1. Before this court is a Notice of Motion dated 23rd January 2024 seeking the following orders:-
a) Spent;
b) That this Honourable Court be pleased to issue an order of injunction to restrain the Defendants, their servants, workmen, licensees, agents or any other persons acting on their own behalf or on behalf of the Defendants/Respondents from howsoever trespassing, entering, evicting, encroaching, remaining in, advertising, selling, subdividing, taking over, dispossessing, alienating, reclaiming, fencing, cultivating, charging and encumbering in any way or harassing the Plaintiffs /Applicants or interfering with their peaceful entitlement and possession of Title Number Kwale /Galu Kinondo /1005 pending the hearing of this application inter partes;
c) That this Honourable Court be pleased to issue an order of inhibition restraining any dealings of any nature whatsoever on Title Number Kwale/Galu Kinondo/1005 without the express approval and consent of the of the Plaintiffs /Applicants pending the hearing of this application interpartes;
d) That this Honourable Court be pleased to issue an order of injunction to restrain the Defendant/Respondent, its servants, workmen, licensees, agents or any other person acting on their own behalf or on behalf of the Defendant/Respondent from howsoever trespassing, entering, evicting, encroaching, remaining in, advertising, selling, subdividing, taking over, dispossessing, alienating, reclaiming, fencing, cultivating, charging and encumbering in any way or harassing the Plaintiffs/Applicants or interfering with their peaceful entitlement and possession of Title Number Kwale /Galu Kinondo/1005 pending the hearing of this suit.
e) That this Honourable Court be pleased to issue an order restraining any dealings of any nature whatsoever on Title Number Kwale/Galu Kinondo/1005 without the express approval and consent of the Plaintiffs/Applicants pending the hearing of this suit;
f) That the OCS-Diani Police Station does assist in the enforcement of any orders issued herein; and
g) That the costs of this application be borne by the Defendant/Respondent.
2. The application is premised on the grounds therein and the Supporting Affidavit of Mr Richard Obwogi, a director of the 1st Plaintiff, sworn on 23rd January 2024.
3. The said Mr Obwogi stated that the 2nd and 3rd Plaintiffs are the joint owners of the subject property and that the defendant threatened to illegally and unlawfully sell the same pursuant to a notification of sale dated 11th December 2023 sent to him via WhatsApp by the 3rd Defendant/Respondent on 22nd January 2024.
4. Further, the 1st Plaintiff took a loan facility of US$250,000 from the 1st Defendant for purposes of investment, which has yet to materialize. The 2nd and 3rd Plaintiffs offered their property (the subject property) to be charged for the borrowed sum in favour of the 1st Plaintiff. The 1st Defendant, however, never gave them a copy of the registered charge.
5. He averred that the plaintiffs have never been served with any statutory notice or auction notice for the sale of the suit property despite being the named property owners in the notification of the sale dated 11th December 2023. Neither he nor the Plaintiffs were aware of any advert or any other notice and are apprehensive the defendant may proceed to sell the property. None of them has ever been served with a 90-day notice or 40-day notice by the auctioneers, nor have they seen the valuation of the property or any valuer visiting the property for valuation purposes.
6. He stated that the suit property is worth over Kes.25,000,000/- and was apprehensive the Defendants may sell it at a throwaway price and without due regard to the law and procedure, causing them to suffer immense loss and inconvenience, which cannot be compensated by way of damages. It was further averred that the Plaintiffs have never received any communication from the defendants in respect of the said loan facility. Further, repayment had become impossible without restructuring.
7. In response, the 1st and 2nd Defendants filed a replying affidavit sworn on 22nd February 2024 by Steven Lee, their director. He denied the contents of the plaintiff's supporting affidavit to the extent that the suit property was being sold illegally. He stated that the 1st Plaintiff was advanced a loan facility of US$ 250,000 by the 2nd Defendant through the 1st Defendant on the terms and conditions of the loan agreement dated 14th December 2020. The loan facility was secured by charge instruments against several properties, including the suit property, LR Nos. Bassi/Begetaorio 11/2530, Bassi/Begetaorio 11/2652 and Bassi/Begetaorio 11/4713.
8. He further stated that the Plaintiffs were unable to repay the loan and, as a result, fell into arrears. Despite several demands to regularize the same, they failed to, and as a result, the entire loan, together with interest and other monies secured under the charge, became due and payable. The 1st and 2nd Defendants then issued a statutory notice dated 7th March 2023 for the exercise of statutory power of sale of the charged property after the expiry of three months. The same was sent to 1st Plaintiff’s director and acknowledged on 22nd February 2023. A notice of sale was issued to the Plaintiffs on 1st August 2023. However, the plaintiffs did not comply with the statutory notices, leaving the Defendants with no option other than to exercise their statutory power of sale.
9. He averred that the plaintiffs have not demonstrated what irreparable loss they will suffer if the injunction is not granted and that it is the 1st and 2nd Defendants who continue to suffer irreparably due to the Plaintiff’s failure to clear the loan, which on 31st January 2024 stood at US$ 266,032 inclusive of penalties.
10. Further, the plaintiffs have not established a prima facie case to warrant the issuance of an injunction, and the application is a delaying tactic. If the recovery process is restrained, the outstanding loan will grow exponentially due to interests which may be beyond the value of the suit property. He urged the court to dismiss the application with costs.
11. The plaintiffs filed a supplementary affidavit sworn on 27th March 2024 by the director of the 1st Plaintiff company, Richard Obwogi.
12. Mr Obwogi reiterated the contents of his Supporting Affidavit. He stated that he is a total stranger to the charging instruments produced by the Respondents as annexures SL3A and SL3B and that he has never been supplied with copies of the same, if at all there were registered. He denied ever being served with any demand letters, statutory notice or auction notice as alleged.
13. He reiterated that they stand to suffer immense irreparable loss that cannot be compensated by way of damages and urged the court to grant the prayers sought.
14. The court directed parties to file their respective submissions. The plaintiffs, through their advocates Kinyanjui, Kirimi & Company Advocates, filed their written submissions dated 21st February 2024.
15. Counsel relied on the case of Giella v Cassman Brown and Co Ltd [1973] EA 358 on the applicable principles and submitted that the subject property is a residential cum hotel property. The same was offered as security for the subject loan facility. It was submitted that pleadings filed herein disclose a prima facie case with probability of success.
16. On the second principle of whether the applicants will suffer irreparable loss, counsel submitted that the applicants have a sentimental attachment to the suit property, which cannot be compensated by way of damages.
17. On the balance of convenience, counsel submitted that the Applicants had shown the inconvenience they would suffer if the injunctive reliefs were denied.
18. In conclusion, counsel urged the court to allow the application as prayed.
19. The defendants, through their advocates, JMK Partners Advocates LLP, filed their written submissions dated 28th March 2024. Counsel submitted on two issues for determination, namely, whether statutory notices were issued and whether the plaintiffs are entitled to a temporary injunction.
20. On the first issue, counsel submitted that the 1st Plaintiff was in default in servicing the loan facility advanced to him by the 2nd Defendant through the 1st Defendant, which was secured by the suit property. The Plaintiffs were duly served with the statutory notices, which they did not comply with, nor did they bother to regularise the payments, and thus, the Defendants' statutory power of sale cannot be rightfully denied.
21. On the second issue counsel relied on the locus classicus case of Giella vs Cassman Brown (1973) EA 358 and submitted that the Plaintiffs/Applicants have not demonstrated prima facie case with a high probability of success and thus it is within the 1st and 2nd Defendants’ legal rights under the registered charge to exercise the statutory remedies under the charge given that the 1st Plaintiff has defaulted and continues to default in repayment.
22. Counsel further submitted that the Plaintiffs have not demonstrated that the award of damages would not be sufficient to compensate any of the alleged anticipated loss. The Plaintiffs/Applicants had not demonstrated what irreparable loss they will suffer if the injunction is not granted. This being a claim over land, any loss that may result can be quantified in terms of damages.
23. On the balance of convenience, counsel submitted that issuance of the temporary injunction at this stage would amount to denial by the Honourable Court of the 1st Defendant’s right to property under Article 40 of the Constitution of Kenya, 2010, actuated by the right to exercise its remedies under the charges given that the 1st Plaintiff has defaulted in repayment of the loan and continues to default. That balance of inconvenience is not in favour of the Plaintiffs as it is the 1st and 2nd Defendants who continue to suffer.
24. In conclusion counsel urged the court to dismiss the application with costs.
25. I have considered the application, the responses therein and the parties’ submissions.
26. Temporary injunction is provided for under Order 40 Rule 1 of the Civil Rules 2010. The said Rule provides that:-
Where in any suit it is proved by affidavit or otherwise—
(a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or
(b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,
the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.
27. The three principles for granting an injunction were settled in the case of Giella vs Cassman Brown Supra) where the Court of Appeal stated:-
“The conditions for the grant of an interlocutory injunction are now, I think, well settled in East Africa. First, an applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.”
28. In defining prima facie case the court in the case of JM vs SMK & 4 others [2022] eKLR stated,
“What then constitutes a prima facie case? In the case of Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, the Court of Appeal held as follows:
“The principles which guide the Court in deciding whether or not to grant an interlocutory injunction are, first, an applicant must show prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience...A mere scintilla of evidence can never be enough: nor can any amount of worthless discredited evidence. It is true that the Court is not required at that stage to decide finally whether the evidence is worthy of credit, or whether if believed it is weighty enough to prove the case conclusively: that final determination can only properly be made when the case for the defence has been heard. It may not be easy to define what is meant by “prima facie case”, but at least it must mean one on which a reasonable tribunal, properly directing its mind to the law and the evidence could convict if no explanation is offered by the defence...The terms “prima facie” case, and “genuine and arguable” case do not necessarily mean the same thing, for in using another term, namely a sustainable cause of action, the words “prima facie” are frequently used to refer to a case which shifts the evidential burden of proof, rather than as giving rise to a legal burden of proof in the manner of considering, which was in relation to the pleadings that had been put forward in the case. It would be in the appellant’s interest to adopt a genuine and arguable case standard rather than one of a prima facie case, the former being the lesser standard of the two...In civil cases a prima facie case is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”
29. As regards the second condition, whether the Plaintiff stands to suffer irreparable loss, the court in the case of In Nguruman Limited vs Jan Bonde Nielsen & 2 Others [2014] eKLR stated as follows:-
“On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be adequately remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prima face, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation, of whatever amount, will never be adequate remedy.”
30. On the issue of balance of convenience, the court in the case of Pius Kipchirchir Kogo vs. Frank Kimeli Tenai [2018] eKLR held as follows:
“The meaning of balance of convenience in favour of the plaintiff is that if an injunction is not granted and the suit is ultimately decided in favour of the plaintiffs, the inconvenience caused to the plaintiff would be greater than that which would be caused to the defendants if an injunction is granted but the suit is ultimately dismissed. Although it is called balance of convenience it is really the balance of inconvenience and it is for the plaintiffs to show that the inconvenience caused to them would be greater than that which may be caused to the defendants. Should the inconvenience be equal, it is the plaintiffs who suffer. In other words, the plaintiffs have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it.”
31. I have considered the application and the supporting documents. In my view, there is no dispute regarding the subject loan facility. Parties also agree that certain properties, which are in danger of being sold were offered as securities. Default on the part of the 1st Plaintiff is also not denied. What is in dispute is whether the Plaintiffs were served with the required statutory notices.
32. The Plaintiffs have argued that they have a sentimental attachment to the suit property and that the property being a residential cum hotel, the sale of the same would cause them irreparable loss that cannot be compensated by way of damages. The Defendants, on the other hand, have submitted that the plaintiffs have no prima facie case and that they are the ones to suffer irreparable loss and inconveniences if the orders sought are issued as the plaintiffs have already utilized and or used the subject loan facility.
33. The evidence presented before this Court shows that all parties signed the signed loan agreement dated 14th December 2020. In light of that The Plaintiffs were aware of the terms and conditions of the same and the consequences in case of default. In the circumstances, I am unable to agree with them that a prima facie case has been demonstrated.
34. I do not agree with the views expressed by the Plaintiffs that since they have sentimental attachments to the property the same ought not to be sold in the exercise of the 1st Defendants statutory power of sale. By offering the suit property as security, with the attendant risk that the same would be sold if there was default, they, in essence, undermined that argument. In my view since this is a loan dispute the Plaintiffs can be compensated by an award of damages.
35. Lastly, the balance of convenience tilts against the grant of the orders sought as default on the part of the 1st Plaintiff has been admitted.
36. The Plaintiffs have not satisfied the test for grant of interlocutory injunction. The application therefore lacks merit and is hereby dismissed.
37. I award the costs of the application to the Defendants/Respondents.
38. Orders accordingly.
Dated and signed at Mombasa this 9th day of May 2024.
a) Spent;
b) That this Honourable Court be pleased to issue an order of injunction to restrain the Defendants, their servants, workmen, licensees, agents or any other persons acting on their own behalf or on behalf of the Defendants/Respondents from howsoever trespassing, entering, evicting, encroaching, remaining in, advertising, selling, subdividing, taking over, dispossessing, alienating, reclaiming, fencing, cultivating, charging and encumbering in any way or harassing the Plaintiffs /Applicants or interfering with their peaceful entitlement and possession of Title Number Kwale /Galu Kinondo /1005 pending the hearing of this application inter partes;
c) That this Honourable Court be pleased to issue an order of inhibition restraining any dealings of any nature whatsoever on Title Number Kwale/Galu Kinondo/1005 without the express approval and consent of the of the Plaintiffs /Applicants pending the hearing of this application interpartes;
d) That this Honourable Court be pleased to issue an order of injunction to restrain the Defendant/Respondent, its servants, workmen, licensees, agents or any other person acting on their own behalf or on behalf of the Defendant/Respondent from howsoever trespassing, entering, evicting, encroaching, remaining in, advertising, selling, subdividing, taking over, dispossessing, alienating, reclaiming, fencing, cultivating, charging and encumbering in any way or harassing the Plaintiffs/Applicants or interfering with their peaceful entitlement and possession of Title Number Kwale /Galu Kinondo/1005 pending the hearing of this suit.
e) That this Honourable Court be pleased to issue an order restraining any dealings of any nature whatsoever on Title Number Kwale/Galu Kinondo/1005 without the express approval and consent of the Plaintiffs/Applicants pending the hearing of this suit;
f) That the OCS-Diani Police Station does assist in the enforcement of any orders issued herein; and
g) That the costs of this application be borne by the Defendant/Respondent.
2. The application is premised on the grounds therein and the Supporting Affidavit of Mr Richard Obwogi, a director of the 1st Plaintiff, sworn on 23rd January 2024.
3. The said Mr Obwogi stated that the 2nd and 3rd Plaintiffs are the joint owners of the subject property and that the defendant threatened to illegally and unlawfully sell the same pursuant to a notification of sale dated 11th December 2023 sent to him via WhatsApp by the 3rd Defendant/Respondent on 22nd January 2024.
4. Further, the 1st Plaintiff took a loan facility of US$250,000 from the 1st Defendant for purposes of investment, which has yet to materialize. The 2nd and 3rd Plaintiffs offered their property (the subject property) to be charged for the borrowed sum in favour of the 1st Plaintiff. The 1st Defendant, however, never gave them a copy of the registered charge.
5. He averred that the plaintiffs have never been served with any statutory notice or auction notice for the sale of the suit property despite being the named property owners in the notification of the sale dated 11th December 2023. Neither he nor the Plaintiffs were aware of any advert or any other notice and are apprehensive the defendant may proceed to sell the property. None of them has ever been served with a 90-day notice or 40-day notice by the auctioneers, nor have they seen the valuation of the property or any valuer visiting the property for valuation purposes.
6. He stated that the suit property is worth over Kes.25,000,000/- and was apprehensive the Defendants may sell it at a throwaway price and without due regard to the law and procedure, causing them to suffer immense loss and inconvenience, which cannot be compensated by way of damages. It was further averred that the Plaintiffs have never received any communication from the defendants in respect of the said loan facility. Further, repayment had become impossible without restructuring.
7. In response, the 1st and 2nd Defendants filed a replying affidavit sworn on 22nd February 2024 by Steven Lee, their director. He denied the contents of the plaintiff's supporting affidavit to the extent that the suit property was being sold illegally. He stated that the 1st Plaintiff was advanced a loan facility of US$ 250,000 by the 2nd Defendant through the 1st Defendant on the terms and conditions of the loan agreement dated 14th December 2020. The loan facility was secured by charge instruments against several properties, including the suit property, LR Nos. Bassi/Begetaorio 11/2530, Bassi/Begetaorio 11/2652 and Bassi/Begetaorio 11/4713.
8. He further stated that the Plaintiffs were unable to repay the loan and, as a result, fell into arrears. Despite several demands to regularize the same, they failed to, and as a result, the entire loan, together with interest and other monies secured under the charge, became due and payable. The 1st and 2nd Defendants then issued a statutory notice dated 7th March 2023 for the exercise of statutory power of sale of the charged property after the expiry of three months. The same was sent to 1st Plaintiff’s director and acknowledged on 22nd February 2023. A notice of sale was issued to the Plaintiffs on 1st August 2023. However, the plaintiffs did not comply with the statutory notices, leaving the Defendants with no option other than to exercise their statutory power of sale.
9. He averred that the plaintiffs have not demonstrated what irreparable loss they will suffer if the injunction is not granted and that it is the 1st and 2nd Defendants who continue to suffer irreparably due to the Plaintiff’s failure to clear the loan, which on 31st January 2024 stood at US$ 266,032 inclusive of penalties.
10. Further, the plaintiffs have not established a prima facie case to warrant the issuance of an injunction, and the application is a delaying tactic. If the recovery process is restrained, the outstanding loan will grow exponentially due to interests which may be beyond the value of the suit property. He urged the court to dismiss the application with costs.
11. The plaintiffs filed a supplementary affidavit sworn on 27th March 2024 by the director of the 1st Plaintiff company, Richard Obwogi.
12. Mr Obwogi reiterated the contents of his Supporting Affidavit. He stated that he is a total stranger to the charging instruments produced by the Respondents as annexures SL3A and SL3B and that he has never been supplied with copies of the same, if at all there were registered. He denied ever being served with any demand letters, statutory notice or auction notice as alleged.
13. He reiterated that they stand to suffer immense irreparable loss that cannot be compensated by way of damages and urged the court to grant the prayers sought.
14. The court directed parties to file their respective submissions. The plaintiffs, through their advocates Kinyanjui, Kirimi & Company Advocates, filed their written submissions dated 21st February 2024.
15. Counsel relied on the case of Giella v Cassman Brown and Co Ltd [1973] EA 358 on the applicable principles and submitted that the subject property is a residential cum hotel property. The same was offered as security for the subject loan facility. It was submitted that pleadings filed herein disclose a prima facie case with probability of success.
16. On the second principle of whether the applicants will suffer irreparable loss, counsel submitted that the applicants have a sentimental attachment to the suit property, which cannot be compensated by way of damages.
17. On the balance of convenience, counsel submitted that the Applicants had shown the inconvenience they would suffer if the injunctive reliefs were denied.
18. In conclusion, counsel urged the court to allow the application as prayed.
19. The defendants, through their advocates, JMK Partners Advocates LLP, filed their written submissions dated 28th March 2024. Counsel submitted on two issues for determination, namely, whether statutory notices were issued and whether the plaintiffs are entitled to a temporary injunction.
20. On the first issue, counsel submitted that the 1st Plaintiff was in default in servicing the loan facility advanced to him by the 2nd Defendant through the 1st Defendant, which was secured by the suit property. The Plaintiffs were duly served with the statutory notices, which they did not comply with, nor did they bother to regularise the payments, and thus, the Defendants' statutory power of sale cannot be rightfully denied.
21. On the second issue counsel relied on the locus classicus case of Giella vs Cassman Brown (1973) EA 358 and submitted that the Plaintiffs/Applicants have not demonstrated prima facie case with a high probability of success and thus it is within the 1st and 2nd Defendants’ legal rights under the registered charge to exercise the statutory remedies under the charge given that the 1st Plaintiff has defaulted and continues to default in repayment.
22. Counsel further submitted that the Plaintiffs have not demonstrated that the award of damages would not be sufficient to compensate any of the alleged anticipated loss. The Plaintiffs/Applicants had not demonstrated what irreparable loss they will suffer if the injunction is not granted. This being a claim over land, any loss that may result can be quantified in terms of damages.
23. On the balance of convenience, counsel submitted that issuance of the temporary injunction at this stage would amount to denial by the Honourable Court of the 1st Defendant’s right to property under Article 40 of the Constitution of Kenya, 2010, actuated by the right to exercise its remedies under the charges given that the 1st Plaintiff has defaulted in repayment of the loan and continues to default. That balance of inconvenience is not in favour of the Plaintiffs as it is the 1st and 2nd Defendants who continue to suffer.
24. In conclusion counsel urged the court to dismiss the application with costs.
25. I have considered the application, the responses therein and the parties’ submissions.
26. Temporary injunction is provided for under Order 40 Rule 1 of the Civil Rules 2010. The said Rule provides that:-
Where in any suit it is proved by affidavit or otherwise—
(a) that any property in dispute in a suit is in danger of being wasted, damaged, or alienated by any party to the suit, or wrongfully sold in execution of a decree; or
(b) that the defendant threatens or intends to remove or dispose of his property in circumstances affording reasonable probability that the plaintiff will or may be obstructed or delayed in the execution of any decree that may be passed against the defendant in the suit,
the court may by order grant a temporary injunction to restrain such act, or make such other order for the purpose of staying and preventing the wasting, damaging, alienation, sale, removal, or disposition of the property as the court thinks fit until the disposal of the suit or until further orders.
27. The three principles for granting an injunction were settled in the case of Giella vs Cassman Brown Supra) where the Court of Appeal stated:-
“The conditions for the grant of an interlocutory injunction are now, I think, well settled in East Africa. First, an applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.”
28. In defining prima facie case the court in the case of JM vs SMK & 4 others [2022] eKLR stated,
“What then constitutes a prima facie case? In the case of Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, the Court of Appeal held as follows:
“The principles which guide the Court in deciding whether or not to grant an interlocutory injunction are, first, an applicant must show prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience...A mere scintilla of evidence can never be enough: nor can any amount of worthless discredited evidence. It is true that the Court is not required at that stage to decide finally whether the evidence is worthy of credit, or whether if believed it is weighty enough to prove the case conclusively: that final determination can only properly be made when the case for the defence has been heard. It may not be easy to define what is meant by “prima facie case”, but at least it must mean one on which a reasonable tribunal, properly directing its mind to the law and the evidence could convict if no explanation is offered by the defence...The terms “prima facie” case, and “genuine and arguable” case do not necessarily mean the same thing, for in using another term, namely a sustainable cause of action, the words “prima facie” are frequently used to refer to a case which shifts the evidential burden of proof, rather than as giving rise to a legal burden of proof in the manner of considering, which was in relation to the pleadings that had been put forward in the case. It would be in the appellant’s interest to adopt a genuine and arguable case standard rather than one of a prima facie case, the former being the lesser standard of the two...In civil cases a prima facie case is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”
29. As regards the second condition, whether the Plaintiff stands to suffer irreparable loss, the court in the case of In Nguruman Limited vs Jan Bonde Nielsen & 2 Others [2014] eKLR stated as follows:-
“On the second factor, that the applicant must establish that he “might otherwise” suffer irreparable injury which cannot be adequately remedied by damages in the absence of an injunction, is a threshold requirement and the burden is on the applicant to demonstrate, prima face, the nature and extent of the injury. Speculative injury will not do; there must be more than an unfounded fear or apprehension on the part of the applicant. The equitable remedy of temporary injunction is issued solely to prevent grave and irreparable injury; that is injury that is actual, substantial and demonstrable; injury that cannot “adequately” be compensated by an award of damages. An injury is irreparable where there is no standard by which their amount can be measured with reasonable accuracy or the injury or harm is such a nature that monetary compensation, of whatever amount, will never be adequate remedy.”
30. On the issue of balance of convenience, the court in the case of Pius Kipchirchir Kogo vs. Frank Kimeli Tenai [2018] eKLR held as follows:
“The meaning of balance of convenience in favour of the plaintiff is that if an injunction is not granted and the suit is ultimately decided in favour of the plaintiffs, the inconvenience caused to the plaintiff would be greater than that which would be caused to the defendants if an injunction is granted but the suit is ultimately dismissed. Although it is called balance of convenience it is really the balance of inconvenience and it is for the plaintiffs to show that the inconvenience caused to them would be greater than that which may be caused to the defendants. Should the inconvenience be equal, it is the plaintiffs who suffer. In other words, the plaintiffs have to show that the comparative mischief from the inconvenience which is likely to arise from withholding the injunction will be greater than which is likely to arise from granting it.”
31. I have considered the application and the supporting documents. In my view, there is no dispute regarding the subject loan facility. Parties also agree that certain properties, which are in danger of being sold were offered as securities. Default on the part of the 1st Plaintiff is also not denied. What is in dispute is whether the Plaintiffs were served with the required statutory notices.
32. The Plaintiffs have argued that they have a sentimental attachment to the suit property and that the property being a residential cum hotel, the sale of the same would cause them irreparable loss that cannot be compensated by way of damages. The Defendants, on the other hand, have submitted that the plaintiffs have no prima facie case and that they are the ones to suffer irreparable loss and inconveniences if the orders sought are issued as the plaintiffs have already utilized and or used the subject loan facility.
33. The evidence presented before this Court shows that all parties signed the signed loan agreement dated 14th December 2020. In light of that The Plaintiffs were aware of the terms and conditions of the same and the consequences in case of default. In the circumstances, I am unable to agree with them that a prima facie case has been demonstrated.
34. I do not agree with the views expressed by the Plaintiffs that since they have sentimental attachments to the property the same ought not to be sold in the exercise of the 1st Defendants statutory power of sale. By offering the suit property as security, with the attendant risk that the same would be sold if there was default, they, in essence, undermined that argument. In my view since this is a loan dispute the Plaintiffs can be compensated by an award of damages.
35. Lastly, the balance of convenience tilts against the grant of the orders sought as default on the part of the 1st Plaintiff has been admitted.
36. The Plaintiffs have not satisfied the test for grant of interlocutory injunction. The application therefore lacks merit and is hereby dismissed.
37. I award the costs of the application to the Defendants/Respondents.
38. Orders accordingly.
Dated and signed at Mombasa this 9th day of May 2024.