NAIVASHA COTTAGES LIMITED v GREEN PARK GOLF & COUNTRY COMPLEX LTD & 4 others [2009] KEHC 506 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAKURU

Civil Suit 177 of 2009

NAIVASHA COTTAGES LIMITED……….......................................……PLAINTIFF

VERSUS

GREEN PARK GOLF &COUNTRY COMPLEX LTD………..……1ST DEFENDANT

GREENPARKGOLDSECTION (B) LIMITED………….…………2ND DEFENDANT

GREENPARKGOLDMANAGEMENT LIMITED….…………..…3RD DEFENDANT

KIPRONO KITTONY…………….…...................................……..4TH DEFENDANT

ROSEMARY KITTONY……………................................……….5TH DEFENDANT

R  U  L  I  N  G

The plaintiff’s application dated 18th June 2009 is seriously contested.  The affidavits in support of and those in opposition to it run into hundreds of paragraphs.  The written submissions on it by counsel for the parties are like theses.  I have perused all of them.  They raise several substantial issues.  At this interlocutory stage, having not heard the parties and lest I prejudice the hearing of the case, I cannot and should not make any definitive findings.  My task at the moment is to determine whether or not, on the settled principles in Giella vs Cassman Brown Co. Ltd [1973] EA 358, the plaintiff has made out a case for the grant of the orders of injunction it seeks.  If it has I will of course grant all or some of the prayers in the application and vice versa.  To make this determination I need to briefly set out the parties’ pleadings and the issues they raise.

The plaintiff avers in its plaint that following the 1st defendant’s solicitation and invitation to members of the public to invest and take up shares in the Green Park Project, a Golf Resort encompassing private chalets, the plaintiff showed interest in Sites B54, B55 and B34.  The 1st defendant’s officers advised the plaintiff that the building regulations in that project stipulated that owners of plots on the outer row and abutting the fence were restricted to building single storey chalets so as not to obstruct the views of chalets in the inner row whose owners were allowed to construct double storey chalets.  On this express stipulation the plaintiff avers that it took shares in Green Park Golf Section (B) Ltd, the second defendant, which shares entitled the plaintiff to access and rights over Site No.B54 within the 1st defendant’s development on L.R. No. 420/100 Naivasha.  According to the regulations governing the scheme, the owner of that site was allowed to construct a double storey chalet which guaranteed a panoramic view of Lake Naivasha and the Aberdare Range of Hills.

The plaintiff further claims that in May 2001, after expending a substantial amount of money in constructing a private chalet on Site No.B54, the 1st defendant without any solicitation whatsoever approached the plaintiff’s architects with an offer to the plaintiff and the owner of the neighbouring Site No. B34 to purchase Site No. B55 andleave it without a dwelling or alternatively construct thereon a swimming pool which would vastly improve the ambiance of the two properties. The Plaintiff and the owner of the said neighbouring Site No.B34 accepted the offer and in due course, and in complete reliance on the terms of that offer, constructed on Site No. B55, at a cost of Kshs.7,647,068/=, a swimming pool and suite without a dwelling as authorized and directed by the 1st, 2nd, and 3rd defendants.

In due course the joint management and use of the swimming pool and suite by the owners of Plot Nos.B54 and B34 became impossible. In June 2008 the 1st Defendant advised the plaintiff that Site No. B55 had been sold to a third party without any reference to the plaintiff.

The plaintiff promptly and formally advised the 1st, 2nd and 3rd defendants that whereas it reserved its rights to pursue the dispute with the owner of Site No.B34 regarding the rights and ownership of Site No.B55 a third party acquiring Site No.B55 would, perforce, be required to take up that site on the very same terms as all the other site owners in the Green Park Complex, and in particular, affording the plaintiff the minimum exclusivity parameters mandated by the 1st, 2nd and 3rd defendants in the relevant instruments.

The plaintiff further claims that in clear breach of the express representations that had been made to the plaintiff, the 1st, 2nd and 3rd defendants permitted the 4th and 5th defendants to develop a double storey chalet on Site No.B55 in front of the plaintiff’s chalet blocking the plaintiff’s views and totally obliterating the vantage scenery and views that had informed the plaintiff’s choice of the said Plot No. B54.

As the defendants did not heed the plaintiff’s protestations about the sale and development on Site No.B55, the plaintiff filed this suit and contemporaneously applied by Chamber Summons underOrder 39 Rules 1(a), 2,3(1) and 7(1)as well asSection 3Aof theCivil Procedure Actfor both prohibitive and mandatory orders of injunction.

The prohibitive orders of injunction sought include restraining the defendants from occupying or carrying out any developments on Plot No.B55 (other than a single storey chalet 20 metres away from the outer limits of the plaintiff’s chalet and not blocking the view from the plaintiff’s chalet) or erecting structures for more than one user on the said plot that is to say a dwelling house and a swimming pool concurrently or howsoever until this suit is heard and determined.  The mandatory injunction sought is directed to the defendants to forthwith pull down and remove so much of the structure constructed on Plot No. B55 as is erected closer than 20 metres from the outer limits of the plaintiff’s chalet and inside the straight line separating chalets on the inner row on the one hand and chalets on the outer row abutting the fence on the other and which is more than one storey.

The application is supported by two affidavits of Kenneth Kiplagat a director of the plaintiff company in which he has reiterated and expounded on the above averments and added that the 1st, 2nd and 3rd defendants stated to prospective purchasers that a purchaser of any site in the scheme is contractually committed to erect a chalet in a specified and approved site identified by specific co-ordinates and marked on the registered plan.  He said they further stated “…that chalets designated Type A and Type B by the company shall not exceed a ground floor area of approximately One Hundred (100) square metres and the chalets designated Type C by the company shall not exceed a ground floor area of approximately One Hundred and Twenty (120) square metres. The 1st, 2nd and 3rd defendants caused the scheme of development to be registered in the Registry of Documents at the Lands office in Nairobi in Volume DI Folio 798/190 File No. DXXVIII. He understood this scheme of development to be binding on the 1st, 2nd and 3rd defendants on the one hand and all the site purchasers on the other and that no deviation, alteration or changes could be made to the said scheme without express agreement of all the parties duly registered in the Registry of Documents.  No such agreement has been reached by the parties.

In accordance with the filed scheme of development Site No. B54 has been described as a chalet ‘with co-ordinates 00-40-29 (S) 036-19-17 (E) marked with a cross in red on the plan annexed hereto (“the chalet”) and more particularly on plans registered in the Registry of Documents.’ Other than the specific co-ordinates, he said this description should apply to Site No. B55.

He further deposed that on the advice of the plaintiff’s lawyers the description of Chalet B55 does not sufficiently define it as required by both the Land Titles Act and Registration of Titles Act and is therefore not a lease recognized in law. On the further advice of the plaintiff’s surveyors he said the 4th and 5th defendants’ structure on Site B55 is not on its co-ordinates and is outside the 10m x 12m (120m2) described as the maximum footprints size of the chalet that can be erected on that site.  He alleged that the 1st, 2nd and 3rd defendants have, in addition to 173m2, admitted allowing the 4th and 5th defendants a further 70m2 for a swimming pool  bringing the total footprint area to a shocking 240m2.

In conclusion he stated that the plaintiff’s principal desire is to enforce the covenants of the scheme of development with intent that Site B54 enjoys its covenanted rights in terms of space, quiet enjoyment and the same treatment as all the other site owners in the scheme of development.  In view of the matters stated hereinabove the plaintiff is not able to enjoy the serenity, peace and solace it craved for as an incentive to invest in the scheme of development at Green Park.  It will totally alter the character of the entire scheme of development if the 1st, 2nd and 3rd defendants permit extension of the chalet on Site No. B55 and that will seriously comprise the plaintiff’s investment.  In the circumstances he prays that the application be allowed with costs.

The defendants seriously dispute the plaintiff’s claims.  Their counsel have raised preliminary points challenging the competence of this suit which I would like to start with.  In their counsel’s submissions, the 1st, 2nd and 3rd defendants challenged the competence of this suit on two main grounds. One, that there being no written contract between the 1st defendant and the plaintiff regarding the alleged sale of Site No.B55, the plaintiff’s claim based on an oral contract is unenforceable and cannot therefore be the basis of granting injunctive orders. Secondly, that Order 39 of the Civil Procedure Rules under which the application is made, has no provision for mandatory injunctions. The application should, in the circumstances, have been brought by Notice of Motion under Order 50 Rule 1 and as that was not done it is incompetent.

Echoing the views of counsel for the 1st, 2nd and 3rd defendants, counsel for the 4th and 5th defendants basing themselves on the notice preliminary objection and their client’s defence and replying affidavit also challenged the competence of this suit.  They also contended that in the absence of a written contract between the plaintiff and the 1st, 2nd and 3rd defendants in respect of Site No. B55 at Green Park Project and in view of the express provisions of Section 3(3)(a) of the Law of Contract Act and Section 54 of the Transfer of Property Act this suit is fatally defective and cannot be the basis of the injunctive orders sought by the plaintiff.

Citing the cases of Salume Namkasa Vs Yozefu Bukya [1966] EA 433, Morris & Company Ltd Vs Kenya Commercial Bank Ltd [2003] 2 EA 600 and Florence I Makotsi Vs Fortune Properties Ltd & Another [2006] eKLR counsel also contended that a mandatory injunction cannot be sought by chamber summons under Order 39 of the Civil Procedure Rules.

In response and while admitting that there is no written contract between the plaintiff and the 1st, 2nd and 3rd defendants relating to the sale of Site No. B55, counsel for the plaintiff argued that the issue of seeking to enforce an unwritten contract for the sale of an interest in land does not arise as there are no valid leases in Green Park Scheme of Development capable of conveying or transmitting an interest in land.  They based this contention on the premise that as stated by P.L. Onalo in his book Land Law and Conveyancing in Kenya Pg.65, a valid lease has to have as its characteristics a defined area, commencement date, a term as a matter of ascertainment and rent.

Counsel for the plaintiff contended that on these settled principles the lease by the 1st defendant to Log Cabin Ltd a copy of which is annexed to the further affidavit of Kenneth Kiplagat and the schedule thereto do not define the area covered by the lease.  They dismissed the plan registered at the Registry of Documents in Nairobi under Presentation Book No. 809 Volume D1 Folio 798/190 in File No. DXXVIII as being only an illustrative map which shows the general lay out of the Green Park Scheme of Development but cannot with any degree of precision show where Plot No. B55 is situate and because its lease does not contain co-ordinates.

Counsel for the plaintiffs cited several sections of the Land Titles Act Cap 282 of the Laws of Kenya relating to the boundaries, plan and description of the property as well as the contents of a certificate of title and submitted that the Green Park leases do not meet the threshold set out in those sections. They further submitted that as the sites at Green Park are not registered in accordance with the provisions of the Land Titles Act there can be no transmission or conveyance of any site within definition of any law including the Law of Contract Act and no land can competently be transferred at the Green Park Scheme of Development.  They also challenged the plan in respect of which Green Park Developments are based as fouling the provisions of the Physical Act of 1998.

In conclusion counsel contended that the Green Park Scheme of Development operates on the basis of ownership of shares entitling a member to a right to construct a chalet at designated sites and no more.  It is not an interest in land but a right conferred on shares.

Having considered these rival submissions, I agree with counsel for the defendants that as stated in Section 3(3)(a) of the Law of Contract Act an unwritten contract for the disposition of an interest in land is unenforceable. However, without evidence I cannot at this stage dismiss the contention by counsel for the plaintiff that the leases at the Green Park Scheme of Development including the one for Site No. B55 do not create interests in land or whether or not they flout the provisions of the Land Titles Act and/or the Physical Planning Act. In the circumstances I make no finding as to whether or not the plaintiff’s claim over Site No. B55 is enforceable.

Having disposed of the preliminary issues, I would now like to consider the application on its merits.

In their joint statement of defence and the replying affidavit of its Company Secretary, Mr. Jacob Ombongi, the 1st, 2nd and 3rd defendants denied the plaintiff’s claim of Site No.B55 and stated that the 1st defendant offered that site jointly to both the plaintiff and Log Cabin Ltd.  Upon the plaintiff’s failure to pay its share of the purchase price, the 1st defendant sold that site to Log Cabin Ltd who afterwards sold and transferred it to the 4th and 5th defendants.  They therefore denied the plaintiff’s claim for Kshs.3,823,534/- relating to that site.

While conceding that they are bound by the rules and regulations governing the Green Park Scheme of Development, the 1st, 2nd and 3rd defendants contended that they have the sole and absolute discretion of approving the type of structure to be erected on Site No. B55.  They therefore denied the plaintiff’s claim that the developments they have authorised on Site No. B55 encroach on the plaintiff’s space or constitute any nuisance. In the circumstances, their counsel argued that the plaintiff is not entitled to the orders of injunction it seeks because it is guilty of material non-disclosure and has not made out a case for either mandatory or prohibitory injunctions and urged me to dismiss the application with costs.

On their part counsel for the 4th and 5th defendants, basing themselves on their client’s defence and replying affidavit submitted that their clients are bona vide purchasers without notice of Site No. B55. Therefore in the absence of any fraud or misrepresentation on their part, their title to it is, by virtue of the provisions of Section 23 of the Registration of Titles Act Cap 281 of the Laws of Kenya, absolute and indefeasible and is not subject to any challenge.  Accordingly the plaintiff’s remedy for the claimed breach of contract, interest, representations, assurances, investments and refund for the expenditure on Site No. B55, if any, lies only in damages as against the 1st, 2nd and 3rd defendants and any such damages can only be sought in arbitration pursuant to Clause 5 of the Agreement of Lease for Site No. B54 between the plaintiff and the 1st, 2nd and 3rd defendants.  They added that there being no privity of contract between the plaintiff and 4th and 5th defendants in respect of Site No. B55 at Green Park Project, and the alleged nuisance having not been established, the plaintiff has not made out a prima facie case with any probability of success to support injunctive orders.

Even if the plaintiff had established a prima facie case, having hibernated for over 7 years during which the 4th and 5th defendants spent Kshs. 14,384,922/= to develop Site No. B55, on a balance of convenience, they urged me to dismiss the plaintiff’s application with costs.

Having perused the written submissions by counsel for all the parties it is common ground that the 1st, 2nd and 3rd defendants created a scheme of development by the name Green Park Gold and Country Complex.  The scheme of development was on 27th January 1999 registered as a document under the Registration of Documents Act.

Prior to selling the sites the 1st, 2nd and 3rd defendants laid out a scheme for sale of the sites in lots comprising identifiable and marked sites subject to restrictions intended to be imposed on all site owners and which, although varying in details as to particular sites, are consistent only with the said general scheme of development.

It is also not in dispute that the 1st, 2nd and 3rd defendants formulated rules and regulations to govern all aspects of that scheme of development which are inserted in all the agreements of lease of the purchasers of the chalets.  Clause 4 of the Sixth Schedule which has the Lessor’s covenants (see copy of the lease annexed to Mr. Kenneth Kiplagat’s further affidavit) makes that quite clear. It states that “…every sublease or tenancy of a chalet hereafter granted by the Lessor shall contain regulations to be observed by the Lessee or Tenants thereof identical with the regulations and shall be substantially in the form of this sublease and contain covenants on the part of the Tenant similar in all material respects to those contained in this sublease.”

In Clause 3 of the Sixth Schedule-Lessor’s Covenants, the 1st, 2nd and 3rd defendants also covenanted that “if so required by the Tenants to enforce or attempt to enforce the covenants and conditions similar to those contained herein on the part of the tenant entered into or to be entered into by the Tenants of the other chalets so far as they affect the chalet on the Tenant indemnifying the Lessor against all costs and expenses of such enforcement or attempted enforcement and giving reasonable security for such costs and expenses.”

In Clause 9 of the Third Schedule of the agreement for Chalet No. B54,the 1st, 2nd and 3rd defendants stated that all site owners or sub-lessees were “(a)  to cause to be inserted in every under-lease (whether mediate or immediate) a covenant by the sublease with the Lessor, the Maintenance Trustee and with the Tenant to observe and perform all the covenants and conditions in this sublease contained (except the covenant for the payment of rent or Maintenance Contribution)” and “(b)  upon any assignment of these sublesses to cause the assigns to enter into a direct covenant with the Lessor and Maintenance Trustee to observe and perform the covenants and conditions hereof and to cause every under-lessee to obtain a similar provision”.

The 1st, 2nd and 3rd defendants intended that these restrictions were to be for the benefit of all the sites intended to be sold.

The issue in this case therefore is whether or not the defendants have complied with these stipulations and if not whether or not I should, at this stage, grant the mandatory injunction sought and order the demolition of the structure the 4th and 5th defendants have erected on site B55. I will start with the prayer for an order of mandatory injunction.

It is trite law that “A mandatory injunction ought not to be granted on an interlocutory application in the absence of special circumstances, and then only in clear cases either where the court thought that the matter ought to be decided at once or where the injunction was directed at a simple and summary act which could be easily remedied or where the defendant had attempted to steal a march on the plaintiff.”-Locabail International Finance Ltd. V. Agroexport and others [1986] 1 ALLER 901 at pg. 901. See also Showin Industries Ltd. Vs Guardian Bank Ltd. & Another [2002] 1 E.A. 284 and Kenya Breweries Ltd. Vs Okeyo (2002) 1 E.A. 109.

This case is not only complex but the mandatory injunction is not directed at a simple and summary act and there are no special circumstances to warrant the grant of a mandatory injunction. There is a serious dispute as to whether or not the defendants have flouted the building regulations. Therefore before a mandatory injunction is issued in this case, evidence will be required to show that the structures the 4th and 5th defendants are constructing on Site No. B55 exceed the maximum footprint dimensions allowed and or they encroach on the plaintiff’s space, obstruct its view and cause a nuisance.  In the circumstances the prayer for a mandatory injunction is hereby dismissed.

On the prayer for a prohibitory injunction, having perused the communication dated 26th September 2007 by Diana Nyarui and that of Gordon Strevens dated 25th June, 2008 to the 4th and 5th defendants on behalf of the 1st, 2nd and 3rd defendants, as well as Clause 1. F of the Agreements relating to Site B54 (which as already stated should be the same as the one in respect of Site B55), I find that the plaintiff has raised a serious issue on the footprint size of the chalet being constructed on Site No. B55. There are also the issues of whether the 1st, 2nd and 3rd defendant have absolute discretion to allow any development in the scheme and if the construction being erected on Site B55 together with the swimming pool already on it amounts to putting the site to more than one user and if so whether or not that flouts the regulations of the scheme.

These are no doubt weighty issues that will have to be determined at the hearing. In the circumstances I find that the plaintiff has made out a prima facie case with a probability of success. If the prohibitory injunction is not granted, and the 4th and 5th defendants are allowed to complete the construction of Chalet B55, that may defeat the exclusivity promised to the investors in the project including the plaintiff. Consequently I grant the prohibitory injunction and order that pending the hearing and final determination of this suit the defendants, jointly and severally, by themselves, their servants, workmen or agents, or otherwise are hereby restrained from modifying, working on, occupying or erecting any building (other than a single storey chalet not nearer than 20 metres from the outer limits of the plaintiff’s chalet and not blocking the plaintiff’s view from the plaintiff’s chalet or constructing structures for more than one user on Site No. B55, that is to say a dwelling house and a swimming pool concurrently), or in any other way dealing with the current structures on Site No. B55 at the Green Park Project Naivasha.  The costs of this application shall be costs in cause.

DATED and delivered at Nakuru this 26th day of November, 2009.

D. K. MARAGA

JUDGE.