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ELCDismissedELC Case of 2016 (Nairobi), Notice of Motion dated 18th October 2016· [2017] KEELC 488 (KLR)

Maureen Munyazi Mwangovya & Another (suing as the Legal Representatives of John Paul Mwangovya (Deceased) v Elemkay Limited & 3 Others [2017] KEELC 488 (KLR)

Environment and Land Court
20 December 2017
EOE.O. Obaga
1,399 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The Environment and Land Court refused to stop the sale of Nairobi properties that had already been lawfully auctioned to satisfy an arbitration award.

What this practically means

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Executive summary

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The applicants, holders of limited letters of administration ad litem in the Estate of Joseph Paul Mwangovya (deceased), sought an interlocutory injunction restraining the respondents from alienating LR No. 209/14046 and 209/14047, Nairobi, the suit properties. The deceased and the third respondent had a joint venture agreement under which the third respondent was to construct maisonettes on the properties, with the deceased to receive one block and Kshs.12,000,000/=. The third respondent failed to complete the project; an arbitrator awarded the deceased Kshs.52,000,000/=. Unable to pay, the third respondent's properties were sold at a public auction, purchased by the first respondent, which sold them to the second respondent. The applicants alleged the transfers were dubious and fraudulent, accusing the fourth respondent of collusion. The respondents opposed: the second respondent cited its purchase and subsequent development approvals; the third respondent said it acted on a decree in HCCC No. 141 of 2012 and that the award required the deceased to relinquish his interest; the fourth respondent denied fraud, noting Duncan Mwangovya had a special power of attorney, was aware of the auction, and that the applicants had benefitted from the proceeds. The court found the applicants had not demonstrated a prima facie case: the properties were sold in execution of an arbitration award adopted as a judgment, the deceased had been paid and was required to relinquish his interest, and the fraud allegations lacked merit. The application was dismissed with costs to the second, third and fourth respondents.

Key legal issues

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01

Whether the applicants established a prima facie case for an interlocutory injunction

Holding

No prima facie case was established; the suit properties had lawfully passed to the first respondent at a public auction in execution of an arbitration award adopted as a court judgment, and the applicants were not denying they benefitted from the auction proceeds.

Reasoning

The court traced the chain of title: the deceased's properties were sold at a public auction pursuant to an arbitration award in his favour which had been adopted as a judgment. A consent and vesting order vested the properties in the first respondent, who sold to the second respondent. The applicants' fraud allegations lacked basis because the award required the deceased to relinquish his interest in the properties upon receiving payment, and the applicants had benefitted from the auction proceeds.

p. 3
02

Whether the fourth respondent engineered the sale of the suit properties fraudulently

Holding

The allegations against the fourth respondent were without merit because the properties had already been sold at a public auction before the suit was filed; his role was explained as acting on instructions of Duncan Mwangovya to protect the deceased's interests.

Reasoning

The court noted it did not understand why the suit was filed when the properties had already been sold. The third respondent had charged and then sold the properties to Jager Holdings Limited after the award but before payment, which possibly explained the filing of the suit. The applicants' claim that the fourth respondent engineered HCCC No. 141 of 2012 to cover fraud was not accepted.

p. 3

Legal principles established

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  • An applicant in an application for injunction must demonstrate a prima facie case.
  • A party paid the full value of properties under an arbitration award cannot retain the properties as well, as that would amount to double benefit.

Court orders

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  1. 1.The applicants' Notice of Motion dated 18th October 2016 is dismissed
  2. 2.Costs of the application awarded to the second, third and fourth respondents
Jurisdiction invoked
Environment and Land Court jurisdiction over the suit properties (interlocutory application in a pending suit); no specific constitutional provision invoked

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Maureen Munyazi Mwangovya & Another (suing as the Legal Representatives of John Paul Mwangovya (Deceased) v Elemkay Limited & 3 Others [2017] KEELC 488 (KLR)", Case Analysis (2017). ELC Case of 2016 (Nairobi), Notice of Motion dated 18th October 2016. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/488/eng@2017-12-20

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.