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ELCPartially AllowedNot stated in judgment (Murang'a ELC suit; application dated 16/08/2018)· [2020] KEELC 7 (KLR)

Mugumoini Farmers Company Limited v Inshwil Builders Engineers Limited; Ephraim Waithaka Ruitha & another ( Interested Parties) [2020] KEELC 7 (KLR)

Environment and Land Court
25 February 2021
1,519 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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A Murang'a court blocked the sale of a disputed 229-acre tea farm, saying money can't compensate land once it's been subdivided and sold.

What this practically means

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Executive summary

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The Plaintiff, a body corporate, sought a temporary injunction and a caveat over land parcel KAKUZI/KIRIMIRI BLOCK 7/37 (approximately 229 acres) and its sub-divisions, pending hearing of the main suit. It alleged that in February 2010 former directors, Julius Mbugua Gatuha and Benjamin Kamande Githuka, who had been removed from office on 17/05/2003, fraudulently transferred the suit property to the Defendant pursuant to a sale agreement dated 11/07/2003 and orders obtained irregularly in Nairobi HCCC No. 3086 of 1994. Two interested parties were joined on 13/09/2019 as bona fide purchasers of part of the property. The Defendant opposed, raising res judicata, while the interested parties asserted bona fide purchaser status, absence of fraud, and protection of proprietary rights under Article 40 of the Constitution. The Defendant's preliminary objection had earlier been dismissed on 23/09/2019. Applying the Giella v Cassman Brown principles, the Court found a prima facie case: the signatory directors had been removed from office, one was hospitalised and his widow disowned the signature as a forgery, the other denied knowledge of the agreement, and the Applicant's then advocates denied lifting prohibitory orders and confirmed terminating the transaction. Damages would not suffice since the land had been subdivided and parcels sold. The Court declined the caveat as unnecessary, holding the injunction sufficient for preservation. It granted the injunction against the Defendant and interested parties and awarded costs to the Plaintiff.

Key legal issues

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01

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

Holding

Yes. The alleged removal of the signatory directors from office, the hospitalisation and widow's denial of one signatory's signature, the other signatory's denial of knowledge of the sale agreement, and the denial by the advocate of lifting prohibitory orders all necessitate inquiry by the Court.

Reasoning

The Court examined the affidavit evidence showing that the alleged signatories to the 2003 sale agreement lacked capacity, that one purported signature was disowned as a forgery by the widow of the deceased director, and that the advocate acting for the Applicant at the material time denied lifting prohibitory orders and confirmed terminating the transaction by letter. These triable issues required investigation, establishing a prima facie case.

p. 2
02

Whether damages would be a sufficient remedy

Holding

No. The suit property is land that has been subdivided and parcels disposed of; the Applicant cannot be adequately compensated by damages, so an injunction is fair and just.

Reasoning

The Court noted the special nature of land as the subject matter of the suit and the prima facie evidence that the Respondent had subdivided and sold off some parcels. Given this real risk of dissipation of the property, monetary compensation would not suffice, and preservation by way of temporary injunction was warranted pending full hearing.

p. 2
03

Whether a caveat should be ordered on the suit property

Holding

No. The temporary injunction already serves the preservation purpose, so a separate caveat order was unnecessary.

Reasoning

Having granted the temporary injunction against interference, sale or disposal of the suit property and its sub-divisions, the Court found that the injunction would achieve the same protective objective as a caveat. There was therefore no need to duplicate the preservation mechanism by also ordering a caveat.

p. 2

Legal principles established

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  • The principles for granting a temporary injunction are those in Giella v Cassman Brown: prima facie case with probability of success, damages as insufficient remedy, and balance of convenience/balance of probability in doubt.
  • Land that has been subdivided and partly disposed of cannot be adequately compensated by damages, justifying an interlocutory injunction.

Court orders

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  1. 1.Temporary injunction issued against the Defendant and interested parties prohibiting any interference, selling or disposing off of the suit property KAKUZI/KIRIMIRI BLOCK 7/37 and its sub-divisions pending the hearing and determination of the main suit
  2. 2.Prayer for caveat not granted, a temporary injunction being sufficient to preserve the suit property
  3. 3.Costs of the application awarded to the Plaintiff, borne by the Respondent and the Interested Parties

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 40

Cases cited (6)

  • Mohamed & Another -vs- Haidara
    [1972] E.A 166
  • Giella v. Cassman Brown & Company Limited
    [1973] E.A 358
  • Nguruman Limited -vs- Jan Bonde Nielsen & 2 others
    [2014] eKLR
  • Bamburi Cement Limited -vs- Chief Registrar & Attorney General
    (2018) eKLR
  • Republic -vs- Registrar of Titles Mombasa & 4 others Ex-parte A.K Abdulgani Limited
    [2018] eKLR
  • Kuria Kiarie & 2 Others -vs- Sammy Magera
    (2018) eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court over land disputes

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, "Mugumoini Farmers Company Limited v Inshwil Builders Engineers Limited; Ephraim Waithaka Ruitha & another ( Interested Parties) [2020] KEELC 7 (KLR)", Case Analysis (2021). Not stated in judgment (Murang'a ELC suit; application dated 16/08/2018). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/7/eng@2020-02-25

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