Two face contempt charges over sale of prime property

By Wahome Thuku

Nairobi, Kenya: Two businessmen have been summoned to appear before the High Court tomorrow to show cause why they should not be jailed for contempt.

John Kagonye Ngururi and auctioneer Kangeri Wanjohi will appear before Lady Justice Pauline Nyamweya at 9am.

The two have been at the centre of a controversial sale of prime property in Nairobi, which has also seen two directors of Ecobank face criminal charges.

Ngururi is also facing charges of fraudulently buying the property from Ecobank.

The property, which houses Down Town Hotel on Mokhtar Dadar Street in Nairobi, was owned by the late businessman Abubakar Habib. In 1996 and 1997, he charged the property for a Sh7.5 million loan from Akiba Bank (now Ecobank Ltd).

Habib died on June 17, 2007, having repaid Sh6.5 to the bank.

The property was taken over by his son Mohamed Abubakar, but the bank continued demanding loan arrears and interest of up to Sh105 million.

On December 15, 2008, the bank sold the property to Ngururi for Sh60 million and Mr Abubakar was asked to pay rent to the new owner.

Thereafter, the property became the subject of legal disputes and law suits.

In 2010, Abubakar filed a complaint of irregular dealings in the property by Ecobank directors.

The transfer to Ngururi was expunged through a directive of the Lands minister.

On January 26, 2010, the High Court issued an order to Ngururi and Wanjohi’s company, Kindest Auctioneers, to return goods they had taken from the premises four days earlier.

On June 15, 2010, the goods were advertised for sale by auction and were actually sold on June 22 of the same year.

On June 24, 2010, Faza Holdings Ltd, which owns Down Town Hotel filed an application at the Environmental and Land Court seeking to have Ngururi and Wanjohi committed to jail for contempt of court. They also sought to have the two compelled to pay Sh9.1 million as damages caused by the auction. Failing that, the company sought orders to be allowed to attach their properties.

Case pending

While this case was still pending, Ngururi allegedly contracted Pyramid Auctioneers who went to the same premises accompanied by the police, broke in and removed more items. They claimed to have been acting on a court order issued on October 28, 2010.

They advertised the goods for auction and sold them at Pangani Auction Centre on November 26, 2010.

Mr Abubakar told the court that the property did not belong to Ngururi, saying it was registered under the name of his father Abubakar Mohamed Habib.

He said the order had been served on the two defendants by court process server Robinson Muhando Khalial who then swore an affidavit of service on February 4, 2010.

The process server claimed he had served Wanjohi with the order the previous day at the Kenyatta International Conference Centre (KICC) cafeteria. He was a man well known to him. He claimed Wanjohi refused to sign the papers and ran away with them.

Ngururi and Wanjohi opposed the application saying they had never been served with the order to return the goods. They claimed the order had not been extended later when the parties appeared in court hence it had lapsed.

The court held that indeed Wanjohi had been served with the order.

“The second defendant’s assertion that the personal service was made in a place other than his registered office cannot hold as there is no such requirement in law and did not cite any such law,” the judge ruled.

The judge noted that though there was no evidence that Ngururi had not been served with the order, he had later filed an affidavit stating that he was aware of the order. He even claimed that the hotel had misled the court to be given that order.

Apparently, Ngururi had sworn the affidavit on February 2, 2010, before the auction had been carried out

“It has been held in several judicial decisions that if personal awareness of the court orders by the alleged contemnors is demonstrated, they will be found culpable of contempt even though they had not been personally served with the court orders,” Lady Justice Nyamweya pointed out.

“I therefore find that as of February 2, 2010, the first defendant was personally aware of the court order and I hereby dispense with the requirement of personal service of the said order on the said defendant.”

She ruled that the defendants were aware of the said court orders during the public auction of the plaintiff’s goods by the second defendant on June 22, 2010, and the public auction by Pyramid Auctioneers on November 26, 2010.

Both Ngururi and Wanjohi had admitted that the property was auctioned and there was evidence to that in court.

Ngururi argued that the goods had been removed by Kindest Auctioneers dues to default in rent. He said he did not deliberately and blatantly disobey and refuse to comply with the court order as the advertisement and the sale of the goods was pursuant to a court order.

Not aware

He claimed that other than the removal of the goods, he was not aware of any destruction and removal of other goods in a report and assessment by one Gilbert Kibire.

Ngururi maintained he was the owner of the premises having bought it from EcoBank for Sh60.5 million on September 30, 2008.

He, however, said he was aware that the transfer had been expunged through a ministerial directive but he had already challenged the directive in court.

Ngururi denied any knowledge of the auction by Pyramid Auctioneers and denied having instructed them through Kinuthia Kahindi and Company Advocates to auction the goods. He said he was a stranger to the proceedings before the magistrate court, which resulted in the order allowing the auction.

Wanjohi also maintained that other than the listed goods, he did not remove any other items in the premises nor damage the building. He said he was a stranger to Pyramid Auctioneers and did not know the firm.

He was not in contempt of court as his auction had been authorised by the magistrate court.

The judge noted that the High Court had later ruled that the order was one of mandatory injunction hence the defendants had to comply with it. It had not lapsed and had not been given for a specific period.

“It’s trite law that a court order, even if alleged to have been irregularly or wrongly obtained, must be obeyed until or unless it is stayed or set aside,” she said.

“In the circumstances of this case, I find that there was outright disobedience by the defendants when they proceeded to auction the plaintiff’s goods,” she added.

The judge ruled that Wanjohi was not involved in the second auction by Pyramid Auctioneers hence not culpable for it. The instructions for the auction, however, had been given by Ngururi through his lawyers.

“The only conclusion that this court can reach in light of evidence before it is that the first defendant was a participant in and authorised the proceedings and is therefore also culpable of continuing contempt in this regard,”

Lady Justice Nyamweya ordered that summonses be issued against Ngururi and Wanjohi to appear before her tomorrow to show cause why they should not be jailed or penalised for contempt.

The two were also ordered to meet the costs of the application.