NDOLA FLOWERS LIMITED, ALICE KWAMBOKA NYAMBANE, ZACHARIA NYAMBANE KENG'ARA & STEPHEN KENG'ERA v NATIONAL BANK OF KENYA LIMITED & GARAM INVESTMENTS [2004] KEHC 34 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT NAIROBI (MILIMANI COMMERCIAL COURTS)

Civil Case 62 of 2001

NDOLAFLOWERS LIMITED......................................... 1st PLAINTIFF

ALICE KWAMBOKA NYAMBANE.............................. 2nd PLAINTIFF

ZACHARIA NYAMBANE KENG'ARA......................... 3rd PLAINTIFF

STEPHEN KENG'ARA.................................................. 4th PLAINTIFF

-  VERSUS-

NATIONAL BANK OF KENYA LIMITED................ 1st DEFENDANT

GARAM INVESTMENTS...................................... ....2nd DEFENDANT

RULING

This application is brought by way of a Chamber Summonsdated and filed in court on 8th January, 2004. It is made underO.XXXIX rules, 2 and 3 of the Civil Procedure Rules and Section 3A ofthe Civil Procedure Act, and all enabling provisions of the law. Themain order which the application seeks is that a temporary injunctionbe issued restraining the defendants, whether by themselves, theirservants and/or agents or however, from auctioning for saleKAKAMEGA 504/96 KAKAMEGA DISTRICT, L.R. NO. ELDORETMUNICIPALITY/BLOCK 5/126/1 (WEST INDIES ESTATE) ELDORET

TOWN on 14th  January 2004 and L.R. NO. 3734/1095 (IR NO.52129/2) LAVINGTON ESTATE as scheduled on 15th January, 2004pending the hearing and determination of this suit on 29th January,2004 as aforesaid properties are the subject matter of this suit andthe suit will be rendered nugatory if the sale proceeds.

The application is supported by the affidavit of ZACHARIANYAMBANE, the third plaintiff and director of the first plaintiff, andespecially on the grounds that this case is scheduled for hearing from29th January 2004 when the same is to proceed to its conclusion toenable the court to determine whether the respondents are justifiedin realizing the securities charged; that to circumvent the scheduledhearing the respondents have proceeded to issue statutory noticesand advertised the suit properties for sale despite the pendinghearing which was fixed by mutual consent; and that the suit hereinwill be rendered nugatory if the intended auctions scheduled for 14thJanuary 2004 and 15th January, 2004 should proceed.

The application is opposed. In her replying affidavit sworn on14th January, 2004 and filed in court the following day, Ms. ZipporahK. Mogaka, the legal services manager of the first defendant, avers

that the first plaintiffs have failed to honor their obligations underthe agreements between the parties by paying the sums advancedtogether with interest thereon, which sums were secured by thecharges executed over the suit premises. Upon this failure, thedefendants/respondents issued statutory notices which were dulyreceived, and since there is no order restraining the defendants fromexercising their statutory power of sale pending the hearing anddetermination of the suit herein, the defendants were entitled toadvertise the sale of the suit premises by public auction, andtherefore to realize the securities.

Ms. Omondi canvassed the application orally on behalf of theapplicants. Her main argument was that since the hearing of themain suit was only a stone's throw down the road, it was fair andproper to allow the plaintiff to prove its case.

In response, Mr. Kariuki for the respondents adopted in totothe contents of Ms. Mogaka's affidavit. In short, his case was thatthe defendants had played by the book, and that therefore they wereentitled to their pound of flesh as they had complied with all therequisites procedures.

Having heard the submissions of both counsel, I don't find itprudent to consider this application in isolation and independently ofthe main suit. The two are so closely and inseparably interwoventhat they ought to be considered together. In a nutshell, the historyof this case is that sometime in or about 1996, the first defendantthrough the European Investment Bank advanced to the first plaintiffa loan for expanding the first plaintiff's horticultural project. The 2ndand third plaintiffs were guarantors to the said loan. As guarantors,they offered as security for the loan properties at Eldoret, Kakamegaand in Nairobi. For some reasons, the horticultural project did notprosper; instead it failed, and the plaintiffs fell into arrears inservicing the loan.

On account of pressure for payment from the first defendantand the threat to sell and realize the security, the plaintiffs went tocourt and filed this action in May, 2001. On or about 29th August,2002, the first defendant served statutory notices on the plaintiffs tothe effect that the first defendant would sell the charged propertyupon the expiry of three months from the date of service of the

notice, in realization of the security thereby conferred. Thethreatened sale was not effected at that time.

Meanwhile the court process took its usual course.Amendments to pleadings were made; lists of documents filed, andother pre-trial procedures were commenced. On 3rd October, 2002,by consent a hearing date was fixed for 30th January, 2003. On thehearing date, the matter came before Justice Osiemo but by consentit was taken out and stood over generally. On 3rd February, 2003,fresh hearing dates were taken and the matter was fixed for hearingon 16th and 17th July, 2003.

On 16th July, 2003, the matter came for hearing before JusticeMwera. Mr. Githara for the defendants said that they had filed theirlist of documents in mid-2002, and their draft was sent to the plaintiffbut was not yet agreed upon as both pleadings had been amended.Mr. Onguto for the plaintiffs confirmed that the issues had not beenagreed upon and it was the intention of counsel to agree on abundle of documents. Besides, the plaintiff’s ‘principal witness was inthe USA as he was unwell and the defendants had been briefed. In

the premises, he was not ready to avail evidence. Mr. Ongutothereupon applied for an adjournment.

Mr. Githara said that when the matter came for hearing on 30thJanuary, the plaintiff had caused the adjournment. Fresh dates weretaken immediately because the defendants were anxious to get thematter over with as they had a counterclaim therein. They wereready for the trial with one witness. After noting the concerns ofboth sides, Justice Mwera further noted that discovery and inspectionwere incomplete and ordered that the trial be given priority datesduring this term. He granted an adjournment with the days costsand witness expenses to the defendant. The plaintiff was alsoordered to pay the court adjournment fees before the next listing.He finally fixed the matter for mention on 30th July, 2003 for theparties to inform the court the progress made in discovery andinspection. When the matter came before him on that day, JusticeMwera stood it over generally until the court adjournment fee of 16thJuly, 2003 was paid.

On 21st October, 2003, by consent, the hearing date was fixedfor 29th January, 2004.  This marked the turning point on this case.

On the same date, M/s Garam Investments, the second defendantsherein, sent notices to the plaintiffs, giving them 45 days in which toredeem the suit premises. These were closely followed by a formalnotification of sale dated 23rd October, 2003, wherein the plaintiffswere warned that their suit premises would be sold on 14th January,2004 for the properties in Kakamega and Eldoret, and on 15thJanuary, 2004 for the property in Nairobi. This was followed bypublication in the Daily Nation of December 22, 2003, advertising theproperties for sale. These developments precipitated the filing of thepresent application.

I have taken the liberty to summarise the above goings on inorder to place this application in its historical perspective. The mainsuit herein was filed in order to forestall that which the defendantsnow seek to accomplish thereby forcing the application before thecourt. It is noteworthy that the notification of sale and the notice ofsale were sent out on the same day that the hearing date was beingtaken. If that was by sheer coincidence, then it was a very neatcoincidence. But if it was not by coincidence, then the timing of thesale cannot be bona fides.

The fact of the matter is that this case had been listed forhearing twice before. The defendants did not take any steps torealize their securities at that time. Having come this far, is it reallyin the interests of justice that the suit premises should be disposedoff at a time when the hearing of the suit has already commenced?Justice is all about fairness. The plaintiff's main witness has alreadystarted testifying. If we now stop him in his trucks, we shall breachan implied promise that he would have his day in court. Such apractice would be no better than that of gazumping buyers. It wouldbe unfair, patently unfair, unfair to the meanest intelligence if hewere to be denied the opportunity to have his case fully heard anddetermined on merits, now that the matter is already part-heard.

If the hearing of this case had not commenced, I would in allprobability, have dismissed the application without butting an eyelid.But now that we have started, I consider it fairer to hear the case toits very end. For these reasons, the court hereby grants prayer fororder number 2 by granting an injunction restraining the defendantswhether by themselves, their servants and/or agents or howsoeverfrom auctioning for sale Kakamega 504/96 Kakamega District, L.R.

No. Eldoret Municipality/block 5/126/1 (West Indies Estate)EldoretTown as scheduled or at all, and L.R. No. 3734/1095 (IR No.52129/2) Lavington estate as scheduled or at all pending the hearingand determination of this suit. Any other decision would mean lesswork for the court, yes, but it would be inequitable and morallyreprehensible.

However, it is not lost on this court that some plaintiffs findcontentment  in  temporary  injunctions  and  are  thereafter veryreluctant to prosecute their suits. I hope and trust that this will notbe the case here as the matter is already part-heard. But should theplaintiff's change course and begin delaying the final determination ofthis case, the defendants will be at liberty to apply.

Costs in the cause.

Orders accordingly.

Dated and delivered at Nairobi this 26th  day of February 2004

L .NJAGIJUDGE