Julia Muthoni Githinji v African Banking Corporation Limited [2018] KEELC 3542 (KLR)
The bottom line
#The Nakuru Environment and Land Court refused to stop a bank from selling charged land, holding that proper statutory notices had been issued and disputing the debt amount is not enough.
What this practically means
#Executive summary
#Key legal issues
#Whether the statutory notices (90 days notice under section 90 of the Land Act, 45 days redemption notice and notification of sale) were issued
The notices were duly issued and sent by registered post; the plaintiff adduced no evidence to counter the sworn statements and annexures (EG4 and EG6) of the defendant
The defendant's replying affidavit annexed a section 90 Land Act notice (EG4) and a 45 days Redemption Notice and Notification of Sale (EG6), with evidence of postage. The notices were sent by registered post to the plaintiff's postal address. There was no countering evidence from the plaintiff, so the court was satisfied the notices required by section 90 of the Land Act and rule 15(d) of the Auctioneers Rules were issued.
Whether section 44A of the Banking Act bars sale of the charged property
No. Section 44A only caps the recoverable amount on a non-performing loan and cannot stop the exercise of the statutory power of sale where the chargor is in default
The court reproduced section 44A and held its impact is limited to capping recovery (principal, interest not exceeding principal, and recovery expenses) on non-performing loans. It does not operate as a bar to the statutory power of sale. Relying on Shimmers Plaza, a dispute over the amount owing is not a ground for an injunction against sale.
Whether the plaintiff established a prima facie case with a probability of success
No; the application was therefore dismissed at the first Giella stage without considering the other limbs
Applying Giella as sequenced in Nguruman, the court found the plaintiff had not established a prima facie case with probability of success, since the statutory notices were proved and the alleged Banking Act violation did not avail her. The remaining limbs (adequacy of damages, balance of convenience) did not require consideration.
Legal principles established
#- All three Giella conditions are separate, distinct and logical hurdles to be surmounted sequentially; if no prima facie case is established, irreparable injury and balance of convenience need no consideration
- Section 44A of the Banking Act only limits the amount recoverable on a non-performing loan; it does not stop the exercise of the statutory power of sale
- A dispute on the exact amount payable under a mortgage is not a ground to restrain the exercise of the mortgagee's power of sale
Court orders
#- 1.Notice of Motion dated 29th June 2017 dismissed
- 2.Costs of the application awarded to the defendant
- Jurisdiction invoked
- Civil Procedure Rules, Order 40 rules 1, 2 and 3 (inherent interlocutory injunction jurisdiction); Land Act section 90; Banking Act section 44A considered
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Julia Muthoni Githinji v African Banking Corporation Limited [2018] KEELC 3542 (KLR)", Case Analysis (2018). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/3542/eng@2018-03-20
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.