[2022] KEHC 9878 (KLR)

Makinya v Zhong & another (Civil Appeal E056 of 2020) [2022] KEHC 9878 (KLR) (Commercial and Tax) (8 July 2022) (Judgment)

Neutral citation: [2022] KEHC 9878 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Law Courts)

Commercial and Tax

Civil Appeal E056 of 2020

DAS Majanja, J

July 8, 2022

Between

Julius Musyoki Makinya

Appellant

and

Weiguo Zhong

1st Respondent

Sleek Trading Limited

2nd Respondent

(Being an appeal from the Ruling and Order of Hon. P. MuKholi, SRM dated 30th September 2020 at the Magistrates Court at Nairobi, Milimani in Civil Case No. 2315 of 2020)

Judgment

1. The Appellant appeals against the ruling of the Subordinate Court allowing the 1st Respondent’s application for an interlocutory injunction restraining the Appellant and 2nd Respondent from selling or otherwise dealing with motor vehicle registration number KCW 920M (“the Motor Vehicle’’) pending the hearing and determination of the suit.

2. By way of context, the 1st Respondent sued the Appellant and 2nd Respondent by the Plaint dated 18th June 2020. His case is that on 8th November 2018, he decided to purchase the Motor Vehicle from the Appellant through the 2nd Respondent for an agreed price of KES. 1,200,000. 00 which was to be deposited in the 2nd Respondent’s account. He paid a deposit of KES. 400,000. 00 and KES 49,500. 00 for insurance. He agreed to pay the balance in installments. At the time of filing suit, he states that he had already paid KES. 750,000. 00 to the 2nd Respondent’s account. The gravamen of the 1st Respondent’s case was that the Appellant repossessed the Motor Vehicle without any justification as the parties agreed that he would not make any payments in the month of May 2020 due to the COVID 19 situation and attendant financial hardships. He also accuses the Appellant of disappearing with 40 thermometers worth KES. 200,000. 00 and colluding with the 2nd Appellant in defrauding him. He states he is ready and willing to continue to paying the remaining installments. In the plaint, the 1st Respondent seeks, ‘’An order declaring the plaintiff as the legal owner of the Motor Vehicle Registration Number KCW 920M.’’

3. It is on the basis of the facts outlined in the plaint, that the 1st Respondent filed a Notice of Motion dated 18th June 2020 made, inter alia, under Order 40 rule 1, 2 and 3 of the Civil Procedure Rules seeking a raft of orders including a temporary injunction restraining the Appellant and the 2nd Respondent from interfering in any way with the Motor Vehicle. The application was supported by the 1st Respondent’s affidavit sworn on the same date. The Appellant opposed the application through his affidavit sworn on 14th July 2020 and the 2nd Respondent through the replying affidavit of its director, Sarmad Asif, sworn on 29th June 2020. The parties filed written submissions in support of their respective positions.

4. The Appellant denied the 1st Respondent’s allegations and asserted that the Motor Vehicle belonged to him. He stated that he knew the 1st Respondent when he was an Uber taxi driver and was subsequently employed by him and in that regard, he approached the 2nd Respondent to purchase the Motor Vehicle which would be used to provide services exclusively to the 1st Respondent. He entered into an agreement with the 2nd Respondent to purchase the Motor Vehicle for KES. 1,200,000. 00. He paid the deposit of KES. 400,000. 00 together with insurance and agreed to pay the balance of KES. 800,000. 00 within three months. He further stated that on 14th February 2020, he paid KES 350,000. 00 to the 2nd Respondent being the second instalment of the purchase price. In order to support his case, the Appellant stated that after he was involved in a road traffic accident on 22nd February 2020, he met the cost of repair personally. He also states that the Motor Vehicle was insured under his name by GA Insurance Company Limited. The Appellant states that when the 1st Respondent failed to pay him, he returned the Motor Vehicle to the 2nd Respondent and traded it in for another motor vehicle.

5. The thrust of the Appellant’s case before the Subordinate Court and this court is that the 1st Respondent did not have capacity to agitate the suit as he did not purchase the Motor Vehicle and was not party to the agreement between him and the 2nd Respondent. He submits that the Appellant did not have any proprietary rights in the Motor Vehicle and that since he returned it to the 2nd Respondent, the court could not issue an injunction against him.

6. The 2nd Respondent supported the position taken by the Appellant. It confirmed that the Appellant purchased the Motor Vehicle and when he defaulted in paying instalments in June 2020, they agreed that the Appellant would return the Motor Vehicle and the trade it for another vehicle worth KES. 833,000. 00 and that the deposit of KES. 600,000. 00 would be credited to him leaving a balance of KES. 283,000. 00 to paid over a period of six months. The 2nd Respondent states that by the time he was served with the court process, the Appellant has already returned the Motor Vehicle. It maintains that the 1st Respondent is a stranger to it as it only dealt with the Appellant.

7. After paying homage to the case of Giella v Cassman Brown [1973] EA 358, the trial magistrate stated that the documents produced show that the Appellant was the purchaser however on the basis of payments being made from a different MPESA account, it was probable that the 1st Respondent had an interest in the Motor Vehicle which would need to be ascertained and that is why that interest ought to be protected by an injunction. The court concluded that it would serve the best interests of all the parties to safeguard the interests of the parties by issuing the injunction that is now subject of this appeal.

8. This appeal was canvassed by brief oral submissions. I heard counsel for the Appellant and 2nd Respondent who also supported the appeal. The 1st Respondent was not represented. I have also considered submissions filed before the Subordinate Court by the parties.

9. Although the Memorandum of Appeal raises several grounds, they can be condensed into a singular issue; whether the learned trial magistrate erred in law and in fact in granting the injunction. The Appellant’s case is that the trial magistrate failed to appreciate and apply the principles for the grant of an injunction established in Giella v Cassman Brown (Supra).

10. Under the principles established in Giella v Cassman Brown (Supra), in order to succeed in an application for injunction, an applicant must demonstrate that it has a prima facie case with a probability of success, demonstrate irreparable injury which cannot be compensated by an award of damages if a temporary injunction is not granted, and if the court is in doubt, show that the balance of convenience is in its favour. In Nguruman Limited v Jane Bonde Nielsen and 2 others NRB CA Civil Appeal No. 77 of 2012 [2014] eKLR, the Court of Appeal reiterated the three conditions to be fulfilled before an interim injunction and clarified that they are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. This means that if an applicant does not establish a prima facie case then irreparable injury and balance of convenience do not require consideration. On the other hand, if a prima facie case is established, then the court will consider the other conditions. The court further stated that in deciding whether there is a prima facie case, the court need not conduct a mini-trial but need only be satisfied on a prima facie basis that the applicant rights will be violated if an injunction is not issued. In Mrao Ltd v First American Bank of Kenya Limited and 2 others MSA CA Civil Appeal No. 39 of 2002 [2003] eKLR, the Court of Appeal explained that 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.”

11. In order to succeed in establishing prima facie case with a probability of success, the 1st Respondent had to establish that it purchased the Motor Vehicle from the 2nd Respondent by producing a sale agreement. Under section 6 of the Sale of Goods Act (Chapter 31 of the Laws of Kenya), a contract for the sale of goods whose value is over KES. 200. 00 must be evidenced in writing. The 1st Respondent did not produce any sale agreement to support his case. The trial magistrate accepted the position taken by the Appellant and 2nd Respondent by stating that the documents show, on a prima facie, basis that the Appellant was the purchaser. In the absence of any agreement between the Appellant and the 2nd Respondent, he could not establish a prima facie case with a probability of success. The 2nd Respondent was categorical that he did not sell the Motor Vehicle to the 1st Respondent and that it was in fact returned by the Appellant who traded it in for another motor vehicle.

12. Having concluded that the documents show the Appellant and not the 1st Respondent as the purchaser of the Motor Vehicle, the court could not issue an injunction. In light of the dicta in Nguruman Limited v Jane Bonde Nielsen and 2 Others (Supra), no further inquiry on the matter was necessary as the 1st Respondent failed to surmount the first hurdle of the three-part stage. Further, the trial magistrate did not consider that the 1st Respondent did not have any legal relationship with the 2nd Respondent and did not have a proprietary interest in the Motor Vehicle.

13. As this is an appeal against the exercise of discretion by the trial court, the court’s approach to the exercise of its appellate jurisdiction is constrained. In Mbogo v Shah [1968] EA 93, Newbold P., expressed the nature and extent of the appellate court’s jurisdiction to interfere with the discretion of the lower court as follows;A court of appeal should not interfere with the exercise of the discretion of a judge unless it is satisfied that the judge in exercising his discretion has misdirected himself in some matter and as a result has arrived at a wrong decision, or unless it is manifest from the case as a whole that the judge has been clearly wrong in the exercise of his discretion and that as a result there has been misjustice.

14. Having considered the decision of the trial court and I hold the trial magistrate misdirected himself on the application of the principles governing interlocutory injunctions, failed to take into account material facts and consequently came to the wrong decision.

15. I therefore allow the Appellant’s appeal and order as follows:a.The order made on 30th September 2020 be and is hereby set aside and substituted with an order that the 1st Respondent’s application dated 18th June 2020 be and is hereby dismissed.b.The 1st Respondent shall pay the costs of the application and this appeal assessed at KES. 25,000. 00 each to the Appellant and 2nd Respondent.

DATED AND DELIVERED AT NAIROBI THIS 8TH DAY OF JULY 2022. D. S. MAJANJAJUDGECourt Assistant: Mr M. Onyango.Mr Kitonyi instructed by MMW Advocates LLP for the Appellant.Mr Ochola instructed by E. O. Wameyo and Company Advocates for the 1st Respondent.