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ELCAllowedNot stated in judgment (Nakuru ELC; Notice of Motion dated 16th March 2020)· [2021] KEELC 4165 (KLR)

Liquidator for Mukungugu Farmers Cooperative Society v Richard K. Gathua & 5 others [2021] KEELC 4165 (KLR)

Environment and Land Court
25 February 2021
DOD. O. Ohungo
1,373 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Environment and Land Court in Nakuru stopped former officials from interfering with cooperative land sold by a court-appointed liquidator, pending full trial.

What this practically means

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Executive summary

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This is a ruling on the plaintiff's Notice of Motion dated 16th March 2020 seeking an interlocutory injunction restraining the defendants from interfering with, dealing with, invading, entering into or destroying three land parcels in Njoro: Cattle Dip Plot No. 332 (2), Artificial Insemination (A.I) Plot No. 326 (3) and Market Place Plot No. 334. The plaintiff, Xavier Okado Lugaga, was appointed liquidator of Mukungugu Farmers' Cooperative Society by the Commissioner for Co-operative Development following the society's dissolution on 27th July 2016, with his mandate extended by Gazette Notice in March 2020. He deponed that he sold the suit properties pursuant to the members' resolution and that the defendants, led by a retired police inspector, used police connections to intimidate buyers and destroy property on the sold parcels. The defendants, through the 1st defendant's replying affidavit, contended that the dissolution and liquidation were procedurally flawed and done without members' participation, that the plots were reserved for public utility, and that the National Land Commission had caused restrictions to be entered against the titles. Applying the Nguruman sequential test and the Mrao definition of a prima facie case, D. O. Ohungo J held that the defendants did not deny the cancellation of registration, the plaintiff's appointment, or the sale of the properties, and that the Co-operative Societies Act empowers both the Commissioner and the liquidator. The court declined to determine at the interlocutory stage whether those powers were properly exercised, found a prima facie case, held damages inadequate, and granted the injunction pending trial, with costs of the application to the defendants. Judgment dated 25th February 2021 at Nakuru.

Key legal issues

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01

Whether the applicant established a prima facie case for an interlocutory injunction

Holding

The court found a prima facie case: the defendants did not deny the cancellation of the society's registration, the plaintiff's appointment as liquidator, or the sale of the suit properties, while the accusations against the defendants went unrebutted.

Reasoning

The court applied the Nguruman and Mrao tests. The defendants admitted the dissolution, liquidation and sale, and the statute empowers the Commissioner to dissolve societies and appoint liquidators, and the liquidator to sell society property. The court held it was not for it, at interlocutory stage, to determine whether those powers were properly exercised. The defendants' allegations of improper procedure did not negate the apparent right; their failure to deny the accusations reinforced the prima facie case.

p. 2
02

Whether damages would be an adequate remedy

Holding

Damages would not be an adequate remedy in the circumstances, so the injunction issued.

Reasoning

Having found a prima facie case, the court moved to the second Giella stage. The properties had already been sold to bona fide purchasers who were being intimidated and driven off the land by the defendants; invasion and destruction of the properties could not adequately be compensated in damages. The court did not consider it necessary to analyse the balance of convenience at length, finding the second limb satisfied.

p. 2

Legal principles established

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  • The three Giella conditions are sequential hurdles: if no prima facie case is established, irreparable injury and balance of convenience need not be considered.
  • A liquidator appointed by the Commissioner under the Co-operative Societies Act has powers to sell movable and immovable property of the society.

Court orders

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  1. 1.An injunction restraining the defendants, their servants, agents and officers from interfering with, dealing with, invading, entering into or destroying the properties on Njoro/Njoro Block 1 (Mukungugu) (A) Cattle Dip Plot No. 332 (2), Artificial Insemination (A.I) Plot No. 326 (3) and Market Place Plot No. 334 pending the hearing and determination of the suit
  2. 2.Costs of the application to be borne by the defendants

Authorities

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Legislation

  • Co-operative Societies ActSections 61, 62 and 65
  • Co-operative Societies ActSection 66(1)(h)

Cases cited (2)

  • Nguruman Limited v Jan Bonde Nielsen & 2 Others
    [2014] eKLR
  • Mrao Ltd vs First American Bank of Kenya Ltd & 2 Others
    (2003) KLR 125
Jurisdiction invoked
Inherent jurisdiction to grant interlocutory injunctions pending hearing of the suit; application under the Co-operative Societies Act framework (Sections 61, 62, 65 and 66(1)(h))

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, "Liquidator for Mukungugu Farmers Cooperative Society v Richard K. Gathua & 5 others [2021] KEELC 4165 (KLR)", Case Analysis (2021). Not stated in judgment (Nakuru ELC; Notice of Motion dated 16th March 2020). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/4165/eng@2021-02-25

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