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ELCPartially AllowedNot stated in the judgment (Notice of Motion application dated 14th December, 2017)· [2019] KEELC 662 (KLR)

Krishma Jitesh Chavda v Joseph Mungai Gikonyo t/a Garam Investments Auctioneers & 5 others [2019] KEELC 662 (KLR)

Environment and Land Court of Kenya
14 November 2019
3,565 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~14 min to read original · ~4 min brief

The bottom line

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A Nairobi court blocked a bank-driven auction of land bought at a prior auction, ruling the registered owner had a strong case and land loss cannot be fixed with money.

What this practically means

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Executive summary

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This is an interlocutory ruling of the Environment and Land Court at Nairobi (S. Okong'o, J) on the plaintiff's amended Notice of Motion dated 14th December 2017. The plaintiff, registered owner of L.R No. 205/26 (I.R 124510) Villa No. 8 Olive Point Villas, purchased the property at a public auction on 4th March 2015 in execution of a decree in High Court Commercial Case No. 502 of 2013 against Green Future Limited and Fredrick Okumu Sewe; the sale was confirmed and a vesting order issued, with registration in her name on 14th December 2016. She sought temporary and permanent injunctions and a declaration of ownership after the 1st defendant advertised the property for auction on 24th October 2017 at the instance of the 2nd defendant, a bank holding a caution registered in January 2015 and a decree in Civil Suit No. 379 of 2015 authorising sale. The 2nd defendant opposed, contending its caution was removed unprocedurally without notice under section 73 of the Land Registration Act, and that it was owed Kshs. 13,677,979/=. Applying Giella v Cassman Brown as refined in Nguman Ltd, the court found a prima facie case with probability of success, irreparable injury not compensable in damages (land being peculiar), and the balance of convenience favouring the plaintiff, noting the prohibitory order took precedence over the 2nd defendant's caution and that no good title could pass to an auction purchaser. The permanent injunction and declaration were refused as final relief. The application was allowed with costs; however, the operative order allowing it 'in terms of prayer 3' (the declaration) is internally inconsistent with the ruling.

Key legal issues

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01

Whether the plaintiff established a prima facie case with a probability of success

Holding

Yes. The plaintiff is the undisputed registered owner of the suit property, acquired it through a court-sanctioned process for Kshs. 38,700,000 and is in possession; the orders vesting the property on her have not been varied or set aside.

Reasoning

The court applied the Giella v Cassman Brown test as refined in Nguman Ltd v Jan Bonde Nielesen adopting Mrao Ltd v First American Bank. It found the plaintiff's registered title and court-sanctioned acquisition undisputed, the intended auction based on an advertisement naming the wrong owner, and no evidence that the vesting orders were set aside. The legality of the process was left for trial, but the plaintiff showed a clear right on the face of it.

p. 3
02

Whether irreparable injury and balance of convenience favoured the plaintiff

Holding

Yes. Loss of land is not adequately compensable in damages, and the plaintiff's possession and registration meant the status quo should be maintained.

Reasoning

The court held that even if doubtful on prima facie case, the balance of convenience favoured the plaintiff since she is registered owner in possession. The 2nd defendant's ability to pay damages did not justify selling property registered in the plaintiff's name as if owned by the 4th defendant. The prohibitory order in the commercial case arguably took precedence over the 2nd defendant's later-registered caution.

p. 4
03

Priority between the prohibitory order in the commercial case and the 2nd defendant's caution

Holding

Without deciding with finality, the prohibitory order took precedence over the 2nd defendant's caution, which was registered against the title while the prohibitory order was in place.

Reasoning

The court noted the caution was registered after the prohibitory order in the commercial case, and rejected the 2nd defendant's argument that upon lifting of the prohibitory order its caution overtook the prohibitory order and vesting order in priority. The court also noted the 2nd defendant's contention that the caution removal procedure under section 73 of the Land Registration Act was not followed, but left that for trial.

p. 4
04

Whether permanent injunction and declaration could issue at the interlocutory stage

Holding

No. Those are final reliefs grantable only after trial.

Reasoning

Although framed in an amended Notice of Motion, prayers for a permanent injunction and a declaration of ownership are final orders that cannot be granted on an interlocutory application; they remain for determination at the trial of the suit.

p. 4

Legal principles established

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  • An applicant for an interlocutory injunction must show a prima facie case with a probability of success and irreparable injury not adequately compensable in damages; if in doubt, the court decides on a balance of convenience (Giella v Cassman Brown applied).
  • Where there are serious conflicts of facts, the trial court should maintain the status quo until the dispute is decided at the trial.
  • A disposition of land by a party who is not the registered owner cannot pass good title to a purchaser.
  • Monetary compensation is in most cases insufficient to compensate for the loss of land.

Court orders

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  1. 1.The plaintiff's Notice of Motion application dated 14th December, 2017 was allowed 'in terms of prayer 3 thereof'
  2. 2.The plaintiff was awarded the costs of the application

Authorities

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Legislation

  • Land Registration Actsection 73

Cases cited (4)

  • Giela v Cassman Brown & Company Ltd.
    [1973] E.A 358
  • Nguman Ltd. v Jan Bonde Nielesen and 2 Others
    [2014] eKLR
  • Mrao Ltd. v First American Bank of Kenya Ltd. and 2 Others
    [2003] KLR 125
  • Ougo and Another v Otieno
    [1997] KLR 364
Jurisdiction invoked
First-instance interlocutory application in the Environment and Land Court; no specific constitutional/statutory jurisdictional provision invoked in the judgment

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, "Krishma Jitesh Chavda v Joseph Mungai Gikonyo t/a Garam Investments Auctioneers & 5 others [2019] KEELC 662 (KLR)", Case Analysis (2019). Not stated in the judgment (Notice of Motion application dated 14th December, 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2019/662/eng@2019-11-14

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