Selian Holdings Company Limited v NIC Bank Limited (Environment & Land Case 445 of 2017) [2017] KEELC 1121 (KLR)
The bottom line
#The Environment and Land Court refused to stop Jamii Bora Bank from selling land securing a defaulted Kshs.101 million loan because the bank followed the law.
What this practically means
#Executive summary
#Key legal issues
#Whether the Applicant established a prima facie case with probability of success
No. The Applicant defaulted on the loan, the statutory notices under Sections 90(1) and 96(2) of the Land Act were validly issued, and the Applicant's rights were not infringed.
The Court found the Plaintiff took a loan of Kshs.101,000,000/= secured by a charge over the suit properties and defaulted in repayment. A 90-day statutory notice was issued on 7th September 2016 and, the arrears remaining unpaid, a 40-day notice to sell followed on 16th December 2016. The meeting of 25th November 2016 did not legally prevent the statutory notices from running because the Plaintiff neither paid the arrears nor made an acceptable payment proposal. The Defendant therefore acted within its statutory rights and the Applicant failed to show any infringement of its rights.
Whether the Applicant would suffer irreparable loss not compensable by damages
No. The charged properties were willingly offered as security and became commodities for sale upon default, and Section 99(4) of the Land Act provides a remedy in damages for unauthorized, improper or irregular exercise of the power of sale.
The Court reasoned that the Applicant knew when it charged the three parcels of land that they could be sold on default. The Defendant's remedy of sale is provided by Section 90(3) of the Land Act, and any prejudice from an unauthorized or irregular exercise of the power of sale is compensable in damages under Section 99(4). Relying on Moses Nganye Kahindo v Agricultural Finance Corporation, the Court held it does not lie in the mouth of a chargor to claim irreparable injury where the lender realizes the security.
Whether the balance of convenience favoured the grant of the injunction
The Court declined to decide the balance of convenience, having found against the Applicant on the first two limbs.
Having found that the Applicant failed to establish a prima facie case and failed to demonstrate irreparable injury not compensable by damages, the Court found itself not in doubt and therefore did not determine the third Giella limb of balance of convenience.
Legal principles established
#- Where a chargee has validly served statutory notices under Sections 90 and 96 of the Land Act following a chargor's default, an injunction will not issue to restrain exercise of the statutory power of sale
- A chargor who offers property as security cannot claim irreparable injury not compensable in damages when the lender realizes the security upon default
- An equitable remedy such as an injunction cannot be granted to a party whose conduct demonstrates it is undeserving of such relief
Court orders
#- 1.The Notice of Motion dated 13th April 2017 is dismissed entirely with costs to the Defendant/Respondent
- Jurisdiction invoked
- Sections 1A, 1B, 3A and 63(c),(e) of the Civil Procedure Act; Order 40 Rules 1 and 4 and Order 51 Rule 1 of the Civil Procedure Rules 2010; Section 103 of the Land Act, 2012
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Selian Holdings Company Limited v NIC Bank Limited (Environment & Land Case 445 of 2017) [2017] KEELC 1121 (KLR)", Case Analysis (2017). Civil Suit No. 8 of 2017 (O.S.). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1121/eng@2017-11-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.