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ELCDismissedNot stated in the extract (plaint dated 14th February 2017)· [2017] KEELC 1353 (KLR)

Lawrence Ndirangu Wahome v Kenya Industrial Estates Ltd & another [2017] KEELC 1353 (KLR)

High Court of Kenya
17 October 2017
LWL N Waithaka
1,978 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~8 min to read original · ~4 min brief

The bottom line

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A Kenyan guarantor who offers his land as loan security could not stop the auction because proper statutory notices were served and any loss is compensable by damages.

What this practically means

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Executive summary

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By a plaint dated 14th February 2017, Lawrence Ndirangu Wahome sued Kenya Industrial Estates Limited and ViewLine Auctioneers seeking to permanently restrain the sale of land known as Mweiga Block III/308, and simultaneously sought a temporary injunction on the ground that no mandatory statutory notice had been issued to him and that sale would render him homeless. The plaintiff deponed that in 2014 he provided his title to Dedan Ngunjiri Ndiritu as security for a loan of Kshs.490,000 from the 1st defendant, and that he only learned of the auction through a Daily Nation advertisement of 30th January 2017. The 1st defendant's regional manager swore a replying affidavit annexing the charge and deed of guarantee, demand letters, statutory notices, delivery book, redemption and notification of sale, affidavits of service and a valuation report, asserting the applicant was personally served and by registered post, and that the outstanding balance was Kshs.356,899. The court, applying the Giella v Cassman Brown principles, found the documentary evidence uncontroverted, since the applicant filed no further affidavit despite being given an opportunity, and held that statutory notices were duly served. Following Nyanza Fish Processors Ltd v Barclays Bank of Kenya, the court held that a guarantor who offered his property as security cannot claim irreparable loss if the property is sold, such loss being compensable by damages. The balance of convenience tilted towards the chargee, whose right of realization had accrued. The application was dismissed with costs to the defendants.

Key legal issues

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01

Whether the applicant established a prima facie case with probability of success

Holding

No prima facie case was established; the evidence showed the principal debtor defaulted and statutory notices were duly served on the applicant, who did not controvert the documentary evidence.

Reasoning

The replying affidavit annexed the charge, deed of guarantee, demand letters, statutory notices, delivery book, affidavits of service, redemption and notification of sale. The applicant, given an opportunity, filed no further affidavit to controvert this documentary evidence. The court found service of statutory notices both personally and by registered mail was proved and the chargee complied with the law.

p. 3
02

Whether the applicant would suffer irreparable loss not compensable by damages

Holding

Any loss is compensable by damages since the applicant voluntarily offered the property as security for the principal debtor's loan.

Reasoning

Following Nyanza Fish Processors Ltd v Barclays Bank of Kenya, property offered as security is a commercial asset whose value is ascertainable. To hold otherwise would defeat the very object for which the security was given. The court held the loss, if any, is compensable by way of damages.

p. 4
03

Where the balance of convenience lies

Holding

The balance of convenience tilts in favour of the 1st defendant, whose right to realize the charge had accrued given the principal debtor's continuing default.

Reasoning

There was no evidence that the principal debtor was meeting his obligations under the charge document. The chargee's right to realize the security had accrued under the charge instrument, and continuing default would escalate the debt to the detriment of the chargee.

p. 4

Legal principles established

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  • A guarantor who offers his property as security cannot claim irreparable loss if the property is sold to meet the purpose for which the security was given; such loss is compensable by damages.
  • A chargee may enforce its rights under a charge directly against the guarantor provided circumstances warranting exercise of that right have arisen.

Court orders

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  1. 1.The applicant's application for a temporary injunction is dismissed
  2. 2.Costs of the application to the defendants/respondents

Authorities

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Cases cited (4)

  • Giella v Cassman Brown & Company Limited
    (1973) E.A 358
  • Patrick Karimi Wairagu t/a Thigi General Stores vs. Barclays Bank of Kenya Ltd & Another
    Nakuru HCCC No. 93 of 2011
  • Nyanza Fish Processors Ltd. v Barclays Bank of Kenya
    Civil Appeal No. 114 of 2009
  • Joseph Okoth Wando v National Bank of Kenya
    Civil Appeal No. 77 of 2004
Jurisdiction invoked
Inherent jurisdiction of the High Court over the suit and the interlocutory application (not expressly stated in the judgment)

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, "Lawrence Ndirangu Wahome v Kenya Industrial Estates Ltd & another [2017] KEELC 1353 (KLR)", Case Analysis (2017). Not stated in the extract (plaint dated 14th February 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1353/eng@2017-10-17

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