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ELCPartially AllowedNot stated in the judgment· [2020] KEELC 2139 (KLR)

Evans Majani Liyosi v Belice Muhenge Agola & 2 others; Petro Oil Kenya Limited (Interested Party) [2020] KEELC 2139 (KLR)

Environment and Land Court
14 May 2020
MNMwangi Njoroge
2,189 words in judgment
View original judgmentRead on Kenya Law Watch case
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·~9 min to read original · ~4 min brief

The bottom line

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A Kitale court froze land sales protecting a buyer who paid Kshs 37.6 million, while the sitting tenant's pre-emptive right claim was too weak for an injunction.

What this practically means

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Executive summary

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This ruling of the Environment and Land Court at Kitale (Mwangi Njoroge, J) determines two consolidated interlocutory applications arising from a dispute over LR No. 2116/486 (I.R No. 23967), Kitale Municipality. The plaintiff, claiming to be a bona fide purchaser under a sale agreement of 26/7/2018, sought a temporary injunction restraining the defendants from alienating or dealing with the suit property, averring he had paid Kshs. 37,600,000 of the purchase price with a balance of Kshs. 2,400,000 outstanding. The interested party, in occupation under a 2003 lease extended to 2023, sought joinder and an injunction protecting its tenancy, contending it held a first option to purchase which the sale breached, and that the plaintiff came to court with unclean hands. The defendants denied receiving any purchase monies and disputed agreement on price. The court framed two issues: whether an interim injunction should issue and for whom, and costs. It held the interested party's only relevant interest under the lease was one of pre-emption; the letters of 9/1/2018 and 21/2/2018 demonstrated a prima facie case for the plaintiff that the interested party was offered and declined the first option, though conclusive proof awaited trial. The interested party failed to establish a prima facie case, its interests being less endangered since the plaintiff disclaimed any eviction intent. The plaintiff's application was granted in terms of prayer 2, tailored to exclude the existing lease, the interested party's injunction prayer was dismissed, and costs of both applications were made costs in the cause.

Key legal issues

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01

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

Holding

Yes, against both the defendants and the interested party, on the strength of the letters of 9/1/2018 and 21/2/2018 showing the interested party was offered the first option to purchase and declined

Reasoning

The court examined the exhibited letter of offer and the interested party's reply declining the offer, concluding they were sufficient to support the plaintiff's prima facie case that the interested party was accorded and declined the first option to purchase. It stressed, however, that conclusive proof awaited the main trial.

p. 3
02

Whether the interested party established a prima facie case warranting an injunction

Holding

No. Its interest under the lease was found to be merely pre-emptive, and the balance of convenience favoured the plaintiff

Reasoning

The court held the interested party's rights under the lease were limited to pre-emption and could be protected without an injunction in its favour. The plaintiff disavowed any intention to evict the interested party, so its interests were less endangered than the plaintiff's, whose purchaser's interest required protection against disposal.

p. 3
03

Scope of the injunction in respect of the existing lease

Holding

The injunction must exclude the existing lease in favour of the interested party and only restrain disposal, including new leasing, in favour of third parties

Reasoning

Because the orders sought would inhibit disposal including by leasing, and a lease already exists between the defendants and the interested party, the court tailored the relief so the existing lease was not disturbed; the plaintiff's interests are secured only against new leases in favour of others.

p. 3

Legal principles established

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  • Where a lease confers only a pre-emptive right, the interest protected is one of pre-emption and its ability to defeat a subsequent sale must await trial
  • Prima facie findings on interlocutory applications are provisional and subject to proof at trial

Court orders

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  1. 1.The plaintiff's application dated 24/4/2019 is granted in terms of prayer no. 2 thereof (temporary injunction restraining the defendants from alienating, selling, transferring, leasing, wasting or dealing with suit property LR No. 2116/486 (I.R No. 23967), Kitale Municipality, pending hearing and determination of the suit)
  2. 2.Prayer no. (c) in the interested party's application dated 28/10/2019 is dismissed
  3. 3.The costs of the two applications shall be in the cause

Authorities

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Legislation

  • Civil Procedure Rules (2010)Order 40 Rules 1 and 2
  • Civil Procedure Rules (2010)Order 1 rule 10; Order 51 rule 1
  • Civil Procedure ActSections 1A, 1B, 3 and 3A
  • Constitution of Kenya 2010Articles 25(c), 40, 50 and 159
Jurisdiction invoked
Order 40 Rules 1 and 2 of the Civil Procedure Rules (2010) and Sections 3, 3A, 1A, 1B and 3B of the Civil Procedure Act; Article 25(c), 40, 50 and 159 of the Constitution (as invoked by the interested party)

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, "Evans Majani Liyosi v Belice Muhenge Agola & 2 others; Petro Oil Kenya Limited (Interested Party) [2020] KEELC 2139 (KLR)", Case Analysis (2020). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2020/2139/eng@2020-05-14

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