Abubaker v Principal Registrar of Crown Lands, Commissioners of Stamp Duties (Civil Appeal No. 8 of 1953; Civil Suit No. 48 of 1953) [1953] EACA 2 (1 January 1953)

# APPELLATE CIVIL

## Before HARLEY, Ag. J.

# AMINABHAI D/O ABUBAKER, Appellant

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# THE PRINCIPAL REGISTRAR OF CROWN LANDS. THE COMMISSIONERS OF STAMP DUTIES, Respondents IN RE THE STAMP ORDINANCE: EX PARTE AMINABHAI D/0 ABUBAKER

# Civil Appeal No. 8 of 1953 and Miscellaneous Civil Suit No. 48 of 1952 (Consolidated)

Crown Lands Ordinance (Cap. 155)—Mortgagee after purchase obtaining vesting order from court—Municipalities Ordinance (Cap. 136) section 95—Premises within Nairobi—Rates unpaid by mortgagor—Certificate by Town Clerk not produced—Refusal by Principal Officer of Crown Lands to register—Whether refusal justified—Stamp Ordinance (Cap. 259) section 2—Definition of "conveyance"—First Schedule Article 23—Whether vesting order liable to ad valorem duty.

The appellant was mortgagee of certain lands in Nairobi and obtained an order of court that the premises should be sold by auction. She bought, by leave of the court, for a little less than the amount due and the mortgagor was at all times willing to convey to her. There was, however, an obstacle. The mortgagor owed the City Council of Nairobi something over Sh. 2,000 for rates due in respect of the mortgaged premises. By virtue of section 95 of the Municipalities Ordinance (Cap. 136) and section 29 of the Local Government (Rating) Ordinance (Cap. 137) no "transfer" of the premises could be "passed or<br>registered" by the Principal Registrar of Crown Lands without production to him of a certificate by the Town Clerk that these rates had been paid. The mortgagor had no funds and therefore could not obtain the necessary certificate. In consequence, he was unable, effectively, to convey the premises to the mortgagee as purchaser. The mortgagee then applied under section 47 of the Trustee Ordinance (Cap. 46) for an order of the Court vesting the premises in her. This was refused by the Supreme Court, but in Civil Appeal No. 52 of 1951 (reported 19 E. A. C. A. 52) the Court of Appeal ordered that a vesting order should issue from the Supreme Court and this was duly done. The appellant presented the vesting order for registration. The Registrar of Crown Lands impounded it as insufficiently stamped and the Senior Collector of Stamp Duties decided that it was liable to duty of Sh. 2,487/50 as a "conveyance" under<br>Article 23 of the First Schedule to the Stamp Ordinance (Cap. 259). The appellant appealed to the Commissioners without success. The appellant appealed to the Supreme Court against the decision of the Principal Registrar of Crown Lands and requested the Commissioners to state a case to the Supreme Court under section 60 of the Stamp Ordinance. The Commissioners did so. The stated case and the appeal were consolidated.

Held (18-12-53).—(1) "Conveyance" unless expressly limited in definition in a specific Act or Ordinance applicable to Kenya must have the general meaning which it has in common<br>law of "any instrument which carries from one person to another an interest in land". This meaning of conveyance is not narrowed or restricted by the Indian Transfer of Property Act:

(2) There is nothing in the Municipalities Ordinance or the Local Government (Rating) Ordinance to indicate that conveyances, transfers or transactions therein mentioned do not include the transfer of title by vesting order. All these Ordinances must apply to vesting orders and vesting orders do not form a separate or special class within or<br>without these three Ordinances. The Registrar of Crown Lands was right to refuse registration of the vesting order until the requirements of the Ordinances had been met.

(3) The definition of "conveyance" contained in section 2 of the Stamp Ordinance<br>is inclusive and not exclusive. The vesting order amounted to a conveyance liable to duty in accordance with Article 23 of the First Schedule to the Ordinance.

Cases cited: In re Calcott and Elvin's contract, (1898) 2 Ch. 460; Aminabhai dío Abubaker v. City Council of Nairobi, (1952) 19 E. A. C. A. 52.

#### D. N. Khanna for appellant.

# Hunter for Registrar of Crown Lands and Commissioners of Stamp Duties.

[Editor's Note.—The judgment was taken on appeal to the Court of Appeal for Eastern Africa (Civil Appeals Nos. 13 and 14 of 1954). The court allowed the appeal against the decision of the Registrar of Crown Lands and directed that official to register the vesting order without any clearance certificate from the Town Clerk, but upheld the decision of the Commissioners. The court took the view that the words "transfer" used in sections 95 and 29 of the Municipalities Ordinance and section 29 of the Local Government (Rating) Ordinance respectively refer only to a transfer between the parties by act of the parties: while an order of a court might effect a transfer, the order can be compulsorily registered and was not a "conveyance", in an ordinary sence, and the construction put upon "vesting order" by the Judge was erroneous. On the other hand, looking to the definition of "conveyance" in the Stamp Ordinance while the vesting order was not a "conveyance" in the ordinary connotation of the word, the word "Instrument" contained in the same section was very wide and included a vesting order as did also the definition of conveyance. The decision of the Commissioners was, therefore, right; and the vesting order was subject to ad valorem dutv.l

JUDGMENT.—On 7th April, 1952, in Civil Appeal No. 52 of 1951 the Court of Appeal for Eastern Africa, directed that an order be made vesting in one Aminabai a plot of land. Accordingly, on 12th August, 1952, the vesting order was made.

On 25th September, 1952, the Senior Collector of Stamp Duties, the senior revenue authority for the purposes of the Stamp Ordinance, stated a case, pursuant to section 59 of the said Ordinance, for the decision of the Commissioners of Stamp Duties, expressing the opinion that the aforesaid vesting order is a "conveyance" within the meaning of the aforesaid Ordinance.

The Commissioners, on or about 10th October, 1952, communicated to the said Senior Collector of Stamp Duties their decision on the case, and were on or about 28th October, 1952, notified of a request by the appellant's advocates that they state a case and refer the same to the Supreme Court under section 60 of the aforesaid Ordinance.

The Commissioners were of the opinion: "that the aforesaid vesting order is a "conveyance" within the meaning of the Stamp Ordinance, and is dutiable as such".

On 14th November, 1952, the statement of case was signed, and the question was put to the Supreme Court (pursuant to section 60 of the Stamp Ordinance (Cap. 259)) whether or not the aforesaid vesting order is a "conveyance" within the meaning of the Stamp Ordinance and dutiable as such.

The bundle of agreed correspondence handed to this Court shows that during 1952, not only was the question of stamp duty being disputed, but also another question whether the Registrar of Crown Lands was right in refusing to register the vesting order before the written statement prescribed by section 95 of the Municipalities Ordinance (Cap. 136) and section 29 of the Local Government (Rating) Ordinance (Cap. 137), was produced to him. The Principal Registrar of Crown Lands, on 31st January, 1953, upheld the order of the Registrar of Crown Lands, refusing to register the vesting order. The Memorandum of Appeal dated 4th February, 1953 (Civil Appeal No. 18 of 1953), prays the Supreme Court to hold that the Principal Registrar was in error and that he be directed to register the vesting order.

As the same plot of land is the subject matter both of the case stated, and of the Memorandum of Appeal, it appears convenient to consolidate the judgment of this Court on the two points for decision which may shortly be stated as follows: —

- 1. Was the Principal Registrar is error in refusing to register the vesting order? - 2. If the vesting order is registered, is it dutiable as a conveyance within the meaning of the Stamp Ordinance?

## Point 1.

The Registrar's grounds for refusing to register were that section 95 of Cap. 136 and section 29 of Cap. 137 were not complied with. The appellant says that compliance with those sections is not necessary in the present case, and his argument in support of such contention may be paraphrased somewhat as follows: "The Supreme Court (Connell, J.) refused a vesting order on the grounds that if he made such an order the Registrar might be compelled to register it without first ensuring the collection of municipal charges due on the property: the Court of Appeal for Eastern Africa held that Connell, J. had applied the wrong test and that he "should not have regard to the possible or probable effect of the order on the City Council". "Therefore ..." (argues the appellant) "... the Court of Appeal for Eastern Africa by making the vesting order intended that the Registrar should register it without further ado". This contention of the appellant is amplified in his letter of 13th January, 1953, addressed to the Hon. Attorney-General.

I cannot agree that there is anything in the judgment of the Court of Appeal for Eastern Africa which lays down that, if a vesting order is made, the registration of it need not comply with Cap. 136 or 137. Therefore, I regard the decision on the two points for consideration as being unfettered by the judgment of the Court of Appeal for Eastern Africa in the appeal case quoted.

Mr. Khanna has told this Court that the present appeal is based on section 140 of the Crown Lands Ordinance (Cap. 155). Part XII of that Ordinance governs the registration of transactions relating to Crown Lands. If a transaction does not come within the orbit of the Ordinance, then the Registrar of course cannot be compelled to register such transaction. If the appellant wants his vesting order registered, he must show that his plot is "land" in respect of which the conveyance, lease or licence from the Crown or Government is required by the provisions of Part XII of the Ordinance to be registered in the Crown Lands Registration office. Section 126 of the Ordinance defines those transactions affecting land which must be registered.

"Conveyance" unless expressly limited by definition in a specific Act or Ordinance applicable to Kenya must, in my view, have the general meaning which it has in common law of "any instrument which carries from one person to another an interest in land" (In re Calcott, (1898) 2 Ch. 460). I do not think that this meaning of conveyance is narrowed or restricted by the Indian Transfer of Property Act.

There is, it seems to me, also nothing in the Kenya Ordinances, Caps. 136, 137 or 155 to indicate that conveyances, transfers or transactions therein mentioned do not include the transfer of a title by vesting order. It seems to me that all those Ordinances must apply to vesting orders, and that vesting orders do not form a separate or special class within or without those three Ordinances. In my opinion, the Registrar was right to refuse registration of the vesting order until the requirements of the Ordinances had been met.

## Point 2.

Now arises the point whether a vesting order is a conveyance within the meaning of the Stamp Ordinance (Cap 259) and dutiable as such. By definition in this Ordinance, a "conveyance includes a conveyance on sale and every instrument by which property, whether movable or immovable, is transferred *inter* vivos and which is not otherwise specifically provided for by the Schedule hereto: and also a decree or order for, or having the effect of an order for, foreclosure". This definition is inclusive but not exclusive.

I do not consider that the vesting order in this case has the effect of an order for foreclosure. The transaction preceding the order was a sale to the mortgagee/appellant. Because he was at one stage before the vesting order a mortgagee the appellant contends that he still, even after the vesting order, comes within the terms of section 47 of the Trustee Ordinance (Cap. 36). If he is right in his contention, he can claim to be assessed for stamp duty under article 62 of the First Schedule to Cap. 259. But he cannot claim to be a trustee or beneficiary at this stage. He became a purchaser and is now a trustee or beneficiary, but sole owner of the plot by reason of the vesting order. That vesting order is a conveyance liable to duty in accordance with article 25 of the First Schedule. In this I am in agreement with the Commissioners and rule accordingly.

In the result, the appeal is dismissed with costs and appellant must also pay the costs of the case stated.