David Mburu Githere & another v Jamii Bora Bank Limited [2017] KEELC 3800 (KLR)
The bottom line
#Kenya's High Court refused to stop a bank from selling charged land, because once property secures a loan it becomes a sellable commodity and money damages are enough.
What this practically means
#Executive summary
#Key legal issues
#Whether the Plaintiffs established a prima facie case with probability of success
They did not; although they advanced an arguable case, no infringement of their rights was shown, since the Defendant complied with Sections 90, 96 and 97(2) of the Land Act
The Court found the Plaintiffs acknowledged indebtedness by letter dated 22nd October 2015, which showed they had received the Statutory Notice served by registered post. The Defendant also obtained a valuation of Kshs.50,000,000 before the intended sale. The chargee's right under the charge had accrued upon default and it was entitled to exercise its statutory power of sale.
Whether the Plaintiffs would suffer irreparable loss not compensable by damages
They would not; the charged property became a commodity for sale upon being offered as security and damages are an adequate remedy, with recourse under Section 99(4) of the Land Act
The Applicants did not address irreparable loss in submissions. The mortgaged property was a commercial residential plot with tenants, not the matrimonial home. A person prejudiced by an improper exercise of the power of sale has a remedy in damages under Section 99(4) of the Land Act, and the Defendant, a financial institution, could compensate in damages.
Balance of convenience
It tilts in favour of the Defendant, as the loan and interest keep accumulating and the debt may outstrip the value of the security
The Plaintiffs admitted default and did not honour their repayment proposal. If the sale is stopped, the debt continues to grow, exposing the Defendant to potentially substantial irrecoverable loss. Realising the security prevents the loan and interest escalating beyond recovery.
Whether the Statutory Notices were issued and served
The Defendant complied with Section 90 of the Land Act; the Plaintiffs' acknowledgment of arrears evidenced receipt of the Notice dated 6th July 2015 served by registered post
Although the Plaintiffs denied receiving the notices, their letter of 22nd October 2015 acknowledging arrears and proposing payment of Kshs.5,000,000 by 1st November 2015 was accepted by the Defendant, indicating they had received the Statutory Notice. The Notice was exhibited as annexture RM4 to the Replying Affidavit.
Whether the suit property was undervalued
No; the Defendant obtained a forced sale valuation of Kshs.50,000,000 by Wamae Mureithi & Associates dated 13th October 2015, satisfying Section 97(2) of the Land Act
The Plaintiffs alleged undervaluation at Kshs.32,000,000 against a market value of Kshs.45,000,000. The Court saw the valuation dated 13th October 2015 marked RM9 giving a value of Kshs.50,000,000, and therefore found the chargee discharged its statutory duty of care.
Legal principles established
#- Once land has been given as security for a loan it becomes a commodity for sale, and a chargor cannot claim irreparable loss which damages cannot adequately compensate
- A chargee who serves a statutory notice under Section 90 of the Land Act and obtains a forced sale valuation under Section 97(2) has complied with the statutory prerequisites for exercising the statutory power of sale under Section 96
Court orders
#- 1.The Notice of Motion dated 25th January 2016 is dismissed entirely with costs to the Respondent
- 2.The parties to comply with Order 11 within the next 60 days from the date of the order
- 3.Thereafter the matter to be fixed for Pre-trial Conference before the Deputy Registrar of the Court
- Jurisdiction invoked
- Order 40 Rules 1, 2, 3 and 4 of the Civil Procedure Rules 2010 and Sections 3 and 3A of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Later judgments citing this (9)
#Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.
- Kepher Ondere Misati v Kenya Commercial Bank Limited & 2 Others[2024] KEHC 169 (KLR)18 Jan 2024applied
- Patricia Mwethya v First Community Bank & 3 others [2021] KEELC 3058 (KLR)[2021] KEELC 3058 (KLR)27 May 2021applied
- Danson Mwangi v Afya Cooperative Savings and Credit Society Limited & George Njoroge Muiruri t/a Leakey Auctioneers [2021] KEELC 3929 (KLR)[2021] KEELC 3929 (KLR)18 Mar 2021
- Soric International Limited & 2 Others v Jamii Bora Bank Limited (In Receivership) (formerly Kenya Commercial Bank/Commercial Bank of Africa)[2020] KEHC 2383 (KLR)23 Oct 2020
- Namsi Limited & Another v 1st Defendant & Leakey Auctioneers (2nd Defendant)[2020] KEHC 7383 (KLR)4 Mar 2020applied
- Plaintiffs/Applicants v 1st Respondent (Bank) & 2nd Respondent (Auctioneers) - Notice of Motion for Temporary Injunction[2019] KEHC 637 (KLR)6 Dec 2019applied
- OCEANIC OIL LIMITED v VERSUSSTANDARD CHARTERED BANK KENYA LTD[2019] KEHC 1807 (KLR)22 Nov 2019
- Eric Timothy Balongo v Paul Siteya Loorkipony [2019] KEELC 958 (KLR)[2019] KEELC 958 (KLR)5 Nov 2019followed
- PREMIER FLOUR MILLS LTD v STANDARD CHARTERED BANK KENYA LTD[2019] KEHC 5173 (KLR)5 Aug 2019followed
Cite this brief
#Cite this brief
Caselaw, "David Mburu Githere & another v Jamii Bora Bank Limited [2017] KEELC 3800 (KLR)", Case Analysis (2017). Not stated in the judgment text provided. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3800/eng@2017-08-31
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.