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ELCPartially AllowedMalindi ELC Motion dated 30th November 2017 (arising from suit over Portion No. 10801 (CR 34037) and Portion No. 11215 (CR 46603))· [2018] KEELC 229 (KLR)

Isha Mohamed Noor v Kenya Commercial Bank Limited & Garam Investments Auctioneers (Environment & Land Case 240 of 2017) [2018] KEELC 229 (KLR)

Environment and Land Court
14 December 2018
JOJ.O. Olola
2,820 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~11 min to read original · ~4 min brief

The bottom line

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A Kenyan court blocked a bank from selling a widow's matrimonial land because it never served her statutory notice, even though the old charges were valid.

What this practically means

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Executive summary

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The Plaintiff, first widow of the late Tahir Sheikh Said Ahmed, moved the Environment and Land Court at Malindi by Notice of Motion seeking an interim injunction to restrain the Kenya Commercial Bank and its auctioneer from selling two portions registered in the deceased's name, and a lis pendens order, on the grounds that she never gave spousal consent to the charges created in 2009 and 2010 as security for facilities advanced to KAAB Investment Ltd, and that she was never served with statutory notices before the bank exercised its statutory power of sale. The Bank opposed, contending the Land Act's spousal-consent requirement did not apply to pre-2012 charges, that the borrower was heavily in default, that a related suit (Malindi ELC No. 2 of 2016) was already pending, and that the Plaintiff lacked full and frank disclosure. Applying Giella v Cassman Brown and Mrao v First American Bank, and following Gladys Wanjiku Waititu v Housing Finance and Barclays Bank v Attorney General, the court held that spousal consent was not a legal requirement before 2nd May 2012, so the validity of the charges could not be attacked on that basis. However, it held that a spouse with an interest in the matrimonial home is still entitled to statutory notice before sale, and no such notice was issued. The court granted the interim injunction at Prayer 3, permitted the Bank to exercise its statutory power of sale once proper notices are issued should the debt remain outstanding, and ordered each party to bear their own costs.

Key legal issues

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01

Spousal consent for charges created before the Land Act, 2012

Holding

The requirement of spousal consent did not exist before 2nd May 2012; charges registered in 2009 and 2010 remain valid without it

Reasoning

The court adopted the reasoning in Gladys Wanjiku Waititu v Housing Finance and Barclays Bank v Attorney General that Section 79(3) of the Land Act 2012 introduced spousal consent prospectively. Section 60 of the Land Laws (Amendment) Act, 2016 inserted a proviso to Section 78(1) preserving the validity of pre-existing charges. The Plaintiff's challenge to charges registered in 2009 and 2010 was therefore a 'very long shot'.

p. 3
02

Statutory notice to a spouse in occupation of the matrimonial home

Holding

The chargee was under an obligation to serve the Plaintiff with a statutory notice notwithstanding the borrower's default

Reasoning

A spouse has an equal though unregistered interest in the matrimonial home and ought to have a chance to redeem. While absence of spousal consent does not vitiate a pre-2012 charge, it does not relieve the chargee of the duty to give notice to a spouse with an interest, as imported by Section 78(1)(b) as amended. Awareness of the husband's earlier suit did not substitute for notice.

p. 4

Legal principles established

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  • Charges registered before 2nd May 2012 cannot be invalidated for lack of spousal consent, as the requirement was introduced by Section 79(3) of the Land Act, 2012
  • A chargee must serve notice on a spouse with an interest in the matrimonial property before exercising the statutory power of sale, even for a pre-2012 charge

Court orders

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  1. 1.An interim injunction as sought at Prayer 3 of the application, restraining the Defendants from selling, alienating or interfering with Portion Number 10801 (CR 34037) and Portion Number 11215 (CR 46603) pending hearing and determination of the suit
  2. 2.The 1st Defendant is at liberty to exercise its statutory power of sale once proper notices are issued to the Plaintiff, if the debt remains outstanding
  3. 3.Each party to bear their own costs

Authorities

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Legislation

  • Land ActSection 90(3); Section 79(3); Section 78(1) and 78(1)(b) as amended by Section 60 of the Land Laws (Amendment) Act, 2016; Section 162
  • Land Registration ActSection 106; Section 109
  • Indian Transfer of Property ActSection 52 (repealed)
  • Civil Procedure ActSections 6 and 7
  • Registered Land Actrepealed by Section 109 of the Land Registration Act, 2012
  • Land Laws (Amendment) ActSection 60

Cases cited (4)

  • Giella –vs- Cassman Brown & Company Ltd
    (1973) EA 358
  • Mrao –vs- First American Bank of Kenya Ltd & 2 Others
    (2003) KLR 125
  • Gladys Wanjiku Waititu –vs- Housing Finance Company Ltd & Another
    (2017) eKLR
  • Barclays Bank of Kenya Ltd –vs- Attorney General & Another
    (2015) eKLR
Jurisdiction invoked
Original jurisdiction of the Environment and Land Court (Land Act, Land Registration Act)

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (2)

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Judgments in the corpus that rely on this one. Where the Court said how it treated the authority, that is shown.

Cite this brief

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Cite this brief

Caselaw, "Isha Mohamed Noor v Kenya Commercial Bank Limited & Garam Investments Auctioneers (Environment & Land Case 240 of 2017) [2018] KEELC 229 (KLR)", Case Analysis (2018). Malindi ELC Motion dated 30th November 2017 (arising from suit over Portion No. 10801 (CR 34037) and Portion No. 11215 (CR 46603)). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/229/eng@2018-12-14

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