Firm risks losing Sh162m and prime land for breaching pact

Karen Nyawira, a volunteer with Kenya Red Cross Society distributes packets of rice to elderly residents of Solio Squatter settlement scheme in Laikipia County on March 26, 2016. [File, Standard]

A company could lose Sh162 million and its large track of land in Rumuruti, Laikipia County for breaching the sale agreement.

Environment and Lands Court Judge Yuvinalis Angima ruled that Laikipia and Nakuru Property Investments Limited cannot claim the money from Halifax Limited or get back the land for failing to remove squatters staying in the land.

“It is the company who has defaulted on its obligation to give vacant possession to the buyer as per the terms of the sale agreement. It cannot claim back possession of the land or demand the balance of Sh162 million,” ruled Angima.

The decision puts Laikipia and Nakuru Property Investments Limited between a rock and a hard place since the court directed that the firm either evict the squatters and give Halifax Limited vacant possession of the land or lose the money.

The dispute dates back to May 2016 when the company signed a sale agreement with Halifax Limited which was to purchase the 100-acre land at Sh180 million.

The agreement stated that Halifax Limited was to pay 10 per cent of the deposit after which Laikipia and Nakuru Property Investments Limited was to transfer the title to its name before paying the balance.

The agreement also stated that upon payment of the deposit, the company will evict the squatters.

As a result, Halifax Limited paid Sh18 million and had the title transferred to its name. It however refused to pay the balance of Sh162 million until Laikipia and Nakuru Property Investments Limited evicts the squatters and hand over the vacant land.

This prompted Laikipia and Nakuru Property Investments Limited to file the suit in court to compel Halifax Ltd to pay the balance or have its title revoked and the land sale reversed as it argued that they were likely to lose both the land and the money.

Justice Angima however ruled that he cannot cancel Halifax Ltd’s title or order it to pay the balance since it was the company that had not fulfilled its end of the bargain.

“There is no legal basis for cancellation of Halifax Limited’s title since they have not defaulted on payment. It was the company which was to specifically remove the remaining occupants from the suit property and hand over vacant possession before being paid,” ruled the judge.

According to the judge, it was Laikipia and Nakuru Property Investments Limited that had breached terms of the sale agreement and that the court cannot aid them in abetting the breach to get back their title.

Justice Angima also declined to order National Bank of Kenya which was the financier of the deal to release the money since the terms of the sale agreement had not been fulfilled.

He argued that Halifax Ltd’s are genuine purchasers of the land and can hold onto the title but should not release the balance payments until the sale conditions are met.