Equity Bank Limited & another v Kinjunje Gardens Limited & 6 others [2017] KEELC 463 (KLR)
The bottom line
#The Environment and Land Court refused to stop Co-op Bank from selling the land because its charge was registered first and takes priority over later charges.
What this practically means
#Executive summary
#Key legal issues
#Prima facie case for temporary injunction
Equity and Commercial Bank failed to demonstrate a prima facie case with probability of success against Coop Bank because Coop Bank's charge was the first in time, registered in 2010 against a genuine title issued in 1997, with no evidence of discharge or consent to subsequent transfers
The court traced the registration history: Coop Bank's charge was registered in September 2010 when Patrick Njuguna was the registered owner under a 1997 title. The titles against which Commercial Bank's and Equity's charges were registered did not exist at that time. Coop Bank never consented to any transfer or further charging, and its charge remains undischarged. The plaintiffs' rights, if any, are secondary to Coop Bank's, so no protected right was threatened.
Alleged parallel fraudulent title in favour of Coop Bank
The allegation that Coop Bank's charge was registered on a parallel fraudulent title was far-fetched; any fraudulent parallel titles were those created later in favour of Wardpa and Kinjunje
Coop Bank's charge was registered in 2010 before the Wardpa (2012) and Kinjunje (2014) titles came into existence, so those titles could not be parallel to it. There was no evidence that Coop Bank was involved in any fraud or that its transaction with Patrick Njuguna was affected by fraud. The court accepted the likelihood of fraud by the Kangethe family entities in creating multiple titles, but that did not implicate Coop Bank's security.
Irreparable injury and adequacy of damages
The plaintiffs failed the irreparable injury limb because the possible loss is quantifiable and compensable in damages, with no evidence Coop Bank could not pay
The court found the amounts owed to Equity and Commercial Bank are ascertainable debts and any loss from sale of the security would be monetary in nature. There was no evidence that Coop Bank would be unable to pay damages if at trial it were found to have no right to sell. The balance of convenience limb therefore did not arise for determination in the plaintiffs' favour.
Legal principles established
#- Interests appearing in the register have priority according to the order in which the instruments leading to registration were presented; the first charge in time prevails over subsequent charges
- Where two titles are issued over the same parcel, the first in time prevails and retains its sanctity; the second title can be challenged
Court orders
#- 1.The Notice of Motion dated 3rd August, 2016 by Equity Bank Limited is dismissed
- 2.The Notice of Motion dated 4th August, 2016 by Commercial Bank of Africa Limited is dismissed
- 3.The costs of the two applications shall be in the cause
- Jurisdiction invoked
- Original jurisdiction of the Environment and Land Court under the Environment and Land Court Act over disputes relating to title and charges over land
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Equity Bank Limited & another v Kinjunje Gardens Limited & 6 others [2017] KEELC 463 (KLR)", Case Analysis (2017). ELC No. 941 of 2016 (Consolidated with ELC No. 947 of 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/463/eng@2017-12-19
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.