A land dispute that has dragged on for 16 years has ended with two buyers losing both the Kilifi property and more than Sh4 million after the Court of Appeal ruled that a land sale agreement automatically comes to an end if the balance of the purchase price is not paid within the agreed 90 days.
The judges made it clear that once the deadline lapses, courts cannot revive the contract.
The judgment, delivered on Friday by Justices Agnes Murgor, Kibaya Imaana Laibuta and Ngenye-Macharia, dismissed an appeal filed by Magretville Asami Macho and Grigorios Smaragdis.
The court noted that the buyers had acknowledged receiving consent from the Bahari Land Control Board on January 12, 2010, meaning their 90-day countdown began on that date.
“On this basis they were under a duty to pay the balance of the purchase price within 90 days thereof. Nothing was presented before the trial court to explain what hindered the appellants from complying,” the court said.
The bench stated that missing the payment deadline made the 2009 agreement unenforceable and the deal ended automatically. “The failure to pay the balance of the purchase price within time rendered the agreement of no force and effect, and as a consequence, the agreement lapsed ipso facto.”
The two had asked the court to compel the transfer of the land based on the agreement they entered into with the seller, Musa Mwera Athuman. They had already paid Sh572,000 of the Sh900,000 total price and argued they were prepared to clear the remaining Sh328,000.
They claimed the seller frustrated the process by delaying completion documents and later transferring the land to other people despite an inhibition order.
However, the Court of Appeal upheld the earlier finding by the Environment and Land Court that the deal had already ended by the time the buyers attempted to enforce it.
Under clause 5 of the agreement, the remaining amount was due within 90 days after the Land Control Board consent was issued.
With the consent issued in January 2010, the judges said the buyers could not revive a contract that had already collapsed. They added that the buyers issued a completion notice on January 7, 2014, which was nearly five years after the agreement was signed, and therefore had no legal basis.
The court also noted a submission by Athuman’s lawyer that the completion date had been October 10, 2009, making any steps taken after that date “of no legal consequence.”
The bench agreed with the seller’s argument that the agreement, which included the Law Society of Kenya Conditions of Sale, could not be renewed once time had run out. It further observed that the buyers did not show any evidence that they tried to settle the remaining amount promptly after receiving LCB consent.
The judges stressed that courts cannot enforce contracts that have expired due to time running out. They said specific performance is only available where a party has met their obligations and monetary compensation is insufficient.
“In this case, the appellants were not entitled to an order of specific performance considering that they breached the essential terms of the Agreement,” the Court held.
The judges also noted that the property had since been sold to other people and “there would be nothing capable of being transferred.”
While the bench upheld the order for the seller to refund the Sh572,000 paid, together with interest from July 10, 2009, it overturned the Sh4 million in general damages that had been awarded by the lower court.
The bench said general damages are not available in contract disputes. “There would be absolutely no basis upon which the learned Judge would go ahead to award… general damages,” the Court said.
Instead, the court granted the buyers nominal damages of Sh100,000 to acknowledge that their rights had been interfered with, even though no real financial loss had been proved.
The Court dismissed the appeal and directed each party to meet their own costs, saying this was appropriate given the history of the case. The ruling reinforces a clear legal position: once the 90-day completion period ends without full payment, a land sale agreement collapses automatically and cannot be brought back to life.
