Bhanoo Shashikant Jai v Multi Options Limited (In Receivership) & 2 others [2018] KECA 48 (KLR)
The bottom line
#Kenya's Court of Appeal upheld interim orders protecting property during receivership, but struck down mandatory orders granted without special circumstances.
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 Judge erred in holding that the 1st respondent had fulfilled the necessary conditions to be granted interlocutory injunctive relief
- 2.Whether the circumstances of the case warranted the issuing of a mandatory injunction at an interlocutory stage
Key legal issues
#Whether the Judge properly exercised her discretion in granting interlocutory injunctive relief
The Judge was alive to and correctly applied the Giella v Cassman Brown principles; the Court would not fault her assessment of prima facie case and irreparable injury
The Judge considered the effect of the transfer of the properties after the appointment of a receiver, whether the properties were subject to the debentures, and whether the company could dispose of them during receivership. She also found that the debenture holder's loss could not adequately be compensated by damages. These were relevant considerations, so the Court could not interfere with that exercise of discretion.
Whether a mandatory injunction could issue at an interlocutory stage
The Judge erred in granting mandatory orders (delivery of title documents and removal of caveat) without establishing special circumstances; those orders were set aside
The Court reviewed Locabail and domestic authority confirming that a mandatory injunction at the interlocutory stage requires special circumstances and clear cases. On review of the ruling, the Judge never considered whether special circumstances existed, and the 1st respondent did not demonstrate any. To that extent only the appellate court was entitled to interfere.
Legal principles established
#- An appellate court may only interfere with the exercise of judicial discretion where the judge misdirected herself in law, misapprehended the facts, considered extraneous matters, failed to consider relevant factors, or where the decision is plainly wrong
- A mandatory injunction ought not to be granted at an interlocutory stage in the absence of special circumstances, and then only in clear cases
Court orders
#- 1.Appeal allowed to the extent that orders numbers 4 and 5 of the orders granted by the High Court are set aside
- 2.Orders numbers 1, 2, 3 and 6 granted by the lower court remain in place pending the hearing and determination of the suit in the High Court
- 3.Each party to bear its own costs of the appeal as well as the costs of the application 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, Milimani Commercial Courts
- MCC Civil Suit No. 718 of 2008
- Jurisdiction invoked
- First appellate jurisdiction over an interlocutory decision of the High Court (appeal as of right against interim injunctive orders)
Relief refused
#Setting aside the remaining interlocutory orders (lis pendens, injunction against distress, setting aside proclamation, statement of affairs)
The Court was satisfied the Judge properly applied the Giella principles and that interim relief by way of temporary injunction to maintain the status quo was deserved
Costs
Each party to bear its own costs of the appeal as well as the costs of the application 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.
we allow the appeal to the extent only that we hereby set aside order numbers 4 and 5 as reproduced at paragraph 1 of this Judgment. For the avoidance of doubt, the orders numbers 1, 2, 3, 6 granted by the lower court shall remain in place pending the hearing and determination of the suit in the High Court.
As the appellant has partially succeeded in this this appeal, we think each party should bear its own costs of the appeal as well as the costs of the application in the High Court.
The consistent reiteration of those principles by the court is an affirmation that the remedy of mandatory injunction is a drastic one which ought not to be granted mechanically but considered with caution.
We can only do so if satisfied that the Judge misdirected herself in law or that she misapprehended the facts or that she considered extraneous matters or that she failed to consider relevant factors or that her decision is plainly wrong.
Issues in the judgment
#The 2nd and 3rd respondents' counsel is recorded as Mr. E. Masika supporting the appeal, while the party roles in the appeal memorandum list the appellant alone; no contradiction in outcomes, but the name of the case cited by the appellant is rendered inconsistently in the judgment ('Janson Mwangi Wanjihia' in paragraph 29 versus 'Johnson Mwangi Wanjihia' in paragraph 18)
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kenya Union Of Journalists & Allied Workers v Nation Media Group Limited [2014] KEELRC 589 (KLR)[2014] KEELRC 589 (KLR)13 Feb 2014
Cite this brief
#Cite this brief
Caselaw, "Bhanoo Shashikant Jai v Multi Options Limited (In Receivership) & 2 others [2018] KECA 48 (KLR)", Case Analysis (2018). Civil Appeal Number 240 of 2009. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2018/48/eng@2018-12-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.