Westlands Resudential Resort Limited v Kawakanja Limited & 2 others [2013] KECA 474 (KLR)
The bottom line
#The Court of Appeal revived a property buyer's suit and blocked the land's sale to others, but only after the buyer deposited Kshs. 100 million as security.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the learned High Court judge was right to strike out, in limine, the appellant's application for injunction under Order 39 of the Civil Procedure Rules as well as the appellant's suit on the grounds that the underlying transaction is void under section 6 of the Land Control Act and that the agreement for sale is inadmissible under section 19 of the Stamp Duty Act
- 2.Whether the judge erred in striking out the suit when what was before him was an application for injunction
- 3.Whether the learned judge considered the application before him and, if not, whether he erred in failing to do so
Key legal issues
#Whether the High Court could strike out a suit in the course of hearing an application for temporary injunction
The judge was entitled to consider the respondents' objections to the application for injunction on the basis that the agreement for sale was void for want of land control board consent, since a matter may in a proper case be finally disposed of on a preliminary point of law
The Court recognised that a matter can, in a proper case, be finally dealt with on the basis of a preliminary objection where, on uncontested facts, an issue can be disposed of on a point of law. However, the grant or refusal of injunction and striking out of pleadings are exercises of judicial discretion subject to appellate restraint. Here the objections raised contested factual and legal questions worthy of trial ventilation.
Whether the learned judge properly exercised his discretion in striking out the suit
The judge failed to take into account relevant considerations, and the suit was prematurely struck out
Matters such as whether consent of the Land Control Board related to the transaction rather than the document, the availability of the proviso to section 8 of the Land Control Act for extension of time, whether a promise could constitute consideration, and the procedure under section 19(3) of the Stamp Duty Act for handling unstamped instruments did not receive due consideration from the judge. These were matters worthy of ventilation at a trial.
Whether the appellant established a prima facie case entitling it to a temporary injunction
The appellant made out a prima facie case for specific performance with some probability of success, and the balance of convenience tilted in its favour, warranting a conditional temporary injunction
The agreement for sale set out the terms of the contract sufficiently, including parties, property, price, completion time and obligations. The question whether the agreement suffered from a defect rendering it invalid or unenforceable was a matter for the trial court. The Court found that the 1st respondent may have deliberately thwarted the transaction by refraining from seeking the consent it was obliged to seek, tilting the balance of convenience in favour of the appellant, though the claim that damages would be inadequate was doubtful.
Whether the agreement for sale was inadmissible for want of stamping
The procedure under section 19(3) of the Stamp Duty Act for handling an unstamped instrument received in court was a matter that ought to have been considered, and inadmissibility could not justify striking out the suit without consideration
Section 19(3) of the Stamp Duty Act stipulates the procedure for handling an unstamped document received by the court. The appellant contended it could regularise the agreement and at worst pay a penalty of ten shillings. Since this issue did not receive due consideration by the judge, it was a matter for ventilation at trial rather than a basis for summary dismissal of the suit.
Legal principles established
#- An appellate court will not interfere with the exercise of judicial discretion by a judge unless the judge misdirected himself or was clearly wrong in the exercise of his discretion resulting in misjustice
- A preliminary objection consists of a pure point of law which has been pleaded or arises by clear implication out of the pleadings, and cannot be raised where any fact has to be ascertained or where what is sought is the exercise of judicial discretion
- The power to strike out pleadings must be used sparingly and cautiously; no suit ought to be summarily dismissed unless it is so hopeless that it plainly and obviously discloses no reasonable cause of action and is beyond redemption and incurable by amendment
- The conditions for the grant of an interlocutory injunction are: a prima facie case with a probability of success; irreparable injury not adequately compensable by damages; and, if in doubt, the balance of convenience
Court orders
#- 1.The whole of the order of the High Court given on 29th March 2011 striking out the appellant's application dated 21st October 2010 and the suit with costs is set aside
- 2.Temporary injunction restraining the respondents from advertising, offering for sale, leasing, mortgaging, charging or transferring the property known as L R NO. 11540/3 IR NO. 109051 other than to the appellant, pending the hearing and determination of the suit
- 3.The appellant shall, within 45 days from the date of delivery of the judgment, deposit the sum of Kenya Shillings One Hundred Million (Kshs. 100,000,000.00) in an interest earning bank account in the joint names of the appellant's advocates and the 1st respondent's advocates to be held pending the hearing and determination of the suit or until further orders
- 4.The appellant shall, within 60 days of delivery of the judgment, complete preparation of its case for hearing in the High Court including preparation of its bundle of documents and witness statements in readiness for fixing a hearing date for the suit
- 5.The costs of the appeal shall abide the outcome of the suit in the High Court
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.S No. 512 of 2010 (ELC)
- Jurisdiction invoked
- First appeal to the Court of Appeal under the Constitution and the Appellate Jurisdiction Act against an interlocutory ruling of the High Court
Relief refused
#Unconditional temporary injunction without terms
The injunction was granted subject to conditions of a Kshs. 100,000,000 deposit and expeditious preparation of the case
Costs against the respondents
The Court declined to make a costs order against the respondents, directing that the costs of the appeal abide the outcome of the suit
Costs
The costs of the appeal shall abide the outcome of the suit in the High Court.
Quotable passages
#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 conclusion the whole of the order of the High Court given on 29th March 2011 striking out the appellant’s application dated 21st October 2010 and the suit with costs is hereby set aside.
In substitution thereof we order that the respondents be and are hereby restrained by order of temporary injunction from advertising, offering for sale, leasing, mortgaging, charging or transferring other than to the appellant, the property known as L R NO. 11540/3 IR NO. 109051 pending the hearing and determination
No suit ought to be summarily dismissed unless it appears so hopeless that it plainly and obviously discloses no reasonable cause of action and is so weak as to be beyond redemption and incurable by amendment.
First, an applicant must show a prima facie case with a probability of success. Secondly, an interlocutory injuction will not normally be granted unless the applicant might otherwise suffer irreparable injury, which would not adequately be compensated by an award of damages.
An appellate court is always slow to tamper with the exercise of judicial discretion.
A preliminary objection is in the nature of what used to be a demurrer. It arises a pure point of law which is argued on the assumption that all the facts pleaded by the other side or correct. It cannot be raised if any fact has to be ascertained or if what is sought is the exercise of judicial discretion.
Issues in the judgment
#The judgment refers to '2nd to 4th respondents' and to a '4th respondent' whose defence and replying affidavit are described, but the coram lists only three respondents (the 2nd respondent being Margaret Nyakinyua Murigu); the identity of the 4th respondent is not stated in the parties heading
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Westlands Resudential Resort Limited v Kawakanja Limited & 2 others [2013] KECA 474 (KLR)", Case Analysis (2013). Civil Appeal No. 165 'A' of 2011. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/474/eng@2013-07-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.