Galaxy Merchant’s Limited & another v Kwagara & another (Environment and Land Appeal E013 of 2024) [2025] KEELC 5024 (KLR)
The bottom line
#Kenya's Environment and Land Court in Meru set aside a judgment against land buyers-turned-owners, ruling you cannot sue strangers to a contract.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the order of permanent injunction issued in respect of the suit properties (Nyaki/Mulathankari/3346 and Nyaki/Mulathankari/3347) was lawful and legally tenable
- 2.Whether there was privity of contract between the 1st appellant and the respondents
- 3.Whether the reliefs granted by the trial court are at variance with the evidence on record
- 4.What reliefs, if any, ought to issue
Key legal issues
#Proprietary basis for permanent injunction
The respondents had no registered interest, caution or restriction on the suit properties; the sale agreement with the 3rd defendant was unregistered and their rights had not accrued, so no permanent injunction could issue against the registered proprietor
The respondents contracted only with Sargai Developers Limited (3rd defendant) and paid deposits. The 3rd defendant lawfully transferred the original parcel to the 1st appellant, who subdivided it. PW1 conceded the agreement was never registered and no caveat was lodged. Their claim was purely contractual against the vendor; absent accrued legal rights or interest in the land, no permanent injunction could issue to restrain the registered proprietor.
Privity of contract
There was no privity of contract between the respondents and the 1st appellant; the appellants were strangers to the sale agreement and received no consideration, so no orders could be made against them
PW1 admitted the 1st and 2nd defendants were not parties to the 2015 agreements and that no monies were paid to them. The 2nd appellant signed the 30th March 2019 compromise agreement in his personal capacity, with no evidence he bound the 1st appellant. Applying the doctrine of privity, the trial court's orders against the appellants were made in vacuum.
Variance between reliefs granted and evidence
The trial court granted reliefs at variance with the evidence: an unproven injunction, refund decreed against parties who never received the monies, and interest at commercial rates when only court rates were pleaded and proved
The refund awards related to deposits paid to Sargai Developers Limited, so only the recipient/beneficiary could be liable. Once refund was computed on the 18th June 2015 agreement, no further claim could rest on the 30th March 2019 agreement. Interest at commercial rates required contractual or customary basis, which was absent; PW1 sought only court rates.
Scope of a first appeal
A first appellate court re-evaluates the evidence and may reach its own conclusions but interferes with trial findings only where they are unsupported, perverse, or founded on an error of principle
Relying on section 78 of the Civil Procedure Act and Peters v Sunday Post, the court held it was duty-bound to subject the evidence to exhaustive scrutiny while allowing for the trial court's advantage of seeing and hearing witnesses. Interference is warranted where findings rest on no evidence or misapprehension, as here.
Legal principles established
#- A first appellate court must subject the entire evidence to fresh and exhaustive examination but may only depart from trial court findings where they are based on no evidence, misapprehension of the evidence, are perverse, or reflect an error of principle
- A permanent injunction can only issue to protect proprietary rights actually acquired by the claimant
- Under the doctrine of privity of contract, a contract affects only the parties to it and cannot be enforced by or against a stranger to it
- A court can only grant reliefs that have been pleaded and proved on the evidence
- Interest at commercial rates is only awardable where stipulated in the contract, allowed by mercantile usage, or provided by statute
Court orders
#- 1.The Appeal be and is hereby allowed
- 2.The Judgment and decree of the Learned Chief Magistrate dated 30th January 2024 be and is hereby set aside in its entirety as against the Appellants
- 3.The Judgment under reference remains valid as against the rest of the Defendants (save for the appellants) in the manner captured at the foot thereof
- 4.Costs of the Appeal awarded to the Appellants
- 5.The Appellants shall also have costs in the subordinate court
- 6.Costs in terms of clauses (iv) and (v) to be agreed upon and in default to be taxed or assessed (where appropriate)
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- On appeal from
- Chief Magistrate's Court at Meru
- not stated (original suit by Plaint dated 11th September 2019)
- Jurisdiction invoked
- First appeal under section 78 of the Civil Procedure Act, Chapter 21 Laws of Kenya
Relief refused
#Respondents' claim against the appellants (permanent injunction, refund and interest)
The respondents had no privity of contract with the appellants, acquired no proprietary interest in the suit properties, and the refund obligation lay with Sargai Developers Limited
Costs
Costs of the Appeal awarded to the Appellants; the Appellants shall also have costs in the subordinate court; such costs to be agreed upon and in default to be taxed or assessed (where appropriate)
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
The Appeal be and is hereby allowed.
The Judgment and decree of the Learned Chief Magistrate dated 30th January 2024 be and is hereby set aside in its entirety as against the Appellants.
The Judgment under reference remains valid as against the rest of the Defendants [save for the appellants herein] in the manner captured at the foot thereof.
Costs of the Appeal be and are hereby awarded to the Appellants.
Absent Legal rights to or Interest[s] over the Suit Properties, no Order of Permanent Injunction could issue; or be granted.
it is only parties to the contract who acquire rights thereto and accrue labilities therefrom.
I am afraid that there is a clear variance between the orders made by the Learned Chief Magistrate and the evidence on record.
Issues in the judgment
#The judgment states the trial judgment was delivered on 3rd January 2024 but the final orders refer to a judgment and decree 'dated 30th January 2024'
The court before which the appeal was heard is not expressly named in the judgment; the case number is also not stated
PW1's testimony on the sums claimed is internally inconsistent - Kshs 2.7 million in one passage and Kshs 2.5 million in another
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Galaxy Merchant’s Limited & another v Kwagara & another (Environment and Land Appeal E013 of 2024) [2025] KEELC 5024 (KLR)", Case Analysis (2025). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2025/5024/eng@2025-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.