Joyce Nancy Kabiru v Faulu Micro-Finance Bank Limited & 2 others [2017] KEELC 2008 (KLR)
The bottom line
#Once a bank lawfully auctions your charged land, Kenyan courts will not reverse the sale—you must seek damages instead, so act before the auction.
What this practically means
#Executive summary
#Key legal issues
#Whether an injunction could issue to restrain a completed statutory power of sale
No - the sale had already occurred, the equity of redemption was extinguished and the plaintiff's only remedy lies in damages
The court found that by the time it directed the deposit of the outstanding sum, the suit land had already been sold by public auction to the 3rd defendant a month earlier. Once the chargee lawfully exercised the power of sale, the equity of redemption was extinguished. Allegations of fraud, irregularity or undervalue cannot be determined on affidavits at the interlocutory stage and must await trial; the remedy for an improper sale is damages under Section 99(4) of the Land Act.
Whether the plaintiff established a prima facie case under the Giella principles
No - the default and the sum due were not in dispute, and damages would adequately compensate her
Applying Giella v Cassman Brown, the plaintiff failed the first limb: her default in repaying the loan and the amount owing were undisputed. Her own valuation placed the land at Ksh. 7,500,000, showing damages would be an adequate remedy, defeating the second limb as well. Her alternative prayer to sell the land privately to settle the loan was rendered academic by the completed sale.
Legal principles established
#- A mortgagee will be restrained from exercising the power of sale only where the mortgagor pays the amount claimed into court, unless the claim is excessive on the terms of the mortgage
- A person prejudiced by an unauthorized, improper or irregular exercise of the power of sale has a remedy in damages against the person exercising that power
Court orders
#- 1.The plaintiff's Notice of Motion dated 2nd November 2016 is dismissed with costs to the 1st and 3rd defendants
- 2.The sum of Ksh. 1,065,092.00 deposited by the plaintiff on 17th November 2016 vide receipt No. B 450404 be released to her forthwith
- Jurisdiction invoked
- Order 40 Rules 1 and 2 of the Civil Procedure Rules (injunctive relief over charged land)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Joyce Nancy Kabiru v Faulu Micro-Finance Bank Limited & 2 others [2017] KEELC 2008 (KLR)", Case Analysis (2017). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/2008/eng@2017-06-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.