Waki Holdings Ltd v Jane Mbiro Karukenya [2004] KEHC 647 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT EMBU

CIVIL CASE NO. 18 OF 2003

WAKI HOLDINGS LTD ………………….. PLAINTIFF

VERSUS

JANE MBIRO KARUKENYA ……………...DEFENDANT

RULING

1. On 20. 1.2004 parties herein fixed two Applications for hearing on 4. 10. 2004. The first is a Chamber Summons under Order XXXIX Rules 1,2 and 9 of the Civil Procedure Rules for orders to restrain the Plaintiff (in the original action) from trespassing, harassing, intimidating, threatening or permitting their servants, agents or a third party to graze their livestock or farm on land parcel number L.R. No.Kagaari/Kanja/997 until the suit herein is determined. That Application is filed by the Defendant in the original action, Jane Mbiro Karukenya.

2. The second is a Notice of Motion under Order XXXV Rule 1 of the Civil Procedure Rules seeking orders that the Defendant in the original action together with her servants, agents or employees do vacate L.R No. Kagaari/Kanja/997 in default of which they should be evicted.

3. The facts are that on 13. 6.2002, the Plaintiff in the original action, M/S Waki Holdings Limited purchased L.R. No.Kagaari/Kanja/997 at a public auction. The property is registered in the names of Vincent B. Karukenya (deceased). The public auction was conducted on behalf of the 2nd Defendant, Kenya Commercial Bank Limited by M/S Megabyte Auctioneers, the 3rd Defendant sued through its principal, Archangel K. Ireri. Subsequently and upon complying with the terms of the auction, title was issued on 18. 12. 2002 to Waki Holdings Ltd. Armed with the title, the said Waki Holdings Ltd through its agents attempted to take possession but met the resistance of Jane Mbiro Karukenya aforesaid.

4. The said Jane Karukenya is the widow of the late Vincent Karukenya and it suit property is her matrimonial home. She denies that there was an auction on 13. 6.2002 hence her insistence that the takeover of her home is illegal.

5. Nonetheless, the Plaintiff, Waki Holdings Ltd filed this suit on 12. 3.2003 and sought only one substantive prayer; that the Defendant do vacate the suit property. On 11. 4.2003, Jane Karukenya filed a Defence and Counterclaim citing fraud and irregularity in the alleged sale of the suit. Particulars thereof are detailed out at paragraph 3 of the Defence. She also alleges misrepresentation in that the Plaintiff allegedly entered into an agreement with Kenya Commercial Bank Ltd that only 20 acres of the suit land would be bought by it thus leaving the Karukenya family with 13 acres to keep.

6. The suit by way Counter-claim seeks an injunction until finalisation of the suit herein and also Succession Cause No. 237/1992 (Nairobi). Further that the title issued to the 1st Defendant be cancelled; that accounts be rendered by Kenya Commercial Bank; that damages for trespass and nuisance be paid to the Defendant. 7. The grounds in support of the Application for Injunction by the Defendant are that;-

i) She has an interest in the property by fact of being the widow of the deceased former registered proprietor, Vincent Karukenya.

ii) the suit properly is her only matrimonial home and if she is evicted, she will suffer irreparable damage.

iii) the Plaintiff, Waki Holdings Ltd does not have title to the property which is in the name of Waki Holdings, a non-existent legal entity.

8. The Plaintiff on the other hand seeks vacant possession as the registered proprietor of the suit land and a bona fide purchaser value and that the Defendant is a trespasser who has refused to vacate despite repeated requests to do so.

9. I should note one more thing before I get down to the issues at hand; this court on 21. 11. 2003 (Okwengu, J.) did join the Administrators of the estate of the late Vincent Karukenya as Co-Plaintiffs in the Counter-Claim and the orders now sought are presumably also being sought by them alongside Jane Karukenya. It is only reasonable from the Counter-claim to think so.

10. I have read the pleadings and listened to Counsel and the only point to address is this; should the Defendant be ordered to vacate the premises at this stage and if not, should the injunction that she seeks be granted?

11. There is no doubt that the Plaintiff both in the plaint and in the Application is seeking a mandatory injunction to grant possession to it. There is also no doubt that such an order can be granted at the interlocutory stage. Cohen, L.J. said so in Canadian Pacific Railway vs Gaud [1949] 2 KB 249. The Learned Judge added a rider to his judgment by saying that “it is a very exceptional form of relief to grant, but it can be granted” Cockar, J.A in Kamau Mucuha vs The Ripples Ltd C.A No. 186/1992also expressed the test to be applied in granting mandatory injunctions when he stated that;

“a court is far more reluctant to grant a mandatory injunction than it would be to grant a comparable Prohibitory Injunction, that in a normal case the court must inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted and this is a higher standard than is required for a prohibitory injunction.” The Learned Judge was quoting Megarry J. in Shepherd Homes Ltd vs Sand ham [1971] Ch. 340 and 351. Land Diplock in N.W.L. Ltd vs Woods [1979] 3 All E.R.614 and 625 had this to say on the matter:

“  a court must give full weight to the realities of the situation and weigh the respective risks that injustice may result from the decision one way or of the other.”

12. Having I think guided myself appropriately, I must turn to the arguments by Counsel. Counsel for the Plaintiff relied on Section 77 (3) of the Registered Land Act on the point that the only remedy now available to any aggrieved party upon sale of the property is a relied in damages. He relied on James Ombere Okotch vs East African Building Society and 2 Others C.A 202/1996 on the point. On the right of a widow to property charged by her husband, he relief on Wanjohi and Others vs Continental Credit Finance Limited C.A No Nairobi 140. 1988

where the holding was that such a widow has no interest by reason of marriage.

13. Counsel for the bank, (3rd Defendant in the Counterclaim) accused the Defendant in the suit of acquiescence in that when the sale was taking place, she stayed put and when the Plaintiff was making all arrangements, she did nothing and only woke up when the suit for eviction was filed. I am told to deny her the injunction she seeks for these reasons.

14. Counsel for the Defendant dwelt at length on the alleged fraud in the public auction; that in fact it was a sham; no payment was made at the conclusion of the auction; the price was low; the guarantees were not considered; there may not have been a debt anyway; there were no accounts ever tendered and Notification of Sale was not served on the administrators. He further argued that as a beneficiary to the estate of the chargor, the Defendant has Locus standi to bring this suit and she would suffer irreparable damage if the eviction is effected. On the other hand the injunction sought by her should be granted as the balance of convenience would tilt in her favour. I am lastly asked to let the matter go to trial so that all issues can be canvassed at that point.

15. I have considered these arguments and the authorities cited. Firstly, where title is issued pursuant to the exercise of the Statutory power of sale, the remedy to “any person suffering damage by an irregular exercise of the power shall have hisremedy in damages onlyagainst the person exercising the power” (Section 77 (3) of the Registered Land Act, Cap. 300. Section 69 B(2) of the Transfer of Property Act provides that where a transfer is made in exercise of the mortgagee’s Statutory Power of sale, the title shall not be impeachable on the grounds that “no notice was given” or that “no case had arisen to authorise the sale” or that “the power was otherwise improperly or irregularly exercised ….. but any person damnified by an authorized, or improper or irregular exercise of the power shall have his remedy in damages.” This was the holding in Ze Yu Yang vs Nova Industrial Products Ltd , HCCC No. 9/2003 (Nyamu, J.) and in the Court of Appeal case of Downhill Ltd vs Harith Ali Al-Busaidy C.A 254/1999.

16. It would seem to me therefore that the title as held by Waki Holdings Ltd (there was a rectification from Waki Holdings) is intact and the remedy left to the aggrieved family of Karukenya is one in damages.

17. Secondly, it does not matter that fraud or misrepresentation as is the case herein is alleged, I am aware that in Mayers and Another vs Akira Ranch Ltd(No.3) [1973] E.A 431 it was held that where fraud is alleged then no order challenging title can be made until the suit is determined. However in the Downhill Limited case (Supra) it was held that even if an allegation of fraud (because the purchase price of shs.7. 5 million was low) “was found to be true it would only give the borrower a cause of action in damages against the Bank.”

18. Thirdly, whereas it is true as I said earlier that the administrators of the estate of the late Vincent Karukenya have been joined as Co-Plaintiffs in the Counterclaim, the suit and the orders as sought for eviction are targeting Jane Karukenya. She is the one in occupation but I note that in the Amended Defence and Counterclaim they all raise issues of negligence and illegality regarding the conduct of the Bank, and the Auctioneer. The only additional point made is that leave of court was not obtained before sale of the charged land and yet H.C Succession Cause No. 237/1992was still pending in court. Not much was made of the point in submission but as I said, even if the issue was valid, the remedy still lies in damages.

19. Having said all these things, should I order that the Defendant be evicted from the suit premises? In asking the question again I am in what I call the Lord Jauncey dilemma as expressed in Factortome No. 2 [1991] 1 AC 603 and 683where Lord Jauncey said,

“ The principal dilemma about the grant of inter-locutory injunctions, whether prohibitory or mandatory, is that there is by definition a risk that the court may make the “wrong” decision, in the sense of granting an injunction to a party who succeeds (or would succeed) at trial. A fundamental principle is therefore that the court should take whichever course appears to carry the lowest risk of injustice if it should turn out to have been “wrong” in the sense I have described. The guidelines for the grant of both kinds of injunctions are derived from this principle.”

20. The Plaintiff may well be entitled to possession immediately yet the Defendant and the administrators of the estate of the late Vincent Karukenya have raised serious issues that cannot by all means be said to be frivolous. Further, the only claim as against the Defendants as set out in the Plaint is vacant possession. It is now being sought at the interlocutory stage and there may be nothing left to try at the end save the counter-claim. In other circumstances I would have been inclined to grant the eviction but each case must be looked at in its peculiar circumstances. The instant is one where I would be reluctant like Lord Jauncey to grant the mandatory injunction and would rather that the matter went to trial. I am in that regard reminded that grant of injunctions is a matter of discretion and as was said inDaniells vs Mendonca and Another EWCA Civ. 1176a decision given on 15. 4.1999,

“The granting of mandatory injunctions is a very serious matter. It is clear that the court must be mindful before imposing them….. the court has an unfettered discretion ….” My discretion must favour the Defendant and the administrators and I see no prejudice shown that would be caused to any other party including the Plaintiff. None has been alleged in any event.

21. Having declined to grant the mandatory injunction at this stage, it follows that I should grant some orders to preserve the property until the suit herein is heard and determined. I shall therefore make the following orders;

1. The Application dated is hereby dismissed with no order as to costs.

2. The Application dated 7th May 2003 is hereby allowed with no order as to costs

3. The suit herein be fixed for hearing on a priority basis for 2 successive days in the month of November 2004 on a date to be agreed at the Registry.

Orders accordingly .

Dated and delivered in open court on this 18th day of November 2004.

I.LENAOLA

AG. JUDGE

Ruling Read in Present of;

Mr. Mwaniki for plaintiff/Applicant Mis Fatuma for

Mr. Njage for 2nd Respondent N/A for 1st Respondent.

I.LENAOLA

AG. JUDGE