[2016] KEHC 8697 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

COMMERCIAL AND ADMIRALTY DIVISION

CIVIL SUIT NO. 592 OF 1998

MOHAMMED BARAKA…………..……….................1ST PLAINTIFF

FRANCIS SABWA………….…..…………...............2ND PLAINTIFF

SIMON MBOGO MUCHIRI…………….……............3RD PLAINTIFF

WANJIRU NDERITU……..…………………….........4TH PLAINTIFF

LUCY MWAURA………….…..………………...…...5TH PLAINTIFF

VERSUS

JOHN NGAIRA SABWA…….…….………......…..1ST DEFENDANT

NATIONAL BANK OF KENYA LIMITED................2ND DEFENDANT

IGAINYA LIMITED....................................................3RD DEFENDANT

THE CHIEF LAND REGISTRAR, NAIROBI............4TH DEFENDANT

RULING NO. 2

1. The application dated 8th April 2016 was brought by the plaintiffs, who are seeking an interlocutory injunction to restrain the 3rd Defendant from unlawfully sub-dividing, selling, transferring or in any other way dealing with the suit property, L.R. No. 7815/8.

2. It is common ground that the 3rd Defendant, IGAINYA LIMITED, is currently the registered proprietor of the suit property.

3. IGAINYA LIMITED purchased the property at a public auction which was conducted on the instructions of the 2nd defendant, NATIONAL BANKof KENYA LIMITED.

4. National Bank sold the suit property when exercising its Statutory powers of Sale, under a Charge Instrument executed by the 1st Defendant, JOHN NGAIRA SABWA.

5. It is common ground that at the time when John Ngaira Sabwa executed the Charge Instrument in favour of National Bank, he was the sole registered proprietor of the suit property.

6. However, it is the plaintiffs case that John Sabwa had fraudulently procured the registration of the ownership of the suit land into his own name, when he was well aware that the plaintiffs had a legal interest in the ownership of the said land.

7. In effect, the plaintiffs deemed themselves as co-owners of the suit property, alongside the 1st defendant. However, the plaintiffs acknowledge that their names were not appearing on the title document for the suit property.

8. When the plaintiffs learnt that the 1st defendant was the sole registered proprietor, they filed suit against him. The said case is MOHAMED BARAKA & 4 OTHERS Vs JOHN SABWA, Hccc No. 1402 of 1998.

9. On 9th November 1998, the case came up for Formal Proof before Onyango Otieno J. (as he then was). The court records show that the parties entered a consent judgement in the following terms;

“1. THAT it is hereby declared that L.R No. 7815/8 is owned jointly by the plaintiffs and the Defendant.

2. THAT an order be and is hereby made revoking and/or counseling (sic!) the title issued in respect of Number L.R 70379 to the defendant as the sole proprietor of L.R. 7815/8.

3. THAT an order be and is hereby made for the discharge and subdivision of the said premises amongst the plaintiffs in an equitable manner.

4. THAT there be no order as to costs?.

10. Pursuant to the Order No. 3 above, the plaintiffs contend that the Charge created by the 1st Defendant, in favour of the 2nd Defendant was discharged.

11. In any event, as the 1st defendant had procured his registration as the sole proprietor of the suit property through fraud, the plaintiffs submit that the Charge in favour of the 2nd defendant was a nullity.

12. The plaintiffs further argument was that the Charge which was a nullity could not enable the 2nd defendant to pass on a good title to the 3rd defendant.

13. Finally, as the plaintiffs deem the title of the 3rd defendant to be a nullity, they ask the court to issue an order to restrain the said 3rd defendant from sub-dividing and selling-off the suit property.

14. The plaintiffs have provided photographs which show that the suit property was being sub-divided. The photos show beacons which were newly erected, together with fencing which demarcates the boundaries between various plots.

15. If the sub-division proceeded and the various plots were taken over by third parties, the plaintiffs fear that the suit property will have been lost forever, thus occasioning them to suffer irreparable loss.

16. It was for that reason that the plaintiffs asked the court to give appropriate orders to preserve the subject matter of the suit.

17. In answer to the application, the 3rd defendant filed a Replying Affidavit, through its Director, ENG. ISAAC GATHUNGU WANJOHI.

18. Eng. Wanjohi said that he visited the suit property on 24th January 2016, for purposes of a regular inspection.

19. On that particular visit, he was surprised to find that some beacons had been placed on the suit property. However, Eng. Wanjohi categorically denied the plaintiffs’ contention that it was the 3rd defendant who was sub-dividing the land and affixing beacons.

20. As proof of the 3rd defendant’s alarm at the activities on the ground, Eng. Wanjohi promptly reported the matter at the ATHI RIVER POLICE STATION. The police officers are said to have visited the suit property, and thereafter they arrested some people, who were to be arraigned in court.

21. In its submissions, the 3rd defendant pointed out that the plaintiffs had failed to demonstrate that the Land Control Board had received any application from the 3rd defendant, for consent to sub-divide the suit property.

22. Secondly, the 3rd defendant pointed out that the plaintiffs had not produced any evidence to show that the 3rd defendant had sought the approval of any relevant authority, for any sub-division plans.

23. In effect, the 3rd defendant was reinforcing its contention, that it was not involved in the sub-division, as alleged by the plaintiffs.

24. Meanwhile, the 2nd defendant filed a Replying Affidavit, through PAUL CHELANG’A, who is its Loan Recoveries Manager.

25. Essentially, the bank indicated that prior to accepting the title of the suit property as a security for the loan given to the 1st defendant, they had performed due diligence. The bank had verified that the 1st defendant was the sole registered proprietor, and that therefore there was no notice of any defect in the title.

26. Secondly, as the charge was duly registered against the title, the bank says that it became entitled to exercise its statutory powers of sale, after the 1st defendant defaulted in servicing the loan he had borrowed.

27. As far as the bank was concerned, the consent judgement recorded by the plaintiffs and the 1st defendant (in Hccc No. 1402 of 1998), was an attempt to defraud the bank, without its knowledge.

28. The bank also pointed out that it only sold the suit property after the court had dismissed the plaintiffs’ application for an injunction. Therefore, the bank reckons that it cannot be accused of any wrong-doing.

29. However, as the present application was not directed at it, the bank did not make any submissions to respond directly to it.

30. On its part, the 3rd defendant decried the delay on the plaintiffs’ part. It pointed out that this case was already 18 years old.

31. During the lifetime of the case, there was no injunction order in favour of the plaintiffs, yet the plaintiffs are said to have failed to take appropriate steps to prosecute the case.

32. In the circumstances, the 3rd defendant expressed fears that if the court were to now grant an injunction, the case was very likely to drag on for much much longer.

33. In my considered view, the fears expressed by the 3rd defendant appear plausible.

34. Secondly, I note that on 3rd August 1999, Ransley J. dismissed an application through which the plaintiffs had sought to have the bank restrained from exercising its statutory power of sale. In effect, the 3rd defendant appears, on a prima facie basis, to have acquired its title from an auction which was sanctioned by the bank.

35. But it is also true that the present application is in relation to matters that have taken place subsequent to the sale of the suit property. In other words, the fact that the court declined to stop the auction, cannot, of itself, be a bar to the plaintiffs seeking orders to restrain the purchaser from alienating the suit property.

36. However, the question is whether or not the plaintiffs have made out a prima facie case with a probability of success?

37. On the strength of the concession by the 1st defendant, that the plaintiffs were joint owners, with him, it implies that when the 1st defendant charged the property to the bank, he knew that he was wrong.

38. However, it would appear, on a prima facie basis, that the bank did not have notice of any defect on the title. Therefore, it does appear that the 3rd defendant may have been a purchaser for value, without notice. That would imply that the said 3rd defendant ought not to be limited on the use which it may wish to put the property to.

39. But the plaintiffs and the 3rd defendant appear to be on the verge of losing the property to persons who were now sub-dividing it. If the said persons were not stopped, the subject matter of the suit would be beyond the reach of the parties, by the time the suit is determined.

40. Therefore, it is imperative that all sub-divisions, sale, alienation and any steps which may encumber the title of the suit property be stopped until the suit is heard and determined.

41. I wish to make it clear that this is not an order of an injunction directed at the 3rd defendant. There is no legal basis for granting such relief.

42. The order I have issued is of a conservatory nature, to preserve the suit property. Therefore, any person who was sub-dividing the property or affixing beacons on the property is ordered to stop forthwith, and to refrain from any such action until the suit is heard and determined.

43. This order shall therefore be served upon the property, the local administration and the police, to ensure that the subject matter of the suit remains intact.

44. Finally, the parties are directed to comply with all pre-trial procedures within the next 30 days, so that the main suit may now proceed to substantive trial.

45. The plaintiffs will pay to the 3rd defendant, the costs of the application dated 8th April 2016: That is because the application was unsuccessful.

DATED, SIGNED and DELIVERED at NAIROBI this3rd day of November2016.

FRED A. OCHIENG

JUDGE

Ruling read in open court in the presence of

Okonyo for Guserwa for the 1st Plaintiff

Mwiti for Kingera for the 2nd Plaintiff

Mwiti for Kingera for the 3rd Plaintiff

Mwiti for Kingera for the 4th Plaintiff

No appearance for the 1st Defendant

No appearance for the 2nd Defendant

No appearance for the 3rd Defendant

No appearance for the 4th Defendant.