Wakilii

Sunder Dass v Municipal Council of Nairobi (Civil Appeal No. 12 of 1948)

East African Court of Appeal · [1948] EACA 10 · 1948 Appeal Allowed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Appeal from decision of the Supreme Court of Kenya refusing to make absolute a garnishee order nisi
Decision
Matter remitted to Supreme Court for determination of the amount, if any, of the Municipal Council's indebtedness to the judgment debtor

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

The Court held that under the contract the garnishees had only a right to deduct lawfully due amounts from the security deposit, not a right to retain the entire sum as forfeiture. The judgment debtor was entitled to recover at least the balance of the security deposit. The fact that the exact amount of the debt had not been ascertained did not defeat the garnishor's claim to attachment where the amount was capable of ascertainment. The matter was remitted to the Supreme Court for determination of the garnishees' indebtedness under Order XX Rule 4.

Outcome

Matter remitted to Supreme Court for determination of the amount, if any, of the Municipal Council's indebtedness to the judgment debtor

Facts

The appellants held a decree dated 23 November 1946 against Taj and Walia Ltd for Sh. 12,221 which remained unsatisfied. On 26 March 1945, the judgment debtors had entered into a contract with the Local Government Housing Committee to supply building stone and deposited Sh. 9,400 as security. On 1 September 1945, the respondent Municipal Council was substituted as party to the contract and received the deposit. Under clause 9(3) of the contract, the security deposit or any balance was to be repayable when the last consignment of stone had been delivered. The judgment debtors allegedly defaulted on the contract in October 1946, and the respondents obtained stone from other sources. In March 1948, the appellants applied for a garnishee order to attach the Sh. 9,400. The respondents objected, claiming the right under clause 9(2) to retain the entire sum against unformulated claims arising from the judgment debtors' breach. The trial judge discharged the garnishee order nisi, holding that the amount was not a debt the judgment debtor could have enforced payment of at the relevant time.

Issues

  1. Whether the garnishees had a right of retention or only a right of deduction in respect of the security deposit.
  2. Whether a debt capable of ascertainment but not yet ascertained can be attached in garnishee proceedings.
  3. Whether the judgment debtor could have enforced payment of the security deposit or any part of it at the relevant time.

Orders

  • Appeal allowed with costs.
  • Order discharging the rule nisi set aside.
  • Case referred back to the Supreme Court of Kenya for trial under Order XX Rule 4 to determine the extent of the indebtedness of the respondents to the judgment creditors.
  • Costs of proceedings in the Supreme Court already incurred and to be incurred to be in the discretion of the Judge conducting the fresh trial.

Rules and key headnotes

Garnishee Proceedings — Attachment of Debts — Right of Retention versus Right of Deduction
Where a contract provides for a security deposit and reserves to one party the right to deduct expenses and pecuniary losses from that deposit, the party does not have a right to retain the entire deposit as a forfeiture but only a right to deduct lawfully due amounts and return the balance.
Garnishee Proceedings — Attachment of Debts — Debt Capable of Ascertainment
The fact that the exact amount of a debt cannot be precisely ascertained at the time of the garnishee application does not defeat the claim of a garnishor to attachment, provided the debt is capable of ascertainment.
Garnishee Proceedings — Test for Attachable Debt
The test for whether a debt is attachable in garnishee proceedings is whether it is owing by the garnishee and whether it is a debt which the judgment debtor can enforce payment of if he desires to do so.
Garnishee Proceedings — Reference for Inquiry under Order XX Rule 4
Where the amount of a garnishee's indebtedness to a judgment debtor requires determination through the striking of an account, the court may refer the matter back for trial under Order XX Rule 4 to ascertain the extent of the indebtedness.
Security Deposits — Right to Deduct Losses from Deposit
A contractual right to deduct expenses and pecuniary losses from a security deposit by reason of breach does not entitle the party to retain the entire deposit indefinitely but requires the party to establish the amount of expenses and losses it is entitled to deduct and return any balance.

Legislation cited (2)

  • Kenya Civil Procedure Rules Order XX
  • Kenya Civil Procedure Rules Order XX Rule 4

Cases cited (2)

  • Holtby v Hodgson (1889) 24 QBD 103
  • O'Driscoll v Manchester Insurance Committee (1915) 3 KB 499

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

Sunder Dass v Municipal Council of Nairobi (Civil Appeal No. 12 of 1948) [1948] EACA 10 (1 January 1948)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.