Justice Kariuki loses Sh65m property case

Justice Kariuki sued Equity Bank in 2011 for breach of contract over sale of the house. FILE 

By Galgallo Fayo,

Court of Appeal Judge GBM Kariuki has lost his long running court battle with Equity Bank over a botched purchase of a prime residential house in Lower Kabete valued at Sh65 million.

Justice Jonathan Havelock on Friday ruled that there was no legal agreement between the parties, since the Equity officer who entered into the contract with Justice Kariuki to sell him the house had no authority to do so.

“I find that there was no contract for the sale/purchase of the suit property entered into as between the plaintiff and either of the defendants,” ruled Justice Havelock.

“Consequently and in that regard, the court awards damages to the plaintiff, to be borne by the 1st defendants. Such shall be in the sum of Sh500,000 taking into the account advocates fees, time expended and inconveniences to the plaintiff,” he added.

Justice Kariuki sued Equity Bank in 2011 for breach of contract over sale of the property and sought an order compelling the bank to transfer the palatial house, L.R. 2951/284, to him. The sale of the house to any other party was put on hold pending the determination of the suit.

READ: Court bars Equity Bank from selling judge Kariuki's home

The judge had accused the bank of accepting an offer to buy the house — complete with a swimming pool and an elaborate block of servant’s quarters — from a third party after he had signed a contract to own the property.

However the bank denied breaching the contract saying that the judge had proposed to buy the property like other interested parties.

Justice Kariuki argued that the bank accepted his offer and requested him to acknowledge a letter of acceptance by depositing a 10 per cent deposit to draw the sale agreement.

The judge claimed he accompanied a senior bank manager in the debt recovery unit, Boniface Ratemo, and the alleged defaulter to inspect the house and evaluate its worth.

He said he made a written offer to the bank for Sh65 million upon confirmation by Mr Ratemo that he had authority to sell the premises.

Justice Havelock in his judgment observed that although there were some correspondence between the Judge and the bank regarding the property, the same did not satisfy the threshold of contract of sale.

The Judge further observed that Mr Kariuki did not pay the 10 per cent deposit within the agreed time.

But Justice Havelock said the bank ‘acted in a manner unbecoming of a professional institution of its nature’ by allowing one of its officers who was not authorised to enter into contract to negotiate over the property suit.

The house, a property of a former Equity Bank employee, was put on sale by a private treaty after the owner defaulted in repaying Sh60 million mortgages secured from the lender