Skip to content
AI-generated case briefs sourced from Kenya Law · Not legal advice
Caselaw
AI-generated case brief
Case Brief · caselaw.co.ke
ELCDismissedCase No 560 of 2017· [2017] KEELC 1706 (KLR)

New Age Developers & Construction Co. Ltd v Jamii Bora Bank Limited [2017] KEELC 1706 (KLR)

Environment and Land Court
19 September 2017
COCHRISTINE OCHIENG
2,801 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

#

A Kenyan land court allowed a bank to proceed selling a borrower's land because the borrower admitted owing money and received proper notices.

What this practically means

#

Executive summary

#
This was a ruling on the Plaintiff's Notice of Motion dated 24th March 2017 seeking temporary injunction orders to restrain the Defendant bank from selling land parcel KAJIADO/KAPUTIEI NORTH/908 in exercise of its statutory power of sale. The Plaintiff, a company that had borrowed Kshs. 95,000,000 secured by a Charge over the suit property, argued that the Land Control Board consent underlying the Charge was fraudulent (alleging no Board meeting was held on 2nd September 2015), that statutory notices under Section 90 of the Land Act and Section 56(2) of the Land Registration Act were not served, that no 45-day auctioneer's notification was served, and that the interest rates contravened Section 33B of the Banking Act and the Consumer Protection Act. The Defendant countered that all statutory notices were served with certificates of posting, that the Land Control Board consent was authentic per a letter from the Assistant County Commissioner Isinya, that the Insolvency Petition was withdrawn, and that the Plaintiff admitted an outstanding debt of Kshs. 112,217,848.58. Applying the Giella v Cassman Brown principles, Christine Ochieng J found no prima facie case: the Charge was duly registered, the consent was authentic, notices were properly served, the Plaintiff accepted the interest terms contractually, and having admitted indebtedness, the Defendant could not be restrained from realizing the security. The court invoked the maxim that he who comes to equity must come with clean hands. The Notice of Motion was dismissed with costs on 19th September 2017.

Key legal issues

#
01

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

Holding

No prima facie case established; the Charge was duly registered and the Land Control Board consent was authentic

Reasoning

The Charge was registered at the Kajiado Land Registry on 8th October 2015 and the Plaintiff admitted receiving the loan. A letter by the Assistant County Commissioner Isinya confirmed the Land Control Board sat on 2nd September 2015 and that the consent was authentic, while the letter purporting to confirm otherwise was a forgery. The Plaintiff signed the Letters of Offer and gave the land as security, undermining its claim that the Charge was a nullity.

p. 4
02

Whether the statutory notices under Section 90 of the Land Act and Section 96(2) were served

Holding

The Plaintiff was duly served with the requisite statutory notices

Reasoning

The Defendant produced notices and a certificate of posting addressed to the Plaintiff's last known address, which the Plaintiff did not dispute. A process server's sworn affidavit confirmed service on the directors' secretary. The 45-day auctioneers' notification of sale was also issued pursuant to the Auctioneers Rules.

p. 4
03

Whether the interest rates levied contravened Section 33B of the Banking Act and the Consumer Protection Act

Holding

No; the Plaintiff accepted the agreed interest rates in the Letters of Offer and variation is permitted under Section 84(1) of the Land Act

Reasoning

The Plaintiff signed two Letters of Offer accepting the interest terms and cannot now resile from them. Section 84(1) of the Land Act permits variation of a variable interest rate by written notice. Section 33B of the Banking Act does not apply retrospectively to facilities advanced before 14th September 2016.

p. 4
04

Whether the Defendant can be restrained from exercising its statutory power of sale given the Plaintiff's admitted indebtedness

Holding

No; a chargee cannot be restrained where part of the debt is admitted

Reasoning

The Plaintiff admitted indebtedness and sought time to repay by selling subdivided portions without specifying amounts or timelines. Relying on Labelle International Ltd v Fidelity Commercial Bank, where part of the amount claimed is admitted or proved due, a chargee cannot be restrained by injunction. The court cannot be made a party to the contractual obligation between the parties.

p. 4

Legal principles established

#
  • When part of the amount claimed is admitted or proved to be due, a chargee cannot be restrained by an injunction

Court orders

#
  1. 1.Dismissal of the Plaintiff's Notice of Motion dated 24th March, 2017 with costs

Authorities

#

Legislation

  • Civil Procedure Act / Civil Procedure RulesSections 1A, 1B, 3A; Order 40 Rule 2(1); Order 51 Rule 1
  • Banking ActSection 33B
  • Consumer Protection ActSection 13(2)
  • Auctioneers RulesRules 15(c), 15(d), 15
  • Land Registration ActSection 56(2)
  • Land ActSections 79(5), 84(1), 90(1), 90(3), 96(1), 96(2), 97(2)
  • Insolvency ActNot specified

Cases cited (2)

  • Giella vs. Cassman Brown & Co. Ltd
    (1973) E.A 358
  • Labelle International Ltd. and Another – vs – Fidelity Commercial Bank & Another
    Civil Case No. 786 of 2002
Jurisdiction invoked
Sections 1A, 1B and 3A of the Civil Procedure Act, Order 40 Rule 2(1) and Order 51 Rule 1 of the Civil Procedure Rules 2010, Section 33B of the Banking Act and Section 13 of the Consumer Protection Act

Key timeline

#

Practical implications

#

Frequently asked questions

#

Later judgments citing this (4)

#

Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

#

Cite this brief

Caselaw, "New Age Developers & Construction Co. Ltd v Jamii Bora Bank Limited [2017] KEELC 1706 (KLR)", Case Analysis (2017). Case No 560 of 2017. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/1706/eng@2017-09-19

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