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ELCPartially AllowedEldoret High Court Civil Case (Notice of Motion dated 9th February 2017)· [2017] KEELC 3388 (KLR)

Bonface Renja Erambo t/a Westport Motors v Commercial Bank of Africa & another [2017] KEELC 3388 (KLR)

High Court of Kenya
16 March 2017
MOM.A. ODENY
1,400 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 temporarily stopped KCB from selling a borrower's land over a disputed loan, but refused to force the bank to restructure repayments.

What this practically means

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Executive summary

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The plaintiff, Boniface Renja Erambo, moved the High Court at Eldoret by Notice of Motion dated 9th February 2017 seeking interim and injunctive orders restraining the 1st defendant from advertising for sale, auctioning, selling, alienating or interfering with parcel ELDORET MUNICIPALITY/BLOCK 21 (KING'ONG'O)/1753, and in the alternative an order restructuring his loan repayment. The application arose from a loan facility secured by a legal charge over the suit property. The plaintiff's case was that, after financial difficulties in 2015, he arranged with the 1st defendant's consent for the 2nd defendant to take over the outstanding loan with a facility of Kshs 20,000,000, but the 1st defendant mid-stream declined to honour professional undertakings and invoked its statutory power of sale. The 1st defendant did not respond to the application; the 2nd defendant asked to be excused as it did not concern them. Applying the traditional Giella-style principles (prima facie case, adequacy of damages, balance of convenience) tempered by Article 159 of the Constitution and the overriding objective, Odeny J held that the plaintiff had established a prima facie case with probability of success given the uncontroverted evidence of willingness to repay and the debt-takeover arrangements, and that the balance of convenience favoured him. The court stressed that an undefended injunction application is not automatically granted. The application succeeded only as to the injunctive relief; the prayer to restructure the loan was denied at the interim stage. Costs were awarded in the cause, and parties were directed to comply with pre-trial procedures within 30 days.

Key legal issues

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01

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

Holding

The plaintiff established a prima facie case with probability of success

Reasoning

The plaintiff admitted obtaining a loan facility and being in arrears, but showed willingness to repay and had negotiated a takeover of the debt by the 2nd defendant with the 1st defendant's consent. The 1st defendant, though served, filed nothing to controvert these assertions. In the absence of contrary evidence, the court found a prima facie case with probability of success.

p. 3
02

Whether the balance of convenience tilts in favour of the plaintiff

Holding

If the court was in doubt, the balance of convenience would tilt in favour of the plaintiff

Reasoning

The court considered the uncontroverted evidence including the loan takeover communications and found that the balance of convenience favoured the plaintiff on the material presented.

p. 3

Legal principles established

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  • An application for injunction that is undefended does not automatically succeed; the court must still examine the pleadings and supporting documentation.
  • The grant of an interlocutory injunction does not pre-empt the outcome of the main suit; it is for preservation of the suit property.

Court orders

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  1. 1.An interim injunction restraining the 1st defendant from advertising for sale, auctioning, selling, disposing off, transferring ownership, alienating and/or interfering with the parcel of land described as ELDORET MUNICIPALITY/BLOCK 21 (KING'ONG'O)/1753 and/or the permanent structures therein pending the hearing and determination of the suit
  2. 2.The prayer for restructuring the repayment of the outstanding loan is denied
  3. 3.Costs of this application be in the cause
  4. 4.Parties to comply with pre-trial procedures within 30 days and fix the matter for hearing of the main suit

Authorities

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Legislation

  • Constitution of KenyaArticle 159
  • Civil Procedure RulesSections 1A & 1B

Cases cited (1)

  • Suleiman -vs- Amboseli Resourt Ltd
    (2004) Eklr 589
Jurisdiction invoked
Inherent jurisdiction of the High Court; Article 159 of the Constitution of Kenya read with Sections 1A & 1B of the Civil Procedure Act

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, "Bonface Renja Erambo t/a Westport Motors v Commercial Bank of Africa & another [2017] KEELC 3388 (KLR)", Case Analysis (2017). Eldoret High Court Civil Case (Notice of Motion dated 9th February 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3388/eng@2017-03-16

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