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ELCDismissedEnvironment & Land Case E054 of 2021· [2023] KEELC 18506 (KLR)

Mwangangi Nzisa & Associates Advocates v Sachania & 2 others

Environment and Land Court
16 March 2023
2,700 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan court refused to help a law firm holding property title documents, ruling it was keeping them wrongly because the buyer had not paid the full price.

What this practically means

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Executive summary

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The Applicant, an advocate firm, filed an Originating Summons under Section 58 of the Civil Procedure Act and Order 34 Rule 2 of the Civil Procedure Rules seeking an interpleader declaration on whom among the Respondents it should surrender the title and completion documents to Flat No. B.8, Nirav Apartments on LR No. 209/1219/3, which it held having acted for both the vendors (1st and 2nd Respondents) and the purchaser (3rd Respondent) in a sale agreement dated 4th August 2017. The vendors demanded release of the documents on grounds of the purchaser's default in paying the balance of Kshs. 2.5 million, while the purchaser claimed an equitable interest having paid approximately 95% of the Kshs. 21 million purchase price and sought that the documents be held by a neutral party. The court framed three issues: whether this was an interpleader suit, what orders should issue, and costs. Applying clause 5.3 of the sale agreement, which required the vendor's advocates to deliver completion documents upon full payment, the court held that the purchaser's admitted non-payment of the full price meant the documents rightly remained with the vendor's advocates. The vendors had withdrawn their instructions from the Applicant. Relying on the principle that courts cannot rewrite contracts, the court found the Applicant was not an interpleader but wrongfully in possession of the documents, and that no term made the Applicant a trustee of the documents for either party. The originating summons was dismissed with each party bearing its own costs, leaving the 3rd Respondent to pursue other remedies for the sums paid.

Key legal issues

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01

Whether the Applicant's suit qualifies as an interpleader under Section 58 of the Civil Procedure Act and Order 34 Rule 2 of the Civil Procedure Rules

Holding

The Applicant does not qualify as an interpleader; it is wrongfully in possession of the completion documents contrary to the sale agreement

Reasoning

Clause 5.3 of the sale agreement required the vendor's advocates to deliver completion documents to the purchaser's advocates only upon payment of the full purchase price. The purchaser admitted paying about 95% of the price, so the condition was unfulfilled. The vendors had also withdrawn their instructions. The court cannot rewrite the contract to place the documents in trust for either party.

p. 5
02

Whether the court should direct release of the completion documents to any of the Respondents

Holding

The court declined to grant any of the orders sought; the 3rd Respondent must pursue her own remedies for the amount already paid

Reasoning

The sale agreement stipulated that completion documents be held by the vendor's advocates pending full payment. Since the full purchase price was unpaid, the documents should remain with the vendor's advocates as stipulated. No term made the Applicant a trustee of the documents, and the purchaser's equitable claim must be pursued through other remedies.

p. 6

Legal principles established

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  • A court cannot rewrite a contract between the parties; parties are bound by the terms of their contract unless coercion, fraud or undue influence are pleaded and proved

Court orders

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  1. 1.The originating summons is dismissed
  2. 2.Each party to bear own costs

Authorities

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Legislation

  • Civil Procedure ActSection 58
  • Civil Procedure RulesOrder 34 Rule 2

Cases cited (8)

  • Safina Properties Limited & Another v Barclays Bank of Kenya Limited & Another
    [2015] eKLR

    Interpleader principles

  • Rts Flexible Systems Limited v Molkerei Alois Muller GmbH & Co KG (UK Production)
    [2010] UKSC 14

    Time of the essence in conveyancing agreements

  • National Bank of Kenya v Pipeplastic Samkolit (K) Ltd & another
    [2001] eKLR

    Court cannot rewrite contracts

  • Macharia Mwangi Maina & 87 others v Davidson Mwangi Kagiri
    [2014] eKLR

    Equitable rights of a person in possession or occupation of land

  • Serve in Love Africa (Sila Trust) v David Kipsang Kipyego & others
    [2017] eKLR

    Fiduciary duty and absence of prejudice

  • South Nyanza Sugar Co. Ltd vs Leonard O. Arera
    [2020] eKLR

    Parties bound by contract terms; court cannot rewrite contracts

  • National Bank of Kenya Ltd vs Pipe Plastic Samkolit (K) Ltd
    [2002] EA 503, [2011] eKLR

    Court cannot rewrite a contract between parties

  • Paul Kimaiyo Langat vs Cooperative Bank of Kenya Ltd
    [2007] eKLR

    It is not the business of courts to rewrite contracts

Jurisdiction invoked
Environment and Land Court jurisdiction under Article 162(2) of the Constitution read with the Environment and Land Court Act; interpleader jurisdiction under Section 58 of the Civil Procedure Act and Order 34 Rule 2 of the Civil Procedure Rules

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, "Mwangangi Nzisa & Associates Advocates v Sachania & 2 others", Case Analysis (2023). Environment & Land Case E054 of 2021. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2023/18506/eng@2023-03-16

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