Bando Projects (K) Ltd v Housing Finance Kenya Ltd [2018] KEELC 2756 (KLR)
The bottom line
#A Kenyan borrower who admitted default in writing could not stop the bank from selling charged property, because disputed accounts alone do not justify an injunction.
What this practically means
#Executive summary
#Key legal issues
#Whether the statutory notice under Section 90 of the Land Act, 2012 was premature
The notice was not premature; it was issued after accrual of the Defendant's rights, following the plaintiff director's email admitting default
The Defendant attached an email dated 7th February 2017 from the Plaintiff's director admitting default and promising to regularise the account within thirty days. Since the statutory notice was issued on 14th March 2017, after default had accrued, it could not be characterised as premature. The Plaintiff did not deny default but instead sought an audit, which would effectively dispose of prayer (b) of the plaint at interlocutory stage.
Whether the Plaintiff established a prima facie case with a probability of success
No - the Plaintiff had defaulted under a secured credit facility and failed to demonstrate a prima facie case
Applying Giella v Cassman Brown and Mrao v First American Bank, the court found the Plaintiff had been afforded a credit facility secured by a charge, had defaulted, and had not denied the default. An applicant must also make full and frank disclosure and show a right requiring protection (Kenleb Cons). The claim of manipulation of account balances and unreconciled figures was not substantiated.
Whether the Plaintiff would suffer irreparable loss not compensable by damages
No - the Plaintiff failed to demonstrate irreparable injury
Following Ooko v Barclays Bank, the onus lies on the applicant to show injury incapable of compensation by damages. The Plaintiff did not discharge this onus, and the balance of convenience was found to tilt towards the Defendant, the Plaintiff having failed to prove that its inconvenience was greater than the Defendant's.
Whether the court should order an audit/accounts and declare wrongly charged interest null and void
No - the claim of illegal interest lacked evidentiary support and the prayer sought to make the court fish for evidence
Illegal interest as a basis for an injunction must be supported by clear and sufficient evidence tabled in court. In its absence, the court cannot decide on unsubstantiated grounds, and granting the audit prayer would amount to disposing of prayer (b) of the plaint at an interlocutory stage.
Legal principles established
#- A dispute as to accounts is not a sufficient ground to restrain a chargee from exercising its statutory power of sale
- An interlocutory mandatory injunction is granted sparingly and only in exceptional circumstances where the applicant's case is very strong and straightforward
- An applicant for an injunction must make full and frank disclosure and show a right, legal or equitable, requiring protection
Court orders
#- 1.The Notice of Motion dated 11th August 2017 is dismissed with costs to the Defendant/Respondent
- Jurisdiction invoked
- Order 40 Rules 1 and 2 of the Civil Procedure Rules and Section 3A of the Civil Procedure Act (inherent jurisdiction)
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Bando Projects (K) Ltd v Housing Finance Kenya Ltd [2018] KEELC 2756 (KLR)", Case Analysis (2018). Not stated in the judgment (Notice of Motion dated 11th August, 2017 in a suit founded on a plaint dated 14th August, 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/2756/eng@2018-04-18
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.