Karura Investment Limited v Harunani & 2 others [2023] KECA 1505 (KLR)

Karura Investment Limited v Harunani & 2 others (Civil Application E083 of 2023) [2023] KECA 1505 (KLR) (8 December 2023) (Ruling)

Neutral citation: [2023] KECA 1505 (KLR)

Republic of Kenya

In the Court of Appeal at Nairobi

Civil Application E083 of 2023

HM Okwengu, K M'Inoti & JM Mativo, JJA

December 8, 2023

Between

Karura Investment Limited

Applicant

and

George Njoroge Kariuki

1st Respondent

Suleiman Abdulshakur Harunani

2nd Respondent

Chief Land Registrar

3rd Respondent

(Being an application for stay of execution of the ruling and orders of the Environment and Land Court at Nairobi (Wabwoto, J.) dated 9th March 2023 in ELC Misc. App No. E050 of 2022 Miscellaneous Application E050 of 2022 )

Ruling

1. Karura Investment Limited (the applicant), by a notice of motion dated 10th March 2023 brought under Rule 5 (2) (b) of the Court of Appeal Rules, 2022 seeks two substantive prayers. One, there be stay of execution of the ruling and orders made on 9th March 2023 in Miscellaneous ELC Application No. E050 of 2022, Milimani (Wabwoto, J.) ordering the eviction of the applicant and the 2nd respondent from LR. No. 12422/319 pending the hearing and determination of its intended appeal. Two, pending the hearing and determination of its intended appeal, there be a stay of any further proceedings in Miscellaneous ELC Application No. E050 of 2022 Milimani.

2. The application is supported by grounds on its body and the supporting affidavit of Sureshchandra Raichand Shah (the applicant’s director) sworn on 10th March 2023 together with annexures thereto and by the 2nd respondent’s replying affidavit sworn on 14th March 2023. It is opposed by the 1st respondent vide a notice of preliminary objection dated 29th March 2023 and a replying affidavit of James Kariuki Njoroge, (the 1st respondent’s son) sworn on 29th March 2023 together with annexures thereto. The application was canvassed through rival pleadings, written submissions and legal authorities cited in support of the parties’ respective opposing positions. At the hearing of the motion both parties relied on their respective filed submissions, which they highlighted orally.

3. The background to the application albeit in summary form is that the 1st respondent moved the Environment and Land Court in ELC Misc. App. No. E050 of 2022 videan amended notice of motion dated 25th May 2022 seeking eviction orders against the applicant and the 2nd respondent from LR. No. 12422/319, Nairobi ("the suit property”). The application was vehemently opposed by the applicant and the 2nd respondentvide replying affidavit sworn on May 2022 and 9th May 2022 respectively. The Superior Court directed that the amended notice of motion be disposed of via oral and written submissions and vide a ruling delivered on 9th March 2023, the learned judge allowed the amended notice of motion and ordered the eviction of the applicant and the 2nd respondent from the suit property.

4. The applicant is desirous to appeal against the said decision. It lodged a notice of appeal dated 9th March 2023 and requested for typed proceedings vide a letter of even date.

5. Germane to the applicant’s case is the contention that it has an arguable appeal. To demonstrate that its intended appeal is arguable, the applicant highlighted 21 grounds essentially faulting the finding by the learned judge of the Superior Court. Briefly, the applicant maintains that the intended appeal discloses a strong and compelling case of serious misapprehension of the jurisdiction of the ELC under Sections l52A, l52B, 152E and 1526 of the Land Act, 2012.

6. As to whether the appeal will be rendered nugatory unless the orders sought are granted, the applicant urges that its possession and ownership of the suit property is pursuant to a transfer dated 25th October 1993 between itself and one Arthur Magugu for a consideration of Kshs.24,727,170/=. Further, the property valued at Kshs.3,710,000,000/= as at 29th January 2021 risks being disposed of to a third party since the 1st respondent has embarked on a proposed development on the suit property based on forged documents.

7. It is also the applicant’s case that no reasonable compensation can be expected from a person accused of forgery and fraud. Therefore, if the orders sought are refused, the suit property will be completely lost. Consequently, it is upon this Court to step in and prevent the sanitization and ratification of land grabbing through court orders issued by the learned judge of the Superior Court.

8. The 2nd respondent supported the application. To demonstrate the applicant’s appeal is arguable, he maintained that he had never met and or even entered into any agreement with the 1st respondent in relation to the suit property and his purported signature on the alleged lease was a clear forgery as confirmed by a forensic document examiner.

9. The 1st respondent’s opposition to the application is two-fold.First, in his preliminary objection, without elaborating, he maintained that the application is incompetent and fatally defective. The elucidation is to be found in his replying affidavit dated 29th March 2023 at paragraph 15 in which he asserts that the applicant is revisiting issues in the instant application when the decision emanating from the preliminary objection in the trial court was not challenged.

10. Second, the 1st respondent maintained that the draft memorandum of appeal does not disclose an arguable because it offends the doctrine of res judicata. Further, the memorandum of appeal fails to meet the threshold as the applicant invokes the question of ownership when the said issue was not up for determination by the superior court. It is the 1st respondent’s case that the superior court simply analyzed material placed before it and concluded that indeed the 1st respondent was deserving of the eviction orders. Therefore, the issue of ownership ought to have been ventilated in a proper forum.

11. It is also the 1st respondent’s case that the applicant and the 2nd and 3rd respondents will not suffer prejudice because they have not demonstrated how the appeal will be rendered nugatory. The 1st respondent maintains that he has already obtained approvals to develop the suit property. Therefore, there is no way the 1st respondent would have obtained approvals from National Environment Management Authority (NEMA), National Construction Authority (NCA) and the Nairobi County Government if he was not the legitimate owner of the parcel of land. Further, in the event the applicant succeeds in its ownership claim in the appropriate forum, it will be compensated by way of money or seek to evict the 1st respondent from the suit property.

12. Lastly, the 1st respondent argues that the applicant will suffer no prejudice because the suit property does not have any structures to be demolished, and the eviction only entails requiring the applicant’s security on site to vacate so that the 1st respondent can install its own security.

13. Our invitation to intervene on behalf of the applicant has been invoked under Rule 5 (2) (b) of the Court of Appeal Rules, 2022. The principles for granting a stay of execution, injunction or stay of proceedings under Rule 5(2) (b) of this Court’s Rules are well settled. (See Stanley Kangethe Kinyanjui vs Tony Ketter & 5 Others [2013] eKLR). An applicant seeking relief premised on the above rule must demonstrate that the appeal or the intended appeal is arguable and second, that the appeal will be rendered nugatory should it ultimately succeed after the substratum of the appeal is no more or out of reach of the successful appellant.

14. We are also guided by the decision in Eric Makokha & 4 Others vs Lawrence Sagini & 2 Others [1994] eKLR CA where this Court in an application under Rule 5 (2) (b) stated:“An application for injunction under Rule 5 (2) (b) is an invocation of the equitable jurisdiction of the Court. So, its grant must be made on principles established by equity…”

15. On the first principle, as to whether or not the appeal is arguable, we have to consider whether there is at least a single bona fide arguable ground that has been raised by the applicant in order to warrant ventilation before this Court on appeal. As was held by this Court in Stanley Kang’ethe Kinyanjui vs Tony Ketter & 5 Others (supra):“vii).An arguable appeal is not one which must necessarily succeed, but one which ought to be argued fully before the court; one which is not frivolous.viii).In considering an application brought under Rule 5 (2) (b) the court must not make definitive or final findings of either fact or law at that stage as doing so may embarrass the ultimate hearing of the main appeal.”

16. In endeavour to satisfy the first prerequisite, the applicant has annexed a draft memorandum of appeal raising 21 grounds. We have examined these grounds against the grounds raised by the 1st respondent. For instance, the 1st respondent argues that the applicant is revisiting issues arising from a preliminary objection in the trial court (as opposed to issues before the court that allowed the miscellaneous application) and that the issues raised in the intended appeal are res judicata. Without delving into the merits of the appeal, we find this line of argument perplexing and misdirected because the intended appeal is against a ruling rendered in a miscellaneous application.

17. Notably, one of the grounds cited by the applicant is that the learned judge erred in law and in fact in finding and holding that a substantive suit which leads to determination of the right to ownership and possession of a property can be commenced by way of a notice of motion. An arguable appeal is not one, which must necessarily succeed. On the contrary, an arguable appeal is one which is not frivolous, but which raises a bona fide issue that can be argued fully before the court. Without saying more lest we embarrass the bench that will be seized of the main appeal, we are satisfied that the intended appeal is arguable.

18. Turning to the second prerequisite, whether the appeal, if successful, would be rendered nugatory in the event we decline to grant the orders sought and the intended appeal succeeds, in Stanley Kang’ethe Kinyanjui vs Tony Ketter & 5 Others (supra) this Court stated that:“ix).The term “nugatory” has to be given its full meaning. It does not only mean worthless, futile or invalid. It also means trifling.x).Whether or not an appeal will be rendered nugatory depends on whether or not what is sought to be stayed if allowed to happen is reversible; or if it is not reversible whether damages will reasonably compensate the party aggrieved.”

19. In determining whether an appeal will be rendered nugatory, the court has to consider the conflicting claims of both parties and each case has to be determined considering its peculiar facts and circumstances. We note that the 1st respondent admits that he is in the process of undertaking some development on the suit property. He also admits having secured the requisite approvals from NEMA, NCA and the County Government to develop the property. This means that there is imminent danger of the character of the land changing unless the orders issued on 9th March 2023 are stayed. Accordingly, we are persuaded that there is a real risk of the intended appeal being rendered nugatory should the character of the land change or should the title be transferred to a third party. For these reasons we are satisfied that the applicant has satisfied the twin requirements of arguability and the nugatory aspect of the intended appeal.

20. Regarding the second prayer seeking stay of proceedings in Miscellaneous ELC Application No. E050 of 2022 Milimani, we note that the impugned proceedings were commenced via a miscellaneous application and therefore, once the learned Judge rendered his verdict on the said application, the proceedings in the miscellaneous application came to a halt since there is nothing pending. It follows that the prayer for stay of further proceedings is untenable and will serve no utilitarian purpose.

21. The upshot is that the application dated 10th March 2023 is allowed in terms of prayer one. There shall be stay of execution of the ruling and orders made on 9th March 2023 in Miscellaneous ELC application No. E050 of 2022 Milimani (Wabwoto, J.) ordering the eviction of the applicant and the 2nd respondent from LR. No. 12422/319 pending the hearing and determination of the applicant’s intended appeal. The costs of this application shall abide the outcome of the intended appeal.

DATED AND DELIVERED AT NAIROBI THIS 8TH DAY OF DECEMBER, 2023. HANNAH OKWENGU.................................JUDGE OF APPEALK. M’INOTI................................JUDGE OF APPEALJ. MATIVO.................................JUDGE OF APPEALI certify that this is a true copy of the originalSIGNEDDEPUTY REGISTRAR