KRA Board Independent Director Leonard Shimaka faces a KSh9.6 million claim over allegations that he released a property purchase deposit without securing the buyer’s registration. The advocate has challenged the proceedings and sought indemnity from the seller and the buyer’s lawyer.
A court has declined to shield Kenya Revenue Authority (KRA) Independent Director Leonard Shimaka from a KSh9.6 million property dispute.
Shimaka, an advocate, faces a claim by Joshua Nderitu over allegations of releasing a purchase deposit without securing successful property transfer.
Nderitu accuses the lawyer of releasing the money to property seller Douglas Odhiambo without his authorisation.
The buyer maintains that the funds should have remained in custody until registration was completed.
He wants a refund of the KSh9.6 million deposit paid towards the property purchase.
The Disputed Deposit
Nderitu told the court that the sale agreements contained clear conditions governing the release of the purchase deposit.
He said the money was to remain secured until successful registration of the property in his name.
However, Shimaka allegedly released the funds to Odhiambo before fulfilling that requirement.
Nderitu further claimed that the transaction proceeded without his approval or notification to his advocates.
He argued that the lawyer disregarded his professional obligations by releasing money entrusted to him.
The buyer subsequently instructed Muthioga Gaturu Advocates to issue a rescission notice and demand repayment.
His lawyers also recalled the KSh9.6 million deposit following the disputed transaction.
Nderitu maintained that his claim concerned Shimaka’s alleged breach of professional obligations.
He argued that Gaturu merely represented him and had no responsibility for the seller’s lawyer’s actions.
Consequently, he opposed attempts to involve his advocate in the proceedings.
Shimaka’s Defence
Shimaka denied liability and sought indemnity against Odhiambo and Gaturu.
He argued that he acted as the seller’s advocate during preparation and execution of the sale agreement.
According to Shimaka, the agreement was jointly and severally executed by the parties.
He described Nderitu’s suit as misconceived, prejudicial, and an abuse of court process.
The KRA director further argued that he performed his duties within the requirements of Section 34 of the Advocates Act.
He maintained that granting Nderitu’s application would prejudice his constitutional rights.
Shimaka also described the allegations as malicious and scandalous.
He argued that the property remained registered in the parties’ names, disputing the basis of Nderitu’s claims.
However, Nderitu opposed the application to bring Gaturu into the dispute.
He maintained that his advocate was never a party to the underlying property transaction.
Court Rejects Objection
In a ruling delivered on July 17, 2024, Justice Stephen Kibunja rejected Shimaka’s preliminary objection.
The judge found that the statutory provision cited by Shimaka had no relevance to the dispute.
He observed that Shimaka’s participation in the transaction extended to attesting the sale agreement and transfer documents.
However, that involvement did not address the central question surrounding the KSh9.6 million deposit.
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The judge consequently dismissed Shimaka’s preliminary objection dated July 12, 2023.
Nevertheless, the court allowed his application to join Odhiambo and Gaturu as intended third parties.
The decision allowed Shimaka to pursue his indemnity claim against the two individuals.
It did not, however, determine whether he was liable for the disputed deposit.
Appeal Pending
During the latest court proceedings, Shimaka’s lawyer, Mugambi, informed the court that an appeal had been filed.
He also told the court that directions had been taken in the appeal.
Justice Antony Ambwayo subsequently scheduled the appeal for mention in April 2027.
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