Home Kenya News Woman to be paid Sh6.8m after company breaches business deal

Woman to be paid Sh6.8m after company breaches business deal

Court ruling

A company and its directors have lost a bid to reverse a decision that ordered it to pay a businesswoman Sh6.8 million after failing to honour a sale agreement on the purchase of two plots.

Amesnet Enterprises Limited entered into a sale agreement dated August 30, 2011, in which the company sold to Susan Wanjiru two plots of land situated in Kilifi for Sh4,500,000.

Despite Wanjiru paying the full consideration for the property, Amesnet failed to honour its part of the bargain, prompting her to demand a refund.

The company and its directors, James Mwangi and Janet Waithira, and Wanjiru then entered into a refund agreement dated August 5, 2016, for the money together with an agreed interest, totalling Sh7,875,000.

But the company only refunded Sh1 million, prompting Wanjiru to institute the suit for recovery of the Sh6,875,000 balance.

In their defence, the appellants said the refund agreement was intended to supplement the sale agreement and, in that respect, the purchase price remained Sh4,500,000 and nothing more.

They stated that the refund agreement was “unconscionable, unreasonable and oppressive as the same was inconsistent with the provisions of the sale agreement dated August 30, 2021, in terms of the purchase price”.

They added that the terms of the sale agreement were applicable as the same had not been repudiated and that Mwangi and Waithira were not liable under the agreements as the company that entered into the sale agreement was distinct and separate.

In 2019, the trial magistrate heard testimonies from both sides and concluded that Wanjiru had proved her case on a balance of probability against the company and its directors and ruled in her favour.

Being aggrieved, the company appealed, demanding the judgment be reversed.

They challenged the validity of the refund agreement, stating that it was entered into under duress, coercion and intimidation. They alleged that they did not execute the same out of their free will.

However, on July 30, Justice David Majanja held that the appellants willingly entered into the refund agreement having recognised that they were truly indebted to Wanjiru.

The contention that they were threatened or coerced into signing the agreement was an afterthought intended to avoid legal consequences.

The judge affirmed the trial magistrate’s decision as it was simply a reflection of the parties’ intention.

“For the reasons I have set out above, I find that the decision of the subordinate court was well-founded on the evidence and the law. This appeal lacks merit and is accordingly dismissed,” Justice Majanja ruled.


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