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ELCDismissedNot stated in the judgment (Notice of Motion dated 10.10.2017)· [2018] KEELC 1864 (KLR)

Simon Kipkoech Kwambai v Sidian Bank Limited & another [2018] KEELC 1864 (KLR)

Environment and Land Court
10 August 2018
AOA. OMBWAYO
1,577 words in judgment
View original judgmentRead on Kenya Law Watch case
AI-assisted case brief
·~6 min to read original · ~4 min brief

The bottom line

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A Kenyan court allowed a bank to proceed with selling charged family land, holding the required sale notices can be issued simultaneously.

What this practically means

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Executive summary

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The plaintiff, registered owner of land parcel Tembelio/Elgeyo Border Block 1(Kapkei) 44, moved the court by Notice of Motion dated 10 October 2017 under Order 40 Rules 1-3 of the Civil Procedure Rules and section 3A of the Civil Procedure Act, seeking a temporary injunction to restrain the defendants from selling the property by private treaty. The property, described as his matrimonial home, was charged to the 1st defendant to secure a consolidated term loan of Kshs. 2,578,231.89 advanced to his daughter (the borrower), with the plaintiff as guarantor. Following default, the outstanding amount stood at Kshs. 2,969,906.07. The chargee issued statutory notices, and a public auction on 9 October 2017 failed to attract a bidder meeting the reserve price, after which a private treaty sale was contemplated. The plaintiff argued the 45-day redemption notice was served concurrently with the notification of sale, rendering the sale process null and void, and relied on section 74 of the repealed Registered Lands Act. The 1st defendant countered that all statutory notices under sections 90 and 96 of the Land Act, 2012 were duly issued, valuation done, spousal consent obtained, and that a charged matrimonial property becomes a commodity for sale. The court held that the notice to sell under section 96(2) of the Land Act and the notification of sale under Rule 15 of the Auctioneers Rules are separate and distinct notices under different legislation that may be issued concurrently, the 40-day period only pre-empting completion of a contract of sale. It further found damages adequate, the balance of convenience favouring the defendants, and dismissed the application with costs on 10 August 2018.

Key legal issues

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01

Concurrent service of the redemption notice and notification of sale

Holding

The two notices are separate and distinct, provided for under different legislation, and may be issued concurrently; the 40-day period under section 96(2) only pre-empts completion of a contract of sale, not the issuance of the notification of sale

Reasoning

The court construed section 96(2) of the Land Act, 2012 alongside Rule 15 of the Auctioneers Rules. Applying the principle of purposive construction to resolve the apparent conflict, it held that the 40-day period prevents completion of a sale contract before lapse, while the auctioneer's 45-day notification of sale may issue concurrently with the notice to sell.

p. 2
02

Whether an injunction should issue over charged matrimonial property

Holding

Injunction refused: the defendant can compensate the plaintiff in damages, the charged property is a commodity for sale, and the balance of convenience favours the chargee

Reasoning

The plaintiff did not deny default on the loan. The court found the chargee capable of compensating the plaintiff if he succeeds, since a charged property is treated as a commodity for sale. The balance of convenience favoured the defendants because the plaintiff had owed money since 2014 and could not be allowed to hold both the money and the land.

p. 2

Legal principles established

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  • The notice to sell under section 96(2) of the Land Act and the notification of sale under Rule 15 of the Auctioneers Rules are separate and distinct notices under different legislation and may be issued concurrently
  • A charged matrimonial property becomes a commodity for sale once charged, and spousal consent having been obtained, the chargee may exercise its statutory power of sale

Court orders

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  1. 1.The plaintiff's Notice of Motion dated 10.10.2017 seeking a temporary injunction is dismissed
  2. 2.Costs of the application awarded to the defendants

Authorities

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Legislation

  • Civil Procedure RulesOrder 40 Rules 1, 2, 3
  • Civil Procedure Actsection 3A
  • Registered Lands Act (repealed)section 74
  • Land Actsection 90(1) and 2(b)
  • Land Actsection 96(2)
  • Auctioneers RulesRule 15
Jurisdiction invoked
Order 40 Rules 1, 2, 3 of the 2010 revised Civil Procedure Rules and section 3A of the Civil Procedure Act

Key timeline

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Practical implications

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Frequently asked questions

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Later judgments citing this (1)

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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, "Simon Kipkoech Kwambai v Sidian Bank Limited & another [2018] KEELC 1864 (KLR)", Case Analysis (2018). Not stated in the judgment (Notice of Motion dated 10.10.2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/1864/eng@2018-08-10

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