Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELCPartially AllowedELC at Eldoret, application dated 2 September 2013 (suit number not stated in judgment)· [2014] KEELC 449 (KLR)

Moses Kibiego Yator v Eco Bank Kenya Limited [2014] KEELC 449 (KLR)

Environment and Land Court
20 March 2014
MSMunyao Sila
2,719 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

#

An Eldoret court stopped a bank from selling a borrower's land because the bank's legal notices were defective, but allowed the bank to restart recovery properly.

What this practically means

#

Executive summary

#
The plaintiff, registered owner of Kiplombe/Kiplombe Block 6 (Kutsi)/42, moved the Environment and Land Court at Eldoret by an application dated 2 September 2013 seeking to restrain the defendant bank from exercising its statutory power of sale over the suit land, which he had offered as security for a Kshs. 6 million loan guaranteed for Stephen Kotut. He claimed no valid statutory notice, redemption notice or advertisement had issued, no valuation was done, no spousal consent obtained, and the equity of redemption was being clogged. The bank asserted that a three-month statutory notice issued on 6 July 2012 and that Valley Auctioneers issued a Notification of Sale on 18 June 2013 before advertising the property. The court held the statutory notice defective because it referred to a charge dated 22 February 2010 instead of the actual charge of 2 February 2010, and doubted proper dispatch given the absence of a postal code in the certificate of postage, resolving the doubt in the chargor's favour. It further found non-compliance with Rule 15 of the Auctioneers Rules on service of the Notification of Sale and the 45-day redemption period, and held that Section 79(3) of the Land Act's spousal consent requirement does not apply retrospectively to a 2010 charge. The court granted an injunction barring the sale founded on the impugned notices, declined to saddled the plaintiff with auctioneer's charges, and preserved the bank's right to commence recovery afresh with proper notices.

Key legal issues

#
01

Validity of the statutory notice

Holding

The statutory notice was defective and invalid because it referred to a charge dated 22 February 2010 whereas the charge was dated 2 February 2010, and there was doubt whether it was dispatched to the correct address.

Reasoning

The notice cited a charge date different from the registered charge instrument, rendering it defective. The benefit of such a defect goes to the chargor. Further, the certificate of postage lacked a postal code, creating doubt as to correct dispatch; that doubt was resolved in the plaintiff's favour, consistent with the burden-shifting approach in Obel Omuom v Kenya Commercial Bank Ltd.

p. 3
02

Service of the Notification of Sale under Rule 15 of the Auctioneers Rules

Holding

The Notification of Sale was not properly served and the 45-day redemption period had not lapsed before advertisement; the auctioneer did not comply with the Auctioneers Rules.

Reasoning

Rule 15 requires service of the notification of sale on the registered owner or an adult family member, with 45 days to redeem, and proof of service. The notification was blank on date, place and time of service, lacked the owner's signature and the auctioneer's certificate where service was refused. No affidavit from the auctioneer was filed to prove service.

p. 4
03

Spousal consent under Section 79(3) of the Land Act

Holding

The requirement of spousal consent for a charge over a matrimonial home does not apply retrospectively to a charge created before the Land Act came into force.

Reasoning

The charge was created on 2 February 2010, while the Land Act commenced on 2 May 2012. The bank could not be penalized for not obtaining spousal consent when no such requirement existed at the time. The court aligned itself with the reasoning of Mutungi J in Elizabeth Nthenya Wambua v Philip Wambua Masila & 3 Others.

p. 4
04

Entitlement to interlocutory injunction

Holding

The plaintiff established a prima facie case with a probability of success and was entitled to an injunction restraining the sale founded on the defective notices.

Reasoning

Given the defective statutory notice and non-compliance with the Auctioneers Rules, the equitable right of redemption had probably not arisen and the scheduled sale was probably premature. On that material the plaintiff satisfied the test for an interlocutory injunction, though the order was confined to the impugned notices and did not permanently bar recovery.

p. 5

Legal principles established

#
  • The benefit of any defect in a statutory notice must be given to the chargor and not the chargee.
  • Where a chargor alleges non-receipt of the statutory notice, the burden shifts to the chargee to demonstrate prima facie that the notice was served.
  • Service of a statutory notice by registered mail to the last known address is a recognized mode of service.
  • Section 79(3) of the Land Act, 2012 (spousal consent for charges of matrimonial homes) does not apply retrospectively to charges created before 2 May 2012.

Court orders

#
  1. 1.The defendant is barred from proceeding to offer for sale the suit land based on the purported statutory notice of 6 July 2012 or the purported Notification of Sale of 18 June 2013
  2. 2.The plaintiff is not to be saddled with the auctioneer's charges for the sale intended for 13 September 2013 unless the defendant proves at trial that the process leading up to that sale was proper and lawful
  3. 3.If there is default, the defendant is free to start the recovery process afresh and issue the proper notices as required by law

Authorities

#

Legislation

  • Registered Land Act (CAP 300) (now repealed)Section 74(1) and (2); Section 77
  • Land Act, 2011Section 90(2)(b)
  • Land Act, Act No. 6 of 2012Section 79(3)
  • Auctioneers RulesRule 15

Cases cited (2)

  • Obel Omuom v Kenya Commercial Bank Ltd
    Court of Appeal at Kisumu, Civil Appeal No. 148 of 1995 (1996) eKLR
  • Elizabeth Nthenya Wambua vs Philip Wambua Masila & 3 Others
    Nairobi ELC No. 240 of 2012, (2013 eKLR)
Jurisdiction invoked
Original civil jurisdiction of the Environment and Land Court over land matters (statutory power of sale over land parcel Kiplombe/Kiplombe Block 6 (Kutsi)/42)

Key timeline

#

Practical implications

#

Frequently asked questions

#

Cite this brief

#

Cite this brief

Caselaw, "Moses Kibiego Yator v Eco Bank Kenya Limited [2014] KEELC 449 (KLR)", Case Analysis (2014). ELC at Eldoret, application dated 2 September 2013 (suit number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2014/449/eng@2014-03-20

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