Rogan-Kamper v Grosvenor (No 2) [1978] KECA 25 (KLR)
The bottom line
#Kenya's Court of Appeal ruled a landlord could claim a court-locked deposit because the tax authority's claim came too late.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the Collector's notice of 2nd August 1977 under section 96 of the Income Tax Act, relating to money deposited in court as security for costs, was valid, given the definition of 'moneys' in section 96(1)
- 2.Whether the Collector had rights existing prior to the attachment before judgment which were not affected by it, within the meaning of Order 38 rule 10
- 3.Whether the Registrar was correct in holding, under Order 21 rule 57 and following Bisheshar Das v Ambika Prasad, that the Collector's title under the section 96 notice had priority over the landlord's conditional attachment
- 4.As between the landlord as judgment-creditor under an attachment and the Collector as assignee under a section 96 notice, whose claim to the KShs 22,000/- security deposit prevails
Key legal issues
#Validity of the section 96 notice in respect of money deposited in court
The notice was valid; the definition of 'moneys' in section 96(1) is inclusive, not exclusive, and covers money held by an agent for a principal, including security deposits in court.
Counsel for the landlord argued the notice could only relate to remuneration. The court rejected this, noting the section uses 'includes' rather than 'means', and reformulated the definition as meaning money held by an agent on behalf of a principal, including salary, wages, pension payments and any other remuneration. Money deposited in court as security for costs therefore fell within the section.
Whether the Collector had prior existing rights protected by Order 38 rule 10
No. The Collector's unappealed assessments gave only personal rights to recover a debt; he acquired no right in or over the deposited money until the notice of 2nd August 1977 issued.
Adopting Registrar of Titles Johore v Temenggong Securities Ltd, the court held that a claim for unpaid tax is an unsecured civil debt giving no right in or over the debtor's property until converted. The rights flowing from the assessments (to sue, issue a section 96 notice, levy distress) were rights in personam. The right in relation to the specific sum crystallised only when the notice issued, after the attachment.
Priority as between the landlord's attachment and the Collector's section 96 assignment
The landlord's conditional attachment, confirmed on 14th December 1977, prevails over the Collector's later-created right by assignment, and the money must be paid to the landlord as judgment creditor.
Although Bisheshar Das v Ambika Prasad correctly states that attachment before judgment prevents alienation without conferring priority over a subsequent decree-holder, the Collector is not a decree-holder but an assignee of money held by an agent. His assigning right arose on 2nd August 1977, after the attachment of 11th July 1977, so Order 38 rule 10 did not assist him and the Registrar's contrary decision was wrong.
Legal principles established
#- A notice under section 96 of the Income Tax Act appointing an agent takes effect in the nature of a statutory assignment, and the right it creates arises only upon issue of the notice, not before
- A claim for unpaid income tax is an unsecured civil debt which, until converted (for example by a statutory notice of assignment), gives no right in or over the property of the debtor
- The definition of 'moneys' in section 96(1) of the Income Tax Act is inclusive and not exhaustive, and extends to money held by an agent on behalf of a principal, including money deposited in court
- The right created by a section 96 notice, being an assignment of money held by an agent, is not a right 'existing prior to the attachment' within Order 38 rule 10 where the notice issued after the attachment before judgment
Court orders
#- 1.The reference is allowed
- 2.The decision of the Registrar directing payment of the KShs 22,000/- to the Collector is set aside
- 3.The KShs 22,000/- is to be transferred to the High Court as ordered by the High Court on 14th December 1977, for payment out to the landlord as judgment creditor
- 4.The costs of the reference and of the application before the Registrar are to be paid by the Collector to the landlord
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Registrar of the Court of Appeal (sitting as taxing master); underlying judgment of the High Court at Nairobi
- High Court Civil Case No 786 of 1971; HCCC 1532/77 (landlord's suit); Civil Appeal No 33 of 1976
- Jurisdiction invoked
- Reference from the decision of the Registrar as taxing master under the Court of Appeal Rules (rule 104) and the Civil Procedure Rules (Order 21 rule 57)
Relief refused
#The Collector's claim to the KShs 22,000/- deposit in satisfaction of the tenant's unpaid tax
The Collector acquired no right in or over the deposited money until he issued the notice of 2nd August 1977, which was after the landlord's conditional attachment of 11th July 1977, so his right was not one 'existing prior to the attachment' under Order 38 rule 10 and did not confer priority
Costs
The costs of this reference, and of the application before the Registrar, be paid by the Collector to the landlord.
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
I hold that the Kshs 22,000/- must be transferred to the High Court, as ordered by the High Court on 14th December, 1977, for payment out to the landlord as judgment creditor. I allow this reference.
so I order that the costs of this reference, and of the application before the Registrar, be paid by the Collector to the landlord.
a notice appointing an employer as agent for the collection of tax takes effect in the nature of a statutory assignment, and that it has priority over a subsequent attachment
This right by way of assignment did not come into existence until the notice was issued on 2nd August, and was accordingly not a right “existing prior to the attachment” in the terms of Order 38 rule 10
a claim for unpaid income tax was an unsecured civil debt which until converted into a judgment debt gave no right in or over the property of a debtor
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Rogan-Kamper v Grosvenor (No 2) [1978] KECA 25 (KLR)", Case Analysis (1978). Reference from the decision of the Registrar as Taxing Master (arising from Civil Appeal No 33 of 1976, A W Rogan Kamper v Lord Robert Grosvenor). Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1978/25/eng@1978-04-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.