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ELCPartially AllowedNot stated in the extract (Murang'a ELC)· [2021] KEELC 4277 (KLR)

Mugumoini Farmers Company Limited v Inshwil Builders Engineers Limited; Ephraim Waithaka Ruitha & another (Interested Parties) [2021] KEELC 4277 (KLR)

Environment and Land Court
25 February 2021
1,519 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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Kenya's Environment and Land Court froze sales of a disputed 229-acre tea estate, ruling that questions about forged signatures and removed directors must go to full trial.

What this practically means

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Executive summary

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In this interlocutory ruling of the Environment and Land Court at Murang'a, the Plaintiff, a body corporate, sought a temporary injunction and caveat over parcel KAKUZI/KIRIMIRI BLOCK 7/37 (approximately 229 acres) and its sub-divisions, alleging that in February 2010 former directors, Julius Mbugua Gatuha and Benjamin Kamande Githuka, fraudulently transferred the suit property to the Defendant pursuant to a sale agreement dated 11/07/2003 despite having been removed from office on 17/05/2003. The Plaintiff alleged the transaction was void for lack of capacity, that consent affidavits were forged (one signatory being hospitalised), and that the transaction was terminated by a letter dated 22/01/2004 from M/S Kamere & Co. Advocates. Two interested parties, bona fide purchasers of portions of the property, were joined on 13/09/2019 and opposed the application, claiming protection as bona fide purchasers under Article 40 of the Constitution and noting that DCI investigations had produced no fraud charges. The Defendant had earlier lost a preliminary objection on res judicata (dismissed 23/09/2019 with costs). Applying the Giella v Cassman Brown principles, the court found a prima facie case on the pleadings, given the disputed capacity of the signatories, the widow's disavowal of the signature, and the denial by the Plaintiff's advocates of lifting prohibitory orders. Damages were held inadequate since the land had been subdivided and partly disposed of. The court granted a temporary injunction against the Defendant and interested parties restraining interference, sale or disposal of the suit property pending trial, declined the caveat as unnecessary, and awarded costs to the Plaintiff against the Respondent and interested parties. Judgment delivered online on 25 February 2021 by J.G. Kemei, Judge.

Key legal issues

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01

Prima facie case with probability of success

Holding

Established on the pleadings and affidavits: the alleged signatories had been removed as directors, one was hospitalised and his widow disowned the signature as forgery, and the Plaintiff's former advocates denied lifting prohibitory orders and confirmed terminating the sale.

Reasoning

The court found disputed questions of authority, capacity and forgery surrounding the 2003 sale agreement and the 2004 consent affidavits. The denial by Advocate Simon Kamere's firm of having lifted prohibitory orders, and the letter of 22/01/2004 terminating the transaction, raised matters requiring full trial inquiry, satisfying the first Giella limb.

p. 2
02

Adequacy of damages

Holding

Damages were inadequate because the land had been subdivided and parcels disposed of; an injunction was the fair and just preservation remedy.

Reasoning

The court noted that the suit property is land and affidavit evidence showed sub-division and disposal of parcels, making compensation by damages insufficient. Interlocutory relief was therefore appropriate pending trial.

p. 2
03

Whether a caveat should also issue

Holding

Refused; the temporary injunction suffices to preserve the property.

Reasoning

The court held that since an injunction already restrains interference, sale or disposal of the suit property, a caveat would add nothing and the preservation objective is met by the injunction alone.

p. 2

Legal principles established

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  • The principles for granting an interlocutory injunction are those in Giella v Cassman Brown: prima facie case with probability of success, damages as inadequate remedy, and balance of convenience if in doubt.
  • Where the subject matter is land and it has been or risks being subdivided and disposed of, damages are not an adequate remedy and an injunction may issue.

Court orders

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  1. 1.Temporary injunction issued against the Defendant and interested parties prohibiting any interference, selling or disposing of the suit property KAKUZI/KIRIMIRI BLOCK 7/37 and its sub-divisions pending hearing and determination of the main suit
  2. 2.Prayer for a caveat declined, the temporary injunction being sufficient to preserve the suit property
  3. 3.Costs awarded to the Plaintiff against the Respondent and the Interested Parties

Authorities

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Legislation

  • Constitution of Kenya, 2010Article 40

Cases cited (6)

  • Mohamed & Another –vs- Haidara
    [1972] E.A 166
  • Giella v. Cassman Brown & Company Limited
    [1973] E.A 358
  • Nguruman Limited –vs- Jan Bonde Nielsen & 2 others
    [2014] eKLR
  • Bamburi Cement Limited –vs- Chief Registrar & Attorney General
    (2018) eKLR
  • Republic –vs- Registrar of Titles Mombasa & 4 others Ex-parte A.K Abdulgani Limited
    [2018] eKLR
  • Kuria Kiarie & 2 Others –vs- Sammy Magera
    (2018) eKLR
Jurisdiction invoked
Inherent jurisdiction to grant interlocutory relief pending hearing of the main suit (Environment and Land Court Act); injunction principles in Giella v Cassman Brown

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, "Mugumoini Farmers Company Limited v Inshwil Builders Engineers Limited; Ephraim Waithaka Ruitha & another (Interested Parties) [2021] KEELC 4277 (KLR)", Case Analysis (2021). Not stated in the extract (Murang'a ELC). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2021/4277/eng@2021-02-25

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