Peter Onsongo Ogeto v Shem Osiago Morumbwa & Co-operative Bank of Kenya Ltd [2018] KEELC 2534 (KLR)

REPUBLIC OF KENYA

IN THE ENVIRONMENT AND LAND COURT AT NAKURU

ELC NO. 106 OF 2017

PETER ONSONGO OGETO ………………………….…… PLAINTIFF

VERSUS

SHEM OSIAGO MORUMBWA …………………...... 1ST DEFENDANT

CO-OPERATIVE BANK OF KENYA LTD.................2ND DEFENDANT

RULING

1. This ruling is in respect of plaintiff’s Notice of Motion dated 13th March 2017, an application  pursuant to which the following orders are sought:

1. Spent.

2. Spent.

3. That pending hearing and determination of the suit herein, this honourable court be pleased to issue orders of injunction restraining the respondents by themselves from evicting, disposing off, wasting, further charging, selling, alienating and/or in any other manner whatsoever from interfering with the applicant’s use, possession and occupation of all that parcel of land known as Njoro/Ngata Block 2/4636 (Kirobon A).

4. That the cost of this application be provided for.

2. The application is supported by an affidavit sworn by the plaintiff.  In it he deposed that pursuant to an agreement dated 31st December 2014, he purchased a parcel of land measuring one (1) acre from the 1st defendant.  The said parcel was to be hived off a larger parcel known as Njoro/Ngata Block 2/28.  The purchase price was Kshs.1, 100, 000 which the plaintiff paid in full over a period of time.  Despite such payment, the 1st defendant did not transfer the land to the plaintiff.  Instead, the 1st defendant obtained a title in respect of the portion which the plaintiff had bought and which upon registration became known as Njoro/Ngata Block 2/4636 (Kirobon ‘A’) (the suit property).  The 1st defendant proceeded to charge the suit property in favour of the 2nd defendant to secure a loan of Kshs1, 100, 000.  He defaulted in his repayment obligations and the plaintiff fears that the 2nd defendant may exercise its statutory power of sale.

3. The 1st defendant opposed the application through his replying affidavit filed on 5th May 2017.  He deposed that the sale agreement referred to by the plaintiff was indeed entered into.  He however denied that the plaintiff had paid the purchase price in full as was alleged.  He urged the court to dismiss the application.

4. The 2nd defendant opposed the application through a replying affidavit sworn by Joseph Maeri, a Business Banker based at its Nakuru East Branch.  He confirmed that the suit property is indeed charged in favour of the 2nd defendant to secure a loan facility of Kshs.1, 000, 000 extended to the 1st defendant. The 1st defendant defaulted in his repayment obligations and as the 2nd defendant was in the process of commencing realization of the security, it was served with an order from the court.  The 2nd defendant thus urged the court to dismiss the application.

5. The application was heard by way of written submissions. The applicant’s submissions were filed on 19th June 2017 while the 2nd defendant’s submissions were filed on 5th July 2017. The 1st defendant did not file any submissions despite being given a chance to do so.  I have carefully considered the application, the affidavits filed as well as the submissions.

6. In an application for an interlocutory injunction, the applicant must satisfy the test in Giella –vs- Cassman Brown & Co. Ltd [1973] E.A 358. He must establish a prima facie case with a probability of success. Even if a prima facie case is established, an injunction would not to issue if damages can adequately compensate him. Finally, if the court is in doubt as to the answers of the above two tests then the court would determine the matter on a balance of convenience. As was recently held by the Court of Appeal in Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR, all the three Giella conditions and stages are to be applied as separate, distinct and logical hurdles which the applicant is expected to surmount sequentially and that if prima faciecase is not established, then irreparable injury and balance of convenience need no consideration.

7. There is no dispute that the parties herein entered into a sale agreement in respect of the suit property and that the purchase price was Kshs.1, 100, 000. There is also no dispute that the 1st defendant is the registered proprietor of the suit property.  Needless to state, the applicant’s case is that he paid the purchase price fully and that he is therefore entitled to ownership of the suit property.  Further, there is no dispute that the suit property is charged in favour of the 2nd defendant.

8. As a registered proprietor, the 1st defendant is entitled to the rights and privileges provided under sections 24 and 25 of the Land Registration Act. I am alive to the fact that the plaintiff is challenging the 1st defendant’s title to the suit property.  However, the outcome such a challenge can only await the hearing and determination of the main suit.  For now, the 1st defendant remains registered proprietor.   Until the 1st defendant’s title is cancelled there would be no basis upon which to impeach the charge created by the 1st defendant in favour of the 2nd defendant.

9. From the material placed before the court, it is apparent that moneys were paid by the plaintiff to the 1st defendant towards the purchase of the suit property.  Whether the purchase price has been paid in full is really not of importance at this stage.  It is sufficient that the plaintiff has demonstrated a valid interest or claim over the suit property.  The plaintiff’s interest is threatened by the 1st defendant’s action of charging the suit property in favour of the 2nd defendant.   I am therefore satisfied that the plaintiff has a prima facie case.

10. To succeed on the application for injunction, the plaintiff must surmount the second test.  He must demonstrate that damages will not be an adequate remedy.  The transaction between the plaintiff and the 1st defendant entailed purchase of the suit property by the plaintiff.  The purchase price was agreed at Kshs.1, 100, 000.  Indeed, among the relief sought by the plaintiff in the plaint is in the alternative, judgment be entered for a refund of the purchase price plus interest to be assessed at current market price.  It seems to me that damages if any can be easily ascertained in view of the terms of the sale agreement and the relief sought by the plaintiff.  The plaintiff can thus be compensated by an award of damages.

11. Even if the court were to consider the balance of convenience, it would be noted that the suit property has since been charged in favour of the 2nd defendant, an entity that was not party to the sale agreement between the plaintiff and the 1st defendant.  The balance of convenience in this case therefore tits in favour of not curtailing the 2nd defendant’s rights under the charge document.

12. In view of all the foregoing, I am not persuaded that an injunction ought to issue herein.  Accordingly, Notice of Motion dated 13th March 2017 is dismissed with costs to the defendants.

Dated, signed and delivered in open court at Nakuru this 20th day of June 2018.

D. O. OHUNGO

JUDGE

In the presence of:

Mr Mwangi for the plaintiff/applicant

No appearance for the 1st defendant/respondent

No appearance for the 2nd defendant/respondent

Court Assistants: Gichaba & Lotkomoi