Hillary Kipkosgei Kiboinnet t/a Sweetland Ltd v Chase Bank (Kenya) Limited & another [2018] KEELC 2595 (KLR)
The bottom line
#A Kenyan court refused to stop a bank auction where the lender followed every required notice step, so borrowers must act on notices, not after.
What this practically means
#Executive summary
#Key legal issues
#Whether the plaintiff established a prima facie case with a probability of success
No prima facie case was established because the chargee followed due process, including service of demand, statutory notice and redemption notice
The court found it undisputed that the plaintiff took a Kshs.12,000,000 facility secured by charges over the suit properties and was in arrears. A demand notice was served on 2.11.2015 at the plaintiff's address with proof of postage; a 90-day statutory notice to exercise the statutory power of sale was issued on 18.2.2016; a 40-day redemption notice was issued on 8.6.2016; and a valuation was conducted before the advertisement. Compliance with these statutory steps defeated the claim that notices were not issued.
Whether the plaintiff would suffer irreparable harm not compensable in damages
No irreparable harm was demonstrated; the defendants can pay damages and the property is a saleable commodity
The court reiterated that irreparable injury is injury that cannot be adequately compensated in damages and that a prima facie case alone is insufficient. Although the plaintiff argued the property was worth over Kshs.40,000,000 against an outstanding balance of about Kshs.6,000,000, the court held the defendants are capable of paying damages and that sentimental value attached to a charged property cannot justify an injunction.
Where the balance of convenience lies
The balance of convenience tilts in favour of the defendants, who are entitled to realise the security to recover the loan
The court reasoned that the defendants had advanced money which the plaintiff still holds together with the land while in default; if the injunction were withheld and the suit ultimately succeeded, the plaintiff would be compensated in damages, whereas denying the defendants the right to sell would leave them without recovery.
Legal principles established
#- A charged property becomes a commodity liable for sale once statutory conditions are met, and sentimental value is no ground for an injunction where the chargee follows due process
- The power to grant a temporary injunction is discretionary and must be exercised reasonably, judiciously and on sound legal principles following the Giella v Cassman Brown principles
Court orders
#- 1.The plaintiff's application for a temporary injunction is dismissed
- 2.Costs of the application awarded to the defendants
- Jurisdiction invoked
- Inherent jurisdiction of the court to grant interlocutory injunctive relief in an undetermined suit (not expressly stated in the judgment)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Hillary Kipkosgei Kiboinnet t/a Sweetland Ltd v Chase Bank (Kenya) Limited & another [2018] KEELC 2595 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/2595/eng@2018-06-28
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.