Introduction
1. Before this Court for determination is the Defendant’s Chamber Summons application dated 11th December 2024, seeking leave to issue a Third-Party Notice to Rachier & Amollo Advocates LLP, the intended Third Party.
2. The application is brought under Order 1 Rule 15 of the Civil Procedure Rules and supported by the affidavit of Lilian Sogo, the Defendant’s Head of Litigation, wherein the Defendant argues that the intended Third Party holds funds central to this dispute and should therefore be joined to the proceedings herein as Third Party.
3. In her affidavit, Ms. Sogo depones on the background of the matter. She states that the Defendant, Kenya Commercial Bank Limited, in the exercise of its statutory power of sale, entered into a Sale Agreement with the Plaintiff in 2006 for the property known as L.R. No. 12467, Enterprise Road, Nairobi. The sale price was KES 56,000,000, of which KES 5,600,000 was paid as a deposit to the Defendant’s then advocates, Rachier & Amollo Advocates LLP, the intended Third Party.
4. It was further deponed that the sale was not concluded due to injunctive orders obtained by the chargor, leading to the present suit by the Plaintiff. That the intended Third Party, who had received a ten percent deposit (KES 5,600,000) of the purchase price in their capacity as advocates for the Defendant, failed to refund the said sum even after the collapse of the sale.
5. That the Defendant in a bid to recover the said deposit from the intended 3rd Party sued the law firm in Civil Case No. E270/2022: Kenya Commercial Bank Limited vs Rachier & Amollo Advocates. Judgment in that case was delivered on 4th October 2024, with the Court (Njoki Mwangi J) ordering the intended third party to release the sum of KES 5,600,000.00, along with accrued interest. The proposed third party has initiated an appeal process against this determination.
6. According to the Defendant, the frustration of the sale was beyond its control, and that the proposed third party's continued refusal to release the deposit makes their inclusion as third parties inevitable.
7. The Defendant contends that since the deposit remains with the intended Third Party, and a judgment has been entered against the Third Party in Civil Case No. E270 of 2022 ordering release of the deposit (which is now the subject of an appeal), the Third Party’s joinder is necessary for a full and final resolution of the dispute.
8. The application is opposed by the Proposed Third Party through a Replying Affidavit sworn by Dr. Jotham Okome Arwa, a Partner in the intended Third-Party Law firm, and written submissions filed on 3rd April 2025.
9. The Proposed Third party, however, maintains that it is not a proper third party under Order 1 Rule 16, as it cannot speak to any questions arising from this matter or the purported frustration of the property's sale.
10. According to the Proposed Third Party, it was only engaged in the conveyancing transaction, not in the underlying litigation between the Plaintiff and Defendant. That it's current dispute with the Defendant involves a general lien over stakeholder sums for unpaid legal fees, which is unrelated to the Plaintiff’s claim.
11. Consequently, the Proposed Third-Party asserts that there is no common cause of action or question of fact between the Plaintiff’s claim and the Defendant’s dispute with the Proposed Third Party. In any event, the matter concerning the lien is pending before the Court of Appeal.
12. The matter proceeded by way of written submissions. The Defendant/Applicant filed its submissions dated 2nd April 2025, whilst the proposed third party/Respondent filed his dated 3rd April 2025. I have read and duly considered the parties’ respective arguments.
Analysis and Determination
13. Upon careful consideration of the application, the response thereto, and submissions filed by the parties in support of their respective positions, the Court is of the view that the only issue that arises for determination is whether leave ought to be granted to the Defendant to issue a Third-Party Notice to Rachier & Amollo Advocates LLP.
14. Order 1 Rule 15 (1) of the Civil Proceedings Rules provides as follows:
“15. Notice to third and subsequent parties
(1) Where a defendant claims as against any other person not already a party to the suit (hereinafter called the third party) —
(a) that he is entitled to contribution or indemnity; or
(b) that he is entitled to any relief or remedy relating to or connected with the original subject-matter of the suit and substantially the same as some relief or remedy claimed by the plaintiff; or
(c) that any question or issue relating to or connected with the said subject-matter is substantially the same question or issue arising between the plaintiff and the defendant and should properly be determined not only as between the plaintiff and the defendant but as between the plaintiff and defendant and the third party or between any or either of them, he shall apply to the Court within fourteen days after the close of pleadings for leave of the Court to issue a notice (hereinafter called a third party notice) to that effect, and such leave shall be applied for by summons in chambers ex parte supported by affidavit”
15. In the case of T ungwa & another v Board of Trustees Pandya Memorial Hospital [2024] KECA 1916 (KLR), the Court of Appeal (AK MURGOR, KI LAIBUTA & GV ODUNGA, JJA) stated as follows regarding Third-Party Notices: -
“ 33. In the Ugandan Court of Appeal case of Sango Bay Estates Ltd and others vs. Dresdner Bank Ag (No. 2) [1971] 1 EA 307, Lutta, JA held that:
“I have stated earlier that … the Rules, inter alia, limit the third party procedure to cases where a defendant claims to be entitled to the remedy of indemnity; it therefore seems to me that one of the objects of this procedure is to prevent a multiplicity of actions. As Lord Esher, M.R., said in Baxter v. France (No. 2), [1895] 1 Q.B. 591, at p. 593, when considering the refusal by a judge at chambers to give directions under O. 16, r. 52:
The general scope of the third party procedure is to deal with cases where by applying it, all the disputes arising out of a transaction as between the plaintiff and the defendant, and between the defendant and a third party, can be tried and settled in the same action. In a case where there will remain a dispute arising out of the transaction which cannot be tried in the same action, but must form the subject of another action, so that in the result there must be two actions, the judge will rightly exercise his discretion by declining to give directions.”
16. From the above, it is clear that for third-party proceedings to succeed, there must be a nexus between the plaintiff’s cause of action against the defendant and the defendant’s claim against the third party.
17. In this case, the Plaintiff’s claim against the Defendant is for breach of contract and specific performance or, in the alternative, damages for failure to complete a sale. The deposit is part of the sale transaction, but the Plaintiff’s grievance is with the Defendant’s non-performance, not with the retention of funds by the Proposed Third Party.
18. The Defendant’s dispute with the Proposed Third Party concerns the latter’s assertion of a general lien over stakeholder funds for unpaid professional fees—a matter which has already been adjudicated in Civil Case No. E270 of 2022 and is currently the subject of an appeal at the Court of Appeal.
19. It is not in dispute that the sale was frustrated by the chargor’s actions, not by the Proposed Third Party. As such, the Court is of the considered view that there is no common cause of action between the Plaintiff and Defendant, and between the Defendant and the Proposed Third Party.
20. The Defendant’s claim against the Proposed Third Party is essentially one for release of funds and indemnity arising from an independent contractual relationship (legal fees). That matter belongs in separate proceedings and, indeed, is already the subject of prior litigation.
21. Therefore, for the reasons stated above, this Honourable Court makes the following orders: -
i. The Chamber Summons application dated 11th December 2024, seeking leave to issue a Third-Party Notice to Rachier & Amollo LLP, is hereby dismissed.
ii. The Defendant/Applicant shall bear the costs of this application, which are hereby assessed at Kshs. 50,000/-.
22. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
17TH DAY OF JULY 2025
ADO MOSES
JUDGE
In the Presence of
Moses C/A
Chebet h/b for Busiega……………for the Plaintiff
Gitau ………. ……………………..for Defendant
Ms. Rachier……………for the proposed 3rd Party
1. Before this Court for determination is the Defendant’s Chamber Summons application dated 11th December 2024, seeking leave to issue a Third-Party Notice to Rachier & Amollo Advocates LLP, the intended Third Party.
2. The application is brought under Order 1 Rule 15 of the Civil Procedure Rules and supported by the affidavit of Lilian Sogo, the Defendant’s Head of Litigation, wherein the Defendant argues that the intended Third Party holds funds central to this dispute and should therefore be joined to the proceedings herein as Third Party.
3. In her affidavit, Ms. Sogo depones on the background of the matter. She states that the Defendant, Kenya Commercial Bank Limited, in the exercise of its statutory power of sale, entered into a Sale Agreement with the Plaintiff in 2006 for the property known as L.R. No. 12467, Enterprise Road, Nairobi. The sale price was KES 56,000,000, of which KES 5,600,000 was paid as a deposit to the Defendant’s then advocates, Rachier & Amollo Advocates LLP, the intended Third Party.
4. It was further deponed that the sale was not concluded due to injunctive orders obtained by the chargor, leading to the present suit by the Plaintiff. That the intended Third Party, who had received a ten percent deposit (KES 5,600,000) of the purchase price in their capacity as advocates for the Defendant, failed to refund the said sum even after the collapse of the sale.
5. That the Defendant in a bid to recover the said deposit from the intended 3rd Party sued the law firm in Civil Case No. E270/2022: Kenya Commercial Bank Limited vs Rachier & Amollo Advocates. Judgment in that case was delivered on 4th October 2024, with the Court (Njoki Mwangi J) ordering the intended third party to release the sum of KES 5,600,000.00, along with accrued interest. The proposed third party has initiated an appeal process against this determination.
6. According to the Defendant, the frustration of the sale was beyond its control, and that the proposed third party's continued refusal to release the deposit makes their inclusion as third parties inevitable.
7. The Defendant contends that since the deposit remains with the intended Third Party, and a judgment has been entered against the Third Party in Civil Case No. E270 of 2022 ordering release of the deposit (which is now the subject of an appeal), the Third Party’s joinder is necessary for a full and final resolution of the dispute.
8. The application is opposed by the Proposed Third Party through a Replying Affidavit sworn by Dr. Jotham Okome Arwa, a Partner in the intended Third-Party Law firm, and written submissions filed on 3rd April 2025.
9. The Proposed Third party, however, maintains that it is not a proper third party under Order 1 Rule 16, as it cannot speak to any questions arising from this matter or the purported frustration of the property's sale.
10. According to the Proposed Third Party, it was only engaged in the conveyancing transaction, not in the underlying litigation between the Plaintiff and Defendant. That it's current dispute with the Defendant involves a general lien over stakeholder sums for unpaid legal fees, which is unrelated to the Plaintiff’s claim.
11. Consequently, the Proposed Third-Party asserts that there is no common cause of action or question of fact between the Plaintiff’s claim and the Defendant’s dispute with the Proposed Third Party. In any event, the matter concerning the lien is pending before the Court of Appeal.
12. The matter proceeded by way of written submissions. The Defendant/Applicant filed its submissions dated 2nd April 2025, whilst the proposed third party/Respondent filed his dated 3rd April 2025. I have read and duly considered the parties’ respective arguments.
Analysis and Determination
13. Upon careful consideration of the application, the response thereto, and submissions filed by the parties in support of their respective positions, the Court is of the view that the only issue that arises for determination is whether leave ought to be granted to the Defendant to issue a Third-Party Notice to Rachier & Amollo Advocates LLP.
14. Order 1 Rule 15 (1) of the Civil Proceedings Rules provides as follows:
“15. Notice to third and subsequent parties
(1) Where a defendant claims as against any other person not already a party to the suit (hereinafter called the third party) —
(a) that he is entitled to contribution or indemnity; or
(b) that he is entitled to any relief or remedy relating to or connected with the original subject-matter of the suit and substantially the same as some relief or remedy claimed by the plaintiff; or
(c) that any question or issue relating to or connected with the said subject-matter is substantially the same question or issue arising between the plaintiff and the defendant and should properly be determined not only as between the plaintiff and the defendant but as between the plaintiff and defendant and the third party or between any or either of them, he shall apply to the Court within fourteen days after the close of pleadings for leave of the Court to issue a notice (hereinafter called a third party notice) to that effect, and such leave shall be applied for by summons in chambers ex parte supported by affidavit”
15. In the case of T ungwa & another v Board of Trustees Pandya Memorial Hospital [2024] KECA 1916 (KLR), the Court of Appeal (AK MURGOR, KI LAIBUTA & GV ODUNGA, JJA) stated as follows regarding Third-Party Notices: -
“ 33. In the Ugandan Court of Appeal case of Sango Bay Estates Ltd and others vs. Dresdner Bank Ag (No. 2) [1971] 1 EA 307, Lutta, JA held that:
“I have stated earlier that … the Rules, inter alia, limit the third party procedure to cases where a defendant claims to be entitled to the remedy of indemnity; it therefore seems to me that one of the objects of this procedure is to prevent a multiplicity of actions. As Lord Esher, M.R., said in Baxter v. France (No. 2), [1895] 1 Q.B. 591, at p. 593, when considering the refusal by a judge at chambers to give directions under O. 16, r. 52:
The general scope of the third party procedure is to deal with cases where by applying it, all the disputes arising out of a transaction as between the plaintiff and the defendant, and between the defendant and a third party, can be tried and settled in the same action. In a case where there will remain a dispute arising out of the transaction which cannot be tried in the same action, but must form the subject of another action, so that in the result there must be two actions, the judge will rightly exercise his discretion by declining to give directions.”
16. From the above, it is clear that for third-party proceedings to succeed, there must be a nexus between the plaintiff’s cause of action against the defendant and the defendant’s claim against the third party.
17. In this case, the Plaintiff’s claim against the Defendant is for breach of contract and specific performance or, in the alternative, damages for failure to complete a sale. The deposit is part of the sale transaction, but the Plaintiff’s grievance is with the Defendant’s non-performance, not with the retention of funds by the Proposed Third Party.
18. The Defendant’s dispute with the Proposed Third Party concerns the latter’s assertion of a general lien over stakeholder funds for unpaid professional fees—a matter which has already been adjudicated in Civil Case No. E270 of 2022 and is currently the subject of an appeal at the Court of Appeal.
19. It is not in dispute that the sale was frustrated by the chargor’s actions, not by the Proposed Third Party. As such, the Court is of the considered view that there is no common cause of action between the Plaintiff and Defendant, and between the Defendant and the Proposed Third Party.
20. The Defendant’s claim against the Proposed Third Party is essentially one for release of funds and indemnity arising from an independent contractual relationship (legal fees). That matter belongs in separate proceedings and, indeed, is already the subject of prior litigation.
21. Therefore, for the reasons stated above, this Honourable Court makes the following orders: -
i. The Chamber Summons application dated 11th December 2024, seeking leave to issue a Third-Party Notice to Rachier & Amollo LLP, is hereby dismissed.
ii. The Defendant/Applicant shall bear the costs of this application, which are hereby assessed at Kshs. 50,000/-.
22. It is so ordered.
SIGNED, DATED, and DELIVERED IN VIRTUAL COURT THIS
17TH DAY OF JULY 2025
ADO MOSES
JUDGE
In the Presence of
Moses C/A
Chebet h/b for Busiega……………for the Plaintiff
Gitau ………. ……………………..for Defendant
Ms. Rachier……………for the proposed 3rd Party