Angwenyi Samuel Aunga & 2 others v I & M Bank [2015] KEELC 111 (KLR)
The bottom line
#A Kenyan court allowed a bank to proceed with auctioning a borrower's land because statutory notices sent to the borrower's old address counted as valid service.
What this practically means
#Executive summary
#Key legal issues
#Validity of service of statutory notices of sale
The statutory notices were validly served by registered post to the Plaintiffs' last known postal address; the closure of the post office box was not communicated to the Defendant
The notices under Sections 90(1) and 96(3)(h) of the Land Act and 56(2) of the Land Registration Act were sent by registered post to the address in the Letter of Offer, with Certificates of Postage. The Plaintiffs knew their box was closed but gave no evidence they informed the Defendant. Service through the last known address is the general rule, and notifying any change is the borrower's duty.
Compliance with Rule 15 of the Auctioneer's Rules on service of the Notification of Sale
Service was properly effected by personal service on the 2nd Plaintiff, an adult member of the registered proprietor, and by registered post, with the auctioneer swearing an affidavit detailing service
Rule 15 requires the auctioneer to prepare a Notification of Sale indicating the value of the property and to serve it on the registered owner or an adult family member, giving a 45-day redemption notice. The Notification of Sale dated 4th September 2014 was in the prescribed form, and Joseph Mungai Gikonyo swore an affidavit detailing personal service at Our Lady of Mercy Secondary School, Shauri Moyo and service by registered post.
Alleged illegal interest rates under Section 44A of the Banking Act
The ground was abandoned; no evidence or submissions were tendered to show contravention of Section 44A
Although the Plaintiffs pleaded that the Defendant was computing interest at high rates contrary to Section 39 of the Central Bank of Kenya Act, no evidence was tendered or submissions made on the issue. Section 44A of the Banking Act limits recoverable interest on defaulted loans, but the Plaintiffs made no attempt to demonstrate a contravention.
Alleged undervaluation of the charged property contrary to Section 97 of the Land Act
The undervaluation ground failed; a parallel valuation report with higher figures is insufficient to prove undervaluation
Section 97(2) of the Land Act obliges a chargee to obtain a forced sale valuation before exercising the right of sale. Daytons Valuers placed market value at Kshs 22 Million; Tuliflocks placed it at Kshs 32.5 Million. Following Gikonyo J. in Olkasasi Limited v Equity Bank Limited, a conflicting valuation must be dislodged on real items, terms and legal parameters acceptable in the valuation profession, which the Plaintiffs did not do.
Legal principles established
#- Service of a statutory notice by registered mail to the chargor's last known address is valid; the burden is on the borrower to notify the lender of any change of address
- A party cannot establish undervaluation merely by producing a parallel valuation report with higher figures; the bank's valuation must be dislodged on real, professional parameters
Court orders
#- 1.The Plaintiffs' application dated 13th February 2015 seeking confirmation of the interim injunction is dismissed with costs to the Defendant
- 2.The Defendant's Notice of Motion dated 16th March 2015 is allowed in terms of prayer Nos. 2, 3 and 5 (discharge/setting aside of the interim injunction orders of 17th February 2015 and payment of auctioneer's costs)
- 3.Costs to the Defendant
- Jurisdiction invoked
- Not expressly stated; original civil jurisdiction over land charge matters
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (1)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Gitimu James Gathu & 2 Others v. Defendant (Chargee Bank, unnamed in judgment)[2017] KEHC 10005 (KLR)12 Sept 2017
Cite this brief
#Cite this brief
Caselaw, "Angwenyi Samuel Aunga & 2 others v I & M Bank [2015] KEELC 111 (KLR)", Case Analysis (2015). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2015/111/eng@2015-07-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.