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ELCDismissedHigh Court Civil Case (suit number not stated in judgment)· [2015] KEELC 756 (KLR)

Sato Properties Limited v County Government Of Nairobi (Successor In Title To The Defunct) City Council Of Nairobi & 3 others [2015] KEELC 756 (KLR)

High Court of Kenya
16 April 2015
JMJ. M. MUTUNGI
1,768 words in judgment
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The bottom line

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Kenya's High Court dismissed a dissolved company's bid to block a land sale because it no longer legally existed and couldn't prove a strong case.

What this practically means

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Executive summary

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The 4th Defendant, described as the successor in title to Antow Trading Co. Ltd, filed a Notice of Motion dated 29th April 2014, later amended (15th May 2014) and re-filed (18th August 2014), seeking an interim injunction restraining the plaintiff and the 1st Defendant from entering upon, fencing, disposing of, alienating or in any manner dealing with L.R. No. 1870/1/217 pending the hearing and determination of the suit. The application was supported by affidavits of Jeneby Arap Too. The plaintiff opposed, arguing that an interim injunction had already been declined on the same principles; that it obtained possession orders in CMCC No. 9260 of 2007, an appeal therefrom having been withdrawn; and that the 4th Defendant was dissolved by Gazette Notice No. 8949 of 14th September 2007 and thus lacked locus standi. The plaintiff also produced a charge sheet (CM CR. Case No. 1266 of 2014) alleging the 4th Defendant's directors forged documents, including a purported court order. Ownership of the suit property is hotly contested, each side accusing the other of fraud. Applying the Giella v Cassman Brown principles, J. M. Mutungi J held that the 4th Defendant failed to establish a prima facie case with a probability of success, since the plaintiff is the registered owner; that the 4th Defendant had not demonstrated locus to litigate, having been dissolved and not shown to be reinstated, with its Registrar of Companies letters disowned; that damages would be adequate compensation; and that the balance of convenience favoured the plaintiff in possession under a valid, unset-aside magistrate's court order. Both applications were dismissed with costs to the plaintiff on 16th April 2015.

Key legal issues

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01

Locus standi of a dissolved company

Holding

The 4th Defendant, having been dissolved by Gazette Notice No. 8949 of 14th September 2007 and not shown to have been reinstated, lacked locus to institute suit or litigate

Reasoning

The court found evidence that the 4th Defendant was dissolved via Gazette Notice in 2007 and prima facie ceased to exist as a company. Letters from the Registrar of Companies relied on by the 4th Defendant to prove existence were disowned by the Registrar in a letter dated 6th May 2014. The 4th Defendant did not demonstrate reinstatement, so it failed even the first Giella condition.

p. 3
02

Prima facie case for interim injunction

Holding

The 4th Defendant did not establish a prima facie case with a probability of success as the plaintiff is the registered owner of the suit property

Reasoning

Although ownership is hotly contested with mutual allegations of fraud, the plaintiff is presently the registered owner. On the tendered evidence the applicant failed to demonstrate a prima facie case, failing the first Giella principle, so the injunction could not issue.

p. 3
03

Irreparable damage and balance of convenience

Holding

Damages would be an adequate remedy and the balance of convenience favours the plaintiff who is in possession

Reasoning

Evidence showed the 4th Defendant intended to sell the suit property, indicating its value is ascertainable and damages adequate. The plaintiff held a valid magistrate's court possession order, not set aside, and was in possession, so the balance of convenience favoured the plaintiff.

p. 4

Legal principles established

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  • A party seeking an interim injunction must establish a prima facie case with a probability of success, irreparable damage not compensable by damages, and failing which the court may consider the balance of convenience
  • A court order granting possession remains valid for as long as it is not varied, reviewed or set aside on appeal

Court orders

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  1. 1.The 4th Defendant's applications dated 15th May 2014 and 18th August 2014 are dismissed
  2. 2.Costs of the applications to the plaintiff

Authorities

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Cases cited (1)

  • GIELLA –VS- CASSMAN BROWN & CO. LTD
    (1973) EA 358
Jurisdiction invoked
Inherent jurisdiction of the High Court to grant interim injunctions in a suit concerning ownership of land (L.R. No. 1870/1/217)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Sato Properties Limited v County Government Of Nairobi (Successor In Title To The Defunct) City Council Of Nairobi & 3 others [2015] KEELC 756 (KLR)", Case Analysis (2015). High Court Civil Case (suit number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2015/756/eng@2015-04-16

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