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ELCDismissedApplication dated 7/4/17 (suit filed at Thika High Court, transferred for hearing to Milimani)· [2017] KEELC 2868 (KLR)

Kitale Main Millers Limited & 2 others v Co-operative Bank of Kenya Limited & another [2017] KEELC 2868 (KLR)

Environment and Land Court
20 April 2017
KBK. BOR
949 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court refused to stop an auction of land charged for a Kshs 28 million loan because the borrowers denied a loan their own signatures proved they took.

What this practically means

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Executive summary

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The Plaintiffs moved the Environment and Land Court, Milimani Nairobi (the matter having originated at the Thika High Court) by an application dated 7th April 2017 seeking an interlocutory injunction to restrain the sale by public auction of Thika Municipality Block 21/2082, charged to the 1st Defendant to secure a loan of Kshs. 28 million. The Plaintiffs argued that no land control board consent application was made, that the property was matrimonial property, that they never executed the letter of offer or the charge, that statutory notices were not served on them in Kitale, and that the debt belonged to unrelated entities (Wananchi Hardware & Tools and Bim Investment Limited). They also complained that the auction advertisement lacked time, place and date. The 1st Defendant, through its Recoveries Officer Zipporah Wachuka, opposed the application, asserting non-disclosure by the Plaintiffs of the remittance of the loan into their account and their monthly repayments, and producing the executed letter of offer, charge, guarantee and indemnity, the land control board consent, evidence of postage of statutory notices, and the auction advertisement specifying the date, time and venue. The court found the Plaintiffs had duly executed the security documents, that the property was registered in the name of the 1st Plaintiff company and unlikely to be matrimonial property, that consent to charge had been obtained, and that notices were sent to the addresses the Plaintiffs themselves supplied. Discretion was accordingly declined and the injunction was refused, with the file returned to Thika for hearing of the suit.

Key legal issues

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01

Execution of the letter of offer, charge and guarantee

Holding

The court found on the documents that the Plaintiffs duly executed the letter of offer, the charge and the guarantee and indemnity

Reasoning

The court examined the annexed documents, including the letter of offer dated 3/9/2014, the charge dated 23/9/2014 and the guarantee and indemnity executed by the 2nd and 3rd Plaintiffs, and a search confirming the charge to secure Kshs. 28 Million. It rejected the Plaintiffs' claim of ignorance of the loan as inconsistent with the documentary record.

p. 2
02

Whether the suit property is matrimonial property

Holding

The court found the suit property is registered in the name of the 1st Plaintiff company and is unlikely to be matrimonial property

Reasoning

The 1st Defendant produced the 1st Plaintiff's certificate of incorporation and the title showing the company as registered proprietor. The court reasoned that property owned by a company cannot readily be characterised as matrimonial property, undermining that ground of opposition to the sale.

p. 2
03

Land control board consent to charge

Holding

Evidence showed the application fees were paid and consent to charge was granted, and counsel conceded he had annexed the consent rather than the application

Reasoning

Counsel for the 1st Defendant candidly conceded the application for consent was not annexed but produced the payment receipt and a copy of the consent granted to charge the suit property, which satisfied the court that the consent process had been undertaken.

p. 2
04

Service of statutory notices for sale

Holding

The court found notices were sent to the addresses the Plaintiffs gave when executing the letter of offer and guarantee

Reasoning

Copies of the notices were posted to the Plaintiffs at P. O. Box 170-10208 Saba Saba, the address they themselves supplied on 3/9/14, and copies were sent to the 2nd and 3rd Plaintiffs in Kitale. The Plaintiffs' assertion of non-service was therefore rejected.

p. 2

Legal principles established

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  • An applicant for an interlocutory injunction must satisfy the Giella v Cassman Brown threshold and come to court with full and candid disclosure of material facts

Court orders

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  1. 1.The Court declines to grant the orders sought in the application dated 7/4/17
  2. 2.The file to be sent back to Thika for hearing and determination of the suit

Authorities

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Legislation

  • Land Control Act (implied by land control board consent to charge)consent to charge agricultural land

Cases cited (1)

  • Giella V. Cassman Brown & Co. Ltd
    [1973] EA 358
Jurisdiction invoked
Environment and Land Court jurisdiction over the suit property dispute (matter moved from Thika High Court)

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, "Kitale Main Millers Limited & 2 others v Co-operative Bank of Kenya Limited & another [2017] KEELC 2868 (KLR)", Case Analysis (2017). Application dated 7/4/17 (suit filed at Thika High Court, transferred for hearing to Milimani). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/2868/eng@2017-04-20

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