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ELCPartially Allowed(Not stated in judgment)· [2024] KEELC 5555 (KLR)

Diamond Trust Bank Kenya Limited v Omwandu & 2 others; Director - Department of Surveys (Interested Party) (Environment and Land Case Civil Suit E189 of 2023) [2024] KEELC 5555 (KLR)

Environment and Land Court
30 July 2024
AOA. Omollo
3,518 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
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The bottom line

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The court dismissed a technical objection and protected a bank's charged land, confirming that disputes hinging on disputed facts must be decided on evidence, not objections.

What this practically means

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Executive summary

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This is a ruling on the plaintiff bank's notice of motion dated 24th November 2023 seeking police assistance to enforce orders, a DCI investigation into allegedly fraudulent leases over Nairobi Block 1/42 (formerly LR 5/64) in Kangemi, a temporary injunction against the 1st Defendant, and an inhibition against further registrations. The bank charged the property to secure facilities of over Kshs 500,000,000 advanced to Nakumatt Holdings Ltd; it alleges the 1st Defendant fraudulently obtained a Certificate of Lease over the same parcel in 2022 in collusion with the 2nd, 3rd and 4th Defendants. The 1st Defendant raised a preliminary objection on jurisdiction and locus standi, asserting he lawfully acquired vacant government land after the original lease expired in 2008. The court, applying Mukisa Biscuits, held the objection rested on contested facts requiring evidence and was not a pure point of law, dismissing it with costs. On the injunction, applying Giella v Cassman and Mrao, the court found a prima facie case on triable issues of lease expiry, forgery of the extension and misrepresentation; held the loss, though quantifiable, may be unrecoverable given Nakumatt's insolvency; and found balance of convenience favoured maintaining the undeveloped status quo. The application was allowed in terms of prayers 5 and 6 only: a temporary injunction against the 1st Defendant and an inhibition against the 2nd and 3rd Defendants, with costs in the cause. The prayers for police assistance and a DCI investigation were not granted.

Key legal issues

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01

Whether the preliminary objection on jurisdiction and locus standi met the Mukisa Biscuits threshold

Holding

It did not; it depended on contested facts requiring affidavit evidence

Reasoning

The objection rested on whether the lease had expired in 2008 and whether the 2014 charge was forged - disputed factual questions forming the gist of the claim, not pure points of law. The court found the Motor Vessel Lilian 'S' case quoted out of context.

p. 6
02

Whether the plaintiff demonstrated a prima facie case

Holding

Yes; triable issues on expiry/forgery of the lease and validity of the charge established a semblance of right

Reasoning

The plaintiff pleaded a chargor's interest under an original title; the dispute over whether the lease expired in 2008, whether the extension was a forgery, and whether the 2nd and 3rd Defendants misrepresented facts raised triable issues constituting a prima facie case.

p. 6
03

Irreparable harm and balance of convenience

Holding

Although the Kshs 500,000,000 exposure is ascertainable, it may be unrecoverable given Nakumatt's insolvency, and the undeveloped state of the land should be preserved

Reasoning

Loss though ascertainable may not be recoverable since Nakumatt Holdings Ltd collapsed and there is no privity between the plaintiff and the 1st Defendant from whom an undertaking could be demanded. Balance of convenience favours maintaining the status quo of an undeveloped property.

p. 6

Legal principles established

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  • A preliminary objection relying on contested facts is not a pure point of law and does not lie
  • Prima facie case test per Giella v Cassman Brown applied

Court orders

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  1. 1.Preliminary Objection dated 6th March 2024 dismissed with costs
  2. 2.Temporary injunction restraining the 1st Defendant, his agents, security guards and/or servants from entering, taking custody, deploying and/or stationing security guards, alienating or interfering with Nairobi Block 1/42 (formerly LR 5/64) pending hearing and determination of the suit
  3. 3.Order of inhibition directed at the 2nd and 3rd Defendants inhibiting registration of any further dealings on Nairobi Block 1/42 pending hearing and determination of the suit
  4. 4.Costs of the application in the cause

Authorities

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Legislation

  • Civil Procedure Rules 2010Orders 40 & 51
  • Civil Procedure ActSections 1A, 1B, 3A, 63(e)
  • Land ActSection 13(1)

Cases cited (5)

  • Mukisa Biscuits Manufacturing Limited v West End Distributors Ltd
    (1969) EA 696
  • Alfred Njau & Others v. City Council of Nairobi
    (1983) KECA 56
  • Owners of the Motor Vessel "Lilian S. v Caltex Oil Kenya Ltd
    (1989) eKLR
  • Giella v Cassman
    (1973) EA 358
  • Mrao Ltd v First American Bank Ltd & 2 Others
    Civil Appeal No. 39 of 2002
Jurisdiction invoked
Orders 40 & 51 of the Civil Procedure Rules 2010 and Sections 1A, 1B, 3A and 63(e) of the Civil Procedure Act

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, "Diamond Trust Bank Kenya Limited v Omwandu & 2 others; Director - Department of Surveys (Interested Party) (Environment and Land Case Civil Suit E189 of 2023) [2024] KEELC 5555 (KLR)", Case Analysis (2024). (Not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2024/5555/eng@2024-07-30

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