Barasa & another v Kapematt Capital Ltd & another (Civil Case E079 of 2025) [2025] KEMC 381 (KLR)

4. That costs of this Application be provided for 3. The instant Application was grounded on the grounds set out on its face and further grounds set out in the Applicants’ Supporting Affidavits herein sworn by Calistus Simiyu Barasa and Everlyne Nasipwondi Wafula sworn on 27th February 2025. 4. The gist of the instant Application is that the Respondents have advertised for sale by auction LR. No. BOKOLI/CHWELE/3258 (suit property) on 07th March 2025 registered in the 2 nd Defendant/Applicant’s name that the 1st Plaintiff/Applicant used as a collateral to boroow a loan of Kshs. 300,000/= without the 1 st Defendant serving upon the Applicants Notices set out under section 90(2) and 96(2) of the Land Act as well as conducting the suit property’s current valuation to determine the suit property’s current market value and forced sale value. 5. It is also the 1st Applicant’s case that the sum of Kshs. 488,189/= sought to be recovered by the 1 st Defendant/Respondent through the sale by auction of the suit property is absurd since the 1st Applicant has repaid the loan advanced to him by the 1 st Applicant to a tune of Kshs. 313,000/=. 6. The 1st Defendant/Respondent opposed the instant Application through a Replying Affidavit sworn by Stephen Ashubwe Aseka; the 1 st Defendant/Respondent’s Loan Recovery Officer, on 14th March 2025. 7. It was deposed by the said Stephen Ashubwe …that on…the 1 st Defendant/Respondent advanced a loan facility of Kshs. 300,000/= to the 1st Plaintiff/Applicant at 20% interest per annum to be repaid for nine (9) months (from 27th May 2023 to 27 January 2024) through equal monthly instalments of Kshs. 40,000/=. The said loan facility was secured by the suit property registered in the 2 nd Plaintiff/Applicant’s case. Bungoma CMC CC. No. E079 of 2025 Page 2 of 13 Ruling

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8. The 1st Defendant/Respondent also deposed that the 1 st Plaintiff/Applicant defaulted in repaying the loan facility advanced to him sometime in November 2023 prompting the 1st Defendant/Respondent to send the relevant notices to the Applicants before realization of the security. 9. They added that they conducted valuation of the suit property as evidenced by the contents of the Loan Assessment Form dated…..24 th April 2023…(SAA – 2) that shows the market value at Kshs. 2,280,000/= and the forced market value at Kshs. 2,240,000/=. That being the case, the 1st Defendant/Respondent avered that they had complied with all relevant procedures hence the instant Application should be dismissed for being an abuse of the court process, scandalous, vexatious and calculated at preventing the 1st Defendant/Respondent from exercising their crystalized right of exercising their statutory right of sale of the suit property. 10. The instant Application was canvassed by way of written submissions. The submissions. 1st Defendant/Respondent The Plaintiffs/Defendants filed their written neither filed further/supplementary affidavits nor written submissions as directed by this court on 18th March 2025. ANALYSIS & DETERMINATION 11. This court has duly considered the parties’ pleadings, submissions, annextures, and authorities relied upon by each party. The only issue for determination is whether the instant Application is merited. Whether the Application and the Orders sought are merited 12. Before determining whether this Application and the Orders sought are merited, this court notes that the 1 st Defendant/Respondent submitted at length on whether the Defendants/Respondents right of Bungoma CMC CC. No. E079 of 2025 Page 3 of 13 Ruling

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sale had accrued and whether they followed the required procedure before exercising their statutory power of sale. They submitted that they had fully complied with all the statutory procedures…this position was at variance with the position taken by the Applicants. 13. The 1st Defendant/Respondent urged this court to determine those issues at this interlocutory stage. It should be remembered that those issues that the 1ST Defendant/Applicant seeks this court to determine have the potential of disposing the main suit if they are determined at this interlocutory stage. 14. Ringera, J (as he then was) in Airland Tours & Travel Limited vs. National Industrial Credit Bank Nairobi (Milimani) HCCC No. 1234 of 2002 stated that in an interlocutory application, the Court is not required to make any conclusive or definitive findings of fact or law, most certainly not on the basis of contradictory affidavit evidence or disputed propositions of law. 15. The same position was adopted in Nairobi High Court Civil Case No. 517 of 2014 – Lucy Nungari Ngigi & 4 Others -vsNational Bank of Kenya Limited & Anor (eKLR) where it was stated: “....I am also aware that the 1st Defendant has raised issues in respect of the mortgage herein, their right to exercise the statutory power of sale, breach of the addendum, default of repayment of the loan etc. They have also raised some accountability issues from the 2nd Defendant on the purchase price. But even these queries should be reserved for and determined at the trial. These issues are in direct conflict with issues raised by the Plaintiffs and the 2nd Defendant. At this stage I should not make any comments or findings, or express opinions on the substantive issues in controversy in order to avoid hurting the trial herein...” (Emphasis added) Bungoma CMC CC. No. E079 of 2025 Page 4 of 13 Ruling

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16. Mrao Ltd v First American Bank of Kenya Ltd & 2 Others [2003] KLR 125, the Court of Appeal held stated that: “…..It is true that the Court is not required at that stage to decide finally whether the evidence is worthy of credit, or whether if believed it is weighty enough to prove the case conclusively: that final determination can only properly be made when the case for the defence has been heard…” 17. Guided by the authorities above, this court will not, at this stage, heed to the invitation by the 1 st Defendant/Respondent to make definitive findings on the substance of the dispute before this court based on the contradictory affidavit evidence placed before this court by the parties herein. 18. This court’s duty at this stage remains determining whether or not the Applicants have established a prima-facie case which can only be properly determined at full trial. 19. The nature of the orders sought by the Applicants are injunctive orders. The principles guiding the grant of interlocutory injunction were set out in East African Industries vs. Trufoods [1972] EA 420 and Giella vs. Cassman Brown & Co. Ltd [1973] EA 358. Those principles to be considered by the court before granting an interlocutory injunction were restated in Nguruman Limited vs. Jan Bonde Nielsen & 2 Others [2014] eKLR where the court rendered itself thus: “In an interlocutory injunction application, the applicant has to satisfy the triple requirements to; (a) establish his case only at a prima facie level, Bungoma CMC CC. No. E079 of 2025 Page 5 of 13 Ruling

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(b) demonstrate irreparable injury if a temporary injunction is not granted, and (c) ally any doubts as to (b) by showing that the balance of convenience is in his favour. These are the three pillars on which rests the foundation of any order of injunction, interlocutory or permanent. It is established that all the above three conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially. See Kenya Commercial Finance Co. Ltd V. Afraha Education Society [2001] Vol. 1 EA 86. If the applicant establishes a prima facie case that alone is not sufficient basis to grant an interlocutory injunction, the court must further be satisfied that the injury the respondent will suffer, in the event the injunction is not granted, will be irreparable. In other words, if damages recoverable in law is an adequate remedy and the respondent is capable of paying, no interlocutory order of injunction should normally be granted, however strong the applicant’s claim may appear at that stage. If prima facie case is not established, then irreparable injury and balance of convenience need no consideration. The existence of a prima facie case does not permit “leap-frogging” by the applicant to injunction directly without crossing the other hurdles in between. It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or both that the question of balance of convenience would arise. The inconvenience to the applicant if interlocutory injunction is refused would be balanced compared with that of the respondent, if it is granted.” Bungoma CMC CC. No. E079 of 2025 Page 6 of 13 Ruling and

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20. This court will proceed to determine whether the Applicants have satidified the principles for the principles set out in the authorities above on the grnat of injunctive orders. 21. On whether the Applicants have established a prima-facie case, this court has had the benefit of going through the annextures placed before this court by the parties herein. 22. The Loan Agreement Form dated 24 th April 2023 lists the 2nd Plaintiff/Applicant as a guarantor is a guarantor of the loan facility advanced to the 1st Plaintiff/Applicant. The statutory Notice dated 16 th November 2023 (SAA – 4) pursuant to section 90 (1) of the Land Act was only served upon the 1st Plaintiff/Applicant through whatsapp. That begs the question on whether the 2nd Plaintiff/Applicant being the registered owner of the suit property was also supposed to be served with the said notice. 23. It is also common ground that the suit property’s market value and forced sale value was determined during the filling of the Loan Agreement Form dated 24th April 2023 filed herein. That begs the question whether the 1st Defendant/Respondent ought to have conducted another valuation of the suit property to determine the suit property’s current market value and current forcerd sale value before advertising the suit property for sale by public question. 24. Forced valuation, market value on 4 th April 2024…whether proper….current market value or current forced value…has it been determined…those questions can only be determined during full trial… 25. The service of the Statutory Notice dated 06 th May 2024 reportedly issued by the 1st Plaintiff/Applicant pursuant to section 90 (2) of the Land Act is also disputed by the Applicants. A perusal of the said Statutory Notice shows that the same was reportedly received by the 1st Plaintiff/Applicant who declined to sign the same. The foregoing Bungoma CMC CC. No. E079 of 2025 Page 7 of 13 Ruling

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raises questions on whether the Applicants were duly served with the said Statutory Notice. 26. It should also be borne in mind that the parties herein placed before this court contradictory Affidavit evidence on the amount that the 1st Plaintiff/Applicant owes the 1st Defendant/Respondent as at the time the suit property was advertised for sale. The 1 st Defendant/Applicant raised concerns on whether he should pay to the 1st Defendant/Respondent amount higher than the principal amount advanced to him. Such an arguments call for a determination on whether the induplum rule is applicable in this matter, and whether the 1st Defendant/Respondent breached that rule. 27. It is this court’s views that the issues above can not be resolved at this stage by way of Affidavit evidence. Those issues can only be determined during a full trial. 28. In the Mrao Ltd Case (supra) the Court of Appeal defined a Prima- facie case as follows: ‘…It may not be easy to define what is meant by “prima facie case”, but at least it must mean one on which a reasonable tribunal, properly directing its mind to the law and the evidence could convict if no explanation is offered by the defence...The terms “prima facie” case, and “genuine and arguable” case do not necessarily mean the same thing, for in using another term, namely a sustainable cause of action, the words “prima facie” are frequently used to refer to a case which shifts the evidential burden of proof, rather than as giving rise to a legal burden of proof in the manner of considering, which was in relation to the pleadings that had been put forward in the case…In civil cases a prima facie case is a case in which on the material presented to the Court a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the Bungoma CMC CC. No. E079 of 2025 Page 8 of 13 Ruling

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opposite party to call for an explanation or rebuttal from the latter. A prima facie case is more than an arguable case. It is not sufficient to raise issues but the evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard, which is higher than an arguable case.’ 29. Guided by the authority above on what constitutes a prima-facie case in interlocutory applications, and considering the issues raised above that remain unsettled between the parties herein, at this stage, it follows that the Applicants have established a prima-facie case. That prima-facie case can only be dislodged or proved with finality after a full trial. 30. As regards proof of irreparable injury, Halsbury’s Laws of England, 3rd Edition Volume 21, Paragraph 739 page 352 which defines irreparable injury as; ‘injury which is substantial and could never be adequately remedied or atoned for by damages, not injury which cannot possibly be repaired and the fact that the plaintiff may have a right to recover damages is no objection to the exercise of the jurisdiction by grant of injunction, if his rights cannot be adequately protected or vindicated by damages. Even where the injury is capable of compensation in damages, an injunction may be granted, if the injury in respect of which relief is sought is likely to destroy the subject matter in question.’(Emphasis added) 31. It is common ground that if the orders sought herein are not granted the Respondents will proceed to sale the suit property by way of public auction. The consequence of that intended sale is that the 2 nd Bungoma CMC CC. No. E079 of 2025 Page 9 of 13 Ruling

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Applicant may never recover her suit property, that will cause damage to the 2nd Applicant. 32. One may be tempted to argue that such damage is capable of being remedied by way of damages. Whereas that argument may be attractive, this court associates Waithaka v Industrial and itself with Commercial the obiter in Development Corporation [2001] eKLR where Ringera J. stated as follows: “I must say that in my understanding of the law, it is not an inexorable rule that where damages may be an appropriate remedy, an interlocutory injunction should never issue. If that were the rule, the law would unduly lean in favour of those rich enough to pay damages for all manner of trespasses. That would not only be unjust but it would also be seen to be unjust. I think that is why the East African Court of Appeal couched the second condition in very careful terms by stating that normally an injunction would not issue if damages would be an adequate remedy. By using the word “normally” the Court was recognizing that there are instances where an injunction can issue even if damages would be an adequate remedy for the injury the applicant may suffer if the adversary were not injuncted. I think some of the considerations to be borne in mind is the strength or otherwise of the applicant’s case for a violation or threatened violation of its legal rights and the conduct of the parties. If the adversary has been shown to be high-handed or oppressive in its dealings with the applicant this may move a Court of equity to say: “money is not everything at all times and in all circumstances and don’t you think you can violate another citizen’s rights only at the pain of damages.” Bungoma CMC CC. No. E079 of 2025 Page 10 of 13 Ruling

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33. The reasoning in the case above was also followed in Joseph Siro Mosioma vs. Housing Finance Company of Kenya Limited & 3 Others [2008] eKLR, where it was stated as follows by Warsame J (as he was then): “damages is not automatic remedy when deciding whether to grant an injunction or not. Damages is not and cannot be substituted for the loss which is occasioned by a clear breach of the law, in any case, the financial strength of a party is not always a factor to refuse an injunction. More so a party cannot be condemned to take damages in lieu of his crystalized right which can be protected by an order of injunction.” (Emphasis added) 34. The foregoing shows that the mere fact that one can be awarded damages for denial of an injunction does not deny an Applicant the necessary protection by way of an interim injunction. 35. In the circumstances, this court holds and finds that if the main suit is ultimately determined in favour of the Plaintiffs/Applicants, failing to preserve the subject matter of this suit at this stage may cause irreparable damage to the Plaintiffs/Applicants for the Applicant may lose the suit property for good. 36. Turning to the ingredient of balance of convenience, this court is of the considered view that given that the Applicants have already satisfied the first two ingredients for grant of injunctive orders, it follows that the balance of convenience tilts in favour of the Applicants. 37. To this end, this court draws inspiration from Paul Gitonga Wanjau vs. Gathuthis Tea Factor Company Ltd & 2 Others [2016] eKLR, where the Court expressed itself thus on this issue:"…If applicant has a strong case on the merits or there is significant irreparable harm, it may influence the balance in favour of granting an injunction. The court will seek to maintain Bungoma CMC CC. No. E079 of 2025 Page 11 of 13 Ruling

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the status quo in determining where the balance on convenience lies.”(Emphasis added) DETERMINATION 38. For the reasons above, the following orders commend to this court:a) That pending the hearing and determination of this suit the Defendants/Respondents whether by themselves, servants, nominees, assignees, agents and or other persons acting under their instructions are restrained from disposing off, auctioning, offering for sale and/or alienating the suit property. b) That pending the hearing and determination of this suit, the Plaintiffs/Applicants whether by themselves, servants, nominees, assignees, agents and or other persons acting under their instructions are restrained from dealing with the suit property in any manner likely to defeat the Defendant/Respondent's statutory right of sale of the suit property c) To avoid abuse of the injunction sought herein by the Applicants, the Applicants are ordered to file and serve all the documents necessary for readying this suit for hearing within 14 days of today upon which the defendants have 14 days within which to comply d) This matter will be mentioned on 22 nd May 2025 to fix a hearing date e) The injunction issued in (a) above shall not last for more than six months of today, unless extended by the court. f) Where the Plaintiffs/Applicants fail to comply as directed in (c) above, the injunction granted to them shall lapse without further reference to this court. g) Costs shall be in the main suit. Bungoma CMC CC. No. E079 of 2025 Page 12 of 13 Ruling

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Read, signed, and delivered in open Court at Bungoma this 17 th day of April 2025 T.O. OMONO RESIDENT MAGISTRATE In the presence of: Ms. Odhaimbo for the Defendants/Respondents Mr. Shikhu h/b for Onkangi for the Plaintiffs/Applicants C/A Albert Bungoma CMC CC. No. E079 of 2025 Page 13 of 13 Ruling

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