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Court of AppealDismissedCivil Appeal No. 28 of 2014

Mohammed Salim Balala & another v Tor Allan Safaris Limited [2015] KECA 725 (KLR)

Court of Appeal of Kenya
23 April 2015
HOH. M. OkwenguASAsike-MakhandiaFSF. Sichale
2,830 words in judgment
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The bottom line

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Kenya's Court of Appeal ruled that escrow agents holding a disputed deposit can be dragged into a lawsuit, and cited wrong legal provisions won't sink an otherwise valid application.

What this practically means

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Executive summary

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The appellants, partners in the law firm Balala & Abed Advocates, acted for a vendor in a sale of land at Ngomeni and held a deposit of Kshs.3,049,200 as stakeholders under a professional undertaking. The sale did not complete over a boundary demarcation dispute, and the purchaser, Tor Allan Safaris Limited, sued the vendor for refund. Before trial it applied to enjoin the appellants as defendants and to amend the plaint to add a prayer for furnishing of accounts. Meoli J. allowed the application by a ruling dated 13th June 2014, and the appellants appealed on eighteen grounds, principally that they were not privy to the contract, that the deposit had been forfeited rendering accounts superfluous, that the application cited the wrong provisions, and that joinder violated advocate-client privilege. The Court of Appeal dismissed the appeal. It held that the failure to cite Order 1 Rule 10(2), the provision specifically governing joinder, was a non-fatal omission since the relief sought was plain on the face of the application and Order 51 Rule 10 forbids defeating applications on technicalities. The Court held that the appellants, as stakeholders and escrow agents, were the persons best placed to answer the disputed questions of forfeiture and accounts, establishing a prima facie case warranting joinder. It further held that advocate-client privilege exists for the client's benefit alone and does not immunise an advocate from suit, and that no burden of proof had been shifted. The High Court ruling was affirmed and the appeal dismissed with costs.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the High Court erred in allowing an application premised on the wrong provisions of law (failure to cite Order 1 Rule 10(2))
  2. 2.Whether the appellants, as stakeholders/escrow agents of the deposit, were properly enjoined as defendants in the suit
  3. 3.Whether the appellants owed the respondent a duty of care as stakeholders
  4. 4.Whether the advocate-client privilege barred the joinder of the appellants
  5. 5.Whether the learned judge erred in shifting the burden of proof onto the appellants

Key legal issues

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01

Whether failure to cite Order 1 Rule 10(2) invalidated the joinder application

Holding

No; the omission was non-fatal because the relief sought was apparent from a plain reading of the application, and Order 51 Rule 10 bars defeating an application on a technicality.

Reasoning

The application was expressed to be brought under Order 1 Rules 4 & 14 and Order 8 Rules 3 & 5, but omitted Order 1 Rule 10(2), the provision specifically governing joinder. The Court held that where the nature of the relief sought is discernible from a plain reading of the application, the court may pronounce its ruling on merit notwithstanding the omission. Order 51 Rule 10 expressly provides that no application shall be defeated for want of form that does not affect its substance.

p. 3
02

Whether the appellants as stakeholders/escrow agents had a place in the suit

Holding

Yes; as stakeholders holding the deposit on a professional undertaking, the appellants were necessary parties, and the disputes over forfeiture and release of the deposit established a prima facie case justifying their joinder.

Reasoning

The deposit was held by the appellants under clause 3.1 of the sale agreement pending completion. Questions of whether the deposit was forfeited, whether the respondent failed to complete, and who should render accounts of the monies are matters the appellants are best placed to answer. Rival completion notices and competing claims over the deposit evidenced a prima facie case; the contentions raised by the appellants were trial matters that could not dislodge the joinder.

p. 4
03

Whether advocate-client privilege shielded the appellants from being enjoined

Holding

No; privilege exists for the client's benefit and it is the client who chooses whether to lift it, so the advocates could still be sued on the basis of that relationship.

Reasoning

The Court, citing Halsbury's Laws of England, held that privilege protects the client, not the advocate. An advocate cannot be compelled to disclose privileged information unless the client lifts the privilege, but this does not immunise the advocate from suit arising out of the advocate-client relationship. The extent of any disclosure required is itself a matter for trial.

p. 4
04

Whether the learned judge shifted the burden of proof onto the appellants

Holding

No; the ruling properly addressed why the joinder was necessary and did not shift any burden of proof.

Reasoning

The appellants complained that the judge incorrectly shifted the burden of proving that they could not be enjoined onto them. The Court reproduced the impugned passage and found it showed only that the judge identified the common questions of fact and the appellants' special capacity as stakeholders. No shifting of the burden was discernible; the passage merely justified the necessity of the joinder.

p. 4

Legal principles established

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  • Failure to cite the proper order and rule under which an application is made is a non-fatal omission where the relief sought is discernible from the application.
  • No application shall be defeated on a technicality or for want of form that does not affect the substance of the application.
  • Advocate-client privilege exists for the benefit of the client, not the advocate; an advocate may still be sued on the basis of his relationship with his client.
  • In considering an application for joinder, the court asks whether it will cause no injustice to the other parties and whether it introduces no new or distinct cause of action.

Court orders

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  1. 1.The appeal is dismissed with costs to the respondent

The bench

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One judgment of the whole court — no separate or dissenting opinions.

HO
majority

Wrote the judgment

AS
majority

Wrote the judgment

FS
majority

Wrote the judgment

On appeal from
High Court of Kenya at Malindi
Malindi H.C.C.S. No. 86 of 2012
Jurisdiction invoked
First appeal to the Court of Appeal under the Court of Appeal's appellate jurisdiction over High Court decisions (Constitution article 164 and the Appellate Jurisdiction Act); the judgment does not cite a specific provision

Relief refused

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Setting aside the High Court ruling allowing the joinder of the appellants as defendants

The Court was satisfied the enjoinder was proper as the appellants held the deposit as stakeholders and disputed issues could only be resolved at trial

p. 5

Costs

The appeal was dismissed with costs to the respondent.

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

However, failure to cite the proper order and rule or vice versa under which the application is made is in our view a non-fatal omission.
p. 3Mis-citation of provisions in applications
No application shall be defeated on a technicality or for want of form that does not affect the substance of the application.
p. 3Substance over form - Order 51 Rule 10
In view of the above, we are satisfied that the enjoinder was proper and on that score this appeal fails and is accordingly dismissed with costs.
p. 5Final orders - dismissal of appeal
A disinterested third party who holds money or property the right to which is disputed between two or more other parties
p. 3Definition of a stakeholder

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (12)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Mohammed Salim Balala & another v Tor Allan Safaris Limited [2015] KECA 725 (KLR)", Case Analysis (2015). Civil Appeal No. 28 of 2014. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2015/725/eng@2015-04-23

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.