[2017] KEELC 3388 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT

AT ELDORET

E&L 117 OF 2016

BONFACE RENJA ERAMBO T/A WESTPORT MOTORS...........PLAINTIFF

VERSUS

COMMERCIAL BANK OF AFRICA..................................1ST DEFENDANT

RAFIKI MICRO FINANCE BANK.....................................2ND DEFENDANT

RULING

INTRODUCTION

This is an application for a temporary injunction which is made by way of a Notice of Motion dated 9th February, 2017. It is supported by an affidavit sworn on the same date by BONIFACE RENJA ERAMBO the Plaintiff/Applicant herein. The application seeks the following orders:

a. THAT an interim injunction be and is hereby issued stopping, preventing and/or restraining the 1st defendant/respondent from advertising for sale, auctioning, selling, disposing off, transferring ownership, alienating and/or interfering with the parcel of land described as ELDORET MUNICIPALITY/BLOCK 21 (KING’ONG’O)/1753 and/or the permanent structures therein pending the hearing inter- partes of this application.

b. THAT an injunctive order be and is hereby issued stopping, preventing and/or restraining the 1st defendant/respondent from advertising for sale, auctioning, selling, disposing off, transferring ownership, alienating and/or interfering with the parcel of land described as ELDORET MUNICIPALITY/BLOCK 21(KING’ONG’O)1753 and/or the permanent structures therein thereafter the interpartes hearing and determination of this application and the hearing and determination of this suit.

c. In the alternative and without prejudice to (b) above, the court be pleased to order the 1st defendant/respondent to restructure the plaintiff’s/applicant’s loan repayment schedule and/or duration or accord the plaintiff/applicant sufficient and/or reasonable time with which to repay the outstanding loan sum.

d. Costs of this application be provided for.

The application is supported by the grounds that were filed on 9th February, 2017. This matter was brought to court under certificate of urgency on 14th February, 2017 whereby the Court certified the same as urgent and order the Plaintiff/applicant herein to serve the application for inter parte hearing on 1st March, 2017.

On 1st March, 2017 when the matter came up for hearing, Miss Cheso, Counsel for the 2nd defendant requested that they be excused from responding to the application, as it is not against the 2nd defendant. She stated that they would be filing an application to be removed from the suit.

Mr. Kagunza, Counsel for the Plaintiff/applicant stated that he was ready to proceed and confirmed that the application had been served as per the affidavit of service filed in court on 1st March, 2017. He prayed that the application be allowed as there was no response from the defendant.

The Court ordered that Counsel files written submissions within 3 days. Submissions were filed on 9th March, 2017.

PLAINTIFF’S COUNSEL’S SUBMISSIONS

Counsel for the Plaintiff submitted that it is clear from the pleadings, and supporting documentation that the Plaintiff entered into a formal contract with the 1st defendant/respondent for the purposes of seeking financial accommodation from the 1st defendant in the nature of a loan facility.

He further submitted that it is not in dispute that pursuant to the contract, the 1st defendant perfected a legal charge over the suit property being security for the advancement. The applicant stated that he made considerable payments towards the settlement of the loan in accordance with the terms of reference. The applicant also averred that his business experienced protracted financial difficulties in 2015 prompting him to seek for financial accommodation from the 2nd defendant.

Counsel submitted that the Plaintiff with the formal authority and/or consent of the 1st defendant contracted the 2nd defendant who offered to advance to the plaintiff a loan facility to the tune of Kshs 20,000,000/- to take over the liability upon release of the funds to settle the entire outstanding loan facility between the plaintiff and the 1st defendant.

The Plaintiff/applicant’s Counsel also submitted that it is evident from the material on the court record that the 1st defendant accepted and/or acceded to the terms and conditions of the takeover and in accordance with the requisite professional undertakings that were executed between the contracting parties.

Counsel further submitted that mid-stream and without notice, explanation and/or justifiable cause, the 1st defendant refused and/or declined to honour its professional undertakings thereby frustrating the contract.

The Plaintiff/Applicant’s counsel went on to submit that after the arbitrary action(s) by the 1st defendant, the 1st defendant immediately proceeded to unvoke its statutory power of sale and issued a statutory notice demanding the settlement of the entire outstanding loan amount.

Counsel stated that the Plaintiff/applicant has a prima facie case with high chances of success and in case the court is in doubt then the balance of convenience should tilt in favour of the plaintiff.

He urged the Court to allow the application.

ISSUES AND DETERMINATION

Has the plaintiff established a prima facie case with the probability of success as was submitted by Counsel?

Is an award of damages adequate remedy? and lastly if in doubt, where does the balance of convenience lie?

These are the traditional principles to be considered when granting injunctions. Article 159 of the Constitution of Kenya read together with the overriding objective as provided for under Sections 1A &1B of the Civil Procedure Rules requires the court to serve substantive justice by interpreting the law in a much wider manner in order to act justly. This argument does not mean that the Court re-invents the wheel but must ensure that the principles are not applied in a restrictive manner which can lead to injustice.

In the case of Suleiman -vs- Amboseli Resourt Ltd (2004) Eklr 589 Ojwang J (as he then was) stated;

“A fundamental principle is that the court should take whichever course that appears to carry the lower risk of injustice if it should turn out to have been “wrong”

My task in this application is simple as the plaintiff’s application has not been controverted by the defendant, the 2nd defendant asked to be excused from responding to this application as it does not concern them.

At this interim stage, I have considered the Plaintiff’s application together with the supporting affidavit, annexures and submission by Counsel. I have also considered the relevant applicable law for granting temporary injunctions.

The Plaintiff admits that he was offered a loan facility by the 1st defendant, it is not denied that he has not paid the outstanding amount. It is further not in dispute that the Plaintiff has the intent of repaying the outstanding loan facility as stated in his pleadings.

The Court notes that the plaintiff annexed in his supporting affidavit documents in respect of communication between him and the 1st and 2nd defendant on the loan facility that the 2nd defendant was to offer and take over the outstanding debt. The 1st defendant was served with the application but did not file any documents to deny or controvert these assertions. The fact that an application for injunction is not defended or opposed does not guarantee the granting of the order. The court will look at the pleadings and the supporting documentation to arrive at an appropriate conclusion depending on the facts of the case before it.

The Plaintiff/applicant has admitted that he has been repaying the loan until he run into financial difficulties which necessitated his negotiation with the 2nd defendant to take over the outstanding loan form the 1st defendant. This is in itself a good sign to show his willingness to repay the loan.

In the absence of any evidence to the contrary, I find that the plaintiff has established a prima facie case with a probability of success.

Interim injunctions are equitable remedies in which the court must exercise its judicial discretion. The grant of an interlocutory injunction does not pre-empt the outcome of the main suit. It is for the preservation of the suit premises until the matter is heard and determined.

If the Court was in doubt, then the balance of convenience would still tilt in favour of the plaintiff/applicant as per the evidence presented before this court.

The plaintiff had also sought for an order for restructuring the repayment of the loan. I find that the Court cannot grant this order at an interim stage and it is therefore not allowed.

Consequently from the above analysis, the plaintiff’s application dated 9th February, 2017 succeeds only to the extent of the injunctive order herein.

(b) The prayer for restructuring the re payment of the outstanding loan is denied.

(c) Costs of this application be in the cause.

(d) Parties to comply with pre-trial procedures within 30 days and fix the matter for hearing of the main suit.

Dated and delivered at Eldoret on this 16th day of March, 2017.

M.A ODENY

JUDGE