Stephen Kipkatam Kenduiywa t/a Kapchebet Farm v Sidian Bank Limited & another [2017] KEELC 3507 (KLR)
The bottom line
#A Kericho court allowed a bank to auction charged land, holding that serving valid statutory notices and obtaining a professional valuation satisfies the Land Act.
What this practically means
#Executive summary
#Key legal issues
#Whether an applicant for an injunction against a chargee's sale established a prima facie case
No; the plaintiff conceded the statutory notices, had no materialised buyer, and admitted an outstanding debt, so no probability of success was shown
Applying Giella vs Cassman Brown, the court made a preliminary assessment of the plaintiff's pleadings and affidavit evidence against the bank's replying affidavit. The plaintiff conceded statutory notices were served, admitted owing the bank, and disclosed that his prospective private sale failed because the buyer could not secure financing. With no contest on the notices and no demonstrable illegality in the intended sale, the plaintiff could not show a likelihood of success.
Whether fresh notices were required before re-advertisement of the suit properties
No; no law requires fresh notices before subsequent advertisements once the statutory notices and auctioneer's redemption notice have been served
The court found no contest on the original statutory notices and auctioneer's notices. The only argument was whether the 29 July 2016 'courtesy letter' was legally sufficient. The court held that postponement of an earlier sale did not vacate the notices, and found nothing untoward in the courtesy letter or the Daily Nation advertisement of 1 August 2016.
Whether the bank complied with its valuation duty under Section 97 of the Land Act, 2012
Yes; the bank engaged two independent professional valuers, discharging its obligation, and cannot be faulted for the values returned
Section 97(2) requires the chargee to ensure a forced sale valuation is undertaken by a valuer. The bank engaged Crystal Valuers and Advent Valuers, whose figures were not far apart. The chargee is not the valuer and cannot direct the value. Section 97(1) requires obtaining the best price reasonably obtainable, which is revealed by properly conducted auction where the highest bidder determines price.
Legal principles established
#- No law requires fresh statutory notices to be issued before a charged property may be advertised for sale or before subsequent advertisements, so long as the statutory notices and auctioneer's redemption notice have been served
- A chargee discharges its valuation obligation under Section 97(2) of the Land Act once it appoints a professional valuer and obtains a report; it cannot dictate the value the valuer gives
- An auction should not be stopped merely because the chargee's valuer and the chargor's valuer give different values; the proper value will emerge at the auction sale
- The mere existence of a prospective private buyer does not stop the chargee from exercising its statutory power of sale by auction
Court orders
#- 1.The application for injunction is dismissed with costs
- 2.The bank is at liberty to advertise the suit properties for sale if it is so minded
- Jurisdiction invoked
- Not expressly invoked; the court exercised original civil jurisdiction over a land/charge dispute as a first-instance suit by plaint
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (6)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Plaintiff Company v Defendant Bank (Injunction and Joinder Applications)[2020] KEHC 277 (KLR)27 Feb 2020followed
- PREMIER FLOUR MILLS LTD v STANDARD CHARTERED BANK KENYA LTD[2019] KEHC 5173 (KLR)5 Aug 2019followed
- Haslington Limited v African Banking Corporation Limited[2019] KEHC 10155 (KLR)8 Feb 2019
- Jane Achieng' Muga v Engen Kenya Limited & 5 Others (consolidated with Kericho HCCC No. 92 of 2009 - Shadrack Koskei Cherogoe v Engen Kenya Limited & Others)[2018] KEHC 6973 (KLR)9 May 2018applied
- Skeme Advertising Group Limited & another v Prime Bank Ltd & another (Environment & Land Case 710 of 2017) [2017] KEELC 3870 (KLR)[2017] KEELC 3870 (KLR)30 Nov 2017
- Skeme Advertising Group Limited & another v Prime Bank Ltd & another (Environment & Land Case 710 of 2017) [2017] KEELC 3870 (KLR)[2017] KEELC 3870 (KLR)30 Nov 2017applied
Cite this brief
#Cite this brief
Caselaw, "Stephen Kipkatam Kenduiywa t/a Kapchebet Farm v Sidian Bank Limited & another [2017] KEELC 3507 (KLR)", Case Analysis (2017). Not stated in the judgment (suit commenced by plaint filed 15 August 2016). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3507/eng@2017-02-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.