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ELCPartially AllowedNot stated in the judgment (suit in respect of Land Title Number Nairobi Block 129/289)· [2021] KEELC 3024 (KLR)

Migui Macharia Mungai & another v Cheska Agencies Limited [2021] KEELC 3024 (KLR)

Environment and Land Court
3 June 2021
1,937 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan court preserved rental income from a disputed Komarock property by appointing an estate agent and ordering rent into a joint advocates' account instead of granting an outright injunction.

What this practically means

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Executive summary

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The plaintiffs sued the defendant for specific performance and mesne profits over Land Title Number Nairobi Block 129/289, Komarock Phase II, Nairobi, purchased under an agreement dated 8/9/2016 for Kshs 7,500,000. They claimed to have paid a deposit of Kshs 2,500,000 and to have been denied completion documents and possession. At the outset of the suit they deposited the balance of Kshs 5,000,000 in court as directed, and an earlier ruling of 23/2/2018 restrained the defendant from disposing of the property pending trial. The present ruling determined the plaintiffs' notice of motion dated 11/11/2019, which sought an injunction restraining the defendant from collecting rental income from the suit premises, or alternatively release of the Kshs 5,000,000 in court to Kenya Commercial Bank towards redemption of the charge. The defendant denied receipt of the full deposit, alleged fundamental breach by the plaintiffs, and argued that the relief sought was final in nature and that the Giella v Cassman Brown criteria were not met. Applying the Giella criteria and Order 40 rule 1, and noting clause 4 of the sale agreement entitling the purchasers to possession upon payment of the deposit, the court found a proper basis to preserve the rental income but declined an outright injunction. It instead ordered appointment of an estate agent to collect rent, deposit of net rental income into a joint interest-earning account in the joint names of the parties' advocates, transfer of the Kshs 5,000,000 into that account, and retention of the title by Kenya Commercial Bank, which confirmed no money was owed to it. Costs were in the cause.

Key legal issues

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01

Whether the plaintiffs satisfied the criteria for interlocutory injunctive relief in respect of rental income from the suit property

Holding

Yes; a proper basis existed for exercising preservation jurisdiction, but the court fashioned a preservation regime rather than an outright injunction

Reasoning

The court noted earlier interlocutory findings that the plaintiffs had demonstrated a prima facie case. Clause 4 of the sale agreement entitled the purchasers to possession upon payment of the deposit, which was paid, and the balance of the purchase price was held in court. Rental income formed part of the suit property in danger of being wasted or alienated, justifying preservation under Order 40 rule 1 via a joint interest-earning account.

p. 2
02

Whether the Kshs 5,000,000 deposit in court should be released to Kenya Commercial Bank

Holding

No; the funds were instead transferred to a joint interest-earning account and the title remained with the Bank

Reasoning

Counsel for Kenya Commercial Bank informed the court on 15/2/2021 that no money was owed to the Bank and the Bank would abide by the court's orders. With no outstanding loan to redeem, there was no basis to order release of the funds to the Bank; preservation in a joint account pending disposal of the suit was the appropriate course.

p. 2

Legal principles established

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  • Under Order 40 rule 1 the court has jurisdiction to preserve suit property in danger of being wasted, damaged or alienated, and rental income accruing from suit property may be preserved by deposit in a joint interest-earning account in the joint names of the parties' advocates
  • The criteria for interlocutory injunctive relief are those in Giella v Cassman Brown: prima facie case with probability of success, irreparable injury not compensable by damages, and balance of convenience if in doubt

Court orders

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  1. 1.Parties, through their respective advocates, to within 15 days agree on and appoint an estate agent to manage and collect rent relating to the suit property, Land Title Number Nairobi Block 129/289, Komarock Estate, Phase II, Nairobi
  2. 2.Net rental income collected from the suit property to be deposited in a joint interest earning account in the joint names of the Advocates acting for the parties (Kinyua Muriithi & Co Advocates for the Defendant; Mungai Kalande & Co Advocates for the Plaintiffs), pending final disposal of the suit
  3. 3.Kenya Commercial Bank Limited to safely keep the Title relating to the suit property pending final disposal of the suit but not to advance any facility to any party on the basis of the said Title
  4. 4.Once the joint interest earning account is opened, the Deputy Registrar to cause the sum of Kshs 5,000,000 deposited in court by the plaintiffs on 27/6/2017 to be transferred to that account to remain therein pending final disposal of the suit
  5. 5.Costs of the application to be in the cause

Authorities

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Legislation

  • Civil Procedure RulesOrder 40 rule 1

Cases cited (1)

  • Giella v Cassman Brown
    (1973) EA 358
Jurisdiction invoked
Order 40 rule 1 of the Civil Procedure Rules (injunctive/preservation jurisdiction)

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, "Migui Macharia Mungai & another v Cheska Agencies Limited [2021] KEELC 3024 (KLR)", Case Analysis (2021). Not stated in the judgment (suit in respect of Land Title Number Nairobi Block 129/289). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3024/eng@2021-06-03

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