1.The motion dated 03.11.2021 by Daniel Gichimu Wambugu (hereafter the Applicant) seeks inter alia that Nafaz David (hereafter the 3rd Respondent), his agents, servants and any persons claiming under him be restrained from interfering with , selling and or transferring to a third party motor vehicle registration number KDC 627B pending the hearing and determination of this appeal; and that the court be pleased to give directions regarding the custody of motor vehicle registration number KDC 627B pending the hearing and determination of this appeal. The motion is expressed to be brought under Section 3A & 3B of the Civil Procedure Act (CPA), Order 43 and Order 51 Rule 1 the Civil Procedure Rules (CPR), inter alia, on the grounds on the face of the motion as amplified in the supporting affidavit sworn by the Applicant.
2.To the effect that being aggrieved and dissatisfied with the ruling of the lower court delivered in Nairobi MCCC No. E8377 of 2021 on 29.09.2021 he has preferred an appeal and is apprehensive of losing motor vehicle registration number KDC 627B (hereafter the suit motor vehicle) an ambulance which is his source of income to the 3rd Respondent. He goes on to depose that on 26.10.2021 he conducted a search that confirmed the suit motor vehicle is registered in the name of the 3rd Respondent and unless the court intervenes, he is likely to lose the suit motor vehicle. He swears that the 3rd Respondent has been trading with the suit motor vehicle since his illegal purchase thereof, thus subjecting it to wear and tear and he may be unable to recoup lost earnings. Hence he contends that unless the court restrains the 3rd Respondent, his meritorious appeal may be rendered nugatory exposing him irreparable loss and damage.
3.Northwave Credit Limited (hereafter the 1st Respondent) opposes the motion through the replying affidavit of Peter Njagi dated 14.03.2022 who describes himself as a director of the 1st Respondent and also duly authorized by Vetrank Investments Auctioneers (hereafter the 2nd Respondent) to swear the affidavit. He deposes that the Applicant successfully applied for a loan facility with the 1st Respondent in the sum of Kshs. 1,320,000/- which to finance the importation of the suit motor vehicle and that the vehicle was to be a security for the said facility. That when the facility became due and payable the Applicant failed and or neglected to honor his obligation resulting in the 1st Respondent exercising its right to realize the security.
4.He further states that the suit motor vehicle was subsequently attached and sold to the 3rd Respondent at a public auction held on 10.05.2021. The deponent contends that an injunction cannot issue against the 3rd Respondent, who is a third party in respect of the contract in dispute and an innocent purchaser for value. That the reliefs as sought for by the Applicant can only be granted once the substantive suit is heard and determined before the lower court. He concludes by deposing that the Applicant being in default has not approached the court with clean hands and the motion ought to be dismissed with costs.
5.The 3rd Respondent on his part opposes the application by way of a replying affidavit dated 11.04.2022. He deposes that he purchased the suit motor vehicle as the highest bidder at a public auction held on 10.05.2021; that the reliefs as sought by the Applicant are unreasonable and unjustifiable as he was a bonafide purchaser for value; and that an injunction cannot issue as against an innocent purchaser for value having acquired the suit motor vehicle at a public auction without knowledge of Applicant’s claim against the 1st Respondent over the suit motor vehicle. He concludes by asserting that he has a good title to the suit motor vehicle as such the instant motion and appeal ought to be dismissed.
6.In a rejoinder by way of a supplementary affidavit the Applicant takes issue with the 1st and 2nd Respondent affidavit material by asserting that the 1st Respondent caused him to hurriedly execute the credit facility documents and thereafter withheld all copies; that he had intentions to settle the loan facility but the 1st Respondent made it extremely difficult to do so; that despite demand by counsel to avail the loan facility agreement, the 1st Respondent declined to avail the same which prompting him to report the matter to police and thereafter institute the suit before the lower court; that after disbursement of the credit facility the suit motor vehicle remained illegally in the custody of the 1st Respondent hindering him from doing any business with it; and that upon the purported instructions to the 2nd Respondent to repossess the suit motor vehicle, he was shocked to learn on 16.06.2021 that the 1st Respondent had sold the suit motor vehicle to the 3rd Respondent. He contends that the 1st and 2nd Respondent colluded to deprive him of the suit motor vehicle through an illegal sale and therefore the 3rd Respondent cannot claim to be an innocent purchaser for value.
7.The Applicant further asserts that the 1st Respondent did not serve the notice of intention to sell, the proclamation notices or the deficiency notice showing the sale price of the suit motor vehicle. That the forced sale value of the suit motor vehicle demonstrates that there was collusion to deprive him of the same, compounded by the fact that the notice of public auction was published in a newspaper that has limited circulation. He deposes that the 1st Respondent is untrustworthy and unless the court intervenes there is a likelihood he will be deprived of his livelihood and yet the Respondents will not be able to reimburse the loss of earnings. He urges the court to order the unconditional release of the suit motor vehicle.
8.The motion was canvassed by way of written submissions. Counsel for the Applicant firstly submitted that there was no chattel agreement created with respect to the loan facility entered into between the Applicant and 1st Respondent. That upon execution of the credit facility the 1st Respondent ought to have disbursed the amount into the Applicant’s account but the 1st Respondent has failed to provide documentation showing that funds were disbursed for clearing the suit motor vehicle. Counsel asserted that the repossession of the suit motor vehicle without a court order was unlawful and not protected by the Movable Property Security Rights Act. Citing the provisions of Section 17(4), 17(5), 18(1) and 18(3) of the Auctioneers Act counsel contended that the 3rd Respondent was not a bona fide purchaser for value as the entire auction process, from advertising to the eventual sale of the suit motor vehicle was flawed. And that the 3rd Respondent failed to conduct due diligence was not an innocent purchaser for value.
9.On the sale of the suit motor vehicle, it was argued that while the 1st Respondent did not tender any proof that it was owed any money it had proceeded to auction the suit motor vehicle and to retain the proceeds of the sale. The Court of Appeal decision in Lawrence P. Mukiri Mungai, Attorney of Francis Muroki Mwaura v Attorney General & 4 others  eKLR was relied on to support the assertion that the 1st Respondent did not have good title to pass to the 3rd Respondent. Counsel further called to aid the decisions in Geilla v Cassman Brown (1973) EA 358 and Orawo & Another v Mistri & Others HCCC No. 2776 of 1987 to contend that the Applicant has tendered sufficient material to warrant issuance of injunctive orders as an award of damages may not be adequate to compensate the Applicant. The court was urged to allow the motion with costs.
10.On behalf of the 1st and 2nd Respondent, counsel anchored his submissions on the decisions in Giella (supra) and Mrao Ltd v First American Bank of Kenya Ltd & 2 Others  eKLR on the threshold to be met for granting an interlocutory injunction. Citing several decisions including John Nduati Kariuki t/a Johester Merchants v National Bank of Kenya Limited  eKLR, and Kenya Commercial Finance Co. Ltd v Afraha Education Society  1 EA on the three conditions for the grant of temporary conditions, counsel asserted that where an applicant fails to demonstrate a prima facie case the court ought not consider the other conditions. He asserted that the Applicant herein had neither an arguable case, nor stood to suffer any irreparable loss that cannot be compensated by damages. Moreover, that the balance of convenience tilts in favour of the 1st and 3rd Respondent because if an injunction is granted, they may not recover the money loaned to the Applicant through sale of the suit motor vehicle whose value depreciates with usage.
11.Defending the sale to the 3rd Respondent, counsel relied on Weston Gitonga & 10 Others v Peter Rugu Gikanga & Another  eKLR and Anita Chelagat O’ Donovan & 2 Others v Fredrick Kwame Kumah & 2 Others  eKLR to assert that the said Respondent is an innocent purchaser for value without notice. That the motor vehicle having been already sold, transferred and registered in the 3rd Respondent’s name, the application herein has been overtaken by events and granting the orders sought would be an exercise in futility. That the Applicant’s remedy lies in damages should the court find that the sale was illegal and un-procedural which issue can only be determined by the trial court.
12.Counsel further called to aid the decisions in Equip Agencies Limited v I & M Bank Limited  eKLR, Geoffrey Njenga v Godfrey Karuri & Another  eKLR and Argos Furnisher Limited v Ecobank Kenya Limited & Another  eKLR to argue that the Applicant has not provided sufficient grounds to warrant interference with the 3rd Respondent’s custody of the suit motor vehicle, which must await final determination by the trial court. Citing the decision in Ibrahim Seikei t/a Masco Enterprises v Delphis Bank  eKLR counsel finally asserted that parties are bound by the terms of an agreement willingly and knowingly executed. The court was urged to dismiss the motion with costs.
13.The 3rd Respondent submitted, relying on Katende v Haridar & Company Limited  2 EA 173 that the 3rd Respondent was an innocent purchaser for value without notice and that the question whether the sale of the suit motor vehicle ought to be nullified cannot be determined at this interlocutory stage but after hearing and final determination of the suit before the lower court. He reiterated that the 3rd Respondent acquired the suit motor vehicle through public auction and therefore was a bona fide purchaser. He urged that the motion ought to be dismissed with costs.
14.The Court has considered the rival affidavit material and submissions canvassed in respect of the motion. Some of the parties’ material ventured into the substantive appeal and or issues that are the preserve of the appellate court, while at this interlocutory stage, the court is not concerned with the merits of the appeal. The Applicant’s motion is expressed to be brought under Section 3A & 3B of the Civil Procedure Act (CPA) and Order 43 the Civil Procedure Rules (CPR). Evidently, the Applicant has invoked the wrong provisions of law, as the appropriate provisions based on the orders sought would be Order 42 Rule 6 (6) of the Civil Procedure Rules. The relevant part of Order 42 Rule 6 of the Civil Procedure Rules provides that: -(1)No appeal or second appeal shall operate as a stay of execution or proceedings under a decree or order appealed from except in so far as the court appealed from may order but, the court appealed from may for sufficient cause order stay of execution of such decree or order, and whether the application for such stay shall have been granted or refused by the court appealed from, the court to which such appeal is preferred shall be at liberty, on application being made, to consider such application and to make such order thereon as may to it seem just, and any person aggrieved by an order of stay made by the court from whose decision the appeal is preferred may apply to the appellate court to have such order set aside…(6)Notwithstanding anything contained in subrule (1) of this rule the High Court shall have power in the exercise of its appellate jurisdiction to grant a temporary injunction on such terms as it thinks just provided the procedure for instituting an appeal from a subordinate court or tribunal has been complied with.”
15.Visram J (as he then was), distilled the applicable principles guiding the grant of injunction pending appeal in Patricia Njeri & 3 Others -Vs- National Museum of Kenya  eKLR. The learned Judge stated: -
16.The court would propose to start with the well settled principles in Giella -Vs- Cassman Brown & Co. Limited  EA 358 as reiterated in Nguruman Limited vs Jan Bonde Nielsen & 2 Others (2014) eKLR, the latter which is particularly illuminating as to the principles applicable to applications for interlocutory injunctions. The Court described the role of the judge in such application to be merely to consider whether the principles for the grant of the interlocutory injunction were met. The Court further observed that: -
17.The Court further stated that the three conditions apply separately as distinct and logical hurdles to be surmounted sequentially by an applicant. Such that, it is not enough for the Applicant to establish a prima facie case, they must further successfully establish irreparable injury, that is, injury for which damages recoverable at law would not be an adequate remedy. And where there is doubt as to the adequacy of damages, the court will consider the balance of convenience. Conversely, where no prima facie case is established, the court need not consider irreparable injury or balance of convenience. The Court of Appeal emphasized that the standard of proof is to prima facie standard.
18.Regarding the definition of a “prima facie case” the Court stated:
19.Concerning the condition requiring the successful applicant to demonstrate a prima facie case which condition also ties in with the requirement on the applicant to demonstrate that he has an arguable appeal, it is not denied that the Applicant herein obtained a credit facility on 01.03.2021 with the 1st Respondent per his annexure “PN1” which loan was inclusive of interest, and became due on or before 01.04.2021. In the said document it evident that the Applicant duly executed every page of the loan facility signifying that he read and understood the terms and conditions therein. Under the loan facility agreement, the collateral for the loan was motor vehicle KDC 627B.
20.The Applicant’s contention was that the 1st Respondent never furnished him with a copy of the foregoing document, did not furnish proof of disbursement of the loan facility to his bank account as agreed or furnish the requisite documentation in respect of payment made to clear the suit motor vehicle necessitating the demand letter and police report -see annexures “DGW2” and “DGW3”- respectively, in the supplementary affidavit. The Applicant did not avail a bank statement for the said period between 01.03.2021 to 01.04.2021 to demonstrate his claims that no disbursements were made to his account. Indeed, if no loan disbursements were made, how did the Applicant procure the motor vehicle that he is claiming in this case, and which he complains was allegedly repossessed by the 1st Respondent?
21.However, on its part, the 1st Respondent asserted in its affidavit material that upon execution of the agreement, the loan disbursements were made directly to the receiving entities for the import and clearance of the suit motor vehicle. The key question here is whether the Plaintiff attempted to settle the loan facility pursuant to the terms and conditions of the agreement he duly executed on 01.03. 2021, whether hurriedly or otherwise. There is no evidence in that regard coming from the Applicant even though it is clear from his material that he was the person claiming right to the use or possession of the suit vehicle at the time of filing suit. He therefore has not shown that he has fulfilled his end of the bargain under the agreement and that the 1st Respondent was not entitled to repossess and sell the vehicle as it did.
22.The court is not persuaded that the Applicant has not demonstrated a prima facie case as to the existence “of a right which has apparently been infringed by the opposite party to call for an explanation or rebuttal from the latter” (see Nguruman’s case). As earlier observed, this finding would equally apply to the question whether the Applicant has an arguable appeal which may be rendered nugatory if the orders sought are denied. In Stanley Kang’ethe Kinyanjui V Tony Keter & 5 Others  eKLR that:See also Denis Mogambi Mong’are V. Attorney General & 3 Others Civil Appeal No. Nairobi 265 of 2011 (UR 175/2011) where the same Court stated that:
23.Besides, it appears to this court that if it were to be eventually found that the sale of the suit vehicle by the 1st Respondent was unlawful, damages would be quantifiable and adequate to compensate the Applicant. Thus, it is hard to see how the appeal would be rendered nugatory. In George Gathura Karanja v George Gathuru Thuo & 2 Others  eKLR, the Court of Appeal stated that:
24.Similarly, it seems to me that granting the prayers sought would inflict more hardship than it would avoid. If the orders sought were granted, the value of the security would continue to depreciate with wear and tear over time, hence adversely affecting the rights of the 1st Respondent as a lender/vendor and the apparent innocent purchaser, the 3rd Respondent. The Court of Appeal in Madhupaper International Limited v Kerr  KLR 840 held that: -
25.In Charter House Investments Ltd. V Simon K. Sang & 3 Others (2010) eKLR, the Court of Appeal stated: -
26.Consequently, upon reviewing all the material placed before it, the court is not persuaded that this is a proper case for granting a temporary injunction pending appeal, and the motion dated 3.11.2021 is hereby dismissed with costs to the Respondents.