NATIONAL BANK OF KENYA LIMITED v SHIMMERS PLAZA LIMITED [2009] KECA 250 (KLR)
The bottom line
#A Kenyan court can stop a bank from selling your property, but only until the bank serves a valid statutory notice — not until the whole case ends.
What this practically means
#Executive summary
#Key legal issues
#Scope of an interlocutory injunction restraining a mortgagee's statutory power of sale where the only defect is an invalid statutory notice
The injunction should be limited in duration until the mortgagee serves a fresh statutory notice complying with the law; an injunction until the determination of the suit improperly frustrates the mortgagee's statutory right.
The Court accepted the trial judge's finding that the notice was defective, but held that the injunction's duration is a matter of judicial discretion. Since the judge had conclusively determined the validity of the notice at the interlocutory stage and the respondent conceded nothing further remained on that issue, an injunction running to the determination of the suit went beyond protecting the respondent and frustrated the bank's statutory right of sale upon a compliant notice. Discretion was therefore not exercised judicially and the order was varied.
Effect of a trial court conclusively determining an issue at an interlocutory stage
Where a judge conclusively determines an issue (here the validity of the statutory notice) at the interlocutory stage, the remaining interlocutory restraint should be tailored to that determination rather than extended to the whole suit, subject to outstanding issues on liability.
The Court observed that the superior court had made a distinct finding that the statutory notice was flawed, a finding not challenged on appeal and conceded by the respondent's counsel. Although other issues on the respondent's liability under the guarantee and charge remained outstanding, the trial judge expressly declined to base his discretion on those issues, and the respondent gave no notice of affirmation on them. The Court thus confined the substituted injunction to the notice issue.
Requirements of a valid statutory notice under Section 69A(1) of the Transfer of Property Act
A statutory notice under Section 69A(1)(a) of the Transfer of Property Act must provide for the mortgage money to be payable three months after service of the notice; a notice stating payment is due three months from the date of the notice, and citing the wrong statute, is invalid.
The Court reproduced Section 69A(1)(a) of the TPA, which requires default for three months after service of the notice. The notice in question cited the Registration of Titles Act and stated monies were payable within three months from the date of the demand notice. The Court agreed with the trial judge's finding, drawn from a Court of Appeal authority, that a notice which does not state that the sale takes place after three months from service is invalid.
Legal principles established
#- Where an interlocutory injunction restrains a mortgagee from exercising its statutory power of sale solely because the statutory notice issued was invalid, the injunction must be limited in duration to the service of a fresh valid statutory notice, not to the determination of the suit.
- The duration of an interlocutory injunction is at the sole discretion of the trial judge and depends on the circumstances of each case; an injunction lasting until the determination of the suit must not frustrate the statutory right of a mortgagee to realise the security upon a valid notice.
Court orders
#- 1.Appeal allowed
- 2.The order of injunction granted by the superior court set aside
- 3.Substituted order of injunction restraining the defendant/respondent from selling, disposing of, transferring or otherwise dealing with Title Number I.R. No. 55525 (L.R. No. 1870/IX/128) situate in Westlands, Nairobi until such time as it shall have served the plaintiff with a valid statutory notice in accordance with the law
- 4.Costs of the appeal awarded to the appellant
- On appeal from
- High Court of Kenya at Nairobi
- H.C.C.C. No. 229 of 2001
- Jurisdiction invoked
- First appeal against an interlocutory ruling of the High Court under the Civil Procedure Rules (Order XXXIX Rule 2(2) Civil Procedure Rules); no constitutional or appellate-jurisdiction provision is cited in the judgment
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (2)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Teresa Wamboi Mwangi v Kenya Commercial Bank Limited & another [2019] KEELC 2100 (KLR)[2019] KEELC 2100 (KLR)30 Jul 2019
- Jitendra Dhokia v Bank of Baroda [2015] KECA 115 (KLR)[2015] KECA 115 (KLR)17 Dec 2015
Cite this brief
#Cite this brief
Caselaw, "NATIONAL BANK OF KENYA LIMITED v SHIMMERS PLAZA LIMITED [2009] KECA 250 (KLR)", Case Analysis (2009). Civil Appeal 26 of 2002. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2009/250/eng@2009-07-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.