REPUBLIC OF KENYA
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL AND TAX DIVISION
HCCOMM NO. E268 OF 2022
PLANES FOR AFRICA LIMITED ………...…….... PLAINTIFF/APPLICANT
-VERSUS-
I & M BANK LIMITED ……...………….……DEFENDANT/RESPONDENT
RULING
1. The plaintiff/applicant filed a Notice of Motion application under certificate of urgency dated 2nd May, 2024 seeking orders of an injunction against the respondent/interested parties whether by themselves, their servants and/or agents restraining them from trespassing upon, evicting or in any way interfering with the property House No. 11 erected on land reference No. 7336/45 (L.R. No. 140354) or any part thereof pending the hearing and determination of the application and the suit. The said application was brought under certificate of urgency.
2. It is anchored on the grounds on the face of the Motion and a supporting affidavit sworn by John Muturi Nyaga, a director of the plaintiff’s company. In the said affidavit, Mr. Nyaga stated that on 22nd April, 2024 he received a letter dated 15th April, 2024 from H&M Associates Advocates informing him that following an alleged successful auction of the suit property, he and his family were required to surrender vacant possession to the 2 interested parties herein.
3. That a subsequent letter dated 30th April, 2024 from the same Advocates gave an ultimatum to the applicant to vacate the premises by 12th May, 2024. Mr. Nyaga stated that due to the destabilizing nature of the letter from the said Advocates, and as a stop gap measure, he quickly instructed his Advocates on record Messrs. Paul C. Onduso to request for extension of time to enable him to comply
4. Mr. Nyaga deposed that he has since made inquiries into the propriety of the purported sale of the subject matter herein by the respondent through Westminster Commercial Auctioneers the 1st interested party herein. The deponent contended that what is before this Court in the nature of pleadings filed are prayers for an account to be rendered by the respondent, having regard to the total sum of Kshs.112,457,322.28 paid by the applicant as at 18th July, 2022.
5. The applicant deposed that the respondent had nevertheless proceeded to advertise the house for recovery of an allegedly outstanding Kshs. 135,377,172.92 by the time of filing the suit before Court.
6. He further deposed that in the absence of such account being rendered as sought, he has no idea of the alleged outstanding amount owed. He stated that the auction proceeded after a period of over 18 months.
7. Mr. Nyaga contended that the alleged auction was not conducted transparently, as neither himself nor his duly appointed attorney were invited to verify the fidelity with the requirements of the law governing such public auction.
8. He stated that he was not privy to the valuation, if any, undertaken by the respondent before authorizing the sale by auction which could otherwise mitigate his liability in sale in such eventuality.
9. Mr. Nyaga further stated that advice from his Advocate on record Messrs. Paul C. Onduso Advocate, is that valuation under such circumstances must be one which fetches the best price to avoid any prejudice that may otherwise be occasioned to a debtor or chargor.
10. The applicant contended that he was aware that the respondent did not carry out the latest valuation of the suit property, and that the rush to advertise and auction is tainted with malafides and exposed the applicant to irreparable loss and damages.
11. Mr. Nyaga contended that unless restrained by the Court, the respondent/interested parties intend to evict and permanently deprive him of the right to receive and interrogate the accounts which the respondent has obstinately refused to render to date.
12. He stated that his Advocate had advised him that the effect of the sale is to circumvent the entire suit and deny him the right to ventilate his lawful grievances before the Court.
ANALYSIS AND DETERMINATION.
13. The present application was filed under certificate of urgency and was certified urgent. The respondent and interested parties had not yet filed their responses by the return date. What Messrs Chahenza and Otieno informed the Court was evidence from the bar. Issues of fact stated from the bar are not acceptable and admissible. I will therefore disregard them and only consider legal issues raised by the two Advocates.
14. I will deal with the application before me based on the history of the case from the proceedings that have taken place before, and the averments made by the applicant at this interim stage.
15. A perusal of the Court file reveals that a previous application dated 18th July, 2022 was made wherein the applicant sought an order of injunction to issue restraining the respondent, its agents and/or servants from causing any transfer or sale or any alterations or from advertising for sale by private treaty or public auction of House No.11 being part of property LR No. 1336/45 pending the hearing of the said application and the suit.
16. On 28th July, 2022, Judge Mwita granted prayer No. 3 of the application on condition that the plaintiff/applicant pays to the respondent Kshs.5,000,000/= within 30 days. In default thereof the injunction order would stand set aside.
17. The case was mentioned on 15th December, 2022 when Mr. Onduso informed Judge Mwita that parties had been engaging in negotiations with a view of settling the matter out of Court. Mr. Onduso prayed for another date to confirm settlement.
18. There was no mention of the amount of Kshs.5,000,000/= having been paid which means that it was not paid. It is apparent from the turn of events that negotiations towards amicably settling the matter were not successful as the property in issue was sold to the 2nd interested parties in a public auction.
19. Such sale by public auction is one of the remedies that were available to the respondent as a result of failure by the applicant to pay the debt when it fell due. Further, having failed to deposit the Kshs.5,000,000/= with the respondent as ordered by Judge Mwita, the applicant which had been given a cushioning pad to protect it pending the hearing and determination of the application dated 18th July, 2022 left itself exposed.
20. In this case, the applicant willingly charged the suit property thereby converting it to a commodity for sale. Inasmuch as the applicant would want the Court to believe that it was not aware of the advertisement for sale of the suit property, it exhibited documents that show that the converse is true.
21. In the case of Giella v Cassman Brown [1973] E.A, 358 Spry J, VP stated as follows-
“The conditions for the grant of an interlocutory injunction are now 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 the case on a balance of convenience”.
22. The Court of Appeal in Mrao Ltd. American First Bank Ltd & 2 others [2003] eKLR defined what a prima facie case is. Guided by the above two decisions and the circumstances of this case wherein the property has already been sold to the 2nd interested parties, I am not convinced that based on the material placed before me that the applicant has established a prima facie case that calls for grant of an interim injunction.
23. On the issue of whether the property was sold for an undervalue, or not, that will be determined at the main hearing of the case. In the event that it turns out that the actual value of the property is more than the amount it was sold for, or that it could have fetched more than what it was sold for, that is a matter that can be resolved by an award of damages. I am therefore not convinced that the applicant will suffer irreparable harm. Issues of accounts will also be dealt with at the main hearing.
24. Taking all factors into consideration, the balance of convenience tilts in favor of the respondent which has realized its security and the 2nd interested parties who bought the property at a public auction.
25. In National Bank of Kenya Ltd. v Pipe Plastic Samkolit (K) Ltd. & another [2002] EA 403, it was held as follows-
“A court of law cannot re-write a contract between the parties. The parties are bound by their terms of their contract unless coercion, fraud or undue influence are pleaded and proved”
26. Mr. Onduso for the applicant exhibited a letter annexed to the applicant’s affidavit wherein the applicant seems to have been given up to 26th May, 2024 to vacate the premises. In my considered view, that is a matter that can be discussed between the applicant and the 2nd interested parties who are the new owners of the suit property. They will probably on humanitarian grounds allow the applicant to vacate the premises on 26th May, 2024. This Court does not want to delve into that issue as it is a matter that was put forward for consideration by the 2nd interested parties.
27. I therefore decline to grant interim orders of injunction. Parties are at liberty to pursue any other orders from the Trial Court. I stepped in to deal with the current application as Judge A. Visram is on annual leave and the date of filing the application and the date when the applicant is required to vacate the suit property is short and the applicant needed to be heard urgently.
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 9th day of May, 2024. Ruling delivered through Microsoft Teams Online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Onduso for the Plaintiff/Applicant
Mr. G. Otieno h/b for Mr. Wafula for the respondent
Mr. Chahenza for the 2nd Interested Parties
Ms B. Wokabi – Court Assistant.
IN THE HIGH COURT OF KENYA AT NAIROBI
COMMERCIAL AND TAX DIVISION
HCCOMM NO. E268 OF 2022
PLANES FOR AFRICA LIMITED ………...…….... PLAINTIFF/APPLICANT
-VERSUS-
I & M BANK LIMITED ……...………….……DEFENDANT/RESPONDENT
RULING
1. The plaintiff/applicant filed a Notice of Motion application under certificate of urgency dated 2nd May, 2024 seeking orders of an injunction against the respondent/interested parties whether by themselves, their servants and/or agents restraining them from trespassing upon, evicting or in any way interfering with the property House No. 11 erected on land reference No. 7336/45 (L.R. No. 140354) or any part thereof pending the hearing and determination of the application and the suit. The said application was brought under certificate of urgency.
2. It is anchored on the grounds on the face of the Motion and a supporting affidavit sworn by John Muturi Nyaga, a director of the plaintiff’s company. In the said affidavit, Mr. Nyaga stated that on 22nd April, 2024 he received a letter dated 15th April, 2024 from H&M Associates Advocates informing him that following an alleged successful auction of the suit property, he and his family were required to surrender vacant possession to the 2 interested parties herein.
3. That a subsequent letter dated 30th April, 2024 from the same Advocates gave an ultimatum to the applicant to vacate the premises by 12th May, 2024. Mr. Nyaga stated that due to the destabilizing nature of the letter from the said Advocates, and as a stop gap measure, he quickly instructed his Advocates on record Messrs. Paul C. Onduso to request for extension of time to enable him to comply
4. Mr. Nyaga deposed that he has since made inquiries into the propriety of the purported sale of the subject matter herein by the respondent through Westminster Commercial Auctioneers the 1st interested party herein. The deponent contended that what is before this Court in the nature of pleadings filed are prayers for an account to be rendered by the respondent, having regard to the total sum of Kshs.112,457,322.28 paid by the applicant as at 18th July, 2022.
5. The applicant deposed that the respondent had nevertheless proceeded to advertise the house for recovery of an allegedly outstanding Kshs. 135,377,172.92 by the time of filing the suit before Court.
6. He further deposed that in the absence of such account being rendered as sought, he has no idea of the alleged outstanding amount owed. He stated that the auction proceeded after a period of over 18 months.
7. Mr. Nyaga contended that the alleged auction was not conducted transparently, as neither himself nor his duly appointed attorney were invited to verify the fidelity with the requirements of the law governing such public auction.
8. He stated that he was not privy to the valuation, if any, undertaken by the respondent before authorizing the sale by auction which could otherwise mitigate his liability in sale in such eventuality.
9. Mr. Nyaga further stated that advice from his Advocate on record Messrs. Paul C. Onduso Advocate, is that valuation under such circumstances must be one which fetches the best price to avoid any prejudice that may otherwise be occasioned to a debtor or chargor.
10. The applicant contended that he was aware that the respondent did not carry out the latest valuation of the suit property, and that the rush to advertise and auction is tainted with malafides and exposed the applicant to irreparable loss and damages.
11. Mr. Nyaga contended that unless restrained by the Court, the respondent/interested parties intend to evict and permanently deprive him of the right to receive and interrogate the accounts which the respondent has obstinately refused to render to date.
12. He stated that his Advocate had advised him that the effect of the sale is to circumvent the entire suit and deny him the right to ventilate his lawful grievances before the Court.
ANALYSIS AND DETERMINATION.
13. The present application was filed under certificate of urgency and was certified urgent. The respondent and interested parties had not yet filed their responses by the return date. What Messrs Chahenza and Otieno informed the Court was evidence from the bar. Issues of fact stated from the bar are not acceptable and admissible. I will therefore disregard them and only consider legal issues raised by the two Advocates.
14. I will deal with the application before me based on the history of the case from the proceedings that have taken place before, and the averments made by the applicant at this interim stage.
15. A perusal of the Court file reveals that a previous application dated 18th July, 2022 was made wherein the applicant sought an order of injunction to issue restraining the respondent, its agents and/or servants from causing any transfer or sale or any alterations or from advertising for sale by private treaty or public auction of House No.11 being part of property LR No. 1336/45 pending the hearing of the said application and the suit.
16. On 28th July, 2022, Judge Mwita granted prayer No. 3 of the application on condition that the plaintiff/applicant pays to the respondent Kshs.5,000,000/= within 30 days. In default thereof the injunction order would stand set aside.
17. The case was mentioned on 15th December, 2022 when Mr. Onduso informed Judge Mwita that parties had been engaging in negotiations with a view of settling the matter out of Court. Mr. Onduso prayed for another date to confirm settlement.
18. There was no mention of the amount of Kshs.5,000,000/= having been paid which means that it was not paid. It is apparent from the turn of events that negotiations towards amicably settling the matter were not successful as the property in issue was sold to the 2nd interested parties in a public auction.
19. Such sale by public auction is one of the remedies that were available to the respondent as a result of failure by the applicant to pay the debt when it fell due. Further, having failed to deposit the Kshs.5,000,000/= with the respondent as ordered by Judge Mwita, the applicant which had been given a cushioning pad to protect it pending the hearing and determination of the application dated 18th July, 2022 left itself exposed.
20. In this case, the applicant willingly charged the suit property thereby converting it to a commodity for sale. Inasmuch as the applicant would want the Court to believe that it was not aware of the advertisement for sale of the suit property, it exhibited documents that show that the converse is true.
21. In the case of Giella v Cassman Brown [1973] E.A, 358 Spry J, VP stated as follows-
“The conditions for the grant of an interlocutory injunction are now 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 the case on a balance of convenience”.
22. The Court of Appeal in Mrao Ltd. American First Bank Ltd & 2 others [2003] eKLR defined what a prima facie case is. Guided by the above two decisions and the circumstances of this case wherein the property has already been sold to the 2nd interested parties, I am not convinced that based on the material placed before me that the applicant has established a prima facie case that calls for grant of an interim injunction.
23. On the issue of whether the property was sold for an undervalue, or not, that will be determined at the main hearing of the case. In the event that it turns out that the actual value of the property is more than the amount it was sold for, or that it could have fetched more than what it was sold for, that is a matter that can be resolved by an award of damages. I am therefore not convinced that the applicant will suffer irreparable harm. Issues of accounts will also be dealt with at the main hearing.
24. Taking all factors into consideration, the balance of convenience tilts in favor of the respondent which has realized its security and the 2nd interested parties who bought the property at a public auction.
25. In National Bank of Kenya Ltd. v Pipe Plastic Samkolit (K) Ltd. & another [2002] EA 403, it was held as follows-
“A court of law cannot re-write a contract between the parties. The parties are bound by their terms of their contract unless coercion, fraud or undue influence are pleaded and proved”
26. Mr. Onduso for the applicant exhibited a letter annexed to the applicant’s affidavit wherein the applicant seems to have been given up to 26th May, 2024 to vacate the premises. In my considered view, that is a matter that can be discussed between the applicant and the 2nd interested parties who are the new owners of the suit property. They will probably on humanitarian grounds allow the applicant to vacate the premises on 26th May, 2024. This Court does not want to delve into that issue as it is a matter that was put forward for consideration by the 2nd interested parties.
27. I therefore decline to grant interim orders of injunction. Parties are at liberty to pursue any other orders from the Trial Court. I stepped in to deal with the current application as Judge A. Visram is on annual leave and the date of filing the application and the date when the applicant is required to vacate the suit property is short and the applicant needed to be heard urgently.
It is so ordered.
DATED, SIGNED and DELIVERED at NAIROBI on this 9th day of May, 2024. Ruling delivered through Microsoft Teams Online Platform.
NJOKI MWANGI
JUDGE
In the presence of:
Mr. Onduso for the Plaintiff/Applicant
Mr. G. Otieno h/b for Mr. Wafula for the respondent
Mr. Chahenza for the 2nd Interested Parties
Ms B. Wokabi – Court Assistant.