Ethics & Anti-Corruption Commission v Evans Kidero, Paul Mutunga Mutungi, John Ndirangu Kariuki, George Wainaina Njogu, The Cups Limited, Johnngari Wainaina, Aduma Joshua Owour, Hannah Muthoni Kariuki, Philomena Kavinya Nzuki, Ng’ang’a Mungai, Ekaya Alumasi Ghonzour, James Mimi Mbugua, Elizabeth Wanjiru Nderitu & Alice Njeri Mundia [2022] KEHC 1559 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI

ANTI-CORRUPTION AND ECONOMIC CRIMES DIVISION

ACEC CIVIL SUIT NO. E008 OF 2021

ETHICS & ANTI-CORRUPTION COMMISSION….................................PLAINTIFF

VERSUS

DR. EVANS KIDERO……………………………….…………...…… 1ST DEFENDANT

PAUL MUTUNGA MUTUNGI……………………………………… 2ND DEFENDANT

JOHN NDIRANGU KARIUKI…………………….……………..…. 3RD DEFENDANT

GEORGE WAINAINA NJOGU…………………………………….. 4TH DEFENDANT

THE CUPS LIMITED……………………………………..….……... 5TH DEFENDANT

JOHNNGARI WAINAINA…………………………………..……… 6TH DEFENDANT

ADUMA JOSHUA OWOUR…………………………………………7TH DEFENDANT

HANNAH MUTHONI KARIUKI……………………………..……. 8TH DEFENDANT

PHILOMENA KAVINYA NZUKI……………………………..…… 9TH DEFENDANT

NG’ANG’A MUNGAI ………………………………..……………..10TH DEFENDANT

EKAYA ALUMASI GHONZOUR……………………...…………..11TH DEFENDANT

JAMES MIMI MBUGUA………………………….…………..…...12TH DEFENDANT

ELIZABETH WANJIRU NDERITU………………………............13TH DEFENDANT

ALICE NJERI MUNDIA……………..…………………..………...14TH DEFENDANT

RULING

1. This is a ruling on the Plaintiff’s Notice of Motion against the 3rd Defendant/Respondent. The Notice of Motion is dated 13th April 2019 and is brought under Sections 1A, 1B, and 3A of the Civil Procedure Act and Order 40 Rules 1, 5, 9 and Order 51 Rule 1 of the Civil Procedure Rules. It is an application for a temporary injunction to restrain the 3rd Defendant whether by himself, his agents, employees or any other person from charging, subdividing, developing, wasting, transferring or in any other manner, dealing with the property referred to as LR NO. 10874/1160registered in his name, pending the hearing and determination of this suit.

2. The gravamen of the application is that the 3rd Defendant/Respondent is together with the other Defendants in this case suspected of having benefitted through corrupt means, from a total sum ofKshs. 58,000,000/=paid toM/s Wachira, Mburu, Mwangi and Company Advocatesby the County Government of Nairobi. That, specifically a sum of Kshs. 17,000,000/= of that money is suspected to have been wired to the 3rd Defendant/Respondent’s account and that the parcel of land LR 10874/1160 is suspected to have been purchased by the 3rd Defendant/Respondent using that corruptly acquired money which is public property; That the 3rd Defendant/Respondent purchased the land with the aim of concealing the illegal source of the funds and that the Plaintiff/Applicant has on behalf of the County Government of Nairobi commenced proceedings to recover the sum of Kshs. 58,000,000/= against all the Defendants jointly and severally and it is therefore necessary to preserve the subject parcel of land by grant of the order sought.

3. Relying on the decision of the Court of Appeal in the cases of Giella V Cassman Brown Co. Ltd and another [1973] EA 358and the case ofNguruman Ltd V Jan Bonde Nielsen and 2 others [2014] eKLRCounsel for the Plaintiff/Applicant urged this court to find that the plaintiff has through the affidavit of Mulki Umar sworn on 13th April 2021 demonstrated that it has a prima facie case; that it has demonstrated that the sum of Kshs. 58,000,000 paid to M/s. Wachira, Mburu, Mwangi and Company Advocates by the County Government of Nairobi was paid fraudulently and the 3rd Respondent converted his portion of Kshs. 17,000,000/= by purchasing the land in issue so as to conceal the source.

4. Citing the case of Celestine Ann King and 4 others V Said Hassan Mwatsuro and 5 others [2020] eKLR, Learned Counsel for the Plaintiff/Applicant submitted that at this stage this court is not required to delve into the merits of the case or to try to resolve the complex issues of fact and law but only to determine whether the applicant has a serious case with prospects of success.

5. Counsel further submitted that the applicant has established that it would suffer loss that cannot be compensated by an award of damages were the application to be refused and its case succeeds.  Counsel submitted that in the absence of an injunction the County Government of Nairobi and the general public shall suffer loss as the 3rd Respondent may dispose the property in order to frustrate and defeat any decree that may be passed against him.

6. Counsel further submitted that the balance of convenience also tilts in favour of the Plaintiff/Applicant as it will be most inconvenienced in trying to trace the assets of the 3rd Respondent in order to recover the money and the cost of so doing would be borne by the government.  For this proposition Counsel relied on the case of Ethics and Anti-Corruption Commission V Jimmy Mutuku Kiamba NBI HCC.NO 33 of 2016 (unreported) and the case of Kenya Anti-Corruption Commission V Stanley Mombo Amuti [2011] eKLR where it was held that:-

“An order of forfeiture can only be made if the property was still available for such forfeiture and it follows therefore that if there was no conservatory order, the property may well have ceased to exist thus rendering the success of the appeal pyrrhic.”

and the case ofShivabhai Nathabhai Patel V Manibhai Patel [1959] E Awhere the court stated:-

“….it is not only right that the court should attempt to preserve property which may be in issue, but it is the clear duty of the court to do so”

7. The 3rd Respondent vehemently opposed the application through a replying affidavit sworn by himself on 15th October 2021.  In paragraphs 3, 4 and 5 of the affidavit he deposes that the sums of Kshs. 10,000,000/=andKshs. 7,000,000/=paid to him at different times by Mr. KariukiofWachira, Mburu, Mwangi and Company Advocates were a refund for a friendly loan advanced to the said Kariuki by himself and a loan advanced to him by the said Kariuki, who he had known for a long time.  In paragraph 6 he deposes that the funds he used to purchase the land parcel LR NO. 10874/1160 were legal but were not proceeds of crime as alleged by the Plaintiff/Applicant. He deposes that he was a Councilor of the defunct Nairobi City Council from 2013 long before the issues herein arose.  He contends that this application is merely intended to discredit and frustrate him and that the Plaintiff/Applicant has not met the threshold for grant of the order sought.  The 3rd Defendant/Respondent also asserts that this application is a ploy to determine the suit herein summarily.

8. Relying on the replying affidavit Learned Counsel for the 3rd Defendant/Respondent submitted that the Plaintiff/Applicant has not demonstrated how the 3rd Defendant/Respondent was connected to the alleged fraud/corruption at the County Government of Nairobi given that he was neither an employee of Nairobi County nor in control of financial matters of the County.  Citing the case ofNguruman Ltd V Jan Bonde Nielsen and 2 others (supra) Learned Counsel for the 3rd Defendant/Respondent submitted that the Plaintiff/Applicant has not demonstrated that it has a prima faciecase with a likelihood of success as the Forensic Investigator revealed that the 3rd Defendant/Respondent was a good friend to Mr Kariuki of Wachira, Mburu, Mwangi and Company Advocates and that the two did not have trust issues in lending money to each other.

9. Counsel further submitted that the injury to the Plaintiff/Applicant would in any case be reparable: that the Plaintiff/Applicant has not demonstrated that the 3rd Defendant/Respondent is incapable of paying the sum of Kshs. 17,000,000/= were the suit to succeed and for that reason the application should fail.

10. On the balance of convenience Learned Counsel for the 3rd Defendant/Respondent submitted that the time frame for this suit is not pre-determined and it may take more time than is expected to the detriment of the 3rd Defendant/Respondent who would have been restrained from dealing with his property.  Counsel contended that the Plaintiff/Applicant has not demonstrated that were the suit to be dismissed it will compensate the 3rd Defendant/Respondent for the inconvenience suffered as opposed to itself whose claim is for recovery of money and costs which has always been borne by the party that loses.  Counsel relied on a passage in the case of Nguruman Ltd V Jan Bonde Nielsen and 2 others (supra)where the court stated:

“It must also be remembered that it is a serious thing to restrain a registered proprietor of a property over what is undeniably his unless there are justifiable grounds to do so.  The 1st respondent’s 50% claim of shares in the appellant company, the resources he used for architectural design, to construct the camp, the airstrip, to grade the road network, US $ 1,917,333 alleged advanced to the 2nd and 3rd respondents, and US $ 14 million allegedly used in the management and development of the camp, are all matters that can be resolved by arithmetical calculation and a refund made, if proved at the trial.”

Analysis and Determination:

11. It is trite that to succeed, an applicant for a temporary injunction must establish a prima faciecase with a likelihood of success, that he is likely to suffer loss that cannot be compensated by an award of damages and where the court is uncertain of the two above that the balance of convenience tilts in his favour. Learned Counsel for the parties both cited the case of Nguruman Ltd V Jan Bonde Nielsen and 2 others (supra)where the Court of Appeal stated:

“In an interlocutory injunction application, the   applicant has to satisfy the triple requirements to;

(a) establish his case only at a prima facie level,

(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 and compared with that of the respondent, if it is granted”

The court also observed that: -

“We reiterate that in considering whether or not a prima facie case has been established, the court does not hold a mini trial and must not examine the merits of the case closely. All that the court is to see is that on the face of it the person applying for an injunction has a right which has been or is threatened with violation. Positions of the parties are not to be proved in such a manner as to give a final decision in discharging a prima facie case.  The Applicant need not establish title it is enough if he can show that he has a fair and bona fide question to raise as to the existence of the right which he alleges. The standard of proof of that prima facie case is on a balance or, as otherwise put, on a preponderance of probabilities. This means no more than that the Court takes the view that on the face of it the applicant’s case is more likely than not to ultimately succeed”.

12. The issue for determination therefore is whether the Plaintiff/Applicant has established a prima faciecase, demonstrated irreparable injury should the temporary injunction be refused and lastly shown that the balance of convenience tilts in its favour.

13. The Plaintiff/Applicant’s contention is that the injunction sought against the 3rd Defendant/Respondent is for the purpose of preserving the land parcel pending hearing and determination of this suit which seeks recovery of a sum of Kshs. 58,000,000/= from the Defendants jointly and severally. On his part the 3rd Defendant/Respondent’s contention is that the Plaintiff/Applicant’s suit is for recovery of money (a sum of Kshs. 17,000,000/=) which he is capable of paying to the Plaintiff/Applicant were the suit to succeed.  I have however perused the Plaint and noted that in prayer (j) the Plaintiff has sought a declaration that it is entitled to trace the afore- mentioned sum of Kshs. 17,000,000/= to the land in question and an order that the 3rd Defendant/Respondent holds the property in trust for the County Government of Nairobi. The Plaintiff/Applicant claims that the sum of Kshs. 17,000,000/= was used to purchase the land in issue in order to conceal the source of the money.  It is therefore not correct to say that the Plaintiff/Applicant’s claim against the 3rd Defendant/Respondent is merely for a sum of money.  In my view the claim for recovery of the sum of Kshs. 17,000,000/= is intrinsically tied to the parcel of land and in so far as these proceedings are concerned the same are not severable. My finding is that the question whether the land in question is traceable to the sum of Kshs. 17,000,000/= which is alleged to have been corruptly paid to the 3rd Defendant/Respondent is a fair and bona fide issue triable by this court and were this land to dissipate and the Plaintiff/Applicant succeeds, the Plaintiff/Applicant would have nothing to trace the sum of Kshs. 17,000,000/= to. I am satisfied therefore that the Applicant has established a prima facie case.  To hold that the Plaintiff/Applicant has established a prima faciecase is not tantamount to saying that the case is one that must succeed. All I am stating is that the Plaintiff/Applicant has a more that arguable case.  As held in the Nguruman case (supra)all the court is required to see at this stage is that on the face of it the Applicant has a right which has been or is threatened with violation, the standard of proof being on a preponderance of probabilities which as was elucidated in the Nguruman case “means no more than that the court takes the view that on the face, of it the Applicant’s case is more likely than not to ultimately succeed.”

14. I also find that the allegation that this application is a means to determine this case summarily is misconceived given that in deciding this application this court has been very careful not to go into the merits of the recovery proceedingsIC or to delve into the issues of facts and law as regards the acquisition of the parcel of land in issue.

15. The Plaintiff/Applicant will during the trial have to adduce evidence to prove it’s case on a balance of probabilities and the 3rd Defendant/Respondent will be given an opportunity to challenge that evidence and also to adduce evidence.

16. I am also persuaded that the Plaintiff/Applicant has demonstrated that it shall suffer irreparable damage should the temporary injunction not issue as the land is the substratum of its claim against the 3rd Defendant/Respondent. Should this parcel of land be disposed then the Plaintiff/Applicant will have nothing to attach to execute its decree.  It is also not in the public interest that a property that is said to have been obtained corruptly using public funds is left in the hands of the Respondent to do whatever he wills with it. This court is duty-bound to preserve the property pending hearing and determination of the recovery proceedings. Should the suit be dismissed the property shall be restored to the 3rd Defendant/Respondent.

17. I am also persuaded that the balance of convenience tilts in the Plaintiff/Applicant’s favour as it is the party that would be most inconvenienced were the injunction to be refused and the case succeeds given that it would have to expend tax payers money to trace the property in order to satisfy the decree.  On his part the 3rd Defendant/Respondent would be compensated by an award for costs if the suit is not successful. It would not be the same for the Plaintiff/Applicant.

18. In the premises the application is merited and it is allowed and it is ordered that pending the hearing and determination of this suit the 3rd Defendant/Respondent be and is hereby, whether by himself, his agents, servants and/or employees or any other person restrained from selling, leasing, charging, subdividing, developing, wasting, transferring or in any other manner dealing with Land parcel LR 10874/1160 which is registered in his name.

19. The costs of this application shall be in the cause.

Orders accordingly.

Signed, dated and delivered virtually this 10th day of March, 2022.

E. N. MAINA

JUDGE