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JudgmentSELINA RAMNIKLAL PATANI AND ASHIT RAMNIKLALA PATANI VS DIVYESH MANSUKHLAL PATANI AND AMITKUMAR MANSUKHLAL PATANI23 min read

SELINA RAMNIKLAL PATANI AND ASHIT RAMNIKLALA PATANI VS DIVYESH MANSUKHLAL PATANI AND AMITKUMAR MANSUKHLAL PATANI

Environment and Land Court at Milimani Environment and Land Court · · E. M. WASHE, J

JUDGEMENT

  1. The Plaintiffs herein through the Amended Plaint dated 14.06.2021 sought the following Orders against the Defendants herein; -
  2. A declaration that the Memorandum of Understanding dated 13th July 2021 is now void and non-operational.
  3. A declaration that the Defendants are bound to render Audited Accounts and an order for them to do so for all rental proceeds collected from the premises since the year 2012.
  4. An Order for sale of property known as LAND REFERENCE NO. 1/520, WOOD AVENUE and distribution of the sale proceeds equally to the three (3) owners, considering the rents to be tabulated as collected by the Defendants over the period.
  5. Costs of the suit and interests thereon.
  6. Any other relief that the Honourable Court may deem fit to grant.
  7. The facts in support of the above prayers is that on or about 13.07.2012, the Plaintiffs and the Defendants entered into a Memorandum of Understanding.
  8. The terms of the Memorandum of understanding dated 13.07.2012 were to the effect that the Defendants would purchase the Plaintiffs interest over the property known as LR.NO.1/520-WOOD AVENUE for a total value of KShs 8,000,000/-.
  9. The agreed mode of payment was that the Defendants would pay a sum of KShs 25,000/- per month from 10th July 2012 to August 2014 and thereafter, the balance would be settled on a date to be determined in future.
  10. Once the Defendants cleared the entire purchase price of KShs 8,000,000/-, then the Plaintiffs would transfer their interest on the property known as LR.NO.1/520-WOOD AVENUE to the Defendants.
  11. Upon execution of the Memorandum of Understanding dated 13.07.2012, the Defendants took possession of the property known as LR.NO.1/520-WOOD AVENUE and started collecting rent thereof.
  12. Unfortunately, the Defendants failed and/or neglected to make the initial instalments of KShs 25,000/- due to the Plaintiffs and further refused to settle the entire consideration as agreed in the Memorandum of Understanding dated 13.07.2012.
  13. It is on the basis of this omissions and/or breaches by the Defendants that the Plaintiffs herein are seeking for nullification of the Memorandum of Understanding dated 13.07.2012 and a full account of the entire rent collected by the Defendants between from July 2012 up to date.
  14. Further to that, the Plaintiffs are seeking an order from this Honourable Court that the said property known as LR.NO.1/520 WOOD AVENUE be disposed off and the proceeds thereof be shared equally among the three registered owners thereof.
  15. The Plaint herein was duly served on the Defendants and the Interested party as required by law.
  16. The 1st and 2nd Defendants prepared and filed a Statement of Defence dated 12.10.2021 in opposition to the Plaint.
  17. In the 1st and 2nd Defendants Defence, there was an admission that the property known as LR.NO.1/520- WOOD AVENUE is jointly owned by the late RAMNIKLAL VIRPAL PATANI, the late MANSUKKHLAL VIRPAL PATANI and DHIRAJLAL VIRPAL PATANI in equal shares.
  18. The 1st and 2nd Defendants further admitted that indeed there was a Memorandum of Understanding executed on the 13.07.2012 with the Plaintiffs on the terms and conditions outlined therein.
  19. Once the full purchase price to the Plaintiffs was settled, the Plaintiffs would transfer their ownership to the Defendants thereof.
  20. The 1st and 2nd Defendants thereafter denied all the allegations of omissions relating to the terms of the Memorandum of Understanding and put the Plaintiffs to strict proof thereof.
  21. The Plaintiffs herein on being served with the 1st and 2nd Defendants Defence responded to the same by filing a Reply to Defence dated 21.10.2021.
  22. In the Reply to the 1st and 2nd Defence, the Plaintiff reiterated the facts pleaded in the Plaint and further responded that they could relinquish their interest in the property known as LR.NO 1/520-WOOD AVENUE only upon the 1st and 2nd Defendants complying with the terms and conditions of the Memorandum of Understanding executed on the 13.07.2012.
  23. According to the pleadings contained in this file, the Interested Party neither filed any pleadings nor participated in the hearing of this suit.
  24. After the close of the pleadings between the Plaintiffs and the Defendants, the hearing commenced on the 11.10.2023.

PLAINTIFFS CASE.

  1. The first Plaintiff’s witness was the 2nd Plaintiff ASHIT RAMNIKLAL PATANI (PW1).
  2. The 2nd Plaintiff introduced himself a manager in a Real Estate company and resident of Nairobi.
  3. The 2nd Plaintiff confirmed to the Honourable Court that he was familiar with the 1st and 2nd Defendants as they were his first cousins.
  4. The 2nd Plaintiff then confirmed preparing and executing the witness statement dated 30.04.2019 and adopted the same as his evidence in chief.
  5. The 2nd Plaintiff then produced the following documents as his exhibits in support of the case before the Honourable Court.

PLAINTIFF’S EXHIBIT 1-  GRANT OF LETTERS OF ADMINISTRATION DATED 05.01.2017 IN RELATION TO THE ESTATE OF RAMNIKLAL VIRPAL PATANI.

PLAINTIFF’S EXHIBIT 2-  COPY OF THE DEATH CERTIFICATE OF THE LATE RAMNIKLAL VIRPAL PATANI DATED 20.09.2006.

PLAINTIFF’S EXHIBIT 3-  COPY OF INDENTURE OVER THE PROPERTY KNOWN AS LR.NO.1/520-WOOD AVENUE DATED 30.09.1968 IN FAVOUR OF RAMNIKLAL VIRPAL PATANI, MANSIKLAL VIRPAL PATANI & DHIRAJLAL VIRPAL PATANI.

PLAINTIFF’S EXHIBIT 4-  COPY OF MEMORANDUM OF UNDERSTANDING DATED 13.07.2012 BETWEEN THE PLAINTIFFS AND DEFENDANTS.

PLAINTIFF’S EXHIBIT 5-  COPY OF DEMAND LETTER DATED 14.03.2019 FROM THE PLAINTIFFS TO THE DEFENDANTS.

PLAINTIFF’S EXHIBIT 6-  COPY OF THE REPLYING AFFIDAVIT FILED IN THE PROCEEDINGS KNOWN AS HCCC.NO.210 OF 1994 SWORN ON THE 25.02.1994 BY THE ORIGINAL OWNERS.

PLAINTIFF’S EXHIBIT 7-  AN AGREEMENT OF THE ORIGINAL OWNERS DATED 14.02.1985.

PLAINTIFF’S EXHIBIT 8-  COPY OF A LETTER DATED 21.10.2000 FROM DHIRAJLAL VIRPAL PATANI TO RAMNIKLAL VIRPAL PATANI.

PLAINTIFF’S EXHIBIT 9-  COPY OF A FEE-NOTE FROM V.M.PATEL, ADVOCATE TO THE ORIGINAL OWNERS.

PLAINTIFF’S EXHIBIT 10-  COPY OF LETTER DATED 23.08.1994 BY V.M.PATEL, ADVOCATE TO ONE NYAIKE.

  1. In reference to Plaintiff’s Exhibit 4, the 2nd Plaintiff stated that the Memorandum of Understanding was to the effect that the Plaintiffs would transfer their ownership over the property known as LR.NO.1/520-WOOD AVENUE to the Defendants upon payment of KShs 8,000,000/-.
  2. However, the payment of KShs 8,000,000/- which was the consideration by the Defendants was never done as agreed.
  3. Referring to the Plaintiffs Exhibit 6, the 2nd Plaintiff relied on the said Affidavit to prove that the property known as LR.NO.1/520- WOOD AVENUE was jointly owned by three brothers.
  4. The 2nd Plaintiff further referred to the Plaintiff’s Exhibit 7 which was an Agreement by their uncles on how the joint assets would be distributed among themselves.
  5. The 2nd Plaintiff also confirmed through the Plaintiff’s Exhibit 9 that the property known as LR.NO.290/1765 was sold through public auction and the proceeds shared equally among the three registered owners of the said property.
  6. The 2nd Plaintiff testified that the main reason they have instituted this suit is because the Defendants have not honoured the terms and conditions in the Memorandum of Understanding signed on the 13.07.2012.
  7. The 2nd Plaintiff informed the Honourable Court that the property known as LR.NO.1/520-WOOD AVENUE is a developed property which the 1st and 2nd Defendants are collecting rent.
  8. However, the 1st and 2nd Defendants have failed, neglected and/or refused to render rental accounts and/or remit any part of the rent to the Plaintiffs as required.
  9. The 2nd Plaintiff however admitted that a sum of KShs 3,600,000/- had been remitted by the 1st and 2nd Defendants over a period of time but it had not been accompanied with the relevant Statement of Account.
  10. The 2nd Plaintiff stated that at the time of entering the Memorandum of Understanding, the property known as LR.NO.1/520-WOOD AVENUE had already been developed and was earning monthly rental income.
  11. On cross-examination, the 2nd Plaintiff confirmed that the 1st Plaintiff was deceased.
  12. On referring to Plaintiff’s Exhibit 3- the 2nd Plaintiff confirmed that the property known as LR.NO.1/520-WOOD AVENUE was in the name of the three brothers.
  13. The 2nd Plaintiff stated that he was aware of the manner in which the three brothers distributed the properties that they jointly acquired.
  14. The 2nd Plaintiff informed the Honourable Court that the properties known as LR.NO.1/681 and LR.NO.1/682 had been sold by another uncle who was not a party to this suit.
  15. As regards the property known as LR.NO.9/3229/5-SUSWA ROAD, the 2nd Plaintiff insisted that this property was owned by his father alone.
  16. The property known as LR.NO.209/765 along Chamber Road was originally registered in the name of the 3 brothers but was subsequently auctioned and the proceeds shared equally among the 3 owners.
  17. The 2nd Plaintiff informed the Honourable Court that there was no express Agreement by the registered 3 brothers that the proceeds of LR.NO.1/520-WOOD AVENUE should be shared equally.
  18. The 2nd Plaintiff was then referred to the 1st and 2nd Defendants Bundle of Documents dated 12.10.2021 which was a letter dated 06.06.1988 by the 3 brothers.
  19. The 2nd Plaintiff confirmed that the letter dated 06.06.1988 had been done after the Plaintiff’s Exhibit 7 had been done.
  20. According to the contents of the letter dated 06.06.1988, the Interested Party was to get the property on Lenana Road, the 1st and 2nd Defendants father was to get Wood Avenue and the 1st and 2nd Plaintiffs father would acquire the property on Chamber’s Road.
  21. The 2nd Plaintiff further affirmed that the contents of the Replying Affidavit produced herein was correct.
  22. According to the 2nd Plaintiff, the property known as LR.NO.1/520-WOOD AVENUE belongs to the 3 brothers and should be shared equally among them.
  23. The 2nd Plaintiff stated that the Plaintiffs ‘Exhibit 8,9 AND 10 did not have any connection to the property known as LR.NO.1/520-WOOD AVENUE.
  24. The 2nd Plaintiff informed the Honourable Court that the outstanding balance emanating from the Memorandum of Understanding was KShs 7,375,000/- which ought to have been paid.
  25. The 2nd Plaintiff indicated that the amount of KShs 3,600,000/- received from the 1st and 2nd Defendants did not have any communication of how it should be applied.
  26. In other words, the 2nd Plaintiff asked this Honourable Court to grant the prayers sought in the Plaint herein.
  27. On re-examination, the 2nd Plaintiff referred to the 1st and 2nd Defendants letter dated 06.06.1988 and informed the Honourable Court that this letter was to the tenants occupying various properties and to whom they should pay their rent.
  28. The letter of 06.06.1988 did not in any way confirm any mode of distribution of the assets therein among the 3 brothers.
  29. The 2nd Plaintiff reiterated that the Memorandum of Understanding was strictly over the property known as LR.NO.1/520 -WOOD AVENUE and there was no dispute relating to any other properties.
  30. The 2nd Plaintiff insisted that the total consideration was KShs 8,000,000/- but so far, only a sum of KShs 625,000/- had been paid by the end of August 2014.
  31. According to the 2nd Plaintiff, the balance had not been paid even after a demand letter had been sent to the 1st and 2nd Defendants.
  32. The 2nd Plaintiff informed the Honourable Court that the 1st and 2nd Defendants had not given any reasons as to why the payments under the Memorandum of Understanding had not been fulfilled.
  33. The 2nd Plaintiff indicated that in the year 2020 after this suit had been filed, the 1st and 2nd Defendants paid a sum of KShs 2,000,000/- only.
  34. The 2nd Plaintiff reiterated that his late father was and is still entitled to 1/3 of the property known as LR.NO.1/520-WOOD AVENUE.
  35. Upon completion of this re-examination, the 2nd Plaintiff was discharged from the witness box and the Plaintiffs closed their case thereafter.

DEFENCE CASE.

  1. The 1st Defence witness was the 2nd Defendant AMIT KUMAR MANSUKLAL PATANI (DW1).
  2. The 2nd Defendant confirmed that he is a brother to the 1st Defendant and one of the administrators of the Estate of MANSUKLAL VIRPAL PATANI.
  3. The 2nd Defendant then informed the Honourable Court that he would like to rely on the witness statement by the 1st Defendant who is now deceased dated 12.10.2021 and adopted the same as his evidence in chief.
  4. The 2nd Defendant also produced the following documents as his exhibits in support of the 1st and 2nd Defendants case; -

DEFENCE EXHIBIT 1-  PAYMENT EXTRACT AUTHORISED BY THE 1ST & 2ND DEFENDANT IN FAVOUR OF THE PLAINTIFFS BETWEEN 20/07/2012 & 09/07/2015.

DEFENCE EXHIBIT 2-  LETTER DATED 06.06.1998 FROM THE ORIGINAL 3 OWNERS TO THE TENANTS OF LENANA ROAD, WOOD AVENUE & CHAMBER HOUSE.

DEFENCE EXHIBIT 3- COPY OF AGREEMENT DATED 23.05.2019 BETWEEN THE 2ND PLAINTIFF AND THE 2ND DEFENDANT FOR RECEIPT OF KSHS 2,000,000/-.

DEFENCE EXHIBIT 4-  COPY OF THE RTGS TRANSFER FORM DATED 27.05.2019 FOR A SUM OF KSHS 2,000,000/-.

DEFENCE EXHIBIT 5-  A COPY OF AN APPLICATION DATED 30.03.2022 MADE BY THE DEFENDANTS HEREIN.

  1. The 2nd Defendant on being referred to the Memorandum of Understanding dated 13.07.2012 denied ever signing the same.
  2. The 2nd Defendant further stated that even if the said Memorandum of Understanding was valid, it did not contain specific timelines within which the consideration was to be fully paid.
  3. The 2nd Defendant admitted that the consideration in the Memorandum of Understanding was KShs 8,000,000/- of which only KShs 3,625,000/- had been paid.
  4. The 2nd Defendant therefore sought for time to pay the balance of the consideration which was to the tune of KShs 4,000,000/-.
  5. On cross-examination, the 2nd Defendant confirmed that he executed the Memorandum of Understanding dated 13.07.2012.
  6. The 2nd Defendant was then referred to Statement of Defence and in particular Paragraph 4 and 5 wherein he confirmed that the property LR.NO.1/520-WOOD AVENUE is jointly owned by the 3 owners.
  7. The 2nd Defendant thereafter admitted that the 1st and 2nd Defendants have been collecting rent from the said property known as LR.NO.1/520-WOOD AVENUE.
  8. The 2nd Defendant disclosed that the amount currently being collected from LR.NO.1/520-WOOD AVENUE was around KShs 120,000/-.
  9. The 2nd Defendant informed the Honourable Court that the Plaintiffs were seeking for an account of the rent collected and/or profit emanating from LR.NO.1/520-WOOD AVENUE.
  10. The 2nd Defendant position was that the accounts have never been supplied to the Plaintiffs because they were not entitled to any rent thereof.
  11. The 2nd Defendant nevertheless stated that according to the Memorandum of Understanding, the Plaintiffs had not extinguished their ownership from the property known as LR.NO.1/520-WOOD AVENUE.
  12. The 2nd Defendant further stated that although a sum of KShs 3,600,000/- has so far been paid to the Plaintiffs, the application of this amount was not provided for.
  13. The 2nd Defendant confirmed that the properties owned by the 3 brothers in different parts of Nairobi City had not been transferred as required.
  14. In particular, the property in issue LR.NO.1/520-WOOD AVENUE was still in the name of the 3 brothers.
  15. The 2nd Defendant confirmed that it was the Defendants that approached the Plaintiffs with an offer to purchase their portion.
  16. It was on the basis of this intention that the Memorandum of Understanding was negotiated and executed therein.
  17. The 2nd Defendant admitted that there were no other disputes relating to any other property.
  18. The 2nd Defendant informed the Honourable Court that the amount of KShs 625,000/- which was to be paid by August 2014 was indeed paid within time.
  19. Referring to Defence Exhibit 1- the 2nd Defendant confirmed to the Honourable Court that the last payment of KShs 25,000/- was made on 09/07/2015 and not August 2014.
  20. The 2nd Defendant therefore admitted that there was a breach of the terms provided for in the Memorandum of Understanding.
  21. Further to that, the 2nd Defendant stated that the total amount shown in the Defence Exhibit 1 is KShs 175,000/- only.
  22. Consequently, both the deposit and the balance of the purchase price in the Memorandum of Understanding had not been fully settled.
  23. On re-examination, the 2nd Defendant testified that it was only the 1st Defendant that had executed the Memorandum of Understanding.
  24. The 2nd Defendant further stated that the Memorandum of Understanding did not provide for the period within which the full purchase price was to be settled.
  25. The 2nd Defendant was of the view that the entire KShs 3,600,000/- should be applied in the following manner; -
  26. Deposit under the Memorandum of Understanding- KShs 625,000/-
  27. Share of Rent Collections for the 1st and 2nd Plaintiff-KShs 3,000,000/-
  28. At the end of this re-examination, the 2nd Defendant was discharged from the witness box and the 1st and 2nd Defendants closed their case.
  29. The parties were then directed to prepare, file and exchange their final written submissions which both parties complied with.
  30. The Honourable Court has indeed perused the said pleadings, gone through the testimonies of the witnesses and the documents produced therein as well as the submissions.
  31. The issues for determination in this suit can be summarised as follows; -

ISSUE NO. 1- WHAT ARE THE TERMS AND CONDITIONS OF THE MEMORANDUM OF UNDERSTANDING DATED 13.07.2012?

ISSUE NO.2- WERE THE TERMS AND CONDITIONS IN THE MEMORANDUM OF UNDERSTANDING DATED 13.07.2012 COMPLIED WITH?

ISSUE NO.3- ARE THE 1ST AND 2ND PLAINTIFFS ENTITLED TO A RENTAL ACCOUNT FROM THE 1ST AND 2ND DEFENDANT ON THE PROPERTY KNOWN AS LR.NO 1/520-WOOD AVENUE?

ISSUE NO.4- ARE THE PLAINTIFFS HEREIN ENTITLED TO THE PRAYERS SOUGHT FOR IN THE PLAINT?

ISSUE NO.5- WHO BEARS THE COSTS OF THIS SUIT?

  1. The Honourable Court having duly identified the above-mentioned issues for determination, the same will now be determined as follows; -

ISSUE NO. 1- WHAT ARE THE TERMS AND CONDITIONS OF THE MEMORANDUM OF UNDERSTANDING DATED 13.07.2012?

  1. The first issue in this suit is to understand the terms and conditions of the Memorandum of Understanding dated 13.07.2012.
  2. The 1st and 2nd Plaintiffs herein produced the Memorandum of Understanding dated 13.07.2012 as Plaintiff’s Exhibit No.4.
  3. The Clause which is of significance to this suit is Clause C in the Memorandum of Understanding dated 13.07.2012 which states as follows; -

“C. That the estate of RAMNIKLAL VIRPAL PATANI shall relinquish and transfer all their interests, rights and claims over the property at a consideration of the sum of Kenya Shillings Eight Million (KShs 8,000,000/-) only payable as follows; -

  1. As to the sum of Kenya Shillings Twenty-Five Thousand (KShs 25,000/-) monthly with effect from the 10th July 2012 up to the month of August 2014 amounting to Kenya Shillings Six Hundred Twenty-Five Thousand (KShs 625,000/-)
  2. As to the balance outstanding then of Kenya Shillings Seven Million Three Hundred Seventy-Five Thousand (KShs 7,375,000/-) as shall be agreed then by both parties upon further negotiations.
  3. The simple understanding of this particular clause in the Memorandum of Understanding dated 13.07.2012 was that the 1st and 2nd Defendants who are the Purchasers were to pay a sum of KShs 8,000,000/- to the 1st and 2nd Plaintiff as consideration of their ownership in the property known as LR.NO.1/520-WOOD AVENUE.
  4. The consideration of KShs 8,000,000/- was to be settled in two instalments with the first being KShs 625,000/- payable by way of monthly instalments of KShs 25,000/- from the 10.07.2012 to August 2014.
  5. Once the initial instalment of KShs 625,000/- was fully paid by August 2014, then another meeting would be convened to agree the mode of payment and period of payment for the balance of KShs 7,375,000/0.
  6. Once the entire consideration of KShs 8,000,000/- was settled by the 1st and 2nd Defendants, then the 1st and 2nd Plaintiffs would relinquish their ownership on the property known as LR.NO.1/520-WOOD AVENUE in favour of the 1st and 2nd Defendant herein.

ISSUE NO.2- WERE THE TERMS AND CONDITIONS IN THE MEMORANDUM OF UNDERSTANDING DATED 13.07.2012 COMPLIED WITH?

  1. Having understood the intention and the terms of the Memorandum of Understanding dated 13.07.2012, the next issue for determination is whether the 1st and 2nd Defendants complied with the said terms and conditions therein.
  2. The 1st and 2nd Plaintiffs herein have pleaded and testified that the 1st and 2nd Defendants failed to complete the initial payment of KShs 625,000/- by August 2014.
  3. Further to that, the 1st and 2nd Defendants have not settled the full payment of KShs 8,000,000/- an anticipated in the Memorandum of Understanding.
  4. In essence therefore, the 1st and 2nd Plaintiffs state that they are still lawful owners of the property known as LR.NO.1/520-WOOD AVENUE as their ownership rights have not yet been relinquished and/or extinguished in favour of the 1st and 2nd Defendants herein.
  5. Consequently, their legitimate expectation is that the 1st and 2nd Defendants being in charge of rent collection from the property known as LR.NO.1/520-WOOD AVENUE must provide a proper Account for the rent collected, the amounts to be distributed to all the three registered owners and/or their estates.
  6. Nevertheless, the 1st and 2nd Plaintiffs admit that a sum of KShs 3,175,000/- has been received from the 1st and 2nd Defendant although there are no instructions on how the same should be applied.
  7. In other words, the 1st and 2nd Plaintiffs contend that the consideration in the Memorandum of Understanding dated 13.07.2012 was never fully settled and also the 1st and 2nd Defendants have been erratic in the distribution of the rent collected from the property known as LR.NO.1/520-WOOD AVENUE hence the need of an Account being provided and the actual amount due to the owners verified.
  8. On the other hand, the 2nd Defendant testified to the effect that the first instalment of KShs 625,000/- payable under the Memorandum of Understanding was duly paid and on time.
  9. On the balance of the consideration amounting to KShs 7,375,000/-, the same was not yet due as the timeframe upon which it must be paid has not been agreed upon an envisaged in the Memorandum of Understanding.
  10. Be as it may, the 2nd Defendant stated that a total of KShs 3,625,000/- had been paid to the 1st and 2nd Plaintiffs which should be applied as follows; -
  11. The sum of KShs 625,000/- to go to the initial instalment in the Memorandum of Understanding.
  12. The balance of KShs 3,000,000/- be applied towards the portion of rent entitled to the 1st and 2nd Plaintiffs from the property known as LR.NO.1/520-WOOD AVENUE.
  13. However, during cross-examination, the 2nd Defendant admitted that the amount paid to the 1st and 2nd Plaintiffs based on the Defence Exhibit 1 was a sum of KShs 175,000/- as 09.07.2015 which was contrary to the understanding in the Memorandum of Understanding.
  14. To this end, the 2nd Defendant confirmed that there was a breach on the payment of the initial instalment of the KShs 625,000/-.
  15. The first aspect in this issue is whether or not the 1st and 2nd Defendants have breached the terms and conditions in the Memorandum of Understanding dated 13.07.2012.
  16. This aspect is rather straight forward keeping in mind the documents presented by the 2nd Defendant and his own admissions.
  17. The 2nd Defendant through Defence Exhibit 1 which is a payment extract from the period 20/07/2012 to 09/07/2015 gives a detailed account of the manner in which the KShs 25,000/- monthly instalments were done in favour of the 1st and 2nd Plaintiffs.
  18. According to the entries on the said extract which is Defence Exhibit 1, the monthly payments were not regular and therefore as at 09.07.2015, only a sum of KShs 175,000/- had been made to the 1st and 2nd Plaintiffs herein.
  19. This position has been duly admitted by the 2nd Defendant during cross-examination by the 1st and 2nd Plaintiff’s counsel.
  20. This being the case, this Honourable Court is indeed satisfied that the 1st and 2nd Defendants breached the terms of Clause C (i) of the Memorandum of Understanding dated 13.07.2012 as alleged by the 1st and 2nd Plaintiffs herein.
  21. The Honourable Court having arrived at a determination that the 1st and 2nd Defendants are in breach of Clause C (i) of the Memorandum of Understanding dated 13.07.2012, then the amount referred in Clause C (ii) of the said Memorandum of Understanding cannot start being settled by the 1st and 2nd Defendants.
  22. In essence therefore, this Honourable Court is of the considered view that the 1st and 2nd Defendants have breached the terms of Clause C (ii) of the Memorandum of Understanding dated 13.07.2012 as alleged by the 1st and 2nd Plaintiff.

ISSUE NO.3- ARE THE 1ST AND 2ND PLAINTIFFS ENTITLED TO A RENTAL ACCOUNT FROM THE 1ST AND 2ND DEFENDANT ON THE PROPERTY KNOWN AS LR.NO 1/520-WOOD AVENUE?

  1. The third issue for determination is whether the 1st and 2nd Plaintiffs are entitled to regular rental accounts and payments from the 1st and 2nd Defendants.
  2. The 1st and 2nd Plaintiffs pleaded and testified that there are beneficiaries of the Estate of MANSUKLAL VIRPAL PATANI who is one of the three registered owners of the property known as LR.NO 1/520-WOOD AVENUE.
  3. As such, the 1st and 2nd Plaintiffs are entitled to a third of the collectable rent on the property known as LR.NO.1/520-WOOD AVENUE.
  4. However, the 1st and 2nd Defendants herein have refused to render any rental accounts to the 1st and 2nd Plaintiffs since the year 2012 and therefore the collectable amount and the appropriate portions payable are unknown.
  5. The 1st and 2nd Defendants in their Statement of Defence did not provide any response to this issue.
  6. However, during the testimony by the 2nd Defendant, it was his testimony that the 1st and 2nd Plaintiffs were not entitled to any rentals after they executed the Memorandum of Understanding dated 13.07.2012.
  7. The 2nd Defendant sought to rely on the letter dated 06.06.1998 which outlined the persons that were to collect rent from the three properties indicated therein.
  8. Based on this letter dated 06.06.1998, the 1st and 2nd Plaintiffs were only entitled to the rents from Chamber Road and not Wood Avenue.
  9. Further to that, the 2nd Defendant was of the view that there was no written agreement between the 3 brothers who were the original owners that rent would be sub-divided equally amongst them.
  10. During cross-examination by the Plaintiffs Counsel, the 2nd Defendant admitted that the 1st and 2nd Plaintiffs interest over the property known as LR.NO 1/520-WOOD AVENUE had not been extinguished and/or relinquished.
  11. The 2nd Defendant further confirmed that a sum of KShs 3,000,000/- had been paid to the 1st and 2nd Plaintiffs between the years 2021 and 2022 although there were no instructions on how it should be applied.
  12. Looking at the facts before the Honourable Court, there is no doubt that the property known as LR.NO.1/520-WOOD AVENUE is registered in the names of the Plaintiffs, the Defendants and the Interested Party.
  13. The 1st and 2nd Plaintiffs ownership on the property known as LR.NO 1/520-WOOD AVENUE was duly recognised by the 1st and 2nd Defendants in the Memorandum of Understanding dated 13.07.2012.
  14. Both the Plaintiffs and the Defendants confirmed during the hearing that the property known as LR.NO 1/520-WOOD AVENUE is developed and rent is collected from the said property.
  15. The 2nd Defendant confirmed that a sum of KShs 120,000/- is currently being collected on the said property.
  16. The 1st and 2nd Plaintiffs being part owners of the property known as LR.NO.1/520-WOOD AVENUE are entitled to enjoy the benefits and/or rentals that accrue from the said property in equal measure as the other co-owners.
  17. For accountability purposes, the 1st and 2nd Defendants who are the collecting agents are required to provide either a monthly and/or periodic statement of Account for the rent collected and how it should be sub-divided among the three owners.
  18. The failure by the 1st and 2nd Defendants to provide the monthly and/or periodic statements of account for the rent collected on the property known as LR.NO.1/520-WOOD AVENUE is in bad faith and breeds suspicion among the co-owners.
  19. The letter dated 06.06.1998 simply placed obligations of the three brothers to ensure rent is collected from all the three properties therein but did not state that such rent collected was for the sole use of the collecting brother.
  20. In essence therefore, this Honourable Court is pursued without any doubt that the 1st and 2nd Defendants are under a duty on the basis of accountability to provide either monthly and/or periodic statements of account on the rent collected from the property known as LR.NO.1/520-WOOD AVENUE and thereafter to equally sub-divide and remit the amounts due to each of the registered owners and/or their estates.

ISSUE NO.4- ARE THE PLAINTIFFS HEREIN ENTITLED TO THE PRAYERS SOUGHT FOR IN THE PLAINT?

  1. The fourth issue is whether the 1st and 2nd Plaintiffs are entitled to the prayers sought in the present Plaint.
  2. Prayer (a) is seeking for a declaration that the Memorandum of Understanding dated 13.07.2021 is now void and non-operational.
  3. The words which the 1st and 2nd Plaintiffs have used denote an intention to declare the Memorandum of Understanding dated 13.07.2012 as null and void.
  4. Unfortunately, the pleadings and the evidence by both the Plaintiffs and the Defendants confirm that the Memorandum of Understanding dated 13.07.2012 was voluntarily executed by the parties herein based on mutually accepted terms and conditions.
  5. The fact that one party failed to comply with the terms and conditions therein cannot render the entire Memorandum of Understanding to be null and void.
  6. The fact of the matter is that there is a breach of the terms by the 1st and 2nd Defendants and therefore such an Agreement can be rescinded for none compliance.
  7. The 1st and 2nd Plaintiffs have indeed proved and the 1st and 2nd Defendants have also admitted that the terms in the Memorandum of Understanding dated 13.07.2012 have not been complied with.
  8. For this reason, this Honourable Court is of the considered finding that where the terms of the contract are no longer being complied with, it is only fair and just that each party be restored to the position they were before the contract was executed.
  9. In other words, this Honourable Court hereby rescinds the Memorandum of Understanding dated 13.07.2012 for non-compliance by the 1st and 2nd Defendants who are the Purchasers therein.
  10. As regards Prayer (b), this Honourable Court is satisfied that the same should be granted as prayed.
  11. On Prayer (c), the 1st and 2nd Plaintiffs are seeking an order from this Honourable Court directing the property known as LR.NO 1/520-WOOD AVENUE to be sold and the proceeds to be equally sub-divided among the three registered owners and/or their estates.
  12. This Honourable Court takes judicial notice that the property known as LR.NO.1/520-WOOD AVENUE is a private property which can only be sold by the registered owners and/or their estates.
  13. Such a sale should be voluntary as it a private treaty which this Honourable Court has no basis in law to force owners who are not ready to sell to do such an act.
  14. Consequently, this Honourable Court declines to grant Prayer (c) in the Plaint herein.

ISSUE NO.5- WHO BEARS THE COSTS OF THIS SUIT?

  1. The last issue for determination is who should bear the costs of this suit.
  2. Costs usually follow the party that is successful unless otherwise stated.

CONCLUSION.

  1. In conclusion therefore, this Honourable Court hereby makes the following Orders in determination to the Amended Plaint dated 14.06.2021; -
  2. THE MEMORANDUM OF UNDERSTANDING DATED 13.07.2012 BE AND IS HEREBY RESCINDED FORTHWITH FOR NON-COMPLIANCE BY THE 1ST AND 2ND DEFENDANTS HEREIN.
  3. THE 1ST AND 2ND DEFENDANTS BE AND ARE HEREBY DIRECTED TO PREPARE A DETAILED AND COMPREHENSIVE RENT COLLECTION STATEMENT OF ACCOUNT PROVIDING DETAILS OF ALL THE RENT COLLECTED FROM THE 1ST OF JULY 2012 TO DATE, THE EXPENSES INCLUDED AND THE NET INCOME AVAILABLE FOR EQUAL SUB-DIVISION AND TRANSMISSION TO ALL THE THREE REGISTERED OWNERS AND/OR EITHER ESTATES WITHIN SIXTY (60) DAYS FROM THE DATE OF THIS JUDGEMENT.
  4. THE SUM OF KSHS 3,175,000/- PAID TO THE 1ST AND 2ND PLAINTIFFS BY THE 1ST AND 2ND DEFENDANTS BETWEEN THE PERIOD OF JULY 2012 TO 2022 WILL BE FULLY APPLIED TOWARDS THE RENTAL COLLECTIONS DUE TO THE 1ST AND 2ND PLAINTIFFS.
  5. THE 1ST AND 2ND DEFENDANTS WILL BEAR THE COSTS OF THIS SUIT.

DATED, SIGNED & DELIVERED Virtually in KILGORIS ELC Court on 12TH MARCH 2024.

IN THE PRESENCE OF:

COURT ASSISTANT: MR. NGENO

ADVOCATE FOR THE PLAINTIFF: MR. KAMAU (N/A)

ADVOCATE FOR THE DEFENDANTS: GACHIE (N/A)

ADVOCATE FOR THE INTERESTED PARTY: (N/A)

Details

Delivered
Court rank
Environment and Land Court
Station
Milimani Environment and Land Court (Environment and Land Court at Milimani Environment and Land Court)
Division
ELC Land
Case type
Civil Suit
Bench
E. M. WASHEJ

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