Lucy Wambui Karanja & another v Chase Bank Kenya Limited (In Receivership) & another [2018] KEELC 1267 (KLR)
The bottom line
#A Kenyan court halted a bank's land auction because the bank could not prove it properly served the required statutory notices before selling.
What this practically means
#Executive summary
#Key legal issues
#Prima facie case
The Applicants established a prima facie case with probability of success because the chargee failed to prove due service of the statutory notices
The chargee alleged service of a 90-day notice on 25th November 2016 and a 40-day notice on 17th March 2017, but the certificates of postage (KK-3(b) and KK-4(b)) were unclear typed documents not confirmed by the Postal Office. Since the requirements of Sections 90 and 96(2) of the Land Act are mandatory and the court doubted service, the Applicants demonstrated a prima facie case with probability of success at trial.
Irreparable loss
Damages would not adequately compensate a breach of the statutory right to notice; the applicants would suffer irreparable loss
Relying on the Joseph Siro Mosioma case, the court held that damages is not an automatic remedy and cannot be substituted for loss occasioned by a clear breach of the law. A party cannot be condemned to take damages in lieu of a crystallized right protectable by injunction. Therefore the loss from an unlawful sale of the charged land could not be adequately compensated by an award of damages.
Balance of convenience
The balance of convenience tilts in favour of maintaining the status quo, namely halting the sale by public auction until the suit is determined
The court found the balance of convenience not in doubt, but even if it were, it would tilt in favour of preserving the status quo that existed before the disputed statutory notices were issued and the sale advertised. Citing Agnes Adhiambo Ojwang v Wycliffe Odhiambo Ojijo, the purpose of an injunction is to preserve the status quo existing before the wrongful act.
Interlocutory stage - finality of findings
At interlocutory stage the court does not decide disputed facts with finality but only assesses entitlement to injunction on the usual criteria
Citing Edwin Kamau Muniu v Barclays Bank of Kenya Ltd, the court reiterated that an interlocutory application does not require determination of the very issues to be canvassed at trial. The court's role is limited to deciding whether the applicant is entitled to the injunction on the usual Giella criteria, preserving the trial court's function.
Legal principles established
#- The statutory notice-to-sell requirements under Section 96(2) of the Land Act are mandatory and must be strictly proved by a valid certificate of postage
- Whether or not to grant an injunction is a discretionary but judicially exercised power
- Realization of security is a matter reserved for hearing by the High Court
Court orders
#- 1.The Notice of Motion dated 12th July 2017 is allowed wholly in terms of prayer No.3 (interim injunction restraining the Defendants from selling, disposing of, entering upon, interfering with or dealing with Title Nos. Sigona/1466, Sigona/1467, Sigona/1468 and Sigona/1469 until the final hearing and determination of the suit)
- 2.Prayer No.4 (accounts) noted as available after the calling of evidence
- 3.The matter is transferred to the Kiambu High Court for hearing and final determination forthwith
- Jurisdiction invoked
- Original civil jurisdiction; the court noted that realization of security is a matter reserved for the High Court and ordered transfer to the Kiambu High Court
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Lucy Wambui Karanja & another v Chase Bank Kenya Limited (In Receivership) & another [2018] KEELC 1267 (KLR)", Case Analysis (2018). Notice of Motion dated 12th July 2017 (suit number not stated in the judgment). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/1267/eng@2018-10-26
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.