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ELCPartially AllowedNot stated in the judgment as provided (Notice of Motion dated 18/07/2024 in pending suit)· [2025] KEELC 2865 (KLR)

Capstone Heights Realtors Limited v Kigwor Kenya Ltd (Environment & Land Case E296 of 2024) [2025] KEELC 2865 (KLR)

Environment and Land Court
27 March 2025
2,426 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~10 min to read original · ~4 min brief

The bottom line

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A Kenyan court froze KES 66 million in a property deposit in a joint bank account, refusing to order an immediate refund before 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 18/07/2024 seeking, at the interlocutory stage, a mandatory injunction compelling the Defendant to refund KES 66,025,120 paid under a sale agreement dated 6/10/2021 for LR No. 21072, as varied by a Deed of Variation of 10/03/2022, or alternatively to deposit that sum in a joint interest-earning account of counsel. The Defendant opposed, contending the matter was highly contested, that the Plaintiff was in breach, and that a mandatory injunction could not issue at the interlocutory stage. The court reasoned that the Giella principles, framed for prohibitory injunctions preserving the status quo, required adaptation because mandatory injunctions at the interlocutory stage demand a higher degree of assurance - a special case - or a showing that the injustice of refusal outweighs that of granting. It found the refund prayer failed: the Deed of Variation did not provide for refund on termination, and the Plaintiff gave no evidence that the stakeholder-held funds had been released to or utilized by the Defendant. However, because the parties disputed where the money was and who held it, and the Vendor's Advocate knew he held it under stakeholder terms, preservation was warranted. The application succeeded in part: a mandatory injunction issued compelling the Defendant to deposit KES 66,025,120 in a joint interest-earning account of both counsels' names until hearing and determination of the suit. Costs were ordered to abide the outcome of the suit.

Key legal issues

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01

Applicable principles for grant of a mandatory injunction at interlocutory stage

Holding

Giella v Cassman Brown principles apply but the standard is higher: the prima facie case must be 'so special' as to persuade the court the orders ought to issue at once, or the injustice balance must clearly favour grant.

Reasoning

The court distinguished prohibitory from mandatory injunctions, noting prohibitory ones preserve the status quo while mandatory ones undo situations, carrying greater risk of injustice. Drawing on Films Rover, Locabail, Shepherd Homes and Kenyan authorities, it held the claimant must show a prima facie case with a higher degree of assurance, or that refusing would cause injustice outweighing that of granting.

p. 4
02

Whether a refund of KES 66,025,120 could be compelled at the interlocutory stage

Holding

No. The refund claim was disputed and unsupported by evidence; the Deed of Variation did not provide for refund on termination.

Reasoning

The Plaintiff claimed monies paid had been released to and utilized by the Defendant, but produced no evidence. The Deed of Variation provided the KES 66,025,120 was to be held by the Vendor's Advocates under stakeholder terms pending completion, not refunded. A refund order now would risk greater injustice if not vindicated at trial.

p. 4
03

Preservation of the stakeholder-held deposit

Holding

A mandatory injunction preserving the KES 66,025,120 by deposit in a joint interest-earning account of counsel was warranted because the parties disagreed on where the money was and who held it.

Reasoning

Since the sum was to be held by the Vendor's Advocates under stakeholder terms pending completion and the parties were not in agreement on its whereabouts, preservation was necessary to prevent dissipation pending trial. The court found the Vendor's Advocate was aware he held the money under stakeholder terms, justifying preservation rather than refund.

p. 5

Legal principles established

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  • The threshold for an interlocutory mandatory injunction is higher than for a prohibitory injunction: the claimant must establish a special case giving the court a high degree of assurance, or show that the risk of injustice in refusing sufficiently outweighs the risk in granting.
  • The overriding consideration is which course carries the least risk of injustice if it turns out to be wrong.

Court orders

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  1. 1.A mandatory injunction compelling the Defendant/Respondent to immediately deposit in a joint interest earning account in the names of the Counsels for the Plaintiff and the Defendant the sum of KES 66,025,120.00 until the hearing and determination of the suit
  2. 2.Costs to abide the outcome of the suit

Authorities

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Legislation

  • Civil Procedure Rules, 2010Order 40 Rule 2, 11; Order 51 Rules 1, 3 & 11
  • Civil Procedure Act, Cap 21 Laws of KenyaSections 1A, 1B, 3 & 63(e)

Cases cited (18)

  • Giella v Cassman Brown Ltd
    EA 358
  • Hezron Kamau Gichuru vs Kianjoya Enterprises Ltd & Another
    [2022] eKLR
  • Kenya Breweries Limited & Another vs Washington O Okeyo
    [2002] eKLR; [2002] 1 EA 109
  • National Bank of Kenya Ltd vs Pipeline Samkolit (K) Ltd & Another
    [2001] KLR
  • Stanbic Bank vs Santowels Ltd
    Petition No. E005 of 2023
  • Joseph Kaloki T/a Royal Family Assembly vs Nancy Otieno Ouma
    [2020] eKLR
  • Sharif Abdi Hassan vs Nadhif Jama Adan
    [2006] eKLR
  • Robert Ng'ang'a Marubu & Another vs Julius Mboya Munyora alias Wamunyora & 3 Others
    [2015] eKLR
  • Bonde vs Steyn
    [2013] 2 EA 8
  • Despina Pontikos
    [1975] EA 38
  • Films Rover International Ltd v Cannon Film Sales Ltd
    [1987] 1 WLR 670, 680
  • Locabail International Finance Ltd v Agroexport & others
    [1986] 1 All ER 901
  • The Siskina
    [1979] AC 2010
  • Shepherd Homes Ltd v Sandham
    [1970] 3 All ER 412
  • Hassan v Adan
    [2007] 2 EA 178
  • Mwangi v Braeburn Ltd
    [2004] 2 E.A 196
  • Mrao Ltd v First American Bank of Kenya & 2 Others
    [2003] eKLR
  • Halsbury's Laws of England Vol. 24, 4th Edition paragraphs 946–952
Jurisdiction invoked
Order 40 Rule 2, 11; Order 51 Rule 1, 3 & 11 of the Civil Procedure Rules, 2010; Sections 1A, 1B, 3 & 63(e) of the Civil Procedure Act, Cap 21

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, "Capstone Heights Realtors Limited v Kigwor Kenya Ltd (Environment & Land Case E296 of 2024) [2025] KEELC 2865 (KLR)", Case Analysis (2025). Not stated in the judgment as provided (Notice of Motion dated 18/07/2024 in pending suit). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/2865/eng@2025-03-27

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