William Kimutai Kandie v Consolidated Bank of Kenya Ltd & another [2016] KEELC 989 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the plaintiff established a prima facie case with a probability of success
Yes - the in-duplum principle and defective service on the agent (who was not yet the plaintiff's attorney at the time) made the demand of Kshs.66,673,424.60 questionable
The charge limited the plaintiff's security to Kshs.13,000,000 plus interest at 19%. Section 44A(2) of the Banking Act caps recoverable interest on a non-performing loan at the principal owing when it became non-performing. Further, the notification of sale and redemption notice were sent to John Kamar on 8th February 2014, yet he only became the plaintiff's attorney on 13th January 2015, so service on the agent was invalid.
Whether service of the statutory notice was valid despite the differing postal addresses
The differing postal addresses (817-30100 and 6748/6784-30100) were used interchangeably by the plaintiff and cannot now be disowned
The charge gave the address as 817-30100 Eldoret and the guarantee gave 6748-30100 Eldoret. The plaintiff executed both documents, so he cannot complain that either address is not his. The court declined to invalidate the notice on that technicality.
Whether damages would be an adequate remedy
No - the loss was quantifiable, so irreparable loss was not established, but the balance of convenience favoured maintaining the status quo
The plaintiff was in possession of developed property (maisonette, servants' quarters, poultry house); the court was inclined to preserve the status quo pending trial even though the irreparable-loss limb failed.
Whether the in-duplum principle under section 44A of the Banking Act applies to a guarantee
The allegation is arguable because 'loan' under section 44A(5)(b) includes a financial guarantee, and the guarantee was limited to Kshs.13,000,000
Subsection 2 was to be read with subsection 5(b), which defines 'loan' to include a financial guarantee. The plaintiff's exposure was a financial guarantee of Kshs.13,000,000, so the Kshs.66,673,424.60 demanded was questionable.
Legal principles established
#- Execution of a charge by a chargor creates a chargor/chargee relationship entitling the chargee to realise the security in default, irrespective of the guarantee contract
- A dispute as to the amount due does not automatically disentitle a plaintiff to injunctive relief where the in-duplum principle is engaged
Court orders
#- 1.An interlocutory injunction issued against the defendants jointly and severally restraining them from selling, advertising, transferring or in whatsoever manner dealing with the land parcel known as ELDORET MUNICIPALITY/BLOCK 14/255 pending the hearing and determination of the suit
- 2.Costs in the cause
- Jurisdiction invoked
- Original civil jurisdiction over land disputes and applications for interlocutory injunctions relating to land
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "William Kimutai Kandie v Consolidated Bank of Kenya Ltd & another [2016] KEELC 989 (KLR)", Case Analysis (2016). Not stated in judgment (Eldoret Environment and Land Court suit). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2016/989/eng@2016-01-22
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.