https://new.kenyalaw.org/akn/ke/judgment/kehc/2026/10618

REPUBLIC OF KENYA **IN THE HIGH COURT OF KENYA AT NAIROBI** **MILIMANI LAW COURTS** **CIVIL APPEAL NO. E820 OF 2025** **MWANANCHI CREDIT LIMITED...........................APPELLANT** **VERSUS** **JOHANA MURIMI KARUIRU…………..............................................RESPONDENT** **JUDGMENT** **Introduction** 1. This is a first appeal against the ruling and order of the Chief Magistrate's Court at Milimani delivered on 25th July 2025 in MCC NoE066 of 2025, by which the learned trial magistrate allowed the respondent's Notice of Motion dated 10th January 2025 and ordered the unconditional release of Motor Vehicle Registration No. **KCA 742B** to the respondent pending the hearing and determination of the suit. 2. The appellant, being dissatisfied with the whole of the ruling, lodged the present appeal contending that the learned trial magistrate misdirected herself both in law and in fact by granting what amounted to a mandatory interlocutory injunction notwithstanding that the motor vehicle constituted the appellant's contractual security for a financing facility and that the amount allegedly outstanding under the facility remained genuinely disputed. 3. The appeal therefore invites this Court to determine whether the learned magistrate properly exercised her judicial discretion in directing the unconditional release of the motor vehicle at an interlocutory stage. **Background** 1. The material facts giving rise to this appeal are largely not in dispute. 2. It is common ground that the appellant advanced a financial facility to the respondent. As security for the facility, the respondent offered Motor Vehicle Registration Numbers **KCK 603V** and **KCA 742B** upon terms contained in the financing agreement executed between the parties. 3. Subsequently, a dispute arose concerning the respondent's repayment obligations under the financing agreement. Whereas the appellant maintained that the respondent had defaulted in servicing the facility and that substantial arrears remained outstanding, the respondent disputed the appellant's computation of the outstanding amount and asserted that the sums demanded were erroneous, excessive and contrary to the parties' agreement. 4. Owing to the alleged default, the appellant retained possession of Motor Vehicle Registration No. **KCA 742B**, asserting its contractual rights under the financing agreement. 5. Aggrieved by the continued detention of the motor vehicle, the respondent instituted proceedings before the subordinate court and contemporaneously filed an application seeking, inter alia, an order compelling the appellant to release the motor vehicle pending the hearing and determination of the suit. 6. After hearing the parties via submissions, the learned trial magistrate allowed the application and ordered the appellant to release Motor Vehicle Registration No. **KCA 742B** to the respondent unconditionally. 7. It is that order which provoked the present appeal. **The Appeal** 1. The Amended Memorandum of Appeal raises several grounds in which, when condensed. It faults the learned trial magistrate for: ***a) granting a mandatory injunction at an interlocutory stage without satisfying the applicable legal threshold;*** ***b) issuing a ruling that had the effect of a final determination of the suit despite there being a contention on amounts due and owing which is an issue that ought to be determined at the full hearing;*** ***c) failing to appreciate that the motor vehicle constituted contractual security for the financing facility;*** ***c) failing to appreciate that import of the restructured loan agreement of 12th August 2024.*** ***d) disregarding the existence of a bona fide dispute regarding the amount outstanding under the financing agreement;*** ***e) misapprehending the applicable principles governing interlocutory injunctions; and*** ***f) improperly exercising judicial discretion.*** 1. The appellant accordingly urges this Court to allow the appeal, set aside the impugned ruling and dismiss the respondent's application with costs. 2. The respondent, on the other hand, supports the decision of the trial court and contends that the learned magistrate properly exercised her discretion in ordering the release of the motor vehicle. **Submissions** 1. Learned counsel for the appellant submitted that the impugned order was in substance a mandatory injunction because it compelled the appellant to surrender possession of Motor Vehicle Registration No. **KCA 742B**, which constituted security for the financial accommodation extended to the respondent. 2. Counsel relied on the case of ***Malier Unissa Karim vs Edward Oluoch Odumbe (2015) Eklr*** where he argued that the law governing mandatory interlocutory injunctions is now settled by the Court of Appeal in Kenya ***Breweries Ltd & Another v Washington O. OkeyoOkeyo (2002)EA 109***, where the Court held that such relief may only be granted in exceptional circumstances and only where the court is satisfied that the case is unusually clear. 3. It was further submitted that the learned magistrate acknowledged that indeed the value of motor vehicle KCA 742B which was in the Appellant’s possession was sufficient to compensate the Appellant in case of any additional claims and they need not pursue motor vehicle KCK 603V. 4. The trial court overlooked the fact that the parties were in sharp disagreement as to the amount outstanding under the financing agreement. Counsel argued that the existence of that dispute alone demonstrated that the matter was unsuitable for the grant of a mandatory injunction. Counsel argued that the existence of that dispute alone demonstrated that the matter was unsuitable for the grant of a mandatory injunction. Further he argued the trial court did not fault the Appellant’s process leading to the repossession of the collateral and so there was no reason for the unconditional release of the motor vehicle to the Respondent who was in default. 5. The appellant further relied upon ***Mbogo & Another v Shah* (supra)** and submitted that this Court is entitled to interfere with the exercise of discretion where the subordinate court acted upon wrong principles of law or reached a plainly erroneous conclusion. 6. Counsel urged the Court to find that the learned magistrate effectively determined the parties' contractual rights before trial by directing the unconditional release of the appellant's security. Counsel urged the Court to order be varied and set aside or at least the status quo abide pending hearing and determination of the suit pending before the trial court. Reliance was placed upon in the cases of ***Kenya power & Lightning Co. Ltd v Samuel Mandere Ogeto (2017) e KLR***. 7. On behalf of the respondent, it was submitted that the trial court properly exercised its discretion in order to prevent continued prejudice arising from the detention of the motor vehicle. Further the respondent submitted that he was up to date with his payments and detention of the vehicle would have made him fall into arrears since he was using it to generate income. 8. Counsel contended that the respondent had demonstrated a prima facie case warranting interlocutory intervention. He relied on the court of Appeal decision in ***Nation Media Group Ltd and 2 others v John Harun Mwau (2014) e KLR***. and argued that the learned magistrate correctly exercised the equitable jurisdiction of the court to prevent injustice. 9. It was further argued that the respondent that the security is registered in joint names of the parties and granting an interlocutory injunction did not prejudice the Appellant. 10. The respondent clearly acknowledged having paid a substantial amount of the loan and the dispute in the trial court was over the interest payable. 11. It was further argued that the order did not determine the substantive dispute concerning the amount outstanding but merely restored possession of the motor vehicle pending the hearing of the suit. He urged the court to dismiss the appeal with costs. **Duty of the First Appellate Court** 1. This being a first appeal, this Court is under a duty to reconsider the evidence that was placed before the subordinate court, evaluate it afresh and draw its own independent conclusions while bearing in mind that it neither saw nor heard the parties and must therefore make due allowance for that disadvantage. 2. The principles governing the jurisdiction of a first appellate court are well settled. In ***Selle & Another v Associated Motor Boat Co.*** ***Ltd & Others [1968] EA 123*** the former Court of Appeal for East Africa held that a first appellate court is obliged to reconsider the evidence, evaluate it itself and draw its own conclusions, though always bearing in mind that it has neither seen nor heard the witnesses. 3. Equally, this Court is alive to the principle that the decision under challenge was one involving the exercise of judicial discretion. Accordingly, interference by an appellate court is not automatic merely because it might have reached a different conclusion. 4. The governing principle was succinctly stated by the Court of Appeal in ***Mbogo & Another v Shah***, ***[1968] EA 93*** where it was held that an appellate court will interfere with the exercise of discretion where the lower court misdirected itself in law, misapprehended the facts, took into account matters it ought not to have taken into account, failed to take into account matters it ought to have considered, or where the decision is plainly wrong and has occasioned a miscarriage of justice. 5. It is therefore incumbent upon this Court to determine whether the learned trial magistrate exercised his discretion judicially and in accordance with the settled principles governing interlocutory mandatory injunctions. **Issues for Determination** 1. Having considered the record of appeal, the grounds of appeal and the rival submissions, the following issues arise for determination: ***a) Whether the order directing the unconditional release of Motor Vehicle Registration No. KCA 742B amounted to a mandatory injunction.*** ***b) Whether the learned trial magistrate properly applied the legal principles governing the grant of a mandatory injunction at an interlocutory stage.*** ***c) Whether the learned trial magistrate properly exercised judicial discretion.*** ***d) What orders should issue as to the appeal.*** The foregoing issues shall now be considered. **ANALYSIS** **Whether the order directing the release of Motor Vehicle Registration No. KCA 742B amounted to a mandatory injunction** 1. The first issue is whether the order made by the learned trial magistrate was in the nature of a mandatory injunction. 2. An injunction may either be prohibitory or mandatory. Whereas a prohibitory injunction restrains the commission of an act and is principally intended to preserve the status quo pending the hearing and determination of a suit, a mandatory injunction compels a party to perform a positive act and has the effect of altering the prevailing state of affairs. 3. The impugned order required the appellant to surrender possession of Motor Vehicle Registration No. **KCA 742B** to the respondent pending the hearing and determination of the suit. That order compelled the appellant to perform a positive act, namely the release of the motor vehicle, which admittedly constituted the contractual security for the financial accommodation advanced to the respondent. 4. In my view, therefore, the learned magistrate granted a mandatory injunction notwithstanding that the order was made at an interlocutory stage. 5. The distinction is significant because the law imposes a considerably higher threshold before a court may grant a mandatory injunction than that applicable to an ordinary prohibitory injunction. **Principles governing interlocutory mandatory injunctions** 1. The law governing interlocutory mandatory injunctions is no longer *res integra.* 2. In ***Kenya Breweries Ltd & Another v Washington O. Okeyo***, ***(2002) eKLR*** the Court of Appeal reaffirmed the principle first enunciated in ***Locabail International Finance Ltd v Agro-Export & Others*** that although a mandatory injunction may issue at an interlocutory stage, such jurisdiction must be exercised sparingly and only in exceptional circumstances. 3. The Court of Appeal stated: ***"A mandatory injunction can be granted on an interlocutory application as well as at the hearing but, in the absence of special circumstances, it will not normally be granted. However, if the case is clear and one which the court thinks ought to be decided at once... or if the act done is a simple and summary one which can be easily remedied, or if the defendant attempted to steal a march on the plaintiff, a mandatory injunction will be granted on an interlocutory application."*** 1. The Court further observed that before granting such relief, the court must attain a **high degree of assurance** that, upon a full trial, it will appear that the injunction was rightly granted. 2. The Court of Appeal reaffirmed those principles in ***Vivo Energy Kenya Limited v Maloba Petrol Station Limited & 3 Others***, where it emphasized that a mandatory injunction is a drastic remedy which should issue only in the clearest of cases and where exceptional circumstances exist. 3. The rationale underlying those decisions is self-evident. Unlike a prohibitory injunction, a mandatory injunction frequently grants substantive relief before trial and therefore carries the risk of finally determining the parties' rights before evidence is tested through the ordinary trial process. 4. It follows that a court exercising interlocutory jurisdiction must proceed with considerable caution lest it prejudges the issues reserved for trial. **Whether the learned magistrate applied the correct principles** 1. Applying those principles to the present appeal, it is immediately apparent that the learned magistrate was confronted with a dispute founded upon a financing agreement under which Motor Vehicle Registration No. **KCA 742B** had been offered as security. 2. The respondent's complaint before the subordinate court was that the appellant had unlawfully retained possession of the motor vehicle. 3. The appellant, on the other hand, asserted that the respondent had defaulted in servicing the financial facility and that the motor vehicle was being retained pursuant to the parties' contractual arrangements pending settlement of the outstanding indebtedness. 4. More significantly, the affidavits filed before the subordinate court reveal that the parties fundamentally disagreed on the amount outstanding under the financing agreement. 5. Whereas the respondent maintained that the appellant had demanded amounts not contractually due, the appellant maintained that substantial arrears remained unpaid. 6. In my respectful view, that disagreement constituted the central issue in controversy. 7. It was not a peripheral question capable of summary determination through affidavit evidence. Rather, it required examination of the financing agreement, the loan statements, the repayments made, the interest charged, and the parties' respective contractual obligations. 8. Those were matters that could only properly be resolved after receiving evidence at the hearing of the suit. 9. It is therefore difficult to appreciate how the learned magistrate could simultaneously acknowledge the existence of a dispute concerning the indebtedness while concluding that the respondent had established the exceptionally clear case required by the authorities. 10. The existence of a genuine dispute concerning the amount due under the financing agreement was itself demonstrative that the matter did not fall within the narrow category of cases contemplated in **Kenya Breweries Ltd**. 11. Put differently, once the court appreciated that the indebtedness remained contested, the matter ceased to be one appropriate for determination through an interlocutory mandatory injunction. **Whether the order preserved or determined the parties' rights** 1. The next question is whether the order preserved the subject matter of the suit. 2. The object of interlocutory relief is ordinarily to preserve the substratum of litigation pending final determination. 3. In the present appeal, however, the learned magistrate ordered the unconditional release of Motor Vehicle Registration No. **KCA 742B**, notwithstanding that it constituted the very security upon which the financing transaction was founded. 4. Security is obtained by a financier to secure repayment of the facility in the event of default. 5. The fact that the motor vehicle remained registered in the joint names of the parties did not, by itself, eliminate the prejudice to the appellant. Registration preserved the appellant's legal interest, but it did not preserve the practical efficacy of the security. Once the vehicle was unconditionally released into the respondent's possession, it became susceptible to depreciation, damage, concealment or other circumstances that could impair the appellant's ability to realize the security in the event the suit ultimately succeeded. The purpose of interlocutory relief is to preserve the subject matter of the dispute, not to expose one party's security to avoidable risk before the merits have been finally determined. 6. By directing the unconditional release of the security before determining whether the respondent had indeed defaulted and before resolving the dispute regarding the amount outstanding, the learned magistrate effectively deprived the appellant of the contractual protection for which the parties had bargained. 7. The effect of that order was not merely procedural. It substantially altered the parties' contractual rights pending trial. 8. If ultimately the appellant were to succeed at trial, the security that formed the basis of the lending arrangement might no longer be available, thereby rendering the appellant's contractual rights largely illusory. 9. Such a consequence illustrates why courts have consistently insisted that mandatory injunctions should only issue in the clearest and most exceptional circumstances. 10. In my considered view, no such exceptional circumstances existed in the present case. **Whether this Court should interfere** 1. The impugned ruling was an exercise of judicial discretion. 2. The principles governing appellate interference with discretion are well settled. 3. In ***Mbogo & Another v Shah***, ***[1968] EA 93*** the Court of Appeal held that an appellate court may interfere where the lower court misdirected itself in law, took into account irrelevant considerations, failed to consider relevant matters or reached a plainly wrong decision. 4. Having carefully re-evaluated the record, I find that the learned magistrate misdirected herself in three fundamental respects. 5. First, the learned magistrate failed to appreciate that the respondent sought a mandatory rather than a prohibitory injunction. 6. Secondly, the learned magistrate failed to apply the heightened threshold established by the Court of Appeal in **Kenya Breweries Ltd & Another v Washington O. Okeyo** (2002) e KLR. 7. Thirdly, the learned magistrate failed to appreciate that the existence of a genuine dispute regarding the indebtedness rendered the matter unsuitable for final interlocutory relief. 8. Those errors resulted in the exercise of discretion upon wrong principles. 9. This Court is therefore entitled, indeed obliged, to interfere with the exercise of that discretion. 10. I consequently find that the learned magistrate erred both in law and in principle in directing the unconditional release of Motor Vehicle Registration No. **KCA 742B** before the substantive dispute concerning the financing agreement had been heard and determined. 11. The appeal is therefore merited. **DETERMINATION** 1. Having independently re-evaluated the record of appeal, the impugned ruling, the rival submissions and the applicable law, I am persuaded that the learned trial magistrate fell into error in granting the respondent an unconditional order for the release of Motor Vehicle Registration No. **KCA 742B**. 2. First, the order granted by the subordinate court was plainly a mandatory injunction. It compelled the appellant to surrender possession of the motor vehicle, which was the contractual security for the financing facility advanced to the respondent. Such an order altered the existing state of affairs and substantially affected the parties' contractual rights before the suit had been heard. 3. Secondly, the learned magistrate failed to appreciate that the applicable legal threshold was not that governing ordinary prohibitory injunctions but the more stringent test governing mandatory interlocutory injunctions as settled by the Court of Appeal in ***Kenya Breweries Ltd & Another v Washington O. Okeyo***. The respondent was therefore required to demonstrate exceptional circumstances and an unusually clear case warranting immediate intervention. 4. Thirdly, the material before the subordinate court disclosed a genuine dispute regarding the amount allegedly outstanding under the financing agreement. That dispute lay at the core of the litigation and could only be resolved after a full hearing upon examination of the financing agreement, the parties' accounts and all relevant evidence. 5. In those circumstances, it cannot reasonably be said that the respondent established the exceptionally clear case contemplated in *Kenya Breweries Ltd*. Indeed, the very existence of the dispute as to the indebtedness demonstrated that the controversy was unsuitable for final interlocutory relief. 6. I also find that the learned magistrate failed to appreciate the legal significance of the appellant's possession of Motor Vehicle Registration No. **KCA 742B**. The appellant was not in possession as a trespasser or wrongdoer. Rather, it held the motor vehicle pursuant to a contractual security arrangement voluntarily entered into by the parties. Until the legality of the appellant's exercise of its contractual rights was determined at trial, the court ought to have been slow to interfere with that security by way of a mandatory order. 7. The Court of Appeal has repeatedly cautioned that interlocutory proceedings are not intended to determine the substantive rights of the parties. In ***Nguruman Limited v Jan Bonde Nielsen & 2 Others***, (2014) ***eKLR*** the Court underscored that at the interlocutory stage a court should refrain from making definitive findings on contested matters that are reserved for trial. While that decision principally concerned prohibitory injunctions, the underlying principle applies with even greater force where the relief sought is mandatory in nature. 8. The order made by the subordinate court had the practical effect of substantially determining one of the principal controversies in the suit. Once the appellant surrendered possession of the security, the respondent obtained substantially the very relief sought in the main action before the trial court had determined whether the appellant was contractually entitled to retain the motor vehicle. 9. Such an approach was inconsistent with the settled jurisprudence of the Court of Appeal and amounted to an improper exercise of judicial discretion. 10. Consequently, this Court is satisfied that the appeal is meritorious. 11. The learned trial magistrate exercised discretion upon wrong principles of law, failed to apply the correct legal threshold governing mandatory interlocutory injunctions, and thereby reached a conclusion that cannot be sustained. **DISPOSITION** 1. Accordingly, the appeal is hereby allowed. 2. The ruling and order of the Chief Magistrate's Court delivered on 25th July 2025 directing the unconditional release of Motor Vehicle Registration No. **KCA 742B** are hereby set aside in their entirety. 3. In substitution thereof, there shall be an order dismissing the respondent's Notice of Motion dated 10th January 2025 seeking the unconditional release of Motor Vehicle Registration No. **KCA 742B** pending the hearing and determination of the suit. 4. For the avoidance of doubt, nothing in this judgment shall be construed as determining the parties' respective rights and obligations under the financing agreement. The dispute concerning the amount, if any, outstanding under the facility remains a matter for determination by the trial court upon hearing evidence. 5. Given that the motor vehicle constitutes the contractual security for the financing facility, the status quo obtaining immediately before the impugned ruling shall remain in force pending the hearing and determination of the suit or until the subordinate court otherwise orders upon sufficient legal basis. 6. In view of the age of the dispute and the interlocutory nature of the issues determined herein, the trial court is directed to accord the suit priority and to proceed with its hearing and determination on an expedited basis. 7. The appellant shall have the costs of this appeal. 8. The costs of the application before the subordinate court shall abide the outcome of the main suit. It is so ordered. **DATED, SIGNED AND DELIVERED AT NAIROBI THIS 14TH DAY OF JULY 2026.** **HON. L. P. KASSAN** **JUDGE**