Kenya Farmers Association Ltd v Barlclays Bank of Kenya Ltd & another [2017] KEELC 1669 (KLR)
The bottom line
#A Nakuru court blocked KCB from auctioning land worth billions until it proves how a Kshs. 77 million loan grew to Kshs. 2.2 billion.
What this practically means
#Executive summary
#Key legal issues
#Validity of the charge instrument under the Land Act, 2012 and the Registered Land Act
The Land Act, 2012 cannot govern the form of a charge executed in 1995; however, a triable issue exists on whether the charge was properly attested under Section 110 of the Registered Land Act
The court held it was futile to demand conformity with the Land Act, 2012 for a charge executed in 1995 before that statute existed. The applicable law on form was the Registered Land Act. On attestation, the copies annexed did not clearly show who attested the charge and whether that person was qualified to do so; the applicant had raised doubt sufficient to constitute an issue to be tried, to be resolved when the original document is availed.
Whether the applicant has fully repaid the loan
A legitimate question to be tried exists as to whether the applicant has fully paid its loan; it is unclear how a Kshs. 77.2 million loan ballooned to over Kshs. 2.2 billion
The court examined the bank's statements and found the escalation from Kshs. 77.2 million to Kshs. 2,203,291,403.50 despite significant payments required explanation at full hearing. The in duplum rule could be argued, but there was so much doubt about what was properly owed that it would be unfair to allow sale of the suit property before that determination.
Whether the requisite statutory notices were issued and served
The applicant made out a prima facie case that no statutory notice was issued; the statutory notice dated 3 October 2007 was addressed to a wrong address and there was no proof of dispatch
The notice of 3 October 2007 bore P.O Box 7236-20100, an address the applicant denied and which differed from the P.O Box 35 Nakuru in the charge instrument and all other correspondence. No certificate of postage proved dispatch. Since the power of sale cannot arise until a statutory notice is served, the bank must prove proper service at the hearing.
Whether the claim is time barred
The court declined to determine the limitation issue as the applicant had already established a prima facie case on other grounds
Having found a prima facie case with a probability of success based on doubts about service of the statutory notice and the actual debt owed, the judge found it unnecessary to address whether the debt was time barred or other issues raised by the parties.
Legal principles established
#- The power of sale by a chargee cannot arise until a statutory notice is served upon the chargor
- Where it is doubtful whether any money is owing at all on a charge, an injunction ought to issue to restrain sale
- A statute cannot be applied to require conformity of an instrument executed before its enactment
Court orders
#- 1.Order of injunction restraining the respondents from offering the suit property for sale in exercise of the statutory power of sale until this suit is heard and determined
- 2.The applicant to have the costs of the application
- Jurisdiction invoked
- Original civil jurisdiction of the Environment and Land Court over land parcel Nakuru Municipality Block 9/33
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Kenya Farmers Association Ltd v Barlclays Bank of Kenya Ltd & another [2017] KEELC 1669 (KLR)", Case Analysis (2017). Not stated in the judgment (Environment and Land Court, Nakuru). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1669/eng@2017-09-27
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.