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ELCPartially AllowedNot stated in the judgment· [2016] KEELC 180 (KLR)

Private Development Company Limited v Rebecca Ngonyo & 3 others [2016] KEELC 180 (KLR)

Environment & Land Court
9 November 2016
983 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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What this practically means

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Executive summary

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The plaintiff applied by notice dated 10 August 2015 for summons to M/s Njema Construction Company, the court-appointed agent for Nakuru Municipality Block 4/46, to account for rent collected from 7 November 2014, or alternatively for distress against defaulting tenants. The 2nd interested party applied on 10 July 2015 to have the agency order set aside and to collect the rent itself. Both applications were founded on the court order of 7 November 2014 directing that rent be collected by M/s Njema Construction and deposited in court; the complaint was that rent was being collected but never deposited. The agent's director, Mr David Manyara, tendered account statements for January-June 2015 and July 2015-June 2016 showing expected rent of Kshs 1,247,900 and Kshs 3,044,000, with collections of only Kshs 699,000 and Kshs 1,490,000 respectively, less various expenses, leaving nominal balances said to be payable. The accounts had no particulars or receipts for expenses and no details of paying and non-paying tenants; even after a meeting directed by the court, the director produced no documents. Holding that the agent had totally failed the parties and defied the order to deposit collections in court, the court removed M/s Njema Construction as agent forthwith, ordered it to remove its personnel from the property, and barred it from receiving any further rent. It declined to hand collection to the 2nd interested party, leaving the parties to agree on a mutually acceptable agent. The alternative prayer for distress was refused pending establishment of who had paid. Costs of both applications were awarded against M/s Njema Construction, with liberty to file further applications against it.

Key legal issues

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01

Compliance with the order appointing a rent-collection agent

Holding

The agent was in total breach: it collected rent but never deposited the money in court as the order of 7 November 2014 required, and its accounts lacked particulars, receipts and tenant details.

Reasoning

The court order of 7 November 2014 directed that rent proceeds of the suit premises be collected by M/s Njema Construction Company Ltd and deposited in court. The agent produced account statements for January-June 2015 and July 2015-June 2016, but these showed substantial uncollected and undeposited sums, had no particulars or receipts for the claimed expenses, and no particulars of tenants who had paid or not paid. Even after the director was directed to meet counsel and avail particulars, he had no documents. Non-compliance with the court order was therefore established.

p. 2
02

Removal of the agent and choice of a replacement

Holding

The agent was removed forthwith; rather than hand collection to the 2nd interested party, the parties were left to agree on a mutually acceptable new agent.

Reasoning

Having found the agent in total default and no longer acceptable to the parties, the court could not fault the parties' position. On the 2nd interested party's competing application, the court reasoned that allowing one litigant to collect rent would appear unfair to the others. A consensual, neutral agent was therefore preferred, with liberty reserved to the parties to pursue any appropriate application against the defaulting agent, including for the unaccounted sums.

p. 3

Legal principles established

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  • A court-appointed agent who fails to deposit collected rent in court as directed, and who cannot account for collections with particulars or receipts, may be removed from the agency and barred from receiving any further rent.
  • Where litigants compete to collect rent from disputed premises, the court will prefer a neutral agent agreed by all parties rather than allow one party to collect.

Court orders

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  1. 1.M/s Njema Construction Company Limited to cease forthwith to be agent for collection of rent or for any other purpose over the suit property
  2. 2.The said firm to remove all its personnel from the suit property
  3. 3.The firm not to receive a single shilling from any person/tenant in the suit property
  4. 4.Parties left to agree among themselves on a new agent acceptable to all of them
  5. 5.Distress for rent against tenants refused pending establishment of who has paid and who has not
  6. 6.Parties at liberty to file any appropriate application against M/s Njema Construction Limited
  7. 7.M/s Njema Construction to shoulder the costs of the applications dated 10 July 2015 and 10 August 2015
Jurisdiction invoked
Inherent supervisory power over a court-appointed rent collection agent and the court's own orders of 7 November 2014 (provision not stated in the judgment)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Private Development Company Limited v Rebecca Ngonyo & 3 others [2016] KEELC 180 (KLR)", Case Analysis (2016). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/180/eng@2016-11-09

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