Veeland Housing Company Ltd & 2 others v David Waweru Kahinga & 8 others [2018] KEELC 4205 (KLR)
The bottom line
#A Kenyan court protected plot buyers who had paid in full and taken possession, while rejecting accusations that their companies and directors were in contempt.
What this practically means
#Executive summary
#Key legal issues
#Prima facie case for injunction
The Plaintiffs established a prima facie case having purchased the plots, paid the full purchase price (acknowledged in the vendors' affidavit of 5th February 2016) and been given possession
The court found the vendors sold various plots, received payment, acknowledged receipt of the full purchase price by affidavit, and gave possession. The 1st Defendant's demands for more money and the demolition attempts violated the sale agreements. Issues raised in rebuttal were triable matters unfit for determination at interlocutory stage on affidavit evidence.
Irreparable loss
The Plaintiffs demonstrated irreparable loss since the 1st Defendant threatened to resell the plots at higher prices and damages cannot substitute crystallized rights
The Plaintiffs were in possession and constructing. The threat of resale to third parties at higher prices meant they would lose the plots before trial. The court adopted the principle that a party cannot be condemned to take damages in lieu of a crystallized right protected by injunction.
Balance of convenience
Balance of convenience tilts in favour of maintaining the status quo prevailing before the wrongful acts
The court held the status quo meant allowing the Plaintiffs to continue in possession and development as before the complained-of acts, preserving the position pending trial.
Contempt of court and lifting the corporate veil
The contempt application failed; plots Nos.88 and 90 belonged to the 3rd Plaintiff who maintained the status quo, and contempt was not proved to the near-criminal standard
Since the 3rd Plaintiff, not the 1st and 2nd Plaintiffs, owned and possessed plots Nos.88 and 90, there was no basis to lift the corporate veil of the 1st and 2nd Plaintiffs. Allegations of contempt are quasi-criminal and require proof almost beyond reasonable doubt, which the Defendants did not meet.
Legal principles established
#- Whether or not to grant an injunction is a judicial discretion based on common sense and legal principles
- An interlocutory court does not determine contested issues with finality but only whether the applicant meets the usual criteria
- The status quo to be preserved by an injunction is that existing before the wrongful act
- Contempt of court must be proved to a standard higher than balance of probabilities
Court orders
#- 1.The Notice of Motion dated 22nd February 2017 is allowed entirely in terms of prayer No.3, restraining the Defendants from selling, demolishing, harassing, alienating or interfering with the Plaintiffs' quiet possession of the suit plots, with costs to the Applicants
- 2.The Notice of Motion dated 17th March 2017 is dismissed entirely with costs to the Plaintiffs/Respondents
- 3.The Defendants to file their Defences not later than 14 days from the date of the ruling
- 4.Parties to comply with Order 11 within 30 days so the matter can be set down for hearing of the main suit
- Jurisdiction invoked
- Sections 1A, 1B and 3A of the Civil Procedure Act and Order 40 Rules 1, 2, 3 and Order 51 Rule 1 of the Civil Procedure Rules
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Veeland Housing Company Ltd & 2 others v David Waweru Kahinga & 8 others [2018] KEELC 4205 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4205/eng@2018-03-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.