WHITE HORSE INVESTMENTS LIMITED v THUITA KIIRU WAINAINA & another [2012] KEHC 4716 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

MILIMANI COMMERCIAL COURT

CIVIL SUIT NO. 729 OF 2010

WHITE HORSE INVESTMENTS LIMITED ……….………. PLAINTIFF

VERSUS

THUITA KIIRU WAINAINA ………………………..….1ST DEFENDANT

PAUL WAINAINA KIMANI ………………………..…2ND DEFENDANT

DIRECTIONS

1. The plaintiff’s claim against the defendants is for Kshs.15 Million that was paid to them as stakeholder in respect of a sale transaction which did not materialize.

2. The defendants, as advocates for the vendor, were to hold the deposit as stakeholder pending completion of the transaction.

3. Contrary to the terms of the sale agreement, the defendants, without the authority of the plaintiff, the purchaser, released the said sum to the vendor and/or its agents. That is expressly admitted by the 2nd defendant in paragraph 8 of his statement of defence where he stated:

“The 2nd defendant paid out monies to various parties on instructions of the vendor and shall at the appropriate time join the vendor and the various beneficiaries as third parties in this suit for the court to be able to determine who is liable to refund the money herein.”

4. On 22nd December, 2011 the 2nd defendant sought leave to commence third party proceedings against Caroget Investments Limited (the vendor) as well as 6 other people.

5. The court granted leave on 15th March, 2012 and set the matter for directions on 24th April, 2012.

6. On 24th April, 2012 none of the defendants or their advocates attended court. Only Mr. Issa, Advocate for the plaintiff, was in attendance.

7. Consequently directions were stood over to 8th May, 2012 and Mr. Issa was directed to issue notices to the defendants’ advocates.

8. On 8th May, 2012 Mr. Issa told the court that he wishes to have the suit between the plaintiff and the defendants heard separately since his client has nothing to do with the issues between the defendants and the 3rd parties. He feared that the third party proceedings may unnecessarily delay the finalization of his client’s claim against the defendant which, in his view, is a straight forward one.

9. Mr. Onguto, who held brief for Miss Wamaitha for the 2nd defendant, told the court that the 2nd defendant had so far managed to serve only 3 of the 7 third parties and sought more time to effect service upon the rest.

10. Miss Njuguna for the 1st defendant opposed the proposal made by Mr. Issa, saying that the plaintiff authorized the release of the deposit.

11. I do not agree with Miss Njuguna that he plaintiff authorized the release of the deposit or any part thereof to the vendor and/or its agents. The contents of paragraph 8 of the 2nd defendant’s statement of defence are clear beyond any peradventure.

12. Ideally, the plaintiff’s claim against the defendants as well as the defendants’ claim against the third parties ought to be heard at the same time so that all these related claims are determined once and for all. However, the court has discretion to direct otherwise, see Order 1 rule 15 (1) (c)of theCivil Procedure Rules.

13. The court appreciates the fears expressed by the plaintiff that determination of its claim against the defendants may be slowed down by the dispute between the defendants and the third parties.

14. The court is cognisant of a stakeholder’s responsibility in a sale transaction and the need to expedite settlement of any claim that may arise between a vendor and a purchaser where the transaction does not materialize for any reason.

15. Bearing all the above in mind, I hereby direct as follows:

(a)The 2nd defendant should serve the third party notice upon all the third parties forthwith.

(b)     The third parties, in the event that they intend to contest the third party proceedings commenced against them by the 2nd defendant, should enter appearance and file their respective defences within 15 days of service.

(c)     The plaintiff, the defendants and the third parties should file their witness statements and bundle of documents, if any, by 4th June, 2012.

(d)      Pre-trial conference shall be on 8th June, 2012 after which a hearing date shall be fixed.

(e)      If by then the defendants or the third parties shall not have filed their respective documents as stated hereinabove, only the plaintiff’s claim against the defendants shall be fixed for hearing.

DATED, SIGNED AND DELIVERED AT NAIROBI THIS 11TH DAY OF MAY, 2012.

D. MUSINGA

JUDGE

In the presence of:

Alex – Court Clerk

Mrs. Kinyanjui for the 2nd Defendant

Ms. Nduta Njuguna for the 1st Defendant

No appearance for the Plaintiff