[1952] EACA 52

## COURT OF APPEAL FOR EASTERN AFRICA

Before SIR BARCLAY NIHILL (President), SIR NEWNHAM WORLEY (Vice-President) and de Lestang, J. (Kenya)

## AMINABAI d/o ABUBAKER w/o HUSSEIN MOHAMED, Appellant (Original Applicant)

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## THE CITY COUNCIL OF NAIROBI, Respondent (Original Respondent) Civil Appeal No. 52 of 1951

(Appeal from the decision of H. M. Supreme Court of Kenya, Connell, Ag. J.)

Practice-Vesting Order-Rule 17-Rules of Court-(Mortgage suits consolidation) rates—Applicability of section 95, Municipalities Ordinance, and section 29 (1), Local Government (Rating) Ordinance.

The appellant as mortgagee of certain property obtained an order for its sale and purchased the property for a sum less than the mortgage amount. At the time of sale the mortgagor owed rates to the Nairobi City Council. The appellant called for a transfer but the mortgagor could not pay the rates and under section 95, Municipalities Ordinance, and section 29 (1), Local Government (Rating) Ordinance, the mortgagor could not effectively execute the necessary transfer. The appellant applied to the Supeme Court under section 47, Transfer Ordinance, and rule 17. Rules of Court (Mortgage Suits Consolidation), for a vesting order. The City Council intervened in the proceedings and opposed the application on the ground that a vesting order might defeat the Council's protection by section 95 of the Municipalities Ordinance.

Held (7-4-52).--Section 95, Municipalities Ordinance, and section 29 (1), Local Government (Rating) Ordinance, had no application to the granting of a vesting order. It was impracticable for the appellant to obtain a conveyance and under rule 17 he was entitled to a vesting order.

Appeal allowed with costs.

D. N. Khanna for appellant.

## Schermbrucker for respondent.

JUDGMENT (delivered by DE LESTANG, J. (Kenya)): - This is an appeal from an order of the Supreme Court of Kenya dismissing the appellant's application for a vesting order in the following circumstances. The appellant as mortgagee of certain property obtained an order from the Supreme Court of Kenya for the sale by public auction of that property. The sale took place on 17th July, 1950, and with the leave of the Court the appellant purchased the property for a sum less than the amount of the mortgage. At the time of the sale there was due by the mortgagor to the City Council of Nairobi in respect of various rates over Sh. 2,000 and it is provided by section 95, Municipalities Ordinance (Cap. 136),<br>and section 29 (1), Local Government (Rating) Ordinance (Cap. 137) that no transfer of any premises within the Municipality shall be passed or registered unless there is produced a certificate issued by the Town Clerk showing that all the rates have been paid. On becoming purchaser the appellant called upon the mortgagor to transfer the property to him but the mortgagor being apparently unable to pay the outstanding rates to the City Council could not effectively execute the necessary transfer. After much delay the appellant applied to the Supreme Court under section 47, Trustee Ordinance (Cap. 36), and rule 17, Rules of Court (Mortgage Suits Consolidation), for an order vesting the property in him on the ground that it was impracticable for him to obtain a conveyance. On being informed that the City Council might be interested in the application the Court ordered that notice thereof be served on it and in due course the City Council intervened in the proceedings. When the application came up for hearing the mortgagor, who had also been joined, consented to the order being made while the City Council opposed it on the ground that the making of a vesting order might defeat the protection given to the Council by section 95, Municipalities Ordinance. The learned Judge, without considering whether the appellant had made out a case or not under rule 17, accepted the Council's contention and held that in the circumstances it would be inexpedient to make a vesting order. It is convenient at this stage to set out section 47, Trustee Ordinance and rule 17, Rules of Court (Mortgage Suits Consolidation): -

"47. Where any Court gives a judgment or makes an order directing the sale or mortgage of any land, every person who is entitled to or possessed of any interest in the land, or entitled to a contingent right therein, and is a party to the action or proceeding in which the judgment or order is given or made or is otherwise bound by the judgment or order, shall be deemed to be so entitled or possessed, as the case may be, as a trustee for the purposes of this Ordinance, and the Court may, if it thinks expedient, make an order vesting the land or any part thereof for such estate or interest as the Court thinks fit in the purchaser or mortgagee or in any other person."

"17. Where it is impracticable for the purchaser to obtain a conveyance under rules 12 and 13 or where undue delay expense would be caused in obtaining such conveyance or where any necessary party is not within the jurisdiction of the Court or for any other sufficient reason the purchaser may apply by chamber summons $ex$ parte in the first instance, supported by affidavits as to the facts, for an order vesting in him the property the subjectmatter of the suit. The Judge may, in his discretion, direct service of summons on such person or persons as he shall think fit."

In my view, section 47 gives a discretion to the Court to make a vesting order in the circumstances therein prescribed and rule 17 sets out instances in which the Court ought to exercise that discretion in mortgage suits. It was accordingly necessary for the learned Judge to decide whether the appellant's application came within the provisions of rule 17. This, as I have already pointed out, he omitted to do and proceeded instead to consider the effect of the vesting order on the City Council. It seems to me that in deciding whether it was expedient or not to grant a vesting order the learned Judge should not have had regard to the possible or probable effect of the order on the City Council. If the restriction imposed by section 95, Municipalities Ordinance, and section 29 (1), Local Government (Rating) Ordinance, on the transfer of property in respect of which rates are outstanding applies to vesting orders then the granting of a vesting order by the Court could neither benefit the appellant nor prejudice the City Council. If on the other hand, vesting orders are outside the provisions of those two sections those sections were irrelevant in the present application. Whatever view, therefore, one takes of sections 47 and 29 (1) they could have had no bearing on the question whether a vesting order should be made or not. That being so, this appeal in my view resolves itself into a very simple question indeed, namely whether the appellant had established a ground for a vesting order under rule 17. The appellant relied on two grounds, firstly that it was impracticable for the purchaser to obtain a conveyance and secondly, that undue expense would be caused in obtaining such a conveyance. It is contended for the City Council as regards the first ground that since a proper conveyance could be obtained on the purchaser paying to the City Council the outstanding rates, there was nothing impracticable in obtaining a conveyance and as regards the second ground that

the expenses of obtaining clearance certificate were not expenses incurred in obtaining the conveyance. If the liability to pay rates was on the appellant and if the word "conveyance" in rule 17 meant merely a document purporting to convey notwithstanding that it was incapable of transferring the property, then there might have been some substance in the Council's contention. Unfortunately this is not the true position at all. The rates are due by the mortgagor and no liability therefore attaches to the appellant either as mortgagee or purchaser and the word "conveyance" in rule 17 can only in my opinion mean a valid transfer, that is to sav a document that will effectively transfer the property from the owner to the purchaser. Until the mortgagor paid off the rates and obtained a clearance certificate from the Town Clerk, he was not in a position to execute an effective conveyance of the property to the appellant and it would be in my view unreasonable to expect the appellant to pay the outstanding rates in order to obtain a title. It seems to me, therefore, that if the learned Judge had properly directed himself he could not have failed to hold that in the circumstances it was clearly impracticable for the appellant to obtain a conveyance and that under rule 17 he was accordingly entitled to a vesting order. I agree with the order proposed by the learned President.

SIR BARCLAY NIHILL (President).—I am of the same opinion as my learned brother and for the same reasons. This appeal must therefore be allowed and the order of the Supreme Court of Kenya set aside. We direct that an order be made vesting in the appellant-plaintiff the property the subject-matter of the mortgage suit.

The appellant will be allowed the costs of this appeal and the application to the Supreme Court as against the respondent. If he also wishes for costs the mortgagor in respect of the proceedings in the lower Court we shall be prepared to hear counsel on his behalf on a date when this Court can be convened as constituted for the hearing of this appeal.

SIR NEWNHAM WORLEY (Vice-President).—I concur.