[1955] EACA 10

## ORIGINAL CIVIL

## Before WINDHAM, J.

## SARDAR GAJJAN SINGH s/o SARDAR BASIA SINGH, Plaintiff ν.

## SARDAR BHAGAT SINGH s/o SARDAR SHAM SINGH, Defendant Civil Suit No. 82 of 1954 (Eldoret)

International Private Law—Jurisdiction—Contract—Sale of piece of land in India -Contract of sale made and parties resident in Kenya-Seller in receipt of price in Kenya—Alleged failure by seller to give possession—Claim for return of purchase money—Whether jurisdiction conferred by sections 12 to 15 of Civil Procedure Ordinance, Cap. 5-Or by Kenya Order in Council, 1921, Article 4 (2)—Recourse to English law applicable to Colony— Circumstances in which Kenva Court will assume jurisdiction.

This suit arose from a sale of a piece of land, in India, by the defendant to the plaintiff. The deed of sale was made and executed in Kenya, where plaintiff and defendant were resident both then and at the time of the suit. In the deed, the defendant acknowledged the payment to him of the purchase price and the defendant covenanted to arrange to give the plaintiff or his agents completely vacant possession of the house situate on the land sold and this covenant was expressed to be the essence of the contract. The plaint alleged that the contract was not fulfilled and claimed the return of the purchase money. The Court came to the conclusion that to determine whether the purchase price had to be returned it would be necessary to determine whether the ownership of the property lay in the plaintiff or in the defendant, and observed that the suit did not seek, directly, for a declaration as to ownership or for specific performance of the contract or for damages for breach of it, but merely, for return of the purchase money which was paid to the defendant in Kenya. The preliminary point arose for determination whether the Court had jurisdiction to entertain such a claim.

*Held* (11-7-55)—(1) The issue of jurisdiction was not governed by the Civil Procedure<br>Ordinance, sections 12 to 15 because that Ordinance is concerned with jurisdiction<br>only in relation to the subject-matter of the suit a only with the local jurisdiction of various courts within Kenya, and is not concerned<br>with extra-territorial jurisdiction. The Ordinance is a domestic and procedural one, and<br>section 15 is concerned only with the conflict parts of Kenya.

(2) There being no peculiar provisions of the law of Kenya dealing with the matter, the law applicable, in Kenya, to questions of the extra-territorial jurisdiction of the Supreme Court, is that laid down by Article 4 (2) of the Kenya Order in Council. 1921, namely, "the substance of the common law, the doctrines of equity and the statutes of general application in force in England on the 12th day of August, 1897" and its jurisdiction is to be exercised in conformity with "the powers vested in and according to the procedure and practice observed by and befor the Process and practice observed by and cyclic counts of busines and business of<br>the Prace in England according to their respective jurisdiction and authorities at that<br>date...." The jurisdiction of the Courts therefore w conflict of laws.

(3) Where a contract relating to immovable property, situated in a foreign country, has been entered into in Kenya and the relief sought is not a specific declaration as to the ownership of that property, nor damages for trespass to it, nor any relief which, if granted, would require to be executed by the courts of that foreign country, but is simply the payment or repayment of money arising from an alleged breach or repudiation of such contract, then, unless there are peculiar reasons which would make it difficult<br>or impracticable for the Supreme Court in Kenya to assume jurisdiction to try the suit, the Supreme Court will assume such jurisdiction, notwithstanding that it may be necessary, for the purpose of determining the suit, to make a decision as to the<br>ownership of such immovable property. The Supreme Court therefore had jurisdiction to try the present case.

Cases cited: British South Africa Company v. Companhia de Moçambique, (1893) A. C. 602 H. L.; In re Hawthorne Graham v. Massey, (1883) 23 Ch. D. 743; Deschamps<br>v. Miller, (1908) 1 Ch D., 856; Norris v. Chambres, (1861) 4 L. T., 345; 45 E. R., 1004.

Authority cited: Halsbury Laws of England, 3rd edn., Vol. 7, pp. 30 to 32, paras. 60 and 64.

Gautama for plaintiff.

Ahmad for defendant.

JUDGMENT (on preliminary issues).—At the outset of the hearing of this action learned counsel for the defendant has argued two preliminary points, both of which are raised in the statement of defence; first, that this Court has no jurisdiction to try the suit, and second, that the plaint discloses no cause of action. It becomes necessary, therefore, to consider and decide on these two points before the case can proceed to trial.

The point regarding jurisdiction is an interesting one and, so far as I am aware, has not been judicially decided in the courts of this country. The facts and issues, so far as they are set out in the pleadings or agreed by counsel in their submissions before me, are the following. Both the plaintiff and the defendant are resident in Kenya. By a deed of sale, dated 2nd April, 1951, made and executed in Kenya, the defendant sold, or purported to sell, to the plaintiff a piece of land situated in India for the sum of Rs. 10,500, being the equivalent of Sh. 15,750, and, in the deed, the defendant acknowledged the payment of that sum to him in Kenya by the plaintiff as the purchase price. In clause 5 of the contract, the defendant covenanted to arrange to give to the plaintiff or his agents completely vacant possession of the house situated on the land sold, and this covenant was expressed to be of the essence of the contract. The plaint alleges that this covenant was not fulfilled, and the claim is for the return of the purchase money with interest and costs. The statement of defence alleges that vacant possession was duly handed over to the plaintiff or his agents, and accordingly denies any liability to return the purchase money. It is implicit in the plaintiff's claim for return of the purchase money, and his counsel has admitted in his argument before me, that the plaintiff contends that the ownership in the property has not passed to him under the contract of sale which he repudiates, but that it remains in the defendant. The defence, on the other hand, contends that ownership of the property has duly passed to the plaintiff under the deed of sale. In order, therefore, for this Court to determine whether the purchase price is to be returned, it will be necessary to determine whether ownership of the property lies in the plaintiff or in the defendant. At the same time it is to be noted that the action does not seek directly for a declaration as to the ownership, nor for specific performance of the contract, nor for damages for the breach of it, but merely for the return of the purchase money which was paid to the defendant in Kenya.

The question for determination at this stage, then, is whether this Court has jurisdiction to entertain such a claim. Now there has been some suggestion that this matter is governed by sections 12 to 15 inclusive of the Civil Procedure Ordinance, and, in particular, paragraph (i) of Explanation (3) of section 15, which provides that in a suit arising out of contract the cause of action arises at the place where the contract was made and that accordingly the court having local jurisdiction in that place has jurisdiction to try it; hence it is suggested that

because the Supreme Court has general jurisdiction throughout Kenya, where the contract in the present case was made, the Supreme Court must have jurisdiction to try it. But the matter is not governed by the Civil Procedure Ordinance at all. That Ordinance is concerned with jurisdiction only in relation $(a)$ to the subjectmatter of the suit, and $(b)$ as regards territorial jurisdiction, only with the local jurisdiction of various courts within Kenya. It is not concerned with extraterritorial jurisdiction. The Ordinance is a domestic and procedural one only, as is clear from its short title and from a reading of it as a whole. And that section 15 in particular is concerned only with the conflict of local jurisdictions within different parts of Kenya is further borne out by the illustrations appended to this section, which deal exclusively with places situated within Kenya, such as Nairobi and Mombasa and Kisumu, and nowhere with places outside.

There being no peculiar provisions of the Laws of Kenya dealing with the matter, the law applicable in Kenya to questions of the extra-territorial jurisdiction of the Supreme Court is that laid down in Article 4 (2) of the Kenya Colony Order in Council, 1921, namely, "the substance of the common law, the doctrines of equity and the statutes of general application in force in England on the 12th day of August, 1897", and its jurisdiction is to be exercised in conformity with "the powers vested in and according to the procedure and practice observed by and before Courts of Justice and Justices of the Peace in England according to their respective jurisdiction and authorities at that date. ...". In short, we must turn to the English law and judicial decisions regarding the jurisdiction of the English courts in actions concerned with immovable property situated abroad, under the general heading of the conflict of laws.

Now there are a large number of English decisions on this subject, and the general effect of them has been briefly summarized in the following passages taken from *Halsbury's Laws of England*, 3rd edn., Vol. 7, pages 30 to 32, in paragraphs 60 and $64:$ —

"60. The English Courts have in general no jurisdiction to determine directly the title to a foreign immovable, nor can they entertain any action which substantially involves the determination of such title. Thus, no action will lie in this country to obtain possession, or to recover damages for dispossession of foreign land, since the question of title must be determined in order to discover the rights of the parties.

64. Where, however, it is only necessary to determine the question of title incidentally, an action relating to rights in respect of a foreign immovable will lie in England. Thus, where a fund is in court representing the proceeds of sale of foreign immovables, and it is necessary to decide who is entitled to it, an action will lie. . . ."

The above propositions are founded on a number of decisions, but not one of them decides directly a case such as the one now under consideration, where the claim is for the return of purchase money paid in respect of immovable property situated abroad. The general history of the matter is dealt with by the House of Lords in the leading case of British South Africa Company v. Companhia de Moçambique, (1893) A. C., 602, H. L. In that case it was held that the Supreme Court of Judicature had no jurisdiction to entertain an action to recover damages for a trespass to land situated abroad. But the main basis of this decision would seem, from a perusal of the judgment of Lord Herschell, L. C., to have been the practical difficulties that would be entailed in assessing the damages for trespass. if the Court should assume jurisdiction and grant them rather than any principle precluding the Court from ever entertaining any action in which the title to a

foreign piece of land falls to be decided either directly or incidentally. The following passages from his judgment, at page 625, indicate the *ratio decidendi*:

"But there appear to me, I confess, to be solid reasons why the courts of this country should, in common with those of most other nations, have refused to adjudicate upon claims of title to foreign land in proceedings founded on an alleged invasion of the proprietary rights attached to it, and to award damages founded on that adjudication.

The inconveniences which might arise from such a course are obvious. and it is by no means clear to my mind that, if the Courts were to exercise jurisdiction in such cases, the ends of justice would in the long run, and looking at the matter broadly, be promoted. Supposing a foreigner to sue in this country for trespass to his lands situate abroad, and for taking possession of and expelling him from them, what is to be the measure of damages? There being no legal process here by which he could obtain possession of the lands, the plaintiff might, I suppose, in certain circumstances, obtain damages equal in amount to their value. But what would there be to prevent his leaving this country after obtaining these damages and re-possessing himself of the lands?..."

And, at page 626, the learned Lord Chancellor clearly contemplates that if there is any general principle against assuming jurisdiction over claims concerned with the ownership of foreign land it is not a rigid one impervious to exceptions; for he continues: $-$

"It is quite true that in the exercise of the undoubted jurisdiction of the Courts it may become necessary incidentally to investigate and determine the title to foreign lands; but it does not seem to me to follow that because such a question may incidentally arise and fall to be adjudicated upon, the courts possess, or that it is expedient that they should exercise, jurisdiction to try an action founded on a disputed claim of title to foreign lands. . . ."

So far, then we have touched no principle whose application would preclude this Court in the case before us from assuming jurisdiction. For here there would be no difficulty in executing the judgment, which would be for the repayment of a definite sum paid by the plaintiff to the defendant in Kenya; nor would the question of assessing damages arise.

Another decision which might at first sight appear to be authority against this Court's assuming jurisdiction in the case before us is that in In re Hawthorne Graham v. Massey, (1883) 23 Ch. D., 743. There the title to immovable property in Saxony was in dispute between A and B. A sold the property to a third party and received part of the purchase money. Both A and B being in England, an action by **B** to make A account for the purchase money was dismissed for want of jurisdiction. But the reason for the decision in that case would again seem from the judgment, to rest not upon any absolute principle but, just as in the 'later case of British South Africa Company v. Companhia de Moçambique, (supra) upon the practical difficulties that would be entailed, this time the fact that the claim depended upon the intricate Saxon laws of devolution of land and the difficulties of proving those laws, Kay, J., in his judgment, at pages 747 and 748, said: $\rightarrow$

"I need not dwell upon the danger or error if the courts of this country were to entertain jurisdiction to determine a contested claim of this kind depending upon questions of foreign law. . . I am not aware of any case where a contested claim depending upon the title to foreign immovables in a foreign country strictly so called, being no part of the British Dominions or possessions has been allowed to be litigated in this country simply because the plaintiff and defendant happened to be here."

Then after considering a case where it had been held that for such purposes of jurisdiction Scotland was not to be considered as a foreign country, the learned Judge continued: -

"But the case is infinitely stronger where the contested claim is based upon the right to land, where the land is situate, not in Scotland but in Dresden, where the question whether the plaintiff has any claim or not must be determined by the law of Saxony as to immovables, and where the only ground for instituting proceedings in this country is the fact that the defendants are resident here."

It is to be observed at this point, that, in the present case, not only is the defendant resident in Kenya, but also the plaintiff is resident here and the contract upon which the action is founded was made here. But the main point is that in neither of the judgments which we have so far considered has any rigid principle been laid down.

I turn now to a later case, *Deschamps v. Miller* (1908) 1 Ch. D., 856. The facts in that case were complicated, and far removed from those in the case now before us, for it concerned a claim in England which involved the question of title to lands situated in India which had been acquired by one of two French subjects who had married in France, and the ground for the English Court's refusal to assume jurisdiction was that it would involve intricate questions of foreign laws (in that case both Indian and French) exactly as in the case of In re Hawthorne (supra), the decision in the latter case being followed. Thus again inconvenience was the criterion, and no inflexible principle was laid down or assumed. But the importance of *Deschamps v. Miller (supra)* is that the Court there explicitly recognizes what was recognized in more general terms by Lord Herschell in the passage from his judgment at page 626 in *British South Africa* Company v. Companhia de Mocambique which I have already quoted, namely that there are definite exceptions to the general rule against the Court's assuming jurisdiction in cases involving decisions upon the title to foreign immovables. I refer to the following passage from the judgment of Parker, J., in *Deschamps v.* Miller (supra), at pages $863-4$ :

"The question is whether under these circumstances the Court ought to entertain jurisdiction. In my opinion the general rule is that the Court will not adjudicate on questions relating to the title to or the right to the possession of immovable property out of the jurisdiction. There are, no doubt, exceptions to the rule, but without attempting to give an exhaustive statement of those exceptions, I think it will be found that they all depend on the existence between the parties to the suit of some personal obligation arising out of contract or implied contract, fiduciary relationship or fraud, or other conduct which, in the view of a Court of Equity in this country, would be unconscionable, and do not depend for their existence on the law of the *locus* of the immovable property. . . . In the present case there is, in my opinion, no such personal obligation as above mentioned, and I do not think I could assume jurisdiction in this case without acting contrary to the decision in *Norris* $v$ . Chambres. In that case there was a contract for sale of immovables abroad, and a deposit was paid. The vendor refused to complete, and the purchaser claimed a lien for the deposit on the property agreed to be sold; but he claimed that lien, not as against the vendor with whom he had contracted, but against a third party who had purchased subsequently with notice of the prior contract and of the claim to the lien for the deposit. There was no personal obligation based on contract. ... "

From this passage it is clear that one of the recognized exceptions to the \_general rule that the Court will not adjudicate on questions relating to the title of foreign immovable property is where there is a personal obligation between the parties arising out of contract, just as there is in the present case. The recognition of such an exception was even more relevant in the case cited in the above passage, namely *Norris v. Chambres,* (1861), 4 LT., 345; 45 E. R., 1004. In that case the plaintiff, who resided in England was the personal representative -of one Sadleir, who as chairman of the A. company contracted to buy a mine in Germany from X, and paid X part of the purchase price for it out of his own pocket. Sadleir then committed suicide, whereupon the defendants who were also resident in England, at a meeting of the A. company formed another company, and X entered into an agreement with the defendants whereby he sold ,(or purported to sell) the mine to the defendants, annulled the previous agreement with Sadleir, and credited towards the new purchase price the moneys which . Sadleir had paid to X. The plaintiffs sued the defendants for an account of what was due to them, as Sadleir's representatives, for those moneys, and for the enforcement of a lien on the mine to secure Sadleir's rights in it. Now that ·was a case where, as in the instant case, the issue depended upon the determination -of the question whether the foreign immovable property, or any rights in it, had or had not been conveyed to Sadleir, through whom the plaintiff claimed. And in that case the Court of Chancery, while refusing to assume jurisdiction, -did so only because there was no privity of contract between the plaintiff and the defendant. The judgment of the Lord Chancellor made it quite clear that, but for that lack of privity, he would have assumed jurisdiction and the claim might have succeeded. **1** cite to the following passage in his judgment, at page 346, in the *Law Times Report,* referring to Sadleir's advance of the purchase moneys ;to X:-

"With respect to this advance, **J** think that, upon the authority of *Penn v. Lord Baltimore,* which has often been acted upon the plaintiff would have been entitled to succeed if he could have proved that the claim for a declaration of the proposed lien or charge on the Maria Anna mine was founded on any contract or priority between him or the deceased John Sadleir and the defendants, the purchasers of the mine .... "

In the instant case there was, of course, privity of contract between the :plaintiff and the defendant.

One further point remains to be considered, namely whether in the case before us it is "only necessary to determine the question of title incidentally", to quote the words used in the passages from *Hals/Jury* which I have set out ,earlier and which are based on the passage from Lord Herschell's judgment in *British South Africa Company v. Companhia de Mor;ambique (supra)* at page 626, ·that "in the exercise of the undoubted jurisdiction of the courts it may become necessary incidentally to investigate and determine the title to foreign land". It seems to me that the determination of the question whether title bas passed in the instant case is precisely one of those cases where it is necessary but ne\"erthe- ·1ess incidental, since the determination must be made and yet a declaration of ·title is not the relief sought.

There is thus sufficient authority on the English decided cases to support ·what I hold to be the law in Kenya; namely that where a contract relating to immovable property situated in a foreign country has been entered into in Kenya, and the relief sought is not a specific declaration as to the ownership -of that property, nor damages for trespass to it, nor any relief which if granted would require to be executed by the courts of that foreign country, but is simply ·.the payment or repayment of money arising from an alleged breach or repudiation

of such contract, then unless there are peculiar reasons which would make it difficult or impracticable for this Court to assume jurisdiction to try the suit. this Court will assume such jurisdiction, notwithstanding that it may be necessary, for the purpose of determining the suit, to make a decision as to the ownership of the immovable property. The present case falls within the ambit of this exposition of the law, and I accordingly hold that this Court has jurisdiction to trv it.

I turn now to the second objection advanced by the defence in limine to the trial of this suit, namely that the plaint discloses no cause of action. This objection may be briefly disposed of. It is based on the fact that paragraph 5 of the plaint alleges that the deed of sale contains a covenant that the defendant "shall *arrange*" to give" the plaintiff vacant possession of the house being sold, whereas the breach of covenant which the plaint goes on to allege is that the defendant failed to give vacant possession, which would not be a breach of the undertaking: in the deed (agreed on the pleadings to be a covenant) which is in fact therein expressed to be an undertaking to arrange to give. The answer to this objection is that this Court will not concern itself with quibbles, but will seek the true issue between the parties. Upon a reading of the pleadings as a whole, and in particular paragraph 5 of the statement of defence, which puts in issue the question: whether the defendant gave vacant possession (and not whether he agreed to give it), it is clear that the true issue between the parties is whether vacant possession was given, and not merely whether it was agreed to be given. I therefore hold that the plaint does disclose a cause of action.

This case will accordingly go to trial on its merits. But the costs of the two issues to which this preliminary judgment relates will be the plaintiff's inany event.