This appeal arises from the ruling of Hon Burudi Josephat Kalo (CM) delivered on 4th December, 2024 in MC ELC CASE NO E181 of 2023. The Appellants being aggrieved by the entire ruling lodged a Memorandum of Appeal dated 3rd January, 2025 and listed the following grounds of Appeal:
1) THAT the learned magistrate erred in law and fact by failing to take into consideration the Appellants argument that a constructive trust had been formed between them and the 1st Respondent and in doing so entirely disregarded the Supreme Court decision in Arvind Shah & 7 others vs Mombasa Bricks & Tiles Limited, Petition No 18 (020) of 2022 vide a Judgment delivered by the Supreme Court on 28th December, 2023.
2) THAT the learned magistrate erred in law and in fact by failing to recognize the Plaintiff’s equitable interest in the suit property and declaring himself in finality stating ‘That the Plaintiffs cannot have greater rights in the property than a secured creditor’; consequently, ignoring the doctrine of lis pendens and determining the whole suit and prejudicing the Appellants right to fair hearing and trial.
3) THAT the learned magistrate erred in law by failing to engage with and making findings on 2 other and yet not lesser principles of ‘irreparable harm’ and ‘balance of probability’ in making his determination considering that it is undisputed that the Plaintiffs have occupied the suit property from the time of their individual purchases prior to accrual of the 2nd Respondent’s interest.
4) THAT the learned Magistrate erred in law and in fact by failing to address and consider undisputed facts including the preexistence and continuation of the Appellants contractual obligations with the 1st Defendant and continued legal and lawful occupation of the suit properties handed over to the Appellants by the 1st Defendant in part completion.
5) THAT the learned Magistrate erred in law and in fact by misapplying the principles governing the grant of interlocutory injunctions, resulting in an unjust decision to deny the Plaintiffs the injunction sought.
The Appellants sought the following orders from the court:
a. The ruling of the Hon Burudi Josephat Kalo made on 4th December, 2024 in CM MC ELC E181 of 2023 be set aside by this Honourable Court and substituted with an order granting temporary injunction to restrain the Defendants either by themselves, officers, agents, employees, assigns or any person acting on their behalf from disposing of, leasing, renting, or in any manner whatsoever dealing with or interfering with the Plaintiffs’ use, ownership and quiet occupation of all the property known as Sub-Division 914/IV/MN; pending hearing and determination of the trial suit. (sic)
b. The Appellant’s appeal herein be allowed with costs.
c. Such and any other orders as this Honourable Court may deem just and expedient.
The Appellants had sued the Respondents in the lower court vide Plaint dated 16th October, 2023 seeking the following orders:
a. A declaration that the 1st Defendant is in breach of the various agreements for sale.
b. An order of Rectification do issue against the 1st Defendant to register and issue the Plaintiffs with 99-year subleases a sublease over their various units on the suit property.
c. A permanent injunction against the 1st and 2nd Defendants, either by themselves, agents, servants, principals and/or employees and/or any person acting under their instructions from interfering with the Suit property in any manner whatsoever.
d. In default of (b) above, the Registrar of Lands Mombasa be ordered to register a sublease in favor of the Plaintiffs against the suit property and dispense with original documents.
e. Costs of this suit.
The trial court in it’s ruling dated 4th December, 2024 pronounced as follows:
“That the land is charged in favour of the 2nd defendant for financial accommodation advanced to the 1st defendant is not denied. The Plaintiff cannot have greater rights in the property than a secured creditor. They cannot be said to have a prima facie case. The court finds and holds that the Plaintiff’s Notice of Motion application dated 16th October, 2023 lacks merit. The same is dismissed with costs to the Defendants.”
APPELLANTS SUBMISSIONS
Counsel for the Appellants filed submissions dated 1st April, 2026 and identified the following issues for determination:
a. Whether the trial court erred in failing to recognize the existence of a constructive trust?
b. Whether the court failed to appreciate the Appellants’ equitable interest?
c. Whether the court ignored the doctrine of lis pendens?
d. Whether the court failed to apply principles governing interlocutory injunctions?
e. Whether relevant undisputed facts and occupation were disregarded?
On the first issue, counsel submitted that the Appellants demonstrated purchase, payment and possession sufficient to establish trust obligations. Reliance was placed on the following cases: Arvind Shah & others vs Mombasa Bricks & Tiles Limited & others Petition No 18 (E020) of 2022 and Willy Kimutai Kitilit vs Michael Kibet [2018] eKLR. On the second issue, counsel submitted that the Appellants had purchase agreements, possession and part performance which the trial court failed to uphold. Counsel relied on the case of Macharia Mwangi Maina & 87 others vs Davidson Mwangi Kagiri [2014] eKLR.
On the third issue, counsel submitted that the trial court ignored the doctrine of lis pendens despite the dispute being active. Reliance was placed on the case of Naftali Ruthi Kinyua vs Patrick Thuita Gachure & Another [2015] eKLR. On the fourth issue, counsel submitted that the magistrate misapplied the principles in Giella vs Cassman Brown [1973] EA 358 despite the appellants satisfying the same. Counsel also relied on the case of Nguruman Ltd vs Jan Bonde Nielsen [2014] eKLR.
On the fifth issue, counsel submitted that the court ignored undisputed facts including lawful occupation by the Appellants, purchases preceding the 2nd Respondent’s interest, ongoing contractual obligations and possession. Reliance was placed on the case of Mbuthia vs Jimba Credit Finance Corporation [1988] eKLR. Counsel urged the court to allow the Appeal as prayed.
2ND RESPONDENT’S SUBMISSIONS
Counsel for the 2nd Respondent filed submissions dated 19th April, 2026 and identified the following issues for determination:
a. Whether the trial court erred in finding that the Appellant had not established a prima facie case?
b. Whether the trial court failed to recognize a constructive trust, the Appellants’ alleged equitable interest and the doctrine of lis pendens?
c. Whether the trial court misapplied the principles governing interlocutory injunctions?
On the first issue, counsel submitted that the trial court correctly found that no prima facie case was established by the Appellants as the sale agreements presented before the Honourable Court were invalid and unenforceable as they were not fully executed and did not meet the mandatory requirements of Section 3 (3) of the Law of Contract Act. Counsel relied on Section 26 (1) of the Land Registration Act and the following cases: Nguruman Limited vs Jan Bonde Nielsen & 2 others [2014], Rainald Schumacher vs Aubrey Garth Minsely (2008), eKLR, Patrick Tarzan Matu & another vs Nassim Sharrif Nassir Abdulla & 2 others (2009) eKLR, Laikipia Mifugo Ranching Co Ltd vs Nanyuki Ranching Ltd (2007) eKLR, John Michael Wanjao vs Alubala Abonayo Andambi (2011), Co-operative Bank of Kenya Ltd vs Patrick Kan’ethe Njuguna & 5 others [2021] eKLR and Pius Kimaiyo Langat vs Co-operative Bank of Kenya Ltd [2022] eKLR.
On the second issue, counsel submitted that a constructive trust must be pleaded and proved and it cannot arise where the underlying transaction is statutorily non-compliant and there is no valid contract. Counsel submitted that lis-pendens does not operate to invalidate transactions involving innocent third parties acting without notice.
Counsel submitted that the 2nd Respondent conducted an official search at the Land Registry confirming that the 2nd Respondent as the registered proprietor and found no encumbrances on the said property hence satisfying the threshold of a bona fide charge for value without notice. Counsel relied on Section 28 of the Land Registration Act and the following cases: Josephat Kiprono Kitur vs National Bank of Kenya Ltd [2021] eKLR, Housing Finance Company of Kenya Ltd vs Scholastica Nyaguthii Muturi [2021] eKLR and Naftali Ruthi Kinyua vs Patrick Thuita Gachure & another [2021] eKLR.
On the third issue, counsel submitted that the trial court properly applied the principles laid down in Giella vs Cassman Brown. Counsel asked the court to dismiss the Appeal with costs.
ANALYSIS AND DETERMINATION
The issue for determination is whether the appeal is merited. The trial court considered whether the appellants were entitled to a temporary injunction order against the Respondents in dealing with the property known as subdivision 914/IV/MN pending the hearing and determination of the suit.
The trial court found that the Appellant’s had not established a prima facie case as the land was charged in favour of the 2nd Respondent herein for financial accommodation advanced to the 1st Respondent herein which was not denied. The trial court found that the Appellants cannot have greater rights in the property than a secured creditor and they cannot be said to have a prima facie case.
A party seeking temporary injunction orders must establish that he/she has a prima facie case with a probability of success, must show that he/she will suffer irreparable loss which would not adequately be compensated by an award of damages, if the order is not granted and if the court is in doubt it will decide the application on a balance of convenience. If an applicant meets this threshold, then the court will grant the order to preserve the substratum of the case pending the hearing and determination of the suit. In Rockland Kenya Limited v Elliot White Miller [1994] eKLR, the court held as follows:
“The object of an interlocutory injunction is to protect the Plaintiff against injury by violation of his legal right for which he could not be adequately compensated in damages recoverable in the action if the matters in dispute were resolved in his favour at the trial. However, his need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal right for which he could not be adequately compensated under the Plaintiff’s undertaking in damages if the subject-matter of the trial was decided in his favour. It is a remedy that is both temporary and discretionary. In cases where the legal rights of the parties depend on facts that are in dispute between them, the evidence available to the Court at the hearing of the application for an interlocutory injunction is given on affidavit and is therefore incomplete as it has not been tested by oral cross-examination. At that stage therefore, it is not the function of the Court to attempt to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. Such matters are to be dealt with at the trial. Nonetheless, the Court must in the exercise of its discretionary power in this regard be satisfied that the claim in respect of which an interlocutory injunction is sought is neither frivolous nor vexatious: in other words, that there is a serious question to be tried.”
This court has looked at the 1st Appellant’s affidavit sworn on 16th October, 2023 in support of the Amended Notice of Motion application dated 6th February 2024. The 1st Appellant contends as follows at paragraphs 10 and 11:
10. THAT from the Survey report I conducted a search on the Premises on which I reside on and discovered that the 1st Defendant had charged the property to the 2nd Defendant to secure a loan of Kes 11,000,000 vide a charge dated 26th April, 2023.
11. THAT I swear this affidavit to confirm that none of the Plaintiffs including myself gave consent of had their consent sought to charge the Suit Property to any person, neither have we relinquished our rights to the said Suit property.
It is a fact that the suit property is charged and it is contended that the Appellant’s had no knowledge of the same. The Appellants are thus questioning the legality of the charge and whether the 1st Respondent had a right to charge the property. This court finds that the Appellants established a prima facie case.
On showing irreparable loss which would not adequately be compensated by an award of damages, the 1st Appellant deponed that there is a high possibility that the Appellants interest in the suit property may be defeated should the 2nd Respondent move to enforce the charge and realize the security by selling the suit property. The Appellant deponed that their families would be rendered homeless should the suit property be disposed. This court finds that the Appellants are entitled to a temporary injunction order and the Appeal has merit. I therefore issue the following orders:
a. The ruling of the Hon Burudi Josephat Kalo made on 4th December, 2024 in CM MC ELC E181 of 2023 is hereby set aside.
b. An order of temporary injunction is hereby issued restraining the Respondents either by themselves, officers, agents, employees, assigns or any person acting on their behalf from disposing of, leasing, renting, or in any manner whatsoever dealing with or interfering with the Appellants use, ownership and quiet occupation of all the property known as Sub-Division 914/IV/MN; pending hearing and determination of the trial suit.
c. The Appellant’s appeal is hereby allowed with costs.
1) THAT the learned magistrate erred in law and fact by failing to take into consideration the Appellants argument that a constructive trust had been formed between them and the 1st Respondent and in doing so entirely disregarded the Supreme Court decision in Arvind Shah & 7 others vs Mombasa Bricks & Tiles Limited, Petition No 18 (020) of 2022 vide a Judgment delivered by the Supreme Court on 28th December, 2023.
2) THAT the learned magistrate erred in law and in fact by failing to recognize the Plaintiff’s equitable interest in the suit property and declaring himself in finality stating ‘That the Plaintiffs cannot have greater rights in the property than a secured creditor’; consequently, ignoring the doctrine of lis pendens and determining the whole suit and prejudicing the Appellants right to fair hearing and trial.
3) THAT the learned magistrate erred in law by failing to engage with and making findings on 2 other and yet not lesser principles of ‘irreparable harm’ and ‘balance of probability’ in making his determination considering that it is undisputed that the Plaintiffs have occupied the suit property from the time of their individual purchases prior to accrual of the 2nd Respondent’s interest.
4) THAT the learned Magistrate erred in law and in fact by failing to address and consider undisputed facts including the preexistence and continuation of the Appellants contractual obligations with the 1st Defendant and continued legal and lawful occupation of the suit properties handed over to the Appellants by the 1st Defendant in part completion.
5) THAT the learned Magistrate erred in law and in fact by misapplying the principles governing the grant of interlocutory injunctions, resulting in an unjust decision to deny the Plaintiffs the injunction sought.
The Appellants sought the following orders from the court:
a. The ruling of the Hon Burudi Josephat Kalo made on 4th December, 2024 in CM MC ELC E181 of 2023 be set aside by this Honourable Court and substituted with an order granting temporary injunction to restrain the Defendants either by themselves, officers, agents, employees, assigns or any person acting on their behalf from disposing of, leasing, renting, or in any manner whatsoever dealing with or interfering with the Plaintiffs’ use, ownership and quiet occupation of all the property known as Sub-Division 914/IV/MN; pending hearing and determination of the trial suit. (sic)
b. The Appellant’s appeal herein be allowed with costs.
c. Such and any other orders as this Honourable Court may deem just and expedient.
The Appellants had sued the Respondents in the lower court vide Plaint dated 16th October, 2023 seeking the following orders:
a. A declaration that the 1st Defendant is in breach of the various agreements for sale.
b. An order of Rectification do issue against the 1st Defendant to register and issue the Plaintiffs with 99-year subleases a sublease over their various units on the suit property.
c. A permanent injunction against the 1st and 2nd Defendants, either by themselves, agents, servants, principals and/or employees and/or any person acting under their instructions from interfering with the Suit property in any manner whatsoever.
d. In default of (b) above, the Registrar of Lands Mombasa be ordered to register a sublease in favor of the Plaintiffs against the suit property and dispense with original documents.
e. Costs of this suit.
The trial court in it’s ruling dated 4th December, 2024 pronounced as follows:
“That the land is charged in favour of the 2nd defendant for financial accommodation advanced to the 1st defendant is not denied. The Plaintiff cannot have greater rights in the property than a secured creditor. They cannot be said to have a prima facie case. The court finds and holds that the Plaintiff’s Notice of Motion application dated 16th October, 2023 lacks merit. The same is dismissed with costs to the Defendants.”
APPELLANTS SUBMISSIONS
Counsel for the Appellants filed submissions dated 1st April, 2026 and identified the following issues for determination:
a. Whether the trial court erred in failing to recognize the existence of a constructive trust?
b. Whether the court failed to appreciate the Appellants’ equitable interest?
c. Whether the court ignored the doctrine of lis pendens?
d. Whether the court failed to apply principles governing interlocutory injunctions?
e. Whether relevant undisputed facts and occupation were disregarded?
On the first issue, counsel submitted that the Appellants demonstrated purchase, payment and possession sufficient to establish trust obligations. Reliance was placed on the following cases: Arvind Shah & others vs Mombasa Bricks & Tiles Limited & others Petition No 18 (E020) of 2022 and Willy Kimutai Kitilit vs Michael Kibet [2018] eKLR. On the second issue, counsel submitted that the Appellants had purchase agreements, possession and part performance which the trial court failed to uphold. Counsel relied on the case of Macharia Mwangi Maina & 87 others vs Davidson Mwangi Kagiri [2014] eKLR.
On the third issue, counsel submitted that the trial court ignored the doctrine of lis pendens despite the dispute being active. Reliance was placed on the case of Naftali Ruthi Kinyua vs Patrick Thuita Gachure & Another [2015] eKLR. On the fourth issue, counsel submitted that the magistrate misapplied the principles in Giella vs Cassman Brown [1973] EA 358 despite the appellants satisfying the same. Counsel also relied on the case of Nguruman Ltd vs Jan Bonde Nielsen [2014] eKLR.
On the fifth issue, counsel submitted that the court ignored undisputed facts including lawful occupation by the Appellants, purchases preceding the 2nd Respondent’s interest, ongoing contractual obligations and possession. Reliance was placed on the case of Mbuthia vs Jimba Credit Finance Corporation [1988] eKLR. Counsel urged the court to allow the Appeal as prayed.
2ND RESPONDENT’S SUBMISSIONS
Counsel for the 2nd Respondent filed submissions dated 19th April, 2026 and identified the following issues for determination:
a. Whether the trial court erred in finding that the Appellant had not established a prima facie case?
b. Whether the trial court failed to recognize a constructive trust, the Appellants’ alleged equitable interest and the doctrine of lis pendens?
c. Whether the trial court misapplied the principles governing interlocutory injunctions?
On the first issue, counsel submitted that the trial court correctly found that no prima facie case was established by the Appellants as the sale agreements presented before the Honourable Court were invalid and unenforceable as they were not fully executed and did not meet the mandatory requirements of Section 3 (3) of the Law of Contract Act. Counsel relied on Section 26 (1) of the Land Registration Act and the following cases: Nguruman Limited vs Jan Bonde Nielsen & 2 others [2014], Rainald Schumacher vs Aubrey Garth Minsely (2008), eKLR, Patrick Tarzan Matu & another vs Nassim Sharrif Nassir Abdulla & 2 others (2009) eKLR, Laikipia Mifugo Ranching Co Ltd vs Nanyuki Ranching Ltd (2007) eKLR, John Michael Wanjao vs Alubala Abonayo Andambi (2011), Co-operative Bank of Kenya Ltd vs Patrick Kan’ethe Njuguna & 5 others [2021] eKLR and Pius Kimaiyo Langat vs Co-operative Bank of Kenya Ltd [2022] eKLR.
On the second issue, counsel submitted that a constructive trust must be pleaded and proved and it cannot arise where the underlying transaction is statutorily non-compliant and there is no valid contract. Counsel submitted that lis-pendens does not operate to invalidate transactions involving innocent third parties acting without notice.
Counsel submitted that the 2nd Respondent conducted an official search at the Land Registry confirming that the 2nd Respondent as the registered proprietor and found no encumbrances on the said property hence satisfying the threshold of a bona fide charge for value without notice. Counsel relied on Section 28 of the Land Registration Act and the following cases: Josephat Kiprono Kitur vs National Bank of Kenya Ltd [2021] eKLR, Housing Finance Company of Kenya Ltd vs Scholastica Nyaguthii Muturi [2021] eKLR and Naftali Ruthi Kinyua vs Patrick Thuita Gachure & another [2021] eKLR.
On the third issue, counsel submitted that the trial court properly applied the principles laid down in Giella vs Cassman Brown. Counsel asked the court to dismiss the Appeal with costs.
ANALYSIS AND DETERMINATION
The issue for determination is whether the appeal is merited. The trial court considered whether the appellants were entitled to a temporary injunction order against the Respondents in dealing with the property known as subdivision 914/IV/MN pending the hearing and determination of the suit.
The trial court found that the Appellant’s had not established a prima facie case as the land was charged in favour of the 2nd Respondent herein for financial accommodation advanced to the 1st Respondent herein which was not denied. The trial court found that the Appellants cannot have greater rights in the property than a secured creditor and they cannot be said to have a prima facie case.
A party seeking temporary injunction orders must establish that he/she has a prima facie case with a probability of success, must show that he/she will suffer irreparable loss which would not adequately be compensated by an award of damages, if the order is not granted and if the court is in doubt it will decide the application on a balance of convenience. If an applicant meets this threshold, then the court will grant the order to preserve the substratum of the case pending the hearing and determination of the suit. In Rockland Kenya Limited v Elliot White Miller [1994] eKLR, the court held as follows:
“The object of an interlocutory injunction is to protect the Plaintiff against injury by violation of his legal right for which he could not be adequately compensated in damages recoverable in the action if the matters in dispute were resolved in his favour at the trial. However, his need for such protection must be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his own legal right for which he could not be adequately compensated under the Plaintiff’s undertaking in damages if the subject-matter of the trial was decided in his favour. It is a remedy that is both temporary and discretionary. In cases where the legal rights of the parties depend on facts that are in dispute between them, the evidence available to the Court at the hearing of the application for an interlocutory injunction is given on affidavit and is therefore incomplete as it has not been tested by oral cross-examination. At that stage therefore, it is not the function of the Court to attempt to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. Such matters are to be dealt with at the trial. Nonetheless, the Court must in the exercise of its discretionary power in this regard be satisfied that the claim in respect of which an interlocutory injunction is sought is neither frivolous nor vexatious: in other words, that there is a serious question to be tried.”
This court has looked at the 1st Appellant’s affidavit sworn on 16th October, 2023 in support of the Amended Notice of Motion application dated 6th February 2024. The 1st Appellant contends as follows at paragraphs 10 and 11:
10. THAT from the Survey report I conducted a search on the Premises on which I reside on and discovered that the 1st Defendant had charged the property to the 2nd Defendant to secure a loan of Kes 11,000,000 vide a charge dated 26th April, 2023.
11. THAT I swear this affidavit to confirm that none of the Plaintiffs including myself gave consent of had their consent sought to charge the Suit Property to any person, neither have we relinquished our rights to the said Suit property.
It is a fact that the suit property is charged and it is contended that the Appellant’s had no knowledge of the same. The Appellants are thus questioning the legality of the charge and whether the 1st Respondent had a right to charge the property. This court finds that the Appellants established a prima facie case.
On showing irreparable loss which would not adequately be compensated by an award of damages, the 1st Appellant deponed that there is a high possibility that the Appellants interest in the suit property may be defeated should the 2nd Respondent move to enforce the charge and realize the security by selling the suit property. The Appellant deponed that their families would be rendered homeless should the suit property be disposed. This court finds that the Appellants are entitled to a temporary injunction order and the Appeal has merit. I therefore issue the following orders:
a. The ruling of the Hon Burudi Josephat Kalo made on 4th December, 2024 in CM MC ELC E181 of 2023 is hereby set aside.
b. An order of temporary injunction is hereby issued restraining the Respondents either by themselves, officers, agents, employees, assigns or any person acting on their behalf from disposing of, leasing, renting, or in any manner whatsoever dealing with or interfering with the Appellants use, ownership and quiet occupation of all the property known as Sub-Division 914/IV/MN; pending hearing and determination of the trial suit.
c. The Appellant’s appeal is hereby allowed with costs.