Interactor Company Limited v Diamond Trust Bank & another (Environment
& Land Case E118 of 2024) [2024] KEELC 6663 (KLR) (23 July 2024) (Ruling)
Neutral citation: [2024] KEELC 6663 (KLR)
REPUBLIC OF KENYA
IN THE ENVIRONMENT AND LAND COURT AT NAIROBI
ENVIRONMENT & LAND CASE E118 OF 2024
MD MWANGI, J
JULY 23, 2024
BETWEEN
INTERACTOR COMPANY LIMITED ................................................... PLAINTIFF
AND
DIAMOND TRUST BANK ............................................................. 1ST DEFENDANT
DALALI TRADERS AUCTIONEERS ........................................... 2ND DEFENDANT
RULING
(In respect to the application dated 15th March, 2024 by the Plainti/Applicant seeking for an order
of temporary injunction to restrain the Defendants/Respondents by themselves, workmen, their
instructed agent, servants or any other person acting under their instructions from oering for the
suit property for sale by public auction and or private treaty pending hearing and determination
of the suit.)
Background
1. The Plainti in this case vide its Plaint dated 15th March, 2024 led this suit seeking amongst other
orders, an order of specic performance of the Memorandum of Sale dated 22nd November, 2023 and
an order directing the 1st Defendant to receive the balance of the purchase price within 30 days after
conclusion of the BPRT case NO. E261 of 2024. In the alternative, the Plainti prays for a refund of
the sum of Kshs. 10,500,000/- together with interest at the rate of 30% per annum with eect from
23rd November, 2023 until payment in full and general damages for breach of contract.
2. It is the Plainti’s case that on 22nd November, 2023 it entered into a Memorandum of Sale with the
Defendants for purchase of the property known as L.R No. 209/34771 Dar es Salaam Road, Nairobi
(hereinafter referred to as the suit property). The Plainti avers that pursuant to the Memorandum
of Sale, and at the fall of the hammer, it was declared the successful purchaser of the suit property at
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the price of Kshs.105,000,000/- and was therefore required to pay a deposit equivalent to 10% of the
purchase price.
3. The Plainti states that it paid Kshs.9,500,000/- to the 2nd Defendant on 23rd November, 2023. It
subsequently paid the balance of Kshs.1,000,000/- vide cheque numbers 046518 and 046521 to the 2nd
Defendant making a total sum of Kshs.10,500,000/- (equivalent to 10% of the purchase price) being
the deposit required of it in accordance with the provisions of the memorandum of sale.
4. The Plainti states that it was on 27th February 2024 served with a Court Order dated 23rd February,
2024 which was an interim injunction restraining the Respondents in that case from selling, alienating,
assigning, transferring, disposing of or otherwise breaking into the suit premises, restricting the
tenant’s access, harassing the tenants or in any other manner interfering with the Claimant’s tenancy
in the suit property.
5. In spite of notifying the 1st Defendant of the said Order, it is the Plainti’s assertion that the 1st
Defendant insisted that the Order did not apply to the sale between them. The 1st Defendant insisted
on payment of the balance of the purchase price in accordance with the memorandum of sale. The
Plainti states that the 1st Defendant proceeded to instruct the 2nd Defendant to re-advertise the suit
property for sale by public auction in spite of the Order from the Business Premises Rent Tribunal.
The 1st Defendant went further to forfeit the Plainti’s deposit of Kshs.10,500,000/-.
6. In its Notice of Motion dated 15th March 2024, the Plainti/Applicant prays for an order of
temporary injunction restraining the Defendants from oering the suit property for sale either by way
of a public auction or a private treaty pending the hearing and determination of the main suit. The
application is premised on the grounds on the face of it and on the supporting adavit of Vinesh
Indubhai Patelwhich reiterates the averments in the Plaint and on the face of the application.
7. In the Replying Adavit, the deponent deposes that she is aware that the 2nd Defendant herein under
instructions of the 1st Defendant advertised the suit property for sale by way of a public auction. One
express condition for the sale was that a deposit of 10% of the sale price was to be paid in cash, banker’s
cheque or electronic money transfer (RTGS) during the day of the auction and the balance thereof
within 90 days.
8. The public auction took place on 22nd November 2023 whereby the Plainti was declared the highest
bidder with an oer of Kshs.105,000,000/-. A memorandum of sale of even date was entered into
between the Plainti and the Auctioneer, acting on behalf of the 1st Defendant. The Deponent
acknowledges that the Plainti indeed paid the 10% deposit of the purchase price in accordance with
the terms of the Memorandum of Sale.
9. It is further deposed in the Replying Adavit that the Plainti did not attach the entire Memorandum
of Sale to its Supporting Adavit and failed to disclose material and express provisions of the
Memorandum of Sale which it did not honour namely;
a. The balance of the purchase price was to be paid to the chargee within 90 days of the date of
sale, time being of essence;
b. If the Purchaser failed to pay the balance of the purchase price within 90 days, the deposit paid
was to be forfeited to the chargee absolutely and the chargee was at liberty to sell the property
at such time, in such manner and subject to such conditions it deemed t without notice to
the purchaser.
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10. The Defendants averred that, after the Memorandum of Sale was executed, the Plainti on 31st January
2024 sought an extension of their completion period to 120 days highlighting inability to pay in 90
days. The request of the Plainti was however declined by the 1st Defendant.
11. The Plainti again sought an extension for 15 more days on 19th February 2024 which was also
declined.
12. The 1st Defendant asserts the position that upon expiry of 90 days from the date of the auction, the
sale automatically terminated and the deposit of Kshs. 10,500,000/- was forfeited.
13. The Defendants further insist that the Order of the BPRT referred to by the Plainti could not restrain
the 1st Defendant, a bank, from exercising its statutory power of sale under the law. In any event, a
dispute between a Landlord and a Tenant is inconsequential to the bank's exercise of its statutory
power of sale. The deponent of the Replying adavit asserts that the suit property was sold without
vacant possession. The bank was not a party in the case before the BPRT anyway. The deponent further
reiterated that the BPRT has no jurisdiction to restrain the bank from exercising its statutory power
of sale.
14. The Defendants assert that the Plainti was never in a position to complete the sale in accordance with
the terms of the memorandum of sale.
Court Directions.
15. The court’s directions were that the Plainti’s application be canvassed by way of written submissions.
Both sides complied and the court has had the opportunity to read the submissions which now form
part of the record of this court.
Issues for determination.
16. The sole issue for determination is whether the Plainti/Applicant has satised the conditions for
grant of a temporary Injunction.
Analysis and Determination.
17. It is not in dispute that the 1st Defendant through the 2nd Defendant, its authorised agent, advertised the
suit property for sale by public auction in exercise of its statutory power of sale. It is also not disputed
that the Plainti bade and was declared the successful bidder. The memorandum of sale dated 22nd
November, 2023, was executed pursuant to the sale by public auction. The terms and conditions of
the sale are not in contention either.
18. The Plainti paid the 10% deposit of the purchase price which is acknowledged by the Defendants.
The balance of the purchase price being 90% of the purchase was payable in 90 days from the date of
execution of the memorandum of sale, i.e. on or before the close of business, 21st February, 2024.
19. From the evidence before the court, the Plainti did not honour the condition on payment of the
balance of the purchase price within the timelines stipulated in the memorandum of sale.
20. In its submissions, the Plainti alludes to what he refers to as ‘unforeseen turn of events’ when he
was allegedly served with an Order from the BPRT on 27th February 2024, as his reason for failing to
comply with a condition on the payment of the balance of the purchase price on the due date.
21. As both sides have rightly submitted; the conditions for the grant of orders of a temporary injunction
are well settled, as spelt out in the well-known case of Giella – vs – Cassman Brown (1973) EA 358.
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22. The Court of Appeal in the case of Nguruman Limited v Jan Bonde Nielsen & 2 Others [2014] eKLR,
while arming the 3 conditions stipulated in the Giella – vs – Cassman Brown case (Supra) stated that
the 3 conditions are to be applied as separate, distinct and logical hurdles that an Applicant for an order
of temporary injunction has to surmount sequentially; one after the other. By way of an explanation,
if a prima facie case is not established, the court need not go further to consider if the Applicant has
established the irreparable harm he is likely to suer if the order is not granted or assess the balance of
convenience for that matter.
23. I will therefore proceed to assess the Plainti’s application against the said parameters.
24. On whether the Plainti has established a prima facie case, the lingering question is whether the
Plainti honoured the terms and conditions of the agreement between him and the Defendant. The
agreement was in the form of a memorandum of sale as the Plainti himself has pleaded.
25. A prima facie case, as elaborated by the Court of Appeal in Mrao Ltd – vs – First American Bank of
Kenya Ltd & 2 Others (2003) eKLR, is more than an arguable case. The court stated: -
“ A prima facie case is more than an arguable case. It is not sucient to raise issues but
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.”
26. From his own admission, the Plainti did not honour the condition on the payment of the balance
of the purchase price on the due date. I agree with the Defendants’ submissions that time was of the
essence as categorically stipulated in the memorandum of sale. What right then has been infringed by
the Defendants while the Plainti is clearly the defaulter?
27. I am not the least persuaded that the Plainti has established a prima facie case. Even if he had
established one, he has a herculean task surmounting the 2nd condition of establishing that he stands
to suer irreparable harm/injury that cannot be adequately compensated by an award of damages.
28. The Court of Appeal in Nguruman Ltd – vs –Jan Bonde Nielsen & 2 others (supra) in no uncertain
terms stated that the burden was upon the Applicant to demonstrate the nature and extent of injury
he is likely to suer if an injunction is not granted. The Court was categorical that: -
“ There must be more than an unfounded fear or apprehension on the part of the Applicant.
The equitable remedy of temporary injunction is issued solely to prevent grave and
irreparable injury; that is injury that is actual, substantial and demonstrable; injury that
cannot adequately be compensated by an award of damages. An injury is irreparable where
there is no standard by which their amount can be measured with reasonable accuracy or
the injury or harm is such a nature that monetary compensation, of whatever amount, will
never adequately remedy.”
29. The Plainti in his submissions at Paragraph 16 thereof submits that: -
“ The Plainti/Applicant has already paid a deposit amount of Kshs.10,500,000/-. The
Defendant/Respondent even wrote to the Plainti/Applicant that its deposit of Kshs.
10,500,000/- is now forfeited simply because the Plainti/Applicant did not pay the
balance of the purchase price even after extension on the 7th March, 2024 was allowed. The
Plainti suering harm and by losing the deposit amount of Kshs.10,500,000/- is real and
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imminent and that only by the court order will the Plainti/Applicant be protected from
the Defendants’ actions.”
30. While I agree that the Plainti/Applicant is likely to suer loss through forfeiture of the deposit
amount of Kshs. 10,500,000/, that loss would not amount to an irreparable injury. It is the kind of
injury that is ascertainable, quantiable, and measurable, and which is capable of being compensated
monetarily.
31. Accordingly, my nding is that the Plainti/Applicant has not established the conditions for the grant
of orders of temporary injunction. Its application is hereby dismissed with costs.
It is so ordered.
RULING DATED, SIGNED AND DELIVERED VIRTUALLY AT NAIROBI THIS 23RD DAY OF
JULY, 2024.
M.D. MWANGI
JUDGE
In the virtual presence of:
Mr. Kibet for the Plainti/Applicant
Mr. Shah for the Defendants/Respondent
Court Assistant: Yvette
M.D. MWANGI
JUDGE
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