Rose Chemutai v Family Bank Limited & another [2018] KEELC 3511 (KLR)
The bottom line
#A Kenyan court halted a bank's auction of a borrower's land because the bank failed to get a proper forced-sale valuation before selling.
What this practically means
#Executive summary
#Key legal issues
#Whether the Plaintiff established a prima facie case with probability of success
Yes - despite admitted default and valid service of statutory notices, the suit land was not properly valued as required by section 97 of the Land Act, establishing a prima facie case
The court found service of the section 90 statutory notices was proved by Certificates of Posting sent to the charge address. However, the valuation report by NileReal Appraisers did not indicate the value of the suit land as required by section 97(1) and (2) of the Land Act, which imposes a duty on the chargee to obtain the best price and undertake a forced sale valuation before sale. This breach of statutory duty gave the Plaintiff a prima facie case.
Whether the Plaintiff would suffer irreparable harm not compensable by damages
Yes - the injuries alleged were not speculative; the Plaintiff demonstrated the harm, being a widow whose home and only property was at stake while she continued repaying the loan
Applying Nguruman Ltd v Jan Bonde Nielsen, the burden is on the applicant to demonstrate actual, substantial and demonstrable injury that cannot adequately be compensated in damages. The Plaintiff had repaid Kshs. 1.6 million since suit was filed, a fact not controverted, and the 1st Defendant could not indicate the extent of default. The injury, loss of her home, was thus not speculative.
Balance of convenience
Balance tilts in favour of the Plaintiff because the Defendants failed to properly value the charged land before advertising it for auction
The court held it was not in doubt on the evidence, finding that the Defendants had infringed the Plaintiff's rights by failing to properly value the charged suit land before advertising it for auction, so the balance of convenience favoured maintaining the status quo pending trial.
Whether the Plaintiff was served with the requisite statutory notices
Yes - notices under section 90 of the Land Act and the auctioneer's notices were sent to the same postal address as in the charge document, with Certificates of Posting annexed
Although the Plaintiff denied receipt, the notices dated 11th November 2016 and 13th February 2017 and the auctioneer's notice were all sent to P.O. Box 61619 - 00200 Nairobi, the same address in the charge document, and Certificates of Posting were produced. The court therefore found service proved.
Legal principles established
#- A chargee must obtain the best price reasonably obtainable and undertake a forced sale valuation before exercising the right of sale
- Principles for granting temporary injunction per Giella v Cassman Brown
Court orders
#- 1.The Plaintiff's Notice of Motion dated 9th June 2017 is found merited and allowed
- 2.Temporary injunction granted pending the outcome of the suit
- Jurisdiction invoked
- Order 40 rule 2(1) and 3 of the Civil Procedure Rules; Sections 3A & 3B of the Civil Procedure Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Rose Chemutai v Family Bank Limited & another [2018] KEELC 3511 (KLR)", Case Analysis (2018). Not stated in judgment (Notice of Motion dated 9th June, 2017). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3511/eng@2018-04-10
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.