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ELCDismissed· [2017] KEELC 3866 (KLR)

Gacucu & another v Standard Chartered Bank of Kenya; Gacucu (Interested Party) (Environment & Land Case 711 of 2017) [2017] KEELC 3866 (KLR)

High Court of Kenya
19 December 2017
EOE. O. Obaga
1,515 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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The High Court dismissed borrowers' bid to stop a completed property auction, ruling their real remedy is claiming damages, not an injunction.

What this practically means

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Executive summary

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The applicants, mortgagors of three properties known as LR No.209/11095/57, 58 and 59 (Rangers Court, South 'C' Estate, Nairobi), moved the court by Notice of Motion dated 15th November 2017 seeking to restrain the respondent bank from taking possession of, completing the sale of, or transferring the suit properties following an auction conducted on 14th November 2017 by Garam Investments Auctioneers, and to compel disclosure of the sale particulars. They argued the auction violated orders of Justice Tuiyott in High Court Civil Case No. 645 of 2015 (Commercial and Admiralty Division), which had stayed the sale on condition that the applicants deposit Kshs.750,000, a deposit admittedly made only after the auction; they also complained of lack of notice to an interested party spouse and tenants, and irregular interest. The respondent opposed, arguing abuse of process, that the issues had been decided by Justice Kariuki's ruling of 22nd April 2016, that the applicants were forum shopping and had not come to court with clean hands. The court applied the Mrao prima facie case test, found no prima facie case, noted the properties were already sold with purchasers disclosed, found no alleged collusion with the buyer, and observed the applicants were preparing damages claims in parallel proceedings while a related case in the Chief Magistrate's Court appeared designed to obstruct the auction. The application was dismissed with costs to the respondent, the applicants being left to damages if irregularity in the auction is proved.

Key legal issues

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01

Whether the applicants established a prima facie case with probability of success for injunctive relief

Holding

The applicants failed to demonstrate a prima facie case; the auction had been completed, the purchasers disclosed, and no collusion was alleged

Reasoning

The court applied the Mrao test for a prima facie case. The applicants admitted the conditional deposit of Kshs.750,000 was made only after the auction. They had been indulged since 2015 and failed to meet conditions set by Justice Kariuki in his ruling of 22nd April 2016. The court found the applicants had no intention of repaying the loan but were preparing claims for damages in parallel proceedings.

p. 3
02

Whether issues previously decided in earlier proceedings could be relitigated in the fresh suit

Holding

Issues of compliance with auction formalities and irregular interest had already been addressed by Justice Kariuki and could not be raised again in a fresh suit while the case before Justice Tuiyott remained pending

Reasoning

The court held that the applicants' complaints about the auction and the interest applied had been fully addressed in the ruling of 22nd April 2016 in the Commercial Division case. If the auction violated Justice Tuiyott's orders, the proper course was to return to that court rather than file a fresh suit raising similar issues, which the court treated as forum shopping.

p. 3

Legal principles established

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  • A prima facie case in a civil application is a case in which, on the material presented, the court concludes a right has apparently been infringed so as to call for an explanation or rebuttal from the opposite party
  • Where suit property has already been sold and no prima facie case or collusion is shown, an applicant claiming an irregular auction is relegated to damages

Court orders

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  1. 1.The Notice of Motion dated 15th November 2017 was dismissed
  2. 2.Costs of the application to the respondent

Authorities

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Cases cited (1)

  • Mrao Vs First American Bank of Kenya Ltd & 2 Others
    (2003) KLR 125
Jurisdiction invoked
Not stated in the judgment

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, "Gacucu & another v Standard Chartered Bank of Kenya; Gacucu (Interested Party) (Environment & Land Case 711 of 2017) [2017] KEELC 3866 (KLR)", Case Analysis (2017). . Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2017/3866/eng@2017-12-19

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