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ELCDismissedNot stated in judgment (ELC application seeking temporary injunction)· [2021] KEELC 3448 (KLR)

Soy Developers Limited v Kenagri Products Limited & 4 others [2021] KEELC 3448 (KLR)

Environment and Land Court
15 April 2021
1,429 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Nairobi court refused to freeze a Kshs 700 million property deal because the applicant misled the court and ignored an existing judgment favouring its rival.

What this practically means

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Executive summary

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This is a ruling on a notice of motion dated 16th February 2021 by the Plaintiff/Applicant seeking a temporary injunction against the Respondents in respect of LR No. 209/11151, or in the alternative, maintenance of status quo pending hearing of the suit. The Applicant claimed ownership of the suit property and alleged it was fraudulently charged to the 2nd Respondent by the 1st Respondent and fraudulently transferred to the 3rd Respondent following a purported statutory power of sale. The 3rd Respondent opposed, asserting it was a bona fide purchaser for value and that a judgment delivered on 29th May 2015 in consolidated suits ELC 24 of 2008 and ELC 567 of 2008 had already recognised it as the registered owner. The Applicant, though not a party to those suits, could not displace that judgment. The court (E. O. Obaga, J) found serious conflicts of fact, including competing claims over whether the 1st Respondent's share purchase of the Applicant company completed, with Cyrus Jirongo claiming to be the Applicant's managing director. The court held the Applicant had not established a prima facie case, had not come to equity with clean hands having previously misled the court that its title was lost, and that damages would adequately compensate it given the property was valued at over Kshs. 700,000,000. The balance of convenience favoured the 3rd Respondent, who held an un-set-aside judgment. The application was dismissed with costs to the 3rd Respondent on 15th April 2021.

Key legal issues

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01

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

Holding

No prima facie case established given competing evidence on the share sale and a subsisting judgment recognising the 3rd Respondent as registered owner

Reasoning

The court found serious conflicts of fact on whether the 1st Respondent purchased the Applicant's company. The Applicant was not party to ELC 24 of 2008 and ELC 567 of 2008, but a valid judgment from those consolidated suits recognised the 3rd Respondent as the registered owner of the suit property. That judgment had not been set aside, so the court could not find a prima facie case.

p. 2
02

Whether the Applicant came to equity with clean hands

Holding

The Applicant misled the court about the loss of its title, disqualifying it from equitable relief

Reasoning

The Applicant first claimed its title was lost, then changed its position to say it had surrendered the title to the 1st Respondent under a sale agreement. Relying on the Court of Appeal in Maxwell Hudson Kaduki Diggs v I.M Bank, the court held that deliberate falsehood or calculated ambivalence disentitles a party from favourable discretion in equity.

p. 2
03

Whether irreparable loss and balance of convenience favoured the injunction

Holding

Damages could adequately compensate the Applicant and the balance of convenience favoured the 3rd Respondent who holds an un-set-aside judgment

Reasoning

The suit property was said to be worth over Kshs. 700,000,000, meaning compensation in damages was adequate if the Applicant succeeded. On balance of convenience, the 3rd Respondent held a judgment in its favour that had not been set aside, so it would be improper for a court of concurrent jurisdiction to maintain status quo.

p. 2

Legal principles established

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  • A party who misleads the court is not deserving of equitable discretion
  • Where damages can adequately compensate the applicant, an injunction will not issue
  • An un-set-aside judgment of a court of concurrent jurisdiction on ownership is fatal to a prima facie case

Court orders

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  1. 1.The Applicant's notice of motion dated 16th February 2021 is dismissed with costs to the 3rd Respondent

Authorities

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Cases cited (1)

  • Maxwell Hudson Kaduki Diggs & Another Vs I.M Bank & 2 Others
    Civil Application No. 32 of 2018 (VR 30/2018)
Jurisdiction invoked
Not stated (first-instance Environment and Land Court, interlocutory 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, "Soy Developers Limited v Kenagri Products Limited & 4 others [2021] KEELC 3448 (KLR)", Case Analysis (2021). Not stated in judgment (ELC application seeking temporary injunction). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/3448/eng@2021-04-15

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