TRUST BANK LIMITED v GEORGE ONGAYA OKOTH (Civil Appeal 177 of 1998) [2000] KECA 13 (KLR)
The bottom line
#Kenya's Court of Appeal ruled that a bank's property sale notice giving a borrower only 14 days instead of three months was invalid, protecting the borrower's home.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the letter of 26th August 1996 constituted a valid statutory notice under section 69A(1)(a) of the Transfer of Property Act
- 2.Whether a statutory notice stating a period shorter than three months is valid where the mortgagee does not attempt to sell until after three months from the date of the notice
Key legal issues
#Validity of a statutory notice under section 69A(1)(a) that allows less than three months to pay
The notice was invalid because it gave the respondent only 14 days to pay, whereas the section requires that default be made in payment for three months after service of the notice; the period runs from service, not from the date of the notice.
The court held that section 69A(1)(a) fixes the commencement date of the notice as the date of service on the mortgagor, and the mortgagee cannot pick any other date. The notice must require payment of the mortgage money and warn of the consequences of default. A notice allowing only 14 days denies the mortgagor the statutory three months; any delay by the mortgagee in selling thereafter is merely ex gratia and cannot cure the invalid notice. Russel Company Limited was expressly disapproved to the extent it held otherwise.
Status of Russel Company Limited v. Commercial Bank of Africa
The decision in Russel's case did not accord with section 69A(1)(a) and was therefore invalid to the extent it treated a notice dated from its own drawing date as sufficient.
In Russel's case the commencement date was taken as the date of the notice rather than the date of service, and the mortgagor was not given the requisite three months from service. The court, while respectful, held that the notice in that case did not accord with the section and was invalid, so the case did not assist the appellant.
Limits of an interlocutory appeal
The court declined to determine issues requiring evidential proof, such as the respondent's contention that nothing was owed or that the claim comprised illegal charges, leaving those to the trial judge.
Because the appeal was interlocutory and the suit remained pending, the court confined itself to the pure question of statutory construction on the validity of the notice and eschewed any attempt to deal with issues requiring oral testimony and cross-examination.
Legal principles established
#- Under section 69A(1)(a) of the Transfer of Property Act, the three-month period of a statutory notice runs only from the date of service of the notice on the mortgagor, and a notice allowing a lesser period is invalid even if the mortgagee delays selling beyond three months.
- A statutory notice must specify what the mortgagor must do (pay the mortgage money) and warn of the consequences of default; giving a lesser period than the statutory three months denies the mortgagor a right the law expressly gives him.
Court orders
#- 1.Appeal dismissed
- 2.Costs of the appeal awarded to the respondent, to be taxed if not agreed
The bench
#One judgment of the whole court — no separate or dissenting opinions.
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 1135 of 1997
- Jurisdiction invoked
- First appellate jurisdiction over an interlocutory ruling of the High Court (appeal from the ruling of Hayanga, J. in H.C.C.C. No. 1135 of 1997)
Relief refused
#The appellant's challenge to the interlocutory injunction restraining it from dealing with the respondent's properties
The statutory notice relied on was invalid as it did not allow three months from the date of service
Costs
Costs of the appeal to the respondent, to be taxed if not agreed
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
Section 69A (l) (a) of the Transfer of Property Act fixes a commencement date of the notice. A Mortgagee has no right to pick on any other date as the date of commencement. The period runs from the date of service of the notice on the Mortgagor.
The Legislature having stipulated that period and the date from which it would run, it is my view that giving a lesser period denies a Mortgagor a right to which the law expressly gives him.
The upshot of the foregoing is that this appeal lacks merits and I would dismiss it with costs to the respondent to be taxed if not agreed.
Issues in the judgment
#The judgment of Owuor, J.A. refers to a draft judgment by Gicheru, J.A., but no separate judgment by Gicheru, J.A. appears in the text supplied; the coram is therefore incomplete on the face of the document.
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "TRUST BANK LIMITED v GEORGE ONGAYA OKOTH (Civil Appeal 177 of 1998) [2000] KECA 13 (KLR)", Case Analysis (2000). Civil Appeal 177 of 1998. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2000/13/eng@2000-01-14
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.