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ELCDismissedNot stated in the judgment (ELC application, Bungoma)· [2018] KEELC 4263 (KLR)

Jonathan Situma Wabomba v National Bank of Kenya Limited [2018] KEELC 4263 (KLR)

Environment and Land Court
22 February 2018
SMS. Mukunya
1,092 words in judgment
View original judgmentRead on Kenya Law Watch case
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The bottom line

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A Kenyan court allowed a bank to auction charged land, ruling that property offered as loan security can be sold if notices were properly served.

What this practically means

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Executive summary

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The applicant, Jonathan Situma Wabwoba, moved the Environment and Land Court at Bungoma by notice of motion under Order 40 rules 1 and 2 of the Civil Procedure Rules seeking a temporary injunction to restrain the defendants from selling by public auction, or otherwise alienating, land parcel East Bukusu/North Sang'alo/5438 pending hearing of the application. He argued that he was not served with the statutory notices and that the amount demanded was unconscionable and excessive. The respondent bank, through a replying affidavit of Agnes Mutisya, opposed the application, showing that the applicant had been granted a term loan of Kshs.600,000 at 18% p.a. repayable in 36 months and later an overdraft of Kshs.1,200,000, both secured by a legal charge of Kshs.2,000,000 over the suit property; that he defaulted; and that a statutory notice dated 18/8/2016 under Section 90 of the Land Act and a redemption notice were served. The court applied the Giella v Cassman Brown principles as restated in Nguruman Limited v Jan Bonde Nelson. It found, on the account opening form and certificate of posting, that the statutory notice was sent by registered post to the applicant's last known address, and rejected the claim of service to the wrong address. No prima facie case was established; the property, having been charged, became a commodity for sale and any loss was compensable in damages per Andrew Muriuki Wanjohi; any undervalue complaint lies under Section 97(1) of the Land Act. The application was dismissed with costs to the respondents.

Key legal issues

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01

Service of statutory notices under the Land Act

Holding

The statutory notice under Section 96(1) and (2) of the Land Act was properly served by registered post to the applicant's last known address as given in the account opening form

Reasoning

The applicant denied the handwriting on the account opening form but did not dispute opening the account, the particulars in the form, or that the signature was his. The certificate of posting proved the notice dated 18/8/2016 was posted to P.O. Box 1142 - 50200 Bungoma, the address he had given. The contention that the notice went to the wrong address was rejected.

p. 2
02

Prima facie case for interlocutory injunction

Holding

No prima facie case with probability of success was established under the first Giella limb

Reasoning

With service of the statutory and redemption notices established, and no arguable challenge to the charge or default, the plaintiff failed at the first hurdle of the Giella test, making an injunction unnecessary to consider further on the merits.

p. 2
03

Irreparable injury

Holding

The second Giella limb fails because damages can adequately compensate the chargor

Reasoning

The suit property was offered as security and thus became a commodity for sale with a monetary value. Following Andrew Muriuki Wanjohi v Equity Building Society, a chargor conscious that default could lead to sale cannot later claim the loss is irreparable. Any claim of enhanced value is addressed by Section 97(1) of the Land Act.

p. 2

Legal principles established

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  • The three Giella v Cassman Brown conditions - prima facie case, irreparable injury, balance of convenience - are separate, distinct and logical hurdles which an applicant must surmount
  • A chargor who offered property as security cannot complain that a sale loss is not compensable by damages, having valued the property in monetary terms
  • A chargor alleging the property is worth more than when charged has a remedy under Section 97(1) of the Land Act

Court orders

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  1. 1.The application for a temporary injunction is dismissed
  2. 2.Costs of the application awarded to the respondents
Jurisdiction invoked
Order 40 rules 1 and 2 of the Civil Procedure Rules

Key timeline

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Practical implications

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Frequently asked questions

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Cite this brief

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Cite this brief

Caselaw, "Jonathan Situma Wabomba v National Bank of Kenya Limited [2018] KEELC 4263 (KLR)", Case Analysis (2018). Not stated in the judgment (ELC application, Bungoma). Source: https://new.kenyalaw.org/akn/ke/judgment/keelc/2018/4263/eng@2018-02-22

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