Caroline Kerubo Ongaga v Joseph Mungai Gikonyo t/a Garam Investments Auctioneers & another [2017] KEELC 3422 (KLR)
The bottom line
#A Kenyan court refused to stop an already-completed property auction because the borrower had defaulted on her loan and waited too long to act.
What this practically means
#Executive summary
#Key legal issues
#Whether the applicant established a prima facie case for interlocutory injunctive relief
She did not; she admitted the charge, the debt, default since February 2016, and knowledge of the auction
Applying Giella v Casman Brown, the court found the applicant did not dispute the charge or the debt and admitted default since February 2016. She was aware the auction was scheduled, sought an injunction only ten days after it occurred, and knew the property had sold for Kshs. 4.875 million. Her procedural complaints about statutory notices required a full trial and could not be resolved on untested affidavit evidence.
Whether an equitable injunction can issue to a defaulting borrower
No; a party who fails to perform her contractual obligations cannot obtain an injunction restraining the other party's enforcement of its covenants
The court adopted the holding in Stanley Kirui v Westlands Pride Limited that a contracting party in default cannot equitably restrain the other party's enforcement. Having admitted default in loan repayment since February 2016 while owing the 2nd Defendant Kshs. 3,900,000 secured by the charge, the plaintiff could not invoke equity to restrain exercise of the chargee's statutory power of sale.
Whether interlocutory proceedings can adjudicate the alleged procedural irregularities of the auction
No; the issues raised are not capable of resolution at the interlocutory stage and must await full trial
The court held that the plaintiff's contentions about lack of statutory notice and the alleged unprocedural auction turned on inconsistent, untested affidavit evidence, which is unsuitable for full adjudication at the interlocutory stage. The court must refrain from determining such issues on a Notice of Motion and leave them to trial.
Legal principles established
#- A party in default of a contract cannot obtain an injunction to restrain breach by the other party, as that would be inequitable
- The Giella test governs interlocutory injunctions: prima facie case with probability of success, irreparable loss not compensable in damages, and balance of convenience if in doubt
Court orders
#- 1.The notice of motion dated 8th March 2017 is dismissed
- 2.The interim orders sought by the Plaintiff are declined
- Jurisdiction invoked
- Order 40 Rule 1 of the Civil Procedure Rules; Sections 3, 3A and 63(c) of the Civil Procedure Act; Sections 90 and 96 of the Land Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Caroline Kerubo Ongaga v Joseph Mungai Gikonyo t/a Garam Investments Auctioneers & another [2017] KEELC 3422 (KLR)", Case Analysis (2017). Not stated in the judgment (Notice of Motion dated 8th March 2017, filed 14th March 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3422/eng@2017-03-16
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.