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LUTTA, J.A.
[1] I have had the advantage of reading in draft the judgment of Law, Ag.
V.-P., with which I am in complete agreement, and there is little that I
need add. It seems to me that the learned judge set aside the interim
injunction on the following bases first, that the defendants denied the
existence of any covenant such as alleged by the plaintiff and intended to
adduce evidence to support their denial and it was therefore impossible to
assess the plaintiff's chances of success in the substantive action.
[2] Secondly, that there was a substantial question to be investigated and
in determining whether the matter should be maintained in status quo, regard
must be had to the balance of convenience in relation to the defendants'
liability to Mr. Bhadresa if he sued them successfully and the extent to
which damages to the plaintiff could be cured by payment of damages rather
than by granting an injunction.
[3] Thirdly, that in considering the balance of convenience Mr. Bhadresa's
position must be taken into account and that his probable loss and
inconvenience greatly exceeded any loss or inconvenience the plaintiff would
suffer by setting aside the injunction.
[4] As I understand it the object of an interim injunction is to keep
matters or things in status quo, in order that, if at the hearing of the
substantive action the plaintiff obtains a judgment in his favour, the
defendant or the respondent, will have been prevented, in the meantime, from
dealing with the property or the subject matter in such a manner as to make
that judgment ineffectual - see HALSBURY'S LAWS OF ENGLAND, 3rd Edition,
Volume 21, page 343, paragraph 716.
[5] A plaintiff is entitled to an interim injunction if he satisfies the
Court in, inter alia, the following Respects first, that there is a
substantial or a serious question to be investigated and secondly, that on
the facts before the Court it is probable that the plaintiff will succeed in
the substantive action.
[6] Both the plaintiff and the defendants accept that there was an oral
agreement under which the defendants let three rooms on the premises in
question to the plaintiff at a monthly rent of shs 650/¬inclusive of water
charges.
[7] However, the defendants deny that a covenant as alleged by the plaintiff
was a term of the oral agreement.
[8] There is thus an issue to be investigated by the Court. It seems to me
that the plaintiff's right to the relief claimed is far from settled or
clear.
[9] The principles on which the relief may be granted by the Court have been
stated in HALSBURY'S LAWS OF ENGLAND. 3rd Edition, Volume 21, page 346
paragraph 7631 as follows ¬
"In cases of interlocutory injunction in aid of the plaintiff's right all
the Court usually has to consider is whether the case is so clear and free
from objection on equitable grounds that it ought to interfere to preserve
property without waiting for the right to be finally established but in no
case does the Court grant an interlocutory injunction as of course."
[10] Then on the next page at paragraph 765 it is stated: - ¬
"Where the plaintiff is asserting a right, he should show a strong prima
facie case, at least, in support of the right which he asserts...”
[11] In the next paragraph (paragraph 766) on page 366, it is stated:-
"where any doubt exists as to the plaintiff's right, or if his right is not
disputed, but its violation is denied, the Court, in determining whether an
interlocutory injunction should be granted, takes into consideration the
balance of convenience to the parties and the nature of the injury which the
defendant, on the one hand, would suffer if the injunction was granted and
he should ultimately turn out to be right, and that which the plaintiff on
the other hand, might sustain if the injunction was refused and he should
ultimately turn out to be right. The burden f proof that the inconvenience
which the plaintiff will suffer by the refusal of the injunction is greater
than that which the defendant will suffer, if it is granted, lies on the
plaintiff."
[12] The learned judge said:-
"In determining whether the matter should be maintained in status quo it is
well established that regard must be had to the balance of convenience and
the extent to which any damage to the plaintiff can be cured by payment of
damages, rather than by granting an injunction".
[13] He went on to say that the person who will suffer most inconvenience is
fir Bhadresa and that his loss would greatly exceed “any loss or in¬
convenience the plaintiff would suffer by setting aside the injunction.” In
my view the learned judge rightly took into consideration the balance of
convenience in this matter in relation to the defendant's liability in
damages to Mr. Bhadresa if the latter brought a successful suit against them
(the defendants).
[14] The learned judge was entitled to set aside the injunction if satisfied
that the status quo could be preserved without it (the injunction). No
argument during the hearing of this appeal has persuaded me that the learned
judge erred on any principle of law in setting aside the injunction granted
_ Ex parte. He found that Mr. Bhadresa had already been in occupation for
three months and that a full and fair disclosure was not made to the court.
[15] He expressed the view that had such a disclosure been made he would not
have granted the injunction. Considering all the circumstances of this case
I would not interfere with the exercise of discretion by the learned judge
in setting aside the injunction.
[16] In the result I would dismiss this appeal with costs and certify for
two advocates.
LAW, AG, V-P.
[17] This appeal arises out of a suit instituted by the appellant, a
practising dentist, against his landlords, the respondents, claiming an
injunction to restrain the respondents from permitting or suffering or
threatening to permit or suffer anyone other than the appellant from
carrying on a dental practice in competition with the appellant in any part
of the premises in which the appellant practises dentistry, in breach of an
alleged oral covenant, and damages.
[18] The plaint on the record of appeal is undated and only one of the
respondents is named as defendant.
[19] I am assured by Mr. Khanna, who appeared for the appellant, that a
draft plaint was typed and included in the record by mistake, and that the
actual plaint filed was in fact framed against both respondents and dated
and filed on the 26th October, 1970.
[20] It is surprising, to say the least, to find such an error perpetrated
in a record certified by an advocate as being "correct and prepared to
accord with copies as supplied by the High Court". The correct plaint, which
I assume is to the same effect as the draft on record was filed on 26th
October, 1970. "On the same date the appellant applied by chamber summons
for an injunction restraining the respondents from permitting their brother
(to whom I shall refer to henceforth as Mr. Bhadresa) from exercising the
practice of dentistry upon the suit promises, and the appellant further
prayed that notice of the application upon the respondents be dispensed with
on the grounds that the granting of the injunction would be defeated by the
delay in serving the notice upon them.
[21] The summons was supported by an affidavit made by the appellant dated
23rd October, 1970, in which he swore inter alia that he became the
respondents' tenant, under an oral tenancy, on 1st October, 1968, having
acquired Mr. Bhadres's dental practice which was carried on in three rooms
on the first floor of the suit premises, Nr Bhadresa having decided to
emigrate to Australia.
[22] The appellant further stated that it was a term of the said oral
tenancy that the respondents would not permit or suffer any other person to
exercise the practice of a dental surgeon upon any part of the suit premises
in competition with the appellant. He went on to aver that the respondents
had made available to Nr Bhadresa a shop on the Ground floor of the suit
premises, that the shop was in the process of being converted into a
dentist's surgery, and that Mr. Bhadresa had openly threatened and made
known to the appellant his intention to carryon therein his dental practice
in competition with the appellant and that the respondents would unless
restrained by injunction permit Nr Bhadresa to carryon practice in the suit
premises in breach of their covenant not to permit such a state of affairs.
[23] The summons was heard exparte on 30th October, 19701 by Simpson, J. in
Chambers, and the learned judge granted an interim injunction restraining
the respondents from permitting or suffering Mr. Bhadresa or any other
person from exercising the practice of dental surgery in any part of the
suit premises.
[24] On 8th December, 1970, the respondents filed their defence, denying the
making of the alleged oral covenant alternatively alleging that if it was
made by the first respondent it was done without the authority of the second
respondent, and further alleging that if any such covenant was entered into,
it was unenforceable being void for uncertainty, ambiguity, perpetuity and
indefiniteness.
[25] The respondents went on to plead that Mr. Bhadresa became a tenant of
the ground floor shop on 1st August, 1970. On the 9th December the
respondents filed a notice of motion asking that the interim ex parte
injunction be set aside.This notice of motion was supported by affidavits
sworn by the two respondents and by Mr. Bhadresa, to the effect that the
shop had been leased to Mr. Bhadresa on 1st August. 1970 and that thereafter
Mr. Bhadresa had employed an architect to prepare plans which were approved
by the City Council of Nairobi on 5th October? Where upon Mr. Bhadresa
employed a builder to do the necessary work to convert the shop into a
dental surgery, which work was largely completed when the interim injunction
was granted.
[26] Furthermore the first respondent swore that he and the second
respondent, to the knowledge of the appellant, lived on the second floor of
the suit premises so that there was no justification for the application
exparte for an interim injunction on the ground put forward by the appellant
that there would be delay involved in serving the chamber summons of 26th
October, 1970 on the respondents.
[27] The fact of the respondents living in the suit premises was not denied
in the appellant's counter-affidavit. The notice of motion for setting aside
the inter-lm injunction was heard on 2nd April, 1971, both parties being
represented by leading counsel.
[28] The learned judge delivered his ruling on 7th April. He allowed the
application and set aside the interim injunction, with costs including a
certificate for two counsel, on the ground that the appellant, on the
application for an exparte interim injunction, had not stated his case fully
and fairly, and had he done so the judge said he would not have granted the
injunction.
[29] In particular, the learned judge found that the appellant had not
disclosed that the respondents lived in the suit premises, so that immediate
service of the chamber summons would have presented no difficulty, and he
held that the appellant must have been aware of Mr. Bhadresa's return from
Australia and of his occupation of the ground floor shop since 1st August,
1970.
[30] The learned judge commented that there was a substantial question to be
investigated and continued¬
¬"In determining whether the matter should be maintained in status quo it is
well established that regard must be had to the balance of convenience and
the extent to which any damage to the plaintiff can be cured by payment of
damages , rather than the granting of an injunction. In Noormohamed
Janmohamed v. Kassamali Virji Madhani (20 E.A.C.A 8.).Sir Newnham Worley
said¬
'except in very exceptional cases, an injunction will not be granted if
there is no likelihood of irreparable injury and by 'irreparable injury' is
meant injury which is substantial and could never be adequately remedied or
atoned for by damages.'
[31] The leaned judge also said¬
"The person who will suffer most inconvenience is Mr. Bhadresa and in
considering the balance of convenience although he is not a party I think I
must take account of his position",
and he concluded as follows ¬
"Whatever he (Mr. Bhadresa) decides even if he should successfully sue the
defendants his loss and inconvenience is bound to be substantial-greatly in
excess of any loss or inconvenience the plaintiff would suffer by the
setting aside of the injunction".
[32] These matters all form the substance of the grounds of appeal argued by
Mr. D.N. Khanna, leading counsel for the appellant. His first submi¬ssion
was that the learned judge attached undue and unwarranted importance to the
position of Mr. Bhadresa who was a stranger to the suit, and whose possible
loss and inconvenience were immaterial and irrelevant to the dispute between
the parties.
[33] But I think that the learned judge was considering Mr. Bhadres’s
position in relation to the ro3pondents' possible liability to compensate
him in the event of the appellant succeeding in his suit.
[34] The ruling appealed from contains two references to this possibility,
and I am satisfied that in considering Mr. Bhadresa's loss and inconvenience
should the status quo be preserved, the learned judge was relating this
question to the loss and inconvenience which would be suffered by the
respondents if they should have to compensate Hr Bhadresa in the event of
the suit succeeding.
[35] Mr. Khanna went further, and submitted that in the case of a negative
covenant the status quo should be preserved as a matter of right upon the
appellant establishing, as he did, a prima facie case of a breach of such a
covenant. .This is, with respect, pitching the case in too high a key.
[36] A judge must whore there is a plain and uncontested breach of a clear
covenant, compel the defendant by interlocutory injunction to perform his
obligation without regard to the balance of convenience, see Hampstead and
Suburban Properties Ltd. v. Diomedous (1969) 1 Ch. 248.
[37] The instant case is very different. The existence of the covenant is
strongly contested and is, in the learned judge's words, the "substantial
question to be investigated". This being so the learned judge retained a
discretion in deciding whether or not the status quo should be maintained
and in exercising that discretion he was entitled to have regard to the
balance of convenience and to the extent to which any damage to the
appellant could be cured by payment of damages r3-ther than by the granting
of an injunction, see Donmar Productions Ltd. v.Bart and Others (1967) I
W.L.R. 740 Herman Pictures N. V. v .Osborne (1967) 2 A.E.R. 324, although
the maintenance of the status quo, where a strong prima facie is shown to
exist, should be a governing consideration. As is stated in Halsbury, 3rd
Ed, paragraph 166 at page 366
"Where any doubt exists as to the plaintiff's right, or if his right is not
disputed but its violation is denied, the Court in deter¬mining whether an
interlocutory injunction should be granted, takes into consideration the
balance of convenience to the parties… The burden of proof that the
inconvenience which the plaintiff will suffer by the refusal of the
injunction is greater than that, which the defendant will suffer, if it is
granted, lies on the plaintiff."
[38] It is with those principles in mind that the learned judge, quite
rightly in my opinion, approached the matter.
[39] On the basis that the judge has a discretion, Mr. Khanna submitted that
he misdirected himself in several respects so as to vitiate his exorcise of
discretion, Firstly, Mr. Khanna objected to the learned judge's finding that
the appellant must have been aware of Mr. Bhadres’s occupation of the ground
floor shop since 1st August, 1970, a finding which Mr. Khanna described as
guesswork.
[40] Far from being guess work, the finding is in my view supported by
paragraph 4 of the appellant's affidavit of 23rd October, 1970¬:-
“The defendants' said brother has however returned from Australia. and is
preparing to re-start his practice as a dental surgeon in Kenya. The
defendants with full knowledge of this, consented to make available a shop
premises on the ground floor of the said suit plot for the purpose? and the
said V.L. Bhadresa has openly threatened and made known to me his intention
to commence to carryon therein a dental practice in competition with me…"
[41] The affidavit is silent as to when the appellant became aware of these
matters, and this silence fully supports the learned judge's finding that
the appellant must have been aware of Nr Bhadresa's occupation of the shop
since 1st August, 1970.
[42] Had the appellant only become aware of these matters shortly before the
institution of the suit on 26th October, 1970, he would surely have said so.
In any event the appellant's affidavit, which was sworn three days before
the suit was filed and the chamber summons issued on 26th October, 1970, was
probably inadmissible having been sworn before the institution of
proceedings, except perhaps on the appellant's undertaking to have the
affidavit re-sworn and filed, see Green v. Prior (1886) H.N. 50. As no
argument was addressed to us on this point, I need say no more than that it
is doubtful whether there was any valid affidavit before the court to
justify the granting of the exparte interim injunction.
[43] Two other misdirections complained of by Mr. Khanna relate to passages
in the ruling which indicate that the learned judge had regard to the
balance of convenience, and that damages would be an adequate remedy. I have
already expressed my view that in the absence of a plain and uncontested
breach of a clear covenant, whether positive or negative, it is open to a
judge to have regard to the balance of convenience, and I see no reason to
differ from the learned judge's opinion that in a case of this nature the
appellant's loss before a decision in the suit is unlikely to be substantial
and could be atoned for by the payment of damages.
[44] The final misdirection, in Mr. Khanna's submission, is that the interim
injunction was set aside on the sole ground of the inconvenience of a
third-party.
[45] This Mr. Khanna characterized as a fundamental mistake which cannot be
supported if principles of justice are to be applied, and a travesty of
justice. I have already stated my opinion that the learned judge was
entitled to consider Mr. Bhadresa's loss and convenience in relation to the
respondents' possible legal liability to him in the event of the suit
succeeding.
[46] In any event this was not the sole ground on which the learned judge
set aside the interim injunction. He had already made it clear that he would
never have granted that injunction had the appellant made a full and fair
disclosure of the material facts at the time. For these reasons I consider
that this appeal fails, and I would dismiss it with costs, and certify for
two counsel.
[47] As Lutta and Mustafa JJA agree, it is so ordered.
MUSTAFA J, A
[48] I agree with the judgment of Law, Ag. V-P., which I have had the
opportunity of reading in draft. |
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