the Defendant to decline any further funding through its letters dated 8/7/2015 and 2/2/2016. He stated that following the Plaintiff's default, it instituted High Court Civil Case No. 83 of 2016, after which the parties entered into the Settlement Agreement requiring payment of Kshs. 71,800,000/= by 31/12/2017.
30. According to the witness, the Plaintiff breached the Settlement Agreement by failing to pay the balance of Kshs. 50,000,000/= within the agreed timelines, notwithstanding the professional undertakings issued by Spire Bank on 12/10/2017 and 1/8/2018, both of which were subsequently withdrawn. He added that although the Defendant released the title to the Karen property upon receipt of the late payment of Kshs. 5,000,000/=, the Plaintiff nevertheless remained in persistent default.
31. The witness further testified that the Defendant issued several demand notices, including letters dated 6/12/2018 and 10/8/2020, together with the statutory ninety (90) day notice dated 6/5/2021 issued under Section 90 of the Land Act. He maintained that the Plaintiff remained indebted to the Defendant in the sum of Kshs. 184,727,891/= and that the Defendant was therefore entitled to exercise its statutory power of sale.
32. The Defendant also produced a bundle of documents containing, inter alia, the Letter of Offer dated 10/10/2013, the charge instruments, demand letters, correspondence exchanged between the parties, the Settlement Agreement, the professional undertakings issued by Spire Bank, the statutory notices and the statement of account.
Plaintiff's Reply to Defence
33. The Plaintiff filed a Reply to Defence dated 6/12/2021, reiterating the averments contained in the Plaint and denying the Defendant's allegation that the default arose from its own conduct. The Plaintiff maintained that it was the Defendant that breached the loan agreement by refusing to continue disbursing the agreed construction funds.
34. The Plaintiff further averred that the Defendant unilaterally altered the terms of financing through its letter dated 10/7/2015 by insisting on the involvement of an equity partner, and thereafter rejected the Plaintiff's proposal notwithstanding the introduction of Shelter Afrique as the proposed equity partner. According to the Plaintiff, the Defendant acted maliciously and in bad faith throughout the transaction.
35. The Plaintiff also maintained that under the Settlement Agreement, only the payment of Kshs. 5,000,000/= was subject to strict timelines, whereas no deadline had been stipulated for payment of the balance of Kshs. 50,000,000/=, which was to be secured by a professional undertaking from Spire Bank. The Plaintiff therefore denied that it had breached the Settlement Agreement and contended that the Defendant's allegations were intended to discredit it despite its continued efforts to resolve the dispute.
36. The Plaintiff further challenged the Credit Reference Bureau listing on the ground that the amount reflected therein was inaccurate. It reiterated the particulars of breach pleaded in the Plaint and maintained that the Defendant could not lawfully rescind the Settlement Agreement unilaterally or proceed with realization of the securities contrary to its terms.
37. Consequently, the Plaintiff prayed that the Defence be struck out or dismissed and that judgment be entered in its favour as prayed in the Plaint.
Analysis and Determination
38. The Plaintiff relied on its bundle of documents dated 28/7/2021 and written submissions dated 24/9/2025. The Defendant, on its part, relied on its bundle of documents dated 16/8/2024 and written submissions dated 16/1/2026.
39. I have carefully considered the pleadings, the oral and documentary evidence, and the submissions filed by the parties. In my view, the following issues arise for determination:
i. Whether the Plaintiff breached the terms of the Settlement Agreement.
ii. Whether the Defendant frustrated performance
iii. Whether the Defendant validly rescinded the Settlement Agreement.
iv. Whether the Defendant acted in breach of the in duplum rule.
Whether the Plaintiff breached the terms of the Settlement Agreement
40. It is common ground that the Defendant extended to the Plaintiff a loan facility of Kshs. 364,000,000/= pursuant to the Letter of Offer dated 10/10/2013. The facility was intended to redeem an outstanding loan of Kshs. 95,000,000/= owed to Kenya Commercial Bank Limited and partly finance the construction of apartment units on the suit property. As security for the facility, the Plaintiff executed a legal charge over L.R. No. 209/1052/1 and a supplemental charge over L.R. No. 1160/339.
41. The evidence on record shows that the Plaintiff fell into arrears in servicing the loan facility, as demonstrated by its letters dated 4/8/2014 and 16/9/2014, in which it expressly acknowledged its default and undertook to regularise the account. Those letters appear at pages 66 and 67 of the Defendant's bundle of documents.
42. Following the Plaintiff's default, the Defendant commenced the process of realizing the charged securities. That prompted the Plaintiff to institute High Court Civil Case No. 83 of 2016 – Elite Intelligent Traffic Systems Limited v Housing Finance Company Limited, seeking, inter alia, an injunction restraining the Defendant from exercising its statutory power of sale.
43. That suit was subsequently withdrawn after the parties entered into a Settlement Agreement dated 18/12/2017, which is contained at pages 6 to 11 of the Plaintiff's bundle of documents. The material terms of the agreement provided as follows:
(a) Elite agrees to pay HFC the sum of Kshs. 71,800,000.00 in full and final settlement of the outstanding amount in Account No. 704-0000749;
(b) Elite has already paid the sum of Kshs. 16,800,000.00, leaving a balance of Kshs. 55,000,000.00;
(c) Spire Bank Kenya Limited shall issue a professional undertaking to HFC to pay Kshs. 50,000,000.00 in consideration of HFC releasing the discharged securities relating to L.R. No. 209/1052/1 to Spire Bank or its advocates for preparation of the requisite security documents;
(d) Within fourteen (14) days of registration of Spire Bank's charge over the suit property, Spire Bank shall remit Kshs. 50,000,000.00 to HFC by Real Time Gross Settlement System;
(e) The balance of Kshs. 5,000,000.00 shall be secured by L.R. No. 1160/339 (Karen Property);
(f) Elite shall pay the said Kshs. 5,000,000.00 within ninety (90) days, but not later than 31st December 2017;
(g) Upon payment of the Kshs. 5,000,000.00, HFC shall execute a discharge of the Supplemental Charge over L.R. No. 1160/339 and release the title within twenty-one (21) days;
(h) Elite shall, within three (3) days of execution of the Settlement Agreement, file a Notice of Withdrawal in High Court Civil Case No. 83 of 2016; and
(i) Each party shall bear its own costs of the suit.
44. It is evident from the record that the Plaintiff paid the Kshs. 5,000,000/= after 31/12/2017, contrary to Clause 1(f) of the Settlement Agreement. Notwithstanding that default, the Defendant accepted the late payment and released the title to L.R. No. 1160/339, thereby waiving strict compliance with that particular timeline.
45. Under Clauses 1(c) and 1(d) of the Settlement Agreement, the Plaintiff was required to procure a professional undertaking from Spire Bank to facilitate the release of the security documents relating to the suit property for purposes of registration. Upon completion of registration, Spire Bank was to remit Kshs. 50,000,000/= to the Defendant within fourteen (14) days.
46. The evidence demonstrates that Spire Bank duly issued a professional undertaking by its letter dated 12/10/2017, whereupon the Defendant released the requisite security documents to facilitate registration. That position is confirmed by the correspondence appearing at pages 85 to 88 of the Defendant's bundle of documents.
47. However, the correspondence subsequently exchanged between the parties reveals that the registration process was never completed because the Plaintiff instructed Spire Bank to halt the transaction. That fact is borne out by the emails dated 2/2/2018, 6/2/2018 and 8/2/2018, appearing at pages 89 to 91 of the Defendant's bundle of documents.
48. As a consequence of the Plaintiff's instructions, Spire Bank declined to remit the agreed sum of Kshs. 50,000,000/= towards settlement of the outstanding debt and considered itself discharged from its professional undertaking, as confirmed in its email dated 8/2/2018.
49. Despite those events, the Defendant afforded the Plaintiff yet another opportunity to complete the transaction after receiving a fresh professional undertaking from Spire Bank dated 1/8/2018. The relevant correspondence appears at pages 94 to 100 of the Defendant's bundle of documents.
50. By its letter dated 24/9/2018, however, Spire Bank once again informed the Defendant that the Plaintiff had halted the transaction, thereby discharging the Bank from its undertaking for the second time.
51. From the foregoing evidence, I am satisfied that the Defendant fulfilled its obligations under Clauses 1(c) and 1(d) of the Settlement Agreement by releasing the requisite security documents upon receipt of the professional undertakings from Spire Bank. The Plaintiff, on the other hand, frustrated completion of the transaction on two separate occasions by instructing Spire Bank to discontinue the registration process. Consequently, the agreed payment of Kshs. 50,000,000/= was never made. I therefore find that the Plaintiff failed to perform its obligations under the Settlement Agreement.
52. The Plaintiff argued that the Settlement Agreement did not prescribe a specific deadline for payment of the Kshs. 50,000,000/=, and that it therefore could not be said to have breached the agreement.
53. I do not agree.
54. Clause 2 of the Settlement Agreement expressly provides that time was of the essence. That provision required the parties to perform their obligations diligently and within a reasonable time.
55. The agreement therefore did not simply extinguish the original indebtedness immediately upon execution. Rather, it established a mechanism through which that indebtedness would be compromised upon successful completion of the agreed payment structure.
56. In any event, the obligation assumed under the Settlement Agreement was the Plaintiff's obligation. The Defendant did not undertake responsibility for the solvency, liquidity, or commercial decisions of Spire Bank. The Plaintiff selected its refinancing structure and assumed the attendant commercial risks.
57. In addition, the Court notes that the Plaintiff's own conduct frustrated the very mechanism agreed upon for payment of the balance of Kshs. 50,000,000/=. It would therefore be inequitable to permit the Plaintiff to rely on the absence of an express payment date when it was its own actions that prevented completion of the transaction. The applicable principle is aptly captured in Halsbury's Laws of England, 4th Edition, Volume 9, paragraph 485, which states:
"In cases where time is not originally of the essence of the contract, or where a stipulation making time of the essence has been waived, time may be made of the essence where there is unreasonable delay, by notice from the party who is not in default fixing a reasonable time for completion and stating that, in the event of non-completion within the time so fixed, he intends to enforce or abandon the contract. The time fixed must, however, be reasonable, having regard to the circumstances existing at the time the notice is given."
58. Having found that the Plaintiff was in breach of the Settlement Agreement, I now turn to the second issue, namely whether the Defendant was entitled to rescind the agreement.
Whether the Defendant frustrated performance
59. The Plaintiff's principal complaint is that the Defendant frustrated implementation of the Settlement Agreement by negatively listing it with Credit Reference Bureaus and discouraging prospective financiers.
60. It is indeed true that a party cannot insist upon performance of a contractual obligation where its own conduct substantially prevented the other party from performing.
61. The burden of proving such prevention rests upon the party alleging it. Sections 107, 108, and 109 of the Evidence Act place that burden squarely upon the Plaintiff.
62. Having reviewed the documentary evidence, the Court is unable to conclude that the Plaintiff discharged that burden.
63. The evidence establishes that long before the execution of the Settlement Agreement, the Plaintiff had already defaulted under the original facility. That default was neither disputed nor temporary. It had persisted over several years.
64. Any reporting by the Defendant to CRB of that indebtedness would therefore not necessarily amount to unlawful conduct.
65. Further, no convincing evidence was placed before the Court demonstrating that any identified financier withdrew solely because of unlawful conduct attributable to the Defendant.
66. The Plaintiff undoubtedly encountered difficulty obtaining replacement financing. However, the evidence does not establish on a balance of probabilities that those difficulties were caused by actionable misconduct on the Defendant's part rather than the Plaintiff's existing financial position.
67. The allegation of frustration therefore remains unproven.
Whether the Defendant validly rescinded the Settlement Agreement
68. The Plaintiff submitted that once the Settlement Agreement was signed, the Defendant permanently abandoned the original indebtedness.
69. Respectfully, the Court is unable to agree.
70. The Settlement Agreement was a conditional compromise. The Defendant agreed to accept a reduced settlement only upon fulfillment of the agreed payment mechanism. That mechanism was never completed.
71. The Plaintiff asks the Court to enforce only those portions of the Settlement Agreement favourable to it while disregarding its own admitted non-performance. Equity does not permit such an approach.
72. The equitable remedy of specific performance is discretionary. It is available only where the claimant demonstrates substantial compliance with its own contractual obligations and remains ready, willing, and able to perform.
73. Although the Plaintiff paid the initial Kshs.16,800,000, the principal consideration
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