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ELCPartially AllowedELC No. 165 of 2021 (Formerly Malindi ELC 3 of 2021)· [2021] KEELC 446 (KLR)

Bamburi Supermarket Limited v Rupa Gupta & 3 others [2021] KEELC 446 (KLR)

Environment and Land Court
7 December 2021
LNL.L Naikuni
7,516 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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Kenya's Land Court confirmed that registered landowners can win injunctions even when shareholding disputes run parallel in other courts.

What this practically means

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Executive summary

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The Environment and Land Court at Mombasa (L.L Naikuni J) determined three interlocutory applications arising from a family dispute over Gupta Complex erected on LR No. 3413 Section I Mainland North, registered in the name of Bamburi Supermarket Limited. The Plaintiff sought a temporary injunction restraining the Defendants from accessing, occupying, managing, leasing or interfering with the suit property, alleging the Defendants, who were neither directors nor shareholders, had taken over the building, collected rent and barred the Plaintiff's access. The 1st Defendant, claiming to be administrator of the estate of the late Prem Lal Ramnath, sought to set aside the ex-parte orders and to stay the suit under Section 6 of the Civil Procedure Act pending HCCC No. E070 of 2021 concerning the shareholding of the company; the 4th Defendant filed grounds of opposition alleging the suit was sub judice and an abuse of process; and the Plaintiff sought contempt orders against the 1st Defendant for disobeying the orders of 19th August 2021. The court framed four issues, applied the Giella v Cassman Brown principles with MRAO and Nguruman, and held the Plaintiff had established a prima facie case and irreparable injury, with the balance of convenience favouring preservation of the property. It found the ELC land-ownership dispute and the High Court shareholding dispute to be distinct, so sub judice and res judicata did not apply. The injunction application was allowed, the stay application and grounds of opposition dismissed, the contempt application stayed on conditions including deposit of rental income into a joint escrow account of the law firms and filing of accounts by the 1st Defendant, and the parties were advised to withdraw or consolidate the multiplicity of suits, with each party bearing their own costs.

Key legal issues

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01

Whether the Plaintiff established a prima facie case for a temporary injunction

Holding

The Plaintiff, holding a Certificate of Title to the suit property, established a prima facie case with a high chance of success

Reasoning

The Plaintiff produced a Certificate of Title indicating the land is legally and absolutely registered in its names. While contested issues remain for full trial, the Plaintiff satisfied the Giella v Cassman Brown test of a prima facie case with probability of success. The court held the ownership dispute in the ELC was distinct from the shareholding dispute in the High Court commercial suit, and the Defendants' claims related to company shares, not title to the registered land.

p. 7
02

Whether the Plaintiff would suffer irreparable injury not compensable by damages

Holding

Yes - the Plaintiff stood to lose rental income and faced exposure to tax-evasion liability, harm not quantifiable in damages

Reasoning

The Defendants had allegedly leased out the suit property, collected rents and barred the Plaintiff and its directors from access, causing loss of rental income and exposure to KRA tax-evasion charges. The court associated itself with Nguruman Limited v Jan Bonde Nielsen, holding that the foundation of injunctive jurisdiction is the probability of irreparable injury and inadequacy of pecuniary compensation, and found the balance of convenience favoured preserving the suit property.

p. 7
03

Whether the suit was barred by sub judice (Section 6) or res judicata (Section 7) of the Civil Procedure Act

Holding

No - the ELC suit on land ownership and the High Court commercial suit on shareholding were distinct in subject matter and relief, so neither doctrine applied

Reasoning

The court set out the ingredients of both doctrines and held that although the parties overlapped (family members), the matters were pending rather than finally determined (defeating res judicata) and the subject matters were substantially distinct (defeating sub judice). The ELC had original and unlimited jurisdiction over land use, title and occupation under Article 162(2)(b) and Section 3 of the ELC Act, while the High Court commercial suit concerned shares of the company.

p. 8
04

Which court has jurisdiction over the directorship/shareholding and succession issues

Holding

The shareholding/commercial issues belong to the High Court commercial division and the succession issues to the family/succession court; the ELC is confined to the land ownership and interference questions

Reasoning

The court held that the High Court (Commercial Division) in HCCC No. 070/2021 is competent to determine the shareholding and commercial disputes concerning Bamburi Supermarket Limited, while the succession cause in the family court deals with the estate of the deceased. The ELC retains jurisdiction solely over ownership, title, occupation and interference with the suit land. The court advised the parties to consolidate or withdraw the multiplicity of suits.

p. 7

Legal principles established

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  • The principles for granting a temporary injunction are a prima facie case with a probability of success, irreparable injury not compensable by damages, and, if in doubt, the balance of convenience (Giella v Cassman Brown)
  • At an interlocutory stage the court is forbidden to decide with finality the facts urged by the parties
  • Section 6 of the Civil Procedure Act bars parallel prosecution of cases in two forums of equal jurisdiction only where the matter in issue is directly and substantially in issue in a previously instituted suit between the same parties litigating under the same title
  • Where commercial and land issues are distinct and severable, each suit properly before the competent court should proceed (mixed grill cases)
  • Costs follow the event under Section 27(1) of the Civil Procedure Act, though the court retains discretion on principles of natural justice, equity and conscience

Court orders

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  1. 1.The Notice of Motion dated 19th August 2021 by the Plaintiff/Applicant is allowed
  2. 2.The Notice of Motion application dated 23rd August 2021 by the Defendant/Applicants is found unmeritorious and dismissed
  3. 3.The grounds of opposition dated 27th September 2021 by the 4th Defendant are found unmeritorious and dismissed
  4. 4.The Notice of Motion application dated 7th September 2021 by the Plaintiff/Applicant (contempt proceedings) is stayed awaiting the outcome of the orders made on 7th December 2021, on conditions that all rental income collected from the suit land from 31st July onwards be deposited into a joint escrow account of the four law firms within 14 days; the account holders/signatories to run, manage and operate the accounts pending determination; and the 1st Defendant to provide detailed accounts and financial statements of all rental income collected from 31st July to date within 30 days
  5. 5.The parties are advised to withdraw all pending court cases over the same subject matter in other courts or to consolidate them
  6. 6.HCCC (Mombasa) No. 070/2021 on the fraudulent and irregular matters of shares in the plaintiff's property to continue to its logical conclusion
  7. 7.ELC No. 165/2021 on ownership and title of the suit land to be fixed for hearing within 90 days on priority basis
  8. 8.Mention of ELC 165/2021 on 1st February 2022 for pre-trial conference under Order 11 of the Civil Procedure Rules, case management and taking of a hearing date
  9. 9.Each party to bear their own costs of the applications

Authorities

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Legislation

  • Constitution of KenyaArticle 162(2)(b)
  • Environment and Land Court Act, No. 19 of 2012Sections 3, 14, 26(1) & (2)
  • Civil Procedure Act, Cap 21Sections 1A, 1B, 3A, 6, 7, 27(1), 63
  • Civil Procedure Rules 2010Order 40 Rules 1, 2 & 3; Order 51 Rule 1; Order 11
  • High Court (Organization and Administration) ActSection 10(2) & (3)
  • High Court (Organization and Administration) (General) Rules 2016Rules 16, 17(1) & (2)
  • High Court Practice and Procedure RulesRule 3(1) & (2)
  • Judicature Act, Cap 8(cited generally)

Cases cited (9)

  • London Distillers (K) Limited v National Environment Management Authority & Another
    2021 eKLR
  • Edward R. Ouko v Speaker of the National Assembly & 4 Others
    (2017) eKLR
  • JR No. E045 of 2020 – Republic v Paul Kihara Kariuki, the Attorney General & 2 Others
  • Giella v Cassman Brown & Company Limited
    (1973) E.A. 308
  • MRAO Ltd v First American Bank of Kenya Ltd & 2 Others
    (2003) eKLR
  • Peter Kasimba & 219 Others v Kwetu Savings & Credit Cooperative Society Limited & 11 Others
    (2020) eKLR
  • Nguruman Limited v Jan Bonde Nielsen & 2 Others
    (2014) eKLR
  • John Florence Maritime Services Limited & Another v Cabinet Secretary for Transport and Infrastructure & 3 Others
    (2015) eKLR
  • Cooperative Bank v Patrick Njuguna Kangethe (CA No. 83 of 2016 Mombasa)
    (2017) eKLR
Jurisdiction invoked
Article 162(2)(b) of the Constitution of Kenya and Section 3 of the Environment and Land Court Act, No. 19 of 2012

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Bamburi Supermarket Limited v Rupa Gupta & 3 others [2021] KEELC 446 (KLR)", Case Analysis (2021). ELC No. 165 of 2021 (Formerly Malindi ELC 3 of 2021). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/446/eng@2021-12-07

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