John Kipkugut Kurgat & another v Trans-National Bank (K) Limited & another [2017] KEELC 448 (KLR)
The bottom line
#A Kenyan court stopped KCB from selling charged land because the bank served the wrong notice — lenders must strictly follow the Land Act's notice rules.
What this practically means
#Executive summary
#Key legal issues
#Whether a proper statutory notice under section 90 of the Land Act was issued
No valid statutory notice under section 90 was served; the purported notice was a section 96 notice to sell and gave 40 days instead of the required 90, so the plaintiffs established a prima facie case
The court examined the formal demand dated 12 November 2015 and the notice annexed as WR4. The demand did not fit the description of a notice of intention to exercise the statutory power of sale, and WR4 was a notice to sell under section 96 rather than the statutory notice contemplated by section 90. It also gave 40 days instead of 90 days. Although the process server, Maina Mwangi, testified credibly and the court found the notification of sale was served, service of the statutory notice itself was not proved, and that notice is the cornerstone of the chargee's action.
Whether the plaintiffs would suffer irreparable injury
No - the charged properties, having been offered as security, became commodities for sale whose value can be ascertained and damages assessed
The court held that irreparable injury must be incapable of adequate compensation in damages. The defendant bank had been collecting rent since 2005, and the properties charged as security are capable of valuation. The plaintiffs could therefore be compensated in damages at the conclusion of the suit, provided the matter is fast-tracked for hearing.
Balance of convenience
The balance of convenience lies in favour of the plaintiffs, who are in possession, and recovery must commence afresh in compliance with the Land Act
The court agreed with the plaintiffs that they have been in possession of the suit land for many years and that the dispute should be resolved before the property is interfered with. Declining the injunction would allow the defendants to advertise and alienate the land to the plaintiffs' detriment. However, since the 2nd plaintiff owes the debt, the chargee must restart the recovery process in accordance with sections 90 and 96 of the Land Act, 2012.
Legal principles established
#- A valid statutory notice under section 90 of the Land Act is the cornerstone of the exercise of the chargee's statutory power of sale; without it the chargee cannot lawfully sell
- A notice under section 96 of the Land Act cannot be construed as a statutory notice under section 90
Court orders
#- 1.Temporary injunction restraining the defendants from selling, transferring or interfering with the plaintiffs' proprietary interests in NANDI/KILIBWONI/605 pending hearing and determination of the suit
- 2.The process of recovery of the debt to be carried out afresh in accordance with sections 90 and 96 of the Land Act, 2012
- 3.Costs of the application to the plaintiffs
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over land parcel NANDI/KILIBWONI/605
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "John Kipkugut Kurgat & another v Trans-National Bank (K) Limited & another [2017] KEELC 448 (KLR)", Case Analysis (2017). ELC Case (Eldoret) - application dated 28.11.2016 (suit number not stated in judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/448/eng@2017-11-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.