Vinbel International Limited, Vincent Amenya Marube & Isabella Kerubo Ongera v Keroka Technical Training Institute, Cabinet Secretary-Ministry of Education, Attorney General, Chase Bank (under receivership) & Nelson Waweru t/a Antique Auctioneers [2019] KEHC 7881 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA AT NAIROBI

CIVIL SUIT NO. 145 OF 2018

VINBEL INTERNATIONAL LIMITED.......1ST PLAINTIFF/APPLICANT

VINCENT AMENYA MARUBE...................2ND PLAINTIFF/APPLICANT

ISABELLA KERUBO ONGERA.................3RD PLAINTIFF/APPLICANT

-VERSUS-

KEROKA TECHNICAL TRAINING

INSTITUTE............................................1ST DEFENDANT/RESPONDENT

CABINET SECRETARY-MINISTRY

OF EDUCATION..................................2ND DEFENDANT/RESPONDENT

THE ATTORNEY GENERAL............3RD DEFENDANT/RESPONDENT

CHASE BANK

(under receivership)..............................4TH DEFENDANT/RESPONDENT

NELSON WAWERU t/a

ANTIQUE AUCTIONEERS..............5TH DEFENDANT/RESPONDENT

RULING

1. The plaintiffs have filed a Notice of Motion dated 18th June, 2018 supported by the grounds set out on the body thereof and the sworn affidavit of Vincent Amenya Marube. The plaintiffs are seeking the following orders:

i) Spent.

ii) Spent.

iii) THAT pending the hearing and determination of the suit, a temporary injunction do issue restraining the 4th and 5th defendants, their employees, agents and/or servants from advertising for sale, auctioning, selling, transferring, disposing and/or dealing with the plaintiffs’ quiet possession and enjoyment of the suit property.

iv) THAT this Honourable Court be pleased to issue a mandatory injunction and/or appropriate prerogative orders directed at the 1st and 2nd defendants to honour the irrevocable undertaking to pay and do pay to the 4th defendant all monies owed by themselves to reduce and/or liquidate the plaintiffs’ charge loan with the 4th defendant.

v) THAT the costs of the application and interest thereon be provided for.

vi) Any other and further reliefs that this Honourable Court may deem fit and just to grant in the circumstances.

2. Vincent Amenya Marube, the deponent in this instance and a director of the 1st plaintiff, averred that the 1st plaintiff took out a credit facility of Kshs.55,000,000/= from the 4th defendant while the 2nd and 3rd plaintiffs acted as guarantors for the 1st plaintiff and charged their two (2) properties to the 4th defendant as security. That the 4th and 5th defendants have since advertised the suit properties in the local newspaper and scheduled a sale by way of public auction for 20th June, 2018.

3. The deponent also stated that the 1st plaintiff and 1st defendant entered into a written contract for certain works for the contract price of Kshs.65,512,000/= and that both the 2nd  and 3rd defendants undertook to pay the proceeds of the said works to the 4th defendant in a bid to liquidate the 1st plaintiff’s credit facility. Vincent Amenya added that the proceeds of the contract can adequately liquidate the 1st plaintiff’s liabilities and that these proceeds are inaccessible to the 1st plaintiff. That the 4th defendant has since failed, neglected and/or refused to accept the proceeds of the aforesaid contract and thus, the purported sale of the suit property will subject the plaintiffs to double jeopardy.

4. In opposition to the Motion, the 1st defendant filed a replying affidavit sworn by Evans Bosire Omwenga. Therein, the deponent confirmed that the 1st defendant had signed a contract with the 1st plaintiff but refuted that an arrangement had been made to have the monies paid by the 1st defendant to the 4th defendant. It was the deponent’s statement that the 1st plaintiff had received all payments and acknowledged receipt thereof and hence, the 1st defendant was not obligated to pay any monies directly to the 4th defendant.

5. On their part, the 2nd and 3rd defendants filed Grounds of Opposition to the Motion on 12th September, 2018 essentially arguing that they are not privy to the dealings between the plaintiffs and the other defendants, and hence the issues raised cannot be controverted by them; that the suit does not disclose a reasonable cause of action against the 2nd and 3rd defendants and that the Motion is incompetent, fatally defective and bad in law.

6. In his replying affidavit on behalf of the 4th and 5th defendants, Kevin Kimani deponed that the 1st plaintiff had taken out a loan facility with the 4th defendant while the 2nd and 3rd plaintiffs executed a letter of Guarantee and Indemnity in that regard; that the 1st plaintiff defaulted in repaying the loan facility, prompting the 4th defendant to issue a demand notice. That despite the issuance of the demand notice, the 1st plaintiff has continued to be in default. The deponent also stated that a redemption notice and notification of sale were later issued and in the absence of a response or effort to make the necessary payments, the suit property was advertised for sale by way of a public auction.

7. It was the deponent’s further averment that the plaintiffs previously filed a chamber summons application dated 17th August, 2017 seeking injunctive orders and which application was heard and dismissed by the late Honourable Justice J.L. Onguto on 2nd February 2018. That owing to the fact that the 1st plaintiff is in default, it would only be fair for the 4th defendant to be permitted to proceed with recovery. That in any case, the plaintiffs have not satisfied the necessary conditions for the granting of an interlocutory injunction.

8. The application was canvassed through written submissions. In citing among others, the Giella v Cassman Brown case, the plaintiffs submitted that they have a prima facie case with a probability of success in the sense that the 1st defendant has failed to pay the contractual sum to the 1st plaintiff whereas the 4th defendant has neglected to collect or otherwise accept the proceeds of the contract. As concerns irreparable harm, the plaintiffs contended that the 4th defendant intends to auction their parcels of land and thus causing them an inconvenience and that the suit will be rendered nugatory. It was also the plaintiffs’ submission that it is the plaintiffs who stand to suffer greater harm should an injunction be denied. In turn, the plaintiffs argued that they have met the threshold for granting a mandatory injunction.

9. The 1st defendant’s submissions reiterated their argument that there was no arrangement to make any payments to the 4th defendant and that the plaintiffs do not have an arguable case. A few authorities were cited in support thereof but which I find to be irrelevant here.

10. In their submissions, the 2nd and 3rd defendants restated the contents of their Grounds of Opposition, adding that the plaintiffs have neither established a prima facie case against the 2nd and 3rd defendants, nor shown the irreparable damage they stand to suffer if the prayer for an interlocutory injunction is not granted. The aforementioned defendants maintained that the suit does not disclose any reasonable cause of action against them as they were not parties to either of the agreements mentioned in the matter. The defendants quoted Order 29, Rule 2 (2) (d) of the Civil Procedure Rules in indicating that the application goes contrary to the cited provision.

11. The 4th and 5th defendants in their submissions echoed the sentiments raised by their counterparts that the plaintiffs have not established a prima facie case or demonstrated what irreparable harm they will suffer, and that the balance of convenience tilts in favour of the 4th respondent.

12. I have considered the application and respective responses together with the rival submissions before me. This is largely a question of whether or not to grant an interlocutory injunction. That said, I must remind the parties that it is not my duty to delve into the merits of the suit at this point in time.

13. The principles surrounding interlocutory injunctions are encapsulated in the renowned Giella v Cassman Brown (1973) EA 358case. In the same wavelength, the case of American Cynamide v Ethicon (1975) AC 396 has stipulated largely similar principles that have proved relevant in offering guidance, that is:

a) Whether there is a prima facie case.

b) Whether damages would be an adequate remedy in the event that an injunction is not granted and if not, whether the applicant would be able to give an undertaking in damages to the defendant(s).

c) Where the balance of convenience tilts.

14. For ease of reference, I shall draw from the Giella v Cassman Brown case (supra). The first principle concerns whether a prima facie case has been established. In Mrao Ltd v First American Bank of Kenya and 2 others [2003] eKLR relied upon by the parties, the Court of Appeal sought to define the same as hereunder:

“A prima facie case in a civil application includes but is not confined to a “genuine and arguable case.” It is a case which, on the material presented to the court, a tribunal properly directing itself will conclude that there exists a right which has apparently been infringed by the opposite party as to call for an explanation or rebuttal from the latter.”

15. The Appeal Court went further to opine that:

“…a prima facie case is more than an arguable case. It is not sufficient to raise issues. The evidence must show an infringement of a right, and the probability of success of the applicant’s case upon trial. That is clearly a standard which is higher than an arguable case.”

16. From the above, it is evident that proof of a prima facie case is placed at a higher pedestal in comparison to an arguable case. It is not in dispute that the 4th defendant advanced a loan facility to the 1st plaintiff or that the 2nd and 3rd plaintiffs acted as its guarantors. It is also not in dispute that the loan is yet to be repaid and in relying on the documents availed to me, it would appear the 4th defendant has every legal right to realize its security since the necessary notices had been issued.

17. That said, there arises the question as to whether or not there was an arrangement to have the payments made to the 4th defendant through the 1st defendant. I have noted from the documents annexed to the Motion the letter dated 19th September, 2013 and marked “VAM 5. ” It would appear the letter was drawn by the Ministry of Public Works and not the 1st defendant. Not only so; the said letter does not address the specifics of the purported payments to be made to the 4th defendant, neither is the 1st defendant mentioned therein. In other words, there is nothing to indicate that the 1st plaintiff and 1st defendant agreed to have the 1st defendant pay any amount to the 4th defendant. Drawing from the above, I take the considered view that the plaintiffs have failed to convince me of the existence of a prima facie case.

18. On the second principle relating to irreparable damage, the plaintiffs are apprehensive that unless an interlocutory injunction is granted, their parcels of land will be auctioned. The case of Paul Gitonga Wanjau v Gathuthi Tea Factory Company Ltd & 2 others [2016] eKLR was cited. The question really is whether the plaintiffs stand to suffer irreparable and substantial loss that cannot be compensated through damages. In Paul Gitonga, the court drew from the Halsbury’s Laws of Englandanalysis that:

“…Where the court interferes by way of an injunction to prevent an injury in respect of which there is a legal remedy, it does so upon two distinct grounds first, that the injury is irreparable and second, that it is continuous. By the term irreparable injury is meant injury which is substantial and could never be adequately remedied or atoned for by damages, not injury which cannot possibly be repaired and the fact that the plaintiff may have a right to recover damages is no objection to the exercise of the jurisdiction by injunction, if his rights cannot be adequately protected or vindicated by damages. Even where the injury is capable of compensation in damages an injunction may be granted, if the act in respect of which relief is sought is likely to destroy the subject matter in question”

19. I have in turn considered the Nguruman Limited v Jan Bonde Nielsen & 2 Others, CA NO. 77 OF 2012 case quoted by the Court of Appeal in Lucy Wangui Gachara v Minudi Okemba Lore [2015] eKLRin this respect:

“…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.”

20. I am alive to the fact that the suit properties were legally charged to the 4th defendant and thus giving it every prerogative to exercise its statutory power of sale over the same in the event of a default. It has also been shown that the 1st plaintiff is in default and that the requisite notices have already been issued to the plaintiffs by the 4th defendant and that the same have not elicited any response from the plaintiffs. Under the circumstances, there is nothing barring the 4th defendant from realizing its securities.

21. In relation thereto, I am called to consider the arguments by the 4th and 5th defendants that the plaintiff has not come to court with clean hands. I reiterate that there is nothing to indicate that the plaintiffs have made efforts to service the loan or reply to the demand notices issued; in this sense, I am inclined to agree with the 4th and 5th respondents and find that the plaintiffs appear to be riding on tenuous arguments.

22. This brings me to the third principle on the balance of convenience. Having determined that the plaintiffs have not established a prima facie case, it is inevitable that the balance of convenience tilts in favour of the defendants and more so, the 4th defendant.

23. I am now left with the prayer relating to the granting of a mandatory injunctions. In consideration thereto, I take from the Court of Appeal’s analysis in Lucy Wangui Gachara(supra) that mandatory injunctions can only be granted in clear-cut cases and especially when sought at the interlocutory stage. The mandatory injunction is sought against the 1st and 2nd defendants and yet there is no proof of the existence of an arrangement for any payments. The letter of undertaking was evidently not issued by either of the said defendants. Consequently, I would be hesitant to grant a mandatory injunction.

24. Before I pen off, I have observed that the 2nd and 3rd defendants sought to have the application and suit against them struck out. I acknowledge that Order 29, Rule 2 (2) (d) of the Civil Procedure Rules prohibits injunctive orders against the government but there are several authorities to the contrary. Should the relevant parties be desirous of having the suit against them struck out, I would advise that they move the court appropriately.

25. The upshot is that the Motion lacks merit and the same is dismissed. The plaintiffs shall bear the costs of the application.

Dated, signed and delivered at NAIROBI this 14th day of February, 2019.

L. NJUGUNA

JUDGE

In the presence of:

……………………………. for the Plaintiffs/Applicants

……………………………. for the 1st Defendant/Respondent

……………………………. for the 2nd and 3rd Defendants/Respondents

……………………………. for the 4th and 5th Defendants/Respondents