Highbeam Limited v Mariaria Wilberforce Nyaboga t/a Mariaria & Co. Advocates [2015] KEHC 4052 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

CIVIL CASE NO.  196 OF 2014

HIGHBEAM LIMITED.......................................................PLAINTIFF

VERSUS

MARIARIA WILBERFORCE NYABOGAT/A

MARIARIA & CO. ADVOCATES...................................DEFENDANT

RULING

By Notice of Motion  dated 30th June 2014 under certificate  of urgency, the plaintiff/applicant  High beam Limited  filed this application against  Mariaria Wilberforce Nyaboga Advocate T/A Mariaria  & Co. advocates, pursuant  to the provisions  of Order 39 Rule 1, order 40 Rule  1(b), 11 of the Civil  Procedure  Rules and Section 3A of  the Civil Procedure Act.  They sought orders:-

1. Spent

2. That pending  hearing and determination of this application, a temporary  injunction  do issue  restraining  the defendant, his servants and or agents from transferring, disposing, withdrawing or parting  with possession of all money held  in account No. 0010025007258701 at Eco Bank  or any bank account  in the name of the defendant.

3. That pending  hearing and determination of the suit, an injunction  do issue restraining  the defendant, his servants and or  agents  from transferring, disposing, withdrawing or parting  with possession of all  his movable  properties  as well as  money held on  account number 0010025007258701 at Eco  Bank or  any bank account in the name of the defendant.

4. That the Honourable court be pleased to order the defendants to deposit security of costs in court pending hearing and determination of this suit.

5. That money held in the defendant’s bank accounts being account No. 0010025007258701 at Eco Bank or any bank account in the name of the defendant be attached pending hearing and determination of the suit.

6. Those costs of this application be provided for.

The application is premised on the grounds that:-

I. The plaintiff through their advocates Daly & Figgis entered into a sale agreement with Brigadier Duncan Kireri Wachira who was represented by the defendant herein.

II. That a deposit of purchase price amounting to Kshs 3,200,000 was paid to the defendant   to hold as stakeholder pending completion of the transaction.

III. The defendant had forwarded a copy of title for the said land parcel to the plaintiff to conduct a search prior to the agreement.

IV. The defendant thereafter issued an original certificate of title to the plaintiff and upon trying to verify its authenticity the plaintiff was informed that the title was a forgery.

V. The defendant after having been informed that the transaction was void for want of good title undertook to release the deposit of the purchase price held by him to the plaintiff but has since refused to release the same to the plaintiff.

VI. The defendant is culpable of fraudulent misrepresentation and professional misconduct.

VII. It is imperative that the defendant be restrained by way of injunction from withdrawing any money held in his accounts pending hearing and final determination of this suit.

VIII. The plaintiff further fears that the defendant will dispose of his property and money held in his account or elsewhere in a bid to frustrate the plaintiff’s effort at recovery hence the same should be attached pending suit.

IX. The plaintiff is also apprehensive that the defendant may abscond and leave jurisdiction of this court, hence the need for orders for deposit of security for costs.

The application is further supported by the affidavit of Rajesh Maneklal Rughani, a Director of the plaintiff company sworn on 30th June 2014.

The defendant opposed the application by filing a replying affidavit on 4th September 2014 and a further replying affidavit on 11th July 2014.  The plaintiff also filed a further affidavit on 18th July 2014.

The parties agreed to dispose of the application by filing written submissions.  They also agreed to make highlights of their submissions.  The plaintiff/applicant filed their submissions on 30th September 2014 whereas the defendant/respondent filed his on 24th October 2014.  The parties’ advocates appeared before me on 17th November 2014 with Mrs Waiganjo advocate representing the plaintiff/applicant while Mr Mariaria advocate was self represented.

In her submissions in support of the application, Mrs Waiganjo gave a brief history of the case between the parties to this suit.  She stated that by  a sale agreement  dated 22nd May 2013 between  the plaintiff and the defendant’s client  one Brigadier Duncan Kireri  Wachira, the latter agreed to sell  to the former a piece of land  described as LR No. 9104/91 original NO.  9104/80 situated in Nairobi City for a consideration of Kshs 32,000,000.

It was further agreed that  pending the completion of the sale transaction the plaintiff would  pay and  did pay a  deposit of 10% thereof  to the defendant’s the sum of  Kshs 3,200,000/- which sum of  money  was to be  held by the defendant herein on a  stakeholder basis pending  the transfer and or satisfactory  search by the purchaser  that the  title  to the property  in question was held  by the vendor.

Further, that indeed, the defendant advocate  did forward to the plaintiff’s advocates- Daly & Figgis a copy  of original  title to the land  but took a long  time to  forward the original executed  agreement  and when the  plaintiff decided  to conduct  a due diligence  and search from the lands registry to determine the authenticity of the title, they discovered  that the said title  was not genuine as shown by the statement  recorded with Central Police Station by one Mr Joseph Kamuyu, the Land Registrar, who confirmed that  the original title did not  emanate  from the lands office and that the photocopied  title used  to conduct  the initial  search materially differed  with the original  title forwarded by  the defendant advocate. Subsequent to those events, the advocates for the purchaser, Ms Daly & figgs requested  for refund  of the 10% deposit  held  by the defendant  as stakeholder, as shown by the various correspondences  including  mails  exchanged  with the defendant but the  defendant refused to release the money which prompted  a  report being made at the Central Police Station.

The defendant did record his statement with the police concerning the foiled  transaction following  the  discovery  of the title  to be fake and that he undertook  to refund  the money upon being given  reasonable  notice, which notice was served on him through  emails and letters  but he refused to remit the money.

Mrs Waiganjo pointed out that from the defendant’s bank statement obtained from Eco Bank Ltd; the Kshs 3,200,000 was received and immediately withdrawn. The following day after deposit on 22nd May 2013  and that  before the deposit  therein, there had  been a negative balance, and the said account  has no funds, an indication that the defendant advocate utilized   the money for his own  purpose  contrary to the agreement that  he was to hold it as stakeholder.

Further, that the defendant even after being notified by Daly & Figgs advocates that the material title  documents  were fake, the defendant  did not remedy the situation but instead, he  gave a false undertaking to the police who  were investigating  the matter, to the effect that he would  refund the money, only to  change his mind  and later claimed that he surrendered  the money to his client  the vendor  as forfeited money after the period lapsed.

In Mrs Waiganjo’s view, the defendant could not have released the money to the vendor after he had been informed that the title document was fake and even after he had given an undertaking to refund the said money to the purchaser. Further, that in the event that he did release the funds as alleged, then it would have been very irresponsible of an advocate of this Court who had a duty of care to ensure the transaction goes in the right direction.

Further, that it would possibly not be true that the defendant released the money to the vendor as alleged in the acknowledgment as the said money was withdrawn from the bank a day after its deposit on 23rd May 2013 whereas the acknowledgment was for 13th September 2013, which acknowledgement she doubted as to its legitimacy since it came after the defendant had recorded a statement with the police.

Mrs Waiganjo further questioned why the defendant had not procured an affidavit from the vendor on the issue of release of the money.  She relied  on the authorities  of ELC 83/11 Joyce  Irene  Atieno Akeyo vs Michael George Okeyo & 4 others; and Osoro Magikoyo T/O Osoro Mogikoyo & co. advocates vs Jared Omollo  & another HCCA 324/2006 to demonstrate  the duty  of care  that the defendant owed to both parties to the agreement for sale of land to  ensure that the transaction went in the right direction.

In opposing the application, Mr Mariaria advocate  who is also the  defendant/respondent argued, relying on his replying  affidavit  and further  replying affidavit that the application under  Order  39 and 40  of the Civil Procedure Rules  is incapable  of being granted as the statement  of account  for account No. 0010025007258701 as exhibited  showed a credit  balance  of only Kshs 56/-.  In his view, based  on the authorities in Nairobi HCC 15/2014 International  Air Transport  Association & another  vs Akarim Agencies Ltd & another , ELC HCC 294/2001  Atul Shah & another  vs Bharat Fouler  & anotherand Nairobi HCC 589/2007-Jerry Njuguna vs J.H. Ltd  that the applicant had not satisfied  the court to  warrant  granting of the orders sought, which are in the discretion of the court among  the conditions  are that:-

i. There must be property being sold by the defendant to defeat the outcome of the suit if successful at the end of the day.

ii. The defendant is most likely or is about to leave the jurisdiction of the court.

iii. The property must be identified specifically, as the injunction or attachment must be specifically directed to a quantifiable property.

iv. Mr Mariaria asserted  that there must be evidence that he  held certain  property  which was  about to be  sold or that  he was  absconding  or about to leave the jurisdiction  of the court.

v. The plaintiff must also demonstrate that it had a good case with real good chances or probability of success.

According to Mr Mariaria, the 10% deposit was no longer held by him and having acted for a known vendor, who entered into negotiations with the plaintiff, the defendant should not be asked to refund any money to the plaintiff.

Further, that the plaintiff had not shown that the defendant had the said money or established any case with a probability of success to enable this court exercise its discretion in their favour.

In the defendant’s view, the plaintiff violated the agreement and it is therefore not entitled to a refund of deposit which he has already paid to his client as forfeited money.  He submitted that it was agreed  that within 90  days from  22nd May 2013 the plaintiff was to furnish an undertaking as to availability  of the  90%  purchase  price and  thereafter  given 21 days seeking for  extension which it  did not seek.

Further, that although the money  was withdrawn  from the account  the following day after it was deposited, it was not demonstrated  that it could not  be released  elsewhere  and neither  does it mean  that it was expended  by the advocate for  his own purpose.  He conceded that the money was only utilized after the expiry of 90 days and that as the plaintiff had not sued the vendor, the defendant was not liable.

In addition, the defendant charged that the plaintiff had filed disciplinary proceedings against him pursuant to the provisions of the Advocates Act.  He also pointed out that as the suit was not filed with summons to enter appearance, it was invalid and prayed for dismissal of the plaintiff’s application with costs.  He further submitted that he had filed a Judicial Review Application which was pending in the High Court.

In response, Mrs Waiganjo  submitted that although the defendant  had mentioned  the statement  of accounts  as attached  not having any monies  capable of being  attached, he had not answered  the question of  where  the money that  was withdrawn  on 23rd May 2013  went  and hence, her  client’s  conclusion  that  the defendant  utilized  the money.

That the defendant  having  admitted  on his own  statement  and undertaking to the police  that he had the money and  was ready to refund it, the plaintiff had established  a good  case  with probability  of success.  And that the defendant had evaded the question of why security for costs could not be deposited.  She further submitted that disciplinary proceedings under the Advocates Act could not stop the proceedings herein.  She maintained  that they  had demonstrated  that the defendant  had utilized  the money  and it was  therefore  upon the defendant to  explain how he had paid out the said  money as the purported  acknowledgement  by the vendor  was highly doubtful.

I have carefully considered the plaintiff’s application dated 30th June 2013, the grounds thereof, and the supporting affidavits by the applicant’s director as well as the replying affidavits by the respondent,  the authorities cited and the rival submissions as filed by both parties advocates and as highlighted together with the law applicable in the circumstances of this case.

The genesis of this case and as summarized by Mrs Waiganjo, emanates from an agreement for sale dated 22nd May 2013 between Brigadier Duncan Kireri Wachira (the ‘vendor”) and High Beam Ltd (the “purchaser”) respecting Land Reference NO.  9104/91 original No. 9104/14/80 (the “property”), which agreement was drawn by M/S Mariaria & Co. Advocates, the defendant herein.  The agreed purchase price was Kshs 32,000,000.  The purchaser’s advocates were Daly & Figgis Advocates.

Under clause 31 of the said agreement, the deposit of 10%  was agreed  to be  paid  by the purchaser  to the vendor’s advocate upon execution  of the said agreement as acknowledged, to be  held on a stakeholder basis   pending the due effective  registration of the transfer  of the property in favour of the purchaser; and under clause 3. 3  the vendor shall deposit  the original Title Deed with the purchaser’s Advocates ONLY UPON receipt  of the 10% purchase  price  aforesaid, from the purchaser. Under clause 3. 4, the balance of the purchase price shall be secured by an undertaking to the vendor’s advocates by the purchaser’s financiers or such financier’s advocates (as the case may be).

In the special condition thereof, it was further agreed that the sale and purchase was subject to among others:-

“

1. ….

2. …..

3. ……

4. The purchaser carrying out a search  and survey  of the property and the  results  thereof   being  satisfactory (in- the sole opinion  of the purchaser.)

It was  further stated  that  the above special  conditions  have been set for  the benefit  of the purchaser who may at any time by notice in writing  waive  any  of them.”

The completion date  was stated to be “ninety (90) days  from the date  of execution  of this agreement  or such  other dates as the  parties  may agree in writing ( the completion  date”).

Clause  1 therefore makes  provision for failure to  complete  or comply  with any conditions  by the purchaser  in which  event, the vendor  shall give the purchaser  21 days  notice in writing  confirming  the vendor’s  readiness to complete  the sale  in all respects and specifying the default, and requiring the purchaser to complete and /or remedy  the default before the expiration  of such notice  and if the purchaser fails to  comply  with such notice  the vendor would be  entitled  to either  rescind  the agreement; retain the deposit  as the agreed liquidated damages; and  thereafter be at liberty to resell the property and the vendor’s would have no  further rights  or claims  against  the purchaser.

On the other hand, in the event  that the  vendor defaulted  under the agreement, the purchaser  would give  him 21 days  notice in writing  to comply  with his obligations and specifying  the default  and requiring  him to make good  or comply  with the notice and if no  compliance, the purchaser  can elect to: sue  for specific performance   and in addition  claim for such loss  or damage  as the purchaser  may have  suffered  as a result  of the vendor’s  failure  to complete; or rescind the  agreement; seek reimbursement  of deposit with   interest  and all expresses  incurred  by the purchaser  pursuant  to the agreement; and liquidated  damages  in an amount equal to the deposit  as compensation for loss of opportunity and other  loss suffered. Clause 11. 4 stipulates  that  in the event  that  the  registration of the transfer  of the property  in favour  of the purchaser  and the charge  in  favour  of the  purchaser’s are not  progressing  due to among  others  and including  but not  limited  to possible defects in the title  to the property, and the reasons  are such that, in the  purchaser’s opinion, it is  not within the powers of  the vendor to rectify within reasonable period, then  the vendor  acknowledged and agreed  that the  vendor  would forthwith upon the purchaser’s election  to  rescind  the agreement pay the sums(including deposit) as set out  in clause  11:2:2 and any undertaking issued  by the purchaser’s financier(s)  or purchaser’s financier’s  advocates  pursuant  to the advocate shall stand  automatically revoked.

Clause 15 related to warranties among them15. 6: the property  is not on a buffer  zone, road, or forest, riparian reserve or public land  and its ownership thereof is not  subject  to any challenge  whatsoever from the  government  of Kenya, any local authority  or any  third party whatsoever. Under clause15. 7: the  vendor  is not engaged in nor threatened  by any litigation, arbitration  or administrative  proceedings relating  to the property  and having made due and  careful inquiry, there  is no fact  or circumstance likely to give rise to any such  litigation, arbitration or administrative  proceedings.

In clause 15. 10:  the vendor has to the best of his knowledge disclosed to the purchaser all material information relating to the property.

Under clause 15. 13:  the vendor agreed to indemnify the purchaser from any proceedings, loss, damages, or other sanctions arising directly or indirectly arising from breach of the warrantees in any manner.

Under clause 27, contractual rights of third parties are not recognized for enforcement of any term of the agreement.

In clauses 28 and 29 parties agreed to be bound by the terms of the agreement and submitted to the jurisdiction of the courts of Kenya.

The said  agreement  was received for  registration in the Registry of Documents  on  5th August  2013 at 15. 55 hours  under  Presentation  No. 536, Volume D  folio 153/2891 file MM x 111 by Mr C.K. Ngetich  212 Registrar of Documents Nairobi.

On 21st May 2013, the defendant herein  issued  a duly signed  irrevocable  professional  undertaking  to the plaintiffs  advocates  Daly & Figgis to release the original title document(certificate of title  relating  to the land in question  upon  receipt  of the 10% deposit pending the other  completion  documents.  He also enclosed 3 copies of the sale agreement duly executed by his client.  On 22nd May 2013 the 10% deposit was  released  to the defendant’s Bank account at Eco Bank  through RTGS A/C No.0010025007258701 by Rughani Investments Ltd with Victoria  Commercial  Bank Ltd Nairobi in the sum of Kshs 3,200,000.  The defendant also advised  the plaintiff’s advocates as 30th May 2013  that he  had lodged  the said  agreement  with the Registrar  and was in  the process  of gathering  all other  relevant  completion documents  in addition  to the  enclosed certificate  of title.

By  a July 2nd 2013  Mail from a Mr Muhammad  to Daly Figgis & company, he enquired, raising  concerns why the stamping  had taken such a longer  time than usual and asking them to write  to the vendors advocates  requesting  for progress on  the stamping  of the sale  agreement and  copy to them (client).

Mr Mariaria advocate who is the defendant contends that the plaintiff was in breach  of the sale  agreement  as to completion date of 90 days from 22nd May 2013 to give  an undertaking  as to the availability  of the balance, after paying deposit of 10%.  However, the available  evidence, shows that after 22nd May 2013 the completion date was subject  to the defendant  transmitting  to the plaintiff’s advocates  duly executed  agreement, which agreement  was only submitted on 8th August  2013  which fact  is not denied  by Mr Mariaria.  It was during this delayed period that the plaintiff sensing that there was something amiss, and decided to conduct a personal search at the lands registry using the original title that it discovered that the said title was fake.

Further, it was confirmed by the lands officer Registrar Mr Joseph Kamunyu that the original title as submitted by Mr Mariaria differed from the copy which latter copy was used during the signing of the sale agreement.  The above  position was  notified  to Mr Mariaria, during  which time, no doubt, he still held the 3. 2 million as a stakeholder as shown by  his own self recorded statement  with Central Police Station on 23rd  October 2013.  He cannot, therefore, in my view purport to have released the money as forfeited deposit to the vendor.

The only issue for determination in this application is whether on the facts and circumstances of this case, the court is inclined to order for security for costs against the defendant.

In my humble view, the agreement subject matter of this suit became  void  the moment the plaintiff  discovered that the vendor  and his advocate had stolen a match on them and therefore there was nothing  capable  of being  enforced.  What remained was reimbursement or return   of the deposit held by Mr Mariaria being an advocate stakeholder and nothing more.

The defendant’s bank account with  Eco bank Ltd clearly shows that  the money  that was  received  therein on 22nd March 2013  was quickly  withdrawn  the following  day on 23rd May 2013.  Mr Mariaria has not explained to the satisfaction of the court where this money went as at that time.  His attempted  explanation through his further replying affidavit that he released  it to the vendor on 13th September  is to say the least, not persuasive.  I have had occasion to carefully examine the acknowledgement purportedly signed by  the vendor on 13th September 2013, which acknowledgement, besides the signature  for Mr Duncan  Kireri Wachira, has  a left  thumb print  attested by Mugambi S. Gathungu Advocate  & Commissioner  for Oaths.  I have also seen the letter dated 19th August 2013 by Mr Mariaria purportedly written to Daly & Figgis Advocates, purporting to give notice of 21 days to complete sale in accordance with Clauses 9 and 11 of the sale agreement.

With utmost respect, I find no sincerity in those two documents.  It cannot be that in October 2013 Mr Mariaria is saying in his statement  to the police that  upon learning that  the titles  were not  genuine, he “advised the purchaser to  write letters  recalling  the money pursuant to Clause 11 of the sale agreement, and that he had since  been  waiting to receive  the 21 days  notice  so as to refund the money  that “ I am  still holding” and  that “ I am ready to refund  the money to the  purchasers  upon a reasonable notice:, while at  the same time purporting  on         19th August 2013  to say that he was  giving 21 days  notice upon whose  expiry the contract  will stand  rescinded  and deposit  paid forfeited  to the vendor in accordance   with Clause  11  of the sale agreement, then  at  the subsequent  date of  13th September 2013 purport  to have paid  out the 3. 2 million forfeited to his client  the vendor .

Furthermore, what was the necessity for the thumb print on the acknowledgment for money if the vendor had signed the agreement?  In addition, the acknowledgement refers to the sale of LR No. 209/11095/39 Nairobi and not LR NO.  9104/91 (original NO. 9104/14/80 (“the property”)quoted or purportedly sold) or purchased vide the sale agreement of 22nd May 2013.  It cannot, therefore, possibly be true that the defendant released money to the vendor as the property quoted was completely different from the one purportedly sold which is LR NO. 9104/91 ORIGINAL 9104/14/80 quoted in the sale agreement.

I have further  carefully examined  the signature  on the acknowledgement  of 19th August  2013  and the sale agreement  of 22nd May 2013  and make the  following observations:- that the said signature of one Brigadier  Duncan Kireri Wachira as appended on the sale agreement appears to have been cut and pasted on the  acknowledgement  and one does not  require  a handwriting  expert to discern the accuracy with which  that signature  is a replica –not similar  but the same as  that on the sale agreement.

I have no doubt  in my mind that the  two documents  acknowledgment  and letter of 19th August 2013 were authored with the intention of  defeating  the claim herein  and unfortunately, the  acknowledgement  lacks the precision in relation to the relevant  parcel of land  thereby letting the cat  out of the bag. Obviously the acknowledgement must have referred to a different transaction all together!

In addition, the letter  of 19th August  2013 from the defendant does not  show that  it was received  by  anybody, contrary to clause  25 of the sale agreement stipulating  that “any notice  to be given  to any party  to this agreement  shall be in writing  and shall be  deemed to be duly  served  upon  hand  delivery to the physical address of the firm of advocates.

The defendant  does not  deny the reference to  the meeting  he held  with the  representative  of Daly & Figgis  Advocates  the morning of      4th September  2013  and hence, it is  unbelievable that the defendant would on 4th September  2013  be in the  clear know that  the agreement  was void  but nonetheless  proceed on 13th September 2013  to release  the deposit to the “vendor.”

Furthermore, the emails  of 13th,16th,19th and 20th August 2013  clearly  sought audience   with the vendor  for the extension  of the completion  date, after the request  for remittance  of the deposit  on 5th September  2013 failed.

On the defence  that this suit is intended  to subject the defendant  to ridicule, difficult  and embarrassment, I find that the defendant  advocate  has indeed  embarrassed  himself   before this  court and  the public  at large.  He has tried to cover up a trail of wrong doing on his part but in the end, he has soiled himself with mud and has himself to blame for the fate that has befallen him.

In my view, this is a case where both the advocate and his ‘client’ the ‘vendor’ if at all he existed must face  the seat  of justice to explain the circumstances  under which  a fake title document  was  used to entice the plaintiff  part with 3. 2 million  and narrowly escaped loosing Kshs 32 million.  I have no doubt  in mind that the  defendant benefited  from the payment  and not his “client the “vendor” and therefore  in law and equity  he is  under an obligation  to refund  the money.  I find that the plaintiff has an arguable case against the defendant, who has not sought any indemnity from his ‘client.”

As a stakeholder  to the sale agreement, which fact is not denied, the defendant was under  an obligation to retain the money  until the sale  was completed  and thereafter  remit  the money to his client  as per the sale  agreement terms  and conditions and especially Clause 3:3: 2(1) a  which required  release of funds  only after effective  registration  of transfer  of property in favour of the purchaser.

However, the bank statements for the defendant’s clients account shows that the defendant spend and exhausted the money before the sale was completed and, curiously, hardly a day after he was paid the money.  The money was meant to be held in trust and not for expenditure.  Neither was the money due to his “client” until all necessary conditions contemplated under the sale agreement were fulfilled.

The defendant, in my view, under those circumstances was not authorized  to disburse  the money and even if  his client  solicited  for it at  that moment  before the completion  of the sale, as an advocate of this  court, the defendant was professionally obliged  to conduct  due diligence  as he owed  a duty of care to  both his client  and the plaintiff on whose  behalf he held the money as stakeholder.

This court observes that the acknowledgement note by his client had no relation or relevance to the property that was being transacted.  It also does not show a credible date when the money was paid out to the defendant’s client.  The money was effectively withdrawn on 23rh May 2013 and the acknowledgement was signed on 19th August 2013, nearly three months later. That conduct by the defendant betrays him.  How  could such huge  sums of money  be withdrawn  in cash on 23rd May 2013  and disbursed  without  any acknowledgement thereof until  three months later.

In my view the manner in which the defendant dealt with the plaintiff was not consistent with professionalism required of him as stakeholder and in this instance, the case of Osoro Magikoyo Advocates vs Jared Omollo & Another HCA 324/2006 is applicable.

Having made  those observations, the  question  is whether  his court should  grant the  order for security  for costs  or any other order  to preserve  the subject matter of the suit as sought by the plaintiff.

The power to order for security for costs is a discretionary one, depending on the circumstances of each case. In this case, I find that the plaintiff has shown a bona fide claim against the defendant.  it has  demonstrated that indeed, the  ‘sale” was a sham and that  the defendant  who held  both copies of “original” title documents  on behalf  of his ‘client’ had  knowledge  that those documents  which he held did  not refer to one and  the same title  of land capable of being sold  out to the plaintiff.

Further, the defendant’s conduct  in the  whole transaction paints  him as  having been  part of  a fraudulent  scheme  to defraud  the plaintiff of  its hard  earned  cash.  The defendant received the money to hold in trust but utilized it within 48 hours and in a bid to cover up the trail manufactured the documentation to show that he had paid out the money to his non –existent client over a nonexistent parcel of land.  He also created a situation that looks like there was breach of contract on the part of the plaintiff when in essence, there was no such breach.

In addition, the account where the money was deposited and swiftly withdrawn has been depleted.  There is no real evidence that the defendant has any intention of depositing therein any money or at all, now or in future.

That being a client’s account, it  would not even be appropriate to  freeze  or injunct  it anyway as it would  have a ripple  effect of subjecting  his innocent  clients  to unnecessary  hardship  for no mistake or theirs.  A freezing order is normally intended to restrain or to enjoin a person from dissipating an asset directly or indirectly.

In Goode in Commercial Law 4th Edition at pg 1287, the authors state:

“the grant of a freezing injunction is governed by principles quite distinct from those laid down for ordinary interim injunctions.  Before granting a freezing injunction the court will usually require to be satisfied that:

a. The claimant has a good arguable case based on a pre-existing cause or action.

b. The claim is one over which the court has jurisdiction.

c. The defendant appears to have assets within the jurisdiction.

d. There is a real risk that those assets will be removed from the jurisdiction or otherwise dissipated if the injunction is not granted.

e. There is a balance of convenience in favour of granting the injunction.

f. The court can also order disclosure of documents or the administration of requests for further information to assist the claimant is ascertaining the location of the defendant’s assets.

Where there is a relationship of trust, tracing of the assets as an equitable remedy can issue.”

In this case, I would hesitate to order for a freezing order.  The best the court can do would be to order for disclosure of the defendant’s personal assets/bank accounts to ascertain the assets he holds.  This is so because it was not shown or demonstrated as to what assets the defendant holds or owns.

In this case, there exists a reasonable circumstance for the court to exercise discretion in favour of the plaintiff who has demonstrated that it has an arguable case.  It was however not shown that essentially, the defendant intends to leave the jurisdiction of the court.  The court  must therefore  look into  different  issues such as  whether  the defendant is willing to  deposit  such security or to  disclose what assets /bank  accounts he holds.

In the instant case, the defendant  did not disclose  to the court that he owns any assets  or property  capable of  realizing the decree if passed against him, instead  he cast/placed  the burden of proving or identifying  and specifying  what  he owns on the plaintiff entirely.  That in itself shows that a lot of hardship and injustice could be caused to the plaintiff to trace the assets of the defendant for attachment if it were to obtain decree in their favour in this suit.  This court  observes  that Mr Mariaria  advocate did not  file any  affidavit  of means  which could  have  assisted  the court in exercising  any judicial discretion in his favour.  He withheld all the information from the court and chose to be defensive.

The court  therefore finds itself persuaded  by the plaintiff that in the  absence  of  proof  of any assets  held by the defendant, which  fact this court  has anxiously considered  against  the backdrop of the affidavit  evidence  and submissions by both parties, this court finds that  this is a suitable  case where  the court would  exercise  its  discretion  in favour of the plaintiff and order the defendant  to deposit  security for costs.

The defendant, in any event, has his unfettered right to be accorded a fair hearing as guaranteed under Article 50(1) of the Constitution.  Therefore, while  ordering  for security  for costs, the  court bears  in mind that  there  are pending disciplinary proceedings against the defendant under  the Advocates Act, as well as the criminal charges  which he is seeking to quash  by way of Judicial Review proceedings.  He, however, did not disclose to this court at what stage those proceedings were.  This court will nonetheless not make any orders that may jeopardize or impede the defendant’s right to a fair hearing.

For those reasons, this court makes the following order:-

1. The defendant  Wilberforce Nyaboga Mariaria   advocate  do furnish or cause  to be  furnished to this court security for  costs  in the sum of kshs five million kshs 5,000,000 by cash deposit  or by bank guarantee issued by a reputable financial institution, to be deposited in this court and to be held by the  court  until this suit  is heard and determined.

2. The said sums of money or bank guarantee shall be deposited or furnished   with 21 days from the date of this ruling.

3. In default  of compliance  with the orders  herein above by the defendant, the defendant  shall forfeit  the right to defend  the suit and the plaintiff shall be at liberty  to proceed  and  prosecute  the suit exparte.

4. Prayers 3 & 5 of the application dated 30th June 2014 are declined for reasons advanced in the ruling.

5. The plaintiff shall have costs of this application.

Dated, signed and delivered at Nairobi this 8th day of May 2015

R.E. ABURILI

JUDGE

8. 5.2015

8. 5.2015

Coram Aburili J

C.C. Kavata

Mrs Waiganjo for plaintiff/applicant

No appearance for defendant in person

COURT- Ruling read and delivered in open court after it was not cause listed for 19th February 2015.

R.E. ABURILI

JUDGE

8. 5.2015

Mrs Waiganjo- I apply for a certified copy of the ruling.

R.E. ABURILI

JUDGE

COURT- Certified typed copy of the ruling to be supplied to the plaintiff upon payment of the requisite fees.

R.E. ABURILI

JUDGE

8. 5.2015