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Court of AppealPartially AllowedCivil Appeal No 59 of 1993

Omega Enterprises (Kenya) Ltd v Kenya Tourist Development Corporation & 2 others (Civil Appeal 59 of 1993) [1998] KECA 2 (KLR)

Court of Appeal of Kenya
11 December 1998
6,594 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~26 min to read original · ~4 min brief

The bottom line

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Kenya's Court of Appeal ruled that ex parte injunctions granted without recorded reasons or beyond 14 days are void, and a court cannot cancel a third party's auction purchase without hearing them.

What this practically means

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Executive summary

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The appellant, Omega Enterprises (Kenya) Limited, purchased Eldoret Sirikwa Hotel at a public auction on 18 December 1992 pursuant to instructions of the receiver/manager appointed by the debenture holder. On the very morning of the auction, the first respondent, an unsecured creditor, obtained an ex parte temporary injunction from Akiwumi J under Order XXXIX rules 1 and 9 of the Civil Procedure Rules without notice and without the judge recording reasons. By a ruling of 15 January 1993, the High Court declared the auction illegal, invalid and of no effect and confirmed the injunction until determination of the suit. Omega, which was never a party to that litigation, appealed. The Court of Appeal (Gicheru, Tunoi and Pall JJ.A, each delivering a judgment) unanimously allowed the appeal. It held that Order XXXIX rule 3(1) mandatorily requires recorded reasons before an application may be heard ex parte, and that rule 3(2) caps ex parte injunctions at 14 days; the order of 18 December 1992 breached both and was null and void. Applying Macfoy v United Africa Co Ltd, every proceeding founded on the void order, including the ruling of 15 January 1993, was itself a nullity. Further, the High Court could not declare Omega's purchase illegal without hearing it, breaching natural justice and attracting the right to be set aside ex debito justitiae. The Court set aside the order of 15 January 1993 and awarded the appellant costs against all three respondents.

Questions the Court framed

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The issues the Court set itself to decide, in its own words.

  1. 1.Whether the ex parte injunction order of 18 December 1992 was invalid for non-compliance with the mandatory requirements of Order XXXIX rule 3(1) of the Civil Procedure Rules (failure to record reasons for hearing the application ex parte)
  2. 2.Whether the ex parte injunction was additionally void for exceeding the 14-day maximum period prescribed by Order 39 rule 3(2)
  3. 3.Whether an order that is null and void could bind the appellant, who was not a party to the proceedings in which it was made
  4. 4.Whether the ruling of 15 January 1993, which declared the public auction illegal and confirmed the injunction, was a nullity as founded on a void order and as made against the appellant without a hearing

Key legal issues

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01

Mandatory nature of Order XXXIX rule 3(1) - recorded reasons for ex parte hearing

Holding

The ex parte order of 18 December 1992 was invalid because the court did not record reasons for being satisfied that the object of the injunction would be defeated by delay; the rule is mandatory, not directory.

Reasoning

The court construed Order XXXIX rule 3(1), which permits ex parte hearing only where the court is satisfied for reasons to be recorded that delay would defeat the injunction. The record showed the judge granted the order without counsel addressing him and without recording any reasons. Following the court's own earlier decision in Uhuru Highway Development Ltd v Central Bank of Kenya, the recording of reasons is mandatory; non-compliance left the order without legal basis and null and void. Reliance on Boyles v Gathure (directory provisions) was distinguished as concerning a mere wrong form of application, not a fundamental breach of a mandatory rule.

p. 10
02

Exceeding the 14-day statutory maximum for ex parte injunctions

Holding

The ex parte injunction granted until 4 January 1993 (16-17 days) exceeded the 14-day maximum in Order 39 rule 3(2) and was therefore made without jurisdiction and null and void.

Reasoning

Order 39 rule 3(2) provides that no injunction may be granted ex parte for longer than shown to be necessary and in no case for more than 14 days. The judge granted the injunction until 4 January 1993, beyond the 14-day limit. The court held this was a defiance of mandatory provisions rendering the order without legal basis and void, compounding the defect of the missing recorded reasons.

p. 10
03

Effect of a void order on third parties and on subsequent proceedings

Holding

A void order is a nullity that binds no one, including third parties; all proceedings founded on it, including the ruling of 15 January 1993, are themselves nullities.

Reasoning

Applying Macfoy v United Africa Co Ltd, the court held that a void act is incurably bad and needs no formal setting aside, and every proceeding founded on it collapses. The ex parte order was not addressed to Omega, so Omega was not obliged to obey it or to apply to set it aside. The ruling of 15 January 1993, being in pursuance of the void order, was of no legal effect. The obligation in Hadkinson v Hadkinson to obey court orders until discharged applies to persons against whom orders are made, not to third parties affected by them.

p. 10
04

Breach of natural justice against the appellant purchaser

Holding

The superior court could not declare the appellant's auction purchase illegal, invalid and of no effect without joining or hearing the appellant; doing so breached natural justice and entitled the appellant to have the order set aside ex debito justitiae.

Reasoning

The appellant was never a party to KTDC's suit against the chargee and receiver, yet the ruling of 15 January 1993 declared its auction purchase illegal and confirmed an injunction continuing to the determination of the suit, directly affecting its interests. The inter partes hearing on 11 January 1993 proceeded without any reference to the appellant. Applying Lord Diplock in Isaacs v Robertson, orders obtained in breach of natural justice attract the inherent right to be set aside ex debito justitiae.

p. 4

Legal principles established

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  • An ex parte injunction may be heard and granted only where the court is satisfied, for reasons recorded on the record, that the object of granting the injunction would be defeated by delay; failure to record such reasons renders the order invalid, null and void.
  • No ex parte injunction may be granted for more than 14 days; an ex parte injunction exceeding that period is made without jurisdiction and is null and void.
  • A void order is a nullity requiring no formal setting aside, and every proceeding founded on it is equally bad and incurably bad.
  • A court cannot declare a sale to a third party illegal or void without first giving that third party, whose interests are affected, an opportunity to be heard; such an order breaches the rules of natural justice and attracts the right to be set aside ex debito justitiae.

Court orders

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  1. 1.Appeal allowed
  2. 2.Order of the superior court dated 15th January 1993 set aside
  3. 3.Costs of the appeal awarded to the appellant against the first, second and third respondents

The bench

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One judgment of the whole court — no separate or dissenting opinions.

majority

Wrote the judgment

Gicheru JA wrote the lead judgment. He held that the ex parte injunction of 18 December 1992 was granted in defiance of Order XXXIX rule 3(1) of the Civil Procedure Rules, which requires recorded reasons for hearing an application ex parte, and that the subsequent ruling of 15 January 1993, which declared the auction illegal and confirmed the injunction, affected the appellant purchaser without giving it a hearing, breaching the rules of natural justice and attracting the right to have it set aside ex debito justitiae. He would allow the appeal, set aside the order of 15 January 1993 and award costs to the appellant against all three respondents.

clearly in breach of the rules of natural justice and attracts ex debito justitiae the right to have it set aside. In the result, I would allow the appellant's appeal, set aside the order of the superior court dated 15th January, 1993p. 4
concurring

Wrote the judgment

Tunoi JA agreed entirely with the judgments of Gicheru and Pall. He held that the ex parte order was made without recorded reasons as mandated by Order 39 rule 3(1) and exceeded the 14-day maximum under rule 3(2), making it null and void; that third parties cannot be guilty of disobeying a void order; and that all proceedings founded on the void order were a complete nullity. He also rejected the respondents' notice of grounds for affirming the decision, which was not addressed at the hearing. He would allow the appeal with costs.

all the proceedings before the learned Judge which were based upon the null and void order having been allegedly disobeyed are a complete nullity since with such a faulty foundation the entire house of cards must collapse without much adop. 6
concurring

Wrote the judgment

Pall JA, in the fullest account of the facts, held that the ex parte order of 18 December 1992 was invalid because the judge recorded no reasons for hearing the application ex parte and granted the injunction for 16 days in defiance of the 14-day cap in Order 39 rule 3(2). He held the order was not addressed to Omega, and that the judge could not declare the auction illegal without giving Omega an opportunity to be heard, breaching natural justice. The proceedings of 15 January 1993 founded on the void order were themselves a nullity. He would allow the appeal with costs and set aside the order of 15 January 1993.

there is no doubt that the learned Judge could not have declared the sale of the suit property illegal or void without first giving Omega an opportunity of being heard which is a breach of one of the fundamental rules of natural justicep. 10
On appeal from
High Court of Kenya at Nairobi
H.C.C.C No. 6776 of 1992
Jurisdiction invoked
First appellate jurisdiction over appeals from the High Court (an appeal from the ruling of the High Court of Kenya at Nairobi dated 15th January, 1993)

Relief refused

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Counsel for the first respondent's request not to participate in the appeal

Granted, not refused - Mr Oyatsi was excused from participating on behalf of KTDC

p. 2

Costs

Costs of the appeal awarded to the appellant against the first, second and third respondents (all three judgments allow the appeal with costs).

Quotable passages

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Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.

In the result, I would allow the appellant's appeal, set aside the order of the superior court dated 15th January, 1993 and order that the costs of this appeal be awarded to the appellant again the first, second and third respondents. As Tunoi and Pall, JJ.A. agree it is so ordered.
p. 4Final orders - appeal allowed, order of 15 January 1993 set aside, costs to appellant
For these reasons I would allow the appeal with costs and set aside the said order of 15th January, 1993.
p. 10Pall JA's concluding disposition
For the above reasons I would allow the appeal with costs.
p. 6Tunoi JA's concluding disposition
the hearing of an application for injunction ex parte can only be legitimate where the court is satisfied that the object of granting the injunction would be defeated by delay and that satisfaction must be manifested by the recorded reasons of the court
p. 3Mandatory recorded reasons for ex parte injunctions
If an act is void, then it is in law a nullity. It is not only bad, but incurably bad. There is no need for an order of the Court to set it aside. It is automatically null and void without more ado
p. 5Macfoy v United Africa Co Ltd - consequences of a void act
It is the plain and unqualified obligation of every person against, or in respect of, whom an order is made by a court of competent jurisdiction to obey it unless and until that order is discharged.
p. 3Hadkinson v Hadkinson - obligation to obey court orders (as adopted)
there is no doubt that the learned Judge could not have declared the sale of the suit property illegal or void without first giving Omega an opportunity of being heard which is a breach of one of the fundamental rules of natural justice
p. 10Natural justice - hearing required before affecting a third party's interests

Issues in the judgment

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minor

The judgment contains internal inconsistencies in dates and quotations: Pall JA's judgment opens by describing the appeal as from a ruling 'delivered on 15th January, 1992' while the coram and the other judgments state 15th January, 1993; the length of the ex parte injunction is variously described as 16 days and 17 days; and the quotations from Macfoy and from Order 39 rule 3(2) contain transcription errors ('No injuries may be granted ex-parte', 'You cannot put something on nothing and expert it to stay there').

minor

Tunoi JA's judgment is signed 'P.K. TUNOI JUDGE KOF APPEAL', an evident typographical error in the copy.

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Omega Enterprises (Kenya) Ltd v Kenya Tourist Development Corporation & 2 others (Civil Appeal 59 of 1993) [1998] KECA 2 (KLR)", Case Analysis (1998). Civil Appeal No 59 of 1993. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/1998/2/eng@1998-12-11

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.