https://new.kenyalaw.org/akn/ke/judgment/keelc/2026/3887

Nyandoro & 2 others v Focus Homes Ltd & 2 others (Land Case E063 of 2026) [2026] KEELC 3887 (KLR) (29 June 2026) (Ruling) Neutral citation: [2026] KEELC 3887 (KLR) Republic of Kenya In the Environment and Land Court at Nairobi Land Case E063 of 2026 CA Ochieng, J June 29, 2026 Between Mercy Gechembe Nyandoro 1st Plaintiff Jane Kwamboka Nyandoro 2nd Plaintiff Robins Okemwa Nyandoro 3rd Plaintiff and Focus Homes Limited 1st Defendant Spire Bank Limited 2nd Defendant Garam Investments Auctioneers 3rd Defendant Ruling 1.What is before the Court for determination is the Plaintiffs’ Notice of Motion application dated the 20th February 2026 in which they seek the following Orders:a.Spent.b.Spent.c.That pending the hearing and determination of this suit, this Honourable Court be pleased to issue a temporary injunction restraining the Respondents, whether by themselves, their directors, employees, representatives, agents or otherwise howsoever, from auctioning, selling, transferring or disposing of the suit property, or dealing with it in a manner that may lead to the auction, sale, transfer, or disposition of the said apartments, or which may threaten, extinguish or in any other way abrogate the applicants’ beneficial interests in the said apartments.d.That the costs of this application be provided for.e.That the Honourable Court provides for any other relief as the court may deem fit to grant in the circumstances to protect the interests of the parties pending the hearing and determination of the application and the suit. 2.The application is premised on grounds on its face and on the 1st Plaintiff’s supporting affidavit. She avers that she purchased Apartment No. 5 on the second floor of Land Reference No. 13/369 (I.R. No. 69578) while the 2nd and 3rd Plaintiffs purchased Apartment Nos. 9 and 10 on the third floor of the said parcel, between 2010 and 2015 respectively. Further, that they have all been in occupation thereon by themselves or their tenants. 3.She claims that the 1st and 2nd Defendants entered into a lending agreement whereby the 2nd Defendant lent certain sums of money to the 1st Defendant, which monies was to be utilized for purposes of erecting units on the suit property, for sale to the general public. She contends that the Plaintiffs were not privy to the lending contract between the 1st and 2nd Defendants, but after entering into sale agreements with respect to the said apartments, the 1st Defendant directed them to remit the requisite purchase price directly to the 2nd Defendant. 4.She avers that by reasons thereof, the 2nd Defendant was aware that the payments that it was receiving from the Plaintiffs were purchase prices for units that had been erected by the 1st Defendant on the suit property and it was also aware that the Plaintiffs had long been given occupation of the said apartments, which has been their homes. Further, that the 2nd Defendant was also aware that the 1st Defendant was merely holding the said apartments in trust for the Plaintiffs but in breach of the aforesaid duty of care, it has advertised the suit property for auction and now the Plaintiffs are faced with an imminent threat of loss of their property. 5.She states that if the auction proceeds, the Plaintiffs will suffer irreparable harm that cannot be adequately compensated by an award of damages. Further, that if the properties are sold to third-party purchasers, the suit would be rendered nugatory while in contrast, the 2nd Defendant, having already benefited from the Plaintiffs’ funds, will not be prejudiced by a preservation order. Response 6.The 1st Defendant filed a replying affidavit in support of the Plaintiffs’ application, sworn by its director, one Jitan Shantilal Dhanan, who claims that the 1st Defendant is the registered proprietor and owner of the suit property. He confirms that by a letter of offer dated 27th June 2013, the 1st Defendant entered into a facility takeover agreement with Equatorial Commercial Bank (now the 2nd Defendant) where the latter was to take over the 1st Defendant’s credit facility in the principal sum of Kshs.200,000,000.00 from Bank of Baroda, which the 1st Defendant had borrowed for the development of apartments on the suit property. 7.He admits that the 1st Defendant pledged the title to the suit property to the 2nd Defendant, for the creation of a first legal charge over twenty (20) apartments erected on the suit property, but the charge was not formally registered. He claims that it was a term of the contract between the 1st and 2nd Defendants that the sale proceeds from the apartments sold would be paid to the 2nd Defendant and so would be any rental income received from letting of the units be assigned to it, in settlement of the said facility, and any surplus thereafter would be available to the borrower. He acknowledges that it was the 1st Defendant’s task and responsibility to procure purchasers for the apartments and ensure that the purchase price was remitted to the Lender. 8.He affirms that upon receipt of the sale proceeds from the properties sold, the Lender was obliged to discharge the lease agreements held as securities, which was to be done for each apartment in the sequence they would be sold. 9.He avers that upon payment of the purchase price by the Plaintiffs, the 1st Defendant requested release of six (6) flats, including the Plaintiffs’, from the security and facilitation of the registration of its Leases. However, after receiving the full purchase price from the Plaintiffs, the 2nd Defendant refused to release the six (6) flats from the security or facilitate registration of Leases for them. 10.He insists that the 1st Defendant duly fulfilled its obligations and met all the conditions stipulated under the contract between the 2nd Defendant and itself. Further, that the 2nd Defendant varied interest rates and inflated the loan account thereby alleging that the 1st Defendant remained indebted to it. He avers that the 1st Defendant received a further Charge instrument dated 3rd January 2018 from the 2nd Defendant, which was registered against the property on 29th January 2018, and that the said Charge is materially different from the unregistered 2013 Charge executed by the 1st Defendant. He claims that notwithstanding the said differences, the 2nd Defendant has purported that the 2018 registered Charge is the same instrument executed by the 1st Defendant in 2013. 11.He contends that on 19th April 2018, the 2nd Defendant issued a ninety (90) days statutory notice to the 1st Defendant purporting to exercise its power of sale over the suit apartments. He confirms that the 1st Defendant challenged the said statutory notice in HC Commercial Suit E373 of 2018, contending that it was based on a forged Charge. Further, upon hearing, the suit was dismissed and being aggrieved by the said decision of Mulwa J delivered on 19th September 2024 in the said matter, the 1st Defendant challenged the entire decision vide Civil Appeal E790 of 2024, which is pending before the Court of Appeal with judgment set to be delivered on 26th June 2026. 12.He contends that it would be unjust and contrary to public policy and morality for the 2nd Defendant to benefit from the Plaintiffs’ proceeds of sale of their apartments, while purporting to sell the same in exercising the alleged statutory power of sale based on a forged 2018 Charge instrument. 13.The 2nd Defendant filed a replying affidavit in opposition, sworn by Samuel Wamaitha, Equity Bank’s Manager, Legal services. He avers that pursuant to Gazette Notice No. 660 dated 27th January 2023, Equity Bank (Kenya) Limited acquired certain assets, including litigation matters in relation to the impugned loan book from Spire Bank Limited. 14.He acknowledges that a legal charge was created over twenty (20) flats erected on the suit land for Ksh. 200,000,000/=. He claims that the suit apartments are in the schedule of the charge document as one of the apartments that was to be Charged. He avers that the loan to the 1st Defendant was disbursed on 5th December 2013 and that the Charge dated 3rd January 2018 was registered on 29th January 2018. 15.He claims that on 14th November 2017, the Defendant issued a demand letter for the payment of kshs.139,670,354.72, which was outstanding. While he acknowledges HCCC 373 OF 2018 between the 1st and 2nd Defendants, was filed and determined by the High Court, he contends that the suit apartments are among the Charged properties, which the Court gave the go ahead to be sold in public auction and that the judgement by Mulwa J, is yet to be set aside. 16.He insists that by virtue of the Charge document, the 2nd Defendant has a superior right over the suit property. Further, that the 1st Defendant still owes the 2nd Defendant and that the loan continues to accrue interest. He reiterates that the Plaintiffs have no prima facie case and that they are not deserving of the orders sought. 17.The 3rd Defendant did not file a response. 18.The application was canvassed by way of written submissions. Submissions 19.The Plaintiffs submit that they have satisfied all the conditions for the grant of a temporary injunction as set out in Giella v Cassman Brown (1973) E.A, having demonstrated a prima facie case founded on full payment of the purchase price of the suit apartments and long-standing possession of over 10 years. Further, that title held by the 1st Defendant is held in trust for them. 20.They also submit that they stand to suffer irreparable harm that cannot be adequately compensated by an award of damages, given the unique nature of the suit property and the risk of the same passing to third parties. 21.To buttress their averments, the Plaintiffs relied on the following decisions: P.J. Dave Flowers Limited v Limuru Hills Limited & 2 others [2022] KECA 129 (KLR) and Mrao Ltd v First American Bank of Kenya Ltd & 2 others [2003] KECA 175 (KLR). 22.The 1st Defendant’s submissions mirror those of the Plaintiff. It contends that the Plaintiff has met the threshold in Giella v Cassman Brown & Company (supra). 23.On its part, the 2nd Defendant submits that the suit is res judicataHCCC 373 OF 2018, where Justice Mulwa made a decision on injunctive orders, which were sought in the said matter by the 1st Defendant herein. 24.It also submits that the Plaintiffs are not entitled to the injunctive prayers sought because at the time of purchasing the suit apartments, the 2nd Defendant’s interest had been registered in the title, the Plaintiffs even paid the purchase price to the 2nd Defendant in settlement of the debt. Further, that the 1st Defendant defaulted in repayment and it is trite that an injunction cannot issue where there is an outstanding debt. 25.It also submits that the Plaintiff will not suffer irreparable injury because once a property is granted as security, it is a commodity for sale. Further, that its statutory power of sale has crystallized and any loss that would be occasioned by the Plaintiffs from the sale would be calculable on the basis of the real market value of the suit apartments. 26.To buttress its averments, the 2nd Defendant relied on the following decisions: Housing Finance Company of Kenya Limited v Attorney General [2015] eKLR; Kenya Commercial Bank Limited v Jeremy Will Tsuma [2014] eKLR and Kenleb Construction Ltd v New Gatitu Service Station Ltd & Another [1990] eKLR. Analysis and Determination 27.Upon consideration of the instant Notice of Motion application including the respective affidavits and rivalling submissions, the only issue for determination is whether the Plaintiffs have met the threshold for grant of an interlocutory injunction restraining the Defendants from dealing with the suit apartments. 28.In relying on the principles established in the case of Giella v Cassman Brown and Company Ltd [1973] E.A and definition of the prima facie case as stated in Mrao v First American Bank of Kenya Ltd & 2 others [2003] eKLR, I will proceed to analyse if the Plaintiffs are entitled to the orders as sought. 29.The Plaintiffs’ case is that they purchased Apartment Nos. 5, 9 and 10 on Land Reference No. 13/369 (I.R. No. 69578) respectively and paid the full purchase price, and have utilized them continuously for the past twelve (10) years. They contend that the 1st Defendant frustrated registration of the Lease in their favour. Further, that the 1st Defendant Charged the title to the suit property (L.R. No. 37/369 (I.R. No. 69578), where their Apartments sit, to secure financial facilities advanced by the 2nd Defendant and that the 3rd Defendant, acting on the instructions of the 2nd Defendant, has advertised the suit apartments for sale by public auction in exercise of the 2nd Defendant's alleged statutory power of sale. They maintain that they were not privy to the transaction between the 1st and 2nd Defendants. 30.The 1st Defendant acknowledges that the Plaintiffs paid the purchase price in full and that the failure to register Leases in their favour was occasioned by the 2nd Defendant’s refusal to release the title documents. It contends that it would be unjust for the 2nd Defendant to retain the Plaintiffs’ purchase price, while simultaneously exercising its statutory power of sale against the suit apartments, which the Plaintiffs fully paid for. 31.On its part, the 2nd Defendant contends that the suit is res judicata HCCC 373 OF 2018 and that its statutory power of sale is lawful and superior to the Plaintiffs’ claim. 32.The Plaintiffs have not denied that the suit apartments are Charged to the 2nd Defendant. The 1st Defendant has acknowledged its indebtedness to the 2nd Defendant. Further, the 1st Defendant admits that the suit apartments were sold to the Plaintiffs when there was already a preexisting Charge. 33.In the case of Palmy Company Limited v Consolidated Bank of Kenya Limited ML HCCC No. 527 of 2013 [2014] eKLR, the court held inter alia:“Needless to state that having an arguable point, as is the case here, is not sufficient to establish a prima facie case for the grant of an injunction especially in cases of exercise of the power of sale by a chargee who has shown that the Applicant has defaulted and continue to be in default. It should be known that, as long as it is lawfully exercised, the Statutory Power of Sale is not a favour that the chargor extends to the chargee or an infringement on the right of or a foreclosure of the chargor’s equity of redemption; it is a statutory remedy which is inextricably tied to the right of the chargee to recover its money-which is property guaranteed under Article 40 of the Constitution.” 34.The Plaintiff relied heavily on the Court of Appeal’s decision in P.J. Dave Flowers Limited v Limuru Hills Limited & 2 others [2022] KECA 129 (KLR) where it was held that:“...It was sufficient for purposes of a prima facie case, for the Appellant to demonstrated that it entered into a sale agreement over a house in the suit property and had paid the purchase price in full. In addition, the irreparable damage and inconvenience it would suffer in the event the said property was sold also justified interim relief pending determination of the issues arising in the suit”See also the case of Andrew Muriuki Wanjohi v Equity Building Society Ltd & 2 others [2006] eKLR. 35.Looking at the documents as presented, I find that since the Plaintiffs purchased the suit apartments when the suit land where the said apartments are situated, was already Charged to the 2nd Defendant by the 1st Defendant, noting that the 1st Defendant has admitted its indebtedness, I opine that the Plaintiffs should have first sought for partial discharge of Charge for each of the suit apartments, before purchase, but there is no indication they did so. 36.The Plaintiffs have sought to blame the 2nd Defendant for seeking to exercise it statutory power of sale over the suit apartments, insisting that they paid the full purchase price to the 2nd Defendant, but it is my considered view that since the suit apartments were Charged, the 2nd Defendant was entitled to exercise its statutory power of sale in case of default, which is the position herein. Further, I note the Court vide HCCC 373 OF 2018, already allowed the 2nd Defendant to exercise its statutory power of sale, which decision is yet to be set aside. In the circumstances, I find that the Plaintiffs have not established a prima case to warrant the orders of interlocutory injunction as sought. 37.Further, in relying on the parameters as provided in Nguruman Ltd. Vs. Jan Bonde Nielsen (2014) eKLR, where the Court of Appeal held that where a party fails to establish a prima facie case, then irreparable injury and balance of convenience need no consideration, I will decline to deal with the other two limbs on injunction. 38.In the circumstances, I find the Notice of Motion application dated the 20th February 2026 unmerited and will disallow it. 39.Each party to bear their own costs. DATED SIGNED AND DELIVERED AT NAIROBI THIS 29TH DAY OF JUNE, 2026CHRISTINE OCHIENGJUDGEIn the presence of:Hansal Shah for Plaintiff/ApplicantKioko for 1st DefendantMs Kamau for 2nd DefendantCourt Assistant: Vena