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ELCOtherMigori High Court No. HCC 4/2017 (transferred to the Environment and Land Court)· [2017] KEELC 280 (KLR)

Isaiah Juma & another v Co-operative Bank Ltd [2017] KEELC 280 (KLR)

Environment and Land Court of Kenya
13 June 2017
GOG. M. A. Ongondo
870 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan land court temporarily froze a bank's attempt to sell charged land, ordering preservation and status quo instead of a full injunction.

What this practically means

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Executive summary

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This interlocutory ruling by the Environment and Land Court at Migori (Ongondo J) determined a Notice of Motion dated 20th January 2017 by the Plaintiffs, borrowers who had obtained credit facilities from the Defendant bank (Kshs 5,760,000 by a term loan granted on 16/8/14 and Kshs 48,300,000 granted on 19th February 2015), secured by legal charges over suit parcels including Suna East/Wasweta 1/1583 and 13561. Following default, the Defendant issued statutory notices of sale. On 20/1/2017 Mrima J had granted a 14-day interim injunction, and the suit, originally Migori High Court No. HCC 4/2017, was transferred to the ELC. The Plaintiffs sought an interim injunction, invoking Order 51 Rule 1, Order 40 Rules 1 and 2, Sections 1A, 1B, 3, 3A and 63E of the Civil Procedure Act and Article 159 of the Constitution. The Defendant opposed, contending the Plaintiffs defaulted and due statutory notices were issued, and urged dismissal of the motion and the entire suit with costs. Both counsel filed written submissions, the Plaintiff relying principally on Giella v Cassman Brown. The court noted there was no dispute that credit facilities were obtained and the suit land charged as security, and that the requisite statutory notices under Sections 90 and 96(2) of the Land Act had been served. Rather than grant or refuse the injunction outright, the court directed that the parties maintain the status quo obtained, that the suit land be preserved, and that no step be taken to enforce the charge pending the hearing and determination of the suit. The parties were to comply with Order 11 within 30 days, the matter was fixed for 25/7/2017 for hearing of the main suit, and costs of the motion were awarded to be in the cause.

Key legal issues

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01

Whether the Plaintiffs were entitled to a temporary injunction restraining the Defendant from exercising statutory power of sale over the charged suit parcels

Holding

The court did not grant the injunction sought; instead it directed preservation of the suit parcels and maintenance of the status quo, with no step to enforce the charge, pending the hearing and determination of the suit on merit

Reasoning

The court accepted that the Plaintiffs obtained credit facilities secured by charges over the suit land and defaulted in repayment, triggering statutory notices under the Land Act. Rather than determine the Giella conditions conclusively, the court invoked its powers under Section 13 of the ELC Act to preserve the suit parcels and maintain the status quo in lieu of the injunction, deferring the substantive dispute to the full hearing of the main suit.

p. 2
02

Compliance with the statutory notices for sale under the Land Act

Holding

The Plaintiffs had been served with the requisite statutory notice of sale under Section 96(2) of the Land Act, and a further notice of not less than 140 days is required before sale

Reasoning

The court recorded that the Plaintiffs had been served with the three months' notice required under Section 96(2) of the Land Act, and that the provisions of Sections 90(1), 90(2) and 90(3) govern the particulars and remedies relating to statutory notices, relying on the Fast security case.

p. 2

Legal principles established

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  • Where an injunction is not appropriate, the court may order preservation of charged land and maintenance of status quo pending full hearing
  • A chargor served with the requisite statutory notice of sale is entitled to a further notice of not less than 140 days before exercise of the chargor's statutory power of sale

Court orders

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  1. 1.That the parties maintain the status quo obtained and the suit land is preserved
  2. 2.That no step be taken to enforce the charge pending the hearing and determination of the suit
  3. 3.That the parties comply with Order 11 Civil Procedure Rules 2010 within the next 30 days
  4. 4.That the matter be mentioned on 25/7/2017 for hearing of the main suit
  5. 5.That costs of the Notice of Motion dated 20/1/2017 be in the cause

Authorities

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Legislation

  • Civil Procedure Act Cap 21 Laws of KenyaSections 1A and 1B, 3, 3A and 63E
  • Constitution of Kenya, 2010Article 159
  • Civil Procedure Rules, 2010Order 51 Rules 1 and 6; Order 40 Rules 1 and 2; Order 11
  • Land ActSections 90(1), 90(2), 90(3) and 96(2)
  • Environment and Land Court ActSection 13

Cases cited (8)

  • Giella Vs. Cassman Brown
    (1973) E.A. 358
  • Benjamin Kamuruga Vs. Stanbic Bank Ltd
    (2014) eKLR
  • Mirau Ltd Vs. First American Bank of Kenya Ltd and 2 others
    (2003) eKLR
  • Jopa Villas LLC Vs. Overseas Private Investment and 2 others
    (2009) eKLR
  • Samuel Kiprop Vs. Ubadia Kipleting Kogei and others
    (2016) eKLR
  • David Ngungi Ngaari Vs. KCB Ltd
    (2015) eKLR
  • Fast security case (Supra)
  • Musa Angira Angira Vs. Industrial and Commercial Development Corperation
    (2015) eKLR
Jurisdiction invoked
Section 13 Environment and Land Court Act, 2015 (2012)

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, "Isaiah Juma & another v Co-operative Bank Ltd [2017] KEELC 280 (KLR)", Case Analysis (2017). Migori High Court No. HCC 4/2017 (transferred to the Environment and Land Court). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/280/eng@2017-06-13

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