JAMES MUNGAI NGURE VS musyoka murambi & associates JAMES MUNGAI NGURE VS musyoka murambi & associates

BRIEF BACKGROUND

A brief history of this matter is that the Applicant filed an Originating Summons application dated 14th July, 2023 together with an affidavit in support thereof sworn by one James Mungai Ngure seeking orders that the Respondent be compelled to honour the professional undertaking dated 17th December, 2022 and further be compelled to pay the balance of the purchase price of Kshs. 4, 200,000. The Applicant further seeks an order of enforcement of payment of the said sum in the event of failure by the Respondent to honour the undertaking.
In response to the application, the Respondent filed a Replying Affidavit dated 25th October, 2023.
The Respondent equally took out a Third Party notice joining the 1st Third Party and the 2nd Third Party as parties to this suit in order that he may be indemnified from the prayers sought against him in the originating summons application.
The 1st Third Party filed a Replying Affidavit dated 14th December, 2023 sworn by Jackson Oire who is the 1st Third Party's Legal Officer.
The Applicant and the Respondent additionally filed supplementary affidavits dated 12th February, 2024.
The brief facts of this case are that the Applicant and the 2nd Third Party entered into an agreement for the sale of land property LR. No. 11934/9(IR. 213321) hereinafter referred to as the suit property for the purchase price of Kshs. 6, 500,000/-. A sale agreement to this effect was executed on the 25th day of March, 2022.
It was a term of the sale agreement that the deposit of the purchase price of Kshs. 2, 300, 000 had already been paid to the Applicant and the balance of Kshs. 4, 200,000/- was to be paid within ninety days wherein the 2nd Third Party ought to have caused the transfer to himself and a legal charge to be registered over the suit property.
In this regard, the 2nd Third Party approached the 1st Third Party for a loan facility to facilitate payment of the balance of the purchase price which facility the 1st Third Party agreed to advance.
In the foregoing, vide a letter of offer dated 20th April, 2022, the 1st Third Party agreed to advance a loan facility of Kshs. 4, 200,000/- to the 2nd Third Party, hereinafter referred to as the purchaser.
The purpose of the loan facility was to facilitate the financing of the balance of the purchase price for property Title number. IR 213321, Land Reference number 11934/9 situate in the East of Kikuyu Township in Kiambu District, hereinafter referred to as the suit property.
To this end, the 1st Third Party instructed the firm of Musyoka Murambi & Associates Advocates to register a charge in its favour for Kshs. 4, 200,000/= and further give a professional undertaking to the Applicant's Advocates for the payment of a sum of money not exceeding Kshs. 4, 200, 000/= within 14 days of receipt of the successfully registered charge and related completion documents.
In addition to the foregoing, the 1st Third Party was very categorical that payment of the financed portion of the purchase price, is subject to evidence that the handling charges have been paid. The handling charges included the Advocates' legal fees, stamp duty and other disbursements paid by the Respondent on behalf of the 2nd Third Party as explained in paragraph 10 of the Respondent's Replying Affidavit.
Consequently, the Respondent proceeded to issue an undertaking to the Applicant on 17th December, 2022 and the 1st Third Party issued its undertaking on 20th December, 2022.
However, after the 2nd Third Party had completed the security perfection process, the 2nd Third Party failed to avail the funds to cater for appraisal fees, Advocates' legal fees, stamp duty and the disbursement fees as stipulated in the undertakings and as such, the 1st Third Party was unable to proceed with the disbursement of the loan facility in line with the terms of the undertaking.
In the circumstances, the 1st Third Party was compelled to commence the process of reversal of the loan facility advanced in line with the provisions of clause 4 of the undertaking issued by the 1st Third Party on 20th December, 2022.
Consequently, due to the failure to disburse the balance of the purchase price to the Applicant, the Applicant's Advocates, on 3rd April, 2023 wrote to the 1st Third Party demanding payment of the balance of the purchase price. The 2nd Third Party responded to this letter on the same day and indicated that he was experiencing financial challenges that had made it impossible for him to continue with the sale transaction as had been agreed upon earlier.
This letter was a substantive confirmation by the 2nd Third Party of his unwillingness to proceed with the transaction and as such, the 1st Third commenced the process of reversing the loan facility.
On 24th April, 2023 at a time when the 1st Third Party had already commenced the process of reversal, the 2nd Third Party wrote to the 1st Third Party again indicating that he was now ready to continue with the transaction.
However, despite the continued negotiations and engagements between the 1st and 2nd Third Party aimed at ensuring that the 2nd Third Party honoured his part of the bargain, he still did not abide by the commitments that he had made to the 1st Third Party.
Therefore, the 1st Third Party further wrote to the Respondent to reverse the charge in favour of the 1st Third Party. Consequently, on 31st July, 2023, the 1st Third Party called for and received from the Respondent Advocates, the transfer forms, discharge and the other relevant documents to facilitate the reversal of the transaction. The 1st Third Party's Attorney signed the documents and the same were sent to the 2nd Third Party for his execution on 3rd August 2023.
In the first instance, the 2nd Third Party declined to execute the documents as requested by the bank and these delaying tactics persisted until 8th September, 2023 when the bank received the signed documents from him and sent them to the Respondent firm of Advocates for reversal of the transaction at the 2nd Third Party's cost.
At the time of institution of this suit, the 1st Third Party had already initiated the process of reversal of the loan amount and cannot therefore be compelled to pay the balance of the purchase price.

APPLICANT'S CASE

The applicant entered into a sale agreement with one Ragui Kamoni over the sale and purchase of parcel of land known as LR. NO. 11934/9 (IR 213321) at a consideration amount of Ksh. 6,500,000/=. The purchaser paid Ksh. 2,300,000/= as an initial deposit. The balance of the purchase price of Ksh. 4,200,000/= was to be financed by Co-operative Bank Limited.
On 17/12/2022 the firm of Musyoka Murambi & Associates on behalf on Co-operative Bank Limited issued the applicant with a professional undertaking to the effect that the balance would be released to the applicant within fourteen (14) days after successful registration of transfer and charge documents in the bank's favour or Forty-Five (45) days from the date when the completion documents would be released to them. On grounds of the irrevocable professional undertaking, the applicant released the completion documents to the said firm.
On the 24.01.23 the respondent effected transfer in favour of the purchaser and a charge created on the same date. The respondent failed to notify the applicant of the successful registration in breach of the undertaking given to him. That Forty-Five (45) days as per the respondent's undertaking lapsed on 12.03.23 and the applicant is yet to receive the balance of the purchase price of Ksh 4,200,000/= to date.
The applicant in his written submissions submitted that this Honourable Court is being called upon to determine whether the professional undertaking issued to the applicant can be enforced as against the Respondent?
It is not in dispute that the respondent issued the applicant with an irrevocable and unconditional professional undertaking in terms of the letter dated 17.12.2022. Placing reliance on the said professional undertaking, the applicant released completion documents to the respondent so that transfer and charge could be created in favour of the 1st third party, the financier.
That indeed on 24.01.2023, the transfer in favour of the 2nd third party and a charge in favour of the 1st third party was registered. Despite the charge being created the applicant never received the balance of the purchase price which was Ksh. 4,200,000/=.
The applicant went further to submit that in exchange of the completion documents and on instructions of the financier the respondent gave their irrevocable and unconditional professional undertaking in the following terms: -

Term 4
We shall ensure the charge is presented for registration simultaneously with the transfer document with the intent that if any of the said transfer or charge is rejected, then, none of them should be registered.
Term 5
That we shall forthwith notify you of the successful registration of the transfer and charge documents and within fourteen (14) days from the date of registration of the transfer and charge documents at the relevant lands office procure payment by the financier to the bank account detail below by way of real time gross settlement system the amount of Kenya Shillings Four Million Two Hundred Thousand Only (ksh 4,200,000/=) hereinafter the financed
amount.
Term 6
That if the financed amounts as herein before advised is not remitted to your nominated bank account within Forty -Five (45) Days from the date when the completion documents are released to us or within Fourteen (14) Days from the date of successful registration of the transfer and charge documents as the relevant lands office (whichever is later) we shall forthwith and immediately upon demand return to you all the completion documents in the same good order and condition in which they were delivered to us subject to cancellation of any entries that may have been on the title documents by the lands office.

The appellant has maintained that the respondents breached the three terms of the professional undertaking in the following respects;-
Failed to notify the applicant that registration of the transfer and charge had been successful.
That forty-five (45) days lapsed on 12. 03.2023 but no money was remitted to the applicant and no explanation as to the cause of the delay was communicated to him. The applicant patiently waited to be paid the balance of the purchase price but the respondent failed to procure the said funds as per the professional undertaking. The applicant made numerous demands to the respondent and 2nd third party but the same were never responded to which necessitated to filing of this suit to enforce the professional undertaking.
The respondent failed to return all the completion documents in the same good order and condition in which they were delivered to them.

The applicant has hinged his case against the respondent on the above stated aspects that he has maintained form the basis of case.
The applicant further submitted that the respondent contends that the terms of the undertaking were to the effect that the respondent would procure payment from the financier upon successful registration of the charge and transfer and at no point did the respondent undertake to pay the balance of the purchase price. It was the respondents case that the funds could not be released due to the 2nd third party inability to meet the necessary conditions for the loan facility disbursements such as settling legal fees and stamp duty.
The 1st third party in their response advanced same reasons for the failure to pay the balance of the purchase price.
The applicant maintains that the professional undertaking issued by the respondent to the applicant was unconditional, irrevocable and binding to the respondent. The respondent had an obligation to ensure that the funds had been released to the applicant.
According to the applicant the terms of the undertaking were clear in that the undertaking was not to be honoured subject to the purchaser making payments for legal costs and other costs, these were not terms that were made in the undertaking and neither was the applicant privy to the contract or terms of engagement between the respondent, the 1st and 2nd third party.
The applicant further submitted that the transaction having failed the respondent commenced the process of reverting ownership of the property back to the applicant and forwarded the documents to the applicant.
The applicant has urged the court to find that the respondent and the 1st and 2nd third party failed to respond to the applicant's letters demanding completion of the transaction.
The applicant further urged the court to find that the respondent despite issuing a professional undertaking failed to update the applicant as to the challenges they were facing remitting the funds.
The applicant went further to claim that the process to revert the suit property back to the applicant was only done three months after filing of this suit. It is clear that the funds for payment of the balance were available but could not be remitted to the applicant as the purchaser failed to make legal fees and disbursements.
The applicant sought to rely on the Black's Law Dictionary definition of an undertaking as being;-

"A promise pledge, or engagement on behalf of another...."
The applicant also cited the case of David Karanja Thuo T/a D.K Thuo & Company Advocates -v- Ishvinder Kaur Kalsi Marwa t/a Kaisi & Company Advocates 2019 eKLR in which a professional undertaking was defined as follows:-
An undertaking is an unequivocal declaration of intention addressed to someone who reasonably places reliance on it and made by a Solicitor in the course of his practice, either personally or by a member of his staff; or a Solicitor as "solicitor". but not in the course of his practice, under which the Solicitor...becomes personally bound. An undertaking is therefore a promise made by a solicitor....to do or refrain from doing something. In practice, undertakings are frequently by Solicitors in order to smooth the path of a transaction, or hasten its progress and are convenient methods by which some otherwise problematic areas of practice can be circumvented"

The applicant urged this court to adopt the aforestated definition of a professional underrating and find that the respondent issued an unequivocal professional undertaking to the applicant and on the basis of the said terms, the applicant released completion documents for Registration of the transfer and the charge. The registration having been successful, the respondent was personally bound to ensure that the balance of the purchase price was paid to the purchaser.
The applicant thus urged this Honorable Court to order that the said undertaking be honored in terms of the professional undertaking issued on 17. 12. 2022.
The applicant further referred this honourable court to the case of Waruhiu K'owade & Ng'ang'a Advocates v Mutune Investment Limited [2016] eKLR where it stated:

"Our answer is that a professional undertaking is an unequivocal promise made by a party to another either to do or to refrain from doing something or acting in a manner which may prejudice the right of the opposite party, to which liability may attach. See Equip Agencies Limited v Credit Bank Limited [2008] 2 EA 115 (HCK). Generally speaking, professional undertakings are given by advocates in order to make transactions easier, faster and more convenient. Where an advocate breaches a professional undertaking, the court has jurisdiction to order the enforcement of that undertaking.
In enforcing undertakings, the court is guided not by the considerations of contract, or of securing the legal rights of parties, but mainly by ensuring the honesty of advocates. See Muiruri v Credit Bank & Another (Civil Appeal No 263 of 1998) LLR No. 5676 (CAK).
In the words of this Court in Harit Sheth t/a Harit Sheth Advocate v K Osmond Advocates [2011] eKLR (Civil Appeal No 276 of 2001),
"a professional undertaking is a bond by an advocate on the authority of his client. It is based on the relationship which exists between the advocate and his client. An advocate who gives such a professional undertaking takes a risk. The risk is his own and he should not be heard to complain that it is too burdensome and that someone else should shoulder the responsibility of recovering the debt from his own client. A professional undertaking is a bond by an advocate to conduct himself as expected of him by the court to which he is an officer. No matter how painful it might be to honour it, the advocate is obliged to honour if only to protect his own reputation as an officer of the court." (emphasis ours)
On the strength of those submissions the applicant urged this court to find the respondent liable for breach of the professional undertaking and order them to complete the transaction.
RESPONDENT’S CASE.

In defense of the matter the respondent submitted that the Applicant herein seeks to enforce the professional undertaking dated 17 December 2022 against them.
The respondent contended that the Applicant is very particular regarding the clause of the undertaking that he wants to enforce, that is paragraph five (5) of the Respondent's undertaking which is couched in the following terms: -

“That we shall forthwith notify you of the successful registration of the Transfer and Charge Documents and within fourteen (14) days from the date of registration of the Transfer and Charge Documents at the relevant Lands Office procure payment by the Financier to the bank account details below by way of Real Time Gross Settlement System the amount of Kenya Shillings Four Million Two Hundred Thousand Only (Kes. 4,200,00/=) hereinafter, 'the financed Amount)'

According to the respondent the question that arises is whether the aforementioned clause and specifically the use of the words ‘procure payment by the Financier' obligates the Respondent to pay the Applicant the said sum in the event the 1" Third Party failed to honor their Financier Undertaking.
The respondents’ position is that the phrase cannot be interpreted to mean that the respondent would assume the legal obligation to pay the amount in the event that the 1^st third party failed to finance the 2^nd third party. The respondent was emphatic that the said undertaking clearly stated that the Respondent was to 'procure' payment by the Financier.
Further, the respondent submitted that the Applicant admits in his submissions that the 1" Third Party gave the Applicant a direct Financier Undertaking to the effect that it was to PAY the Applicant the balance of the Purchase Price.
The respondent contends that at no point did they undertake to pay the Applicant. According to the respondent if that was the intention in executing the undertaking the undertaking would have stated so in express terms.
The applicant on the other hand sought to rely on the case of Kiruti & Company Advocates v Kaplan and Straton Advocates [2019] eKLR in which Justice Tuiyott J (as he then was) held that the word 'procure' was not to be assigned a casual meaning for it required the Defendant firm to do something more than to simply prevail upon, induce or persuade its clients to pay up the outstanding sums of money. At paragraph 23, the learned judge stated that:

"23. The firm was under a duty to advise the lenders when the responsibility to pay fell due and to lean on its clients to pay up...

The respondent went further to submit that after the documents were forwarded to the bank, duly registered in the name of the 2nd Third Party they were advised to pay, the 1st Third Party wrote to the Respondent with instructions to the effect that the 2nd Third Party was not in a position to finalize the transaction and that the Respondent should invoke the contents of paragraph 6 of their undertaking by cancelling the entries and returning the documents to the Applicant.
The Respondent submitted that they leaned on the 1st Third Party so much that a decision to reverse the entries was made on 20 June 2023 before the Applicant filed the current proceedings on 14 July 2023.
According to the respondent they discharged the burden placed on their shoulders by procuring instructions on 20 June 2023 to cancel the charge and transfer entries whereupon they initiated the process of cancellation.
The respondent has urged this court to find that the Applicant rushed to court to lock in the Respondent for purposes of converting the undertaking to 'procure' into a 'cash' undertaking.
In Kiruti & Company Advocates v Kaplan and Straton Advocates [2019] eKLR while addressing what 'procure' entails the court went further to state as follows:-

"25...that that responsibility did not extend to forcing the clients to pay but was to be carried out within the scope of legal work. The judge observed that while a lawyer may have some leverage over a client through persuasion, he may not have coercive authority to force the client to do or refrain from doing something. If the duty expected of the Defendant firm was intended to be more compulsive than would ordinarily be expected of advocates then the Plaintiff firm, which worked out the wording of Clause 5, needed to have expressly said so. Even greater still, was the need to be explicit that the promise included the duty to pay in the event of default by the clients."

The respondents maintain that just as suggested by court in the above decision, had the Respondent intended to pay the balance of the purchase price in the event of failure by the 1" Third Party, then the subject professional undertaking would have expressly stated that.
The word procure according to the respondent cannot be interpreted to mean compulsion to pay and does not impose the obligation to pay.
In conclusion the Respondent submitted that they ought not be condemned to pay the balance of the Purchase Price yet it is the 1" Third Party that expressly undertook to pay the balance of the Purchase Price.
The respondent has urged the court to find that there are overwhelming reasons to believe that the Applicant has filed this Application against the Respondent in bad faith and with overwhelming malice. The respondent urged that despite the applicant having in his possession the financier’s undertaking pledging to pay him the balance of the Purchase Price, the Applicant maliciously chose to drag the Respondent to court.
The respondent ended by stating that the 1^st Third Party has been looped in as a party to this suit, and in the event that any orders for the payment of the outstanding sum are to be made, then the same should be issued against the 1" and 2nd Third Parties.
As a further demonstration of malice on the part of the Applicant, the respondent has urged the court to find that the applicant has resorted into selective interpretation of the professional undertaking. In support of that argument the respondent has urged the cour to look at paragraph six (6) of the professional undertaking which provides as follows,

“That if the Financed Amount as herein before advised is not remitted to your nominated bank account within firty-five (45) days from the date when the Completion documents are released to us within Fourteen (14) days from the date of successful registration of the Transfer and Charge Documents at the relevant lands office (whichever is later), we shall forthwith and immediately upon demand return to you all the Completion Documents in the same good order and condition in which they were delivered to us subject to cancellation of any entries that may have been on the Title Documents by the Lands Office.”

According to the respondent the Applicant has utterly turned a blind eye to this provision in the undertaking. After the 2nd Third party failed to settle the Respondents legal fees and disbursements which had been paid by the Respondent on his behalf, the financier refrained from disbursing the facility as it awaited the 2nd Third Party to comply. The undertaking required the Applicant to formally demand for his title documents free of entries made thereon. The Applicant did not and up to this point has not asked for the said documents. While waiting for the Applicant to issue the notice, the Respondent and the 1st Third Party discussed the non-compliance by the 2nd Third Party. Despite repeated assurances from the 2nd Third Party that he would comply, he failed to do so.
The respondent maintains that when the 1^st Third Party and the Respondent realized that nothing was forthcoming from the deliberations with the 2nd Third Party, in honouring their respective undertakings, the 1" Third Party went ahead to instruct the Respondent to process the cancellation of entries for the property to revert to the Applicant.
In the absence of a demand for cancellation on September 14, 2023, the Respondent took the initiative to forward the transfer forms (duly signed by the 2nd Third Party) to the Applicant for execution. This action was aimed at facilitating the cancellation of the entries and reverting the property back to the Applicant's name, as outlined in the undertaking.
The applicant is said to have completely avoided to address himself to the contents of paragraph 6 of the Respondent's professional undertaking. He has not attached any evidence to demonstrate that he attempted to invoke paragraph 6 of the Respondent's undertaking.
It is further argued on behalf of the respondent and the 1^st third party that the applicant could not sue on that undertaking without an express demand as set out in the letter of undertaking.
Despite the documents seeking to have the transaction reversed being delivered to the Applicant for his execution, the applicant is said to have failed, neglected and or refused to acknowledge receipt, let alone execute them, to enable the Respondent to comply with its undertaking for cancellation of the entries as set out at paragraph 6 of the Respondent's professional undertaking. The Applicant's action has undeniably impeded and intentionally frustrated the Respondent's endevours to proceed with the registration of the discharge of charge and the subsequent transfer in favour of the Applicant
By way of this suit the respondent and the 1^st third party the Applicant seeks to benefit from his own mischief by pursuing to enforce only a part of the undertaking while ignoring the part where the Respondent undertakes to cancel the entries made on the Applicant's title. The applicant seeks to enforce an undertaking whose compliance with he has intentionally frustrated.
The Respondent maintains that he has diligently pursued all reasonable means to effectuate the cancellation of the entries recorded on the title.
The Professional undertaking has no clause that strictly compels the Respondent to pay the Applicant in any circumstance including the circumstance that arose that resulted in the transaction falling through.
The Respondent has urged this court to find that calling upon the Respondent to pay the Applicant the balance of the purchase price is not in sync with parties' intention as captured by the terms of the professional undertaking which has the option of cancellation of the entries.
The respondent has further urged the court in determining this matter to consider the following;-

the loan facility advanced to the 2nd third party has since been cancelled;
that the discharge of charge has been duly signed by both the 1st and 2nd Third Parties;
the transfer forms have been signed by the 2nd Third Party and forwarded to the Applicant for his execution;
the applicant has since refused to sign the documents to facilitate reversal of the entries.

The respondent has urged the court to find that parties are bound by the terms of their contract and they must respect the rights of each party in the contract and that a party cannot seek to unilaterally rewrite a contract nor can a court of law be invited to rewrite a contract between the parties.
In addressing the issue of costs the respondent has urged the court to find that the Applicant has maliciously involved the Respondent in this matter, despite knowing that the Respondent did not give an undertaking to pay but procure. Furthermore, the Applicant has brought this matter to court despite the ongoing process of reverting the title entries back into his name, a process which he is currently withholding. The Applicant sued the Respondent to pay him the balance of the purchase while he was holding a Financier Undertaking issued to him by the 1" Third Party. The respondent has thus urged the court to award them costs upon the dismissal of the suit.

1^st Third Party Case.

The 1st Third Party was enjoined in these proceedings by the respondent so that should the court enter judgment against the respondent the interested parties be condemned to indemnify them. The 1^st Third party does not deny issuing a financier undertaking to the Applicant herein on the 20th day of December, 2022.
The 1st Third Party however submits that it was not a term of the contract that in the event of default, it would be compelled to pay the financed amount upon the successful registration of the transfer and charge, notwithstanding that the other terms of the financier undertaking had not been met.
The 1st Third Party submits that the financier undertaking was conditional upon successful registration of the transfer in favour of the 2nd Third Party and a charge in favour of the bank as stated in clause 2 of the financier undertaking.

"The financed amount shall be paid within fourteen (14) calendar days from the date of successful registration of transfer in favour of the purchaser and our charge by way of RTGS made into your bank account details below..."

The 1st Third Party further avers that successful registration of charge entailed payment of the handling charges, disbursements, Advocates' legal fees and stamp duty by the 2nd Third Party which monies were not remitted as required.
The 1st Third Party further submitted that in the event of failure to remit the financed amount within 14 days from successful registration of transfer and charge, the financier undertaking provided for the remedy available to the Applicant/ vendor.
According to the 1^st third party the applicant has remedy clearly stated under clause 4 of the financier undertaking in the following terms: -

"that if the financed amount as aforesaid is not paid into your bank account within fourteen (14) days from the date of successful registration of transfer in favour of the purchaser and charge in our favour of the purchaser and charge in our favour, then our advocates shall upon demand, return the completion documents to you in the state in which they were sent to them and shall procure the Registrar's cancellation of all entries made against the subject title."

In line with the above clause of the financier undertaking, the 1st Third Party submitted that this suit is premature for the reason that clause 4 above clearly provided for the remedy available to the Applicant in the event the balance of the purchase price had not been remitted within 14 days from the date of successful registration of the charge and the transfer.
It is the firm position of the 1^st third party that on that ground alone the suit should be dismissed.
Further, it was submitted that the Applicant ought to have demanded for the completion documents from the Advocates of the 1st Third Party in the state in which they were issued. He however did not do this. Instead, he went ahead and filed a suit against the Advocates of the 1st Third Party without due regard to the provisions of the financier undertaking.
The financier undertaking did not provide that in the event of default, the 1st Third Party would be compelled to pay the purchase price for the suit property. In the 1^st third party’s view the applicant by seeking an order to compel the bank to pay the balance of the purchase price, has gone against the terms of the contract which means that he has approached this court with unclean hands and therefore he is undeserving of the orders sought.
In the case of Njamunya vs Nyaga (1983) KLR 282 as cited in the case of Elijah Mbatha v Madivest Company Limited [2018] eKLR the Court of Appeal held that: -

"Where it is not stipulated in the contract that time is of essence, the notice must be given to the defaulting party and that notice is what will make time to be of essence. It therefore follows that unless the Agreement provides otherwise, where the Agreement provides that "time is of essence", a notice need not be given where the agreement has lapsed by effluxion of time for it to be rescinded or terminated. The Law Society Conditions pertaining to termination of such an agreement do not apply in such a situation."

It therefore follows that when time lapsed yet the contract for payment of the balance of the purchase price had not been fulfilled, the Applicant ought to have known that the contract had been terminated by effluxion of time and as such, he ought to have demanded for the return of the completion documents from the Respondent in the state in which the documents were availed to the Respondent. The applicant should not have resorted to a suit in the first instance.
The 1^st third party cited the case of Omar Gorhan v Municipal Council of Malindi (Council Government of Kilifi) v Overlook Management Kenya Ltd [2020] eKLR where it was held that: -

"the institution of contract, by which parties are empowered to create a charter of their rights and obligations interest, can operate effectively only if the parties, at the time of consideration they create their charter, can form some estimate of liability in the event of default in performance."

The 1st Third Party therefore had to take initiative by commencing the process of reversal of the loan facility and cancellation of the charge and transfer registered against the Applicant's title. The 1st Third Party called for and received the transfer forms, the discharge of charge and other relevant documents to facilitate the reversal of the transaction.
At the time of filing this suit, the process of reversal of the loan facility was underway and in due time, the applicant would have received the documents relating to the suit property in the state in which they were issued to the 1st Third Party and in line with the terms of the financier undertaking.
The 1st Third Party thus contends that the Applicant has not satisfactorily proved that he is deserving of the orders sought because he has contravened the terms of the contract entered into with the 1st Third Party.
The 1^st third party maintains that the the Applicant is aware that the 1st Third Party has commenced the process of reversal of the charge and transfer consequently the suit must fail.
The 1st Third Party's further submitted that the Successful registration of the transfer and the charge was predicated upon the payment of handling charges by the 2nd Third Party herein who is also the purchaser and the borrower. This was clearly stated in the instructions letter to the Respondent couched in the following terms: -

.....payment of the financed portion of the purchase price, is subject to evidence that the unfinanced portion has been paid."

The 1st Third Party contends that the purchaser did not remit the money meant for handling charges and when the 1st Third Party attempted to follow up with the purchaser to have the same monies paid, the purchaser through his letter dated 3rd April 2023, indicated that he was facing financial challenges which had made it impossible for him to continue with the purchase process.
In light of the unpaid handling charges and the indication from the purchaser that he will not proceed with the purchase of the property, the 1st Third Party commenced the process of reversing the loan facility advanced to the 2nd Third Party. It is for this reason that the 1^st third party insists that the applicants move to initiate the instant proceedings was ill advised and premature.
By embarking on reversing the loan facility, the 1^st third party was acting within its rights in line with the instructions issued to the Respondent and by reason of clause 4 of the financier undertaking.
In view of the above submissions, the 1st Third Party states that the orders sought to have the bank compelled to pay the balance of the purchase price have been made in bad faith and therefore, the application ought to be dismissed with costs to the 1st Third Party.

ANALYSIS AND DETERMINATION
The pleadings in this matter raise the following issues for determination;-

What was the nature and extent of the undertaking between the Applicant and the Respondent?
Whether the Respondent can be compelled to pay the Applicant when the undertaking has the option for reverting the property into the name of the Applicant in the event of non-payment by the Financier.
Who should bear the costs of this suit?

The court has considered the submissions by all parties in respect of the matter and in regard to the first issue, it clear from the undertaking that the same was predicated upon the respondents getting the 1^st Third party to finance the remainder of the purchase price.
The inclusion of the clause requiring the respondent to procure funding from the 1^st third party did not in effect mean that should the financing arrangement fail then the Respondents would have to pay the amount.
It is clear from a reading of the undertaking that the primary parties being the applicant and the 2^nd third party had each to perform their respective obligations under the sale agreement otherwise failure to do so would lead to a collapse of the substratum upon which the professional undertaking was given.
The respondent did not either expressly or by implication undertake to make good the balance of the purchase price if for any reason they 1^st third party was to fail to finance.
The respondent was under duty to ensure that once funds were made available for the completion of the transaction that the same would be passed to the applicant while at the same time ensuring that the interests of the 1^st third party are protected by the creation of a charge over the title.
The respondent discharged the responsibility of ensuring that all the requisite documents were executed and that the 1^st third party interest was adequately protected. The respondent was therefore expecting the 1^st third party to finance the transaction.
The 1^st third party did not do so thus the respondent had no funds to pass to the applicant.
The undertaking was premised on that undertaking by the financier thus the professional undertaking by the respondent was a conditional one.
The respondent could only pay to the applicant funds upon receipt.
The undertaking was executed on the understanding that if for whatever reason the sale collapsed the respondent would initiate a reversal of the transaction.
It is the view of this court that it would amount to rewriting of the contract between the parties if one was to interpret the undertaking to mean that the Advocates(respondent) assumed the responsibility to pay the balance of the purchase price in the event the 1^st and 2^nd third parties failed to discharge their contractual obligations.
That would obviously be an oppressive action that would run contrary to the express wording of the undertaking. The language of the undertaking is to be accorded its plain meaning in order to avoid introducing matters that go beyond the express intention of the parties.
In Diamond Star General Trading LLC vs Ambrose D.O Rachier carrying on business as Rachier & Amollo Advocates [2017] eKLR the court held:
“Black Law dictionary gives the definition of an undertaking as, “a promise, pledge or engagement”. The US Legal Definitions.com states that “Undertaking in general means, an agreement to be responsible for something. In Legal context, it typically refers to a party agreeing to surety arrangements, under which they will pay a debt or perform, a duty if the other person who is bound to pay the debt or perform the duty fails to do so”.
The Encyclopaedia of Forms and Precedents, 5th Edition by Hon. Sir Peter Millet, M.A. Vol. 39 pages 859, 860 describes a professional undertaking as follows:
“An unequivocal declaration of intention addressed to someone who reasonably places reliance on it and made by a solicitor in the course of his practice, either personally or by a member of his staff, or a solicitor as ‘solicitor’ (or in case of a member of his staff, his employer) becomes personally bound.
It’s a promise to do or to refrain from doing something. In practice undertakings are frequently given by solicitors in order to smooth the path of transaction or to hasten its progress, and are convenient method by which some otherwise problematic areas of practice can be circumvented”.
The Halsbury’s Laws of England, 4th Edition by Lord Hailsham of St. Marylebone, Vol. 44(1), pages 222, 223, 224, states as follows:
· Where a solicitor who is acting professionally for a client gives his personal undertaking in that character to the client or to a third person, or gives an undertaking to the Court in the course of proceedings, that undertaking may be enforced summarily upon application to the Court.
· It must be shown that the undertaking was given by the solicitor personally, and not merely as agent on behalf of his client.
· It must also be given by the solicitor, not as an individual, but in his professional capacity as a solicitor.
· The undertaking must be clear in its terms. The whole of the agreement to which it relates must be before the Court, and the undertaking must be one which is not impossible ab initio for the solicitor to perform.
· If the undertaking is conditional, the condition must be fulfilled before the undertaking will be enforced.”
It is clear from the above, if the undertaking given by an advocate is conditional, the condition must be fulfilled before the undertaking is enforced.
In the instant case the financing had to be made by the 1^st third party in order for the respondent to perform their undertaking in the form of release of funds to the applicant.
The 1^st third party having failed to remit the funds to the respondent left the respondent only with the option of reversal of the transaction in order not to disadvantage the applicant.
The 1^st third party has just like the respondent informed the court that the process of reversal was initiated and that the same has not been completed because the applicant has held on to the documents and failed to act.
It is clear to this court that the applicant is bent on extracting payment from the wrong party. The 2^nd third party having failed to meet his part of the bargain rendered the performance of the contract by the 1^st third party and the respondent impossible. He simply frustrated the contract. The applicant had the option of suing the 2^nd third party for specific performance but identified the respondent to be his soft target in total disregard of the terms of the undertaking.
In the circumstances of this matter, the immediate remedial measure available to the respondent was to initiate a reversal of the sale transaction which the respondent and the 1^st third party have undeniably commenced.
It is therefore true that the applicant has not exhausted the options open to him in ensuring his rights are protected under the contract.
On the second issue the court finds that the reversal option is still live and the applicant is literally holding the respondent and the 1^st third party back in their effort to complete the same. It therefore falls on the shoulders of the applicant to ensure that the documents sent to him are executed without delay in order to enable the respondent fully discharge his professional undertaking.
The respondent has been placed in the circumstances they find themselves in by the action of the 2^nd third party and the 1^st third party by extension. If the 1^st third party had financed the transaction as was envisaged this court would not have hesitated to order the respondent to pay up the balance of the purchase price.
The financing having failed the only option left to the respondent was to initiate a reversal of the registration. The suit by the applicant was therefore ill advised, premature and an unwarranted step in the circumstances. To ask the court to order the respondent to pay up the balance of the purchase price is to invite the court to make an oppressive order against the advocates when all facts considered they are victims of the purchaser’s craft. The court therefore declines that invitation.
To allow the claim by the applicant this court would open a floodgate of suits against advocates who whilst in the honest discharge of their role as counsel are to be sued by parties to whom they give undertakings over breach of contracts by their clients even where such advocates have demonstrated good faith in the handling of a transaction but for actions attributable to their clients are unable to complete a transaction. It would be a sad day for legal practitioners if this court was to do so.
Finally, on the issue of costs, this court finds that costs should follow the event. The applicant having filed the suit prematurely must bear the costs. The applicant took a drastic step of dragging the respondent to court and thus necessitating the joinder of the 1^st third party who has defended the suit.
The move was a grave miscalculation on the part of the applicant since a concrete cause of action had not crystalized against the respondent to justify the action by the applicant.
In the end the originating summons dated the 14^th July 2023 is hereby dismissed with costs to the respondent and the 1^st third party.
It is so ordered.

JAMES MUNGAI NGURE VS musyoka murambi & associates

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