IN THE COURT OF APPEAL FOR EAST AFRICA
(CORAM: LAW, AG V-P., LUTTA AND MUSTAFA JJ.A)
CIVIL APPEAL NO 21 OF 1971
JAYNDRAKUMAR DEVECHAND DEVANI}……………….………APPELLANT
1. HARIDAS VALLABHDAS BHADRESA}
2. BALDEV VALLABHDAS BHADRESA}………….……………RESPONDENTS
[Appeal from ruling and order of the High Court of Kenya at Nairobi (Simpson, J.) dated 7th April, 1971 in Civil Case No. 1309 of 1970]
10 November 1971.
The following Judgments were read.
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.
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.
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.
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.
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.
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.
However, the defendants deny that a covenant as alleged by the plaintiff was a term of the oral agreement. 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.
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."
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...”
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."
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".
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).
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.
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.
In the result I would dismiss this appeal with costs and certify for two advocates.
LAW, AG, V-P.
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.
The plaint on the record of appeal is undated and only one of the respondents is named as defendant.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.'
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".
These matters all form the substance of the grounds of appeal argued by Mr. D.N. Khanna, leading counsel for the appellant. His first submission 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.
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. 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.
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.
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.
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 determining 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."
It is with those principles in mind that the learned judge, quite rightly in my opinion, approached the matter.
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.
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…"
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.
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.
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.
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.
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.
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.
As Lutta and Mustafa JJA agree, it is so ordered.
MUSTAFA J, A
I agree with the judgment of Law, Ag. V-P., which I have had the opportunity of reading in draft.