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Court of AppealDismissedCivil Appeal No. 105 of 2005· [2013] KECA 440 (KLR)

Nahashon Kariuki Mbatia v Housing Finance Company of Kenya [2013] KECA 440 (KLR)

Court of Appeal
26 July 2013
GKG. B. M. KariukiWilliam OukoW. OukoKMK. M'inoti
2,954 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~12 min to read original · ~4 min brief

The bottom line

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The Court of Appeal confirmed that a defendant only needs to show genuine triable issues to keep their defence alive and defend a case at trial.

What this practically means

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Executive summary

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The appellant, registered proprietor of Nairobi/Block 72/989, charged the property to Housing Finance Company of Kenya in December 1997 to secure a loan of KShs 2,500,000. After default, the chargee served a statutory notice and advertised the property for sale. The appellant sued in the High Court seeking a declaration that the intended sale was unlawful and an injunction, contending that the charge did not confer a statutory power of sale because it lacked an acknowledgement in the prescribed Form LR 9 under section 65(1) of the Registered Land Act. Two years later he applied under Order VI Rule 13(1)(b) of the Civil Procedure Rules to strike out the defence. Kasango J dismissed the application on 14th March 2005, finding the defence raised triable issues. On appeal, the appellant argued only one ground: that the charge improperly reserved a statutory power of sale. The Court of Appeal, in a single judgment of the court, applied the settled principles governing striking out of pleadings, noting that a defendant need only show triable issues. The court found the charge contained an acknowledgement of the effect of section 74 signed by the chargor and certified by an advocate, and identified seven strong triable issues, including whether use of Form LR 9 is mandatory, the purport of section 108 of the Act, the effect of the reference to 'she' in the acknowledgement, and the recoverability of costs. It also held that the appellant's authority, Kenya Commercial Finance Company Ltd v Ngeny, did not support his position. The appeal was dismissed with costs to the respondent, affirming the High Court ruling.

Key legal issues

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01

Whether the charge contained the special acknowledgement required by section 65(1) of the Registered Land Act so as to reserve a statutory power of sale

Holding

The charge contained an acknowledgement that the chargor understood the effect of section 74, together with the information required by Form LR 9, signed and certified; the defence on this issue was triable and could not be struck out

Reasoning

The court examined section 65(1) and section 74 of the Registered Land Act and held that where section 74 is not expressly excluded, the charge must contain a special acknowledgement signed by the chargor. Page 11 of the charge contained such an acknowledgement, the schedule reproduced the Form LR 9 information, and signatures were witnessed and certified by an advocate. Whether use of Form LR 9 itself is mandatory, and the effect of the reference to 'she', were triable issues unfit for summary determination.

p. 5
02

Whether the High Court judge erred in declining to strike out the defence under Order VI Rule 13(1)(b)

Holding

The judge was right: the defence raised several strong triable issues, including whether Form LR 9 is mandatory, the purport of section 108 of the Act, the effect of the 'she' reference, and the passing on of recovery costs

Reasoning

Applying the settled principles that a party is not to be deprived of a trial unless the matter is plain and obvious, and that a defendant showing a bona fide triable issue must be allowed to defend without condition, the court identified seven triable issues arising from the charge and the rival interpretations of sections 65, 74 and 108. The authority relied on by the appellant, Kenya Commercial Finance Company Ltd v Ngeny, did not actually support his position.

p. 5

Legal principles established

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  • A defence that raises triable issues ought not be struck out under Order VI Rule 13(1)(b); a defendant need only show triable issues, not a defence that must succeed
  • A party should not be deprived of a proper trial unless the matter is plain and obvious; a defendant showing a bona fide triable issue must be allowed to defend without condition

Court orders

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  1. 1.Appeal dismissed
  2. 2.Costs of the appeal awarded to the respondent

Authorities

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Legislation

  • Registered Land Act (Cap 300, Laws of Kenya, now repealed)section 65(1)
  • Registered Land Act (Cap 300, Laws of Kenya, now repealed)section 74
  • Registered Land Act (Cap 300, Laws of Kenya, now repealed)section 108(1)
  • Registered Land Act (Cap 300, Laws of Kenya, now repealed)Third Schedule, Form LR 9
  • Civil Procedure RulesOrder VI Rule 13(1)(a), (b), (c) and (d)
  • Civil Procedure Actsection 3A

Cases cited (3)

  • Attorney General vs Equip Agencies Ltd
    (2006) 1 KLR, 10
  • Kenya Trade Combine Ltd vs M M Shah
    Civil Application No. NAI 193 of 1999 (unreported)
  • Kenya Commercial Finance Company Ltd vs Ngeny & Another
    (2002) 1 KLR, 106
On appeal from
High Court of Kenya at Nairobi
HCCC No. 1042 of 2001
Jurisdiction invoked
First appeal to the Court of Appeal from the High Court under the Constitution and the Appellate Jurisdiction Act (appeal from ruling and order of the High Court)

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Nahashon Kariuki Mbatia v Housing Finance Company of Kenya [2013] KECA 440 (KLR)", Case Analysis (2013). Civil Appeal No. 105 of 2005. Source: https://new.kenyalaw.org/akn/ke/judgment/keca/2013/440/eng@2013-07-26

Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.