[1950] EACA 120

## H. M. COURT OF APPEAL FOR EASTERN AFRICA

Before SIR NEWNHAM WORLEY (President), BRIGGS and BACON, Justices of Appeal

### ABDULRAZAK BIN MBARAK, Appellant (Original Defendant)

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# (1) FERAJ BIN ABED EL-AWENI and (2) KARAMA BIN EL-ABED BIN ABUD TIMIMI, Respondents (Original Plaintiffs)

## Civil Appeal No. 96 of 1955

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

Sale of land—Specific performance—Indian Contract Act, section 32.

The appellant entered into a contract for the sale to the respondents of an interest in land, the interest then being vested in a third party. The Supreme Court made an order that the appellant should take the requisite action to acquire the registered title to the interest in question and thus put himself in a position to fulfill his contract. Between the date of hearing and the date on which judgment was delivered the transfer to the appellant of the interest concerned had been registered but the Court was not informed of this.

Held (29-3-56).—Had the Supreme Court been aware of the facts it could and doubtiess would have ordered the contract to be specifically performed.

Appeal dismissed but order of the Supreme Court varied by substitution of an order for specific performance in the usual form.

Cases referred to: In re Anstis. (1886) 31 Ch. D. 605; Carne v. Mitchell, (1846) 15 L. J. Eq. 288; Howard v. Miller, (1915) A. C. 326.

#### Gautama for appellant.

Todd for respondents.

JUDGMENT (prepared by Bacon, J. A.).—This was the original defendant's appeal against a decree of the Supreme Court of Kenya to the effect that the defendantappellant take the requisite action to acquire the registered title to the share of one Nanguma binti Ali in Plot No. 5, Section III, Mtongwe, and thus put himself in a position to fulfil his agreement with the respondents dated 6th August, 1952, to sell and transfer to them the said share, and that, in default of the appellant so doing within a reasonable period, the respondents be authorized to take such action on the appellant's behalf.

We dismissed the appeal and substituted an order for specific performance in the usual form for that part of the decree which required the appellant to take action as mentioned above. We now give our reasons for our decision.

The sequence of the material events was as follows:—

On 19th July, 1952, Nanguma binti Ali made an agreement in writing with the appellant to sell and transfer to the latter her right, title and interest in the plot of land concerned which interest was, as the parties to that agreement knew, at that time the subject-matter in dispute in other proceedings in the Supreme Court, namely Civil Case No. 305 of 1951.

By an agreement in writing dated 6th August, 1952, the appellant agreed to sell and transfer to the respondents all the right, title and interest agreed to be purchased by him by the agreement of 19th July, 1952, subject to the condition that the vendor should be called upon to execute the transfer only when the above-mentioned dispute was determined and the vendor obtained a transfer from Nanguma. It was further agreed by the agreement of 6th August, 1952, that the purchase price of Sh. 8,000, being the price payable by the respondents for the interest to be acquired from Nanguma and also another specified interest to be acquired from one Mohamed bin Ali, should be paid as to Sh. 4,000 on the signing of that agreement (which payment was acknowledged therein) and as to the remaining Sh. 4,000 by depositing the same with a named advocate who should pay over to the appellant against his executing a transfer to the respondents.

The dispute in Civil Case No. 305 of 1951 was determined before the end of 1952 and resulted in the registration in the Land Registry on 6th January, 1953, of a one-sixth undivided share of the above-mentioned plot in the name of Nanguma binti Ali and of a one-third undivided share in the name of Mohamed bin Ali.

Mohamed bin Ali's share plays no further part in the present story, for he duly transferred it to the appellant and thereafter the appellant transferred it to the respondents. But Nanguma failed or refused to carry out her agreement of 19th July, 1952.

That was the state of affairs when the plaint herein was filed on 25th January, 1955, whereby the respondents claimed specific performance of their agreement with the appellant or in the alternative Sh. 10,000 as damages and interest thereon.

In the face of Nanguma's failure or refusal to transfer her one-sixth share the appellant at last, on 28th February, 1955-more than two years after Nanguma had obtained her registered title, and five weeks after the filing of the respondent's plaint herein-filed suit against her. On 21st April, 1955, the appellant obtained judgment against her for specific performance of her agreement with him and an order that she should execute a transfer of her share. Whatever doubt there might previously have been as to whether the respondents would ultimately succeed in obtaining a transfer from the appellant of what had been Nanguma's one-sixth share of the plot, all such doubt vanished at that moment. Had the appellant promptly taken the requisite and obligatory steps to fulfil his agreement with the respondents he would have saved himself both trouble and expense. However, he took no such steps but allowed the suit against him to take its course.

On 15th July, 1955, the decree obtained by the appellant in his suit against Nanguma was registered in the Land Registry. By that decree Nanguma was ordered to execute a transfer to the appellant within 14 days, and, in default, the Registrar of the Supreme Court was authorized to sign on her behalf. Nanguma was apparently permitted by the appellant to cause still further delay, for no transfer of her share was registered for considerably longer than the time prescribed by the decree.

On 15th September, 1955, the trial took place and judgment was reserved. On that date Nanguma was still the registered owner of the one-sixth share. At the trial the respondents abandoned their alternative claim for damages and elected to press for specific performance.

Before judgment was delivered, namely on 26th September, the transfer from Nanguma to the appellant was registered. Clearly, however, on 29th September, when he delivered judgment, the learned trial Judge had not been informed of the recent turn of events. Consequently, his judgment took the form mentioned at the commencement of these reasons instead of the usual form of order for specific performance simpliciter.

The appellant relied on two grounds for reversing the Supreme Court decree:

First, he contended that prior to filing their suit the respondents had rendered the agreement between the parties void within the meaning of section 32 of the Indian Contract Act by withdrawing from the stakeholder the deposit which, as previously mentioned, they had made pending execution of a transfer to them of the one-sixth share. What, in fact, happened was that by a letter dated 23rd November, 1953, the respondents' advocates asked the stakeholder to refund the sum of Sh. 4,500 made up of Sh. 4,000 principal sum, Sh. 300 conveyance fees and Sh. 200 commission. To that the stakeholder, who was also the appellant's advocate, replied by letter dated 4th December, 1953, that he had consulted the appellant and that the only amount repayable was Sh. 3,166/67 for which he enclosed his cheque. This was clearly no acceptance of the respondents' proposal but a counter-offer. It was never accepted. In those circumstances we are of the opinion that neither by virtue of section 32 of the Indian Contract Act nor under any other provision or rule of law did the respondents prejudice or affect their right thereafter to claim specific performance of the agreement in question.

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Secondly, the appellant submitted that the decree could not stand because the suit was premature inasmuch as at the date of the plaint the appellant had not obtained a transfer from Nanguma of her share. It is, of course, true that at that time the appellant had not, in fact, yet obtained such transfer. It is also true that, but for prolonged and unjustifiable delays on his part, the appellant could by then have obtained it; when at last he took the necessary action he obtained it without difficulty. The sole reason for the situation as at the date of the respondents' plaint herein was the appellant's failure or unwillingnessapparently the former, but it matters not which-to enforce his rights against Nanguma who was to his knowledge wrongfully failing or refusing to comply with her contractual obligation.

In our view the appellant cannot rely on his own prolonged failure to do that from the doing of which he would ultimately have no lawful escape. It was implicit in his agreement with the respondents that he thereby undertook to take the necessary steps—and, moreover, to take them within a reasonable time, not merely when he might choose so to do-to enable himself to fulfil that agreement. Equity looks on that as done which ought to be done. In favour of persons entitled specifically to enforce a contract, equity treats an agreement to do a thing as if the thing were already done: per Lindley, L. J., in In re Anstis, (1886) 31 Ch. D. at pp. 605–606. When, in April, 1955, the appellant had obtained judgment against Nanguma for specific performance of her agreement with him, and when, in July, 1955, the decree against Nanguma in that suit had been registered, the Court at the subsequent hearing of the suit from which the instant appeal arises could only act on the view that those events constituted steps in furtherance of the appellant's performance of his agreement with the respondents. It only remained to compel him to complete that performance, and the respondents were entitled to have it completed. The principle on which the trial Court was bound to act was stated per the Vice-Chancellor in *Carne v. Mitchell*, (1846) 15 L. J. Eq. at p. 288 thus: "As to the question of equity, I am of opinion that it is an undeniable proposition that when a party enters into a contract without having the power of performing that contract, and afterwards acquires the right which he contracted to dispose of, he is then bound to perform it".

Another view of the situation at the time of the hearing at first instance is that which was expressed by the Judicial Committee in *Howard v. Miller*, (1915) A. C. at p. 326 as follows: "It is sometimes said that under a contract for the sale of an interest in land the vendor becomes a trustee for the purchaser of the interest contracted to be sold subject to a lien for the purchase money; but however useful such a statement may be as illustrating a general principle of

equity, it is only true if and so far as a Court of equity would under all the the circumstances of the case grant specific performance of the contract".

We have no doubt but that the instant case was one in which the trial Court could and should have ordered the agreement of 6th August, 1952, to be specifically performed, and that, in the light of his belief as to the state of affairs at the time when judgment was delivered, the learned trial Judge made an order in the correct form. Had he known, as we knew on the hearing of this appeal, that the appellant had by then become the registered owner of the interest in question, he would doubtless have made the usual form of order. We therefore merely substituted the form of order which should have been made at the trial on the footing of the true state of affairs at that time.