[2022] KEHC 11938 (KLR)

Oloo & another v Agencies & another (Civil Case 031 of 2020) [2022] KEHC 11938 (KLR) (Commercial and Tax) (21 July 2022) (Ruling)

Neutral citation: [2022] KEHC 11938 (KLR)

Republic of Kenya

In the High Court at Nairobi (Milimani Commercial Courts Commercial and Tax Division)

Commercial and Tax

Civil Case 031 of 2020

WA Okwany, J

July 21, 2022

Between

Victor Ochieng Oloo

1st Plaintiff

Think Business Limited

2nd Plaintiff

and

Robert Waweru Maina t/a Antique Auctions Agencies

1st Defendant

Kenya Deposit Insurance Corporation Sued as Receiver for Chase Bank Kenya Limited

2nd Defendant

Ruling

1. This ruling determines the 1st defendants application dated December 11, 2020 seeking the following orders;1)Spent.2)That this honourable court be pleased to issue a declaration that the conditional order issued on April 12, 2016 automatically lapsed once the plaintiff/ respondents failed to remit the sum of Kenya Shillings Three Million (3,000,000) on or before the scheduled auction of May 26, 2016. 3)That this honourable court be pleased to issue an order restraining the plaintiff/ respondents, their servants, employees and/or Advocates and agents including Messrs. Gems Management Limited from in any way whatsoever interfering with any scheduled auction of the suit property.4)That the honourable court be pleased to issue an order directing the Officer Commanding Station (OCS), Athi River Police Station to facilitate, supervise and ensure the 1st defendant/ applicant's uninhibited access and entry to the suit property for purposes of disposing the said property by way of Auction.5)That the costs of this Application be borne by the plaintiff/ respondents.

2. The application is supported by the affidavit of the 1st defendants of debt recovery manager Ms Edna Omangi and is based on the following grounds:-a.That on April 12, 2016, the plaintiff/ respondents' filed a Notice of Motion Application under Certificate of Urgency seeking inter alia a temporary injunction restraining the 1st defendant/ applicant from selling, taking possession or in any way interfering with the 1st plaintiff/ respondent's title, occupation/ possession over all that property known as L R no 27409 (I R no 132344), Greenpark Estate pending the hearing and determination of the subject Application and the suit as well.b.That the Environment & Land Court, upon hearing the subject application exparte on April 12, 2016, granted a conditional stay barring the sale of the suit property on condition that the plaintiff/ applicants' to deposit the sum of Kenya Shillings three million (kshs 3,000,000/=) on or before the scheduled auction on May 20, 2016. c.That in a bid to exercise its statutory power of sale over all that property known as L R no 27409 (I R no 132344), Greenpark Estate, and pursuant to the conditional order issued by the Environment & Land Court on April 12, 2016, 1st defendant/ applicant herein proceeded to instruct its agents to sell and/or dispose the suit property in order to recover the outstanding amounts due and owing to the 1st defendant/ applicant.d.That the plaintiff/ respondents mala fides is apparent from the fact that despite the afore-stated conditional order of stay, they made deliberate attempts to prevent the valuation and sale of the suit property from taking place through threats of reports being made to the police as well as threats to the lives of the 1st defendant/ applicant's agents.e.That despite being very aware of the conditional order issued by the honourable court, the 1st plaintiff/ respondent has on several occasions proceeded to intimidate, attack, harass the auctioneers and denied access of the suit property to the auctioneers any potential buyer(s).f.That the plaintiffs/ respondents in total disregard of the Court orders have frustrated the 1st defendant/ applicant's efforts to realize its security and proceed with the scheduled auction.g.That the 1st plaintiff/ respondent has in colluded with his property agents, Messrs. Gems Management Limited to dispose of the suit property, being all that property known as LR no 27409 (I R no 132344), Greenpark Estate, which property had been charged to Chase Bank (K) Limited, and which Charge is yet to be discharged as the Plaintiff/ Respondents who are still in default of the Mortgage Facility to the tune of Kenya Shillings Sixty Eight Million Six Hundred Twenty-Five Thousand Six Hundred and Thirty-Three and Twenty-Two Cents only (kshs 68,625,633. 22/=)h.That at all material times, the 1st defendant/ applicant herein has complied with the orders of this honourable court throughout the proceedings herein and due to the plaintiff/ respondents' conduct as aforestated, the 1st defendant/ applicant vide the orders sought herein is desirous of this honourable court's protection.i.That it is in the interests of equity and justice that the orders sought herein are granted.

3. The plaintiffs opposed the application through the 1st plaintiff’s replying affidavit wherein he avers that the application is defective, improper and an abuse of the court’s process because the orders sought therein can only be granted in a suit brought through a plaint or counterclaim. He states that while the application seeks orders to restrain the plaintiffs and a company known as Gems Management Limited, the said company is not a party to the suit.

4. The application was canvassed by way of written submissions which I have considered.

5. The facts of this case are straight forward. This court issued a conditional order on April 12, 2016 which order the plaintiff has not complied with. The orders sought through this application are in the nature of enforcement of the said orders and to restrain the respondent from interfering with the said enforcement.

6. The principles governing the granting of orders of temporary injunction were set out in the case of Giella vs Cassman Brown and Company Limited (1973) E A 385, at page 360 where Spry J held that: -“The conditions for the grant of an interlocutory injunction are now, I think, well settled in East Africa. First, an applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injunction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages. Thirdly, if the court is in doubt, it will decide an application on the balance of convenience.”

7. The Court of Appeal in determining what amounts to a prima facie case in Mrao Limited vs First American Bank of Kenya and 2 Others (2003) KLR 125 stated:-“A prima facie case in a civil case includes but is not confined to a “genuine or arguable” case. It is a case which on the material presented to the court; a tribunal properly directing itself will conclude there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.”

8. The Court of Appeal in Nguruman Limited vs Jan Bonde Nielsen & 2 Others [2014] eKLR adopted the same position and added that:-“The party on whom the burden of proving a prima facie case lies must show a clear and unmistakable right to be protected which is directly threatened by an act sought to be restrained, the invasion of the right has to be material and substantive and there must be an urgent necessity to prevent the irreparable damage that may result from the invasion...... The standard of proof of that prima facie case is on a balance or, as otherwise put, on a preponderance of probabilities. This means no more than that the Court takes the view that on the face of it the applicant’s case is more likely than not to ultimately succeed.”

9. I find that the applicant has demonstrated that it has a prima facie case against the respondents who have not complied with the order of April 12, 2016 requiring the 1st plaintiff to deposits kshs 3,000,000. It was the applicant’s case it has been unable to carry out a valuation of the as the plaintiff has denied them access to the suit property.

10. The respondent, on the other hand, blamed the applicant for the delay in fixing the case for pre- trial directions and for failing to enjoin Gems Management Limited to the suit.

11. A perusal of the court record and reveals that the court issued interim orders on April 12, 2016 restraining the defendants and/or agents from selling or taking possession or in any way interfering with the 1st plaintiff’s occupation/ possession over LR NO 27409 on condition that the plaintiff pays Kenya Shillings three million to the 1st defendant.

12. It is not disputed that the respondents have not complied with the said order. The respondents have also not sought an extension of the time within which to comply with the said order and neither have they preferred an appeal against the orders of the court. In the premises, I find that the interim orders lapsed on April 18, 2016 and the applicant is now at liberty to continue with the realization of its security.

13. The appellant further sought orders to restrain the respondent from interfering with the valuation process. According to the applicant, the respondent has on several occasions intimidated the auctioneers and denied them access of the suit property.

14. Section 97(2) of the Land Act a chargee is required to carry out a forced valuation of charged property before exercising the power of sale. The section provides that:-97. (1)A chargee who exercises a power to sell the charged land, including the exercise of the power to sell in pursuance of an order of a court, owes a duty of care to the chargor, any guarantor of the whole or any part of the sums advanced to the chargor, any chargee under a subsequent charge or under a lien to obtain the best price reasonably obtainable at the time of sale.(2)A chargee shall, before exercising the right of sale, ensure that a forced sale valuation is undertaken by a valuer.

15. I find that the applicant has established that it is entitled to the orders sought in the application. The respondent did not challenge its indebtedness to the 1st defendant.

16. For the above reasons, I find that the application dated December 11, 2020 has merit and is therefore allow it in the following terms:-a.The interim orders issued on April 12, 2016 automatically lapsed on April 18, 2016 when the respondent failed to remit the sum of Kenya Shillings Three Million (3,000,000).b.The plaintiff/respondents, their servants, employees and/or Advocates and agents including Messrs Gems Management Limited are hereby restrained from in any way whatsoever interfering with any scheduled auction of the suit property.c.The Officer Commanding Station (OCS), Athi River police station to facilitate, supervise and ensure the 1st defendant/ applicant's uninhibited access and entry to the suit property for purposes of conducting a valuation and disposing the said property through way of auction.d.The respondent shall bear the costs of the application.

DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 21ST DAY OF JULY 2022. W A OKWANYJUDGEIn the presence of: -Macharia for 1st defendant/applicantMs Gikonyo for Thuita for plaintiff/respondentCourt assistant- Sylvia